[Congressional Record (Bound Edition), Volume 154 (2008), Part 17]
[House]
[Pages 23901-24000]
[From the U.S. Government Publishing Office, www.gpo.gov]




              EMERGENCY ECONOMIC STABILIZATION ACT OF 2008

  Mr. FRANK of Massachusetts. Madam Speaker, pursuant to House 
Resolution 1525, I call up from the Speaker's table the bill (H.R. 
1424) to amend section 712 of the Employee Retirement Income Security 
Act of 1974, section 2705 of the Public Health Service Act, and section 
9812 of the Internal Revenue Code of 1986 to require equity in the 
provision of mental health and substance-related disorder benefits 
under group health plans, and offer the motion at the desk.
  The SPEAKER pro tempore. The Clerk will report the title of the bill, 
designate the Senate amendments, and designate the motion.
  The Clerk read the title of the bill.
  The text of the Senate amendments is as follows:

       Strike all after the enacting clause and insert the 
     following:

              DIVISION A--EMERGENCY ECONOMIC STABILIZATION

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This division may be cited as the 
     ``Emergency Economic Stabilization Act of 2008''.
       (b) Table of Contents.--The table of contents for this 
     division is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.

                TITLE I--TROUBLED ASSETS RELIEF PROGRAM

Sec. 101. Purchases of troubled assets.
Sec. 102. Insurance of troubled assets.
Sec. 103. Considerations.
Sec. 104. Financial Stability Oversight Board.
Sec. 105. Reports.
Sec. 106. Rights; management; sale of troubled assets; revenues and 
              sale proceeds.
Sec. 107. Contracting procedures.
Sec. 108. Conflicts of interest.
Sec. 109. Foreclosure mitigation efforts.
Sec. 110. Assistance to homeowners.
Sec. 111. Executive compensation and corporate governance.
Sec. 112. Coordination with foreign authorities and central banks.
Sec. 113. Minimization of long-term costs and maximization of benefits 
              for taxpayers.
Sec. 114. Market transparency.
Sec. 115. Graduated authorization to purchase.
Sec. 116. Oversight and audits.
Sec. 117. Study and report on margin authority.
Sec. 118. Funding.
Sec. 119. Judicial review and related matters.
Sec. 120. Termination of authority.
Sec. 121. Special Inspector General for the Troubled Asset Relief 
              Program.
Sec. 122. Increase in statutory limit on the public debt.
Sec. 123. Credit reform.
Sec. 124. HOPE for Homeowners amendments.
Sec. 125. Congressional Oversight Panel.
Sec. 126. FDIC authority.
Sec. 127. Cooperation with the FBI.
Sec. 128. Acceleration of effective date.
Sec. 129. Disclosures on exercise of loan authority.
Sec. 130. Technical corrections.
Sec. 131. Exchange Stabilization Fund reimbursement.
Sec. 132. Authority to suspend mark-to-market accounting.
Sec. 133. Study on mark-to-market accounting.
Sec. 134. Recoupment.
Sec. 135. Preservation of authority.
Sec. 136. Temporary increase in deposit and share insurance coverage.

                  TITLE II--BUDGET-RELATED PROVISIONS

Sec. 201. Information for congressional support agencies.
Sec. 202. Reports by the Office of Management and Budget and the 
              Congressional Budget Office.
Sec. 203. Analysis in President's Budget.
Sec. 204. Emergency treatment.

                       TITLE III--TAX PROVISIONS

Sec. 301. Gain or loss from sale or exchange of certain preferred 
              stock.
Sec. 302. Special rules for tax treatment of executive compensation of 
              employers participating in the troubled assets relief 
              program.
Sec. 303. Extension of exclusion of income from discharge of qualified 
              principal residence indebtedness.

     SEC. 2. PURPOSES.

       The purposes of this Act are--
       (1) to immediately provide authority and facilities that 
     the Secretary of the Treasury can use to restore liquidity 
     and stability to the financial system of the United States; 
     and
       (2) to ensure that such authority and such facilities are 
     used in a manner that--
       (A) protects home values, college funds, retirement 
     accounts, and life savings;
       (B) preserves homeownership and promotes jobs and economic 
     growth;
       (C) maximizes overall returns to the taxpayers of the 
     United States; and
       (D) provides public accountability for the exercise of such 
     authority.

     SEC. 3. DEFINITIONS.

       For purposes of this Act, the following definitions shall 
     apply:
       (1) Appropriate committees of congress.--The term 
     ``appropriate committees of Congress'' means--
       (A) the Committee on Banking, Housing, and Urban Affairs, 
     the Committee on Finance, the Committee on the Budget, and 
     the Committee on Appropriations of the Senate; and

[[Page 23902]]

       (B) the Committee on Financial Services, the Committee on 
     Ways and Means, the Committee on the Budget, and the 
     Committee on Appropriations of the House of Representatives.
       (2) Board.--The term ``Board'' means the Board of Governors 
     of the Federal Reserve System.
       (3) Congressional support agencies.--The term 
     ``congressional support agencies'' means the Congressional 
     Budget Office and the Joint Committee on Taxation.
       (4) Corporation.--The term ``Corporation'' means the 
     Federal Deposit Insurance Corporation.
       (5) Financial institution.--The term ``financial 
     institution'' means any institution, including, but not 
     limited to, any bank, savings association, credit union, 
     security broker or dealer, or insurance company, established 
     and regulated under the laws of the United States or any 
     State, territory, or possession of the United States, the 
     District of Columbia, Commonwealth of Puerto Rico, 
     Commonwealth of Northern Mariana Islands, Guam, American 
     Samoa, or the United States Virgin Islands, and having 
     significant operations in the United States, but excluding 
     any central bank of, or institution owned by, a foreign 
     government.
       (6) Fund.--The term ``Fund'' means the Troubled Assets 
     Insurance Financing Fund established under section 102.
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury.
       (8) TARP.--The term ``TARP'' means the Troubled Asset 
     Relief Program established under section 101.
       (9) Troubled assets.--The term ``troubled assets'' means--
       (A) residential or commercial mortgages and any securities, 
     obligations, or other instruments that are based on or 
     related to such mortgages, that in each case was originated 
     or issued on or before March 14, 2008, the purchase of which 
     the Secretary determines promotes financial market stability; 
     and
       (B) any other financial instrument that the Secretary, 
     after consultation with the Chairman of the Board of 
     Governors of the Federal Reserve System, determines the 
     purchase of which is necessary to promote financial market 
     stability, but only upon transmittal of such determination, 
     in writing, to the appropriate committees of Congress.

                TITLE I--TROUBLED ASSETS RELIEF PROGRAM

     SEC. 101. PURCHASES OF TROUBLED ASSETS.

       (a) Offices; Authority.--
       (1) Authority.--The Secretary is authorized to establish 
     the Troubled Asset Relief Program (or ``TARP'') to purchase, 
     and to make and fund commitments to purchase, troubled assets 
     from any financial institution, on such terms and conditions 
     as are determined by the Secretary, and in accordance with 
     this Act and the policies and procedures developed and 
     published by the Secretary.
       (2) Commencement of program.--Establishment of the policies 
     and procedures and other similar administrative requirements 
     imposed on the Secretary by this Act are not intended to 
     delay the commencement of the TARP.
       (3) Establishment of treasury office.--
       (A) In general.--The Secretary shall implement any program 
     under paragraph (1) through an Office of Financial Stability, 
     established for such purpose within the Office of Domestic 
     Finance of the Department of the Treasury, which office shall 
     be headed by an Assistant Secretary of the Treasury, 
     appointed by the President, by and with the advice and 
     consent of the Senate, except that an interim Assistant 
     Secretary may be appointed by the Secretary.
       (B) Clerical amendments.--
       (i) Title 5.--Section 5315 of title 5, United States Code, 
     is amended in the item relating to Assistant Secretaries of 
     the Treasury, by striking ``(9)'' and inserting ``(10)''.
       (ii) Title 31.--Section 301(e) of title 31, United States 
     Code, is amended by striking ``9'' and inserting ``10''.
       (b) Consultation.--In exercising the authority under this 
     section, the Secretary shall consult with the Board, the 
     Corporation, the Comptroller of the Currency, the Director of 
     the Office of Thrift Supervision, the Chairman of the 
     National Credit Union Administration Board, and the Secretary 
     of Housing and Urban Development.
       (c) Necessary Actions.--The Secretary is authorized to take 
     such actions as the Secretary deems necessary to carry out 
     the authorities in this Act, including, without limitation, 
     the following:
       (1) The Secretary shall have direct hiring authority with 
     respect to the appointment of employees to administer this 
     Act.
       (2) Entering into contracts, including contracts for 
     services authorized by section 3109 of title 5, United States 
     Code.
       (3) Designating financial institutions as financial agents 
     of the Federal Government, and such institutions shall 
     perform all such reasonable duties related to this Act as 
     financial agents of the Federal Government as may be 
     required.
       (4) In order to provide the Secretary with the flexibility 
     to manage troubled assets in a manner designed to minimize 
     cost to the taxpayers, establishing vehicles that are 
     authorized, subject to supervision by the Secretary, to 
     purchase, hold, and sell troubled assets and issue 
     obligations.
       (5) Issuing such regulations and other guidance as may be 
     necessary or appropriate to define terms or carry out the 
     authorities or purposes of this Act.
       (d) Program Guidelines.--Before the earlier of the end of 
     the 2-business-day period beginning on the date of the first 
     purchase of troubled assets pursuant to the authority under 
     this section or the end of the 45-day period beginning on the 
     date of enactment of this Act, the Secretary shall publish 
     program guidelines, including the following:
       (1) Mechanisms for purchasing troubled assets.
       (2) Methods for pricing and valuing troubled assets.
       (3) Procedures for selecting asset managers.
       (4) Criteria for identifying troubled assets for purchase.
       (e) Preventing Unjust Enrichment.--In making purchases 
     under the authority of this Act, the Secretary shall take 
     such steps as may be necessary to prevent unjust enrichment 
     of financial institutions participating in a program 
     established under this section, including by preventing the 
     sale of a troubled asset to the Secretary at a higher price 
     than what the seller paid to purchase the asset. This 
     subsection does not apply to troubled assets acquired in a 
     merger or acquisition, or a purchase of assets from a 
     financial institution in conservatorship or receivership, or 
     that has initiated bankruptcy proceedings under title 11, 
     United States Code.

     SEC. 102. INSURANCE OF TROUBLED ASSETS.

       (a) Authority.--
       (1) In general.--If the Secretary establishes the program 
     authorized under section 101, then the Secretary shall 
     establish a program to guarantee troubled assets originated 
     or issued prior to March 14, 2008, including mortgage-backed 
     securities.
       (2) Guarantees.--In establishing any program under this 
     subsection, the Secretary may develop guarantees of troubled 
     assets and the associated premiums for such guarantees. Such 
     guarantees and premiums may be determined by category or 
     class of the troubled assets to be guaranteed.
       (3) Extent of guarantee.--Upon request of a financial 
     institution, the Secretary may guarantee the timely payment 
     of principal of, and interest on, troubled assets in amounts 
     not to exceed 100 percent of such payments. Such guarantee 
     may be on such terms and conditions as are determined by the 
     Secretary, provided that such terms and conditions are 
     consistent with the purposes of this Act.
       (b) Reports.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall report to the 
     appropriate committees of Congress on the program established 
     under subsection (a).
       (c) Premiums.--
       (1) In general.--The Secretary shall collect premiums from 
     any financial institution participating in the program 
     established under subsection (a). Such premiums shall be in 
     an amount that the Secretary determines necessary to meet the 
     purposes of this Act and to provide sufficient reserves 
     pursuant to paragraph (3).
       (2) Authority to base premiums on product risk.--In 
     establishing any premium under paragraph (1), the Secretary 
     may provide for variations in such rates according to the 
     credit risk associated with the particular troubled asset 
     that is being guaranteed. The Secretary shall publish the 
     methodology for setting the premium for a class of troubled 
     assets together with an explanation of the appropriateness of 
     the class of assets for participation in the program 
     established under this section. The methodology shall ensure 
     that the premium is consistent with paragraph (3).
       (3) Minimum level.--The premiums referred to in paragraph 
     (1) shall be set by the Secretary at a level necessary to 
     create reserves sufficient to meet anticipated claims, based 
     on an actuarial analysis, and to ensure that taxpayers are 
     fully protected.
       (4) Adjustment to purchase authority.--The purchase 
     authority limit in section 115 shall be reduced by an amount 
     equal to the difference between the total of the outstanding 
     guaranteed obligations and the balance in the Troubled Assets 
     Insurance Financing Fund.
       (d) Troubled Assets Insurance Financing Fund.--
       (1) Deposits.--The Secretary shall deposit fees collected 
     under this section into the Fund established under paragraph 
     (2).
       (2) Establishment.--There is established a Troubled Assets 
     Insurance Financing Fund that shall consist of the amounts 
     collected pursuant to paragraph (1), and any balance in such 
     fund shall be invested by the Secretary in United States 
     Treasury securities, or kept in cash on hand or on deposit, 
     as necessary.
       (3) Payments from fund.--The Secretary shall make payments 
     from amounts deposited in the Fund to fulfill obligations of 
     the guarantees provided to financial institutions under 
     subsection (a).

     SEC. 103. CONSIDERATIONS.

       In exercising the authorities granted in this Act, the 
     Secretary shall take into consideration--
       (1) protecting the interests of taxpayers by maximizing 
     overall returns and minimizing the impact on the national 
     debt;
       (2) providing stability and preventing disruption to 
     financial markets in order to limit the impact on the economy 
     and protect American jobs, savings, and retirement security;
       (3) the need to help families keep their homes and to 
     stabilize communities;
       (4) in determining whether to engage in a direct purchase 
     from an individual financial institution, the long-term 
     viability of the financial institution in determining whether 
     the purchase represents the most efficient use of funds under 
     this Act;
       (5) ensuring that all financial institutions are eligible 
     to participate in the program, without

[[Page 23903]]

     discrimination based on size, geography, form of 
     organization, or the size, type, and number of assets 
     eligible for purchase under this Act;
       (6) providing financial assistance to financial 
     institutions, including those serving low- and moderate-
     income populations and other underserved communities, and 
     that have assets less than $1,000,000,000, that were well or 
     adequately capitalized as of June 30, 2008, and that as a 
     result of the devaluation of the preferred government-
     sponsored enterprises stock will drop one or more capital 
     levels, in a manner sufficient to restore the financial 
     institutions to at least an adequately capitalized level;
       (7) the need to ensure stability for United States public 
     instrumentalities, such as counties and cities, that may have 
     suffered significant increased costs or losses in the current 
     market turmoil;
       (8) protecting the retirement security of Americans by 
     purchasing troubled assets held by or on behalf of an 
     eligible retirement plan described in clause (iii), (iv), 
     (v), or (vi) of section 402(c)(8)(B) of the Internal Revenue 
     Code of 1986, except that such authority shall not extend to 
     any compensation arrangements subject to section 409A of such 
     Code; and
       (9) the utility of purchasing other real estate owned and 
     instruments backed by mortgages on multifamily properties.

     SEC. 104. FINANCIAL STABILITY OVERSIGHT BOARD.

       (a) Establishment.--There is established the Financial 
     Stability Oversight Board, which shall be responsible for--
       (1) reviewing the exercise of authority under a program 
     developed in accordance with this Act, including--
       (A) policies implemented by the Secretary and the Office of 
     Financial Stability created under sections 101 and 102, 
     including the appointment of financial agents, the 
     designation of asset classes to be purchased, and plans for 
     the structure of vehicles used to purchase troubled assets; 
     and
       (B) the effect of such actions in assisting American 
     families in preserving home ownership, stabilizing financial 
     markets, and protecting taxpayers;
       (2) making recommendations, as appropriate, to the 
     Secretary regarding use of the authority under this Act; and
       (3) reporting any suspected fraud, misrepresentation, or 
     malfeasance to the Special Inspector General for the Troubled 
     Assets Relief Program or the Attorney General of the United 
     States, consistent with section 535(b) of title 28, United 
     States Code.
       (b) Membership.--The Financial Stability Oversight Board 
     shall be comprised of--
       (1) the Chairman of the Board of Governors of the Federal 
     Reserve System;
       (2) the Secretary;
       (3) the Director of the Federal Housing Finance Agency;
       (4) the Chairman of the Securities Exchange Commission; and
       (5) the Secretary of Housing and Urban Development.
       (c) Chairperson.--The chairperson of the Financial 
     Stability Oversight Board shall be elected by the members of 
     the Board from among the members other than the Secretary.
       (d) Meetings.--The Financial Stability Oversight Board 
     shall meet 2 weeks after the first exercise of the purchase 
     authority of the Secretary under this Act, and monthly 
     thereafter.
       (e) Additional Authorities.--In addition to the 
     responsibilities described in subsection (a), the Financial 
     Stability Oversight Board shall have the authority to ensure 
     that the policies implemented by the Secretary are--
       (1) in accordance with the purposes of this Act;
       (2) in the economic interests of the United States; and
       (3) consistent with protecting taxpayers, in accordance 
     with section 113(a).
       (f) Credit Review Committee.--The Financial Stability 
     Oversight Board may appoint a credit review committee for the 
     purpose of evaluating the exercise of the purchase authority 
     provided under this Act and the assets acquired through the 
     exercise of such authority, as the Financial Stability 
     Oversight Board determines appropriate.
       (g) Reports.--The Financial Stability Oversight Board shall 
     report to the appropriate committees of Congress and the 
     Congressional Oversight Panel established under section 125, 
     not less frequently than quarterly, on the matters described 
     under subsection (a)(1).
       (h) Termination.--The Financial Stability Oversight Board, 
     and its authority under this section, shall terminate on the 
     expiration of the 15-day period beginning upon the later of--
       (1) the date that the last troubled asset acquired by the 
     Secretary under section 101 has been sold or transferred out 
     of the ownership or control of the Federal Government; or
       (2) the date of expiration of the last insurance contract 
     issued under section 102.

     SEC. 105. REPORTS.

       (a) In General.--Before the expiration of the 60-day period 
     beginning on the date of the first exercise of the authority 
     granted in section 101(a), or of the first exercise of the 
     authority granted in section 102, whichever occurs first, and 
     every 30-day period thereafter, the Secretary shall report to 
     the appropriate committees of Congress, with respect to each 
     such period--
       (1) an overview of actions taken by the Secretary, 
     including the considerations required by section 103 and the 
     efforts under section 109;
       (2) the actual obligation and expenditure of the funds 
     provided for administrative expenses by section 118 during 
     such period and the expected expenditure of such funds in the 
     subsequent period; and
       (3) a detailed financial statement with respect to the 
     exercise of authority under this Act, including--
       (A) all agreements made or renewed;
       (B) all insurance contracts entered into pursuant to 
     section 102;
       (C) all transactions occurring during such period, 
     including the types of parties involved;
       (D) the nature of the assets purchased;
       (E) all projected costs and liabilities;
       (F) operating expenses, including compensation for 
     financial agents;
       (G) the valuation or pricing method used for each 
     transaction; and
       (H) a description of the vehicles established to exercise 
     such authority.
       (b) Tranche Reports to Congress.--
       (1) Reports.--The Secretary shall provide to the 
     appropriate committees of Congress, at the times specified in 
     paragraph (2), a written report, including--
       (A) a description of all of the transactions made during 
     the reporting period;
       (B) a description of the pricing mechanism for the 
     transactions;
       (C) a justification of the price paid for and other 
     financial terms associated with the transactions;
       (D) a description of the impact of the exercise of such 
     authority on the financial system, supported, to the extent 
     possible, by specific data;
       (E) a description of challenges that remain in the 
     financial system, including any benchmarks yet to be 
     achieved; and
       (F) an estimate of additional actions under the authority 
     provided under this Act that may be necessary to address such 
     challenges.
       (2) Timing.--The report required by this subsection shall 
     be submitted not later than 7 days after the date on which 
     commitments to purchase troubled assets under the authorities 
     provided in this Act first reach an aggregate of 
     $50,000,000,000 and not later than 7 days after each 
     $50,000,000,000 interval of such commitments is reached 
     thereafter.
       (c) Regulatory Modernization Report.--The Secretary shall 
     review the current state of the financial markets and the 
     regulatory system and submit a written report to the 
     appropriate committees of Congress not later than April 30, 
     2009, analyzing the current state of the regulatory system 
     and its effectiveness at overseeing the participants in the 
     financial markets, including the over-the-counter swaps 
     market and government-sponsored enterprises, and providing 
     recommendations for improvement, including--
       (1) recommendations regarding--
       (A) whether any participants in the financial markets that 
     are currently outside the regulatory system should become 
     subject to the regulatory system; and
       (B) enhancement of the clearing and settlement of over-the-
     counter swaps; and
       (2) the rationale underlying such recommendations.
       (d) Sharing of Information.--Any report required under this 
     section shall also be submitted to the Congressional 
     Oversight Panel established under section 125.
       (e) Sunset.--The reporting requirements under this section 
     shall terminate on the later of--
       (1) the date that the last troubled asset acquired by the 
     Secretary under section 101 has been sold or transferred out 
     of the ownership or control of the Federal Government; or
       (2) the date of expiration of the last insurance contract 
     issued under section 102.

     SEC. 106. RIGHTS; MANAGEMENT; SALE OF TROUBLED ASSETS; 
                   REVENUES AND SALE PROCEEDS.

       (a) Exercise of Rights.--The Secretary may, at any time, 
     exercise any rights received in connection with troubled 
     assets purchased under this Act.
       (b) Management of Troubled Assets.--The Secretary shall 
     have authority to manage troubled assets purchased under this 
     Act, including revenues and portfolio risks therefrom.
       (c) Sale of Troubled Assets.--The Secretary may, at any 
     time, upon terms and conditions and at a price determined by 
     the Secretary, sell, or enter into securities loans, 
     repurchase transactions, or other financial transactions in 
     regard to, any troubled asset purchased under this Act.
       (d) Transfer to Treasury.--Revenues of, and proceeds from 
     the sale of troubled assets purchased under this Act, or from 
     the sale, exercise, or surrender of warrants or senior debt 
     instruments acquired under section 113 shall be paid into the 
     general fund of the Treasury for reduction of the public 
     debt.
       (e) Application of Sunset to Troubled Assets.--The 
     authority of the Secretary to hold any troubled asset 
     purchased under this Act before the termination date in 
     section 120, or to purchase or fund the purchase of a 
     troubled asset under a commitment entered into before the 
     termination date in section 120, is not subject to the 
     provisions of section 120.

     SEC. 107. CONTRACTING PROCEDURES.

       (a) Streamlined Process.--For purposes of this Act, the 
     Secretary may waive specific provisions of the Federal 
     Acquisition Regulation upon a determination that urgent and 
     compelling circumstances make compliance with such provisions 
     contrary to the public interest. Any such determination, and 
     the justification for such determination, shall be submitted 
     to the Committees on Oversight and Government Reform and 
     Financial Services of the House of

[[Page 23904]]

     Representatives and the Committees on Homeland Security and 
     Governmental Affairs and Banking, Housing, and Urban Affairs 
     of the Senate within 7 days.
       (b) Additional Contracting Requirements.--In any 
     solicitation or contract where the Secretary has, pursuant to 
     subsection (a), waived any provision of the Federal 
     Acquisition Regulation pertaining to minority contracting, 
     the Secretary shall develop and implement standards and 
     procedures to ensure, to the maximum extent practicable, the 
     inclusion and utilization of minorities (as such term is 
     defined in section 1204(c) of the Financial Institutions 
     Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 
     note)) and women, and minority- and women-owned businesses 
     (as such terms are defined in section 21A(r)(4) of the 
     Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)), in that 
     solicitation or contract, including contracts to asset 
     managers, servicers, property managers, and other service 
     providers or expert consultants.
       (c) Eligibility of FDIC.--Notwithstanding subsections (a) 
     and (b), the Corporation--
       (1) shall be eligible for, and shall be considered in, the 
     selection of asset managers for residential mortgage loans 
     and residential mortgage-backed securities; and
       (2) shall be reimbursed by the Secretary for any services 
     provided.

     SEC. 108. CONFLICTS OF INTEREST.

       (a) Standards Required.--The Secretary shall issue 
     regulations or guidelines necessary to address and manage or 
     to prohibit conflicts of interest that may arise in 
     connection with the administration and execution of the 
     authorities provided under this Act, including--
       (1) conflicts arising in the selection or hiring of 
     contractors or advisors, including asset managers;
       (2) the purchase of troubled assets;
       (3) the management of the troubled assets held;
       (4) post-employment restrictions on employees; and
       (5) any other potential conflict of interest, as the 
     Secretary deems necessary or appropriate in the public 
     interest.
       (b) Timing.--Regulations or guidelines required by this 
     section shall be issued as soon as practicable after the date 
     of enactment of this Act.

     SEC. 109. FORECLOSURE MITIGATION EFFORTS.

       (a) Residential Mortgage Loan Servicing Standards.--To the 
     extent that the Secretary acquires mortgages, mortgage backed 
     securities, and other assets secured by residential real 
     estate, including multifamily housing, the Secretary shall 
     implement a plan that seeks to maximize assistance for 
     homeowners and use the authority of the Secretary to 
     encourage the servicers of the underlying mortgages, 
     considering net present value to the taxpayer, to take 
     advantage of the HOPE for Homeowners Program under section 
     257 of the National Housing Act or other available programs 
     to minimize foreclosures. In addition, the Secretary may use 
     loan guarantees and credit enhancements to facilitate loan 
     modifications to prevent avoidable foreclosures.
       (b) Coordination.--The Secretary shall coordinate with the 
     Corporation, the Board (with respect to any mortgage or 
     mortgage-backed securities or pool of securities held, owned, 
     or controlled by or on behalf of a Federal reserve bank, as 
     provided in section 110(a)(1)(C)), the Federal Housing 
     Finance Agency, the Secretary of Housing and Urban 
     Development, and other Federal Government entities that hold 
     troubled assets to attempt to identify opportunities for the 
     acquisition of classes of troubled assets that will improve 
     the ability of the Secretary to improve the loan modification 
     and restructuring process and, where permissible, to permit 
     bona fide tenants who are current on their rent to remain in 
     their homes under the terms of the lease. In the case of a 
     mortgage on a residential rental property, the plan required 
     under this section shall include protecting Federal, State, 
     and local rental subsidies and protections, and ensuring any 
     modification takes into account the need for operating funds 
     to maintain decent and safe conditions at the property.
       (c) Consent to Reasonable Loan Modification Requests.--Upon 
     any request arising under existing investment contracts, the 
     Secretary shall consent, where appropriate, and considering 
     net present value to the taxpayer, to reasonable requests for 
     loss mitigation measures, including term extensions, rate 
     reductions, principal write downs, increases in the 
     proportion of loans within a trust or other structure allowed 
     to be modified, or removal of other limitation on 
     modifications.

     SEC. 110. ASSISTANCE TO HOMEOWNERS.

       (a) Definitions.--As used in this section--
       (1) the term ``Federal property manager'' means--
       (A) the Federal Housing Finance Agency, in its capacity as 
     conservator of the Federal National Mortgage Association and 
     the Federal Home Loan Mortgage Corporation;
       (B) the Corporation, with respect to residential mortgage 
     loans and mortgage-backed securities held by any bridge 
     depository institution pursuant to section 11(n) of the 
     Federal Deposit Insurance Act; and
       (C) the Board, with respect to any mortgage or mortgage-
     backed securities or pool of securities held, owned, or 
     controlled by or on behalf of a Federal reserve bank, other 
     than mortgages or securities held, owned, or controlled in 
     connection with open market operations under section 14 of 
     the Federal Reserve Act (12 U.S.C. 353), or as collateral for 
     an advance or discount that is not in default;
       (2) the term ``consumer'' has the same meaning as in 
     section 103 of the Truth in Lending Act (15 U.S.C. 1602);
       (3) the term ``insured depository institution'' has the 
     same meaning as in section 3 of the Federal Deposit Insurance 
     Act (12 U.S.C. 1813); and
       (4) the term ``servicer'' has the same meaning as in 
     section 6(i)(2) of the Real Estate Settlement Procedures Act 
     of 1974 (12 U.S.C. 2605(i)(2)).
       (b) Homeowner Assistance by Agencies.--
       (1) In general.--To the extent that the Federal property 
     manager holds, owns, or controls mortgages, mortgage backed 
     securities, and other assets secured by residential real 
     estate, including multifamily housing, the Federal property 
     manager shall implement a plan that seeks to maximize 
     assistance for homeowners and use its authority to encourage 
     the servicers of the underlying mortgages, and considering 
     net present value to the taxpayer, to take advantage of the 
     HOPE for Homeowners Program under section 257 of the National 
     Housing Act or other available programs to minimize 
     foreclosures.
       (2) Modifications.--In the case of a residential mortgage 
     loan, modifications made under paragraph (1) may include--
       (A) reduction in interest rates;
       (B) reduction of loan principal; and
       (C) other similar modifications.
       (3) Tenant protections.--In the case of mortgages on 
     residential rental properties, modifications made under 
     paragraph (1) shall ensure--
       (A) the continuation of any existing Federal, State, and 
     local rental subsidies and protections; and
       (B) that modifications take into account the need for 
     operating funds to maintain decent and safe conditions at the 
     property.
       (4) Timing.--Each Federal property manager shall develop 
     and begin implementation of the plan required by this 
     subsection not later than 60 days after the date of enactment 
     of this Act.
       (5) Reports to congress.--Each Federal property manager 
     shall, 60 days after the date of enactment of this Act and 
     every 30 days thereafter, report to Congress specific 
     information on the number and types of loan modifications 
     made and the number of actual foreclosures occurring during 
     the reporting period in accordance with this section.
       (6) Consultation.--In developing the plan required by this 
     subsection, the Federal property managers shall consult with 
     one another and, to the extent possible, utilize consistent 
     approaches to implement the requirements of this subsection.
       (c) Actions With Respect to Servicers.--In any case in 
     which a Federal property manager is not the owner of a 
     residential mortgage loan, but holds an interest in 
     obligations or pools of obligations secured by residential 
     mortgage loans, the Federal property manager shall--
       (1) encourage implementation by the loan servicers of loan 
     modifications developed under subsection (b); and
       (2) assist in facilitating any such modifications, to the 
     extent possible.
       (d) Limitation.--The requirements of this section shall not 
     supersede any other duty or requirement imposed on the 
     Federal property managers under otherwise applicable law.

     SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE.

       (a) Applicability.--Any financial institution that sells 
     troubled assets to the Secretary under this Act shall be 
     subject to the executive compensation requirements of 
     subsections (b) and (c) and the provisions under the Internal 
     Revenue Code of 1986, as provided under the amendment by 
     section 302, as applicable.
       (b) Direct Purchases.--
       (1) In general.--Where the Secretary determines that the 
     purposes of this Act are best met through direct purchases of 
     troubled assets from an individual financial institution 
     where no bidding process or market prices are available, and 
     the Secretary receives a meaningful equity or debt position 
     in the financial institution as a result of the transaction, 
     the Secretary shall require that the financial institution 
     meet appropriate standards for executive compensation and 
     corporate governance. The standards required under this 
     subsection shall be effective for the duration of the period 
     that the Secretary holds an equity or debt position in the 
     financial institution.
       (2) Criteria.--The standards required under this subsection 
     shall include--
       (A) limits on compensation that exclude incentives for 
     senior executive officers of a financial institution to take 
     unnecessary and excessive risks that threaten the value of 
     the financial institution during the period that the 
     Secretary holds an equity or debt position in the financial 
     institution;
       (B) a provision for the recovery by the financial 
     institution of any bonus or incentive compensation paid to a 
     senior executive officer based on statements of earnings, 
     gains, or other criteria that are later proven to be 
     materially inaccurate; and
       (C) a prohibition on the financial institution making any 
     golden parachute payment to its senior executive officer 
     during the period that the Secretary holds an equity or debt 
     position in the financial institution.
       (3) Definition.--For purposes of this section, the term 
     ``senior executive officer'' means an individual who is one 
     of the top 5 highly paid executives of a public company, 
     whose compensation is required to be disclosed pursuant to 
     the Securities Exchange Act of 1934, and any regulations 
     issued thereunder, and non-public company counterparts.

[[Page 23905]]

       (c) Auction Purchases.--Where the Secretary determines that 
     the purposes of this Act are best met through auction 
     purchases of troubled assets, and only where such purchases 
     per financial institution in the aggregate exceed 
     $300,000,000 (including direct purchases), the Secretary 
     shall prohibit, for such financial institution, any new 
     employment contract with a senior executive officer that 
     provides a golden parachute in the event of an involuntary 
     termination, bankruptcy filing, insolvency, or receivership. 
     The Secretary shall issue guidance to carry out this 
     paragraph not later than 2 months after the date of enactment 
     of this Act, and such guidance shall be effective upon 
     issuance.
       (d) Sunset.--The provisions of subsection (c) shall apply 
     only to arrangements entered into during the period during 
     which the authorities under section 101(a) are in effect, as 
     determined under section 120.

     SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES AND CENTRAL 
                   BANKS.

       The Secretary shall coordinate, as appropriate, with 
     foreign financial authorities and central banks to work 
     toward the establishment of similar programs by such 
     authorities and central banks. To the extent that such 
     foreign financial authorities or banks hold troubled assets 
     as a result of extending financing to financial institutions 
     that have failed or defaulted on such financing, such 
     troubled assets qualify for purchase under section 101.

     SEC. 113. MINIMIZATION OF LONG-TERM COSTS AND MAXIMIZATION OF 
                   BENEFITS FOR TAXPAYERS.

       (a) Long-Term Costs and Benefits.--
       (1) Minimizing negative impact.--The Secretary shall use 
     the authority under this Act in a manner that will minimize 
     any potential long-term negative impact on the taxpayer, 
     taking into account the direct outlays, potential long-term 
     returns on assets purchased, and the overall economic 
     benefits of the program, including economic benefits due to 
     improvements in economic activity and the availability of 
     credit, the impact on the savings and pensions of 
     individuals, and reductions in losses to the Federal 
     Government.
       (2) Authority.--In carrying out paragraph (1), the 
     Secretary shall--
       (A) hold the assets to maturity or for resale for and until 
     such time as the Secretary determines that the market is 
     optimal for selling such assets, in order to maximize the 
     value for taxpayers; and
       (B) sell such assets at a price that the Secretary 
     determines, based on available financial analysis, will 
     maximize return on investment for the Federal Government.
       (3) Private sector participation.--The Secretary shall 
     encourage the private sector to participate in purchases of 
     troubled assets, and to invest in financial institutions, 
     consistent with the provisions of this section.
       (b) Use of Market Mechanisms.--In making purchases under 
     this Act, the Secretary shall--
       (1) make such purchases at the lowest price that the 
     Secretary determines to be consistent with the purposes of 
     this Act; and
       (2) maximize the efficiency of the use of taxpayer 
     resources by using market mechanisms, including auctions or 
     reverse auctions, where appropriate.
       (c) Direct Purchases.--If the Secretary determines that use 
     of a market mechanism under subsection (b) is not feasible or 
     appropriate, and the purposes of the Act are best met through 
     direct purchases from an individual financial institution, 
     the Secretary shall pursue additional measures to ensure that 
     prices paid for assets are reasonable and reflect the 
     underlying value of the asset.
       (d) Conditions on Purchase Authority for Warrants and Debt 
     Instruments.--
       (1) In general.--The Secretary may not purchase, or make 
     any commitment to purchase, any troubled asset under the 
     authority of this Act, unless the Secretary receives from the 
     financial institution from which such assets are to be 
     purchased--
       (A) in the case of a financial institution, the securities 
     of which are traded on a national securities exchange, a 
     warrant giving the right to the Secretary to receive 
     nonvoting common stock or preferred stock in such financial 
     institution, or voting stock with respect to which, the 
     Secretary agrees not to exercise voting power, as the 
     Secretary determines appropriate; or
       (B) in the case of any financial institution other than one 
     described in subparagraph (A), a warrant for common or 
     preferred stock, or a senior debt instrument from such 
     financial institution, as described in paragraph (2)(C).
       (2) Terms and conditions.--The terms and conditions of any 
     warrant or senior debt instrument required under paragraph 
     (1) shall meet the following requirements:
       (A) Purposes.--Such terms and conditions shall, at a 
     minimum, be designed--
       (i) to provide for reasonable participation by the 
     Secretary, for the benefit of taxpayers, in equity 
     appreciation in the case of a warrant or other equity 
     security, or a reasonable interest rate premium, in the case 
     of a debt instrument; and
       (ii) to provide additional protection for the taxpayer 
     against losses from sale of assets by the Secretary under 
     this Act and the administrative expenses of the TARP.
       (B) Authority to sell, exercise, or surrender.--The 
     Secretary may sell, exercise, or surrender a warrant or any 
     senior debt instrument received under this subsection, based 
     on the conditions established under subparagraph (A).
       (C) Conversion.--The warrant shall provide that if, after 
     the warrant is received by the Secretary under this 
     subsection, the financial institution that issued the warrant 
     is no longer listed or traded on a national securities 
     exchange or securities association, as described in paragraph 
     (1)(A), such warrants shall convert to senior debt, or 
     contain appropriate protections for the Secretary to ensure 
     that the Treasury is appropriately compensated for the value 
     of the warrant, in an amount determined by the Secretary.
       (D) Protections.--Any warrant representing securities to be 
     received by the Secretary under this subsection shall contain 
     anti-dilution provisions of the type employed in capital 
     market transactions, as determined by the Secretary. Such 
     provisions shall protect the value of the securities from 
     market transactions such as stock splits, stock 
     distributions, dividends, and other distributions, mergers, 
     and other forms of reorganization or recapitalization.
       (E) Exercise price.--The exercise price for any warrant 
     issued pursuant to this subsection shall be set by the 
     Secretary, in the interest of the taxpayers.
       (F) Sufficiency.--The financial institution shall guarantee 
     to the Secretary that it has authorized shares of nonvoting 
     stock available to fulfill its obligations under this 
     subsection. Should the financial institution not have 
     sufficient authorized shares, including preferred shares that 
     may carry dividend rights equal to a multiple number of 
     common shares, the Secretary may, to the extent necessary, 
     accept a senior debt note in an amount, and on such terms as 
     will compensate the Secretary with equivalent value, in the 
     event that a sufficient shareholder vote to authorize the 
     necessary additional shares cannot be obtained.
       (3) Exceptions.--
       (A) De minimis.--The Secretary shall establish de minimis 
     exceptions to the requirements of this subsection, based on 
     the size of the cumulative transactions of troubled assets 
     purchased from any one financial institution for the duration 
     of the program, at not more than $100,000,000.
       (B) Other exceptions.--The Secretary shall establish an 
     exception to the requirements of this subsection and 
     appropriate alternative requirements for any participating 
     financial institution that is legally prohibited from issuing 
     securities and debt instruments, so as not to allow 
     circumvention of the requirements of this section.

     SEC. 114. MARKET TRANSPARENCY.

       (a) Pricing.--To facilitate market transparency, the 
     Secretary shall make available to the public, in electronic 
     form, a description, amounts, and pricing of assets acquired 
     under this Act, within 2 business days of purchase, trade, or 
     other disposition.
       (b) Disclosure.--For each type of financial institutions 
     that sells troubled assets to the Secretary under this Act, 
     the Secretary shall determine whether the public disclosure 
     required for such financial institutions with respect to off-
     balance sheet transactions, derivatives instruments, 
     contingent liabilities, and similar sources of potential 
     exposure is adequate to provide to the public sufficient 
     information as to the true financial position of the 
     institutions. If such disclosure is not adequate for that 
     purpose, the Secretary shall make recommendations for 
     additional disclosure requirements to the relevant 
     regulators.

     SEC. 115. GRADUATED AUTHORIZATION TO PURCHASE.

       (a) Authority.--The authority of the Secretary to purchase 
     troubled assets under this Act shall be limited as follows:
       (1) Effective upon the date of enactment of this Act, such 
     authority shall be limited to $250,000,000,000 outstanding at 
     any one time.
       (2) If at any time, the President submits to the Congress a 
     written certification that the Secretary needs to exercise 
     the authority under this paragraph, effective upon such 
     submission, such authority shall be limited to 
     $350,000,000,000 outstanding at any one time.
       (3) If, at any time after the certification in paragraph 
     (2) has been made, the President transmits to the Congress a 
     written report detailing the plan of the Secretary to 
     exercise the authority under this paragraph, unless there is 
     enacted, within 15 calendar days of such transmission, a 
     joint resolution described in subsection (c), effective upon 
     the expiration of such 15-day period, such authority shall be 
     limited to $700,000,000,000 outstanding at any one time.
       (b) Aggregation of Purchase Prices.--The amount of troubled 
     assets purchased by the Secretary outstanding at any one time 
     shall be determined for purposes of the dollar amount 
     limitations under subsection (a) by aggregating the purchase 
     prices of all troubled assets held.
       (c) Joint Resolution of Disapproval.--
       (1) In general.--Notwithstanding any other provision of 
     this section, the Secretary may not exercise any authority to 
     make purchases under this Act with regard to any amount in 
     excess of $350,000,000,000 previously obligated, as described 
     in this section if, within 15 calendar days after the date on 
     which Congress receives a report of the plan of the Secretary 
     described in subsection (a)(3), there is enacted into law a 
     joint resolution disapproving the plan of the Secretary with 
     respect to such additional amount.
       (2) Contents of joint resolution.--For the purpose of this 
     section, the term ``joint resolution'' means only a joint 
     resolution--
       (A) that is introduced not later than 3 calendar days after 
     the date on which the report of the plan of the Secretary 
     referred to in subsection (a)(3) is received by Congress;
       (B) which does not have a preamble;

[[Page 23906]]

       (C) the title of which is as follows: ``Joint resolution 
     relating to the disapproval of obligations under the 
     Emergency Economic Stabilization Act of 2008''; and
       (D) the matter after the resolving clause of which is as 
     follows: ``That Congress disapproves the obligation of any 
     amount exceeding the amounts obligated as described in 
     paragraphs (1) and (2) of section 115(a) of the Emergency 
     Economic Stabilization Act of 2008.''.
       (d) Fast Track Consideration in House of Representatives.--
       (1) Reconvening.--Upon receipt of a report under subsection 
     (a)(3), the Speaker, if the House would otherwise be 
     adjourned, shall notify the Members of the House that, 
     pursuant to this section, the House shall convene not later 
     than the second calendar day after receipt of such report;
       (2) Reporting and discharge.--Any committee of the House of 
     Representatives to which a joint resolution is referred shall 
     report it to the House not later than 5 calendar days after 
     the date of receipt of the report described in subsection 
     (a)(3). If a committee fails to report the joint resolution 
     within that period, the committee shall be discharged from 
     further consideration of the joint resolution and the joint 
     resolution shall be referred to the appropriate calendar.
       (3) Proceeding to consideration.--After each committee 
     authorized to consider a joint resolution reports it to the 
     House or has been discharged from its consideration, it shall 
     be in order, not later than the sixth day after Congress 
     receives the report described in subsection (a)(3), to move 
     to proceed to consider the joint resolution in the House. All 
     points of order against the motion are waived. Such a motion 
     shall not be in order after the House has disposed of a 
     motion to proceed on the joint resolution. The previous 
     question shall be considered as ordered on the motion to its 
     adoption without intervening motion. The motion shall not be 
     debatable. A motion to reconsider the vote by which the 
     motion is disposed of shall not be in order.
       (4) Consideration.--The joint resolution shall be 
     considered as read. All points of order against the joint 
     resolution and against its consideration are waived. The 
     previous question shall be considered as ordered on the joint 
     resolution to its passage without intervening motion except 
     two hours of debate equally divided and controlled by the 
     proponent and an opponent. A motion to reconsider the vote on 
     passage of the joint resolution shall not be in order.
       (e) Fast Track Consideration in Senate.--
       (1) Reconvening.--Upon receipt of a report under subsection 
     (a)(3), if the Senate has adjourned or recessed for more than 
     2 days, the majority leader of the Senate, after consultation 
     with the minority leader of the Senate, shall notify the 
     Members of the Senate that, pursuant to this section, the 
     Senate shall convene not later than the second calendar day 
     after receipt of such message.
       (2) Placement on calendar.--Upon introduction in the 
     Senate, the joint resolution shall be placed immediately on 
     the calendar.
       (3) Floor consideration.--
       (A) In general.--Notwithstanding Rule XXII of the Standing 
     Rules of the Senate, it is in order at any time during the 
     period beginning on the 4th day after the date on which 
     Congress receives a report of the plan of the Secretary 
     described in subsection (a)(3) and ending on the 6th day 
     after the date on which Congress receives a report of the 
     plan of the Secretary described in subsection (a)(3) (even 
     though a previous motion to the same effect has been 
     disagreed to) to move to proceed to the consideration of the 
     joint resolution, and all points of order against the joint 
     resolution (and against consideration of the joint 
     resolution) are waived. The motion to proceed is not 
     debatable. The motion is not subject to a motion to postpone. 
     A motion to reconsider the vote by which the motion is agreed 
     to or disagreed to shall not be in order. If a motion to 
     proceed to the consideration of the resolution is agreed to, 
     the joint resolution shall remain the unfinished business 
     until disposed of.
       (B) Debate.--Debate on the joint resolution, and on all 
     debatable motions and appeals in connection therewith, shall 
     be limited to not more than 10 hours, which shall be divided 
     equally between the majority and minority leaders or their 
     designees. A motion further to limit debate is in order and 
     not debatable. An amendment to, or a motion to postpone, or a 
     motion to proceed to the consideration of other business, or 
     a motion to recommit the joint resolution is not in order.
       (C) Vote on passage.--The vote on passage shall occur 
     immediately following the conclusion of the debate on a joint 
     resolution, and a single quorum call at the conclusion of the 
     debate if requested in accordance with the rules of the 
     Senate.
       (D) Rulings of the chair on procedure.--Appeals from the 
     decisions of the Chair relating to the application of the 
     rules of the Senate, as the case may be, to the procedure 
     relating to a joint resolution shall be decided without 
     debate.
       (f) Rules Relating to Senate and House of 
     Representatives.--
       (1) Coordination with action by other house.--If, before 
     the passage by one House of a joint resolution of that House, 
     that House receives from the other House a joint resolution, 
     then the following procedures shall apply:
       (A) The joint resolution of the other House shall not be 
     referred to a committee.
       (B) With respect to a joint resolution of the House 
     receiving the resolution--
       (i) the procedure in that House shall be the same as if no 
     joint resolution had been received from the other House; but
       (ii) the vote on passage shall be on the joint resolution 
     of the other House.
       (2) Treatment of joint resolution of other house.--If one 
     House fails to introduce or consider a joint resolution under 
     this section, the joint resolution of the other House shall 
     be entitled to expedited floor procedures under this section.
       (3) Treatment of companion measures.--If, following passage 
     of the joint resolution in the Senate, the Senate then 
     receives the companion measure from the House of 
     Representatives, the companion measure shall not be 
     debatable.
       (4) Consideration after passage.--
       (A) In general.--If Congress passes a joint resolution, the 
     period beginning on the date the President is presented with 
     the joint resolution and ending on the date the President 
     takes action with respect to the joint resolution shall be 
     disregarded in computing the 15-calendar day period described 
     in subsection (a)(3).
       (B) Vetoes.--If the President vetoes the joint resolution--
       (i) the period beginning on the date the President vetoes 
     the joint resolution and ending on the date the Congress 
     receives the veto message with respect to the joint 
     resolution shall be disregarded in computing the 15-calendar 
     day period described in subsection (a)(3), and
       (ii) debate on a veto message in the Senate under this 
     section shall be 1 hour equally divided between the majority 
     and minority leaders or their designees.
       (5) Rules of house of representatives and senate.--This 
     subsection and subsections (c), (d), and (e) are enacted by 
     Congress--
       (A) as an exercise of the rulemaking power of the Senate 
     and House of Representatives, respectively, and as such it is 
     deemed a part of the rules of each House, respectively, but 
     applicable only with respect to the procedure to be followed 
     in that House in the case of a joint resolution, and it 
     supersedes other rules only to the extent that it is 
     inconsistent with such rules; and
       (B) with full recognition of the constitutional right of 
     either House to change the rules (so far as relating to the 
     procedure of that House) at any time, in the same manner, and 
     to the same extent as in the case of any other rule of that 
     House.

     SEC. 116. OVERSIGHT AND AUDITS.

       (a) Comptroller General Oversight.--
       (1) Scope of oversight.--The Comptroller General of the 
     United States shall, upon establishment of the troubled 
     assets relief program under this Act (in this section 
     referred to as the ``TARP''), commence ongoing oversight of 
     the activities and performance of the TARP and of any agents 
     and representatives of the TARP (as related to the agent or 
     representative's activities on behalf of or under the 
     authority of the TARP), including vehicles established by the 
     Secretary under this Act. The subjects of such oversight 
     shall include the following:
       (A) The performance of the TARP in meeting the purposes of 
     this Act, particularly those involving--
       (i) foreclosure mitigation;
       (ii) cost reduction;
       (iii) whether it has provided stability or prevented 
     disruption to the financial markets or the banking system; 
     and
       (iv) whether it has protected taxpayers.
       (B) The financial condition and internal controls of the 
     TARP, its representatives and agents.
       (C) Characteristics of transactions and commitments entered 
     into, including transaction type, frequency, size, prices 
     paid, and all other relevant terms and conditions, and the 
     timing, duration and terms of any future commitments to 
     purchase assets.
       (D) Characteristics and disposition of acquired assets, 
     including type, acquisition price, current market value, sale 
     prices and terms, and use of proceeds from sales.
       (E) Efficiency of the operations of the TARP in the use of 
     appropriated funds.
       (F) Compliance with all applicable laws and regulations by 
     the TARP, its agents and representatives.
       (G) The efforts of the TARP to prevent, identify, and 
     minimize conflicts of interest involving any agent or 
     representative performing activities on behalf of or under 
     the authority of the TARP.
       (H) The efficacy of contracting procedures pursuant to 
     section 107(b), including, as applicable, the efforts of the 
     TARP in evaluating proposals for inclusion and contracting to 
     the maximum extent possible of minorities (as such term is 
     defined in 1204(c) of the Financial Institutions Reform, 
     Recovery, and Enhancement Act of 1989 (12 U.S.C. 1811 note), 
     women, and minority- and women-owned businesses, including 
     ascertaining and reporting the total amount of fees paid and 
     other value delivered by the TARP to all of its agents and 
     representatives, and such amounts paid or delivered to such 
     firms that are minority- and women-owned businesses (as such 
     terms are defined in section 21A of the Federal Home Loan 
     Bank Act (12 U.S.C. 1441a)).
       (2) Conduct and administration of oversight.--
       (A) GAO presence.--The Secretary shall provide the 
     Comptroller General with appropriate space and facilities in 
     the Department of the Treasury as necessary to facilitate 
     oversight of the TARP until the termination date established 
     in section 120.

[[Page 23907]]

       (B) Access to records.--To the extent otherwise consistent 
     with law, the Comptroller General shall have access, upon 
     request, to any information, data, schedules, books, 
     accounts, financial records, reports, files, electronic 
     communications, or other papers, things, or property 
     belonging to or in use by the TARP, or any vehicles 
     established by the Secretary under this Act, and to the 
     officers, directors, employees, independent public 
     accountants, financial advisors, and other agents and 
     representatives of the TARP (as related to the agent or 
     representative's activities on behalf of or under the 
     authority of the TARP) or any such vehicle at such reasonable 
     time as the Comptroller General may request. The Comptroller 
     General shall be afforded full facilities for verifying 
     transactions with the balances or securities held by 
     depositaries, fiscal agents, and custodians. The Comptroller 
     General may make and retain copies of such books, accounts, 
     and other records as the Comptroller General deems 
     appropriate.
       (C) Reimbursement of costs.--The Treasury shall reimburse 
     the Government Accountability Office for the full cost of any 
     such oversight activities as billed therefor by the 
     Comptroller General of the United States. Such reimbursements 
     shall be credited to the appropriation account ``Salaries and 
     Expenses, Government Accountability Office'' current when the 
     payment is received and remain available until expended.
       (3) Reporting.--The Comptroller General shall submit 
     reports of findings under this section, regularly and no less 
     frequently than once every 60 days, to the appropriate 
     committees of Congress, and the Special Inspector General for 
     the Troubled Asset Relief Program established under this Act 
     on the activities and performance of the TARP. The 
     Comptroller may also submit special reports under this 
     subsection as warranted by the findings of its oversight 
     activities.
       (b) Comptroller General Audits.--
       (1) Annual audit.--The TARP shall annually prepare and 
     issue to the appropriate committees of Congress and the 
     public audited financial statements prepared in accordance 
     with generally accepted accounting principles, and the 
     Comptroller General shall annually audit such statements in 
     accordance with generally accepted auditing standards. The 
     Treasury shall reimburse the Government Accountability Office 
     for the full cost of any such audit as billed therefor by the 
     Comptroller General. Such reimbursements shall be credited to 
     the appropriation account ``Salaries and Expenses, Government 
     Accountability Office'' current when the payment is received 
     and remain available until expended. The financial statements 
     prepared under this paragraph shall be on the fiscal year 
     basis prescribed under section 1102 of title 31, United 
     States Code.
       (2) Authority.--The Comptroller General may audit the 
     programs, activities, receipts, expenditures, and financial 
     transactions of the TARP and any agents and representatives 
     of the TARP (as related to the agent or representative's 
     activities on behalf of or under the authority of the TARP), 
     including vehicles established by the Secretary under this 
     Act.
       (3) Corrective responses to audit problems.--The TARP 
     shall--
       (A) take action to address deficiencies identified by the 
     Comptroller General or other auditor engaged by the TARP; or
       (B) certify to appropriate committees of Congress that no 
     action is necessary or appropriate.
       (c) Internal Control.--
       (1) Establishment.--The TARP shall establish and maintain 
     an effective system of internal control, consistent with the 
     standards prescribed under section 3512(c) of title 31, 
     United States Code, that provides reasonable assurance of--
       (A) the effectiveness and efficiency of operations, 
     including the use of the resources of the TARP;
       (B) the reliability of financial reporting, including 
     financial statements and other reports for internal and 
     external use; and
       (C) compliance with applicable laws and regulations.
       (2) Reporting.--In conjunction with each annual financial 
     statement issued under this section, the TARP shall--
       (A) state the responsibility of management for establishing 
     and maintaining adequate internal control over financial 
     reporting; and
       (B) state its assessment, as of the end of the most recent 
     year covered by such financial statement of the TARP, of the 
     effectiveness of the internal control over financial 
     reporting.
       (d) Sharing of Information.--Any report or audit required 
     under this section shall also be submitted to the 
     Congressional Oversight Panel established under section 125.
       (e) Termination.--Any oversight, reporting, or audit 
     requirement under this section shall terminate on the later 
     of--
       (1) the date that the last troubled asset acquired by the 
     Secretary under section 101 has been sold or transferred out 
     of the ownership or control of the Federal Government; or
       (2) the date of expiration of the last insurance contract 
     issued under section 102.

     SEC. 117. STUDY AND REPORT ON MARGIN AUTHORITY.

       (a) Study.--The Comptroller General shall undertake a study 
     to determine the extent to which leverage and sudden 
     deleveraging of financial institutions was a factor behind 
     the current financial crisis.
       (b) Content.--The study required by this section shall 
     include--
       (1) an analysis of the roles and responsibilities of the 
     Board, the Securities and Exchange Commission, the Secretary, 
     and other Federal banking agencies with respect to monitoring 
     leverage and acting to curtail excessive leveraging;
       (2) an analysis of the authority of the Board to regulate 
     leverage, including by setting margin requirements, and what 
     process the Board used to decide whether or not to use its 
     authority;
       (3) an analysis of any usage of the margin authority by the 
     Board; and
       (4) recommendations for the Board and appropriate 
     committees of Congress with respect to the existing authority 
     of the Board.
       (c) Report.--Not later than June 1, 2009, the Comptroller 
     General shall complete and submit a report on the study 
     required by this section to the Committee on Banking, 
     Housing, and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives.
       (d) Sharing of Information.--Any reports required under 
     this section shall also be submitted to the Congressional 
     Oversight Panel established under section 125.

     SEC. 118. FUNDING.

       For the purpose of the authorities granted in this Act, and 
     for the costs of administering those authorities, the 
     Secretary may use the proceeds of the sale of any securities 
     issued under chapter 31 of title 31, United States Code, and 
     the purposes for which securities may be issued under chapter 
     31 of title 31, United States Code, are extended to include 
     actions authorized by this Act, including the payment of 
     administrative expenses. Any funds expended or obligated by 
     the Secretary for actions authorized by this Act, including 
     the payment of administrative expenses, shall be deemed 
     appropriated at the time of such expenditure or obligation.

     SEC. 119. JUDICIAL REVIEW AND RELATED MATTERS.

       (a) Judicial Review.--
       (1) Standard.--Actions by the Secretary pursuant to the 
     authority of this Act shall be subject to chapter 7 of title 
     5, United States Code, including that such final actions 
     shall be held unlawful and set aside if found to be 
     arbitrary, capricious, an abuse of discretion, or not in 
     accordance with law.
       (2) Limitations on equitable relief.--
       (A) Injunction.--No injunction or other form of equitable 
     relief shall be issued against the Secretary for actions 
     pursuant to section 101, 102, 106, and 109, other than to 
     remedy a violation of the Constitution.
       (B) Temporary restraining order.--Any request for a 
     temporary restraining order against the Secretary for actions 
     pursuant to this Act shall be considered and granted or 
     denied by the court within 3 days of the date of the request.
       (C) Preliminary injunction.--Any request for a preliminary 
     injunction against the Secretary for actions pursuant to this 
     Act shall be considered and granted or denied by the court on 
     an expedited basis consistent with the provisions of rule 
     65(b)(3) of the Federal Rules of Civil Procedure, or any 
     successor thereto.
       (D) Permanent injunction.--Any request for a permanent 
     injunction against the Secretary for actions pursuant to this 
     Act shall be considered and granted or denied by the court on 
     an expedited basis. Whenever possible, the court shall 
     consolidate trial on the merits with any hearing on a request 
     for a preliminary injunction, consistent with the provisions 
     of rule 65(a)(2) of the Federal Rules of Civil Procedure, or 
     any successor thereto.
       (3) Limitation on actions by participating companies.--No 
     action or claims may be brought against the Secretary by any 
     person that divests its assets with respect to its 
     participation in a program under this Act, except as provided 
     in paragraph (1), other than as expressly provided in a 
     written contract with the Secretary.
       (4) Stays.--Any injunction or other form of equitable 
     relief issued against the Secretary for actions pursuant to 
     section 101, 102, 106, and 109, shall be automatically 
     stayed. The stay shall be lifted unless the Secretary seeks a 
     stay from a higher court within 3 calendar days after the 
     date on which the relief is issued.
       (b) Related Matters.--
       (1) Treatment of homeowners' rights.--The terms of any 
     residential mortgage loan that is part of any purchase by the 
     Secretary under this Act shall remain subject to all claims 
     and defenses that would otherwise apply, notwithstanding the 
     exercise of authority by the Secretary under this Act.
       (2) Savings clause.--Any exercise of the authority of the 
     Secretary pursuant to this Act shall not impair the claims or 
     defenses that would otherwise apply with respect to persons 
     other than the Secretary. Except as established in any 
     contract, a servicer of pooled residential mortgages owes any 
     duty to determine whether the net present value of the 
     payments on the loan, as modified, is likely to be greater 
     than the anticipated net recovery that would result from 
     foreclosure to all investors and holders of beneficial 
     interests in such investment, but not to any individual or 
     groups of investors or beneficial interest holders, and shall 
     be deemed to act in the best interests of all such investors 
     or holders of beneficial interests if the servicer agrees to 
     or implements a modification or workout plan when the 
     servicer takes reasonable loss mitigation actions, including 
     partial payments.

     SEC. 120. TERMINATION OF AUTHORITY.

       (a) Termination.--The authorities provided under sections 
     101(a), excluding section 101(a)(3), and 102 shall terminate 
     on December 31, 2009.
       (b) Extension Upon Certification.--The Secretary, upon 
     submission of a written certification to Congress, may extend 
     the authority provided under this Act to expire not later 
     than 2 years from the date of enactment of this Act. Such 
     certification shall include a justification of

[[Page 23908]]

     why the extension is necessary to assist American families 
     and stabilize financial markets, as well as the expected cost 
     to the taxpayers for such an extension.

     SEC. 121. SPECIAL INSPECTOR GENERAL FOR THE TROUBLED ASSET 
                   RELIEF PROGRAM.

       (a) Office of Inspector General.--There is hereby 
     established the Office of the Special Inspector General for 
     the Troubled Asset Relief Program.
       (b) Appointment of Inspector General; Removal.--(1) The 
     head of the Office of the Special Inspector General for the 
     Troubled Asset Relief Program is the Special Inspector 
     General for the Troubled Asset Relief Program (in this 
     section referred to as the ``Special Inspector General''), 
     who shall be appointed by the President, by and with the 
     advice and consent of the Senate.
       (2) The appointment of the Special Inspector General shall 
     be made on the basis of integrity and demonstrated ability in 
     accounting, auditing, financial analysis, law, management 
     analysis, public administration, or investigations.
       (3) The nomination of an individual as Special Inspector 
     General shall be made as soon as practicable after the 
     establishment of any program under sections 101 and 102.
       (4) The Special Inspector General shall be removable from 
     office in accordance with the provisions of section 3(b) of 
     the Inspector General Act of 1978 (5 U.S.C. App.).
       (5) For purposes of section 7324 of title 5, United States 
     Code, the Special Inspector General shall not be considered 
     an employee who determines policies to be pursued by the 
     United States in the nationwide administration of Federal 
     law.
       (6) The annual rate of basic pay of the Special Inspector 
     General shall be the annual rate of basic pay for an 
     Inspector General under section 3(e) of the Inspector General 
     Act of 1978 (5 U.S.C. App.).
       (c) Duties.--(1) It shall be the duty of the Special 
     Inspector General to conduct, supervise, and coordinate 
     audits and investigations of the purchase, management, and 
     sale of assets by the Secretary of the Treasury under any 
     program established by the Secretary under section 101, and 
     the management by the Secretary of any program established 
     under section 102, including by collecting and summarizing 
     the following information:
       (A) A description of the categories of troubled assets 
     purchased or otherwise procured by the Secretary.
       (B) A listing of the troubled assets purchased in each such 
     category described under subparagraph (A).
       (C) An explanation of the reasons the Secretary deemed it 
     necessary to purchase each such troubled asset.
       (D) A listing of each financial institution that such 
     troubled assets were purchased from.
       (E) A listing of and detailed biographical information on 
     each person or entity hired to manage such troubled assets.
       (F) A current estimate of the total amount of troubled 
     assets purchased pursuant to any program established under 
     section 101, the amount of troubled assets on the books of 
     the Treasury, the amount of troubled assets sold, and the 
     profit and loss incurred on each sale or disposition of each 
     such troubled asset.
       (G) A listing of the insurance contracts issued under 
     section 102.
       (2) The Special Inspector General shall establish, 
     maintain, and oversee such systems, procedures, and controls 
     as the Special Inspector General considers appropriate to 
     discharge the duty under paragraph (1).
       (3) In addition to the duties specified in paragraphs (1) 
     and (2), the Inspector General shall also have the duties and 
     responsibilities of inspectors general under the Inspector 
     General Act of 1978.
       (d) Powers and Authorities.--(1) In carrying out the duties 
     specified in subsection (c), the Special Inspector General 
     shall have the authorities provided in section 6 of the 
     Inspector General Act of 1978.
       (2) The Special Inspector General shall carry out the 
     duties specified in subsection (c)(1) in accordance with 
     section 4(b)(1) of the Inspector General Act of 1978.
       (e) Personnel, Facilities, and Other Resources.--(1) The 
     Special Inspector General may select, appoint, and employ 
     such officers and employees as may be necessary for carrying 
     out the duties of the Special Inspector General, subject to 
     the provisions of title 5, United States Code, governing 
     appointments in the competitive service, and the provisions 
     of chapter 51 and subchapter III of chapter 53 of such title, 
     relating to classification and General Schedule pay rates.
       (2) The Special Inspector General may obtain services as 
     authorized by section 3109 of title 5, United States Code, at 
     daily rates not to exceed the equivalent rate prescribed for 
     grade GS-15 of the General Schedule by section 5332 of such 
     title.
       (3) The Special Inspector General may enter into contracts 
     and other arrangements for audits, studies, analyses, and 
     other services with public agencies and with private persons, 
     and make such payments as may be necessary to carry out the 
     duties of the Inspector General.
       (4)(A) Upon request of the Special Inspector General for 
     information or assistance from any department, agency, or 
     other entity of the Federal Government, the head of such 
     entity shall, insofar as is practicable and not in 
     contravention of any existing law, furnish such information 
     or assistance to the Special Inspector General, or an 
     authorized designee.
       (B) Whenever information or assistance requested by the 
     Special Inspector General is, in the judgment of the Special 
     Inspector General, unreasonably refused or not provided, the 
     Special Inspector General shall report the circumstances to 
     the appropriate committees of Congress without delay.
       (f) Reports.--(1) Not later than 60 days after the 
     confirmation of the Special Inspector General, and every 
     calendar quarter thereafter, the Special Inspector General 
     shall submit to the appropriate committees of Congress a 
     report summarizing the activities of the Special Inspector 
     General during the 120-day period ending on the date of such 
     report. Each report shall include, for the period covered by 
     such report, a detailed statement of all purchases, 
     obligations, expenditures, and revenues associated with any 
     program established by the Secretary of the Treasury under 
     sections 101 and 102, as well as the information collected 
     under subsection (c)(1).
       (2) Nothing in this subsection shall be construed to 
     authorize the public disclosure of information that is--
       (A) specifically prohibited from disclosure by any other 
     provision of law;
       (B) specifically required by Executive order to be 
     protected from disclosure in the interest of national defense 
     or national security or in the conduct of foreign affairs; or
       (C) a part of an ongoing criminal investigation.
       (3) Any reports required under this section shall also be 
     submitted to the Congressional Oversight Panel established 
     under section 125.
       (g) Funding.--(1) Of the amounts made available to the 
     Secretary of the Treasury under section 118, $50,000,000 
     shall be available to the Special Inspector General to carry 
     out this section.
       (2) The amount available under paragraph (1) shall remain 
     available until expended.
       (h) Termination.--The Office of the Special Inspector 
     General shall terminate on the later of--
       (1) the date that the last troubled asset acquired by the 
     Secretary under section 101 has been sold or transferred out 
     of the ownership or control of the Federal Government; or
       (2) the date of expiration of the last insurance contract 
     issued under section 102.

     SEC. 122. INCREASE IN STATUTORY LIMIT ON THE PUBLIC DEBT.

       Subsection (b) of section 3101 of title 31, United States 
     Code, is amended by striking out the dollar limitation 
     contained in such subsection and inserting 
     ``$11,315,000,000,000''.

     SEC. 123. CREDIT REFORM.

       (a) In General.--Subject to subsection (b), the costs of 
     purchases of troubled assets made under section 101(a) and 
     guarantees of troubled assets under section 102, and any cash 
     flows associated with the activities authorized in section 
     102 and subsections (a), (b), and (c) of section 106 shall be 
     determined as provided under the Federal Credit Reform Act of 
     1990 (2 U.S.C. 661 et. seq.).
       (b) Costs.--For the purposes of section 502(5) of the 
     Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5))--
       (1) the cost of troubled assets and guarantees of troubled 
     assets shall be calculated by adjusting the discount rate in 
     section 502(5)(E) (2 U.S.C. 661a(5)(E)) for market risks; and
       (2) the cost of a modification of a troubled asset or 
     guarantee of a troubled asset shall be the difference between 
     the current estimate consistent with paragraph (1) under the 
     terms of the troubled asset or guarantee of the troubled 
     asset and the current estimate consistent with paragraph (1) 
     under the terms of the troubled asset or guarantee of the 
     troubled asset, as modified.

     SEC. 124. HOPE FOR HOMEOWNERS AMENDMENTS.

       Section 257 of the National Housing Act (12 U.S.C. 1715z-
     23) is amended--
       (1) in subsection (e)--
       (A) in paragraph (1)(B), by inserting before ``a ratio'' 
     the following: ``, or thereafter is likely to have, due to 
     the terms of the mortgage being reset,'';
       (B) in paragraph (2)(B), by inserting before the period at 
     the end ``(or such higher percentage as the Board determines, 
     in the discretion of the Board)'';
       (C) in paragraph (4)(A)--
       (i) in the first sentence, by inserting after ``insured 
     loan'' the following: ``and any payments made under this 
     paragraph,''; and
       (ii) by adding at the end the following: ``Such actions may 
     include making payments, which shall be accepted as payment 
     in full of all indebtedness under the eligible mortgage, to 
     any holder of an existing subordinate mortgage, in lieu of 
     any future appreciation payments authorized under 
     subparagraph (B).''; and
       (2) in subsection (w), by inserting after ``administrative 
     costs'' the following: ``and payments pursuant to subsection 
     (e)(4)(A)''.

     SEC. 125. CONGRESSIONAL OVERSIGHT PANEL.

       (a) Establishment.--There is hereby established the 
     Congressional Oversight Panel (hereafter in this section 
     referred to as the ``Oversight Panel'') as an establishment 
     in the legislative branch.
       (b) Duties.--The Oversight Panel shall review the current 
     state of the financial markets and the regulatory system and 
     submit the following reports to Congress:
       (1) Regular reports.--
       (A) In general.--Regular reports of the Oversight Panel 
     shall include the following:
       (i) The use by the Secretary of authority under this Act, 
     including with respect to the use of contracting authority 
     and administration of the program.

[[Page 23909]]

       (ii) The impact of purchases made under the Act on the 
     financial markets and financial institutions.
       (iii) The extent to which the information made available on 
     transactions under the program has contributed to market 
     transparency.
       (iv) The effectiveness of foreclosure mitigation efforts, 
     and the effectiveness of the program from the standpoint of 
     minimizing long-term costs to the taxpayers and maximizing 
     the benefits for taxpayers.
       (B) Timing.--The reports required under this paragraph 
     shall be submitted not later than 30 days after the first 
     exercise by the Secretary of the authority under section 
     101(a) or 102, and every 30 days thereafter.
       (2) Special report on regulatory reform.--The Oversight 
     Panel shall submit a special report on regulatory reform not 
     later than January 20, 2009, analyzing the current state of 
     the regulatory system and its effectiveness at overseeing the 
     participants in the financial system and protecting 
     consumers, and providing recommendations for improvement, 
     including recommendations regarding whether any participants 
     in the financial markets that are currently outside the 
     regulatory system should become subject to the regulatory 
     system, the rationale underlying such recommendation, and 
     whether there are any gaps in existing consumer protections.
       (c) Membership.--
       (1) In general.--The Oversight Panel shall consist of 5 
     members, as follows:
       (A) 1 member appointed by the Speaker of the House of 
     Representatives.
       (B) 1 member appointed by the minority leader of the House 
     of Representatives.
       (C) 1 member appointed by the majority leader of the 
     Senate.
       (D) 1 member appointed by the minority leader of the 
     Senate.
       (E) 1 member appointed by the Speaker of the House of 
     Representatives and the majority leader of the Senate, after 
     consultation with the minority leader of the Senate and the 
     minority leader of the House of Representatives.
       (2) Pay.--Each member of the Oversight Panel shall each be 
     paid at a rate equal to the daily equivalent of the annual 
     rate of basic pay for level I of the Executive Schedule for 
     each day (including travel time) during which such member is 
     engaged in the actual performance of duties vested in the 
     Commission.
       (3) Prohibition of compensation of federal employees.--
     Members of the Oversight Panel who are full-time officers or 
     employees of the United States or Members of Congress may not 
     receive additional pay, allowances, or benefits by reason of 
     their service on the Oversight Panel.
       (4) Travel expenses.--Each member shall receive travel 
     expenses, including per diem in lieu of subsistence, in 
     accordance with applicable provisions under subchapter I of 
     chapter 57 of title 5, United States Code.
       (5) Quorum.--Four members of the Oversight Panel shall 
     constitute a quorum but a lesser number may hold hearings.
       (6) Vacancies.--A vacancy on the Oversight Panel shall be 
     filled in the manner in which the original appointment was 
     made.
       (7) Meetings.--The Oversight Panel shall meet at the call 
     of the Chairperson or a majority of its members.
       (d) Staff.--
       (1) In general.--The Oversight Panel may appoint and fix 
     the pay of any personnel as the Commission considers 
     appropriate.
       (2) Experts and consultants.--The Oversight Panel may 
     procure temporary and intermittent services under section 
     3109(b) of title 5, United States Code.
       (3) Staff of agencies.--Upon request of the Oversight 
     Panel, the head of any Federal department or agency may 
     detail, on a reimbursable basis, any of the personnel of that 
     department or agency to the Oversight Panel to assist it in 
     carrying out its duties under this Act.
       (e) Powers.--
       (1) Hearings and sessions.--The Oversight Panel may, for 
     the purpose of carrying out this section, hold hearings, sit 
     and act at times and places, take testimony, and receive 
     evidence as the Panel considers appropriate and may 
     administer oaths or affirmations to witnesses appearing 
     before it.
       (2) Powers of members and agents.--Any member or agent of 
     the Oversight Panel may, if authorized by the Oversight 
     Panel, take any action which the Oversight Panel is 
     authorized to take by this section.
       (3) Obtaining official data.--The Oversight Panel may 
     secure directly from any department or agency of the United 
     States information necessary to enable it to carry out this 
     section. Upon request of the Chairperson of the Oversight 
     Panel, the head of that department or agency shall furnish 
     that information to the Oversight Panel.
       (4) Reports.--The Oversight Panel shall receive and 
     consider all reports required to be submitted to the 
     Oversight Panel under this Act.
       (f) Termination.--The Oversight Panel shall terminate 6 
     months after the termination date specified in section 120.
       (g) Funding for Expenses.--
       (1) Authorization of appropriations.--There is authorized 
     to be appropriated to the Oversight Panel such sums as may be 
     necessary for any fiscal year, half of which shall be derived 
     from the applicable account of the House of Representatives, 
     and half of which shall be derived from the contingent fund 
     of the Senate.
       (2) Reimbursement of amounts.--An amount equal to the 
     expenses of the Oversight Panel shall be promptly transferred 
     by the Secretary, from time to time upon the presentment of a 
     statement of such expenses by the Chairperson of the 
     Oversight Panel, from funds made available to the Secretary 
     under this Act to the applicable fund of the House of 
     Representatives and the contingent fund of the Senate, as 
     appropriate, as reimbursement for amounts expended from such 
     account and fund under paragraph (1).

     SEC. 126. FDIC AUTHORITY.

       (a) In General.--Section 18(a) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1828(a)) is amended by adding at the 
     end the following new paragraph:
       ``(4) False advertising, misuse of fdic names, and 
     misrepresentation to indicate insured status.--
       ``(A) Prohibition on false advertising and misuse of fdic 
     names.--No person may represent or imply that any deposit 
     liability, obligation, certificate, or share is insured or 
     guaranteed by the Corporation, if such deposit liability, 
     obligation, certificate, or share is not insured or 
     guaranteed by the Corporation--
       ``(i) by using the terms `Federal Deposit', `Federal 
     Deposit Insurance', `Federal Deposit Insurance Corporation', 
     any combination of such terms, or the abbreviation `FDIC' as 
     part of the business name or firm name of any person, 
     including any corporation, partnership, business trust, 
     association, or other business entity; or
       ``(ii) by using such terms or any other terms, sign, or 
     symbol as part of an advertisement, solicitation, or other 
     document.
       ``(B) Prohibition on misrepresentations of insured 
     status.--No person may knowingly misrepresent--
       ``(i) that any deposit liability, obligation, certificate, 
     or share is insured, under this Act, if such deposit 
     liability, obligation, certificate, or share is not so 
     insured; or
       ``(ii) the extent to which or the manner in which any 
     deposit liability, obligation, certificate, or share is 
     insured under this Act, if such deposit liability, 
     obligation, certificate, or share is not so insured, to the 
     extent or in the manner represented.
       ``(C) Authority of the appropriate federal banking 
     agency.--The appropriate Federal banking agency shall have 
     enforcement authority in the case of a violation of this 
     paragraph by any person for which the agency is the 
     appropriate Federal banking agency, or any institution-
     affiliated party thereof.
       ``(D) Corporation authority if the appropriate federal 
     banking agency fails to follow recommendation.--
       ``(i) Recommendation.--The Corporation may recommend in 
     writing to the appropriate Federal banking agency that the 
     agency take any enforcement action authorized under section 8 
     for purposes of enforcement of this paragraph with respect to 
     any person for which the agency is the appropriate Federal 
     banking agency or any institution-affiliated party thereof.
       ``(ii) Agency response.--If the appropriate Federal banking 
     agency does not, within 30 days of the date of receipt of a 
     recommendation under clause (i), take the enforcement action 
     with respect to this paragraph recommended by the Corporation 
     or provide a plan acceptable to the Corporation for 
     responding to the situation presented, the Corporation may 
     take the recommended enforcement action against such person 
     or institution-affiliated party.
       ``(E) Additional authority.--In addition to its authority 
     under subparagraphs (C) and (D), for purposes of this 
     paragraph, the Corporation shall have, in the same manner and 
     to the same extent as with respect to a State nonmember 
     insured bank--
       ``(i) jurisdiction over--

       ``(I) any person other than a person for which another 
     agency is the appropriate Federal banking agency or any 
     institution-affiliated party thereof; and
       ``(II) any person that aids or abets a violation of this 
     paragraph by a person described in subclause (I); and

       ``(ii) for purposes of enforcing the requirements of this 
     paragraph, the authority of the Corporation under--

       ``(I) section 10(c) to conduct investigations; and
       ``(II) subsections (b), (c), (d) and (i) of section 8 to 
     conduct enforcement actions.

       ``(F) Other actions preserved.--No provision of this 
     paragraph shall be construed as barring any action otherwise 
     available, under the laws of the United States or any State, 
     to any Federal or State agency or individual.''.
       (b) Enforcement Orders.--Section 8(c) of the Federal 
     Deposit Insurance Act (12 U.S.C. 1818(c)) is amended by 
     adding at the end the following new paragraph:
       ``(4) False advertising or misuse of names to indicate 
     insured status.--
       ``(A) Temporary order.--
       ``(i) In general.--If a notice of charges served under 
     subsection (b)(1) specifies on the basis of particular facts 
     that any person engaged or is engaging in conduct described 
     in section 18(a)(4), the Corporation or other appropriate 
     Federal banking agency may issue a temporary order 
     requiring--

       ``(I) the immediate cessation of any activity or practice 
     described, which gave rise to the notice of charges; and
       ``(II) affirmative action to prevent any further, or to 
     remedy any existing, violation.

       ``(ii) Effect of order.--Any temporary order issued under 
     this subparagraph shall take effect upon service.

[[Page 23910]]

       ``(B) Effective period of temporary order.--A temporary 
     order issued under subparagraph (A) shall remain effective 
     and enforceable, pending the completion of an administrative 
     proceeding pursuant to subsection (b)(1) in connection with 
     the notice of charges--
       ``(i) until such time as the Corporation or other 
     appropriate Federal banking agency dismisses the charges 
     specified in such notice; or
       ``(ii) if a cease-and-desist order is issued against such 
     person, until the effective date of such order.
       ``(C) Civil money penalties.--Any violation of section 
     18(a)(4) shall be subject to civil money penalties, as set 
     forth in subsection (i), except that for any person other 
     than an insured depository institution or an institution-
     affiliated party that is found to have violated this 
     paragraph, the Corporation or other appropriate Federal 
     banking agency shall not be required to demonstrate any loss 
     to an insured depository institution.''.
       (c) Unenforceability of Certain Agreements.--Section 13(c) 
     of the Federal Deposit Insurance Act (12 U.S.C. 1823(c)) is 
     amended by adding at the end the following new paragraph:
       ``(11) Unenforceability of certain agreements.--No 
     provision contained in any existing or future standstill, 
     confidentiality, or other agreement that, directly or 
     indirectly--
       ``(A) affects, restricts, or limits the ability of any 
     person to offer to acquire or acquire,
       ``(B) prohibits any person from offering to acquire or 
     acquiring, or
       ``(C) prohibits any person from using any previously 
     disclosed information in connection with any such offer to 
     acquire or acquisition of,
     all or part of any insured depository institution, including 
     any liabilities, assets, or interest therein, in connection 
     with any transaction in which the Corporation exercises its 
     authority under section 11 or 13, shall be enforceable 
     against or impose any liability on such person, as such 
     enforcement or liability shall be contrary to public 
     policy.''.
       (d) Technical and Conforming Amendments.--Section 18 of the 
     Federal Deposit Insurance Act (12 U.S.C. 1828) is amended--
       (1) in subsection (a)(3)--
       (A) by striking ``this subsection'' the first place that 
     term appears and inserting ``paragraph (1)''; and
       (B) by striking ``this subsection'' the second place that 
     term appears and inserting ``paragraph (2)''; and
       (2) in the heading for subsection (a), by striking 
     ``Insurance Logo.--'' and inserting ``Representations of 
     Deposit Insurance.--''.

     SEC. 127. COOPERATION WITH THE FBI.

       Any Federal financial regulatory agency shall cooperate 
     with the Federal Bureau of Investigation and other law 
     enforcement agencies investigating fraud, misrepresentation, 
     and malfeasance with respect to development, advertising, and 
     sale of financial products.

     SEC. 128. ACCELERATION OF EFFECTIVE DATE.

       Section 203 of the Financial Services Regulatory Relief Act 
     of 2006 (12 U.S.C. 461 note) is amended by striking ``October 
     1, 2011'' and inserting ``October 1, 2008''.

     SEC. 129. DISCLOSURES ON EXERCISE OF LOAN AUTHORITY.

       (a) In General.--Not later than 7 days after the date on 
     which the Board exercises its authority under the third 
     paragraph of section 13 of the Federal Reserve Act (12 U.S.C. 
     343; relating to discounts for individuals, partnerships, and 
     corporations) the Board shall provide to the Committee on 
     Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on Financial Services of the House of 
     Representatives a report which includes--
       (1) the justification for exercising the authority; and
       (2) the specific terms of the actions of the Board, 
     including the size and duration of the lending, available 
     information concerning the value of any collateral held with 
     respect to such a loan, the recipient of warrants or any 
     other potential equity in exchange for the loan, and any 
     expected cost to the taxpayers for such exercise.
       (b) Periodic Updates.--The Board shall provide updates to 
     the Committees specified in subsection (a) not less 
     frequently than once every 60 days while the subject loan is 
     outstanding, including--
       (1) the status of the loan;
       (2) the value of the collateral held by the Federal reserve 
     bank which initiated the loan; and
       (3) the projected cost to the taxpayers of the loan.
       (c) Confidentiality.--The information submitted to the 
     Congress under this section shall be kept confidential, upon 
     the written request of the Chairman of the Board, in which 
     case it shall be made available only to the Chairpersons and 
     Ranking Members of the Committees described in subsection 
     (a).
       (d) Applicability.--The provisions of this section shall be 
     in force for all uses of the authority provided under section 
     13 of the Federal Reserve Act occurring during the period 
     beginning on March 1, 2008 and ending on the after the date 
     of enactment of this Act, and reports described in subsection 
     (a) shall be required beginning not later than 30 days after 
     that date of enactment, with respect to any such exercise of 
     authority.
       (e) Sharing of Information.--Any reports required under 
     this section shall also be submitted to the Congressional 
     Oversight Panel established under section 125.

     SEC. 130. TECHNICAL CORRECTIONS.

       (a) In General.--Section 128(b)(2) of the Truth in Lending 
     Act (15 U.S.C. 1638(b)(2)), as amended by section 2502 of the 
     Mortgage Disclosure Improvement Act of 2008 (Public Law 110-
     289), is amended--
       (1) in subparagraph (A), by striking ``In the case'' and 
     inserting ``Except as provided in subparagraph (G), in the 
     case''; and
       (2) by amending subparagraph (G) to read as follows:
       ``(G)(i) In the case of an extension of credit relating to 
     a plan described in section 101(53D) of title 11, United 
     States Code--
       ``(I) the requirements of subparagraphs (A) through (E) 
     shall not apply; and
       ``(II) a good faith estimate of the disclosures required 
     under subsection (a) shall be made in accordance with 
     regulations of the Board under section 121(c) before such 
     credit is extended, or shall be delivered or placed in the 
     mail not later than 3 business days after the date on which 
     the creditor receives the written application of the consumer 
     for such credit, whichever is earlier.
       ``(ii) If a disclosure statement furnished within 3 
     business days of the written application (as provided under 
     clause (i)(II)) contains an annual percentage rate which is 
     subsequently rendered inaccurate, within the meaning of 
     section 107(c), the creditor shall furnish another disclosure 
     statement at the time of settlement or consummation of the 
     transaction.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect as if included in the amendments made by 
     section 2502 of the Mortgage Disclosure Improvement Act of 
     2008 (Public Law 110-289).

     SEC. 131. EXCHANGE STABILIZATION FUND REIMBURSEMENT.

       (a) Reimbursement.--The Secretary shall reimburse the 
     Exchange Stabilization Fund established under section 5302 of 
     title 31, United States Code, for any funds that are used for 
     the Treasury Money Market Funds Guaranty Program for the 
     United States money market mutual fund industry, from funds 
     under this Act.
       (b) Limits on Use of Exchange Stabilization Fund.--The 
     Secretary is prohibited from using the Exchange Stabilization 
     Fund for the establishment of any future guaranty programs 
     for the United States money market mutual fund industry.

     SEC. 132. AUTHORITY TO SUSPEND MARK-TO-MARKET ACCOUNTING.

       (a) Authority.--The Securities and Exchange Commission 
     shall have the authority under the securities laws (as such 
     term is 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 Statement 
     Number 157 of the Financial Accounting Standards Board for 
     any issuer (as such term is defined in section 3(a)(8) of 
     such Act) or with respect to any class or category of 
     transaction if the Commission determines that is necessary or 
     appropriate in the public interest and is consistent with the 
     protection of investors.
       (b) Savings Provision.--Nothing in subsection (a) shall be 
     construed to restrict or limit any authority of the 
     Securities and Exchange Commission under securities laws as 
     in effect on the date of enactment of this Act.

     SEC. 133. STUDY ON MARK-TO-MARKET ACCOUNTING.

       (a) Study.--The Securities and Exchange Commission, in 
     consultation with the Board and the Secretary, shall conduct 
     a study on mark-to-market accounting standards as provided in 
     Statement Number 157 of the Financial Accounting Standards 
     Board, as such standards are applicable to financial 
     institutions, including depository institutions. Such a study 
     shall consider at a minimum--
       (1) the effects of such accounting standards on a financial 
     institution's balance sheet;
       (2) the impacts of such accounting on bank failures in 
     2008;
       (3) the impact of such standards on the quality of 
     financial information available to investors;
       (4) the process used by the Financial Accounting Standards 
     Board in developing accounting standards;
       (5) the advisability and feasibility of modifications to 
     such standards; and
       (6) alternative accounting standards to those provided in 
     such Statement Number 157.
       (b) Report.--The Securities and Exchange Commission shall 
     submit to Congress a report of such study before the end of 
     the 90-day period beginning on the date of the enactment of 
     this Act containing the findings and determinations of the 
     Commission, including such administrative and legislative 
     recommendations as the Commission determines appropriate.

     SEC. 134. RECOUPMENT.

       Upon the expiration of the 5-year period beginning upon the 
     date of the enactment of this Act, the Director of the Office 
     of Management and Budget, in consultation with the Director 
     of the Congressional Budget Office, shall submit a report to 
     the Congress on the net amount within the Troubled Asset 
     Relief Program under this Act. In any case where there is a 
     shortfall, the President shall submit a legislative proposal 
     that recoups from the financial industry an amount equal to 
     the shortfall in order to ensure that the Troubled Asset 
     Relief Program does not add to the deficit or national debt.

     SEC. 135. PRESERVATION OF AUTHORITY.

       With the exception of section 131, nothing in this Act may 
     be construed to limit the authority of the Secretary or the 
     Board under any other provision of law.

     SEC. 136. TEMPORARY INCREASE IN DEPOSIT AND SHARE INSURANCE 
                   COVERAGE.

       (a) Federal Deposit Insurance Act; Temporary Increase in 
     Deposit Insurance.--
       (1) Increased amount.--Effective only during the period 
     beginning on the date of enactment

[[Page 23911]]

     of this Act and ending on December 31, 2009, section 
     11(a)(1)(E) of the Federal Deposit Insurance Act (12 U.S.C. 
     1821(a)(1)(E)) shall apply with ``$250,000'' substituted for 
     ``$100,000''.
       (2) Temporary increase not to be considered for setting 
     assessments.--The temporary increase in the standard maximum 
     deposit insurance amount made under paragraph (1) shall not 
     be taken into account by the Board of Directors of the 
     Corporation for purposes of setting assessments under section 
     7(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 
     1817(b)(2)).
       (3) Borrowing limits temporarily lifted.--During the period 
     beginning on the date of enactment of this Act and ending on 
     December 31, 2009, the Board of Directors of the Corporation 
     may request from the Secretary, and the Secretary shall 
     approve, a loan or loans in an amount or amounts necessary to 
     carry out this subsection, without regard to the limitations 
     on such borrowing under section 14(a) and 15(c) of the 
     Federal Deposit Insurance Act (12 U.S.C. 1824(a), 1825(c)).
       (b) Federal Credit Union Act; Temporary Increase in Share 
     Insurance.--
       (1) Increased amount.--Effective only during the period 
     beginning on the date of enactment of this Act and ending on 
     December 31, 2009, section 207(k)(5) of the Federal Credit 
     Union Act (12 U.S.C. 1787(k)(5)) shall apply with 
     ``$250,000'' substituted for ``$100,000''.
       (2) Temporary increase not to be considered for setting 
     insurance premium charges and insurance deposit 
     adjustments.--The temporary increase in the standard maximum 
     share insurance amount made under paragraph (1) shall not be 
     taken into account by the National Credit Union 
     Administration Board for purposes of setting insurance 
     premium charges and share insurance deposit adjustments under 
     section 202(c)(2) of the Federal Credit Union Act (12 U.S.C. 
     1782(c)(2)).
       (3) Borrowing limits temporarily lifted.--During the period 
     beginning on the date of enactment of this Act and ending on 
     December 31, 2009, the National Credit Union Administration 
     Board may request from the Secretary, and the Secretary shall 
     approve, a loan or loans in an amount or amounts necessary to 
     carry out this subsection, without regard to the limitations 
     on such borrowing under section 203(d)(1) of the Federal 
     Credit Union Act (12 U.S.C. 1783(d)(1)).
       (c) Not for Use in Inflation Adjustments.--The temporary 
     increase in the standard maximum deposit insurance amount 
     made under this section shall not be used to make any 
     inflation adjustment under section 11(a)(1)(F) of the Federal 
     Deposit Insurance Act (12 U.S.C. 1821(a)(1)(F)) for purposes 
     of that Act or the Federal Credit Union Act.

                  TITLE II--BUDGET-RELATED PROVISIONS

     SEC. 201. INFORMATION FOR CONGRESSIONAL SUPPORT AGENCIES.

       Upon request, and to the extent otherwise consistent with 
     law, all information used by the Secretary in connection with 
     activities authorized under this Act (including the records 
     to which the Comptroller General is entitled under this Act) 
     shall be made available to congressional support agencies (in 
     accordance with their obligations to support the Congress as 
     set out in their authorizing statutes) for the purposes of 
     assisting the committees of Congress with conducting 
     oversight, monitoring, and analysis of the activities 
     authorized under this Act.

     SEC. 202. REPORTS BY THE OFFICE OF MANAGEMENT AND BUDGET AND 
                   THE CONGRESSIONAL BUDGET OFFICE.

       (a) Reports by the Office of Management and Budget.--Within 
     60 days of the first exercise of the authority granted in 
     section 101(a), but in no case later than December 31, 2008, 
     and semiannually thereafter, the Office of Management and 
     Budget shall report to the President and the Congress--
       (1) the estimate, notwithstanding section 502(5)(F) of the 
     Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)(F)), as 
     of the first business day that is at least 30 days prior to 
     the issuance of the report, of the cost of the troubled 
     assets, and guarantees of the troubled assets, determined in 
     accordance with section 123;
       (2) the information used to derive the estimate, including 
     assets purchased or guaranteed, prices paid, revenues 
     received, the impact on the deficit and debt, and a 
     description of any outstanding commitments to purchase 
     troubled assets; and
       (3) a detailed analysis of how the estimate has changed 
     from the previous report.
     Beginning with the second report under subsection (a), the 
     Office of Management and Budget shall explain the differences 
     between the Congressional Budget Office estimates delivered 
     in accordance with subsection (b) and prior Office of 
     Management and Budget estimates.
       (b) Reports by the Congressional Budget Office.--Within 45 
     days of receipt by the Congress of each report from the 
     Office of Management and Budget under subsection (a), the 
     Congressional Budget Office shall report to the Congress the 
     Congressional Budget Office's assessment of the report 
     submitted by the Office of Management and Budget, including--
       (1) the cost of the troubled assets and guarantees of the 
     troubled assets,
       (2) the information and valuation methods used to calculate 
     such cost, and
       (3) the impact on the deficit and the debt.
       (c) Financial Expertise.--In carrying out the duties in 
     this subsection or performing analyses of activities under 
     this Act, the Director of the Congressional Budget Office may 
     employ personnel and procure the services of experts and 
     consultants.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to produce 
     reports required by this section.

     SEC. 203. ANALYSIS IN PRESIDENT'S BUDGET.

       (a) In General.--Section 1105(a) of title 31, United States 
     Code, is amended by adding at the end the following new 
     paragraph:
       ``(35) as supplementary materials, a separate analysis of 
     the budgetary effects for all prior fiscal years, the current 
     fiscal year, the fiscal year for which the budget is 
     submitted, and ensuing fiscal years of the actions the 
     Secretary of the Treasury has taken or plans to take using 
     any authority provided in the Emergency Economic 
     Stabilization Act of 2008, including--
       ``(A) an estimate of the current value of all assets 
     purchased, sold, and guaranteed under the authority provided 
     in the Emergency Economic Stabilization Act of 2008 using 
     methodology required by the Federal Credit Reform Act of 1990 
     (2 U.S.C. 661 et seq.) and section 123 of the Emergency 
     Economic Stabilization Act of 2008;
       ``(B) an estimate of the deficit, the debt held by the 
     public, and the gross Federal debt using methodology required 
     by the Federal Credit Reform Act of 1990 and section 123 of 
     the Emergency Economic Stabilization Act of 2008;
       ``(C) an estimate of the current value of all assets 
     purchased, sold, and guaranteed under the authority provided 
     in the Emergency Economic Stabilization Act of 2008 
     calculated on a cash basis;
       ``(D) a revised estimate of the deficit, the debt held by 
     the public, and the gross Federal debt, substituting the 
     cash-based estimates in subparagraph (C) for the estimates 
     calculated under subparagraph (A) pursuant to the Federal 
     Credit Reform Act of 1990 and section 123 of the Emergency 
     Economic Stabilization Act of 2008; and
       ``(E) the portion of the deficit which can be attributed to 
     any action taken by the Secretary using authority provided by 
     the Emergency Economic Stabilization Act of 2008 and the 
     extent to which the change in the deficit since the most 
     recent estimate is due to a reestimate using the methodology 
     required by the Federal Credit Reform Act of 1990 and section 
     123 of the Emergency Economic Stabilization Act of 2008.''
       (b) Consultation.--In implementing this section, the 
     Director of Office of Management and Budget shall consult 
     periodically, but at least annually, with the Committee on 
     the Budget of the House of Representatives, the Committee on 
     the Budget of the Senate, and the Director of the 
     Congressional Budget Office.
       (c) Effective Date.--This section and the amendment made by 
     this section shall apply beginning with respect to the fiscal 
     year 2010 budget submission of the President.

     SEC. 204. EMERGENCY TREATMENT.

       All provisions of this Act are designated as an emergency 
     requirement and necessary to meet emergency needs pursuant to 
     section 204(a) of S. Con. Res 21 (110th Congress), the 
     concurrent resolution on the budget for fiscal year 2008 and 
     rescissions of any amounts provided in this Act shall not be 
     counted for purposes of budget enforcement.

                       TITLE III--TAX PROVISIONS

     SEC. 301. 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--
       (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.

[[Page 23912]]

       (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.

     SEC. 302. SPECIAL RULES FOR TAX TREATMENT OF EXECUTIVE 
                   COMPENSATION OF EMPLOYERS PARTICIPATING IN THE 
                   TROUBLED ASSETS RELIEF PROGRAM.

       (a) Denial of Deduction.--Subsection (m) of section 162 of 
     the Internal Revenue Code of 1986 is amended by adding at the 
     end the following new paragraph:
       ``(5) Special rule for application to employers 
     participating in the troubled assets relief program.--
       ``(A) In general.--In the case of an applicable employer, 
     no deduction shall be allowed under this chapter--
       ``(i) in the case of executive remuneration for any 
     applicable taxable year which is attributable to services 
     performed by a covered executive during such applicable 
     taxable year, to the extent that the amount of such 
     remuneration exceeds $500,000, or
       ``(ii) in the case of deferred deduction executive 
     remuneration for any taxable year for services performed 
     during any applicable taxable year by a covered executive, to 
     the extent that the amount of such remuneration exceeds 
     $500,000 reduced (but not below zero) by the sum of--

       ``(I) the executive remuneration for such applicable 
     taxable year, plus
       ``(II) the portion of the deferred deduction executive 
     remuneration for such services which was taken into account 
     under this clause in a preceding taxable year.

       ``(B) Applicable employer.--For purposes of this 
     paragraph--
       ``(i) In general.--Except as provided in clause (ii), the 
     term `applicable employer' means any employer from whom 1 or 
     more troubled assets are acquired under a program established 
     by the Secretary under section 101(a) of the Emergency 
     Economic Stabilization Act of 2008 if the aggregate amount of 
     the assets so acquired for all taxable years exceeds 
     $300,000,000.
       ``(ii) Disregard of certain assets sold through direct 
     purchase.--If the only sales of troubled assets by an 
     employer under the program described in clause (i) are 
     through 1 or more direct purchases (within the meaning of 
     section 113(c) of the Emergency Economic Stabilization Act of 
     2008), such assets shall not be taken into account under 
     clause (i) in determining whether the employer is an 
     applicable employer for purposes of this paragraph.
       ``(iii) Aggregation rules.--Two or more persons who are 
     treated as a single employer under subsection (b) or (c) of 
     section 414 shall be treated as a single employer, except 
     that in applying section 1563(a) for purposes of either such 
     subsection, paragraphs (2) and (3) thereof shall be 
     disregarded.
       ``(C) Applicable taxable year.--For purposes of this 
     paragraph, the term `applicable taxable year' means, with 
     respect to any employer--
       ``(i) the first taxable year of the employer--

       ``(I) which includes any portion of the period during which 
     the authorities under section 101(a) of the Emergency 
     Economic Stabilization Act of 2008 are in effect (determined 
     under section 120 thereof), and
       ``(II) in which the aggregate amount of troubled assets 
     acquired from the employer during the taxable year pursuant 
     to such authorities (other than assets to which subparagraph 
     (B)(ii) applies), when added to the aggregate amount so 
     acquired for all preceding taxable years, exceeds 
     $300,000,000, and

       ``(ii) any subsequent taxable year which includes any 
     portion of such period.
       ``(D) Covered executive.--For purposes of this paragraph--
       ``(i) In general.--The term `covered executive' means, with 
     respect to any applicable taxable year, any employee--

       ``(I) who, at any time during the portion of the taxable 
     year during which the authorities under section 101(a) of the 
     Emergency Economic Stabilization Act of 2008 are in effect 
     (determined under section 120 thereof), is the chief 
     executive officer of the applicable employer or the chief 
     financial officer of the applicable employer, or an 
     individual acting in either such capacity, or
       ``(II) who is described in clause (ii).

       ``(ii) Highest compensated employees.--An employee is 
     described in this clause if the employee is 1 of the 3 
     highest compensated officers of the applicable employer for 
     the taxable year (other than an individual described in 
     clause (i)(I)), determined--

       ``(I) on the basis of the shareholder disclosure rules for 
     compensation under the Securities Exchange Act of 1934 
     (without regard to whether those rules apply to the 
     employer), and
       ``(II) by only taking into account employees employed 
     during the portion of the taxable year described in clause 
     (i)(I).

       ``(iii) Employee remains covered executive.--If an employee 
     is a covered executive with respect to an applicable employer 
     for any applicable taxable year, such employee shall be 
     treated as a covered executive with respect to such employer 
     for all subsequent applicable taxable years and for all 
     subsequent taxable years in which deferred deduction 
     executive remuneration with respect to services performed in 
     all such applicable taxable years would (but for this 
     paragraph) be deductible.
       ``(E) Executive remuneration.--For purposes of this 
     paragraph, the term `executive remuneration' means the 
     applicable employee remuneration of the covered executive, as 
     determined under paragraph (4) without regard to 
     subparagraphs (B), (C), and (D) thereof. Such term shall not 
     include any deferred deduction executive remuneration with 
     respect to services performed in a prior applicable taxable 
     year.
       ``(F) Deferred deduction executive remuneration.--For 
     purposes of this paragraph, the term `deferred deduction 
     executive remuneration' means remuneration which would be 
     executive remuneration for services performed in an 
     applicable taxable year but for the fact that the deduction 
     under this chapter (determined without regard to this 
     paragraph) for such remuneration is allowable in a subsequent 
     taxable year.
       ``(G) Coordination.--Rules similar to the rules of 
     subparagraphs (F) and (G) of paragraph (4) shall apply for 
     purposes of this paragraph.
       ``(H) Regulatory authority.--The Secretary may prescribe 
     such guidance, rules, or regulations as are necessary to 
     carry out the purposes of this paragraph and the Emergency 
     Economic Stabilization Act of 2008, including the extent to 
     which this paragraph applies in the case of any acquisition, 
     merger, or reorganization of an applicable employer.''.
       (b) Golden Parachute Rule.--Section 280G of the Internal 
     Revenue Code of 1986 is amended--
       (1) by redesignating subsection (e) as subsection (f), and
       (2) by inserting after subsection (d) the following new 
     subsection:
       ``(e) Special Rule for Application to Employers 
     Participating in the Troubled Assets Relief Program.--
       ``(1) In general.--In the case of the severance from 
     employment of a covered executive of an applicable employer 
     during the period during which the authorities under section 
     101(a) of the Emergency Economic Stabilization Act of 2008 
     are in effect (determined under section 120 of such Act), 
     this section shall be applied to payments to such executive 
     with the following modifications:
       ``(A) Any reference to a disqualified individual (other 
     than in subsection (c)) shall be treated as a reference to a 
     covered executive.
       ``(B) Any reference to a change described in subsection 
     (b)(2)(A)(i) shall be treated as a reference to an applicable 
     severance from employment of a covered executive, and any 
     reference to a payment contingent on such a change shall be 
     treated as a reference to any payment made during an 
     applicable taxable year of the employer on account of such 
     applicable severance from employment.
       ``(C) Any reference to a corporation shall be treated as a 
     reference to an applicable employer.
       ``(D) The provisions of subsections (b)(2)(C), (b)(4), 
     (b)(5), and (d)(5) shall not apply.
       ``(2) Definitions and special rules.--For purposes of this 
     subsection:
       ``(A) Definitions.--Any term used in this subsection which 
     is also used in section 162(m)(5) shall have the meaning 
     given such term by such section.
       ``(B) Applicable severance from employment.--The term 
     `applicable severance from employment' means any severance 
     from employment of a covered executive--
       ``(i) by reason of an involuntary termination of the 
     executive by the employer, or
       ``(ii) in connection with any bankruptcy, liquidation, or 
     receivership of the employer.
       ``(C) Coordination and other rules.--
       ``(i) In general.--If a payment which is treated as a 
     parachute payment by reason of this subsection is also a 
     parachute payment determined without regard to this 
     subsection, this subsection shall not apply to such payment.
       ``(ii) Regulatory authority.--The Secretary may prescribe 
     such guidance, rules, or regulations as are necessary--

       ``(I) to carry out the purposes of this subsection and the 
     Emergency Economic Stabilization Act of 2008, including the 
     extent to which this subsection applies in the case of any 
     acquisition, merger, or reorganization of an applicable 
     employer,
       ``(II) to apply this section and section 4999 in cases 
     where one or more payments with respect to any individual are 
     treated as parachute payments by reason of this subsection, 
     and other payments with respect to such individual are 
     treated as parachute payments under this section without 
     regard to this subsection, and
       ``(III) to prevent the avoidance of the application of this 
     section through the mischaracterization of a severance from 
     employment as other than an applicable severance from 
     employment.''.

[[Page 23913]]

       (c) Effective Dates.--
       (1) In general.--The amendment made by subsection (a) shall 
     apply to taxable years ending on or after the date of the 
     enactment of this Act.
       (2) Golden parachute rule.--The amendments made by 
     subsection (b) shall apply to payments with respect to 
     severances occurring during the period during which the 
     authorities under section 101(a) of this Act are in effect 
     (determined under section 120 of this Act).

     SEC. 303. EXTENSION OF EXCLUSION OF INCOME FROM DISCHARGE OF 
                   QUALIFIED PRINCIPAL RESIDENCE INDEBTEDNESS.

       (a) Extension.--Subparagraph (E) of section 108(a)(1) of 
     the Internal Revenue Code of 1986 is amended by striking 
     ``January 1, 2010'' and inserting ``January 1, 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to discharges of indebtedness occurring on or 
     after January 1, 2010.

        DIVISION B--ENERGY IMPROVEMENT AND EXTENSION ACT OF 2008

     SECTION 1. SHORT TITLE, ETC.

       (a) Short Title.--This division may be cited as the 
     ``Energy Improvement and Extension Act of 2008''.
       (b) Reference.--Except as otherwise expressly provided, 
     whenever in this division an amendment or repeal is expressed 
     in terms of an amendment to, or repeal of, a section or other 
     provision, the reference shall be considered to be made to a 
     section or other provision of the Internal Revenue Code of 
     1986.
       (c) Table of Contents.--The table of contents for this 
     division is as follows:

Sec. 1. Short title, etc.

                 TITLE I--ENERGY PRODUCTION INCENTIVES

                Subtitle A--Renewable Energy Incentives

Sec. 101. Renewable energy credit.
Sec. 102. Production credit for electricity produced from marine 
              renewables.
Sec. 103. Energy credit.
Sec. 104. Energy credit for small wind property.
Sec. 105. Energy credit for geothermal heat pump systems.
Sec. 106. Credit for residential energy efficient property.
Sec. 107. New clean renewable energy bonds.
Sec. 108. Credit for steel industry fuel.
Sec. 109. Special rule to implement FERC and State electric 
              restructuring policy.

           Subtitle B--Carbon Mitigation and Coal Provisions

Sec. 111. Expansion and modification of advanced coal project 
              investment credit.
Sec. 112. Expansion and modification of coal gasification investment 
              credit.
Sec. 113. Temporary increase in coal excise tax; funding of Black Lung 
              Disability Trust Fund.
Sec. 114. Special rules for refund of the coal excise tax to certain 
              coal producers and exporters.
Sec. 115. Tax credit for carbon dioxide sequestration.
Sec. 116. Certain income and gains relating to industrial source carbon 
              dioxide treated as qualifying income for publicly traded 
              partnerships.
Sec. 117. Carbon audit of the tax code.

     TITLE II--TRANSPORTATION AND DOMESTIC FUEL SECURITY PROVISIONS

Sec. 201. Inclusion of cellulosic biofuel in bonus depreciation for 
              biomass ethanol plant property.
Sec. 202. Credits for biodiesel and renewable diesel.
Sec. 203. Clarification that credits for fuel are designed to provide 
              an incentive for United States production.
Sec. 204. Extension and modification of alternative fuel credit.
Sec. 205. Credit for new qualified plug-in electric drive motor 
              vehicles.
Sec. 206. Exclusion from heavy truck tax for idling reduction units and 
              advanced insulation.
Sec. 207. Alternative fuel vehicle refueling property credit.
Sec. 208. Certain income and gains relating to alcohol fuels and 
              mixtures, biodiesel fuels and mixtures, and alternative 
              fuels and mixtures treated as qualifying income for 
              publicly traded partnerships.
Sec. 209. Extension and modification of election to expense certain 
              refineries.
Sec. 210. Extension of suspension of taxable income limit on percentage 
              depletion for oil and natural gas produced from marginal 
              properties.
Sec. 211. Transportation fringe benefit to bicycle commuters.

        TITLE III--ENERGY CONSERVATION AND EFFICIENCY PROVISIONS

Sec. 301. Qualified energy conservation bonds.
Sec. 302. Credit for nonbusiness energy property.
Sec. 303. Energy efficient commercial buildings deduction.
Sec. 304. New energy efficient home credit.
Sec. 305. Modifications of energy efficient appliance credit for 
              appliances produced after 2007.
Sec. 306. Accelerated recovery period for depreciation of smart meters 
              and smart grid systems.
Sec. 307. Qualified green building and sustainable design projects.
Sec. 308. Special depreciation allowance for certain reuse and 
              recycling property.

                      TITLE IV--REVENUE PROVISIONS

Sec. 401. Limitation of deduction for income attributable to domestic 
              production of oil, gas, or primary products thereof.
Sec. 402. Elimination of the different treatment of foreign oil and gas 
              extraction income and foreign oil related income for 
              purposes of the foreign tax credit.
Sec. 403. Broker reporting of customer's basis in securities 
              transactions.
Sec. 404. 0.2 percent FUTA surtax.
Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax.

                 TITLE I--ENERGY PRODUCTION INCENTIVES

                Subtitle A--Renewable Energy Incentives

     SEC. 101. RENEWABLE ENERGY CREDIT.

       (a) Extension of Credit.--
       (1) 1-year extension for wind and refined coal 
     facilities.--Paragraphs (1) and (8) of section 45(d) are each 
     amended by striking ``January 1, 2009'' and inserting 
     ``January 1, 2010''.
       (2) 2-year extension for certain other facilities.--Each of 
     the following provisions of section 45(d) is amended by 
     striking ``January 1, 2009'' and inserting ``January 1, 
     2011'':
       (A) Clauses (i) and (ii) of paragraph (2)(A).
       (B) Clauses (i)(I) and (ii) of paragraph (3)(A).
       (C) Paragraph (4).
       (D) Paragraph (5).
       (E) Paragraph (6).
       (F) Paragraph (7).
       (G) Subparagraphs (A) and (B) of paragraph (9).
       (b) Modification of Refined Coal as a Qualified Energy 
     Resource.--
       (1) Elimination of increased market value test.--Section 
     45(c)(7)(A)(i) (defining refined coal), as amended by section 
     108, is amended--
       (A) by striking subclause (IV),
       (B) by adding ``and'' at the end of subclause (II), and
       (C) by striking ``, and'' at the end of subclause (III) and 
     inserting a period.
       (2) Increase in required emission reduction.--Section 
     45(c)(7)(B) (defining qualified emission reduction) is 
     amended by inserting ``at least 40 percent of the emissions 
     of'' after ``nitrogen oxide and''.
       (c) Trash Facility Clarification.--Paragraph (7) of section 
     45(d) is amended--
       (1) by striking ``facility which burns'' and inserting 
     ``facility (other than a facility described in paragraph (6)) 
     which uses'', and
       (2) by striking ``combustion''.
       (d) Expansion of Biomass Facilities.--
       (1) Open-loop biomass facilities.--Paragraph (3) of section 
     45(d) is amended by redesignating subparagraph (B) as 
     subparagraph (C) and by inserting after subparagraph (A) the 
     following new subparagraph:
       ``(B) Expansion of facility.--Such term shall include a new 
     unit placed in service after the date of the enactment of 
     this subparagraph in connection with a facility described in 
     subparagraph (A), but only to the extent of the increased 
     amount of electricity produced at the facility by reason of 
     such new unit.''.
       (2) Closed-loop biomass facilities.--Paragraph (2) of 
     section 45(d) is amended by redesignating subparagraph (B) as 
     subparagraph (C) and inserting after subparagraph (A) the 
     following new subparagraph:
       ``(B) Expansion of facility.--Such term shall include a new 
     unit placed in service after the date of the enactment of 
     this subparagraph in connection with a facility described in 
     subparagraph (A)(i), but only to the extent of the increased 
     amount of electricity produced at the facility by reason of 
     such new unit.''.
       (e) Modification of Rules for Hydropower Production.--
     Subparagraph (C) of section 45(c)(8) is amended to read as 
     follows:
       ``(C) Nonhydroelectric dam.--For purposes of subparagraph 
     (A), a facility is described in this subparagraph if--
       ``(i) the hydroelectric project installed on the 
     nonhydroelectric dam is licensed by the Federal Energy 
     Regulatory Commission and meets all other applicable 
     environmental, licensing, and regulatory requirements,
       ``(ii) the nonhydroelectric dam was placed in service 
     before the date of the enactment of this paragraph and 
     operated for flood control, navigation, or water supply 
     purposes and did not produce hydroelectric power on the date 
     of the enactment of this paragraph, and
       ``(iii) the hydroelectric project is operated so that the 
     water surface elevation at any given location and time that 
     would have occurred in the absence of the hydroelectric 
     project is maintained, subject to any license requirements 
     imposed under applicable law that change the water surface 
     elevation for the purpose of improving environmental quality 
     of the affected waterway.
     The Secretary, in consultation with the Federal Energy 
     Regulatory Commission, shall certify if a hydroelectric 
     project licensed at a nonhydroelectric dam meets the criteria 
     in clause (iii). Nothing in this section shall affect the 
     standards under which the Federal Energy Regulatory 
     Commission issues licenses for and regulates hydropower 
     projects under part I of the Federal Power Act.''.
       (f) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to property originally placed in service after December 31, 
     2008.
       (2) Refined coal.--The amendments made by subsection (b) 
     shall apply to coal produced and sold from facilities placed 
     in service after December 31, 2008.

[[Page 23914]]

       (3) Trash facility clarification.--The amendments made by 
     subsection (c) shall apply to electricity produced and sold 
     after the date of the enactment of this Act.
       (4) Expansion of biomass facilities.--The amendments made 
     by subsection (d) shall apply to property placed in service 
     after the date of the enactment of this Act.

     SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRODUCED FROM 
                   MARINE RENEWABLES.

       (a) In General.--Paragraph (1) of section 45(c) is amended 
     by striking ``and'' at the end of subparagraph (G), by 
     striking the period at the end of subparagraph (H) and 
     inserting ``, and'', and by adding at the end the following 
     new subparagraph:
       ``(I) marine and hydrokinetic renewable energy.''.
       (b) Marine Renewables.--Subsection (c) of section 45 is 
     amended by adding at the end the following new paragraph:
       ``(10) Marine and hydrokinetic renewable energy.--
       ``(A) In general.--The term `marine and hydrokinetic 
     renewable energy' means energy derived from--
       ``(i) waves, tides, and currents in oceans, estuaries, and 
     tidal areas,
       ``(ii) free flowing water in rivers, lakes, and streams,
       ``(iii) free flowing water in an irrigation system, canal, 
     or other man-made channel, including projects that utilize 
     nonmechanical structures to accelerate the flow of water for 
     electric power production purposes, or
       ``(iv) differentials in ocean temperature (ocean thermal 
     energy conversion).
       ``(B) Exceptions.--Such term shall not include any energy 
     which is derived from any source which utilizes a dam, 
     diversionary structure (except as provided in subparagraph 
     (A)(iii)), or impoundment for electric power production 
     purposes.''.
       (c) Definition of Facility.--Subsection (d) of section 45 
     is amended by adding at the end the following new paragraph:
       ``(11) Marine and hydrokinetic renewable energy 
     facilities.--In the case of a facility producing electricity 
     from marine and hydrokinetic renewable energy, the term 
     `qualified facility' means any facility owned by the 
     taxpayer--
       ``(A) which has a nameplate capacity rating of at least 150 
     kilowatts, and
       ``(B) which is originally placed in service on or after the 
     date of the enactment of this paragraph and before January 1, 
     2012.''.
       (d) Credit Rate.--Subparagraph (A) of section 45(b)(4) is 
     amended by striking ``or (9)'' and inserting ``(9), or 
     (11)''.
       (e) Coordination With Small Irrigation Power.--Paragraph 
     (5) of section 45(d), as amended by section 101, is amended 
     by striking ``January 1, 2012'' and inserting ``the date of 
     the enactment of paragraph (11)''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to electricity produced and sold after the date 
     of the enactment of this Act, in taxable years ending after 
     such date.

     SEC. 103. ENERGY CREDIT.

       (a) Extension of Credit.--
       (1) Solar energy property.--Paragraphs (2)(A)(i)(II) and 
     (3)(A)(ii) of section 48(a) are each amended by striking 
     ``January 1, 2009'' and inserting ``January 1, 2017''.
       (2) Fuel cell property.--Subparagraph (E) of section 
     48(c)(1) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2016''.
       (3) Microturbine property.--Subparagraph (E) of section 
     48(c)(2) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2016''.
       (b) Allowance of Energy Credit Against Alternative Minimum 
     Tax.--
       (1) In general.--Subparagraph (B) of section 38(c)(4), as 
     amended by the Housing Assistance Tax Act of 2008, is amended 
     by redesignating clause (vi) as clause (vi) and (vii), 
     respectively, and by inserting after clause (iv) the 
     following new clause:
       ``(v) the credit determined under section 46 to the extent 
     that such credit is attributable to the energy credit 
     determined under section 48,''.
       (2) Technical amendment.--Clause (vi) of section 
     38(c)(4)(B), as redesignated by paragraph (1), is amended by 
     striking ``section 47 to the extent attributable to'' and 
     inserting ``section 46 to the extent that such credit is 
     attributable to the rehabilitation credit under section 47, 
     but only with respect to''.
       (c) Energy Credit for Combined Heat and Power System 
     Property.--
       (1) In general.--Section 48(a)(3)(A) is amended by striking 
     ``or'' at the end of clause (iii), by inserting ``or'' at the 
     end of clause (iv), and by adding at the end the following 
     new clause:
       ``(v) combined heat and power system property,''.
       (2) Combined heat and power system property.--Subsection 
     (c) of section 48 is amended--
       (A) by striking ``Qualified Fuel Cell Property; Qualified 
     Microturbine Property'' in the heading and inserting 
     ``Definitions'', and
       (B) by adding at the end the following new paragraph:
       ``(3) Combined heat and power system property.--
       ``(A) Combined heat and power system property.--The term 
     `combined heat and power system property' means property 
     comprising a system--
       ``(i) which uses the same energy source for the 
     simultaneous or sequential generation of electrical power, 
     mechanical shaft power, or both, in combination with the 
     generation of steam or other forms of useful thermal energy 
     (including heating and cooling applications),
       ``(ii) which produces--

       ``(I) at least 20 percent of its total useful energy in the 
     form of thermal energy which is not used to produce 
     electrical or mechanical power (or combination thereof), and
       ``(II) at least 20 percent of its total useful energy in 
     the form of electrical or mechanical power (or combination 
     thereof),

       ``(iii) the energy efficiency percentage of which exceeds 
     60 percent, and
       ``(iv) which is placed in service before January 1, 2017.
       ``(B) Limitation.--
       ``(i) In general.--In the case of combined heat and power 
     system property with an electrical capacity in excess of the 
     applicable capacity placed in service during the taxable 
     year, the credit under subsection (a)(1) (determined without 
     regard to this paragraph) for such year shall be equal to the 
     amount which bears the same ratio to such credit as the 
     applicable capacity bears to the capacity of such property.
       ``(ii) Applicable capacity.--For purposes of clause (i), 
     the term `applicable capacity' means 15 megawatts or a 
     mechanical energy capacity of more than 20,000 horsepower or 
     an equivalent combination of electrical and mechanical energy 
     capacities.
       ``(iii) Maximum capacity.--The term `combined heat and 
     power system property' shall not include any property 
     comprising a system if such system has a capacity in excess 
     of 50 megawatts or a mechanical energy capacity in excess of 
     67,000 horsepower or an equivalent combination of electrical 
     and mechanical energy capacities.
       ``(C) Special rules.--
       ``(i) Energy efficiency percentage.--For purposes of this 
     paragraph, the energy efficiency percentage of a system is 
     the fraction--

       ``(I) the numerator of which is the total useful 
     electrical, thermal, and mechanical power produced by the 
     system at normal operating rates, and expected to be consumed 
     in its normal application, and
       ``(II) the denominator of which is the lower heating value 
     of the fuel sources for the system.

       ``(ii) Determinations made on btu basis.--The energy 
     efficiency percentage and the percentages under subparagraph 
     (A)(ii) shall be determined on a Btu basis.
       ``(iii) Input and output property not included.--The term 
     `combined heat and power system property' does not include 
     property used to transport the energy source to the facility 
     or to distribute energy produced by the facility.
       ``(D) Systems using biomass.--If a system is designed to 
     use biomass (within the meaning of paragraphs (2) and (3) of 
     section 45(c) without regard to the last sentence of 
     paragraph (3)(A)) for at least 90 percent of the energy 
     source--
       ``(i) subparagraph (A)(iii) shall not apply, but
       ``(ii) the amount of credit determined under subsection (a) 
     with respect to such system shall not exceed the amount which 
     bears the same ratio to such amount of credit (determined 
     without regard to this subparagraph) as the energy efficiency 
     percentage of such system bears to 60 percent.''.
       (3) Conforming amendment.--Section 48(a)(1) is amended by 
     striking ``paragraphs (1)(B) and (2)(B)'' and inserting 
     ``paragraphs (1)(B), (2)(B), and (3)(B)''.
       (d) Increase of Credit Limitation for Fuel Cell Property.--
     Subparagraph (B) of section 48(c)(1) is amended by striking 
     ``$500'' and inserting ``$1,500''.
       (e) Public Utility Property Taken Into Account.--
       (1) In general.--Paragraph (3) of section 48(a) is amended 
     by striking the second sentence thereof.
       (2) Conforming amendments.--
       (A) Paragraph (1) of section 48(c) is amended by striking 
     subparagraph (D) and redesignating subparagraph (E) as 
     subparagraph (D).
       (B) Paragraph (2) of section 48(c) is amended by striking 
     subparagraph (D) and redesignating subparagraph (E) as 
     subparagraph (D).
       (f) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall take 
     effect on the date of the enactment of this Act.
       (2) Allowance against alternative minimum tax.--The 
     amendments made by subsection (b) shall apply to credits 
     determined under section 46 of the Internal Revenue Code of 
     1986 in taxable years beginning after the date of the 
     enactment of this Act and to carrybacks of such credits.
       (3) Combined heat and power and fuel cell property.--The 
     amendments made by subsections (c) and (d) shall apply to 
     periods after the date of the enactment of this Act, in 
     taxable years ending after such date, under rules similar to 
     the rules of section 48(m) of the Internal Revenue Code of 
     1986 (as in effect on the day before the date of the 
     enactment of the Revenue Reconciliation Act of 1990).
       (4)  Public utility property.--The amendments made by 
     subsection (e) shall apply to periods after February 13, 
     2008, in taxable years ending after such date, under rules 
     similar to the rules of section 48(m) of the Internal Revenue 
     Code of 1986 (as in effect on the day before the date of the 
     enactment of the Revenue Reconciliation Act of 1990).

     SEC. 104. ENERGY CREDIT FOR SMALL WIND PROPERTY.

       (a) In General.--Section 48(a)(3)(A), as amended by section 
     103, is amended by striking ``or'' at the end of clause (iv), 
     by adding ``or'' at the end of clause (v), and by inserting 
     after clause (v) the following new clause:

[[Page 23915]]

       ``(vi) qualified small wind energy property,''.
       (b) 30 Percent Credit.--Section 48(a)(2)(A)(i) is amended 
     by striking ``and'' at the end of subclause (II) and by 
     inserting after subclause (III) the following new subclause:

       ``(IV) qualified small wind energy property, and''.

       (c) Qualified Small Wind Energy Property.--Section 48(c), 
     as amended by section 103, is amended by adding at the end 
     the following new paragraph:
       ``(4) Qualified small wind energy property.--
       ``(A) In general.--The term `qualified small wind energy 
     property' means property which uses a qualifying small wind 
     turbine to generate electricity.
       ``(B) Limitation.--In the case of qualified small wind 
     energy property placed in service during the taxable year, 
     the credit otherwise determined under subsection (a)(1) for 
     such year with respect to all such property of the taxpayer 
     shall not exceed $4,000.
       ``(C) Qualifying small wind turbine.--The term `qualifying 
     small wind turbine' means a wind turbine which has a 
     nameplate capacity of not more than 100 kilowatts.
       ``(D) Termination.--The term `qualified small wind energy 
     property' shall not include any property for any period after 
     December 31, 2016.''.
       (d) Conforming Amendment.--Section 48(a)(1), as amended by 
     section 103, is amended by striking ``paragraphs (1)(B), 
     (2)(B), and (3)(B)'' and inserting ``paragraphs (1)(B), 
     (2)(B), (3)(B), and (4)(B)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to periods after the date of the enactment of 
     this Act, in taxable years ending after such date, under 
     rules similar to the rules of section 48(m) of the Internal 
     Revenue Code of 1986 (as in effect on the day before the date 
     of the enactment of the Revenue Reconciliation Act of 1990).

     SEC. 105. ENERGY CREDIT FOR GEOTHERMAL HEAT PUMP SYSTEMS.

       (a) In General.--Subparagraph (A) of section 48(a)(3), as 
     amended by this Act, is amended by striking ``or'' at the end 
     of clause (v), by inserting ``or'' at the end of clause (vi), 
     and by adding at the end the following new clause:
       ``(vii) equipment which uses the ground or ground water as 
     a thermal energy source to heat a structure or as a thermal 
     energy sink to cool a structure, but only with respect to 
     periods ending before January 1, 2017,''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to periods after the date of the enactment of 
     this Act, in taxable years ending after such date, under 
     rules similar to the rules of section 48(m) of the Internal 
     Revenue Code of 1986 (as in effect on the day before the date 
     of the enactment of the Revenue Reconciliation Act of 1990).

     SEC. 106. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

       (a) Extension.--Section 25D(g) is amended by striking 
     ``December 31, 2008'' and inserting ``December 31, 2016''.
       (b) Removal of Limitation for Solar Electric Property.--
       (1) In general.--Section 25D(b)(1), as amended by 
     subsections (c) and (d), is amended--
       (A) by striking subparagraph (A), and
       (B) by redesignating subparagraphs (B) through (E) as 
     subparagraphs (A) through and (D), respectively.
       (2) Conforming amendment.--Section 25D(e)(4)(A), as amended 
     by subsections (c) and (d), is amended--
       (A) by striking clause (i), and
       (B) by redesignating clauses (ii) through (v) as clauses 
     (i) and (iv), respectively.
       (c) Credit for Residential Wind Property.--
       (1) In general.--Section 25D(a) is amended by striking 
     ``and'' at the end of paragraph (2), by striking the period 
     at the end of paragraph (3) and inserting ``, and'', and by 
     adding at the end the following new paragraph:
       ``(4) 30 percent of the qualified small wind energy 
     property expenditures made by the taxpayer during such 
     year.''.
       (2) Limitation.--Section 25D(b)(1) is amended by striking 
     ``and'' at the end of subparagraph (B), by striking the 
     period at the end of subparagraph (C) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(D) $500 with respect to each half kilowatt of capacity 
     (not to exceed $4,000) of wind turbines for which qualified 
     small wind energy property expenditures are made.''.
       (3) Qualified small wind energy property expenditures.--
       (A) In general.--Section 25D(d) is amended by adding at the 
     end the following new paragraph:
       ``(4) Qualified small wind energy property expenditure.--
     The term `qualified small wind energy property expenditure' 
     means an expenditure for property which uses a wind turbine 
     to generate electricity for use in connection with a dwelling 
     unit located in the United States and used as a residence by 
     the taxpayer.''.
       (B) No double benefit.--Section 45(d)(1) is amended by 
     adding at the end the following new sentence: ``Such term 
     shall not include any facility with respect to which any 
     qualified small wind energy property expenditure (as defined 
     in subsection (d)(4) of section 25D) is taken into account in 
     determining the credit under such section.''.
       (4) Maximum expenditures in case of joint occupancy.--
     Section 25D(e)(4)(A) is amended by striking ``and'' at the 
     end of clause (ii), by striking the period at the end of 
     clause (iii) and inserting ``, and'', and by adding at the 
     end the following new clause:
       ``(iv) $1,667 in the case of each half kilowatt of capacity 
     (not to exceed $13,333) of wind turbines for which qualified 
     small wind energy property expenditures are made.''.
       (d) Credit for Geothermal Heat pump Systems.--
       (1) In general.--Section 25D(a), as amended by subsection 
     (c), is amended by striking ``and'' at the end of paragraph 
     (3), by striking the period at the end of paragraph (4) and 
     inserting ``, and'', and by adding at the end the following 
     new paragraph:
       ``(5) 30 percent of the qualified geothermal heat pump 
     property expenditures made by the taxpayer during such 
     year.''.
       (2) Limitation.--Section 25D(b)(1), as amended by 
     subsection (c), is amended by striking ``and'' at the end of 
     subparagraph (C), by striking the period at the end of 
     subparagraph (D) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(E) $2,000 with respect to any qualified geothermal heat 
     pump property expenditures.''.
       (3) Qualified geothermal heat pump property expenditure.--
     Section 25D(d), as amended by subsection (c), is amended by 
     adding at the end the following new paragraph:
       ``(5) Qualified geothermal heat pump property 
     expenditure.--
       ``(A) In general.--The term `qualified geothermal heat pump 
     property expenditure' means an expenditure for qualified 
     geothermal heat pump property installed on or in connection 
     with a dwelling unit located in the United States and used as 
     a residence by the taxpayer.
       ``(B) Qualified geothermal heat pump property.--The term 
     `qualified geothermal heat pump property' means any equipment 
     which--
       ``(i) uses the ground or ground water as a thermal energy 
     source to heat the dwelling unit referred to in subparagraph 
     (A) or as a thermal energy sink to cool such dwelling unit, 
     and
       ``(ii) meets the requirements of the Energy Star program 
     which are in effect at the time that the expenditure for such 
     equipment is made.''.
       (4) Maximum expenditures in case of joint occupancy.--
     Section 25D(e)(4)(A), as amended by subsection (c), is 
     amended by striking ``and'' at the end of clause (iii), by 
     striking the period at the end of clause (iv) and inserting 
     ``, and'', and by adding at the end the following new clause:
       ``(v) $6,667 in the case of any qualified geothermal heat 
     pump property expenditures.''.
       (e) Credit Allowed Against Alternative Minimum Tax.--
       (1) In general.--Subsection (c) of section 25D is amended 
     to read as follows:
       ``(c) Limitation Based on Amount of Tax; Carryforward of 
     Unused Credit.--
       ``(1) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for the taxable year 
     shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section) and section 27 for the taxable 
     year.
       ``(2) Carryforward of unused credit.--
       ``(A) Rule for years in which all personal credits allowed 
     against regular and alternative minimum tax.--In the case of 
     a taxable year to which section 26(a)(2) applies, if the 
     credit allowable under subsection (a) exceeds the limitation 
     imposed by section 26(a)(2) for such taxable year reduced by 
     the sum of the credits allowable under this subpart (other 
     than this section), such excess shall be carried to the 
     succeeding taxable year and added to the credit allowable 
     under subsection (a) for such succeeding taxable year.
       ``(B) Rule for other years.--In the case of a taxable year 
     to which section 26(a)(2) does not apply, if the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such succeeding 
     taxable year.''.
       (2) Conforming amendments.--
       (A) Section 23(b)(4)(B) is amended by inserting ``and 
     section 25D'' after ``this section''.
       (B) Section 24(b)(3)(B) is amended by striking ``and 25B'' 
     and inserting ``, 25B, and 25D''.
       (C) Section 25B(g)(2) is amended by striking ``section 23'' 
     and inserting ``sections 23 and 25D''.
       (D) Section 26(a)(1) is amended by striking ``and 25B'' and 
     inserting ``25B, and 25D''.
       (f) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 2007.
       (2) Solar electric property limitation.--The amendments 
     made by subsection (b) shall apply to taxable years beginning 
     after December 31, 2008.
       (3) Application of egtrra sunset.--The amendments made by 
     subparagraphs (A) and (B) of subsection (e)(2) shall be 
     subject to title IX of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 in the same manner as the 
     provisions of such Act to which such amendments relate.

     SEC. 107. NEW CLEAN RENEWABLE ENERGY BONDS.

       (a) In General.--Subpart I of part IV of subchapter A of 
     chapter 1 is amended by adding at the end the following new 
     section:

[[Page 23916]]



     ``SEC. 54C. NEW CLEAN RENEWABLE ENERGY BONDS.

       ``(a) New Clean Renewable Energy Bond.--For purposes of 
     this subpart, the term `new clean renewable energy bond' 
     means any bond issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for capital expenditures incurred by 
     governmental bodies, public power providers, or cooperative 
     electric companies for one or more qualified renewable energy 
     facilities,
       ``(2) the bond is issued by a qualified issuer, and
       ``(3) the issuer designates such bond for purposes of this 
     section.
       ``(b) Reduced Credit Amount.--The annual credit determined 
     under section 54A(b) with respect to any new clean renewable 
     energy bond shall be 70 percent of the amount so determined 
     without regard to this subsection.
       ``(c) Limitation on Amount of Bonds Designated.--
       ``(1) In general.--The maximum aggregate face amount of 
     bonds which may be designated under subsection (a) by any 
     issuer shall not exceed the limitation amount allocated under 
     this subsection to such issuer.
       ``(2) National limitation on amount of bonds designated.--
     There is a national new clean renewable energy bond 
     limitation of $800,000,000 which shall be allocated by the 
     Secretary as provided in paragraph (3), except that--
       ``(A) not more than 33\1/3\ percent thereof may be 
     allocated to qualified projects of public power providers,
       ``(B) not more than 33\1/3\ percent thereof may be 
     allocated to qualified projects of governmental bodies, and
       ``(C) not more than 33\1/3\ percent thereof may be 
     allocated to qualified projects of cooperative electric 
     companies.
       ``(3) Method of allocation.--
       ``(A) Allocation among public power providers.--After the 
     Secretary determines the qualified projects of public power 
     providers which are appropriate for receiving an allocation 
     of the national new clean renewable energy bond limitation, 
     the Secretary shall, to the maximum extent practicable, make 
     allocations among such projects in such manner that the 
     amount allocated to each such project bears the same ratio to 
     the cost of such project as the limitation under paragraph 
     (2)(A) bears to the cost of all such projects.
       ``(B) Allocation among governmental bodies and cooperative 
     electric companies.--The Secretary shall make allocations of 
     the amount of the national new clean renewable energy bond 
     limitation described in paragraphs (2)(B) and (2)(C) among 
     qualified projects of governmental bodies and cooperative 
     electric companies, respectively, in such manner as the 
     Secretary determines appropriate.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified renewable energy facility.--The term 
     `qualified renewable energy facility' means a qualified 
     facility (as determined under section 45(d) without regard to 
     paragraphs (8) and (10) thereof and to any placed in service 
     date) owned by a public power provider, a governmental body, 
     or a cooperative electric company.
       ``(2) Public power provider.--The term `public power 
     provider' means a State utility with a service obligation, as 
     such terms are defined in section 217 of the Federal Power 
     Act (as in effect on the date of the enactment of this 
     paragraph).
       ``(3) Governmental body.--The term `governmental body' 
     means any State or Indian tribal government, or any political 
     subdivision thereof.
       ``(4) Cooperative electric company.--The term `cooperative 
     electric company' means a mutual or cooperative electric 
     company described in section 501(c)(12) or section 
     1381(a)(2)(C).
       ``(5) Clean renewable energy bond lender.--The term `clean 
     renewable energy bond lender' means a lender which is a 
     cooperative which is owned by, or has outstanding loans to, 
     100 or more cooperative electric companies and is in 
     existence on February 1, 2002, and shall include any 
     affiliated entity which is controlled by such lender.
       ``(6) Qualified issuer.--The term `qualified issuer' means 
     a public power provider, a cooperative electric company, a 
     governmental body, a clean renewable energy bond lender, or a 
     not-for-profit electric utility which has received a loan or 
     loan guarantee under the Rural Electrification Act.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 54A(d) is amended to read as 
     follows:
       ``(1) Qualified tax credit bond.--The term `qualified tax 
     credit bond' means--
       ``(A) a qualified forestry conservation bond, or
       ``(B) a new clean renewable energy bond,
     which is part of an issue that meets requirements of 
     paragraphs (2), (3), (4), (5), and (6).''.
       (2) Subparagraph (C) of section 54A(d)(2) is amended to 
     read as follows:
       ``(C) Qualified purpose.--For purposes of this paragraph, 
     the term `qualified purpose' means--
       ``(i) in the case of a qualified forestry conservation 
     bond, a purpose specified in section 54B(e), and
       ``(ii) in the case of a new clean renewable energy bond, a 
     purpose specified in section 54C(a)(1).''.
       (3) The table of sections for subpart I of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 54C. Qualified clean renewable energy bonds.''.

       (c) Extension for Clean Renewable Energy Bonds.--Subsection 
     (m) of section 54 is amended by striking ``December 31, 
     2008'' and inserting ``December 31, 2009''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 108. CREDIT FOR STEEL INDUSTRY FUEL.

       (a) Treatment as Refined Coal.--
       (1) In general.--Subparagraph (A) of section 45(c)(7) of 
     the Internal Revenue Code of 1986 (relating to refined coal), 
     as amended by this Act, is amended to read as follows:
       ``(A) In general.--The term `refined coal' means a fuel--
       ``(i) which--

       ``(I) is a liquid, gaseous, or solid fuel produced from 
     coal (including lignite) or high carbon fly ash, including 
     such fuel used as a feedstock,
       ``(II) is sold by the taxpayer with the reasonable 
     expectation that it will be used for purpose of producing 
     steam,
       ``(III) is certified by the taxpayer as resulting (when 
     used in the production of steam) in a qualified emission 
     reduction, and
       ``(IV) is produced in such a manner as to result in an 
     increase of at least 50 percent in the market value of the 
     refined coal (excluding any increase caused by materials 
     combined or added during the production process), as compared 
     to the value of the feedstock coal, or

       ``(ii) which is steel industry fuel.''.
       (2) Steel industry fuel defined.--Paragraph (7) of section 
     45(c) of such Code is amended by adding at the end the 
     following new subparagraph:
       ``(C) Steel industry fuel.--
       ``(i) In general.--The term `steel industry fuel' means a 
     fuel which--

       ``(I) is produced through a process of liquifying coal 
     waste sludge and distributing it on coal, and
       ``(II) is used as a feedstock for the manufacture of coke.

       ``(ii) Coal waste sludge.--The term `coal waste sludge' 
     means the tar decanter sludge and related byproducts of the 
     coking process, including such materials that have been 
     stored in ground, in tanks and in lagoons, that have been 
     treated as hazardous wastes under applicable Federal 
     environmental rules absent liquefaction and processing with 
     coal into a feedstock for the manufacture of coke.''.
       (b) Credit Amount.--
       (1) In general.--Paragraph (8) of section 45(e) of the 
     Internal Revenue Code of 1986 (relating to refined coal 
     production facilities) is amended by adding at the end the 
     following new subparagraph:
       ``(D) Special rule for steel industry fuel.--
       ``(i) In general.--In the case of a taxpayer who produces 
     steel industry fuel--

       ``(I) this paragraph shall be applied separately with 
     respect to steel industry fuel and other refined coal, and
       ``(II) in applying this paragraph to steel industry fuel, 
     the modifications in clause (ii) shall apply.

       ``(ii) Modifications.--

       ``(I) Credit amount.--Subparagraph (A) shall be applied by 
     substituting `$2 per barrel-of-oil equivalent' for `$4.375 
     per ton'.
       ``(II) Credit period.--In lieu of the 10-year period 
     referred to in clauses (i) and (ii)(II) of subparagraph (A), 
     the credit period shall be the period beginning on the later 
     of the date such facility was originally placed in service, 
     the date the modifications described in clause (iii) were 
     placed in service, or October 1, 2008, and ending on the 
     later of December 31, 2009, or the date which is 1 year after 
     the date such facility or the modifications described in 
     clause (iii) were placed in service.
       ``(III) No phaseout.--Subparagraph (B) shall not apply.

       ``(iii) Modifications.--The modifications described in this 
     clause are modifications to an existing facility which allow 
     such facility to produce steel industry fuel.
       ``(iv) Barrel-of-oil equivalent.--For purposes of this 
     subparagraph, a barrel-of-oil equivalent is the amount of 
     steel industry fuel that has a Btu content of 5,800,000 
     Btus.''.
       (2) Inflation adjustment.--Paragraph (2) of section 45(b) 
     of such Code is amended by inserting ``the $3 amount in 
     subsection (e)(8)(D)(ii)(I),'' after ``subsection 
     (e)(8)(A),''.
       (c) Termination.--Paragraph (8) of section 45(d) of the 
     Internal Revenue Code of 1986 (relating to refined coal 
     production facility), as amended by this Act, is amended to 
     read as follows:
       ``(8) Refined coal production facility.--In the case of a 
     facility that produces refined coal, the term `refined coal 
     production facility' means--
       ``(A) with respect to a facility producing steel industry 
     fuel, any facility (or any modification to a facility) which 
     is placed in service before January 1, 2010, and
       ``(B) with respect to any other facility producing refined 
     coal, any facility placed in service after the date of the 
     enactment of the American Jobs Creation Act of 2004 and 
     before January 1, 2010.''.
       (d) Coordination With Credit for Producing Fuel From a 
     Nonconventional Source.--
       (1) In general.--Subparagraph (B) of section 45(e)(9) of 
     the Internal Revenue Code of 1986 is amended--
       (A) by striking ``The term'' and inserting the following:
       ``(i) In general.--The term'', and
       (B) by adding at the end the following new clause:

[[Page 23917]]

       ``(ii) Exception for steel industry coal.--In the case of a 
     facility producing steel industry fuel, clause (i) shall not 
     apply to so much of the refined coal produced at such 
     facility as is steel industry fuel.''.
       (2) No double benefit.--Section 45K(g)(2) of such Code is 
     amended by adding at the end the following new subparagraph:
       ``(E) Coordination with section 45.--No credit shall be 
     allowed with respect to any qualified fuel which is steel 
     industry fuel (as defined in section 45(c)(7)) if a credit is 
     allowed to the taxpayer for such fuel under section 45.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to fuel produced and sold after September 30, 
     2008.

     SEC. 109. SPECIAL RULE TO IMPLEMENT FERC AND STATE ELECTRIC 
                   RESTRUCTURING POLICY.

       (a) Extension for Qualified Electric Utilities.--
       (1) In general.--Paragraph (3) of section 451(i) is amended 
     by inserting ``(before January 1, 2010, in the case of a 
     qualified electric utility)'' after ``January 1, 2008''.
       (2) Qualified electric utility.--Subsection (i) of section 
     451 is amended by redesignating paragraphs (6) through (10) 
     as paragraphs (7) through (11), respectively, and by 
     inserting after paragraph (5) the following new paragraph:
       ``(6) Qualified electric utility.--For purposes of this 
     subsection, the term `qualified electric utility' means a 
     person that, as of the date of the qualifying electric 
     transmission transaction, is vertically integrated, in that 
     it is both--
       ``(A) a transmitting utility (as defined in section 3(23) 
     of the Federal Power Act (16 U.S.C. 796(23))) with respect to 
     the transmission facilities to which the election under this 
     subsection applies, and
       ``(B) an electric utility (as defined in section 3(22) of 
     the Federal Power Act (16 U.S.C. 796(22))).''.
       (b) Extension of Period for Transfer of Operational Control 
     Authorized by FERC.--Clause (ii) of section 451(i)(4)(B) is 
     amended by striking ``December 31, 2007'' and inserting ``the 
     date which is 4 years after the close of the taxable year in 
     which the transaction occurs''.
       (c) Property Located Outside the United States Not Treated 
     as Exempt Utility Property.--Paragraph (5) of section 451(i) 
     is amended by adding at the end the following new 
     subparagraph:
       ``(C) Exception for property located outside the united 
     states.--The term `exempt utility property' shall not include 
     any property which is located outside the United States.''.
       (d) Effective Dates.--
       (1) Extension.--The amendments made by subsection (a) shall 
     apply to transactions after December 31, 2007.
       (2) Transfers of operational control.--The amendment made 
     by subsection (b) shall take effect as if included in section 
     909 of the American Jobs Creation Act of 2004.
       (3) Exception for property located outside the united 
     states.--The amendment made by subsection (c) shall apply to 
     transactions after the date of the enactment of this Act.

           Subtitle B--Carbon Mitigation and Coal Provisions

     SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED COAL PROJECT 
                   INVESTMENT CREDIT.

       (a) Modification of Credit Amount.--Section 48A(a) is 
     amended by striking ``and'' at the end of paragraph (1), by 
     striking the period at the end of paragraph (2) and inserting 
     ``, and'', and by adding at the end the following new 
     paragraph:
       ``(3) 30 percent of the qualified investment for such 
     taxable year in the case of projects described in clause 
     (iii) of subsection (d)(3)(B).''.
       (b) Expansion of Aggregate Credits.--Section 48A(d)(3)(A) 
     is amended by striking ``$1,300,000,000'' and inserting 
     ``$2,550,000,000''.
       (c) Authorization of Additional Projects.--
       (1) In general.--Subparagraph (B) of section 48A(d)(3) is 
     amended to read as follows:
       ``(B) Particular projects.--Of the dollar amount in 
     subparagraph (A), the Secretary is authorized to certify--
       ``(i) $800,000,000 for integrated gasification combined 
     cycle projects the application for which is submitted during 
     the period described in paragraph (2)(A)(i),
       ``(ii) $500,000,000 for projects which use other advanced 
     coal-based generation technologies the application for which 
     is submitted during the period described in paragraph 
     (2)(A)(i), and
       ``(iii) $1,250,000,000 for advanced coal-based generation 
     technology projects the application for which is submitted 
     during the period described in paragraph (2)(A)(ii).''.
       (2) Application period for additional projects.--
     Subparagraph (A) of section 48A(d)(2) is amended to read as 
     follows:
       ``(A) Application period.--Each applicant for certification 
     under this paragraph shall submit an application meeting the 
     requirements of subparagraph (B). An applicant may only 
     submit an application--
       ``(i) for an allocation from the dollar amount specified in 
     clause (i) or (ii) of paragraph (3)(B) during the 3-year 
     period beginning on the date the Secretary establishes the 
     program under paragraph (1), and
       ``(ii) for an allocation from the dollar amount specified 
     in paragraph (3)(B)(iii) during the 3-year period beginning 
     at the earlier of the termination of the period described in 
     clause (i) or the date prescribed by the Secretary.''.
       (3) Capture and sequestration of carbon dioxide emissions 
     requirement.--
       (A) In general.--Section 48A(e)(1) is amended by striking 
     ``and'' at the end of subparagraph (E), by striking the 
     period at the end of subparagraph (F) and inserting ``; 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(G) in the case of any project the application for which 
     is submitted during the period described in subsection 
     (d)(2)(A)(ii), the project includes equipment which separates 
     and sequesters at least 65 percent (70 percent in the case of 
     an application for reallocated credits under subsection 
     (d)(4)) of such project's total carbon dioxide emissions.''.
       (B) Highest priority for projects which sequester carbon 
     dioxide emissions.--Section 48A(e)(3) is amended by striking 
     ``and'' at the end of subparagraph (A)(iii), by striking the 
     period at the end of subparagraph (B)(iii) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(C) give highest priority to projects with the greatest 
     separation and sequestration percentage of total carbon 
     dioxide emissions.''.
       (C) Recapture of credit for failure to sequester.--Section 
     48A is amended by adding at the end the following new 
     subsection:
       ``(i) Recapture of Credit for Failure To Sequester.--The 
     Secretary shall provide for recapturing the benefit of any 
     credit allowable under subsection (a) with respect to any 
     project which fails to attain or maintain the separation and 
     sequestration requirements of subsection (e)(1)(G).''.
       (4) Additional priority for research partnerships.--Section 
     48A(e)(3)(B), as amended by paragraph (3)(B), is amended--
       (A) by striking ``and'' at the end of clause (ii),
       (B) by redesignating clause (iii) as clause (iv), and
       (C) by inserting after clause (ii) the following new 
     clause:
       ``(iii) applicant participants who have a research 
     partnership with an eligible educational institution (as 
     defined in section 529(e)(5)), and''.
       (5) Clerical amendment.--Section 48A(e)(3) is amended by 
     striking ``integrated gasification combined cycle'' in the 
     heading and inserting ``certain''.
       (d) Disclosure of Allocations.--Section 48A(d) is amended 
     by adding at the end the following new paragraph:
       ``(5) Disclosure of allocations.--The Secretary shall, upon 
     making a certification under this subsection or section 
     48B(d), publicly disclose the identity of the applicant and 
     the amount of the credit certified with respect to such 
     applicant.''.
       (e) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to credits the application for which is submitted during the 
     period described in section 48A(d)(2)(A)(ii) of the Internal 
     Revenue Code of 1986 and which are allocated or reallocated 
     after the date of the enactment of this Act.
       (2) Disclosure of allocations.--The amendment made by 
     subsection (d) shall apply to certifications made after the 
     date of the enactment of this Act.
       (3) Clerical amendment.--The amendment made by subsection 
     (c)(5) shall take effect as if included in the amendment made 
     by section 1307(b) of the Energy Tax Incentives Act of 2005.

     SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFICATION 
                   INVESTMENT CREDIT.

       (a) Modification of Credit Amount.--Section 48B(a) is 
     amended by inserting ``(30 percent in the case of credits 
     allocated under subsection (d)(1)(B))'' after ``20 percent''.
       (b) Expansion of Aggregate Credits.--Section 48B(d)(1) is 
     amended by striking ``shall not exceed $350,000,000'' and all 
     that follows and inserting ``shall not exceed--
       ``(A) $350,000,000, plus
       ``(B) $250,000,000 for qualifying gasification projects 
     that include equipment which separates and sequesters at 
     least 75 percent of such project's total carbon dioxide 
     emissions.''.
       (c) Recapture of Credit for Failure to Sequester.--Section 
     48B is amended by adding at the end the following new 
     subsection:
       ``(f) Recapture of Credit for Failure to Sequester.--The 
     Secretary shall provide for recapturing the benefit of any 
     credit allowable under subsection (a) with respect to any 
     project which fails to attain or maintain the separation and 
     sequestration requirements for such project under subsection 
     (d)(1).''.
       (d) Selection Priorities.--Section 48B(d) is amended by 
     adding at the end the following new paragraph:
       ``(4) Selection priorities.--In determining which 
     qualifying gasification projects to certify under this 
     section, the Secretary shall--
       ``(A) give highest priority to projects with the greatest 
     separation and sequestration percentage of total carbon 
     dioxide emissions, and
       ``(B) give high priority to applicant participants who have 
     a research partnership with an eligible educational 
     institution (as defined in section 529(e)(5)).''.
       (e) Eligible Projects Include Transportation Grade Liquid 
     Fuels.--Section 48B(c)(7) (defining eligible entity) is 
     amended by striking ``and'' at the end of subparagraph (F), 
     by striking the period at the end of subparagraph (G) and 
     inserting ``, and'', and by adding at the end the following 
     new subparagraph:
       ``(H) transportation grade liquid fuels.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to credits described in section 48B(d)(1)(B) of 
     the Internal Revenue

[[Page 23918]]

     Code of 1986 which are allocated or reallocated after the 
     date of the enactment of this Act.

     SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX; FUNDING OF 
                   BLACK LUNG DISABILITY TRUST FUND.

       (a) Extension of Temporary Increase.--Paragraph (2) of 
     section 4121(e) is amended--
       (1) by striking ``January 1, 2014'' in subparagraph (A) and 
     inserting ``December 31, 2018'', and
       (2) by striking ``January 1 after 1981'' in subparagraph 
     (B) and inserting ``December 31 after 2007''.
       (b) Restructuring of Trust Fund Debt.--
       (1) Definitions.--For purposes of this subsection--
       (A) Market value of the outstanding repayable advances, 
     plus accrued interest.--The term ``market value of the 
     outstanding repayable advances, plus accrued interest'' means 
     the present value (determined by the Secretary of the 
     Treasury as of the refinancing date and using the Treasury 
     rate as the discount rate) of the stream of principal and 
     interest payments derived assuming that each repayable 
     advance that is outstanding on the refinancing date is due on 
     the 30th anniversary of the end of the fiscal year in which 
     the advance was made to the Trust Fund, and that all such 
     principal and interest payments are made on September 30 of 
     the applicable fiscal year.
       (B) Refinancing date.--The term ``refinancing date'' means 
     the date occurring 2 days after the enactment of this Act.
       (C) Repayable advance.--The term ``repayable advance'' 
     means an amount that has been appropriated to the Trust Fund 
     in order to make benefit payments and other expenditures that 
     are authorized under section 9501 of the Internal Revenue 
     Code of 1986 and are required to be repaid when the Secretary 
     of the Treasury determines that monies are available in the 
     Trust Fund for such purpose.
       (D) Treasury rate.--The term ``Treasury rate'' means a rate 
     determined by the Secretary of the Treasury, taking into 
     consideration current market yields on outstanding marketable 
     obligations of the United States of comparable maturities.
       (E) Treasury 1-year rate.--The term ``Treasury 1-year 
     rate'' means a rate determined by the Secretary of the 
     Treasury, taking into consideration current market yields on 
     outstanding marketable obligations of the United States with 
     remaining periods to maturity of approximately 1 year, to 
     have been in effect as of the close of business 1 business 
     day prior to the date on which the Trust Fund issues 
     obligations to the Secretary of the Treasury under paragraph 
     (2)(B).
       (2) Refinancing of outstanding principal of repayable 
     advances and unpaid interest on such advances.--
       (A) Transfer to general fund.--On the refinancing date, the 
     Trust Fund shall repay the market value of the outstanding 
     repayable advances, plus accrued interest, by transferring 
     into the general fund of the Treasury the following sums:
       (i) The proceeds from obligations that the Trust Fund shall 
     issue to the Secretary of the Treasury in such amounts as the 
     Secretaries of Labor and the Treasury shall determine and 
     bearing interest at the Treasury rate, and that shall be in 
     such forms and denominations and be subject to such other 
     terms and conditions, including maturity, as the Secretary of 
     the Treasury shall prescribe.
       (ii) All, or that portion, of the appropriation made to the 
     Trust Fund pursuant to paragraph (3) that is needed to cover 
     the difference defined in that paragraph.
       (B) Repayment of obligations.--In the event that the Trust 
     Fund is unable to repay the obligations that it has issued to 
     the Secretary of the Treasury under subparagraph (A)(i) and 
     this subparagraph, or is unable to make benefit payments and 
     other authorized expenditures, the Trust Fund shall issue 
     obligations to the Secretary of the Treasury in such amounts 
     as may be necessary to make such repayments, payments, and 
     expenditures, with a maturity of 1 year, and bearing interest 
     at the Treasury 1-year rate. These obligations shall be in 
     such forms and denominations and be subject to such other 
     terms and conditions as the Secretary of the Treasury shall 
     prescribe.
       (C) Authority to issue obligations.--The Trust Fund is 
     authorized to issue obligations to the Secretary of the 
     Treasury under subparagraphs (A)(i) and (B). The Secretary of 
     the Treasury is authorized to purchase such obligations of 
     the Trust Fund. For the purposes of making such purchases, 
     the Secretary of the Treasury may use as a public debt 
     transaction the proceeds from the sale of any securities 
     issued under chapter 31 of title 31, United States Code, and 
     the purposes for which securities may be issued under such 
     chapter are extended to include any purchase of such Trust 
     Fund obligations under this subparagraph.
       (3) One-time appropriation.--There is hereby appropriated 
     to the Trust Fund an amount sufficient to pay to the general 
     fund of the Treasury the difference between--
       (A) the market value of the outstanding repayable advances, 
     plus accrued interest; and
       (B) the proceeds from the obligations issued by the Trust 
     Fund to the Secretary of the Treasury under paragraph 
     (2)(A)(i).
       (4) Prepayment of trust fund obligations.--The Trust Fund 
     is authorized to repay any obligation issued to the Secretary 
     of the Treasury under subparagraphs (A)(i) and (B) of 
     paragraph (2) prior to its maturity date by paying a 
     prepayment price that would, if the obligation being prepaid 
     (including all unpaid interest accrued thereon through the 
     date of prepayment) were purchased by a third party and held 
     to the maturity date of such obligation, produce a yield to 
     the third-party purchaser for the period from the date of 
     purchase to the maturity date of such obligation 
     substantially equal to the Treasury yield on outstanding 
     marketable obligations of the United States having a 
     comparable maturity to this period.

     SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EXCISE TAX TO 
                   CERTAIN COAL PRODUCERS AND EXPORTERS.

       (a) Refund.--
       (1) Coal producers.--
       (A) In general.--Notwithstanding subsections (a)(1) and (c) 
     of section 6416 and section 6511 of the Internal Revenue Code 
     of 1986, if--
       (i) a coal producer establishes that such coal producer, or 
     a party related to such coal producer, exported coal produced 
     by such coal producer to a foreign country or shipped coal 
     produced by such coal producer to a possession of the United 
     States, or caused such coal to be exported or shipped, the 
     export or shipment of which was other than through an 
     exporter who meets the requirements of paragraph (2),
       (ii) such coal producer filed an excise tax return on or 
     after October 1, 1990, and on or before the date of the 
     enactment of this Act, and
       (iii) such coal producer files a claim for refund with the 
     Secretary not later than the close of the 30-day period 
     beginning on the date of the enactment of this Act,

     then the Secretary shall pay to such coal producer an amount 
     equal to the tax paid under section 4121 of such Code on such 
     coal exported or shipped by the coal producer or a party 
     related to such coal producer, or caused by the coal producer 
     or a party related to such coal producer to be exported or 
     shipped.
       (B) Special rules for certain taxpayers.--For purposes of 
     this section--
       (i) In general.--If a coal producer or a party related to a 
     coal producer has received a judgment described in clause 
     (iii), such coal producer shall be deemed to have established 
     the export of coal to a foreign country or shipment of coal 
     to a possession of the United States under subparagraph 
     (A)(i).
       (ii) Amount of payment.--If a taxpayer described in clause 
     (i) is entitled to a payment under subparagraph (A), the 
     amount of such payment shall be reduced by any amount paid 
     pursuant to the judgment described in clause (iii).
       (iii) Judgment described.--A judgment is described in this 
     subparagraph if such judgment--

       (I) is made by a court of competent jurisdiction within the 
     United States,
       (II) relates to the constitutionality of any tax paid on 
     exported coal under section 4121 of the Internal Revenue Code 
     of 1986, and
       (III) is in favor of the coal producer or the party related 
     to the coal producer.

       (2) Exporters.--Notwithstanding subsections (a)(1) and (c) 
     of section 6416 and section 6511 of the Internal Revenue Code 
     of 1986, and a judgment described in paragraph (1)(B)(iii) of 
     this subsection, if--
       (A) an exporter establishes that such exporter exported 
     coal to a foreign country or shipped coal to a possession of 
     the United States, or caused such coal to be so exported or 
     shipped,
       (B) such exporter filed a tax return on or after October 1, 
     1990, and on or before the date of the enactment of this Act, 
     and
       (C) such exporter files a claim for refund with the 
     Secretary not later than the close of the 30-day period 
     beginning on the date of the enactment of this Act,

     then the Secretary shall pay to such exporter an amount equal 
     to $0.825 per ton of such coal exported by the exporter or 
     caused to be exported or shipped, or caused to be exported or 
     shipped, by the exporter.
       (b) Limitations.--Subsection (a) shall not apply with 
     respect to exported coal if a settlement with the Federal 
     Government has been made with and accepted by, the coal 
     producer, a party related to such coal producer, or the 
     exporter, of such coal, as of the date that the claim is 
     filed under this section with respect to such exported coal. 
     For purposes of this subsection, the term ``settlement with 
     the Federal Government'' shall not include any settlement or 
     stipulation entered into as of the date of the enactment of 
     this Act, the terms of which contemplate a judgment 
     concerning which any party has reserved the right to file an 
     appeal, or has filed an appeal.
       (c) Subsequent Refund Prohibited.--No refund shall be made 
     under this section to the extent that a credit or refund of 
     such tax on such exported or shipped coal has been paid to 
     any person.
       (d) Definitions.--For purposes of this section--
       (1) Coal producer.--The term ``coal producer'' means the 
     person in whom is vested ownership of the coal immediately 
     after the coal is severed from the ground, without regard to 
     the existence of any contractual arrangement for the sale or 
     other disposition of the coal or the payment of any royalties 
     between the producer and third parties. The term includes any 
     person who extracts coal from coal waste refuse piles or from 
     the silt waste product which results from the wet washing (or 
     similar processing) of coal.
       (2) Exporter.--The term ``exporter'' means a person, other 
     than a coal producer, who does not have a contract, fee 
     arrangement, or any other agreement with a producer or seller 
     of such coal to export or ship such coal to a third

[[Page 23919]]

     party on behalf of the producer or seller of such coal and--
       (A) is indicated in the shipper's export declaration or 
     other documentation as the exporter of record, or
       (B) actually exported such coal to a foreign country or 
     shipped such coal to a possession of the United States, or 
     caused such coal to be so exported or shipped.
       (3) Related party.--The term ``a party related to such coal 
     producer'' means a person who--
       (A) is related to such coal producer through any degree of 
     common management, stock ownership, or voting control,
       (B) is related (within the meaning of section 144(a)(3) of 
     the Internal Revenue Code of 1986) to such coal producer, or
       (C) has a contract, fee arrangement, or any other agreement 
     with such coal producer to sell such coal to a third party on 
     behalf of such coal producer.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Treasury or the Secretary's designee.
       (e) Timing of Refund.--With respect to any claim for refund 
     filed pursuant to this section, the Secretary shall determine 
     whether the requirements of this section are met not later 
     than 180 days after such claim is filed. If the Secretary 
     determines that the requirements of this section are met, the 
     claim for refund shall be paid not later than 180 days after 
     the Secretary makes such determination.
       (f) Interest.--Any refund paid pursuant to this section 
     shall be paid by the Secretary with interest from the date of 
     overpayment determined by using the overpayment rate and 
     method under section 6621 of the Internal Revenue Code of 
     1986.
       (g) Denial of Double Benefit.--The payment under subsection 
     (a) with respect to any coal shall not exceed--
       (1) in the case of a payment to a coal producer, the amount 
     of tax paid under section 4121 of the Internal Revenue Code 
     of 1986 with respect to such coal by such coal producer or a 
     party related to such coal producer, and
       (2) in the case of a payment to an exporter, an amount 
     equal to $0.825 per ton with respect to such coal exported by 
     the exporter or caused to be exported by the exporter.
       (h) Application of Section.--This section applies only to 
     claims on coal exported or shipped on or after October 1, 
     1990, through the date of the enactment of this Act.
       (i) Standing Not Conferred.--
       (1) Exporters.--With respect to exporters, this section 
     shall not confer standing upon an exporter to commence, or 
     intervene in, any judicial or administrative proceeding 
     concerning a claim for refund by a coal producer of any 
     Federal or State tax, fee, or royalty paid by the coal 
     producer.
       (2) Coal producers.--With respect to coal producers, this 
     section shall not confer standing upon a coal producer to 
     commence, or intervene in, any judicial or administrative 
     proceeding concerning a claim for refund by an exporter of 
     any Federal or State tax, fee, or royalty paid by the 
     producer and alleged to have been passed on to an exporter.

     SEC. 115. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRATION.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business credits) is amended by adding 
     at the end the following new section:

     ``SEC. 45Q. CREDIT FOR CARBON DIOXIDE SEQUESTRATION.

       ``(a) General Rule.--For purposes of section 38, the carbon 
     dioxide sequestration credit for any taxable year is an 
     amount equal to the sum of--
       ``(1) $20 per metric ton of qualified carbon dioxide which 
     is--
       ``(A) captured by the taxpayer at a qualified facility, and
       ``(B) disposed of by the taxpayer in secure geological 
     storage, and
       ``(2) $10 per metric ton of qualified carbon dioxide which 
     is--
       ``(A) captured by the taxpayer at a qualified facility, and
       ``(B) used by the taxpayer as a tertiary injectant in a 
     qualified enhanced oil or natural gas recovery project.
       ``(b) Qualified Carbon Dioxide.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified carbon dioxide' 
     means carbon dioxide captured from an industrial source 
     which--
       ``(A) would otherwise be released into the atmosphere as 
     industrial emission of greenhouse gas, and
       ``(B) is measured at the source of capture and verified at 
     the point of disposal or injection.
       ``(2) Recycled carbon dioxide.--The term `qualified carbon 
     dioxide' includes the initial deposit of captured carbon 
     dioxide used as a tertiary injectant. Such term does not 
     include carbon dioxide that is re-captured, recycled, and re-
     injected as part of the enhanced oil and natural gas recovery 
     process.
       ``(c) Qualified Facility.--For purposes of this section, 
     the term `qualified facility' means any industrial facility--
       ``(1) which is owned by the taxpayer,
       ``(2) at which carbon capture equipment is placed in 
     service, and
       ``(3) which captures not less than 500,000 metric tons of 
     carbon dioxide during the taxable year.
       ``(d) Special Rules and Other Definitions.--For purposes of 
     this section--
       ``(1) Only carbon dioxide captured and disposed of or used 
     within the united states taken into account.--The credit 
     under this section shall apply only with respect to qualified 
     carbon dioxide the capture and disposal or use of which is 
     within--
       ``(A) the United States (within the meaning of section 
     638(1)), or
       ``(B) a possession of the United States (within the meaning 
     of section 638(2)).
       ``(2) Secure geological storage.--The Secretary, in 
     consultation with the Administrator of the Environmental 
     Protection Agency, shall establish regulations for 
     determining adequate security measures for the geological 
     storage of carbon dioxide under subsection (a)(1)(B) such 
     that the carbon dioxide does not escape into the atmosphere. 
     Such term shall include storage at deep saline formations and 
     unminable coal seems under such conditions as the Secretary 
     may determine under such regulations.
       ``(3) Tertiary injectant.--The term `tertiary injectant' 
     has the same meaning as when used within section 193(b)(1).
       ``(4) Qualified enhanced oil or natural gas recovery 
     project.--The term `qualified enhanced oil or natural gas 
     recovery project' has the meaning given the term `qualified 
     enhanced oil recovery project' by section 43(c)(2), by 
     substituting `crude oil or natural gas' for `crude oil' in 
     subparagraph (A)(i) thereof.
       ``(5) Credit attributable to taxpayer.--Any credit under 
     this section shall be attributable to the person that 
     captures and physically or contractually ensures the disposal 
     of or the use as a tertiary injectant of the qualified carbon 
     dioxide, except to the extent provided in regulations 
     prescribed by the Secretary.
       ``(6) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit of any credit allowable 
     under subsection (a) with respect to any qualified carbon 
     dioxide which ceases to be captured, disposed of, or used as 
     a tertiary injectant in a manner consistent with the 
     requirements of this section.
       ``(7) Inflation adjustment.--In the case of any taxable 
     year beginning in a calendar year after 2009, there shall be 
     substituted for each dollar amount contained in subsection 
     (a) an amount equal to the product of--
       ``(A) such dollar amount, multiplied by
       ``(B) the inflation adjustment factor for such calendar 
     year determined under section 43(b)(3)(B) for such calendar 
     year, determined by substituting `2008' for `1990'.
       ``(e) Application of Section.--The credit under this 
     section shall apply with respect to qualified carbon dioxide 
     before the end of the calendar year in which the Secretary, 
     in consultation with the Administrator of the Environmental 
     Protection Agency, certifies that 75,000,000 metric tons of 
     qualified carbon dioxide have been captured and disposed of 
     or used as a tertiary injectant.''.
       (b) Conforming Amendment.--Section 38(b) (relating to 
     general business credit) is amended by striking ``plus'' at 
     the end of paragraph (32), by striking the period at the end 
     of paragraph (33) and inserting ``, plus'', and by adding at 
     the end of following new paragraph:
       ``(34) the carbon dioxide sequestration credit determined 
     under section 45Q(a).''.
       (c) Clerical Amendment.--The table of sections for subpart 
     B of part IV of subchapter A of chapter 1 (relating to other 
     credits) is amended by adding at the end the following new 
     section:

``Sec. 45Q. Credit for carbon dioxide sequestration.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to carbon dioxide captured after the date of the 
     enactment of this Act.

     SEC. 116. CERTAIN INCOME AND GAINS RELATING TO INDUSTRIAL 
                   SOURCE CARBON DIOXIDE TREATED AS QUALIFYING 
                   INCOME FOR PUBLICLY TRADED PARTNERSHIPS.

       (a) In General.--Subparagraph (E) of section 7704(d)(1) 
     (defining qualifying income) is amended by inserting ``or 
     industrial source carbon dioxide'' after ``timber)''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act, 
     in taxable years ending after such date.

     SEC. 117. CARBON AUDIT OF THE TAX CODE.

       (a) Study.--The Secretary of the Treasury shall enter into 
     an agreement with the National Academy of Sciences to 
     undertake a comprehensive review of the Internal Revenue Code 
     of 1986 to identify the types of and specific tax provisions 
     that have the largest effects on carbon and other greenhouse 
     gas emissions and to estimate the magnitude of those effects.
       (b) Report.--Not later than 2 years after the date of 
     enactment of this Act, the National Academy of Sciences shall 
     submit to Congress a report containing the results of study 
     authorized under this section.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $1,500,000 for 
     the period of fiscal years 2009 and 2010.

     TITLE II--TRANSPORTATION AND DOMESTIC FUEL SECURITY PROVISIONS

     SEC. 201. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS 
                   DEPRECIATION FOR BIOMASS ETHANOL PLANT 
                   PROPERTY.

       (a) In General.--Paragraph (3) of section 168(l) is amended 
     to read as follows:
       ``(3) Cellulosic biofuel.--The term `cellulosic biofuel' 
     means any liquid fuel which is produced from any 
     lignocellulosic or hemicellulosic matter that is available on 
     a renewable or recurring basis.''.
       (b) Conforming Amendments.--Subsection (l) of section 168 
     is amended--

[[Page 23920]]

       (1) by striking ``cellulosic biomass ethanol'' each place 
     it appears and inserting ``cellulosic biofuel'',
       (2) by striking ``Cellulosic Biomass Ethanol'' in the 
     heading of such subsection and inserting ``Cellulosic 
     Biofuel'', and
       (3) by striking ``cellulosic biomass ethanol'' in the 
     heading of paragraph (2) thereof and inserting ``cellulosic 
     biofuel''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

     SEC. 202. CREDITS FOR BIODIESEL AND RENEWABLE DIESEL.

       (a) In General.--Sections 40A(g), 6426(c)(6), and 
     6427(e)(5)(B) are each amended by striking ``December 31, 
     2008'' and inserting ``December 31, 2009''.
       (b) Increase in Rate of Credit.--
       (1) Income tax credit.--Paragraphs (1)(A) and (2)(A) of 
     section 40A(b) are each amended by striking ``50 cents'' and 
     inserting ``$1.00''.
       (2) Excise tax credit.--Paragraph (2) of section 6426(c) is 
     amended to read as follows:
       ``(2) Applicable amount.--For purposes of this subsection, 
     the applicable amount is $1.00.''.
       (3) Conforming amendments.--
       (A) Subsection (b) of section 40A is amended by striking 
     paragraph (3) and by redesignating paragraphs (4) and (5) as 
     paragraphs (3) and (4), respectively.
       (B) Paragraph (2) of section 40A(f) is amended to read as 
     follows:
       ``(2) Exception.--Subsection (b)(4) shall not apply with 
     respect to renewable diesel.''.
       (C) Paragraphs (2) and (3) of section 40A(e) are each 
     amended by striking ``subsection (b)(5)(C)'' and inserting 
     ``subsection (b)(4)(C)''.
       (D) Clause (ii) of section 40A(d)(3)(C) is amended by 
     striking ``subsection (b)(5)(B)'' and inserting ``subsection 
     (b)(4)(B)''.
       (c) Uniform Treatment of Diesel Produced From Biomass.--
     Paragraph (3) of section 40A(f) is amended--
       (1) by striking ``diesel fuel'' and inserting ``liquid 
     fuel'',
       (2) by striking ``using a thermal depolymerization 
     process'', and
       (3) by inserting ``, or other equivalent standard approved 
     by the Secretary'' after ``D396''.
       (d) Coproduction of Renewable Diesel With Petroleum 
     Feedstock.--
       (1) In general.--Paragraph (3) of section 40A(f) is amended 
     by adding at the end the following new sentences: ``Such term 
     does not include any fuel derived from coprocessing biomass 
     with a feedstock which is not biomass. For purposes of this 
     paragraph, the term `biomass' has the meaning given such term 
     by section 45K(c)(3).''.
       (2) Conforming amendment.--Paragraph (3) of section 40A(f) 
     is amended by striking ``(as defined in section 45K(c)(3))''.
       (e) Eligibility of Certain Aviation Fuel.--Subsection (f) 
     of section 40A (relating to renewable diesel) is amended by 
     adding at the end the following new paragraph:
       ``(4) Certain aviation fuel.--
       ``(A) In general.--Except as provided in the last 3 
     sentences of paragraph (3), the term `renewable diesel' shall 
     include fuel derived from biomass which meets the 
     requirements of a Department of Defense specification for 
     military jet fuel or an American Society of Testing and 
     Materials specification for aviation turbine fuel.
       ``(B) Application of mixture credits.--In the case of fuel 
     which is treated as renewable diesel solely by reason of 
     subparagraph (A), subsection (b)(1) and section 6426(c) shall 
     be applied with respect to such fuel by treating kerosene as 
     though it were diesel fuel.''.
       (f) Modification Relating to Definition of Agri-
     Biodiesel.--Paragraph (2) of section 40A(d) (relating to 
     agri-biodiesel) is amended by striking ``and mustard seeds'' 
     and inserting ``mustard seeds, and camelina''.
       (g) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to fuel produced, and sold or used, after December 31, 2008.
       (2) Coproduction of renewable diesel with petroleum 
     feedstock.--The amendment made by subsection (d) shall apply 
     to fuel produced, and sold or used, after the date of the 
     enactment of this Act.

     SEC. 203. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO 
                   PROVIDE AN INCENTIVE FOR UNITED STATES 
                   PRODUCTION.

       (a) Alcohol Fuels Credit.--Subsection (d) of section 40 is 
     amended by adding at the end the following new paragraph:
       ``(7) Limitation to alcohol with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any alcohol which is produced outside the 
     United States for use as a fuel outside the United States. 
     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States.''.
       (b) Biodiesel Fuels Credit.--Subsection (d) of section 40A 
     is amended by adding at the end the following new paragraph:
       ``(5) Limitation to biodiesel with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any biodiesel which is produced outside the 
     United States for use as a fuel outside the United States. 
     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States.''.
       (c) Excise Tax Credit.--
       (1) In general.--Section 6426 is amended by adding at the 
     end the following new subsection:
       ``(i) Limitation to Fuels With Connection to the United 
     States.--
       ``(1) Alcohol.--No credit shall be determined under this 
     section with respect to any alcohol which is produced outside 
     the United States for use as a fuel outside the United 
     States.
       ``(2) Biodiesel and alternative fuels.--No credit shall be 
     determined under this section with respect to any biodiesel 
     or alternative fuel which is produced outside the United 
     States for use as a fuel outside the United States.

     For purposes of this subsection, the term `United States' 
     includes any possession of the United States.''.
       (2) Conforming amendment.--Subsection (e) of section 6427 
     is amended by redesignating paragraph (5) as paragraph (6) 
     and by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) Limitation to fuels with connection to the united 
     states.--No amount shall be payable under paragraph (1) or 
     (2) with respect to any mixture or alternative fuel if credit 
     is not allowed with respect to such mixture or alternative 
     fuel by reason of section 6426(i).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to claims for credit or payment made on or after 
     May 15, 2008.

     SEC. 204. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL 
                   CREDIT.

       (a) Extension.--
       (1) Alternative fuel credit.--Paragraph (4) of section 
     6426(d) (relating to alternative fuel credit) is amended by 
     striking ``September 30, 2009'' and inserting ``December 31, 
     2009''.
       (2) Alternative fuel mixture credit.--Paragraph (3) of 
     section 6426(e) (relating to alternative fuel mixture credit) 
     is amended by striking ``September 30, 2009'' and inserting 
     ``December 31, 2009''.
       (3) Payments.--Subparagraph (C) of section 6427(e)(5) 
     (relating to termination) is amended by striking ``September 
     30, 2009'' and inserting ``December 31, 2009''.
       (b) Modifications.--
       (1) Alternative fuel to include compressed or liquified 
     biomass gas.--Paragraph (2) of section 6426(d) (relating to 
     alternative fuel credit) is amended by striking ``and'' at 
     the end of subparagraph (E), by redesignating subparagraph 
     (F) as subparagraph (G), and by inserting after subparagraph 
     (E) the following new subparagraph:
       ``(F) compressed or liquefied gas derived from biomass (as 
     defined in section 45K(c)(3)), and''.
       (2) Credit allowed for aviation use of fuel.--Paragraph (1) 
     of section 6426(d) is amended by inserting ``sold by the 
     taxpayer for use as a fuel in aviation,'' after 
     ``motorboat,''.
       (c) Carbon Capture Requirement for Certain Fuels.--
       (1) In general.--Subsection (d) of section 6426, as amended 
     by subsection (a), is amended by redesignating paragraph (4) 
     as paragraph (5) and by inserting after paragraph (3) the 
     following new paragraph:
       ``(4) Carbon capture requirement.--
       ``(A) In general.--The requirements of this paragraph are 
     met if the fuel is certified, under such procedures as 
     required by the Secretary, as having been derived from coal 
     produced at a gasification facility which separates and 
     sequesters not less than the applicable percentage of such 
     facility's total carbon dioxide emissions.
       ``(B) Applicable percentage.--For purposes of subparagraph 
     (A), the applicable percentage is--
       ``(i) 50 percent in the case of fuel produced after 
     September 30, 2009, and on or before December 30, 2009, and
       ``(ii) 75 percent in the case of fuel produced after 
     December 30, 2009.''.
       (2) Conforming amendment.--Subparagraph (E) of section 
     6426(d)(2) is amended by inserting ``which meets the 
     requirements of paragraph (4) and which is'' after ``any 
     liquid fuel''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to fuel sold or used after the date of the 
     enactment of this Act.

     SEC. 205. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE 
                   MOTOR VEHICLES.

       (a) Plug-in Electric Drive Motor Vehicle Credit.--Subpart B 
     of part IV of subchapter A of chapter 1 (relating to other 
     credits) is amended by adding at the end the following new 
     section:

     ``SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR 
                   VEHICLES.

       ``(a) Allowance of Credit.--
       ``(1) In general.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to the applicable amount with respect to each 
     new qualified plug-in electric drive motor vehicle placed in 
     service by the taxpayer during the taxable year.
       ``(2) Applicable amount.--For purposes of paragraph (1), 
     the applicable amount is sum of--
       ``(A) $2,500, plus
       ``(B) $417 for each kilowatt hour of traction battery 
     capacity in excess of 4 kilowatt hours.
       ``(b) Limitations.--
       ``(1) Limitation based on weight.--The amount of the credit 
     allowed under subsection (a) by reason of subsection (a)(2) 
     shall not exceed--
       ``(A) $7,500, in the case of any new qualified plug-in 
     electric drive motor vehicle with a gross vehicle weight 
     rating of not more than 10,000 pounds,
       ``(B) $10,000, in the case of any new qualified plug-in 
     electric drive motor vehicle with a gross vehicle weight 
     rating of more than 10,000 pounds but not more than 14,000 
     pounds,
       ``(C) $12,500, in the case of any new qualified plug-in 
     electric drive motor vehicle with a gross

[[Page 23921]]

     vehicle weight rating of more than 14,000 pounds but not more 
     than 26,000 pounds, and
       ``(D) $15,000, in the case of any new qualified plug-in 
     electric drive motor vehicle with a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(2) Limitation on number of passenger vehicles and light 
     trucks eligible for credit.--
       ``(A) In general.--In the case of a new qualified plug-in 
     electric drive motor vehicle sold during the phaseout period, 
     only the applicable percentage of the credit otherwise 
     allowable under subsection (a) shall be allowed.
       ``(B) Phaseout period.--For purposes of this subsection, 
     the phaseout period is the period beginning with the second 
     calendar quarter following the calendar quarter which 
     includes the first date on which the total number of such new 
     qualified plug-in electric drive motor vehicles sold for use 
     in the United States after December 31, 2008, is at least 
     250,000.
       ``(C) Applicable percentage.--For purposes of subparagraph 
     (A), the applicable percentage is--
       ``(i) 50 percent for the first 2 calendar quarters of the 
     phaseout period,
       ``(ii) 25 percent for the 3d and 4th calendar quarters of 
     the phaseout period, and
       ``(iii) 0 percent for each calendar quarter thereafter.
       ``(D) Controlled groups.--Rules similar to the rules of 
     section 30B(f)(4) shall apply for purposes of this 
     subsection.
       ``(c) New Qualified Plug-in Electric Drive Motor Vehicle.--
     For purposes of this section, the term `new qualified plug-in 
     electric drive motor vehicle' means a motor vehicle--
       ``(1) which draws propulsion using a traction battery with 
     at least 4 kilowatt hours of capacity,
       ``(2) which uses an offboard source of energy to recharge 
     such battery,
       ``(3) which, in the case of a passenger vehicle or light 
     truck which has a gross vehicle weight rating of not more 
     than 8,500 pounds, has received a certificate of conformity 
     under the Clean Air Act and meets or exceeds the equivalent 
     qualifying California low emission vehicle standard under 
     section 243(e)(2) of the Clean Air Act for that make and 
     model year, and
       ``(A) in the case of a vehicle having a gross vehicle 
     weight rating of 6,000 pounds or less, the Bin 5 Tier II 
     emission standard established in regulations prescribed by 
     the Administrator of the Environmental Protection Agency 
     under section 202(i) of the Clean Air Act for that make and 
     model year vehicle, and
       ``(B) in the case of a vehicle having a gross vehicle 
     weight rating of more than 6,000 pounds but not more than 
     8,500 pounds, the Bin 8 Tier II emission standard which is so 
     established,
       ``(4) the original use of which commences with the 
     taxpayer,
       ``(5) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(6) which is made by a manufacturer.
       ``(d) Application With Other Credits.--
       ``(1) Business credit treated as part of general business 
     credit.--So much of the credit which would be allowed under 
     subsection (a) for any taxable year (determined without 
     regard to this subsection) that is attributable to property 
     of a character subject to an allowance for depreciation shall 
     be treated as a credit listed in section 38(b) for such 
     taxable year (and not allowed under subsection (a)).
       ``(2) Personal credit.--
       ``(A) In general.--For purposes of this title, the credit 
     allowed under subsection (a) for any taxable year (determined 
     after application of paragraph (1)) shall be treated as a 
     credit allowable under subpart A for such taxable year.
       ``(B) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for any taxable year 
     (determined after application of paragraph (1)) shall not 
     exceed the excess of--
       ``(i) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(ii) the sum of the credits allowable under subpart A 
     (other than this section and sections 23 and 25D) and section 
     27 for the taxable year.
       ``(e) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Motor vehicle.--The term `motor vehicle' has the 
     meaning given such term by section 30(c)(2).
       ``(2) Other terms.--The terms `passenger automobile', 
     `light truck', and `manufacturer' have the meanings given 
     such terms in regulations prescribed by the Administrator of 
     the Environmental Protection Agency for purposes of the 
     administration of title II of the Clean Air Act (42 U.S.C. 
     7521 et seq.).
       ``(3) Traction battery capacity.--Traction battery capacity 
     shall be measured in kilowatt hours from a 100 percent state 
     of charge to a zero percent state of charge.
       ``(4) Reduction in basis.--For purposes of this subtitle, 
     the basis of any property for which a credit is allowable 
     under subsection (a) shall be reduced by the amount of such 
     credit so allowed.
       ``(5) No double benefit.--The amount of any deduction or 
     other credit allowable under this chapter for a new qualified 
     plug-in electric drive motor vehicle shall be reduced by the 
     amount of credit allowed under subsection (a) for such 
     vehicle for the taxable year.
       ``(6) Property used by tax-exempt entity.--In the case of a 
     vehicle the use of which is described in paragraph (3) or (4) 
     of section 50(b) and which is not subject to a lease, the 
     person who sold such vehicle to the person or entity using 
     such vehicle shall be treated as the taxpayer that placed 
     such vehicle in service, but only if such person clearly 
     discloses to such person or entity in a document the amount 
     of any credit allowable under subsection (a) with respect to 
     such vehicle (determined without regard to subsection 
     (b)(2)).
       ``(7) Property used outside united states, etc., not 
     qualified.--No credit shall be allowable under subsection (a) 
     with respect to any property referred to in section 50(b)(1) 
     or with respect to the portion of the cost of any property 
     taken into account under section 179.
       ``(8) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit of any credit allowable 
     under subsection (a) with respect to any property which 
     ceases to be property eligible for such credit (including 
     recapture in the case of a lease period of less than the 
     economic life of a vehicle).
       ``(9) Election to not take credit.--No credit shall be 
     allowed under subsection (a) for any vehicle if the taxpayer 
     elects not to have this section apply to such vehicle.
       ``(10) Interaction with air quality and motor vehicle 
     safety standards.--Unless otherwise provided in this section, 
     a motor vehicle shall not be considered eligible for a credit 
     under this section unless such vehicle is in compliance 
     with--
       ``(A) the applicable provisions of the Clean Air Act for 
     the applicable make and model year of the vehicle (or 
     applicable air quality provisions of State law in the case of 
     a State which has adopted such provision under a waiver under 
     section 209(b) of the Clean Air Act), and
       ``(B) the motor vehicle safety provisions of sections 30101 
     through 30169 of title 49, United States Code.
       ``(f) Regulations.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Secretary shall promulgate such regulations as necessary to 
     carry out the provisions of this section.
       ``(2) Coordination in prescription of certain 
     regulations.--The Secretary of the Treasury, in coordination 
     with the Secretary of Transportation and the Administrator of 
     the Environmental Protection Agency, shall prescribe such 
     regulations as necessary to determine whether a motor vehicle 
     meets the requirements to be eligible for a credit under this 
     section.
       ``(g) Termination.--This section shall not apply to 
     property purchased after December 31, 2014.''.
       (b) Coordination With Alternative Motor Vehicle Credit.--
     Section 30B(d)(3) is amended by adding at the end the 
     following new subparagraph:
       ``(D) Exclusion of plug-in vehicles.--Any vehicle with 
     respect to which a credit is allowable under section 30D 
     (determined without regard to subsection (d) thereof) shall 
     not be taken into account under this section.''.
       (c) Credit Made Part of General Business Credit.--Section 
     38(b), as amended by this Act, is amended by striking 
     ``plus'' at the end of paragraph (33), by striking the period 
     at the end of paragraph (34) and inserting ``plus'', and by 
     adding at the end the following new paragraph:
       ``(35) the portion of the new qualified plug-in electric 
     drive motor vehicle credit to which section 30D(d)(1) 
     applies.''.
       (d) Conforming Amendments.--
       (1)(A) Section 24(b)(3)(B), as amended by section 106, is 
     amended by striking ``and 25D'' and inserting ``25D, and 
     30D''.
       (B) Section 25(e)(1)(C)(ii) is amended by inserting 
     ``30D,'' after ``25D,''.
       (C) Section 25B(g)(2), as amended by section 106, is 
     amended by striking ``and 25D'' and inserting ``, 25D, and 
     30D''.
       (D) Section 26(a)(1), as amended by section 106, is amended 
     by striking ``and 25D'' and inserting ``25D, and 30D''.
       (E) Section 1400C(d)(2) is amended by striking ``and 25D'' 
     and inserting ``25D, and 30D''.
       (2) Section 1016(a) is amended by striking ``and'' at the 
     end of paragraph (35), by striking the period at the end of 
     paragraph (36) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(37) to the extent provided in section 30D(e)(4).''.
       (3) Section 6501(m) is amended by inserting ``30D(e)(9),'' 
     after ``30C(e)(5),''.
       (4) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 30D. New qualified plug-in electric drive motor vehicles.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.
       (f) Application of EGTRRA Sunset.--The amendment made by 
     subsection (d)(1)(A) shall be subject to title IX of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001 in 
     the same manner as the provision of such Act to which such 
     amendment relates.

     SEC. 206. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING REDUCTION 
                   UNITS AND ADVANCED INSULATION.

       (a) In General.--Section 4053 is amended by adding at the 
     end the following new paragraphs:
       ``(9) Idling reduction device.--Any device or system of 
     devices which--
       ``(A) is designed to provide to a vehicle those services 
     (such as heat, air conditioning, or electricity) that would 
     otherwise require the operation of the main drive engine 
     while the vehicle is temporarily parked or remains stationary 
     using one or more devices affixed to a tractor, and

[[Page 23922]]

       ``(B) is determined by the Administrator of the 
     Environmental Protection Agency, in consultation with the 
     Secretary of Energy and the Secretary of Transportation, to 
     reduce idling of such vehicle at a motor vehicle rest stop or 
     other location where such vehicles are temporarily parked or 
     remain stationary.
       ``(10) Advanced insulation.--Any insulation that has an R 
     value of not less than R35 per inch.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to sales or installations after the date of the 
     enactment of this Act.

     SEC. 207. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

       (a) Extension of Credit.--Paragraph (2) of section 30C(g) 
     is amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (b) Inclusion of Electricity as a Clean-Burning Fuel.--
     Section 30C(c)(2) is amended by adding at the end the 
     following new subparagraph:
       ``(C) Electricity.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

     SEC. 208. CERTAIN INCOME AND GAINS RELATING TO ALCOHOL FUELS 
                   AND MIXTURES, BIODIESEL FUELS AND MIXTURES, AND 
                   ALTERNATIVE FUELS AND MIXTURES TREATED AS 
                   QUALIFYING INCOME FOR PUBLICLY TRADED 
                   PARTNERSHIPS.

       (a) In General.--Subparagraph (E) of section 7704(d)(1), as 
     amended by this Act, is amended by striking ``or industrial 
     source carbon dioxide'' and inserting ``, industrial source 
     carbon dioxide, or the transportation or storage of any fuel 
     described in subsection (b), (c), (d), or (e) of section 
     6426, or any alcohol fuel defined in section 6426(b)(4)(A) or 
     any biodiesel fuel as defined in section 40A(d)(1)'' after 
     ``timber)''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act, 
     in taxable years ending after such date.

     SEC. 209. EXTENSION AND MODIFICATION OF ELECTION TO EXPENSE 
                   CERTAIN REFINERIES.

       (a) Extension.--Paragraph (1) of section 179C(c) (relating 
     to qualified refinery property) is amended--
       (1) by striking ``January 1, 2012'' in subparagraph (B) and 
     inserting ``January 1, 2014'', and
       (2) by striking ``January 1, 2008'' each place it appears 
     in subparagraph (F) and inserting ``January 1, 2010''.
       (b) Inclusion of Fuel Derived From Shale and Tar Sands.--
       (1) In general.--Subsection (d) of section 179C is amended 
     by inserting ``, or directly from shale or tar sands'' after 
     ``(as defined in section 45K(c))''.
       (2) Conforming amendment.--Paragraph (2) of section 179C(e) 
     is amended by inserting ``shale, tar sands, or'' before 
     ``qualified fuels''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 210. EXTENSION OF SUSPENSION OF TAXABLE INCOME LIMIT ON 
                   PERCENTAGE DEPLETION FOR OIL AND NATURAL GAS 
                   PRODUCED FROM MARGINAL PROPERTIES.

       Subparagraph (H) of section 613A(c)(6) (relating to oil and 
     gas produced from marginal properties) is amended by striking 
     ``for any taxable year'' and all that follows and inserting 
     ``for any taxable year--
       ``(i) beginning after December 31, 1997, and before January 
     1, 2008, or
       ``(ii) beginning after December 31, 2008, and before 
     January 1, 2010.''.

     SEC. 211. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS.

       (a) In General.--Paragraph (1) of section 132(f) is amended 
     by adding at the end the following:
       ``(D) Any qualified bicycle commuting reimbursement.''.
       (b) Limitation on Exclusion.--Paragraph (2) of section 
     132(f) is amended by striking ``and'' at the end of 
     subparagraph (A), by striking the period at the end of 
     subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(C) the applicable annual limitation in the case of any 
     qualified bicycle commuting reimbursement.''.
       (c) Definitions.--Paragraph (5) of section 132(f) is 
     amended by adding at the end the following:
       ``(F) Definitions related to bicycle commuting 
     reimbursement.--
       ``(i) Qualified bicycle commuting reimbursement.--The term 
     `qualified bicycle commuting reimbursement' means, with 
     respect to any calendar year, any employer reimbursement 
     during the 15-month period beginning with the first day of 
     such calendar year for reasonable expenses incurred by the 
     employee during such calendar year for the purchase of a 
     bicycle and bicycle improvements, repair, and storage, if 
     such bicycle is regularly used for travel between the 
     employee's residence and place of employment.
       ``(ii) Applicable annual limitation.--The term `applicable 
     annual limitation' means, with respect to any employee for 
     any calendar year, the product of $20 multiplied by the 
     number of qualified bicycle commuting months during such 
     year.
       ``(iii) Qualified bicycle commuting month.--The term 
     `qualified bicycle commuting month' means, with respect to 
     any employee, any month during which such employee--

       ``(I) regularly uses the bicycle for a substantial portion 
     of the travel between the employee's residence and place of 
     employment, and
       ``(II) does not receive any benefit described in 
     subparagraph (A), (B), or (C) of paragraph (1).''.

       (d) Constructive Receipt of Benefit.--Paragraph (4) of 
     section 132(f) is amended by inserting ``(other than a 
     qualified bicycle commuting reimbursement)'' after 
     ``qualified transportation fringe''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

        TITLE III--ENERGY CONSERVATION AND EFFICIENCY PROVISIONS

     SEC. 301. QUALIFIED ENERGY CONSERVATION BONDS.

       (a) In General.--Subpart I of part IV of subchapter A of 
     chapter 1, as amended by section 107, is amended by adding at 
     the end the following new section:

     ``SEC. 54D. QUALIFIED ENERGY CONSERVATION BONDS.

       ``(a) Qualified Energy Conservation Bond.--For purposes of 
     this subchapter, the term `qualified energy conservation 
     bond' means any bond issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for one or more qualified conservation 
     purposes,
       ``(2) the bond is issued by a State or local government, 
     and
       ``(3) the issuer designates such bond for purposes of this 
     section.
       ``(b) Reduced Credit Amount.--The annual credit determined 
     under section 54A(b) with respect to any qualified energy 
     conservation bond shall be 70 percent of the amount so 
     determined without regard to this subsection.
       ``(c) Limitation on Amount of Bonds Designated.--The 
     maximum aggregate face amount of bonds which may be 
     designated under subsection (a) by any issuer shall not 
     exceed the limitation amount allocated to such issuer under 
     subsection (e).
       ``(d) National Limitation on Amount of Bonds Designated.--
     There is a national qualified energy conservation bond 
     limitation of $800,000,000.
       ``(e) Allocations.--
       ``(1) In general.--The limitation applicable under 
     subsection (d) shall be allocated by the Secretary among the 
     States in proportion to the population of the States.
       ``(2) Allocations to largest local governments.--
       ``(A) In general.--In the case of any State in which there 
     is a large local government, each such local government shall 
     be allocated a portion of such State's allocation which bears 
     the same ratio to the State's allocation (determined without 
     regard to this subparagraph) as the population of such large 
     local government bears to the population of such State.
       ``(B) Allocation of unused limitation to state.--The amount 
     allocated under this subsection to a large local government 
     may be reallocated by such local government to the State in 
     which such local government is located.
       ``(C) Large local government.--For purposes of this 
     section, the term `large local government' means any 
     municipality or county if such municipality or county has a 
     population of 100,000 or more.
       ``(3) Allocation to issuers; restriction on private 
     activity bonds.--Any allocation under this subsection to a 
     State or large local government shall be allocated by such 
     State or large local government to issuers within the State 
     in a manner that results in not less than 70 percent of the 
     allocation to such State or large local government being used 
     to designate bonds which are not private activity bonds.
       ``(f) Qualified Conservation Purpose.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified conservation 
     purpose' means any of the following:
       ``(A) Capital expenditures incurred for purposes of--
       ``(i) reducing energy consumption in publicly-owned 
     buildings by at least 20 percent,
       ``(ii) implementing green community programs,
       ``(iii) rural development involving the production of 
     electricity from renewable energy resources, or
       ``(iv) any qualified facility (as determined under section 
     45(d) without regard to paragraphs (8) and (10) thereof and 
     without regard to any placed in service date).
       ``(B) Expenditures with respect to research facilities, and 
     research grants, to support research in--
       ``(i) development of cellulosic ethanol or other nonfossil 
     fuels,
       ``(ii) technologies for the capture and sequestration of 
     carbon dioxide produced through the use of fossil fuels,
       ``(iii) increasing the efficiency of existing technologies 
     for producing nonfossil fuels,
       ``(iv) automobile battery technologies and other 
     technologies to reduce fossil fuel consumption in 
     transportation, or
       ``(v) technologies to reduce energy use in buildings.
       ``(C) Mass commuting facilities and related facilities that 
     reduce the consumption of energy, including expenditures to 
     reduce pollution from vehicles used for mass commuting.
       ``(D) Demonstration projects designed to promote the 
     commercialization of--
       ``(i) green building technology,
       ``(ii) conversion of agricultural waste for use in the 
     production of fuel or otherwise,
       ``(iii) advanced battery manufacturing technologies,

[[Page 23923]]

       ``(iv) technologies to reduce peak use of electricity, or
       ``(v) technologies for the capture and sequestration of 
     carbon dioxide emitted from combusting fossil fuels in order 
     to produce electricity.
       ``(E) Public education campaigns to promote energy 
     efficiency.
       ``(2) Special rules for private activity bonds.--For 
     purposes of this section, in the case of any private activity 
     bond, the term `qualified conservation purposes' shall not 
     include any expenditure which is not a capital expenditure.
       ``(g) Population.--
       ``(1) In general.--The population of any State or local 
     government shall be determined for purposes of this section 
     as provided in section 146(j) for the calendar year which 
     includes the date of the enactment of this section.
       ``(2) Special rule for counties.--In determining the 
     population of any county for purposes of this section, any 
     population of such county which is taken into account in 
     determining the population of any municipality which is a 
     large local government shall not be taken into account in 
     determining the population of such county.
       ``(h) Application to Indian Tribal Governments.--An Indian 
     tribal government shall be treated for purposes of this 
     section in the same manner as a large local government, 
     except that--
       ``(1) an Indian tribal government shall be treated for 
     purposes of subsection (e) as located within a State to the 
     extent of so much of the population of such government as 
     resides within such State, and
       ``(2) any bond issued by an Indian tribal government shall 
     be treated as a qualified energy conservation bond only if 
     issued as part of an issue the available project proceeds of 
     which are used for purposes for which such Indian tribal 
     government could issue bonds to which section 103(a) 
     applies.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 54A(d), as amended by this 
     Act, is amended to read as follows:
       ``(1) Qualified tax credit bond.--The term `qualified tax 
     credit bond' means--
       ``(A) a qualified forestry conservation bond,
       ``(B) a new clean renewable energy bond, or
       ``(C) a qualified energy conservation bond,
     which is part of an issue that meets requirements of 
     paragraphs (2), (3), (4), (5), and (6).''.
       (2) Subparagraph (C) of section 54A(d)(2), as amended by 
     this Act, is amended to read as follows:
       ``(C) Qualified purpose.--For purposes of this paragraph, 
     the term `qualified purpose' means--
       ``(i) in the case of a qualified forestry conservation 
     bond, a purpose specified in section 54B(e),
       ``(ii) in the case of a new clean renewable energy bond, a 
     purpose specified in section 54C(a)(1), and
       ``(iii) in the case of a qualified energy conservation 
     bond, a purpose specified in section 54D(a)(1).''.
       (3) The table of sections for subpart I of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by adding at the end the following new item:

``Sec. 54D. Qualified energy conservation bonds.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 302. CREDIT FOR NONBUSINESS ENERGY PROPERTY.

       (a) Extension of Credit.--Section 25C(g) is amended by 
     striking ``placed in service after December 31, 2007'' and 
     inserting ``placed in service--
       ``(1) after December 31, 2007, and before January 1, 2009, 
     or
       ``(2) after December 31, 2009.''.
       (b) Qualified Biomass Fuel Property.--
       (1) In general.--Section 25C(d)(3) is amended--
       (A) by striking ``and'' at the end of subparagraph (D),
       (B) by striking the period at the end of subparagraph (E) 
     and inserting ``, and'', and
       (C) by adding at the end the following new subparagraph:
       ``(F) a stove which uses the burning of biomass fuel to 
     heat a dwelling unit located in the United States and used as 
     a residence by the taxpayer, or to heat water for use in such 
     a dwelling unit, and which has a thermal efficiency rating of 
     at least 75 percent.''.
       (2) Biomass fuel.--Section 25C(d) is amended by adding at 
     the end the following new paragraph:
       ``(6) Biomass fuel.--The term `biomass fuel' means any 
     plant-derived fuel available on a renewable or recurring 
     basis, including agricultural crops and trees, wood and wood 
     waste and residues (including wood pellets), plants 
     (including aquatic plants), grasses, residues, and fibers.''.
       (c) Modification of Water Heater Requirements.--Section 
     25C(d)(3)(E) is amended by inserting ``or a thermal 
     efficiency of at least 90 percent'' after ``0.80''.
       (d) Coordination With Credit for Qualified Geothermal Heat 
     pump Property Expenditures.--
       (1) In general.--Paragraph (3) of section 25C(d), as 
     amended by subsections (b) and (c), is amended by striking 
     subparagraph (C) and by redesignating subparagraphs (D), (E), 
     and (F) as subparagraphs (C), (D), and (E), respectively.
       (2) Conforming amendment.--Subparagraph (C) of section 
     25C(d)(2) is amended to read as follows:
       ``(C) Requirements and standards for air conditioners and 
     heat pumps.--The standards and requirements prescribed by the 
     Secretary under subparagraph (B) with respect to the energy 
     efficiency ratio (EER) for central air conditioners and 
     electric heat pumps--
       ``(i) shall require measurements to be based on published 
     data which is tested by manufacturers at 95 degrees 
     Fahrenheit, and
       ``(ii) may be based on the certified data of the Air 
     Conditioning and Refrigeration Institute that are prepared in 
     partnership with the Consortium for Energy Efficiency.''.
       (e) Modification of Qualified Energy Efficiency 
     Improvements.--
       (1) In general.--Paragraph (1) of section 25C(c) is amended 
     by inserting ``, or an asphalt roof with appropriate cooling 
     granules,'' before ``which meet the Energy Star program 
     requirements''.
       (2) Building envelope component.--Subparagraph (D) of 
     section 25C(c)(2) is amended--
       (A) by inserting ``or asphalt roof'' after ``metal roof'', 
     and
       (B) by inserting ``or cooling granules'' after ``pigmented 
     coatings''.
       (f) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made this section shall apply to expenditures made 
     after December 31, 2008.
       (2) Modification of qualified energy efficiency 
     improvements.--The amendments made by subsection (e) shall 
     apply to property placed in service after the date of the 
     enactment of this Act.

     SEC. 303. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

       Subsection (h) of section 179D is amended by striking 
     ``December 31, 2008'' and inserting ``December 31, 2013''.

     SEC. 304. NEW ENERGY EFFICIENT HOME CREDIT.

       Subsection (g) of section 45L (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.

     SEC. 305. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT 
                   FOR APPLIANCES PRODUCED AFTER 2007.

       (a) In General.--Subsection (b) of section 45M is amended 
     to read as follows:
       ``(b) Applicable Amount.--For purposes of subsection (a)--
       ``(1) Dishwashers.--The applicable amount is--
       ``(A) $45 in the case of a dishwasher which is manufactured 
     in calendar year 2008 or 2009 and which uses no more than 324 
     kilowatt hours per year and 5.8 gallons per cycle, and
       ``(B) $75 in the case of a dishwasher which is manufactured 
     in calendar year 2008, 2009, or 2010 and which uses no more 
     than 307 kilowatt hours per year and 5.0 gallons per cycle 
     (5.5 gallons per cycle for dishwashers designed for greater 
     than 12 place settings).
       ``(2) Clothes washers.--The applicable amount is--
       ``(A) $75 in the case of a residential top-loading clothes 
     washer manufactured in calendar year 2008 which meets or 
     exceeds a 1.72 modified energy factor and does not exceed a 
     8.0 water consumption factor,
       ``(B) $125 in the case of a residential top-loading clothes 
     washer manufactured in calendar year 2008 or 2009 which meets 
     or exceeds a 1.8 modified energy factor and does not exceed a 
     7.5 water consumption factor,
       ``(C) $150 in the case of a residential or commercial 
     clothes washer manufactured in calendar year 2008, 2009, or 
     2010 which meets or exceeds 2.0 modified energy factor and 
     does not exceed a 6.0 water consumption factor, and
       ``(D) $250 in the case of a residential or commercial 
     clothes washer manufactured in calendar year 2008, 2009, or 
     2010 which meets or exceeds 2.2 modified energy factor and 
     does not exceed a 4.5 water consumption factor.
       ``(3) Refrigerators.--The applicable amount is--
       ``(A) $50 in the case of a refrigerator which is 
     manufactured in calendar year 2008, and consumes at least 20 
     percent but not more than 22.9 percent less kilowatt hours 
     per year than the 2001 energy conservation standards,
       ``(B) $75 in the case of a refrigerator which is 
     manufactured in calendar year 2008 or 2009, and consumes at 
     least 23 percent but no more than 24.9 percent less kilowatt 
     hours per year than the 2001 energy conservation standards,
       ``(C) $100 in the case of a refrigerator which is 
     manufactured in calendar year 2008, 2009, or 2010, and 
     consumes at least 25 percent but not more than 29.9 percent 
     less kilowatt hours per year than the 2001 energy 
     conservation standards, and
       ``(D) $200 in the case of a refrigerator manufactured in 
     calendar year 2008, 2009, or 2010 and which consumes at least 
     30 percent less energy than the 2001 energy conservation 
     standards.''.
       (b) Eligible Production.--
       (1) Similar treatment for all appliances.--Subsection (c) 
     of section 45M is amended--
       (A) by striking paragraph (2),
       (B) by striking ``(1) In general'' and all that follows 
     through ``the eligible'' and inserting ``The eligible'',
       (C) by moving the text of such subsection in line with the 
     subsection heading, and
       (D) by redesignating subparagraphs (A) and (B) as 
     paragraphs (1) and (2), respectively, and by moving such 
     paragraphs 2 ems to the left.
       (2) Modification of base period.--Paragraph (2) of section 
     45M(c), as amended by paragraph (1), is amended by striking 
     ``3-calendar year'' and inserting ``2-calendar year''.

[[Page 23924]]

       (c) Types of Energy Efficient Appliances.--Subsection (d) 
     of section 45M is amended to read as follows:
       ``(d) Types of Energy Efficient Appliance.--For purposes of 
     this section, the types of energy efficient appliances are--
       ``(1) dishwashers described in subsection (b)(1),
       ``(2) clothes washers described in subsection (b)(2), and
       ``(3) refrigerators described in subsection (b)(3).''.
       (d) Aggregate Credit Amount Allowed.--
       (1) Increase in limit.--Paragraph (1) of section 45M(e) is 
     amended to read as follows:
       ``(1) Aggregate credit amount allowed.--The aggregate 
     amount of credit allowed under subsection (a) with respect to 
     a taxpayer for any taxable year shall not exceed $75,000,000 
     reduced by the amount of the credit allowed under subsection 
     (a) to the taxpayer (or any predecessor) for all prior 
     taxable years beginning after December 31, 2007.''.
       (2) Exception for certain refrigerator and clothes 
     washers.--Paragraph (2) of section 45M(e) is amended to read 
     as follows:
       ``(2) Amount allowed for certain refrigerators and clothes 
     washers.--Refrigerators described in subsection (b)(3)(D) and 
     clothes washers described in subsection (b)(2)(D) shall not 
     be taken into account under paragraph (1).''.
       (e) Qualified Energy Efficient Appliances.--
       (1) In general.--Paragraph (1) of section 45M(f) is amended 
     to read as follows:
       ``(1) Qualified energy efficient appliance.--The term 
     `qualified energy efficient appliance' means--
       ``(A) any dishwasher described in subsection (b)(1),
       ``(B) any clothes washer described in subsection (b)(2), 
     and
       ``(C) any refrigerator described in subsection (b)(3).''.
       (2) Clothes washer.--Section 45M(f)(3) is amended by 
     inserting ``commercial'' before ``residential'' the second 
     place it appears.
       (3) Top-loading clothes washer.--Subsection (f) of section 
     45M is amended by redesignating paragraphs (4), (5), (6), and 
     (7) as paragraphs (5), (6), (7), and (8), respectively, and 
     by inserting after paragraph (3) the following new paragraph:
       ``(4) Top-loading clothes washer.--The term `top-loading 
     clothes washer' means a clothes washer which has the clothes 
     container compartment access located on the top of the 
     machine and which operates on a vertical axis.''.
       (4) Replacement of energy factor.--Section 45M(f)(6), as 
     redesignated by paragraph (3), is amended to read as follows:
       ``(6) Modified energy factor.--The term `modified energy 
     factor' means the modified energy factor established by the 
     Department of Energy for compliance with the Federal energy 
     conservation standard.''.
       (5) Gallons per cycle; water consumption factor.--Section 
     45M(f), as amended by paragraph (3), is amended by adding at 
     the end the following:
       ``(9) Gallons per cycle.--The term `gallons per cycle' 
     means, with respect to a dishwasher, the amount of water, 
     expressed in gallons, required to complete a normal cycle of 
     a dishwasher.
       ``(10) Water consumption factor.--The term `water 
     consumption factor' means, with respect to a clothes washer, 
     the quotient of the total weighted per-cycle water 
     consumption divided by the cubic foot (or liter) capacity of 
     the clothes washer.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to appliances produced after December 31, 2007.

     SEC. 306. ACCELERATED RECOVERY PERIOD FOR DEPRECIATION OF 
                   SMART METERS AND SMART GRID SYSTEMS.

       (a) In General.--Section 168(e)(3)(D) is amended by 
     striking ``and'' at the end of clause (i), by striking the 
     period at the end of clause (ii) and inserting a comma, and 
     by inserting after clause (ii) the following new clauses:
       ``(iii) any qualified smart electric meter, and
       ``(iv) any qualified smart electric grid system.''.
       (b) Definitions.--Section 168(i) is amended by inserting at 
     the end the following new paragraph:
       ``(18) Qualified smart electric meters.--
       ``(A) In general.--The term `qualified smart electric 
     meter' means any smart electric meter which--
       ``(i) is placed in service by a taxpayer who is a supplier 
     of electric energy or a provider of electric energy services, 
     and
       ``(ii) does not have a class life (determined without 
     regard to subsection (e)) of less than 10 years.
       ``(B) Smart electric meter.--For purposes of subparagraph 
     (A), the term `smart electric meter' means any time-based 
     meter and related communication equipment which is capable of 
     being used by the taxpayer as part of a system that--
       ``(i) measures and records electricity usage data on a 
     time-differentiated basis in at least 24 separate time 
     segments per day,
       ``(ii) provides for the exchange of information between 
     supplier or provider and the customer's electric meter in 
     support of time-based rates or other forms of demand 
     response,
       ``(iii) provides data to such supplier or provider so that 
     the supplier or provider can provide energy usage information 
     to customers electronically, and
       ``(iv) provides net metering.
       ``(19) Qualified smart electric grid systems.--
       ``(A) In general.--The term `qualified smart electric grid 
     system' means any smart grid property which--
       ``(i) is used as part of a system for electric distribution 
     grid communications, monitoring, and management placed in 
     service by a taxpayer who is a supplier of electric energy or 
     a provider of electric energy services, and
       ``(ii) does not have a class life (determined without 
     regard to subsection (e)) of less than 10 years.
       ``(B) Smart grid property.--For the purposes of 
     subparagraph (A), the term `smart grid property' means 
     electronics and related equipment that is capable of--
       ``(i) sensing, collecting, and monitoring data of or from 
     all portions of a utility's electric distribution grid,
       ``(ii) providing real-time, two-way communications to 
     monitor or manage such grid, and
       ``(iii) providing real time analysis of and event 
     prediction based upon collected data that can be used to 
     improve electric distribution system reliability, quality, 
     and performance.''.
       (c) Continued Application of 150 Percent Declining Balance 
     Method.--Paragraph (2) of section 168(b) is amended by 
     striking ``or'' at the end of subparagraph (B), by 
     redesignating subparagraph (C) as subparagraph (D), and by 
     inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) any property (other than property described in 
     paragraph (3)) which is a qualified smart electric meter or 
     qualified smart electric grid system, or''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 307. QUALIFIED GREEN BUILDING AND SUSTAINABLE DESIGN 
                   PROJECTS.

       (a) In General.--Paragraph (8) of section 142(l) is amended 
     by striking ``September 30, 2009'' and inserting ``September 
     30, 2012''.
       (b) Treatment of Current Refunding Bonds.--Paragraph (9) of 
     section 142(l) is amended by striking ``October 1, 2009'' and 
     inserting ``October 1, 2012''.
       (c) Accountability.--The second sentence of section 701(d) 
     of the American Jobs Creation Act of 2004 is amended by 
     striking ``issuance,'' and inserting ``issuance of the last 
     issue with respect to such project,''.

     SEC. 308. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN REUSE 
                   AND RECYCLING PROPERTY.

       (a) In General.--Section 168 is amended by adding at the 
     end the following new subsection:
       ``(m) Special Allowance for Certain Reuse and Recycling 
     Property.--
       ``(1) In general.--In the case of any qualified reuse and 
     recycling property--
       ``(A) the depreciation deduction provided by section 167(a) 
     for the taxable year in which such property is placed in 
     service shall include an allowance equal to 50 percent of the 
     adjusted basis of the qualified reuse and recycling property, 
     and
       ``(B) the adjusted basis of the qualified reuse and 
     recycling property shall be reduced by the amount of such 
     deduction before computing the amount otherwise allowable as 
     a depreciation deduction under this chapter for such taxable 
     year and any subsequent taxable year.
       ``(2) Qualified reuse and recycling property.--For purposes 
     of this subsection--
       ``(A) In general.--The term `qualified reuse and recycling 
     property' means any reuse and recycling property--
       ``(i) to which this section applies,
       ``(ii) which has a useful life of at least 5 years,
       ``(iii) the original use of which commences with the 
     taxpayer after August 31, 2008, and
       ``(iv) which is--

       ``(I) acquired by purchase (as defined in section 
     179(d)(2)) by the taxpayer after August 31, 2008, but only if 
     no written binding contract for the acquisition was in effect 
     before September 1, 2008, or
       ``(II) acquired by the taxpayer pursuant to a written 
     binding contract which was entered into after August 31, 
     2008.

       ``(B) Exceptions.--
       ``(i) Bonus depreciation property under subsection (k).--
     The term `qualified reuse and recycling property' shall not 
     include any property to which section 168(k) applies.
       ``(ii) Alternative depreciation property.--The term 
     `qualified reuse and recycling property' shall not include 
     any property to which the alternative depreciation system 
     under subsection (g) applies, determined without regard to 
     paragraph (7) of subsection (g) (relating to election to have 
     system apply).
       ``(iii) Election out.--If a taxpayer makes an election 
     under this clause with respect to any class of property for 
     any taxable year, this subsection shall not apply to all 
     property in such class placed in service during such taxable 
     year.
       ``(C) Special rule for self-constructed property.--In the 
     case of a taxpayer manufacturing, constructing, or producing 
     property for the taxpayer's own use, the requirements of 
     clause (iv) of subparagraph (A) shall be treated as met if 
     the taxpayer begins manufacturing, constructing, or producing 
     the property after August 31, 2008.
       ``(D) Deduction allowed in computing minimum tax.--For 
     purposes of determining alternative minimum taxable income 
     under section 55, the deduction under subsection (a) for 
     qualified reuse and recycling property shall be determined 
     under this section without regard to any adjustment under 
     section 56.

[[Page 23925]]

       ``(3) Definitions.--For purposes of this subsection--
       ``(A) Reuse and recycling property.--
       ``(i) In general.--The term `reuse and recycling property' 
     means any machinery and equipment (not including buildings or 
     real estate), along with all appurtenances thereto, including 
     software necessary to operate such equipment, which is used 
     exclusively to collect, distribute, or recycle qualified 
     reuse and recyclable materials.
       ``(ii) Exclusion.--Such term does not include rolling stock 
     or other equipment used to transport reuse and recyclable 
     materials.
       ``(B) Qualified reuse and recyclable materials.--
       ``(i) In general.--The term `qualified reuse and recyclable 
     materials' means scrap plastic, scrap glass, scrap textiles, 
     scrap rubber, scrap packaging, recovered fiber, scrap ferrous 
     and nonferrous metals, or electronic scrap generated by an 
     individual or business.
       ``(ii) Electronic scrap.--For purposes of clause (i), the 
     term `electronic scrap' means--

       ``(I) any cathode ray tube, flat panel screen, or similar 
     video display device with a screen size greater than 4 inches 
     measured diagonally, or
       ``(II) any central processing unit.

       ``(C) Recycling or recycle.--The term `recycling' or 
     `recycle' means that process (including sorting) by which 
     worn or superfluous materials are manufactured or processed 
     into specification grade commodities that are suitable for 
     use as a replacement or substitute for virgin materials in 
     manufacturing tangible consumer and commercial products, 
     including packaging.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after August 31, 
     2008.

                      TITLE IV--REVENUE PROVISIONS

     SEC. 401. LIMITATION OF DEDUCTION FOR INCOME ATTRIBUTABLE TO 
                   DOMESTIC PRODUCTION OF OIL, GAS, OR PRIMARY 
                   PRODUCTS THEREOF.

       (a) In General.--Section 199(d) is amended by redesignating 
     paragraph (9) as paragraph (10) and by inserting after 
     paragraph (8) the following new paragraph:
       ``(9) Special rule for taxpayers with oil related qualified 
     production activities income.--
       ``(A) In general.--If a taxpayer has oil related qualified 
     production activities income for any taxable year beginning 
     after 2009, the amount otherwise allowable as a deduction 
     under subsection (a) shall be reduced by 3 percent of the 
     least of--
       ``(i) the oil related qualified production activities 
     income of the taxpayer for the taxable year,
       ``(ii) the qualified production activities income of the 
     taxpayer for the taxable year, or
       ``(iii) taxable income (determined without regard to this 
     section).
       ``(B) Oil related qualified production activities income.--
     For purposes of this paragraph, the term `oil related 
     qualified production activities income' means for any taxable 
     year the qualified production activities income which is 
     attributable to the production, refining, processing, 
     transportation, or distribution of oil, gas, or any primary 
     product thereof during such taxable year.
       ``(C) Primary product.--For purposes of this paragraph, the 
     term `primary product' has the same meaning as when used in 
     section 927(a)(2)(C), as in effect before its repeal.''.
       (b) Conforming Amendment.--Section 199(d)(2) (relating to 
     application to individuals) is amended by striking 
     ``subsection (a)(1)(B)'' and inserting ``subsections 
     (a)(1)(B) and (d)(9)(A)(iii)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

     SEC. 402. ELIMINATION OF THE DIFFERENT TREATMENT OF FOREIGN 
                   OIL AND GAS EXTRACTION INCOME AND FOREIGN OIL 
                   RELATED INCOME FOR PURPOSES OF THE FOREIGN TAX 
                   CREDIT.

       (a) In General.--Subsections (a) and (b) of section 907 
     (relating to special rules in case of foreign oil and gas 
     income) are amended to read as follows:
       ``(a) Reduction in Amount Allowed as Foreign Tax Under 
     Section 901.--In applying section 901, the amount of any 
     foreign oil and gas taxes paid or accrued (or deemed to have 
     been paid) during the taxable year which would (but for this 
     subsection) be taken into account for purposes of section 901 
     shall be reduced by the amount (if any) by which the amount 
     of such taxes exceeds the product of--
       ``(1) the amount of the combined foreign oil and gas income 
     for the taxable year,
       ``(2) multiplied by--
       ``(A) in the case of a corporation, the percentage which is 
     equal to the highest rate of tax specified under section 
     11(b), or
       ``(B) in the case of an individual, a fraction the 
     numerator of which is the tax against which the credit under 
     section 901(a) is taken and the denominator of which is the 
     taxpayer's entire taxable income.
       ``(b) Combined Foreign Oil and Gas Income; Foreign Oil and 
     Gas Taxes.--For purposes of this section--
       ``(1) Combined foreign oil and gas income.--The term 
     `combined foreign oil and gas income' means, with respect to 
     any taxable year, the sum of--
       ``(A) foreign oil and gas extraction income, and
       ``(B) foreign oil related income.
       ``(2) Foreign oil and gas taxes.--The term `foreign oil and 
     gas taxes' means, with respect to any taxable year, the sum 
     of--
       ``(A) oil and gas extraction taxes, and
       ``(B) any income, war profits, and excess profits taxes 
     paid or accrued (or deemed to have been paid or accrued under 
     section 902 or 960) during the taxable year with respect to 
     foreign oil related income (determined without regard to 
     subsection (c)(4)) or loss which would be taken into account 
     for purposes of section 901 without regard to this 
     section.''.
       (b) Recapture of Foreign Oil and Gas Losses.--Paragraph (4) 
     of section 907(c) (relating to recapture of foreign oil and 
     gas extraction losses by recharacterizing later extraction 
     income) is amended to read as follows:
       ``(4) Recapture of foreign oil and gas losses by 
     recharacterizing later combined foreign oil and gas income.--
       ``(A) In general.--The combined foreign oil and gas income 
     of a taxpayer for a taxable year (determined without regard 
     to this paragraph) shall be reduced--
       ``(i) first by the amount determined under subparagraph 
     (B), and
       ``(ii) then by the amount determined under subparagraph 
     (C).

     The aggregate amount of such reductions shall be treated as 
     income (from sources without the United States) which is not 
     combined foreign oil and gas income.
       ``(B) Reduction for pre-2009 foreign oil extraction 
     losses.--The reduction under this paragraph shall be equal to 
     the lesser of--
       ``(i) the foreign oil and gas extraction income of the 
     taxpayer for the taxable year (determined without regard to 
     this paragraph), or
       ``(ii) the excess of--

       ``(I) the aggregate amount of foreign oil extraction losses 
     for preceding taxable years beginning after December 31, 
     1982, and before January 1, 2009, over
       ``(II) so much of such aggregate amount as was 
     recharacterized under this paragraph (as in effect before and 
     after the date of the enactment of the Energy Improvement and 
     Extension Act of 2008) for preceding taxable years beginning 
     after December 31, 1982.

       ``(C) Reduction for post-2008 foreign oil and gas losses.--
     The reduction under this paragraph shall be equal to the 
     lesser of--
       ``(i) the combined foreign oil and gas income of the 
     taxpayer for the taxable year (determined without regard to 
     this paragraph), reduced by an amount equal to the reduction 
     under subparagraph (A) for the taxable year, or
       ``(ii) the excess of--

       ``(I) the aggregate amount of foreign oil and gas losses 
     for preceding taxable years beginning after December 31, 
     2008, over
       ``(II) so much of such aggregate amount as was 
     recharacterized under this paragraph for preceding taxable 
     years beginning after December 31, 2008.

       ``(D) Foreign oil and gas loss defined.--
       ``(i) In general.--For purposes of this paragraph, the term 
     `foreign oil and gas loss' means the amount by which--

       ``(I) the gross income for the taxable year from sources 
     without the United States and its possessions (whether or not 
     the taxpayer chooses the benefits of this subpart for such 
     taxable year) taken into account in determining the combined 
     foreign oil and gas income for such year, is exceeded by
       ``(II) the sum of the deductions properly apportioned or 
     allocated thereto.

       ``(ii) Net operating loss deduction not taken into 
     account.--For purposes of clause (i), the net operating loss 
     deduction allowable for the taxable year under section 172(a) 
     shall not be taken into account.
       ``(iii) Expropriation and casualty losses not taken into 
     account.--For purposes of clause (i), there shall not be 
     taken into account--

       ``(I) any foreign expropriation loss (as defined in section 
     172(h) (as in effect on the day before the date of the 
     enactment of the Revenue Reconciliation Act of 1990)) for the 
     taxable year, or
       ``(II) any loss for the taxable year which arises from 
     fire, storm, shipwreck, or other casualty, or from theft,

     to the extent such loss is not compensated for by insurance 
     or otherwise.
       ``(iv) Foreign oil extraction loss.--For purposes of 
     subparagraph (B)(ii)(I), foreign oil extraction losses shall 
     be determined under this paragraph as in effect on the day 
     before the date of the enactment of the Energy Improvement 
     and Extension Act of 2008.''.
       (c) Carryback and Carryover of Disallowed Credits.--Section 
     907(f) (relating to carryback and carryover of disallowed 
     credits) is amended--
       (1) by striking ``oil and gas extraction taxes'' each place 
     it appears and inserting ``foreign oil and gas taxes'', and
       (2) by adding at the end the following new paragraph:
       ``(4) Transition rules for pre-2009 and 2009 disallowed 
     credits.--
       ``(A) Pre-2009 credits.--In the case of any unused credit 
     year beginning before January 1, 2009, this subsection shall 
     be applied to any unused oil and gas extraction taxes carried 
     from such unused credit year to a year beginning after 
     December 31, 2008--
       ``(i) by substituting `oil and gas extraction taxes' for 
     `foreign oil and gas taxes' each place it appears in 
     paragraphs (1), (2), and (3), and
       ``(ii) by computing, for purposes of paragraph (2)(A), the 
     limitation under subparagraph (A) for the year to which such 
     taxes are carried by substituting `foreign oil and gas 
     extraction income' for `foreign oil and gas income' in 
     subsection (a).
       ``(B) 2009 credits.--In the case of any unused credit year 
     beginning in 2009, the amendments

[[Page 23926]]

     made to this subsection by the Energy Improvement and 
     Extension Act of 2008 shall be treated as being in effect for 
     any preceding year beginning before January 1, 2009, solely 
     for purposes of determining how much of the unused foreign 
     oil and gas taxes for such unused credit year may be deemed 
     paid or accrued in such preceding year.''.
       (d) Conforming Amendment.--Section 6501(i) is amended by 
     striking ``oil and gas extraction taxes'' and inserting 
     ``foreign oil and gas taxes''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

     SEC. 403. BROKER REPORTING OF CUSTOMER'S BASIS IN SECURITIES 
                   TRANSACTIONS.

       (a) In General.--
       (1) Broker reporting for securities transactions.--Section 
     6045 is amended by adding at the end the following new 
     subsection:
       ``(g) Additional Information Required in the Case of 
     Securities Transactions, etc.--
       ``(1) In general.--If a broker is otherwise required to 
     make a return under subsection (a) with respect to the gross 
     proceeds of the sale of a covered security, the broker shall 
     include in such return the information described in paragraph 
     (2).
       ``(2) Additional information required.--
       ``(A) In general.--The information required under paragraph 
     (1) to be shown on a return with respect to a covered 
     security of a customer shall include the customer's adjusted 
     basis in such security and whether any gain or loss with 
     respect to such security is long-term or short-term (within 
     the meaning of section 1222).
       ``(B) Determination of adjusted basis.--For purposes of 
     subparagraph (A)--
       ``(i) In general.--The customer's adjusted basis shall be 
     determined--

       ``(I) in the case of any security (other than any stock for 
     which an average basis method is permissible under section 
     1012), in accordance with the first-in first-out method 
     unless the customer notifies the broker by means of making an 
     adequate identification of the stock sold or transferred, and
       ``(II) in the case of any stock for which an average basis 
     method is permissible under section 1012, in accordance with 
     the broker's default method unless the customer notifies the 
     broker that he elects another acceptable method under section 
     1012 with respect to the account in which such stock is held.

       ``(ii) Exception for wash sales.--Except as otherwise 
     provided by the Secretary, the customer's adjusted basis 
     shall be determined without regard to section 1091 (relating 
     to loss from wash sales of stock or securities) unless the 
     transactions occur in the same account with respect to 
     identical securities.
       ``(3) Covered security.--For purposes of this subsection--
       ``(A) In general.--The term `covered security' means any 
     specified security acquired on or after the applicable date 
     if such security--
       ``(i) was acquired through a transaction in the account in 
     which such security is held, or
       ``(ii) was transferred to such account from an account in 
     which such security was a covered security, but only if the 
     broker received a statement under section 6045A with respect 
     to the transfer.
       ``(B) Specified security.--The term `specified security' 
     means--
       ``(i) any share of stock in a corporation,
       ``(ii) any note, bond, debenture, or other evidence of 
     indebtedness,
       ``(iii) any commodity, or contract or derivative with 
     respect to such commodity, if the Secretary determines that 
     adjusted basis reporting is appropriate for purposes of this 
     subsection, and
       ``(iv) any other financial instrument with respect to which 
     the Secretary determines that adjusted basis reporting is 
     appropriate for purposes of this subsection.
       ``(C) Applicable date.--The term `applicable date' means--
       ``(i) January 1, 2011, in the case of any specified 
     security which is stock in a corporation (other than any 
     stock described in clause (ii)),
       ``(ii) January 1, 2012, in the case of any stock for which 
     an average basis method is permissible under section 1012, 
     and
       ``(iii) January 1, 2013, or such later date determined by 
     the Secretary in the case of any other specified security.
       ``(4) Treatment of s corporations.--In the case of the sale 
     of a covered security acquired by an S corporation (other 
     than a financial institution) after December 31, 2011, such S 
     corporation shall be treated in the same manner as a 
     partnership for purposes of this section.
       ``(5) Special rules for short sales.--In the case of a 
     short sale, reporting under this section shall be made for 
     the year in which such sale is closed.''.
       (2) Broker information required with respect to options.--
     Section 6045, as amended by subsection (a), is amended by 
     adding at the end the following new subsection:
       ``(h) Application to Options on Securities.--
       ``(1) Exercise of option.--For purposes of this section, if 
     a covered security is acquired or disposed of pursuant to the 
     exercise of an option that was granted or acquired in the 
     same account as the covered security, the amount received 
     with respect to the grant or paid with respect to the 
     acquisition of such option shall be treated as an adjustment 
     to gross proceeds or as an adjustment to basis, as the case 
     may be.
       ``(2) Lapse or closing transaction.--In the case of the 
     lapse (or closing transaction (as defined in section 
     1234(b)(2)(A))) of an option on a specified security or the 
     exercise of a cash-settled option on a specified security, 
     reporting under subsections (a) and (g) with respect to such 
     option shall be made for the calendar year which includes the 
     date of such lapse, closing transaction, or exercise.
       ``(3) Prospective application.--Paragraphs (1) and (2) 
     shall not apply to any option which is granted or acquired 
     before January 1, 2013.
       ``(4) Definitions.--For purposes of this subsection, the 
     terms `covered security' and `specified security' shall have 
     the meanings given such terms in subsection (g)(3).''.
       (3) Extension of period for statements sent to customers.--
       (A) In general.--Subsection (b) of section 6045 is amended 
     by striking ``January 31'' and inserting ``February 15''.
       (B) Statements related to substitute payments.--Subsection 
     (d) of section 6045 is amended--
       (i) by striking ``at such time and'', and
       (ii) by inserting after ``other item.'' the following new 
     sentence: ``The written statement required under the 
     preceding sentence shall be furnished on or before February 
     15 of the year following the calendar year in which the 
     payment was made.''.
       (C) Other statements.--Subsection (b) of section 6045 is 
     amended by adding at the end the following: ``In the case of 
     a consolidated reporting statement (as defined in 
     regulations) with respect to any customer, any statement 
     which would otherwise be required to be furnished on or 
     before January 31 of a calendar year with respect to any item 
     reportable to the taxpayer shall instead be required to be 
     furnished on or before February 15 of such calendar year if 
     furnished with such consolidated reporting statement.''.
       (b) Determination of Basis of Certain Securities on Account 
     by Account or Average Basis Method.--Section 1012 is 
     amended--
       (1) by striking ``The basis of property'' and inserting the 
     following:
       ``(a) In General.--The basis of property'',
       (2) by striking ``The cost of real property'' and inserting 
     the following:
       ``(b) Special Rule for Apportioned Real Estate Taxes.--The 
     cost of real property'', and
       (3) by adding at the end the following new subsections:
       ``(c) Determinations by Account.--
       ``(1) In general.--In the case of the sale, exchange, or 
     other disposition of a specified security on or after the 
     applicable date, the conventions prescribed by regulations 
     under this section shall be applied on an account by account 
     basis.
       ``(2) Application to certain funds.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     any stock for which an average basis method is permissible 
     under section 1012 which is acquired before January 1, 2012, 
     shall be treated as a separate account from any such stock 
     acquired on or after such date.
       ``(B) Election fund for treatment as single account.--If a 
     fund described in subparagraph (A) elects to have this 
     subparagraph apply with respect to one or more of its 
     stockholders--
       ``(i) subparagraph (A) shall not apply with respect to any 
     stock in such fund held by such stockholders, and
       ``(ii) all stock in such fund which is held by such 
     stockholders shall be treated as covered securities described 
     in section 6045(g)(3) without regard to the date of the 
     acquisition of such stock.

     A rule similar to the rule of the preceding sentence shall 
     apply with respect to a broker holding such stock as a 
     nominee.
       ``(3) Definitions.--For purposes of this section, the terms 
     `specified security' and `applicable date' shall have the 
     meaning given such terms in section 6045(g).
       ``(d) Average Basis for Stock Acquired Pursuant to a 
     Dividend Reinvestment Plan.--
       ``(1) In general.--In the case of any stock acquired after 
     December 31, 2010, in connection with a dividend reinvestment 
     plan, the basis of such stock while held as part of such plan 
     shall be determined using one of the methods which may be 
     used for determining the basis of stock in an open-end fund.
       ``(2) Treatment after transfer.--In the case of the 
     transfer to another account of stock to which paragraph (1) 
     applies, such stock shall have a cost basis in such other 
     account equal to its basis in the dividend reinvestment plan 
     immediately before such transfer (properly adjusted for any 
     fees or other charges taken into account in connection with 
     such transfer).
       ``(3) Separate accounts; election for treatment as single 
     account.--Rules similar to the rules of subsection (c)(2) 
     shall apply for purposes of this subsection.
       ``(4) Dividend reinvestment plan.--For purposes of this 
     subsection--
       ``(A) In general.--The term `dividend reinvestment plan' 
     means any arrangement under which dividends on any stock are 
     reinvested in stock identical to the stock with respect to 
     which the dividends are paid.
       ``(B) Initial stock acquisition treated as acquired in 
     connection with plan.--Stock shall be treated as acquired in 
     connection with a dividend reinvestment plan if such stock is 
     acquired pursuant to such plan or if the dividends paid on 
     such stock are subject to such plan.''.
       (c) Information by Transferors To Aid Brokers.--
       (1) In general.--Subpart B of part III of subchapter A of 
     chapter 61 is amended by inserting after section 6045 the 
     following new section:

[[Page 23927]]



     ``SEC. 6045A. INFORMATION REQUIRED IN CONNECTION WITH 
                   TRANSFERS OF COVERED SECURITIES TO BROKERS.

       ``(a) Furnishing of Information.--Every applicable person 
     which transfers to a broker (as defined in section 
     6045(c)(1)) a security which is a covered security (as 
     defined in section 6045(g)(3)) in the hands of such 
     applicable person shall furnish to such broker a written 
     statement in such manner and setting forth such information 
     as the Secretary may by regulations prescribe for purposes of 
     enabling such broker to meet the requirements of section 
     6045(g).
       ``(b) Applicable Person.--For purposes of subsection (a), 
     the term `applicable person' means--
       ``(1) any broker (as defined in section 6045(c)(1)), and
       ``(2) any other person as provided by the Secretary in 
     regulations.
       ``(c) Time for Furnishing Statement.--Except as otherwise 
     provided by the Secretary, any statement required by 
     subsection (a) shall be furnished not later than 15 days 
     after the date of the transfer described in such 
     subsection.''.
       (2) Assessable penalties.--Paragraph (2) of section 
     6724(d), as amended by the Housing Assistance Tax Act of 
     2008, is amended by redesignating subparagraphs (I) through 
     (DD) as subparagraphs (J) through (EE), respectively, and by 
     inserting after subparagraph (H) the following new 
     subparagraph:
       ``(I) section 6045A (relating to information required in 
     connection with transfers of covered securities to 
     brokers),''.
       (3) Clerical amendment.--The table of sections for subpart 
     B of part III of subchapter A of chapter 61 is amended by 
     inserting after the item relating to section 6045 the 
     following new item:

``Sec. 6045A. Information required in connection with transfers of 
              covered securities to brokers.''.
       (d) Additional Issuer Information To Aid Brokers.--
       (1) In general.--Subpart B of part III of subchapter A of 
     chapter 61, as amended by subsection (b), is amended by 
     inserting after section 6045A the following new section:

     ``SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING BASIS OF 
                   SPECIFIED SECURITIES.

       ``(a) In General.--According to the forms or regulations 
     prescribed by the Secretary, any issuer of a specified 
     security shall make a return setting forth--
       ``(1) a description of any organizational action which 
     affects the basis of such specified security of such issuer,
       ``(2) the quantitative effect on the basis of such 
     specified security resulting from such action, and
       ``(3) such other information as the Secretary may 
     prescribe.
       ``(b) Time for Filing Return.--Any return required by 
     subsection (a) shall be filed not later than the earlier of--
       ``(1) 45 days after the date of the action described in 
     subsection (a), or
       ``(2) January 15 of the year following the calendar year 
     during which such action occurred.
       ``(c) Statements To Be Furnished to Holders of Specified 
     Securities or Their Nominees.--According to the forms or 
     regulations prescribed by the Secretary, every person 
     required to make a return under subsection (a) with respect 
     to a specified security shall furnish to the nominee with 
     respect to the specified security (or certificate holder if 
     there is no nominee) a written statement showing--
       ``(1) the name, address, and phone number of the 
     information contact of the person required to make such 
     return,
       ``(2) the information required to be shown on such return 
     with respect to such security, and
       ``(3) such other information as the Secretary may 
     prescribe.

     The written statement required under the preceding sentence 
     shall be furnished to the holder on or before January 15 of 
     the year following the calendar year during which the action 
     described in subsection (a) occurred.
       ``(d) Specified Security.--For purposes of this section, 
     the term `specified security' has the meaning given such term 
     by section 6045(g)(3)(B). No return shall be required under 
     this section with respect to actions described in subsection 
     (a) with respect to a specified security which occur before 
     the applicable date (as defined in section 6045(g)(3)(C)) 
     with respect to such security.
       ``(e) Public Reporting in Lieu of Return.--The Secretary 
     may waive the requirements under subsections (a) and (c) with 
     respect to a specified security, if the person required to 
     make the return under subsection (a) makes publicly 
     available, in such form and manner as the Secretary 
     determines necessary to carry out the purposes of this 
     section--
       ``(1) the name, address, phone number, and email address of 
     the information contact of such person, and
       ``(2) the information described in paragraphs (1), (2), and 
     (3) of subsection (a).''.
       (2) Assessable penalties.--
       (A) Subparagraph (B) of section 6724(d)(1), as amended by 
     the Housing Assistance Tax Act of 2008, is amended by 
     redesignating clause (iv) and each of the clauses which 
     follow as clauses (v) through (xxiii), respectively, and by 
     inserting after clause (iii) the following new clause:
       ``(iv) section 6045B(a) (relating to returns relating to 
     actions affecting basis of specified securities),''.
       (B) Paragraph (2) of section 6724(d), as amended by the 
     Housing Assistance Tax Act of 2008 and by subsection (c)(2), 
     is amended by redesignating subparagraphs (J) through (EE) as 
     subparagraphs (K) through (FF), respectively, and by 
     inserting after subparagraph (I) the following new 
     subparagraph:
       ``(J) subsections (c) and (e) of section 6045B (relating to 
     returns relating to actions affecting basis of specified 
     securities),''.
       (3) Clerical amendment.--The table of sections for subpart 
     B of part III of subchapter A of chapter 61, as amended by 
     subsection (b)(3), is amended by inserting after the item 
     relating to section 6045A the following new item:

``Sec. 6045B. Returns relating to actions affecting basis of specified 
              securities.''.
       (e) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall take 
     effect on January 1, 2011.
       (2) Extension of period for statements sent to customers.--
     The amendments made by subsection (a)(3) shall apply to 
     statements required to be furnished after December 31, 2008.

     SEC. 404. 0.2 PERCENT FUTA SURTAX.

       (a) In General.--Section 3301 (relating to rate of tax) is 
     amended--
       (1) by striking ``through 2008'' in paragraph (1) and 
     inserting ``through 2009'', and
       (2) by striking ``calendar year 2009'' in paragraph (2) and 
     inserting ``calendar year 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to wages paid after December 31, 2008.

     SEC. 405. INCREASE AND EXTENSION OF OIL SPILL LIABILITY TRUST 
                   FUND TAX.

       (a) Increase in Rate.--
       (1) In general.--Section 4611(c)(2)(B) (relating to rates) 
     is amended by striking ``is 5 cents a barrel.'' and inserting 
     ``is--
       ``(i) in the case of crude oil received or petroleum 
     products entered before January 1, 2017, 8 cents a barrel, 
     and
       ``(ii) in the case of crude oil received or petroleum 
     products entered after December 31, 2016, 9 cents a 
     barrel.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply on and after the first day of the first calendar 
     quarter beginning more than 60 days after the date of the 
     enactment of this Act.
       (b) Extension.--
       (1) In general.--Section 4611(f) (relating to application 
     of Oil Spill Liability Trust Fund financing rate) is amended 
     by striking paragraphs (2) and (3) and inserting the 
     following new paragraph:
       ``(2) Termination.--The Oil Spill Liability Trust Fund 
     financing rate shall not apply after December 31, 2017.''.
       (2) Conforming amendment.--Section 4611(f)(1) is amended by 
     striking ``paragraphs (2) and (3)'' and inserting ``paragraph 
     (2)''.
       (3) Effective date.--The amendments made by this subsection 
     shall take effect on the date of the enactment of this Act.

      DIVISION C--TAX EXTENDERS AND ALTERNATIVE MINIMUM TAX RELIEF

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF 
                   CONTENTS.

       (a) Short Title.--This division may be cited as the ``Tax 
     Extenders and Alternative Minimum Tax Relief Act of 2008''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this division an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents of this 
     division is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.

                TITLE I--ALTERNATIVE MINIMUM TAX RELIEF

Sec. 101. Extension of alternative minimum tax relief for nonrefundable 
              personal credits.
Sec. 102. Extension of increased alternative minimum tax exemption 
              amount.
Sec. 103. Increase of AMT refundable credit amount for individuals with 
              long-term unused credits for prior year minimum tax 
              liability, etc.

            TITLE II--EXTENSION OF INDIVIDUAL TAX PROVISIONS

Sec. 201. Deduction for State and local sales taxes.
Sec. 202. Deduction of qualified tuition and related expenses.
Sec. 203. Deduction for certain expenses of elementary and secondary 
              school teachers.
Sec. 204. Additional standard deduction for real property taxes for 
              nonitemizers.
Sec. 205. Tax-free distributions from individual retirement plans for 
              charitable purposes.
Sec. 206. Treatment of certain dividends of regulated investment 
              companies.
Sec. 207. Stock in RIC for purposes of determining estates of 
              nonresidents not citizens.
Sec. 208. Qualified investment entities.

            TITLE III--EXTENSION OF BUSINESS TAX PROVISIONS

Sec. 301. Extension and modification of research credit.
Sec. 302. New markets tax credit.
Sec. 303. Subpart F exception for active financing income.
Sec. 304. Extension of look-thru rule for related controlled foreign 
              corporations.
Sec. 305. Extension of 15-year straight-line cost recovery for 
              qualified leasehold improvements and qualified restaurant 
              improvements; 15-year straight-line cost recovery for 
              certain improvements to retail space.

[[Page 23928]]

Sec. 306. Modification of tax treatment of certain payments to 
              controlling exempt organizations.
Sec. 307. Basis adjustment to stock of S corporations making charitable 
              contributions of property.
Sec. 308. Increase in limit on cover over of rum excise tax to Puerto 
              Rico and the Virgin Islands.
Sec. 309. Extension of economic development credit for American Samoa.
Sec. 310. Extension of mine rescue team training credit.
Sec. 311. Extension of election to expense advanced mine safety 
              equipment.
Sec. 312. Deduction allowable with respect to income attributable to 
              domestic production activities in Puerto Rico.
Sec. 313. Qualified zone academy bonds.
Sec. 314. Indian employment credit.
Sec. 315. Accelerated depreciation for business property on Indian 
              reservations.
Sec. 316. Railroad track maintenance.
Sec. 317. Seven-year cost recovery period for motorsports racing track 
              facility.
Sec. 318. Expensing of environmental remediation costs.
Sec. 319. Extension of work opportunity tax credit for Hurricane 
              Katrina employees.
Sec. 320. Extension of increased rehabilitation credit for structures 
              in the Gulf Opportunity Zone.
Sec. 321. Enhanced deduction for qualified computer contributions.
Sec. 322. Tax incentives for investment in the District of Columbia.
Sec. 323. Enhanced charitable deductions for contributions of food 
              inventory.
Sec. 324. Extension of enhanced charitable deduction for contributions 
              of book inventory.
Sec. 325. Extension and modification of duty suspension on wool 
              products; wool research fund; wool duty refunds.

          TITLE IV--EXTENSION OF TAX ADMINISTRATION PROVISIONS

Sec. 401. Permanent authority for undercover operations.
Sec. 402. Permanent authority for disclosure of information relating to 
              terrorist activities.

        TITLE V--ADDITIONAL TAX RELIEF AND OTHER TAX PROVISIONS

                     Subtitle A--General Provisions

Sec. 501. $8,500 income threshold used to calculate refundable portion 
              of child tax credit.
Sec. 502. Provisions related to film and television productions.
Sec. 503. Exemption from excise tax for certain wooden arrows designed 
              for use by children.
Sec. 504. Income averaging for amounts received in connection with the 
              Exxon Valdez litigation.
Sec. 505. Certain farming business machinery and equipment treated as 
              5-year property.
Sec. 506. Modification of penalty on understatement of taxpayer's 
              liability by tax return preparer.

 Subtitle B--Paul Wellstone and Pete Domenici Mental Health Parity and 
                      Addiction Equity Act of 2008

Sec. 511. Short title.
Sec. 512. Mental health parity.

                       TITLE VI--OTHER PROVISIONS

Sec. 601. Secure rural schools and community self-determination 
              program.
Sec. 602. Transfer to abandoned mine reclamation fund.

                       TITLE VII--DISASTER RELIEF

        Subtitle A--Heartland and Hurricane Ike Disaster Relief

Sec. 701. Short title.
Sec. 702. Temporary tax relief for areas damaged by 2008 Midwestern 
              severe storms, tornados, and flooding.
Sec. 703. Reporting requirements relating to disaster relief 
              contributions.
Sec. 704. Temporary tax-exempt bond financing and low-income housing 
              tax relief for areas damaged by Hurricane Ike.

                  Subtitle B--National Disaster Relief

Sec. 706. Losses attributable to federally declared disasters.
Sec. 707. Expensing of Qualified Disaster Expenses.
Sec. 708. Net operating losses attributable to federally declared 
              disasters.
Sec. 709. Waiver of certain mortgage revenue bond requirements 
              following federally declared disasters.
Sec. 710. Special depreciation allowance for qualified disaster 
              property.
Sec. 711. Increased expensing for qualified disaster assistance 
              property.
Sec. 712. Coordination with Heartland disaster relief.

TITLE VIII--SPENDING REDUCTIONS AND APPROPRIATE REVENUE RAISERS FOR NEW 
                           TAX RELIEF POLICY

Sec. 801. Nonqualified deferred compensation from certain tax 
              indifferent parties.

                TITLE I--ALTERNATIVE MINIMUM TAX RELIEF

     SEC. 101. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF FOR 
                   NONREFUNDABLE PERSONAL CREDITS.

       (a) In General.--Paragraph (2) of section 26(a) (relating 
     to special rule for taxable years 2000 through 2007) is 
     amended--
       (1) by striking ``or 2007'' and inserting ``2007, or 
     2008'', and
       (2) by striking ``2007'' in the heading thereof and 
     inserting ``2008''.
       (b)  Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 102. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX 
                   EXEMPTION AMOUNT.

       (a) In General.--Paragraph (1) of section 55(d) (relating 
     to exemption amount) is amended--
       (1) by striking ``($66,250 in the case of taxable years 
     beginning in 2007)'' in subparagraph (A) and inserting 
     ``($69,950 in the case of taxable years beginning in 2008)'', 
     and
       (2) by striking ``($44,350 in the case of taxable years 
     beginning in 2007)'' in subparagraph (B) and inserting 
     ``($46,200 in the case of taxable years beginning in 2008)''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 103. INCREASE OF AMT REFUNDABLE CREDIT AMOUNT FOR 
                   INDIVIDUALS WITH LONG-TERM UNUSED CREDITS FOR 
                   PRIOR YEAR MINIMUM TAX LIABILITY, ETC.

       (a) In General.--Paragraph (2) of section 53(e) is amended 
     to read as follows:
       ``(2) AMT refundable credit amount.--For purposes of 
     paragraph (1), the term `AMT refundable credit amount' means, 
     with respect to any taxable year, the amount (not in excess 
     of the long-term unused minimum tax credit for such taxable 
     year) equal to the greater of--
       ``(A) 50 percent of the long-term unused minimum tax credit 
     for such taxable year, or
       ``(B) the amount (if any) of the AMT refundable credit 
     amount determined under this paragraph for the taxpayer's 
     preceding taxable year (determined without regard to 
     subsection (f)(2)).''.
       (b) Treatment of Certain Underpayments, Interest, and 
     Penalties Attributable to the Treatment of Incentive Stock 
     Options.--Section 53 is amended by adding at the end the 
     following new subsection:
       ``(f) Treatment of Certain Underpayments, Interest, and 
     Penalties Attributable to the Treatment of Incentive Stock 
     Options.--
       ``(1) Abatement.--Any underpayment of tax outstanding on 
     the date of the enactment of this subsection which is 
     attributable to the application of section 56(b)(3) for any 
     taxable year ending before January 1, 2008, and any interest 
     or penalty with respect to such underpayment which is 
     outstanding on such date of enactment, is hereby abated. The 
     amount determined under subsection (b)(1) shall not include 
     any tax abated under the preceding sentence.
       ``(2) Increase in credit for certain interest and penalties 
     already paid.--The AMT refundable credit amount, and the 
     minimum tax credit determined under subsection (b), for the 
     taxpayer's first 2 taxable years beginning after December 31, 
     2007, shall each be increased by 50 percent of the aggregate 
     amount of the interest and penalties which were paid by the 
     taxpayer before the date of the enactment of this subsection 
     and which would (but for such payment) have been abated under 
     paragraph (1).''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 2007.
       (2) Abatement.--Section 53(f)(1), as added by subsection 
     (b), shall take effect on the date of the enactment of this 
     Act.

            TITLE II--EXTENSION OF INDIVIDUAL TAX PROVISIONS

     SEC. 201. DEDUCTION FOR STATE AND LOCAL SALES TAXES.

       (a) In General.--Subparagraph (I) of section 164(b)(5) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 202. DEDUCTION OF QUALIFIED TUITION AND RELATED 
                   EXPENSES.

       (a) In General.--Subsection (e) of section 222 (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 203. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND 
                   SECONDARY SCHOOL TEACHERS.

       (a) In General.--Subparagraph (D) of section 62(a)(2) 
     (relating to certain expenses of elementary and secondary 
     school teachers) is amended by striking ``or 2007'' and 
     inserting ``2007, 2008, or 2009''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 204. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY 
                   TAXES FOR NONITEMIZERS.

       (a) In General.--Subparagraph (C) of section 63(c)(1), as 
     added by the Housing Assistance Tax Act of 2008, is amended 
     by inserting ``or 2009'' after ``2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

[[Page 23929]]



     SEC. 205. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT 
                   PLANS FOR CHARITABLE PURPOSES.

       (a) In General.--Subparagraph (F) of section 408(d)(8) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distributions made in taxable years beginning 
     after December 31, 2007.

     SEC. 206. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED 
                   INVESTMENT COMPANIES.

       (a) Interest-Related Dividends.--Subparagraph (C) of 
     section 871(k)(1) (defining interest-related dividend) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2009''.
       (b) Short-Term Capital Gain Dividends.--Subparagraph (C) of 
     section 871(k)(2) (defining short-term capital gain dividend) 
     is amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2009''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to dividends with respect to taxable years of 
     regulated investment companies beginning after December 31, 
     2007.

     SEC. 207. STOCK IN RIC FOR PURPOSES OF DETERMINING ESTATES OF 
                   NONRESIDENTS NOT CITIZENS.

       (a) In General.--Paragraph (3) of section 2105(d) (relating 
     to stock in a RIC) is amended by striking ``December 31, 
     2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to decedents dying after December 31, 2007.

     SEC. 208. QUALIFIED INVESTMENT ENTITIES.

       (a) In General.--Clause (ii) of section 897(h)(4)(A) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on January 1, 2008.

            TITLE III--EXTENSION OF BUSINESS TAX PROVISIONS

     SEC. 301. EXTENSION AND MODIFICATION OF RESEARCH CREDIT.

       (a) Extension.--
       (1) In general.--Section 41(h) (relating to termination) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2009'' in paragraph (1)(B).
       (2) Conforming amendment.--Subparagraph (D) of section 
     45C(b)(1) (relating to special rule) is amended by striking 
     ``after December 31, 2007'' and inserting ``after December 
     31, 2009''.
       (b) Termination of Alternative Incremental Credit.--Section 
     41(h) is amended by redesignating paragraph (2) as paragraph 
     (3), and by inserting after paragraph (1) the following new 
     paragraph:
       ``(2) Termination of alternative incremental credit.--No 
     election under subsection (c)(4) shall apply to taxable years 
     beginning after December 31, 2008.''.
       (c) Modification of Alternative Simplified Credit.--
     Paragraph (5)(A) of section 41(c) (relating to election of 
     alternative simplified credit) is amended by striking ``12 
     percent'' and inserting ``14 percent (12 percent in the case 
     of taxable years ending before January 1, 2009)''.
       (d) Technical Correction.--Paragraph (3) of section 41(h) 
     is amended to read as follows:
       ``(2) Computation for taxable year in which credit 
     terminates.--In the case of any taxable year with respect to 
     which this section applies to a number of days which is less 
     than the total number of days in such taxable year--
       ``(A) the amount determined under subsection (c)(1)(B) with 
     respect to such taxable year shall be the amount which bears 
     the same ratio to such amount (determined without regard to 
     this paragraph) as the number of days in such taxable year to 
     which this section applies bears to the total number of days 
     in such taxable year, and
       ``(B) for purposes of subsection (c)(5), the average 
     qualified research expenses for the preceding 3 taxable years 
     shall be the amount which bears the same ratio to such 
     average qualified research expenses (determined without 
     regard to this paragraph) as the number of days in such 
     taxable year to which this section applies bears to the total 
     number of days in such taxable year.''.
       (e) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 2007.
       (2) Extension.--The amendments made by subsection (a) shall 
     apply to amounts paid or incurred after December 31, 2007.

     SEC. 302. NEW MARKETS TAX CREDIT.

       Subparagraph (D) of section 45D(f)(1) (relating to national 
     limitation on amount of investments designated) is amended by 
     striking ``and 2008'' and inserting ``2008, and 2009''.

     SEC. 303. SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME.

       (a) Exempt Insurance Income.--Paragraph (10) of section 
     953(e) (relating to application) is amended--
       (1) by striking ``January 1, 2009'' and inserting ``January 
     1, 2010'', and
       (2) by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) Exception to Treatment as Foreign Personal Holding 
     Company Income.--Paragraph (9) of section 954(h) (relating to 
     application) is amended by striking ``January 1, 2009'' and 
     inserting ``January 1, 2010''.

     SEC. 304. EXTENSION OF LOOK-THRU RULE FOR RELATED CONTROLLED 
                   FOREIGN CORPORATIONS.

       (a) In General.--Subparagraph (C) of section 954(c)(6) 
     (relating to application) is amended by striking ``January 1, 
     2009'' and inserting ``January 1, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years of foreign corporations 
     beginning after December 31, 2007, and to taxable years of 
     United States shareholders with or within which such taxable 
     years of foreign corporations end.

     SEC. 305. EXTENSION OF 15-YEAR STRAIGHT-LINE COST RECOVERY 
                   FOR QUALIFIED LEASEHOLD IMPROVEMENTS AND 
                   QUALIFIED RESTAURANT IMPROVEMENTS; 15-YEAR 
                   STRAIGHT-LINE COST RECOVERY FOR CERTAIN 
                   IMPROVEMENTS TO RETAIL SPACE.

       (a) Extension of Leasehold and Restaurant Improvements.--
       (1) In general.--Clauses (iv) and (v) of section 
     168(e)(3)(E) (relating to 15-year property) are each amended 
     by striking ``January 1, 2008'' and inserting ``January 1, 
     2010''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to property placed in service after December 31, 
     2007.
       (b) Treatment To Include New Construction.--
       (1) In general.--Paragraph (7) of section 168(e) (relating 
     to classification of property) is amended to read as follows:
       ``(7) Qualified restaurant property.--
       ``(A) In general.--The term `qualified restaurant property' 
     means any section 1250 property which is--
       ``(i) a building, if such building is placed in service 
     after December 31, 2008, and before January 1, 2010, or
       ``(ii) an improvement to a building,
     if more than 50 percent of the building's square footage is 
     devoted to preparation of, and seating for on-premises 
     consumption of, prepared meals.
       ``(B) Exclusion from bonus depreciation.--Property 
     described in this paragraph shall not be considered qualified 
     property for purposes of subsection (k).''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to property placed in service after December 31, 
     2008.
       (c) Recovery Period for Depreciation of Certain 
     Improvements to Retail Space.--
       (1) 15-year recovery period.--Section 168(e)(3)(E) 
     (relating to 15-year property) is amended by striking ``and'' 
     at the end of clause (vii), by striking the period at the end 
     of clause (viii) and inserting ``, and'', and by adding at 
     the end the following new clause:
       ``(ix) any qualified retail improvement property placed in 
     service after December 31, 2008, and before January 1, 
     2010.''.
       (2) Qualified retail improvement property.--Section 168(e) 
     is amended by adding at the end the following new paragraph:
       ``(8) Qualified retail improvement property.--
       ``(A) In general.--The term `qualified retail improvement 
     property' means any improvement to an interior portion of a 
     building which is nonresidential real property if--
       ``(i) such portion is open to the general public and is 
     used in the retail trade or business of selling tangible 
     personal property to the general public, and
       ``(ii) such improvement is placed in service more than 3 
     years after the date the building was first placed in 
     service.
       ``(B) Improvements made by owner.--In the case of an 
     improvement made by the owner of such improvement, such 
     improvement shall be qualified retail improvement property 
     (if at all) only so long as such improvement is held by such 
     owner. Rules similar to the rules under paragraph (6)(B) 
     shall apply for purposes of the preceding sentence.
       ``(C) Certain improvements not included.--Such term shall 
     not include any improvement for which the expenditure is 
     attributable to--
       ``(i) the enlargement of the building,
       ``(ii) any elevator or escalator,
       ``(iii) any structural component benefitting a common area, 
     or
       ``(iv) the internal structural framework of the building.
       ``(D) Exclusion from bonus depreciation.--Property 
     described in this paragraph shall not be considered qualified 
     property for purposes of subsection (k).
       ``(E) Termination.--Such term shall not include any 
     improvement placed in service after December 31, 2009.''.
       (3) Requirement to use straight line method.--Section 
     168(b)(3) is amended by adding at the end the following new 
     subparagraph:
       ``(I) Qualified retail improvement property described in 
     subsection (e)(8).''.
       (4) Alternative system.--The table contained in section 
     168(g)(3)(B) is amended by inserting after the item relating 
     to subparagraph (E)(viii) the following new item:
``(E)(ix).........................................................39''.
       (5) Effective date.--The amendments made by this subsection 
     shall apply to property placed in service after December 31, 
     2008.

     SEC. 306. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS 
                   TO CONTROLLING EXEMPT ORGANIZATIONS.

       (a) In General.--Clause (iv) of section 512(b)(13)(E) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to payments received or accrued after December 
     31, 2007.

     SEC. 307. BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING 
                   CHARITABLE CONTRIBUTIONS OF PROPERTY.

       (a) In General.--The last sentence of section 1367(a)(2) 
     (relating to decreases in basis) is

[[Page 23930]]

     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2007.

     SEC. 308. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX 
                   TO PUERTO RICO AND THE VIRGIN ISLANDS.

       (a) In General.--Paragraph (1) of section 7652(f) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distilled spirits brought into the United 
     States after December 31, 2007.

     SEC. 309. EXTENSION OF ECONOMIC DEVELOPMENT CREDIT FOR 
                   AMERICAN SAMOA.

       (a) In General.--Subsection (d) of section 119 of division 
     A of the Tax Relief and Health Care Act of 2006 is amended--
       (1) by striking ``first two taxable years'' and inserting 
     ``first 4 taxable years'', and
       (2) by striking ``January 1, 2008'' and inserting ``January 
     1, 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 310. EXTENSION OF MINE RESCUE TEAM TRAINING CREDIT.

       Section 45N(e) (relating to termination) is amended by 
     striking ``December 31, 2008'' and inserting ``December 31, 
     2009''.

     SEC. 311. EXTENSION OF ELECTION TO EXPENSE ADVANCED MINE 
                   SAFETY EQUIPMENT.

       Section 179E(g) (relating to termination) is amended by 
     striking ``December 31, 2008'' and inserting ``December 31, 
     2009''.

     SEC. 312. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME 
                   ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES 
                   IN PUERTO RICO.

       (a) In General.--Subparagraph (C) of section 199(d)(8) 
     (relating to termination) is amended--
       (1) by striking ``first 2 taxable years'' and inserting 
     ``first 4 taxable years'', and
       (2) by striking ``January 1, 2008'' and inserting ``January 
     1, 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 313. QUALIFIED ZONE ACADEMY BONDS.

       (a) In General.--Subpart I of part IV of subchapter A of 
     chapter 1 is amended by adding at the end the following new 
     section:

     ``SEC. 54E. QUALIFIED ZONE ACADEMY BONDS.

       ``(a) Qualified Zone Academy Bonds.--For purposes of this 
     subchapter, the term `qualified zone academy bond' means any 
     bond issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for a qualified purpose with respect to 
     a qualified zone academy established by an eligible local 
     education agency,
       ``(2) the bond is issued by a State or local government 
     within the jurisdiction of which such academy is located, and
       ``(3) the issuer--
       ``(A) designates such bond for purposes of this section,
       ``(B) certifies that it has written assurances that the 
     private business contribution requirement of subsection (b) 
     will be met with respect to such academy, and
       ``(C) certifies that it has the written approval of the 
     eligible local education agency for such bond issuance.
       ``(b)  Private Business Contribution Requirement.--For 
     purposes of subsection (a), the private business contribution 
     requirement of this subsection is met with respect to any 
     issue if the eligible local education agency that established 
     the qualified zone academy has written commitments from 
     private entities to make qualified contributions having a 
     present value (as of the date of issuance of the issue) of 
     not less than 10 percent of the proceeds of the issue.
       ``(c) Limitation on Amount of Bonds Designated.--
       ``(1) National limitation.--There is a national zone 
     academy bond limitation for each calendar year. Such 
     limitation is $400,000,000 for 2008 and 2009, and, except as 
     provided in paragraph (4), zero thereafter.
       ``(2) Allocation of limitation.--The national zone academy 
     bond limitation for a calendar year shall be allocated by the 
     Secretary among the States on the basis of their respective 
     populations of individuals below the poverty line (as defined 
     by the Office of Management and Budget). The limitation 
     amount allocated to a State under the preceding sentence 
     shall be allocated by the State education agency to qualified 
     zone academies within such State.
       ``(3) Designation subject to limitation amount.--The 
     maximum aggregate face amount of bonds issued during any 
     calendar year which may be designated under subsection (a) 
     with respect to any qualified zone academy shall not exceed 
     the limitation amount allocated to such academy under 
     paragraph (2) for such calendar year.
       ``(4) Carryover of unused limitation.--
       ``(A) In general.--If for any calendar year--
       ``(i) the limitation amount for any State, exceeds
       ``(ii) the amount of bonds issued during such year which 
     are designated under subsection (a) with respect to qualified 
     zone academies within such State,

     the limitation amount for such State for the following 
     calendar year shall be increased by the amount of such 
     excess.
       ``(B) Limitation on carryover.--Any carryforward of a 
     limitation amount may be carried only to the first 2 years 
     following the unused limitation year. For purposes of the 
     preceding sentence, a limitation amount shall be treated as 
     used on a first-in first-out basis.
       ``(C) Coordination with section 1397e.--Any carryover 
     determined under section 1397E(e)(4) (relating to carryover 
     of unused limitation) with respect to any State to calendar 
     year 2008 or 2009 shall be treated for purposes of this 
     section as a carryover with respect to such State for such 
     calendar year under subparagraph (A), and the limitation of 
     subparagraph (B) shall apply to such carryover taking into 
     account the calendar years to which such carryover relates.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified zone academy.--The term `qualified zone 
     academy' means any public school (or academic program within 
     a public school) which is established by and operated under 
     the supervision of an eligible local education agency to 
     provide education or training below the postsecondary level 
     if--
       ``(A) such public school or program (as the case may be) is 
     designed in cooperation with business to enhance the academic 
     curriculum, increase graduation and employment rates, and 
     better prepare students for the rigors of college and the 
     increasingly complex workforce,
       ``(B) students in such public school or program (as the 
     case may be) will be subject to the same academic standards 
     and assessments as other students educated by the eligible 
     local education agency,
       ``(C) the comprehensive education plan of such public 
     school or program is approved by the eligible local education 
     agency, and
       ``(D)(i) such public school is located in an empowerment 
     zone or enterprise community (including any such zone or 
     community designated after the date of the enactment of this 
     section), or
       ``(ii) there is a reasonable expectation (as of the date of 
     issuance of the bonds) that at least 35 percent of the 
     students attending such school or participating in such 
     program (as the case may be) will be eligible for free or 
     reduced-cost lunches under the school lunch program 
     established under the National School Lunch Act.
       ``(2) Eligible local education agency.--For purposes of 
     this section, the term `eligible local education agency' 
     means any local educational agency as defined in section 9101 
     of the Elementary and Secondary Education Act of 1965.
       ``(3) Qualified purpose.--The term `qualified purpose' 
     means, with respect to any qualified zone academy--
       ``(A) rehabilitating or repairing the public school 
     facility in which the academy is established,
       ``(B) providing equipment for use at such academy,
       ``(C) developing course materials for education to be 
     provided at such academy, and
       ``(D) training teachers and other school personnel in such 
     academy.
       ``(4) Qualified contributions.--The term `qualified 
     contribution' means any contribution (of a type and quality 
     acceptable to the eligible local education agency) of--
       ``(A) equipment for use in the qualified zone academy 
     (including state-of-the-art technology and vocational 
     equipment),
       ``(B) technical assistance in developing curriculum or in 
     training teachers in order to promote appropriate market 
     driven technology in the classroom,
       ``(C) services of employees as volunteer mentors,
       ``(D) internships, field trips, or other educational 
     opportunities outside the academy for students, or
       ``(E) any other property or service specified by the 
     eligible local education agency.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 54A(d), as amended by this 
     Act, is amended by striking ``or'' at the end of subparagraph 
     (B), by inserting ``or'' at the end of subparagraph (C), and 
     by inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) a qualified zone academy bond,''.
       (2) Subparagraph (C) of section 54A(d)(2), as amended by 
     this Act, is amended by striking ``and'' at the end of clause 
     (ii), by striking the period at the end of clause (iii) and 
     inserting ``, and'', and by adding at the end the following 
     new clause:
       ``(iv) in the case of a qualified zone academy bond, a 
     purpose specified in section 54E(a)(1).''.
       (3) Section 1397E is amended by adding at the end the 
     following new subsection:
       ``(m) Termination.--This section shall not apply to any 
     obligation issued after the date of the enactment of the Tax 
     Extenders and Alternative Minimum Tax Relief Act of 2008.''.
       (4) The table of sections for subpart I of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 54E. Qualified zone academy bonds.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 314. INDIAN EMPLOYMENT CREDIT.

       (a) In General.--Subsection (f) of section 45A (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 315. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON 
                   INDIAN RESERVATIONS.

       (a) In General.--Paragraph (8) of section 168(j) (relating 
     to termination) is amended by

[[Page 23931]]

     striking ``December 31, 2007'' and inserting ``December 31, 
     2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 316. RAILROAD TRACK MAINTENANCE.

       (a) In General.--Subsection (f) of section 45G (relating to 
     application of section) is amended by striking ``January 1, 
     2008'' and inserting ``January 1, 2010''.
       (b) Credit Allowed Against Alternative Minimum Tax.--
     Subparagraph (B) of section 38(c)(4), as amended by this Act, 
     is amended--
       (1) by redesignating clauses (v), (vi), and (vii) as 
     clauses (vi), (vii), and (viii), respectively, and
       (2) by inserting after clause (iv) the following new 
     clause:
       ``(v) the credit determined under section 45G,''.
       (c) Effective Dates.--
       (1) The amendment made by subsection (a) shall apply to 
     expenditures paid or incurred during taxable years beginning 
     after December 31, 2007.
       (2) The amendments made by subsection (b) shall apply to 
     credits determined under section 45G of the Internal Revenue 
     Code of 1986 in taxable years beginning after December 31, 
     2007, and to carrybacks of such credits.

     SEC. 317. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS 
                   RACING TRACK FACILITY.

       (a) In General.--Subparagraph (D) of section 168(i)(15) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 318. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.

       (a) In General.--Subsection (h) of section 198 (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred after December 
     31, 2007.

     SEC. 319. EXTENSION OF WORK OPPORTUNITY TAX CREDIT FOR 
                   HURRICANE KATRINA EMPLOYEES.

       (a) In General.--Paragraph (1) of section 201(b) of the 
     Katrina Emergency Tax Relief Act of 2005 is amended by 
     striking ``2-year'' and inserting ``4-year''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to individuals hired after August 27, 2007.

     SEC. 320. EXTENSION OF INCREASED REHABILITATION CREDIT FOR 
                   STRUCTURES IN THE GULF OPPORTUNITY ZONE.

       (a) In General.--Subsection (h) of section 1400N is amended 
     by striking ``December 31, 2008'' and inserting ``December 
     31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred after the date 
     of the enactment of this Act.

     SEC. 321. ENHANCED DEDUCTION FOR QUALIFIED COMPUTER 
                   CONTRIBUTIONS.

       (a) In General.--Subparagraph (G) of section 170(e)(6) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made during taxable years 
     beginning after December 31, 2007.

     SEC. 322. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF 
                   COLUMBIA.

       (a) Designation of Zone.--
       (1) In general.--Subsection (f) of section 1400 is amended 
     by striking ``2007'' both places it appears and inserting 
     ``2009''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to periods beginning after December 31, 2007.
       (b) Tax-Exempt Economic Development Bonds.--
       (1) In general.--Subsection (b) of section 1400A is amended 
     by striking ``2007'' and inserting ``2009''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to bonds issued after December 31, 2007.
       (c) Zero Percent Capital Gains Rate.--
       (1) In general.--Subsection (b) of section 1400B is amended 
     by striking ``2008'' each place it appears and inserting 
     ``2010''.
       (2) Conforming amendments.--
       (A) Section 1400B(e)(2) is amended--
       (i) by striking ``2012'' and inserting ``2014'', and
       (ii) by striking ``2012'' in the heading thereof and 
     inserting ``2014''.
       (B) Section 1400B(g)(2) is amended by striking ``2012'' and 
     inserting ``2014''.
       (C) Section 1400F(d) is amended by striking ``2012'' and 
     inserting ``2014''.
       (3) Effective dates.--
       (A) Extension.--The amendments made by paragraph (1) shall 
     apply to acquisitions after December 31, 2007.
       (B) Conforming amendments.--The amendments made by 
     paragraph (2) shall take effect on the date of the enactment 
     of this Act.
       (d) First-Time Homebuyer Credit.--
       (1) In general.--Subsection (i) of section 1400C is amended 
     by striking ``2008'' and inserting ``2010''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to property purchased after December 31, 2007.

     SEC. 323. ENHANCED CHARITABLE DEDUCTIONS FOR CONTRIBUTIONS OF 
                   FOOD INVENTORY.

       (a) Increased Amount of Deduction.--
       (1) In general.--Clause (iv) of section 170(e)(3)(C) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to contributions made after December 31, 2007.
       (b) Temporary Suspension of Limitations on Charitable 
     Contributions.--
       (1) In general.--Section 170(b) is amended by adding at the 
     end the following new paragraph:
       ``(3) Temporary suspension of limitations on charitable 
     contributions.--In the case of a qualified farmer or rancher 
     (as defined in paragraph (1)(E)(v)), any charitable 
     contribution of food--
       ``(A) to which subsection (e)(3)(C) applies (without regard 
     to clause (ii) thereof), and
       ``(B) which is made during the period beginning on the date 
     of the enactment of this paragraph and before January 1, 
     2009,
     shall be treated for purposes of paragraph (1)(E) or (2)(B), 
     whichever is applicable, as if it were a qualified 
     conservation contribution which is made by a qualified farmer 
     or rancher and which otherwise meets the requirements of such 
     paragraph.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

     SEC. 324. EXTENSION OF ENHANCED CHARITABLE DEDUCTION FOR 
                   CONTRIBUTIONS OF BOOK INVENTORY.

       (a) Extension.--Clause (iv) of section 170(e)(3)(D) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Clerical Amendment.--Clause (iii) of section 
     170(e)(3)(D) (relating to certification by donee) is amended 
     by inserting ``of books'' after ``to any contribution''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to contributions made after December 31, 2007.

     SEC. 325. EXTENSION AND MODIFICATION OF DUTY SUSPENSION ON 
                   WOOL PRODUCTS; WOOL RESEARCH FUND; WOOL DUTY 
                   REFUNDS.

       (a) Extension of Temporary Duty Reductions.--Each of the 
     following headings of the Harmonized Tariff Schedule of the 
     United States is amended by striking the date in the 
     effective period column and inserting ``12/31/2014'':
       (1) Heading 9902.51.11 (relating to fabrics of worsted 
     wool).
       (2) Heading 9902.51.13 (relating to yarn of combed wool).
       (3) Heading 9902.51.14 (relating to wool fiber, waste, 
     garnetted stock, combed wool, or wool top).
       (4) Heading 9902.51.15 (relating to fabrics of combed 
     wool).
       (5) Heading 9902.51.16 (relating to fabrics of combed 
     wool).
       (b) Extension of Duty Refunds and Wool Research Trust 
     Fund.--
       (1) In general.--Section 4002(c) of the Wool Suit and 
     Textile Trade Extension Act of 2004 (Public Law 108-429; 118 
     Stat. 2603) is amended--
       (A) in paragraph (3)(C), by striking ``2010'' and inserting 
     ``2015''; and
       (B) in paragraph (6)(A), by striking ``through 2009'' and 
     inserting ``through 2014''.
       (2) Sunset.--Section 506(f) of the Trade and Development 
     Act of 2000 (Public 106-200; 114 Stat. 303 (7 U.S.C. 7101 
     note)) is amended by striking ``2010'' and inserting 
     ``2015''.

          TITLE IV--EXTENSION OF TAX ADMINISTRATION PROVISIONS

     SEC. 401. PERMANENT AUTHORITY FOR UNDERCOVER OPERATIONS.

       (a) In General.--Section 7608(c) (relating to rules 
     relating to undercover operations) is amended by striking 
     paragraph (6).
       (b) Effective Date.--The amendment made by this section 
     shall apply to operations conducted after the date of the 
     enactment of this Act.

     SEC. 402. PERMANENT AUTHORITY FOR DISCLOSURE OF INFORMATION 
                   RELATING TO TERRORIST ACTIVITIES.

       (a) Disclosure of Return Information To Apprise Appropriate 
     Officials of Terrorist Activities.--Subparagraph (C) of 
     section 6103(i)(3) is amended by striking clause (iv).
       (b) Disclosure Upon Request of Information Relating to 
     Terrorist Activities.--Paragraph (7) of section 6103(i) is 
     amended by striking subparagraph (E).
       (c) Effective Date.--The amendments made by this section 
     shall apply to disclosures after the date of the enactment of 
     this Act.

        TITLE V--ADDITIONAL TAX RELIEF AND OTHER TAX PROVISIONS

                     Subtitle A--General Provisions

     SEC. 501. $8,500 INCOME THRESHOLD USED TO CALCULATE 
                   REFUNDABLE PORTION OF CHILD TAX CREDIT.

       (a) In General.--Section 24(d) is amended by adding at the 
     end the following new paragraph:
       ``(4) Special rule for 2008.--Notwithstanding paragraph 
     (3), in the case of any taxable year beginning in 2008, the 
     dollar amount in effect for such taxable year under paragraph 
     (1)(B)(i) shall be $8,500.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 502. PROVISIONS RELATED TO FILM AND TELEVISION 
                   PRODUCTIONS.

       (a) Extension of Expensing Rules for Qualified Film and 
     Television Productions.--Section 181(f) (relating to 
     termination) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2009''.
       (b) Modification of Limitation on Expensing.--Subparagraph 
     (A) of section 181(a)(2) is amended to read as follows:

[[Page 23932]]

       ``(A) In general.--Paragraph (1) shall not apply to so much 
     of the aggregate cost of any qualified film or television 
     production as exceeds $15,000,000.''.
       (c) Modifications to Deduction for Domestic Activities.--
       (1) Determination of w-2 wages.--Paragraph (2) of section 
     199(b) is amended by adding at the end the following new 
     subparagraph:
       ``(D) Special rule for qualified film.--In the case of a 
     qualified film, such term shall include compensation for 
     services performed in the United States by actors, production 
     personnel, directors, and producers.''.
       (2) Definition of qualified film.--Paragraph (6) of section 
     199(c) is amended by adding at the end the following: ``A 
     qualified film shall include any copyrights, trademarks, or 
     other intangibles with respect to such film. The methods and 
     means of distributing a qualified film shall not affect the 
     availability of the deduction under this section.''.
       (3) Partnerships.--Subparagraph (A) of section 199(d)(1) is 
     amended by striking ``and'' at the end of clause (ii), by 
     striking the period at the end of clause (iii) and inserting 
     ``, and'', and by adding at the end the following new clause:
       ``(iv) in the case of each partner of a partnership, or 
     shareholder of an S corporation, who owns (directly or 
     indirectly) at least 20 percent of the capital interests in 
     such partnership or of the stock of such S corporation--

       ``(I) such partner or shareholder shall be treated as 
     having engaged directly in any film produced by such 
     partnership or S corporation, and
       ``(II) such partnership or S corporation shall be treated 
     as having engaged directly in any film produced by such 
     partner or shareholder.''.

       (d) Conforming Amendment.--Section 181(d)(3)(A) is amended 
     by striking ``actors'' and all that follows and inserting 
     ``actors, production personnel, directors, and producers.''.
       (e) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to qualified film and television productions commencing after 
     December 31, 2007.
       (2) Deduction.--The amendments made by subsection (c) shall 
     apply to taxable years beginning after December 31, 2007.

     SEC. 503. EXEMPTION FROM EXCISE TAX FOR CERTAIN WOODEN ARROWS 
                   DESIGNED FOR USE BY CHILDREN.

       (a) In General.--Paragraph (2) of section 4161(b) is 
     amended by redesignating subparagraph (B) as subparagraph (C) 
     and by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) Exemption for certain wooden arrow shafts.--
     Subparagraph (A) shall not apply to any shaft consisting of 
     all natural wood with no laminations or artificial means of 
     enhancing the spine of such shaft (whether sold separately or 
     incorporated as part of a finished or unfinished product) of 
     a type used in the manufacture of any arrow which after its 
     assembly--
       ``(i) measures \5/16\ of an inch or less in diameter, and
       ``(ii) is not suitable for use with a bow described in 
     paragraph (1)(A).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to shafts first sold after the date of enactment 
     of this Act.

     SEC. 504. INCOME AVERAGING FOR AMOUNTS RECEIVED IN CONNECTION 
                   WITH THE EXXON VALDEZ LITIGATION.

       (a) Income Averaging of Amounts Received From the Exxon 
     Valdez Litigation.--For purposes of section 1301 of the 
     Internal Revenue Code of 1986--
       (1) any qualified taxpayer who receives any qualified 
     settlement income in any taxable year shall be treated as 
     engaged in a fishing business (determined without regard to 
     the commercial nature of the business), and
       (2) such qualified settlement income shall be treated as 
     income attributable to such a fishing business for such 
     taxable year.
       (b) Contributions of Amounts Received to Retirement 
     Accounts.--
       (1) In general.--Any qualified taxpayer who receives 
     qualified settlement income during the taxable year may, at 
     any time before the end of the taxable year in which such 
     income was received, make one or more contributions to an 
     eligible retirement plan of which such qualified taxpayer is 
     a beneficiary in an aggregate amount not to exceed the lesser 
     of--
       (A) $100,000 (reduced by the amount of qualified settlement 
     income contributed to an eligible retirement plan in prior 
     taxable years pursuant to this subsection), or
       (B) the amount of qualified settlement income received by 
     the individual during the taxable year.
       (2) Time when contributions deemed made.--For purposes of 
     paragraph (1), a qualified taxpayer shall be deemed to have 
     made a contribution to an eligible retirement plan on the 
     last day of the taxable year in which such income is received 
     if the contribution is made on account of such taxable year 
     and is made not later than the time prescribed by law for 
     filing the return for such taxable year (not including 
     extensions thereof).
       (3) Treatment of contributions to eligible retirement 
     plans.--For purposes of the Internal Revenue Code of 1986, if 
     a contribution is made pursuant to paragraph (1) with respect 
     to qualified settlement income, then--
       (A) except as provided in paragraph (4)--
       (i) to the extent of such contribution, the qualified 
     settlement income shall not be included in taxable income, 
     and
       (ii) for purposes of section 72 of such Code, such 
     contribution shall not be considered to be investment in the 
     contract,
       (B) the qualified taxpayer shall, to the extent of the 
     amount of the contribution, be treated--
       (i) as having received the qualified settlement income--

       (I) in the case of a contribution to an individual 
     retirement plan (as defined under section 7701(a)(37) of such 
     Code), in a distribution described in section 408(d)(3) of 
     such Code, and
       (II) in the case of any other eligible retirement plan, in 
     an eligible rollover distribution (as defined under section 
     402(f)(2) of such Code), and

       (ii) as having transferred the amount to the eligible 
     retirement plan in a direct trustee to trustee transfer 
     within 60 days of the distribution,
       (C) section 408(d)(3)(B) of the Internal Revenue Code of 
     1986 shall not apply with respect to amounts treated as a 
     rollover under this paragraph, and
       (D) section 408A(c)(3)(B) of the Internal Revenue Code of 
     1986 shall not apply with respect to amounts contributed to a 
     Roth IRA (as defined under section 408A(b) of such Code) or a 
     designated Roth contribution to an applicable retirement plan 
     (within the meaning of section 402A of such Code) under this 
     paragraph.
       (4) Special rule for roth iras and roth 401(k)s.--For 
     purposes of the Internal Revenue Code of 1986, if a 
     contribution is made pursuant to paragraph (1) with respect 
     to qualified settlement income to a Roth IRA (as defined 
     under section 408A(b) of such Code) or as a designated Roth 
     contribution to an applicable retirement plan (within the 
     meaning of section 402A of such Code), then--
       (A) the qualified settlement income shall be includible in 
     taxable income, and
       (B) for purposes of section 72 of such Code, such 
     contribution shall be considered to be investment in the 
     contract.
       (5) Eligible retirement plan.--For purpose of this 
     subsection, the term ``eligible retirement plan'' has the 
     meaning given such term under section 402(c)(8)(B) of the 
     Internal Revenue Code of 1986.
       (c) Treatment of Qualified Settlement Income Under 
     Employment Taxes.--
       (1) SECA.--For purposes of chapter 2 of the Internal 
     Revenue Code of 1986 and section 211 of the Social Security 
     Act, no portion of qualified settlement income received by a 
     qualified taxpayer shall be treated as self-employment 
     income.
       (2) FICA.--For purposes of chapter 21 of the Internal 
     Revenue Code of 1986 and section 209 of the Social Security 
     Act, no portion of qualified settlement income received by a 
     qualified taxpayer shall be treated as wages.
       (d) Qualified Taxpayer.--For purposes of this section, the 
     term ``qualified taxpayer'' means--
       (1) any individual who is a plaintiff in the civil action 
     In re Exxon Valdez, No. 89-095-CV (HRH) (Consolidated) (D. 
     Alaska); or
       (2) any individual who is a beneficiary of the estate of 
     such a plaintiff who--
       (A) acquired the right to receive qualified settlement 
     income from that plaintiff; and
       (B) was the spouse or an immediate relative of that 
     plaintiff.
       (e) Qualified Settlement Income.--For purposes of this 
     section, the term ``qualified settlement income'' means any 
     interest and punitive damage awards which are--
       (1) otherwise includible in taxable income, and
       (2) received (whether as lump sums or periodic payments) in 
     connection with the civil action In re Exxon Valdez, No. 89-
     095-CV (HRH) (Consolidated) (D. Alaska) (whether pre- or 
     post-judgment and whether related to a settlement or 
     judgment).

     SEC. 505. CERTAIN FARMING BUSINESS MACHINERY AND EQUIPMENT 
                   TREATED AS 5-YEAR PROPERTY.

       (a) In General.--Section 168(e)(3)(B) (defining 5-year 
     property) is amended by striking ``and'' at the end of clause 
     (v), by striking the period at the end of clause (vi)(III) 
     and inserting ``, and'', and by inserting after clause (vi) 
     the following new clause:
       ``(vii) any machinery or equipment (other than any grain 
     bin, cotton ginning asset, fence, or other land improvement) 
     which is used in a farming business (as defined in section 
     263A(e)(4)), the original use of which commences with the 
     taxpayer after December 31, 2008, and which is placed in 
     service before January 1, 2010.''.
       (b) Alternative System.--The table contained in section 
     168(g)(3)(B) (relating to special rule for certain property 
     assigned to classes) is amended by inserting after the item 
     relating to subparagraph (B)(iii) the following:

  (B)(vii).................................................       210''.
 

       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2008.

     SEC. 506. MODIFICATION OF PENALTY ON UNDERSTATEMENT OF 
                   TAXPAYER'S LIABILITY BY TAX RETURN PREPARER.

       (a) In General.--Subsection (a) of section 6694 is amended 
     to read as follows:
       ``(a) Understatement Due to Unreasonable Positions.--
       ``(1) In general.--If a tax return preparer--
       ``(A) prepares any return or claim of refund with respect 
     to which any part of an understatement of liability is due to 
     a position described in paragraph (2), and
       ``(B) knew (or reasonably should have known) of the 
     position,

     such tax return preparer shall pay a penalty with respect to 
     each such return or claim in an

[[Page 23933]]

     amount equal to the greater of $1,000 or 50 percent of the 
     income derived (or to be derived) by the tax return preparer 
     with respect to the return or claim.
       ``(2) Unreasonable position.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, a position is described in this paragraph unless 
     there is or was substantial authority for the position.
       ``(B) Disclosed positions.--If the position was disclosed 
     as provided in section 6662(d)(2)(B)(ii)(I) and is not a 
     position to which subparagraph (C) applies, the position is 
     described in this paragraph unless there is a reasonable 
     basis for the position.
       ``(C) Tax shelters and reportable transactions.--If the 
     position is with respect to a tax shelter (as defined in 
     section 6662(d)(2)(C)(ii)) or a reportable transaction to 
     which section 6662A applies, the position is described in 
     this paragraph unless it is reasonable to believe that the 
     position would more likely than not be sustained on its 
     merits.
       ``(3) Reasonable cause exception.--No penalty shall be 
     imposed under this subsection if it is shown that there is 
     reasonable cause for the understatement and the tax return 
     preparer acted in good faith.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply--
       (1) in the case of a position other than a position 
     described in subparagraph (C) of section 6694(a)(2) of the 
     Internal Revenue Code of 1986 (as amended by this section), 
     to returns prepared after May 25, 2007, and
       (2) in the case of a position described in such 
     subparagraph (C), to returns prepared for taxable years 
     ending after the date of the enactment of this Act.

 Subtitle B--Paul Wellstone and Pete Domenici Mental Health Parity and 
                      Addiction Equity Act of 2008

     SEC. 511. SHORT TITLE.

       This subtitle may be cited as the ``Paul Wellstone and Pete 
     Domenici Mental Health Parity and Addiction Equity Act of 
     2008''.

     SEC. 512. MENTAL HEALTH PARITY.

       (a) Amendments to ERISA.--Section 712 of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1185a) is 
     amended--
       (1) in subsection (a), by adding at the end the following:
       ``(3) Financial requirements and treatment limitations.--
       ``(A) In general.--In the case of a group health plan (or 
     health insurance coverage offered in connection with such a 
     plan) that provides both medical and surgical benefits and 
     mental health or substance use disorder benefits, such plan 
     or coverage shall ensure that--
       ``(i) the financial requirements applicable to such mental 
     health or substance use disorder benefits are no more 
     restrictive than the predominant financial requirements 
     applied to substantially all medical and surgical benefits 
     covered by the plan (or coverage), and there are no separate 
     cost sharing requirements that are applicable only with 
     respect to mental health or substance use disorder benefits; 
     and
       ``(ii) the treatment limitations applicable to such mental 
     health or substance use disorder benefits are no more 
     restrictive than the predominant treatment limitations 
     applied to substantially all medical and surgical benefits 
     covered by the plan (or coverage) and there are no separate 
     treatment limitations that are applicable only with respect 
     to mental health or substance use disorder benefits.
       ``(B) Definitions.--In this paragraph:
       ``(i) Financial requirement.--The term `financial 
     requirement' includes deductibles, copayments, coinsurance, 
     and out-of-pocket expenses, but excludes an aggregate 
     lifetime limit and an annual limit subject to paragraphs (1) 
     and (2),
       ``(ii) Predominant.--A financial requirement or treatment 
     limit is considered to be predominant if it is the most 
     common or frequent of such type of limit or requirement.
       ``(iii) Treatment limitation.--The term `treatment 
     limitation' includes limits on the frequency of treatment, 
     number of visits, days of coverage, or other similar limits 
     on the scope or duration of treatment.
       ``(4) Availability of plan information.--The criteria for 
     medical necessity determinations made under the plan with 
     respect to mental health or substance use disorder benefits 
     (or the health insurance coverage offered in connection with 
     the plan with respect to such benefits) shall be made 
     available by the plan administrator (or the health insurance 
     issuer offering such coverage) in accordance with regulations 
     to any current or potential participant, beneficiary, or 
     contracting provider upon request. The reason for any denial 
     under the plan (or coverage) of reimbursement or payment for 
     services with respect to mental health or substance use 
     disorder benefits in the case of any participant or 
     beneficiary shall, on request or as otherwise required, be 
     made available by the plan administrator (or the health 
     insurance issuer offering such coverage) to the participant 
     or beneficiary in accordance with regulations.
       ``(5) Out-of-network providers.--In the case of a plan or 
     coverage that provides both medical and surgical benefits and 
     mental health or substance use disorder benefits, if the plan 
     or coverage provides coverage for medical or surgical 
     benefits provided by out-of-network providers, the plan or 
     coverage shall provide coverage for mental health or 
     substance use disorder benefits provided by out-of-network 
     providers in a manner that is consistent with the 
     requirements of this section.'';
       (2) in subsection (b), by amending paragraph (2) to read as 
     follows:
       ``(2) in the case of a group health plan (or health 
     insurance coverage offered in connection with such a plan) 
     that provides mental health or substance use disorder 
     benefits, as affecting the terms and conditions of the plan 
     or coverage relating to such benefits under the plan or 
     coverage, except as provided in subsection (a).'';
       (3) in subsection (c)--
       (A) in paragraph (1)(B)--
       (i) by inserting ``(or 1 in the case of an employer 
     residing in a State that permits small groups to include a 
     single individual)'' after ``at least 2'' the first place 
     that such appears; and
       (ii) by striking ``and who employs at least 2 employees on 
     the first day of the plan year''; and
       (B) by striking paragraph (2) and inserting the following:
       ``(2) Cost exemption.--
       ``(A) In general.--With respect to a group health plan (or 
     health insurance coverage offered in connection with such a 
     plan), if the application of this section to such plan (or 
     coverage) results in an increase for the plan year involved 
     of the actual total costs of coverage with respect to medical 
     and surgical benefits and mental health and substance use 
     disorder benefits under the plan (as determined and certified 
     under subparagraph (C)) by an amount that exceeds the 
     applicable percentage described in subparagraph (B) of the 
     actual total plan costs, the provisions of this section shall 
     not apply to such plan (or coverage) during the following 
     plan year, and such exemption shall apply to the plan (or 
     coverage) for 1 plan year. An employer may elect to continue 
     to apply mental health and substance use disorder parity 
     pursuant to this section with respect to the group health 
     plan (or coverage) involved regardless of any increase in 
     total costs.
       ``(B) Applicable percentage.--With respect to a plan (or 
     coverage), the applicable percentage described in this 
     subparagraph shall be--
       ``(i) 2 percent in the case of the first plan year in which 
     this section is applied; and
       ``(ii) 1 percent in the case of each subsequent plan year.
       ``(C) Determinations by actuaries.--Determinations as to 
     increases in actual costs under a plan (or coverage) for 
     purposes of this section shall be made and certified by a 
     qualified and licensed actuary who is a member in good 
     standing of the American Academy of Actuaries. All such 
     determinations shall be in a written report prepared by the 
     actuary. The report, and all underlying documentation relied 
     upon by the actuary, shall be maintained by the group health 
     plan or health insurance issuer for a period of 6 years 
     following the notification made under subparagraph (E).
       ``(D) 6-month determinations.--If a group health plan (or a 
     health insurance issuer offering coverage in connection with 
     a group health plan) seeks an exemption under this paragraph, 
     determinations under subparagraph (A) shall be made after 
     such plan (or coverage) has complied with this section for 
     the first 6 months of the plan year involved.
       ``(E) Notification.--
       ``(i) In general.--A group health plan (or a health 
     insurance issuer offering coverage in connection with a group 
     health plan) that, based upon a certification described under 
     subparagraph (C), qualifies for an exemption under this 
     paragraph, and elects to implement the exemption, shall 
     promptly notify the Secretary, the appropriate State 
     agencies, and participants and beneficiaries in the plan of 
     such election.
       ``(ii) Requirement.--A notification to the Secretary under 
     clause (i) shall include--

       ``(I) a description of the number of covered lives under 
     the plan (or coverage) involved at the time of the 
     notification, and as applicable, at the time of any prior 
     election of the cost-exemption under this paragraph by such 
     plan (or coverage);
       ``(II) for both the plan year upon which a cost exemption 
     is sought and the year prior, a description of the actual 
     total costs of coverage with respect to medical and surgical 
     benefits and mental health and substance use disorder 
     benefits under the plan; and
       ``(III) for both the plan year upon which a cost exemption 
     is sought and the year prior, the actual total costs of 
     coverage with respect to mental health and substance use 
     disorder benefits under the plan.

       ``(iii) Confidentiality.--A notification to the Secretary 
     under clause (i) shall be confidential. The Secretary shall 
     make available, upon request and on not more than an annual 
     basis, an anonymous itemization of such notifications, that 
     includes--

       ``(I) a breakdown of States by the size and type of 
     employers submitting such notification; and
       ``(II) a summary of the data received under clause (ii).

       ``(F) Audits by appropriate agencies.--To determine 
     compliance with this paragraph, the Secretary may audit the 
     books and records of a group health plan or health insurance 
     issuer relating to an exemption, including any actuarial 
     reports prepared pursuant to subparagraph (C), during the 6 
     year period following the notification of such exemption 
     under subparagraph (E). A State agency receiving a 
     notification under subparagraph (E) may also conduct such an 
     audit with respect to an exemption covered by such 
     notification.'';
       (4) in subsection (e), by striking paragraph (4) and 
     inserting the following:
       ``(4) Mental health benefits.--The term `mental health 
     benefits' means benefits with respect to services for mental 
     health conditions, as defined under the terms of the plan and 
     in accordance with applicable Federal and State law.

[[Page 23934]]

       ``(5) Substance use disorder benefits.--The term `substance 
     use disorder benefits' means benefits with respect to 
     services for substance use disorders, as defined under the 
     terms of the plan and in accordance with applicable Federal 
     and State law.'';
       (5) by striking subsection (f);
       (6) by inserting after subsection (e) the following:
       ``(f) Secretary Report.--The Secretary shall, by January 1, 
     2012, and every two years thereafter, submit to the 
     appropriate committees of Congress a report on compliance of 
     group health plans (and health insurance coverage offered in 
     connection with such plans) with the requirements of this 
     section. Such report shall include the results of any surveys 
     or audits on compliance of group health plans (and health 
     insurance coverage offered in connection with such plans) 
     with such requirements and an analysis of the reasons for any 
     failures to comply.
       ``(g) Notice and Assistance.--The Secretary, in cooperation 
     with the Secretaries of Health and Human Services and 
     Treasury, as appropriate, shall publish and widely 
     disseminate guidance and information for group health plans, 
     participants and beneficiaries, applicable State and local 
     regulatory bodies, and the National Association of Insurance 
     Commissioners concerning the requirements of this section and 
     shall provide assistance concerning such requirements and the 
     continued operation of applicable State law. Such guidance 
     and information shall inform participants and beneficiaries 
     of how they may obtain assistance under this section, 
     including, where appropriate, assistance from State consumer 
     and insurance agencies.'';
       (7) by striking ``mental health benefits'' and inserting 
     ``mental health and substance use disorder benefits'' each 
     place it appears in subsections (a)(1)(B)(i), (a)(1)(C), 
     (a)(2)(B)(i), and (a)(2)(C); and
       (8) by striking ``mental health benefits'' and inserting 
     ``mental health or substance use disorder benefits'' each 
     place it appears (other than in any provision amended by the 
     previous paragraph).
       (b) Amendments to Public Health Service Act.--Section 2705 
     of the Public Health Service Act (42 U.S.C. 300gg-5) is 
     amended--
       (1) in subsection (a), by adding at the end the following:
       ``(3) Financial requirements and treatment limitations.--
       ``(A) In general.--In the case of a group health plan (or 
     health insurance coverage offered in connection with such a 
     plan) that provides both medical and surgical benefits and 
     mental health or substance use disorder benefits, such plan 
     or coverage shall ensure that--
       ``(i) the financial requirements applicable to such mental 
     health or substance use disorder benefits are no more 
     restrictive than the predominant financial requirements 
     applied to substantially all medical and surgical benefits 
     covered by the plan (or coverage), and there are no separate 
     cost sharing requirements that are applicable only with 
     respect to mental health or substance use disorder benefits; 
     and
       ``(ii) the treatment limitations applicable to such mental 
     health or substance use disorder benefits are no more 
     restrictive than the predominant treatment limitations 
     applied to substantially all medical and surgical benefits 
     covered by the plan (or coverage) and there are no separate 
     treatment limitations that are applicable only with respect 
     to mental health or substance use disorder benefits.
       ``(B) Definitions.--In this paragraph:
       ``(i) Financial requirement.--The term `financial 
     requirement' includes deductibles, copayments, coinsurance, 
     and out-of-pocket expenses, but excludes an aggregate 
     lifetime limit and an annual limit subject to paragraphs (1) 
     and (2).
       ``(ii) Predominant.--A financial requirement or treatment 
     limit is considered to be predominant if it is the most 
     common or frequent of such type of limit or requirement.
       ``(iii) Treatment limitation.--The term `treatment 
     limitation' includes limits on the frequency of treatment, 
     number of visits, days of coverage, or other similar limits 
     on the scope or duration of treatment.
       ``(4) Availability of plan information.--The criteria for 
     medical necessity determinations made under the plan with 
     respect to mental health or substance use disorder benefits 
     (or the health insurance coverage offered in connection with 
     the plan with respect to such benefits) shall be made 
     available by the plan administrator (or the health insurance 
     issuer offering such coverage) in accordance with regulations 
     to any current or potential participant, beneficiary, or 
     contracting provider upon request. The reason for any denial 
     under the plan (or coverage) of reimbursement or payment for 
     services with respect to mental health or substance use 
     disorder benefits in the case of any participant or 
     beneficiary shall, on request or as otherwise required, be 
     made available by the plan administrator (or the health 
     insurance issuer offering such coverage) to the participant 
     or beneficiary in accordance with regulations.
       ``(5) Out-of-network providers.--In the case of a plan or 
     coverage that provides both medical and surgical benefits and 
     mental health or substance use disorder benefits, if the plan 
     or coverage provides coverage for medical or surgical 
     benefits provided by out-of-network providers, the plan or 
     coverage shall provide coverage for mental health or 
     substance use disorder benefits provided by out-of-network 
     providers in a manner that is consistent with the 
     requirements of this section.'';
       (2) in subsection (b), by amending paragraph (2) to read as 
     follows:
       ``(2) in the case of a group health plan (or health 
     insurance coverage offered in connection with such a plan) 
     that provides mental health or substance use disorder 
     benefits, as affecting the terms and conditions of the plan 
     or coverage relating to such benefits under the plan or 
     coverage, except as provided in subsection (a).'';
       (3) in subsection (c)--
       (A) in paragraph (1), by inserting before the period the 
     following: ``(as defined in section 2791(e)(4), except that 
     for purposes of this paragraph such term shall include 
     employers with 1 employee in the case of an employer residing 
     in a State that permits small groups to include a single 
     individual)''; and
       (B) by striking paragraph (2) and inserting the following:
       ``(2) Cost exemption.--
       ``(A) In general.--With respect to a group health plan (or 
     health insurance coverage offered in connection with such a 
     plan), if the application of this section to such plan (or 
     coverage) results in an increase for the plan year involved 
     of the actual total costs of coverage with respect to medical 
     and surgical benefits and mental health and substance use 
     disorder benefits under the plan (as determined and certified 
     under subparagraph (C)) by an amount that exceeds the 
     applicable percentage described in subparagraph (B) of the 
     actual total plan costs, the provisions of this section shall 
     not apply to such plan (or coverage) during the following 
     plan year, and such exemption shall apply to the plan (or 
     coverage) for 1 plan year. An employer may elect to continue 
     to apply mental health and substance use disorder parity 
     pursuant to this section with respect to the group health 
     plan (or coverage) involved regardless of any increase in 
     total costs.
       ``(B) Applicable percentage.--With respect to a plan (or 
     coverage), the applicable percentage described in this 
     subparagraph shall be--
       ``(i) 2 percent in the case of the first plan year in which 
     this section is applied; and
       ``(ii) 1 percent in the case of each subsequent plan year.
       ``(C) Determinations by actuaries.--Determinations as to 
     increases in actual costs under a plan (or coverage) for 
     purposes of this section shall be made and certified by a 
     qualified and licensed actuary who is a member in good 
     standing of the American Academy of Actuaries. All such 
     determinations shall be in a written report prepared by the 
     actuary. The report, and all underlying documentation relied 
     upon by the actuary, shall be maintained by the group health 
     plan or health insurance issuer for a period of 6 years 
     following the notification made under subparagraph (E).
       ``(D) 6-month determinations.--If a group health plan (or a 
     health insurance issuer offering coverage in connection with 
     a group health plan) seeks an exemption under this paragraph, 
     determinations under subparagraph (A) shall be made after 
     such plan (or coverage) has complied with this section for 
     the first 6 months of the plan year involved.
       ``(E) Notification.--
       ``(i) In general.--A group health plan (or a health 
     insurance issuer offering coverage in connection with a group 
     health plan) that, based upon a certification described under 
     subparagraph (C), qualifies for an exemption under this 
     paragraph, and elects to implement the exemption, shall 
     promptly notify the Secretary, the appropriate State 
     agencies, and participants and beneficiaries in the plan of 
     such election.
       ``(ii) Requirement.--A notification to the Secretary under 
     clause (i) shall include--

       ``(I) a description of the number of covered lives under 
     the plan (or coverage) involved at the time of the 
     notification, and as applicable, at the time of any prior 
     election of the cost-exemption under this paragraph by such 
     plan (or coverage);
       ``(II) for both the plan year upon which a cost exemption 
     is sought and the year prior, a description of the actual 
     total costs of coverage with respect to medical and surgical 
     benefits and mental health and substance use disorder 
     benefits under the plan; and
       ``(III) for both the plan year upon which a cost exemption 
     is sought and the year prior, the actual total costs of 
     coverage with respect to mental health and substance use 
     disorder benefits under the plan.

       ``(iii) Confidentiality.--A notification to the Secretary 
     under clause (i) shall be confidential. The Secretary shall 
     make available, upon request and on not more than an annual 
     basis, an anonymous itemization of such notifications, that 
     includes--

       ``(I) a breakdown of States by the size and type of 
     employers submitting such notification; and
       ``(II) a summary of the data received under clause (ii).

       ``(F) Audits by appropriate agencies.--To determine 
     compliance with this paragraph, the Secretary may audit the 
     books and records of a group health plan or health insurance 
     issuer relating to an exemption, including any actuarial 
     reports prepared pursuant to subparagraph (C), during the 6 
     year period following the notification of such exemption 
     under subparagraph (E). A State agency receiving a 
     notification under subparagraph (E) may also conduct such an 
     audit with respect to an exemption covered by such 
     notification.'';
       (4) in subsection (e), by striking paragraph (4) and 
     inserting the following:
       ``(4) Mental health benefits.--The term `mental health 
     benefits' means benefits with respect to services for mental 
     health conditions, as

[[Page 23935]]

     defined under the terms of the plan and in accordance with 
     applicable Federal and State law.
       ``(5) Substance use disorder benefits.--The term `substance 
     use disorder benefits' means benefits with respect to 
     services for substance use disorders, as defined under the 
     terms of the plan and in accordance with applicable Federal 
     and State law.'';
       (5) by striking subsection (f);
       (6) by striking ``mental health benefits'' and inserting 
     ``mental health and substance use disorder benefits'' each 
     place it appears in subsections (a)(1)(B)(i), (a)(1)(C), 
     (a)(2)(B)(i), and (a)(2)(C); and
       (7) by striking ``mental health benefits'' and inserting 
     ``mental health or substance use disorder benefits'' each 
     place it appears (other than in any provision amended by the 
     previous paragraph).
       (c) Amendments to Internal Revenue Code.--Section 9812 of 
     the Internal Revenue Code of 1986 is amended--
       (1) in subsection (a), by adding at the end the following:
       ``(3) Financial requirements and treatment limitations.--
       ``(A) In general.--In the case of a group health plan that 
     provides both medical and surgical benefits and mental health 
     or substance use disorder benefits, such plan shall ensure 
     that--
       ``(i) the financial requirements applicable to such mental 
     health or substance use disorder benefits are no more 
     restrictive than the predominant financial requirements 
     applied to substantially all medical and surgical benefits 
     covered by the plan, and there are no separate cost sharing 
     requirements that are applicable only with respect to mental 
     health or substance use disorder benefits; and
       ``(ii) the treatment limitations applicable to such mental 
     health or substance use disorder benefits are no more 
     restrictive than the predominant treatment limitations 
     applied to substantially all medical and surgical benefits 
     covered by the plan and there are no separate treatment 
     limitations that are applicable only with respect to mental 
     health or substance use disorder benefits.
       ``(B) Definitions.--In this paragraph:
       ``(i) Financial requirement.--The term `financial 
     requirement' includes deductibles, copayments, coinsurance, 
     and out-of-pocket expenses, but excludes an aggregate 
     lifetime limit and an annual limit subject to paragraphs (1) 
     and (2),
       ``(ii) Predominant.--A financial requirement or treatment 
     limit is considered to be predominant if it is the most 
     common or frequent of such type of limit or requirement.
       ``(iii) Treatment limitation.--The term `treatment 
     limitation' includes limits on the frequency of treatment, 
     number of visits, days of coverage, or other similar limits 
     on the scope or duration of treatment.
       ``(4) Availability of plan information.--The criteria for 
     medical necessity determinations made under the plan with 
     respect to mental health or substance use disorder benefits 
     shall be made available by the plan administrator in 
     accordance with regulations to any current or potential 
     participant, beneficiary, or contracting provider upon 
     request. The reason for any denial under the plan of 
     reimbursement or payment for services with respect to mental 
     health or substance use disorder benefits in the case of any 
     participant or beneficiary shall, on request or as otherwise 
     required, be made available by the plan administrator to the 
     participant or beneficiary in accordance with regulations.
       ``(5) Out-of-network providers.--In the case of a plan that 
     provides both medical and surgical benefits and mental health 
     or substance use disorder benefits, if the plan provides 
     coverage for medical or surgical benefits provided by out-of-
     network providers, the plan shall provide coverage for mental 
     health or substance use disorder benefits provided by out-of-
     network providers in a manner that is consistent with the 
     requirements of this section.'';
       (2) in subsection (b), by amending paragraph (2) to read as 
     follows:
       ``(2) in the case of a group health plan that provides 
     mental health or substance use disorder benefits, as 
     affecting the terms and conditions of the plan relating to 
     such benefits under the plan, except as provided in 
     subsection (a).'';
       (3) in subsection (c)--
       (A) by amending paragraph (1) to read as follows:
       ``(1) Small employer exemption.--
       ``(A) In general.--This section shall not apply to any 
     group health plan for any plan year of a small employer.
       ``(B) Small employer.--For purposes of subparagraph (A), 
     the term `small employer' means, with respect to a calendar 
     year and a plan year, an employer who employed an average of 
     at least 2 (or 1 in the case of an employer residing in a 
     State that permits small groups to include a single 
     individual) but not more than 50 employees on business days 
     during the preceding calendar year. For purposes of the 
     preceding sentence, all persons treated as a single employer 
     under subsection (b), (c), (m), or (o) of section 414 shall 
     be treated as 1 employer and rules similar to rules of 
     subparagraphs (B) and (C) of section 4980D(d)(2) shall 
     apply.''; and
       (B) by striking paragraph (2) and inserting the following:
       ``(2) Cost exemption.--
       ``(A) In general.--With respect to a group health plan, if 
     the application of this section to such plan results in an 
     increase for the plan year involved of the actual total costs 
     of coverage with respect to medical and surgical benefits and 
     mental health and substance use disorder benefits under the 
     plan (as determined and certified under subparagraph (C)) by 
     an amount that exceeds the applicable percentage described in 
     subparagraph (B) of the actual total plan costs, the 
     provisions of this section shall not apply to such plan 
     during the following plan year, and such exemption shall 
     apply to the plan for 1 plan year. An employer may elect to 
     continue to apply mental health and substance use disorder 
     parity pursuant to this section with respect to the group 
     health plan involved regardless of any increase in total 
     costs.
       ``(B) Applicable percentage.--With respect to a plan, the 
     applicable percentage described in this subparagraph shall 
     be--
       ``(i) 2 percent in the case of the first plan year in which 
     this section is applied; and
       ``(ii) 1 percent in the case of each subsequent plan year.
       ``(C) Determinations by actuaries.--Determinations as to 
     increases in actual costs under a plan for purposes of this 
     section shall be made and certified by a qualified and 
     licensed actuary who is a member in good standing of the 
     American Academy of Actuaries. All such determinations shall 
     be in a written report prepared by the actuary. The report, 
     and all underlying documentation relied upon by the actuary, 
     shall be maintained by the group health plan for a period of 
     6 years following the notification made under subparagraph 
     (E).
       ``(D) 6-month determinations.--If a group health plan seeks 
     an exemption under this paragraph, determinations under 
     subparagraph (A) shall be made after such plan has complied 
     with this section for the first 6 months of the plan year 
     involved.
       ``(E) Notification.--
       ``(i) In general.--A group health plan that, based upon a 
     certification described under subparagraph (C), qualifies for 
     an exemption under this paragraph, and elects to implement 
     the exemption, shall promptly notify the Secretary, the 
     appropriate State agencies, and participants and 
     beneficiaries in the plan of such election.
       ``(ii) Requirement.--A notification to the Secretary under 
     clause (i) shall include--

       ``(I) a description of the number of covered lives under 
     the plan involved at the time of the notification, and as 
     applicable, at the time of any prior election of the cost-
     exemption under this paragraph by such plan;
       ``(II) for both the plan year upon which a cost exemption 
     is sought and the year prior, a description of the actual 
     total costs of coverage with respect to medical and surgical 
     benefits and mental health and substance use disorder 
     benefits under the plan; and
       ``(III) for both the plan year upon which a cost exemption 
     is sought and the year prior, the actual total costs of 
     coverage with respect to mental health and substance use 
     disorder benefits under the plan.

       ``(iii) Confidentiality.--A notification to the Secretary 
     under clause (i) shall be confidential. The Secretary shall 
     make available, upon request and on not more than an annual 
     basis, an anonymous itemization of such notifications, that 
     includes--

       ``(I) a breakdown of States by the size and type of 
     employers submitting such notification; and
       ``(II) a summary of the data received under clause (ii).

       ``(F) Audits by appropriate agencies.--To determine 
     compliance with this paragraph, the Secretary may audit the 
     books and records of a group health plan relating to an 
     exemption, including any actuarial reports prepared pursuant 
     to subparagraph (C), during the 6 year period following the 
     notification of such exemption under subparagraph (E). A 
     State agency receiving a notification under subparagraph (E) 
     may also conduct such an audit with respect to an exemption 
     covered by such notification.'';
       (4) in subsection (e), by striking paragraph (4) and 
     inserting the following:
       ``(4) Mental health benefits.--The term `mental health 
     benefits' means benefits with respect to services for mental 
     health conditions, as defined under the terms of the plan and 
     in accordance with applicable Federal and State law.
       ``(5) Substance use disorder benefits.--The term `substance 
     use disorder benefits' means benefits with respect to 
     services for substance use disorders, as defined under the 
     terms of the plan and in accordance with applicable Federal 
     and State law.'';
       (5) by striking subsection (f);
       (6) by striking ``mental health benefits'' and inserting 
     ``mental health and substance use disorder benefits'' each 
     place it appears in subsections (a)(1)(B)(i), (a)(1)(C), 
     (a)(2)(B)(i), and (a)(2)(C); and
       (7) by striking ``mental health benefits'' and inserting 
     ``mental health or substance use disorder benefits'' each 
     place it appears (other than in any provision amended by the 
     previous paragraph).
       (d) Regulations.--Not later than 1 year after the date of 
     enactment of this Act, the Secretaries of Labor, Health and 
     Human Services, and the Treasury shall issue regulations to 
     carry out the amendments made by subsections (a), (b), and 
     (c), respectively.
       (e) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply with respect to group health plans for plan years 
     beginning after the date that is 1 year after the date of 
     enactment of this Act, regardless of whether regulations have 
     been issued to carry out such amendments by such effective 
     date, except that the amendments made by subsections (a)(5), 
     (b)(5), and

[[Page 23936]]

     (c)(5), relating to striking of certain sunset provisions, 
     shall take effect on January 1, 2009.
       (2) Special rule for collective bargaining agreements.--In 
     the case of a group health plan maintained pursuant to one or 
     more collective bargaining agreements between employee 
     representatives and one or more employers ratified before the 
     date of the enactment of this Act, the amendments made by 
     this section shall not apply to plan years beginning before 
     the later of--
       (A) the date on which the last of the collective bargaining 
     agreements relating to the plan terminates (determined 
     without regard to any extension thereof agreed to after the 
     date of the enactment of this Act), or
       (B) January 1, 2009.

     For purposes of subparagraph (A), any plan amendment made 
     pursuant to a collective bargaining agreement relating to the 
     plan which amends the plan solely to conform to any 
     requirement added by this section shall not be treated as a 
     termination of such collective bargaining agreement.
       (f) Assuring Coordination.--The Secretary of Health and 
     Human Services, the Secretary of Labor, and the Secretary of 
     the Treasury may ensure, through the execution or revision of 
     an interagency memorandum of understanding among such 
     Secretaries, that--
       (1) regulations, rulings, and interpretations issued by 
     such Secretaries relating to the same matter over which two 
     or more such Secretaries have responsibility under this 
     section (and the amendments made by this section) are 
     administered so as to have the same effect at all times; and
       (2) coordination of policies relating to enforcing the same 
     requirements through such Secretaries in order to have a 
     coordinated enforcement strategy that avoids duplication of 
     enforcement efforts and assigns priorities in enforcement.
       (g) Conforming Clerical Amendments.--
       (1) ERISA heading.--
       (A) In general.--The heading of section 712 of the Employee 
     Retirement Income Security Act of 1974 is amended to read as 
     follows:

     ``SEC. 712. PARITY IN MENTAL HEALTH AND SUBSTANCE USE 
                   DISORDER BENEFITS.''.

       (B) Clerical amendment.--The table of contents in section 1 
     of such Act is amended by striking the item relating to 
     section 712 and inserting the following new item:

``Sec. 712. Parity in mental health and substance use disorder 
              benefits.''.
       (2) PHSA heading.--The heading of section 2705 of the 
     Public Health Service Act is amended to read as follows:

     ``SEC. 2705. PARITY IN MENTAL HEALTH AND SUBSTANCE USE 
                   DISORDER BENEFITS.''.

       (3) IRC heading.--
       (A) In general.--The heading of section 9812 of the 
     Internal Revenue Code of 1986 is amended to read as follows:

     ``SEC. 9812. PARITY IN MENTAL HEALTH AND SUBSTANCE USE 
                   DISORDER BENEFITS.''.

       (B) Clerical amendment.--The table of sections for 
     subchapter B of chapter 100 of such Code is amended by 
     striking the item relating to section 9812 and inserting the 
     following new item:

``Sec. 9812. Parity in mental health and substance use disorder 
              benefits.''.
       (h) GAO Study on Coverage and Exclusion of Mental Health 
     and Substance Use Disorder Diagnoses.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study that analyzes the specific 
     rates, patterns, and trends in coverage and exclusion of 
     specific mental health and substance use disorder diagnoses 
     by health plans and health insurance. The study shall include 
     an analysis of--
       (A) specific coverage rates for all mental health 
     conditions and substance use disorders;
       (B) which diagnoses are most commonly covered or excluded;
       (C) whether implementation of this Act has affected trends 
     in coverage or exclusion of such diagnoses; and
       (D) the impact of covering or excluding specific diagnoses 
     on participants' and enrollees' health, their health care 
     coverage, and the costs of delivering health care.
       (2) Reports.--Not later than 3 years after the date of the 
     enactment of this Act, and 2 years after the date of 
     submission the first report under this paragraph, the 
     Comptroller General shall submit to Congress a report on the 
     results of the study conducted under paragraph (1).

                       TITLE VI--OTHER PROVISIONS

     SEC. 601. SECURE RURAL SCHOOLS AND COMMUNITY SELF-
                   DETERMINATION PROGRAM.

       (a) Reauthorization of the Secure Rural Schools and 
     Community Self-Determination Act of 2000.--The Secure Rural 
     Schools and Community Self-Determination Act of 2000 (16 
     U.S.C. 500 note; Public Law 106-393) is amended by striking 
     sections 1 through 403 and inserting the following:

     ``SECTION 1. SHORT TITLE.

       ``This Act may be cited as the `Secure Rural Schools and 
     Community Self-Determination Act of 2000'.

     ``SEC. 2. PURPOSES.

       ``The purposes of this Act are--
       ``(1) to stabilize and transition payments to counties to 
     provide funding for schools and roads that supplements other 
     available funds;
       ``(2) to make additional investments in, and create 
     additional employment opportunities through, projects that--
       ``(A)(i) improve the maintenance of existing 
     infrastructure;
       ``(ii) implement stewardship objectives that enhance forest 
     ecosystems; and
       ``(iii) restore and improve land health and water quality;
       ``(B) enjoy broad-based support; and
       ``(C) have objectives that may include--
       ``(i) road, trail, and infrastructure maintenance or 
     obliteration;
       ``(ii) soil productivity improvement;
       ``(iii) improvements in forest ecosystem health;
       ``(iv) watershed restoration and maintenance;
       ``(v) the restoration, maintenance, and improvement of 
     wildlife and fish habitat;
       ``(vi) the control of noxious and exotic weeds; and
       ``(vii) the reestablishment of native species; and
       ``(3) to improve cooperative relationships among--
       ``(A) the people that use and care for Federal land; and
       ``(B) the agencies that manage the Federal land.

     ``SEC. 3. DEFINITIONS.

       ``In this Act:
       ``(1) Adjusted share.--The term `adjusted share' means the 
     number equal to the quotient obtained by dividing--
       ``(A) the number equal to the quotient obtained by 
     dividing--
       ``(i) the base share for the eligible county; by
       ``(ii) the income adjustment for the eligible county; by
       ``(B) the number equal to the sum of the quotients obtained 
     under subparagraph (A) and paragraph (8)(A) for all eligible 
     counties.
       ``(2) Base share.--The term `base share' means the number 
     equal to the average of--
       ``(A) the quotient obtained by dividing--
       ``(i) the number of acres of Federal land described in 
     paragraph (7)(A) in each eligible county; by
       ``(ii) the total number acres of Federal land in all 
     eligible counties in all eligible States; and
       ``(B) the quotient obtained by dividing--
       ``(i) the amount equal to the average of the 3 highest 25-
     percent payments and safety net payments made to each 
     eligible State for each eligible county during the 
     eligibility period; by
       ``(ii) the amount equal to the sum of the amounts 
     calculated under clause (i) and paragraph (9)(B)(i) for all 
     eligible counties in all eligible States during the 
     eligibility period.
       ``(3) County payment.--The term `county payment' means the 
     payment for an eligible county calculated under section 
     101(b).
       ``(4) Eligible county.--The term `eligible county' means 
     any county that--
       ``(A) contains Federal land (as defined in paragraph (7)); 
     and
       ``(B) elects to receive a share of the State payment or the 
     county payment under section 102(b).
       ``(5) Eligibility period.--The term `eligibility period' 
     means fiscal year 1986 through fiscal year 1999.
       ``(6) Eligible state.--The term `eligible State' means a 
     State or territory of the United States that received a 25-
     percent payment for 1 or more fiscal years of the eligibility 
     period.
       ``(7) Federal land.--The term `Federal land' means--
       ``(A) land within the National Forest System, as defined in 
     section 11(a) of the Forest and Rangeland Renewable Resources 
     Planning Act of 1974 (16 U.S.C. 1609(a)) exclusive of the 
     National Grasslands and land utilization projects designated 
     as National Grasslands administered pursuant to the Act of 
     July 22, 1937 (7 U.S.C. 1010-1012); and
       ``(B) such portions of the revested Oregon and California 
     Railroad and reconveyed Coos Bay Wagon Road grant land as are 
     or may hereafter come under the jurisdiction of the 
     Department of the Interior, which have heretofore or may 
     hereafter be classified as timberlands, and power-site land 
     valuable for timber, that shall be managed, except as 
     provided in the former section 3 of the Act of August 28, 
     1937 (50 Stat. 875; 43 U.S.C. 1181c), for permanent forest 
     production.
       ``(8) 50-percent adjusted share.--The term `50-percent 
     adjusted share' means the number equal to the quotient 
     obtained by dividing--
       ``(A) the number equal to the quotient obtained by 
     dividing--
       ``(i) the 50-percent base share for the eligible county; by
       ``(ii) the income adjustment for the eligible county; by
       ``(B) the number equal to the sum of the quotients obtained 
     under subparagraph (A) and paragraph (1)(A) for all eligible 
     counties.
       ``(9) 50-percent base share.--The term `50-percent base 
     share' means the number equal to the average of--
       ``(A) the quotient obtained by dividing--
       ``(i) the number of acres of Federal land described in 
     paragraph (7)(B) in each eligible county; by
       ``(ii) the total number acres of Federal land in all 
     eligible counties in all eligible States; and
       ``(B) the quotient obtained by dividing--
       ``(i) the amount equal to the average of the 3 highest 50-
     percent payments made to each eligible county during the 
     eligibility period; by
       ``(ii) the amount equal to the sum of the amounts 
     calculated under clause (i) and paragraph (2)(B)(i) for all 
     eligible counties in all eligible States during the 
     eligibility period.
       ``(10) 50-percent payment.--The term `50-percent payment' 
     means the payment that is the sum of the 50-percent share 
     otherwise paid to a county pursuant to title II of the Act of 
     August 28, 1937 (chapter 876; 50 Stat. 875; 43 U.S.C. 1181f), 
     and the payment made to a county pursuant to the Act of May 
     24, 1939 (chapter 144; 53 Stat. 753; 43 U.S.C. 1181f-1 et 
     seq.).

[[Page 23937]]

       ``(11) Full funding amount.--The term `full funding amount' 
     means--
       ``(A) $500,000,000 for fiscal year 2008; and
       ``(B) for fiscal year 2009 and each fiscal year thereafter, 
     the amount that is equal to 90 percent of the full funding 
     amount for the preceding fiscal year.
       ``(12) Income adjustment.--The term `income adjustment' 
     means the square of the quotient obtained by dividing--
       ``(A) the per capita personal income for each eligible 
     county; by
       ``(B) the median per capita personal income of all eligible 
     counties.
       ``(13) Per capita personal income.--The term `per capita 
     personal income' means the most recent per capita personal 
     income data, as determined by the Bureau of Economic 
     Analysis.
       ``(14) Safety net payments.--The term `safety net payments' 
     means the special payment amounts paid to States and counties 
     required by section 13982 or 13983 of the Omnibus Budget 
     Reconciliation Act of 1993 (Public Law 103-66; 16 U.S.C. 500 
     note; 43 U.S.C. 1181f note).
       ``(15) Secretary concerned.--The term `Secretary concerned' 
     means--
       ``(A) the Secretary of Agriculture or the designee of the 
     Secretary of Agriculture with respect to the Federal land 
     described in paragraph (7)(A); and
       ``(B) the Secretary of the Interior or the designee of the 
     Secretary of the Interior with respect to the Federal land 
     described in paragraph (7)(B).
       ``(16) State payment.--The term `State payment' means the 
     payment for an eligible State calculated under section 
     101(a).
       ``(17) 25-percent payment.--The term `25-percent payment' 
     means the payment to States required by the sixth paragraph 
     under the heading of `FOREST SERVICE' in the Act of May 23, 
     1908 (35 Stat. 260; 16 U.S.C. 500), and section 13 of the Act 
     of March 1, 1911 (36 Stat. 963; 16 U.S.C. 500).

 ``TITLE I--SECURE PAYMENTS FOR STATES AND COUNTIES CONTAINING FEDERAL 
                                  LAND

     ``SEC. 101. SECURE PAYMENTS FOR STATES CONTAINING FEDERAL 
                   LAND.

       ``(a) State Payment.--For each of fiscal years 2008 through 
     2011, the Secretary of Agriculture shall calculate for each 
     eligible State an amount equal to the sum of the products 
     obtained by multiplying--
       ``(1) the adjusted share for each eligible county within 
     the eligible State; by
       ``(2) the full funding amount for the fiscal year.
       ``(b) County Payment.--For each of fiscal years 2008 
     through 2011, the Secretary of the Interior shall calculate 
     for each eligible county that received a 50-percent payment 
     during the eligibility period an amount equal to the product 
     obtained by multiplying--
       ``(1) the 50-percent adjusted share for the eligible 
     county; by
       ``(2) the full funding amount for the fiscal year.

     ``SEC. 102. PAYMENTS TO STATES AND COUNTIES.

       ``(a) Payment Amounts.--Except as provided in section 103, 
     the Secretary of the Treasury shall pay to--
       ``(1) a State or territory of the United States an amount 
     equal to the sum of the amounts elected under subsection (b) 
     by each county within the State or territory for--
       ``(A) if the county is eligible for the 25-percent payment, 
     the share of the 25-percent payment; or
       ``(B) the share of the State payment of the eligible 
     county; and
       ``(2) a county an amount equal to the amount elected under 
     subsection (b) by each county for--
       ``(A) if the county is eligible for the 50-percent payment, 
     the 50-percent payment; or
       ``(B) the county payment for the eligible county.
       ``(b) Election To Receive Payment Amount.--
       ``(1) Election; submission of results.--
       ``(A) In general.--The election to receive a share of the 
     State payment, the county payment, a share of the State 
     payment and the county payment, a share of the 25-percent 
     payment, the 50-percent payment, or a share of the 25-percent 
     payment and the 50-percent payment, as applicable, shall be 
     made at the discretion of each affected county by August 1, 
     2008 (or as soon thereafter as the Secretary concerned 
     determines is practicable), and August 1 of each second 
     fiscal year thereafter, in accordance with paragraph (2), and 
     transmitted to the Secretary concerned by the Governor of 
     each eligible State.
       ``(B) Failure to transmit.--If an election for an affected 
     county is not transmitted to the Secretary concerned by the 
     date specified under subparagraph (A), the affected county 
     shall be considered to have elected to receive a share of the 
     State payment, the county payment, or a share of the State 
     payment and the county payment, as applicable.
       ``(2) Duration of election.--
       ``(A) In general.--A county election to receive a share of 
     the 25-percent payment or 50-percent payment, as applicable, 
     shall be effective for 2 fiscal years.
       ``(B) Full funding amount.--If a county elects to receive a 
     share of the State payment or the county payment, the 
     election shall be effective for all subsequent fiscal years 
     through fiscal year 2011.
       ``(3) Source of payment amounts.--The payment to an 
     eligible State or eligible county under this section for a 
     fiscal year shall be derived from--
       ``(A) any amounts that are appropriated to carry out this 
     Act;
       ``(B) any revenues, fees, penalties, or miscellaneous 
     receipts, exclusive of deposits to any relevant trust fund, 
     special account, or permanent operating funds, received by 
     the Federal Government from activities by the Bureau of Land 
     Management or the Forest Service on the applicable Federal 
     land; and
       ``(C) to the extent of any shortfall, out of any amounts in 
     the Treasury of the United States not otherwise appropriated.
       ``(c) Distribution and Expenditure of Payments.--
       ``(1) Distribution method.--A State that receives a payment 
     under subsection (a) for Federal land described in section 
     3(7)(A) shall distribute the appropriate payment amount among 
     the appropriate counties in the State in accordance with--
       ``(A) the Act of May 23, 1908 (16 U.S.C. 500); and
       ``(B) section 13 of the Act of March 1, 1911 (36 Stat. 963; 
     16 U.S.C. 500).
       ``(2) Expenditure purposes.--Subject to subsection (d), 
     payments received by a State under subsection (a) and 
     distributed to counties in accordance with paragraph (1) 
     shall be expended as required by the laws referred to in 
     paragraph (1).
       ``(d) Expenditure Rules for Eligible Counties.--
       ``(1) Allocations.--
       ``(A) Use of portion in same manner as 25-percent payment 
     or 50-percent payment, as applicable.--Except as provided in 
     paragraph (3)(B), if an eligible county elects to receive its 
     share of the State payment or the county payment, not less 
     than 80 percent, but not more than 85 percent, of the funds 
     shall be expended in the same manner in which the 25-percent 
     payments or 50-percent payment, as applicable, are required 
     to be expended.
       ``(B) Election as to use of balance.--Except as provided in 
     subparagraph (C), an eligible county shall elect to do 1 or 
     more of the following with the balance of any funds not 
     expended pursuant to subparagraph (A):
       ``(i) Reserve any portion of the balance for projects in 
     accordance with title II.
       ``(ii) Reserve not more than 7 percent of the total share 
     for the eligible county of the State payment or the county 
     payment for projects in accordance with title III.
       ``(iii) Return the portion of the balance not reserved 
     under clauses (i) and (ii) to the Treasury of the United 
     States.
       ``(C) Counties with modest distributions.--In the case of 
     each eligible county to which more than $100,000, but less 
     than $350,000, is distributed for any fiscal year pursuant to 
     either or both of paragraphs (1)(B) and (2)(B) of subsection 
     (a), the eligible county, with respect to the balance of any 
     funds not expended pursuant to subparagraph (A) for that 
     fiscal year, shall--
       ``(i) reserve any portion of the balance for--

       ``(I) carrying out projects under title II;
       ``(II) carrying out projects under title III; or
       ``(III) a combination of the purposes described in 
     subclauses (I) and (II); or

       ``(ii) return the portion of the balance not reserved under 
     clause (i) to the Treasury of the United States.
       ``(2) Distribution of funds.--
       ``(A) In general.--Funds reserved by an eligible county 
     under subparagraph (B)(i) or (C)(i) of paragraph (1) for 
     carrying out projects under title II shall be deposited in a 
     special account in the Treasury of the United States.
       ``(B) Availability.--Amounts deposited under subparagraph 
     (A) shall--
       ``(i) be available for expenditure by the Secretary 
     concerned, without further appropriation; and
       ``(ii) remain available until expended in accordance with 
     title II.
       ``(3) Election.--
       ``(A) Notification.--
       ``(i) In general.--An eligible county shall notify the 
     Secretary concerned of an election by the eligible county 
     under this subsection not later than September 30, 2008 (or 
     as soon thereafter as the Secretary concerned determines is 
     practicable), and each September 30 thereafter for each 
     succeeding fiscal year.
       ``(ii) Failure to elect.--Except as provided in 
     subparagraph (B), if the eligible county fails to make an 
     election by the date specified in clause (i), the eligible 
     county shall--

       ``(I) be considered to have elected to expend 85 percent of 
     the funds in accordance with paragraph (1)(A); and
       ``(II) return the balance to the Treasury of the United 
     States.

       ``(B) Counties with minor distributions.--In the case of 
     each eligible county to which less than $100,000 is 
     distributed for any fiscal year pursuant to either or both of 
     paragraphs (1)(B) and (2)(B) of subsection (a), the eligible 
     county may elect to expend all the funds in the same manner 
     in which the 25-percent payments or 50-percent payments, as 
     applicable, are required to be expended.
       ``(e) Time for Payment.--The payments required under this 
     section for a fiscal year shall be made as soon as 
     practicable after the end of that fiscal year.

     ``SEC. 103. TRANSITION PAYMENTS TO STATES.

       ``(a) Definitions.--In this section:
       ``(1) Adjusted amount.--The term `adjusted amount' means, 
     with respect to a covered State--
       ``(A) for fiscal year 2008, 90 percent of--
       ``(i) the sum of the amounts paid for fiscal year 2006 
     under section 102(a)(2) (as in effect on

[[Page 23938]]

     September 29, 2006) for the eligible counties in the covered 
     State that have elected under section 102(b) to receive a 
     share of the State payment for fiscal year 2008; and
       ``(ii) the sum of the amounts paid for fiscal year 2006 
     under section 103(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the State of Oregon that have 
     elected under section 102(b) to receive the county payment 
     for fiscal year 2008;
       ``(B) for fiscal year 2009, 81 percent of--
       ``(i) the sum of the amounts paid for fiscal year 2006 
     under section 102(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the covered State that have 
     elected under section 102(b) to receive a share of the State 
     payment for fiscal year 2009; and
       ``(ii) the sum of the amounts paid for fiscal year 2006 
     under section 103(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the State of Oregon that have 
     elected under section 102(b) to receive the county payment 
     for fiscal year 2009; and
       ``(C) for fiscal year 2010, 73 percent of--
       ``(i) the sum of the amounts paid for fiscal year 2006 
     under section 102(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the covered State that have 
     elected under section 102(b) to receive a share of the State 
     payment for fiscal year 2010; and
       ``(ii) the sum of the amounts paid for fiscal year 2006 
     under section 103(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the State of Oregon that have 
     elected under section 102(b) to receive the county payment 
     for fiscal year 2010.
       ``(2) Covered state.--The term `covered State' means each 
     of the States of California, Louisiana, Oregon, Pennsylvania, 
     South Carolina, South Dakota, Texas, and Washington.
       ``(b) Transition Payments.--For each of fiscal years 2008 
     through 2010, in lieu of the payment amounts that otherwise 
     would have been made under paragraphs (1)(B) and (2)(B) of 
     section 102(a), the Secretary of the Treasury shall pay the 
     adjusted amount to each covered State and the eligible 
     counties within the covered State, as applicable.
       ``(c) Distribution of Adjusted Amount.--Except as provided 
     in subsection (d), it is the intent of Congress that the 
     method of distributing the payments under subsection (b) 
     among the counties in the covered States for each of fiscal 
     years 2008 through 2010 be in the same proportion that the 
     payments were distributed to the eligible counties in fiscal 
     year 2006.
       ``(d) Distribution of Payments in California.--The 
     following payments shall be distributed among the eligible 
     counties in the State of California in the same proportion 
     that payments under section 102(a)(2) (as in effect on 
     September 29, 2006) were distributed to the eligible counties 
     for fiscal year 2006:
       ``(1) Payments to the State of California under subsection 
     (b).
       ``(2) The shares of the eligible counties of the State 
     payment for California under section 102 for fiscal year 
     2011.
       ``(e) Treatment of Payments.--For purposes of this Act, any 
     payment made under subsection (b) shall be considered to be a 
     payment made under section 102(a).

              ``TITLE II--SPECIAL PROJECTS ON FEDERAL LAND

     ``SEC. 201. DEFINITIONS.

       ``In this title:
       ``(1) Participating county.--The term `participating 
     county' means an eligible county that elects under section 
     102(d) to expend a portion of the Federal funds received 
     under section 102 in accordance with this title.
       ``(2) Project funds.--The term `project funds' means all 
     funds an eligible county elects under section 102(d) to 
     reserve for expenditure in accordance with this title.
       ``(3) Resource advisory committee.--The term `resource 
     advisory committee' means--
       ``(A) an advisory committee established by the Secretary 
     concerned under section 205; or
       ``(B) an advisory committee determined by the Secretary 
     concerned to meet the requirements of section 205.
       ``(4) Resource management plan.--The term `resource 
     management plan' means--
       ``(A) a land use plan prepared by the Bureau of Land 
     Management for units of the Federal land described in section 
     3(7)(B) pursuant to section 202 of the Federal Land Policy 
     and Management Act of 1976 (43 U.S.C. 1712); or
       ``(B) a land and resource management plan prepared by the 
     Forest Service for units of the National Forest System 
     pursuant to section 6 of the Forest and Rangeland Renewable 
     Resources Planning Act of 1974 (16 U.S.C. 1604).

     ``SEC. 202. GENERAL LIMITATION ON USE OF PROJECT FUNDS.

       ``(a) Limitation.--Project funds shall be expended solely 
     on projects that meet the requirements of this title.
       ``(b) Authorized Uses.--Project funds may be used by the 
     Secretary concerned for the purpose of entering into and 
     implementing cooperative agreements with willing Federal 
     agencies, State and local governments, private and nonprofit 
     entities, and landowners for protection, restoration, and 
     enhancement of fish and wildlife habitat, and other resource 
     objectives consistent with the purposes of this Act on 
     Federal land and on non-Federal land where projects would 
     benefit the resources on Federal land.

     ``SEC. 203. SUBMISSION OF PROJECT PROPOSALS.

       ``(a) Submission of Project Proposals to Secretary 
     Concerned.--
       ``(1) Projects funded using project funds.--Not later than 
     September 30 for fiscal year 2008 (or as soon thereafter as 
     the Secretary concerned determines is practicable), and each 
     September 30 thereafter for each succeeding fiscal year 
     through fiscal year 2011, each resource advisory committee 
     shall submit to the Secretary concerned a description of any 
     projects that the resource advisory committee proposes the 
     Secretary undertake using any project funds reserved by 
     eligible counties in the area in which the resource advisory 
     committee has geographic jurisdiction.
       ``(2) Projects funded using other funds.--A resource 
     advisory committee may submit to the Secretary concerned a 
     description of any projects that the committee proposes the 
     Secretary undertake using funds from State or local 
     governments, or from the private sector, other than project 
     funds and funds appropriated and otherwise available to do 
     similar work.
       ``(3) Joint projects.--Participating counties or other 
     persons may propose to pool project funds or other funds, 
     described in paragraph (2), and jointly propose a project or 
     group of projects to a resource advisory committee 
     established under section 205.
       ``(b) Required Description of Projects.--In submitting 
     proposed projects to the Secretary concerned under subsection 
     (a), a resource advisory committee shall include in the 
     description of each proposed project the following 
     information:
       ``(1) The purpose of the project and a description of how 
     the project will meet the purposes of this title.
       ``(2) The anticipated duration of the project.
       ``(3) The anticipated cost of the project.
       ``(4) The proposed source of funding for the project, 
     whether project funds or other funds.
       ``(5)(A) Expected outcomes, including how the project will 
     meet or exceed desired ecological conditions, maintenance 
     objectives, or stewardship objectives.
       ``(B) An estimate of the amount of any timber, forage, and 
     other commodities and other economic activity, including jobs 
     generated, if any, anticipated as part of the project.
       ``(6) A detailed monitoring plan, including funding needs 
     and sources, that--
       ``(A) tracks and identifies the positive or negative 
     impacts of the project, implementation, and provides for 
     validation monitoring; and
       ``(B) includes an assessment of the following:
       ``(i) Whether or not the project met or exceeded desired 
     ecological conditions; created local employment or training 
     opportunities, including summer youth jobs programs such as 
     the Youth Conservation Corps where appropriate.
       ``(ii) Whether the project improved the use of, or added 
     value to, any products removed from land consistent with the 
     purposes of this title.
       ``(7) An assessment that the project is to be in the public 
     interest.
       ``(c) Authorized Projects.--Projects proposed under 
     subsection (a) shall be consistent with section 2.

     ``SEC. 204. EVALUATION AND APPROVAL OF PROJECTS BY SECRETARY 
                   CONCERNED.

       ``(a) Conditions for Approval of Proposed Project.--The 
     Secretary concerned may make a decision to approve a project 
     submitted by a resource advisory committee under section 203 
     only if the proposed project satisfies each of the following 
     conditions:
       ``(1) The project complies with all applicable Federal laws 
     (including regulations).
       ``(2) The project is consistent with the applicable 
     resource management plan and with any watershed or subsequent 
     plan developed pursuant to the resource management plan and 
     approved by the Secretary concerned.
       ``(3) The project has been approved by the resource 
     advisory committee in accordance with section 205, including 
     the procedures issued under subsection (e) of that section.
       ``(4) A project description has been submitted by the 
     resource advisory committee to the Secretary concerned in 
     accordance with section 203.
       ``(5) The project will improve the maintenance of existing 
     infrastructure, implement stewardship objectives that enhance 
     forest ecosystems, and restore and improve land health and 
     water quality.
       ``(b) Environmental Reviews.--
       ``(1) Request for payment by county.--The Secretary 
     concerned may request the resource advisory committee 
     submitting a proposed project to agree to the use of project 
     funds to pay for any environmental review, consultation, or 
     compliance with applicable environmental laws required in 
     connection with the project.
       ``(2) Conduct of environmental review.--If a payment is 
     requested under paragraph (1) and the resource advisory 
     committee agrees to the expenditure of funds for this 
     purpose, the Secretary concerned shall conduct environmental 
     review, consultation, or other compliance responsibilities in 
     accordance with Federal laws (including regulations).
       ``(3) Effect of refusal to pay.--
       ``(A) In general.--If a resource advisory committee does 
     not agree to the expenditure of funds under paragraph (1), 
     the project shall be deemed withdrawn from further 
     consideration by the Secretary concerned pursuant to this 
     title.
       ``(B) Effect of withdrawal.--A withdrawal under 
     subparagraph (A) shall be deemed to be a rejection of the 
     project for purposes of section 207(c).
       ``(c) Decisions of Secretary Concerned.--
       ``(1) Rejection of projects.--
       ``(A) In general.--A decision by the Secretary concerned to 
     reject a proposed project shall be at the sole discretion of 
     the Secretary concerned.
       ``(B) No administrative appeal or judicial review.--
     Notwithstanding any other provision of law, a decision by the 
     Secretary concerned to

[[Page 23939]]

     reject a proposed project shall not be subject to 
     administrative appeal or judicial review.
       ``(C) Notice of rejection.--Not later than 30 days after 
     the date on which the Secretary concerned makes the rejection 
     decision, the Secretary concerned shall notify in writing the 
     resource advisory committee that submitted the proposed 
     project of the rejection and the reasons for rejection.
       ``(2) Notice of project approval.--The Secretary concerned 
     shall publish in the Federal Register notice of each project 
     approved under subsection (a) if the notice would be required 
     had the project originated with the Secretary.
       ``(d) Source and Conduct of Project.--Once the Secretary 
     concerned accepts a project for review under section 203, the 
     acceptance shall be deemed a Federal action for all purposes.
       ``(e) Implementation of Approved Projects.--
       ``(1) Cooperation.--Notwithstanding chapter 63 of title 31, 
     United States Code, using project funds the Secretary 
     concerned may enter into contracts, grants, and cooperative 
     agreements with States and local governments, private and 
     nonprofit entities, and landowners and other persons to 
     assist the Secretary in carrying out an approved project.
       ``(2) Best value contracting.--
       ``(A) In general.--For any project involving a contract 
     authorized by paragraph (1) the Secretary concerned may elect 
     a source for performance of the contract on a best value 
     basis.
       ``(B) Factors.--The Secretary concerned shall determine 
     best value based on such factors as--
       ``(i) the technical demands and complexity of the work to 
     be done;
       ``(ii)(I) the ecological objectives of the project; and
       ``(II) the sensitivity of the resources being treated;
       ``(iii) the past experience by the contractor with the type 
     of work being done, using the type of equipment proposed for 
     the project, and meeting or exceeding desired ecological 
     conditions; and
       ``(iv) the commitment of the contractor to hiring highly 
     qualified workers and local residents.
       ``(3) Merchantable timber contracting pilot program.--
       ``(A) Establishment.--The Secretary concerned shall 
     establish a pilot program to implement a certain percentage 
     of approved projects involving the sale of merchantable 
     timber using separate contracts for--
       ``(i) the harvesting or collection of merchantable timber; 
     and
       ``(ii) the sale of the timber.
       ``(B) Annual percentages.--Under the pilot program, the 
     Secretary concerned shall ensure that, on a nationwide basis, 
     not less than the following percentage of all approved 
     projects involving the sale of merchantable timber are 
     implemented using separate contracts:
       ``(i) For fiscal year 2008, 35 percent.
       ``(ii) For fiscal year 2009, 45 percent.
       ``(iii) For each of fiscal years 2010 and 2011, 50 percent.
       ``(C) Inclusion in pilot program.--The decision whether to 
     use separate contracts to implement a project involving the 
     sale of merchantable timber shall be made by the Secretary 
     concerned after the approval of the project under this title.
       ``(D) Assistance.--
       ``(i) In general.--The Secretary concerned may use funds 
     from any appropriated account available to the Secretary for 
     the Federal land to assist in the administration of projects 
     conducted under the pilot program.
       ``(ii) Maximum amount of assistance.--The total amount 
     obligated under this subparagraph may not exceed $1,000,000 
     for any fiscal year during which the pilot program is in 
     effect.
       ``(E) Review and report.--
       ``(i) Initial report.--Not later than September 30, 2010, 
     the Comptroller General shall submit to the Committees on 
     Agriculture, Nutrition, and Forestry and Energy and Natural 
     Resources of the Senate and the Committees on Agriculture and 
     Natural Resources of the House of Representatives a report 
     assessing the pilot program.
       ``(ii) Annual report.--The Secretary concerned shall submit 
     to the Committees on Agriculture, Nutrition, and Forestry and 
     Energy and Natural Resources of the Senate and the Committees 
     on Agriculture and Natural Resources of the House of 
     Representatives an annual report describing the results of 
     the pilot program.
       ``(f) Requirements for Project Funds.--The Secretary shall 
     ensure that at least 50 percent of all project funds be used 
     for projects that are primarily dedicated--
       ``(1) to road maintenance, decommissioning, or 
     obliteration; or
       ``(2) to restoration of streams and watersheds.

     ``SEC. 205. RESOURCE ADVISORY COMMITTEES.

       ``(a) Establishment and Purpose of Resource Advisory 
     Committees.--
       ``(1) Establishment.--The Secretary concerned shall 
     establish and maintain resource advisory committees to 
     perform the duties in subsection (b), except as provided in 
     paragraph (4).
       ``(2) Purpose.--The purpose of a resource advisory 
     committee shall be--
       ``(A) to improve collaborative relationships; and
       ``(B) to provide advice and recommendations to the land 
     management agencies consistent with the purposes of this 
     title.
       ``(3) Access to resource advisory committees.--To ensure 
     that each unit of Federal land has access to a resource 
     advisory committee, and that there is sufficient interest in 
     participation on a committee to ensure that membership can be 
     balanced in terms of the points of view represented and the 
     functions to be performed, the Secretary concerned may, 
     establish resource advisory committees for part of, or 1 or 
     more, units of Federal land.
       ``(4) Existing advisory committees.--
       ``(A) In general.--An advisory committee that meets the 
     requirements of this section, a resource advisory committee 
     established before September 29, 2006, or an advisory 
     committee determined by the Secretary concerned before 
     September 29, 2006, to meet the requirements of this section 
     may be deemed by the Secretary concerned to be a resource 
     advisory committee for the purposes of this title.
       ``(B) Charter.--A charter for a committee described in 
     subparagraph (A) that was filed on or before September 29, 
     2006, shall be considered to be filed for purposes of this 
     Act.
       ``(C) Bureau of land management advisory committees.--The 
     Secretary of the Interior may deem a resource advisory 
     committee meeting the requirements of subpart 1784 of part 
     1780 of title 43, Code of Federal Regulations, as a resource 
     advisory committee for the purposes of this title.
       ``(b) Duties.--A resource advisory committee shall--
       ``(1) review projects proposed under this title by 
     participating counties and other persons;
       ``(2) propose projects and funding to the Secretary 
     concerned under section 203;
       ``(3) provide early and continuous coordination with 
     appropriate land management agency officials in recommending 
     projects consistent with purposes of this Act under this 
     title;
       ``(4) provide frequent opportunities for citizens, 
     organizations, tribes, land management agencies, and other 
     interested parties to participate openly and meaningfully, 
     beginning at the early stages of the project development 
     process under this title;
       ``(5)(A) monitor projects that have been approved under 
     section 204; and
       ``(B) advise the designated Federal official on the 
     progress of the monitoring efforts under subparagraph (A); 
     and
       ``(6) make recommendations to the Secretary concerned for 
     any appropriate changes or adjustments to the projects being 
     monitored by the resource advisory committee.
       ``(c) Appointment by the Secretary.--
       ``(1) Appointment and term.--
       ``(A) In general.--The Secretary concerned, shall appoint 
     the members of resource advisory committees for a term of 4 
     years beginning on the date of appointment.
       ``(B) Reappointment.--The Secretary concerned may reappoint 
     members to subsequent 4-year terms.
       ``(2) Basic requirements.--The Secretary concerned shall 
     ensure that each resource advisory committee established 
     meets the requirements of subsection (d).
       ``(3) Initial appointment.--Not later than 180 days after 
     the date of the enactment of this Act, the Secretary 
     concerned shall make initial appointments to the resource 
     advisory committees.
       ``(4) Vacancies.--The Secretary concerned shall make 
     appointments to fill vacancies on any resource advisory 
     committee as soon as practicable after the vacancy has 
     occurred.
       ``(5) Compensation.--Members of the resource advisory 
     committees shall not receive any compensation.
       ``(d) Composition of Advisory Committee.--
       ``(1) Number.--Each resource advisory committee shall be 
     comprised of 15 members.
       ``(2) Community interests represented.--Committee members 
     shall be representative of the interests of the following 3 
     categories:
       ``(A) 5 persons that--
       ``(i) represent organized labor or non-timber forest 
     product harvester groups;
       ``(ii) represent developed outdoor recreation, off highway 
     vehicle users, or commercial recreation activities;
       ``(iii) represent--

       ``(I) energy and mineral development interests; or
       ``(II) commercial or recreational fishing interests;

       ``(iv) represent the commercial timber industry; or
       ``(v) hold Federal grazing or other land use permits, or 
     represent nonindustrial private forest land owners, within 
     the area for which the committee is organized.
       ``(B) 5 persons that represent--
       ``(i) nationally recognized environmental organizations;
       ``(ii) regionally or locally recognized environmental 
     organizations;
       ``(iii) dispersed recreational activities;
       ``(iv) archaeological and historical interests; or
       ``(v) nationally or regionally recognized wild horse and 
     burro interest groups, wildlife or hunting organizations, or 
     watershed associations.
       ``(C) 5 persons that--
       ``(i) hold State elected office (or a designee);
       ``(ii) hold county or local elected office;
       ``(iii) represent American Indian tribes within or adjacent 
     to the area for which the committee is organized;
       ``(iv) are school officials or teachers; or
       ``(v) represent the affected public at large.
       ``(3) Balanced representation.--In appointing committee 
     members from the 3 categories in paragraph (2), the Secretary 
     concerned shall provide for balanced and broad representation 
     from within each category.

[[Page 23940]]

       ``(4) Geographic distribution.--The members of a resource 
     advisory committee shall reside within the State in which the 
     committee has jurisdiction and, to extent practicable, the 
     Secretary concerned shall ensure local representation in each 
     category in paragraph (2).
       ``(5) Chairperson.--A majority on each resource advisory 
     committee shall select the chairperson of the committee.
       ``(e) Approval Procedures.--
       ``(1) In general.--Subject to paragraph (3), each resource 
     advisory committee shall establish procedures for proposing 
     projects to the Secretary concerned under this title.
       ``(2) Quorum.--A quorum must be present to constitute an 
     official meeting of the committee.
       ``(3) Approval by majority of members.--A project may be 
     proposed by a resource advisory committee to the Secretary 
     concerned under section 203(a), if the project has been 
     approved by a majority of members of the committee from each 
     of the 3 categories in subsection (d)(2).
       ``(f) Other Committee Authorities and Requirements.--
       ``(1) Staff assistance.--A resource advisory committee may 
     submit to the Secretary concerned a request for periodic 
     staff assistance from Federal employees under the 
     jurisdiction of the Secretary.
       ``(2) Meetings.--All meetings of a resource advisory 
     committee shall be announced at least 1 week in advance in a 
     local newspaper of record and shall be open to the public.
       ``(3) Records.--A resource advisory committee shall 
     maintain records of the meetings of the committee and make 
     the records available for public inspection.

     ``SEC. 206. USE OF PROJECT FUNDS.

       ``(a) Agreement Regarding Schedule and Cost of Project.--
       ``(1) Agreement between parties.--The Secretary concerned 
     may carry out a project submitted by a resource advisory 
     committee under section 203(a) using project funds or other 
     funds described in section 203(a)(2), if, as soon as 
     practicable after the issuance of a decision document for the 
     project and the exhaustion of all administrative appeals and 
     judicial review of the project decision, the Secretary 
     concerned and the resource advisory committee enter into an 
     agreement addressing, at a minimum, the following:
       ``(A) The schedule for completing the project.
       ``(B) The total cost of the project, including the level of 
     agency overhead to be assessed against the project.
       ``(C) For a multiyear project, the estimated cost of the 
     project for each of the fiscal years in which it will be 
     carried out.
       ``(D) The remedies for failure of the Secretary concerned 
     to comply with the terms of the agreement consistent with 
     current Federal law.
       ``(2) Limited use of federal funds.--The Secretary 
     concerned may decide, at the sole discretion of the Secretary 
     concerned, to cover the costs of a portion of an approved 
     project using Federal funds appropriated or otherwise 
     available to the Secretary for the same purposes as the 
     project.
       ``(b) Transfer of Project Funds.--
       ``(1) Initial transfer required.--As soon as practicable 
     after the agreement is reached under subsection (a) with 
     regard to a project to be funded in whole or in part using 
     project funds, or other funds described in section 203(a)(2), 
     the Secretary concerned shall transfer to the applicable unit 
     of National Forest System land or Bureau of Land Management 
     District an amount of project funds equal to--
       ``(A) in the case of a project to be completed in a single 
     fiscal year, the total amount specified in the agreement to 
     be paid using project funds, or other funds described in 
     section 203(a)(2); or
       ``(B) in the case of a multiyear project, the amount 
     specified in the agreement to be paid using project funds, or 
     other funds described in section 203(a)(2) for the first 
     fiscal year.
       ``(2) Condition on project commencement.--The unit of 
     National Forest System land or Bureau of Land Management 
     District concerned, shall not commence a project until the 
     project funds, or other funds described in section 203(a)(2) 
     required to be transferred under paragraph (1) for the 
     project, have been made available by the Secretary concerned.
       ``(3) Subsequent transfers for multiyear projects.--
       ``(A) In general.--For the second and subsequent fiscal 
     years of a multiyear project to be funded in whole or in part 
     using project funds, the unit of National Forest System land 
     or Bureau of Land Management District concerned shall use the 
     amount of project funds required to continue the project in 
     that fiscal year according to the agreement entered into 
     under subsection (a).
       ``(B) Suspension of work.--The Secretary concerned shall 
     suspend work on the project if the project funds required by 
     the agreement in the second and subsequent fiscal years are 
     not available.

     ``SEC. 207. AVAILABILITY OF PROJECT FUNDS.

       ``(a) Submission of Proposed Projects To Obligate Funds.--
     By September 30, 2008 (or as soon thereafter as the Secretary 
     concerned determines is practicable), and each September 30 
     thereafter for each succeeding fiscal year through fiscal 
     year 2011, a resource advisory committee shall submit to the 
     Secretary concerned pursuant to section 203(a)(1) a 
     sufficient number of project proposals that, if approved, 
     would result in the obligation of at least the full amount of 
     the project funds reserved by the participating county in the 
     preceding fiscal year.
       ``(b) Use or Transfer of Unobligated Funds.--Subject to 
     section 208, if a resource advisory committee fails to comply 
     with subsection (a) for a fiscal year, any project funds 
     reserved by the participating county in the preceding fiscal 
     year and remaining unobligated shall be available for use as 
     part of the project submissions in the next fiscal year.
       ``(c) Effect of Rejection of Projects.--Subject to section 
     208, any project funds reserved by a participating county in 
     the preceding fiscal year that are unobligated at the end of 
     a fiscal year because the Secretary concerned has rejected 
     one or more proposed projects shall be available for use as 
     part of the project submissions in the next fiscal year.
       ``(d) Effect of Court Orders.--
       ``(1) In general.--If an approved project under this Act is 
     enjoined or prohibited by a Federal court, the Secretary 
     concerned shall return the unobligated project funds related 
     to the project to the participating county or counties that 
     reserved the funds.
       ``(2) Expenditure of funds.--The returned funds shall be 
     available for the county to expend in the same manner as the 
     funds reserved by the county under subparagraph (B) or (C)(i) 
     of section 102(d)(1).

     ``SEC. 208. TERMINATION OF AUTHORITY.

       ``(a) In General.--The authority to initiate projects under 
     this title shall terminate on September 30, 2011.
       ``(b) Deposits in Treasury.--Any project funds not 
     obligated by September 30, 2012, shall be deposited in the 
     Treasury of the United States.

                       ``TITLE III--COUNTY FUNDS

     ``SEC. 301. DEFINITIONS.

       ``In this title:
       ``(1) County funds.--The term `county funds' means all 
     funds an eligible county elects under section 102(d) to 
     reserve for expenditure in accordance with this title.
       ``(2) Participating county.--The term `participating 
     county' means an eligible county that elects under section 
     102(d) to expend a portion of the Federal funds received 
     under section 102 in accordance with this title.

     ``SEC. 302. USE.

       ``(a) Authorized Uses.--A participating county, including 
     any applicable agencies of the participating county, shall 
     use county funds, in accordance with this title, only--
       ``(1) to carry out activities under the Firewise 
     Communities program to provide to homeowners in fire-
     sensitive ecosystems education on, and assistance with 
     implementing, techniques in home siting, home construction, 
     and home landscaping that can increase the protection of 
     people and property from wildfires;
       ``(2) to reimburse the participating county for search and 
     rescue and other emergency services, including firefighting, 
     that are--
       ``(A) performed on Federal land after the date on which the 
     use was approved under subsection (b);
       ``(B) paid for by the participating county; and
       ``(3) to develop community wildfire protection plans in 
     coordination with the appropriate Secretary concerned.
       ``(b) Proposals.--A participating county shall use county 
     funds for a use described in subsection (a) only after a 45-
     day public comment period, at the beginning of which the 
     participating county shall--
       ``(1) publish in any publications of local record a 
     proposal that describes the proposed use of the county funds; 
     and
       ``(2) submit the proposal to any resource advisory 
     committee established under section 205 for the participating 
     county.

     ``SEC. 303. CERTIFICATION.

       ``(a) In General.--Not later than February 1 of the year 
     after the year in which any county funds were expended by a 
     participating county, the appropriate official of the 
     participating county shall submit to the Secretary concerned 
     a certification that the county funds expended in the 
     applicable year have been used for the uses authorized under 
     section 302(a), including a description of the amounts 
     expended and the uses for which the amounts were expended.
       ``(b) Review.--The Secretary concerned shall review the 
     certifications submitted under subsection (a) as the 
     Secretary concerned determines to be appropriate.

     ``SEC. 304. TERMINATION OF AUTHORITY.

       ``(a) In General.--The authority to initiate projects under 
     this title terminates on September 30, 2011.
       ``(b) Availability.--Any county funds not obligated by 
     September 30, 2012, shall be returned to the Treasury of the 
     United States.

                  ``TITLE IV--MISCELLANEOUS PROVISIONS

     ``SEC. 401. REGULATIONS.

       ``The Secretary of Agriculture and the Secretary of the 
     Interior shall issue regulations to carry out the purposes of 
     this Act.

     ``SEC. 402. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated such sums as are 
     necessary to carry out this Act for each of fiscal years 2008 
     through 2011.

     ``SEC. 403. TREATMENT OF FUNDS AND REVENUES.

       ``(a) Relation to Other Appropriations.--Funds made 
     available under section 402 and funds made available to a 
     Secretary concerned under section 206 shall be in addition to 
     any other annual appropriations for the Forest Service and 
     the Bureau of Land Management.
       ``(b) Deposit of Revenues and Other Funds.--All revenues 
     generated from projects pursuant to title II, including any 
     interest accrued from the revenues, shall be deposited in the 
     Treasury of the United States.''.
       (b) Forest Receipt Payments to Eligible States and 
     Counties.--

[[Page 23941]]

       (1) Act of may 23, 1908.--The sixth paragraph under the 
     heading ``FOREST SERVICE'' in the Act of May 23, 1908 (16 
     U.S.C. 500) is amended in the first sentence by striking 
     ``twenty-five percentum'' and all that follows through 
     ``shall be paid'' and inserting the following: ``an amount 
     equal to the annual average of 25 percent of all amounts 
     received for the applicable fiscal year and each of the 
     preceding 6 fiscal years from each national forest shall be 
     paid''.
       (2) Weeks law.--Section 13 of the Act of March 1, 1911 
     (commonly known as the ``Weeks Law'') (16 U.S.C. 500) is 
     amended in the first sentence by striking ``twenty-five 
     percentum'' and all that follows through ``shall be paid'' 
     and inserting the following: ``an amount equal to the annual 
     average of 25 percent of all amounts received for the 
     applicable fiscal year and each of the preceding 6 fiscal 
     years from each national forest shall be paid''.
       (c) Payments in Lieu of Taxes.--
       (1) In general.--Section 6906 of title 31, United States 
     Code, is amended to read as follows:

     ``Sec. 6906. Funding

       ``For each of fiscal years 2008 through 2012--
       ``(1) each county or other eligible unit of local 
     government shall be entitled to payment under this chapter; 
     and
       ``(2) sums shall be made available to the Secretary of the 
     Interior for obligation or expenditure in accordance with 
     this chapter.''.
       (2) Conforming amendment.--The table of sections for 
     chapter 69 of title 31, United States Code, is amended by 
     striking the item relating to section 6906 and inserting the 
     following:

``6906. Funding.''.

       (3) Budget scorekeeping.--
       (A) In general.--Notwithstanding the Budget Scorekeeping 
     Guidelines and the accompanying list of programs and accounts 
     set forth in the joint explanatory statement of the committee 
     of conference accompanying Conference Report 105-217, the 
     section in this title regarding Payments in Lieu of Taxes 
     shall be treated in the baseline for purposes of section 257 
     of the Balanced Budget and Emergency Deficit Control Act of 
     1985 (as in effect prior to September 30, 2002), and by the 
     Chairmen of the House and Senate Budget Committees, as 
     appropriate, for purposes of budget enforcement in the House 
     and Senate, and under the Congressional Budget Act of 1974 as 
     if Payment in Lieu of Taxes (14-1114-0-1-806) were an account 
     designated as Appropriated Entitlements and Mandatories for 
     Fiscal Year 1997 in the joint explanatory statement of the 
     committee of conference accompanying Conference Report 105-
     217.
       (B) Effective date.--This paragraph shall remain in effect 
     for the fiscal years to which the entitlement in section 6906 
     of title 31, United States Code (as amended by paragraph 
     (1)), applies.

     SEC. 602. TRANSFER TO ABANDONED MINE RECLAMATION FUND.

       Subparagraph (C) of section 402(i)(1) of the Surface Mining 
     Control and Reclamation Act of 1977 (30 U.S.C. 1232(i)(1)) is 
     amended by striking ``and $9,000,000 on October 1, 2009'' and 
     inserting ``$9,000,000 on October 1, 2009, and $9,000,000 on 
     October 1, 2010''.

                       TITLE VII--DISASTER RELIEF

        Subtitle A--Heartland and Hurricane Ike Disaster Relief

     SEC. 701. SHORT TITLE.

       This subtitle may be cited as the ``Heartland Disaster Tax 
     Relief Act of 2008''.

     SEC. 702. TEMPORARY TAX RELIEF FOR AREAS DAMAGED BY 2008 
                   MIDWESTERN SEVERE STORMS, TORNADOS, AND 
                   FLOODING.

       (a) In General.--Subject to the modifications described in 
     this section, the following provisions of or relating to the 
     Internal Revenue Code of 1986 shall apply to any Midwestern 
     disaster area in addition to the areas to which such 
     provisions otherwise apply:
       (1) Go zone benefits.--
       (A) Section 1400N (relating to tax benefits) other than 
     subsections (b), (d), (e), (i), (j), (m), and (o) thereof.
       (B) Section 1400O (relating to education tax benefits).
       (C) Section 1400P (relating to housing tax benefits).
       (D) Section 1400Q (relating to special rules for use of 
     retirement funds).
       (E) Section 1400R(a) (relating to employee retention credit 
     for employers).
       (F) Section 1400S (relating to additional tax relief) other 
     than subsection (d) thereof.
       (G) Section 1400T (relating to special rules for mortgage 
     revenue bonds).
       (2) Other benefits included in katrina emergency tax relief 
     act of 2005.--Sections 302, 303, 304, 401, and 405 of the 
     Katrina Emergency Tax Relief Act of 2005.
       (b) Midwestern Disaster Area.--
       (1) In general.--For purposes of this section and for 
     applying the substitutions described in subsections (d) and 
     (e), the term ``Midwestern disaster area'' means an area--
       (A) with respect to which a major disaster has been 
     declared by the President on or after May 20, 2008, and 
     before August 1, 2008, under section 401 of the Robert T. 
     Stafford Disaster Relief and Emergency Assistance Act by 
     reason of severe storms, tornados, or flooding occurring in 
     any of the States of Arkansas, Illinois, Indiana, Iowa, 
     Kansas, Michigan, Minnesota, Missouri, Nebraska, and 
     Wisconsin, and
       (B) determined by the President to warrant individual or 
     individual and public assistance from the Federal Government 
     under such Act with respect to damages attributable to such 
     severe storms, tornados, or flooding.
       (2) Certain benefits available to areas eligible only for 
     public assistance.--For purposes of applying this section to 
     benefits under the following provisions, paragraph (1) shall 
     be applied without regard to subparagraph (B):
       (A) Sections 1400Q, 1400S(b), and 1400S(d) of the Internal 
     Revenue Code of 1986.
       (B) Sections 302, 401, and 405 of the Katrina Emergency Tax 
     Relief Act of 2005.
       (c) References.--
       (1) Area.--Any reference in such provisions to the 
     Hurricane Katrina disaster area or the Gulf Opportunity Zone 
     shall be treated as a reference to any Midwestern disaster 
     area and any reference to the Hurricane Katrina disaster area 
     or the Gulf Opportunity Zone within a State shall be treated 
     as a reference to all Midwestern disaster areas within the 
     State.
       (2) Items attributable to disaster.--Any reference in such 
     provisions to any loss, damage, or other item attributable to 
     Hurricane Katrina shall be treated as a reference to any 
     loss, damage, or other item attributable to the severe 
     storms, tornados, or flooding giving rise to any Presidential 
     declaration described in subsection (b)(1)(A).
       (3) Applicable disaster date.--For purposes of applying the 
     substitutions described in subsections (d) and (e), the term 
     ``applicable disaster date'' means, with respect to any 
     Midwestern disaster area, the date on which the severe 
     storms, tornados, or flooding giving rise to the Presidential 
     declaration described in subsection (b)(1)(A) occurred.
       (d) Modifications to 1986 Code.--The following provisions 
     of the Internal Revenue Code of 1986 shall be applied with 
     the following modifications:
       (1) Tax-exempt bond financing.--Section 1400N(a)--
       (A) by substituting ``qualified Midwestern disaster area 
     bond'' for ``qualified Gulf Opportunity Zone Bond'' each 
     place it appears, except that in determining whether a bond 
     is a qualified Midwestern disaster area bond--
       (i) paragraph (2)(A)(i) shall be applied by only treating 
     costs as qualified project costs if--

       (I) in the case of a project involving a private business 
     use (as defined in section 141(b)(6)), either the person 
     using the property suffered a loss in a trade or business 
     attributable to the severe storms, tornados, or flooding 
     giving rise to any Presidential declaration described in 
     subsection (b)(1)(A) or is a person designated for purposes 
     of this section by the Governor of the State in which the 
     project is located as a person carrying on a trade or 
     business replacing a trade or business with respect to which 
     another person suffered such a loss, and
       (II) in the case of a project relating to public utility 
     property, the project involves repair or reconstruction of 
     public utility property damaged by such severe storms, 
     tornados, or flooding, and

       (ii) paragraph (2)(A)(ii) shall be applied by treating an 
     issue as a qualified mortgage issue only if 95 percent or 
     more of the net proceeds (as defined in section 150(a)(3)) of 
     the issue are to be used to provide financing for mortgagors 
     who suffered damages to their principal residences 
     attributable to such severe storms, tornados, or flooding.
       (B) by substituting ``any State in which a Midwestern 
     disaster area is located'' for ``the State of Alabama, 
     Louisiana, or Mississippi'' in paragraph (2)(B),
       (C) by substituting ``designated for purposes of this 
     section (on the basis of providing assistance to areas in the 
     order in which such assistance is most needed)'' for 
     ``designated for purposes of this section'' in paragraph 
     (2)(C),
       (D) by substituting ``January 1, 2013'' for ``January 1, 
     2011'' in paragraph (2)(D),
       (E) in paragraph (3)(A)--
       (i) by substituting ``$1,000'' for ``$2,500'', and
       (ii) by substituting ``before the earliest applicable 
     disaster date for Midwestern disaster areas within the 
     State'' for ``before August 28, 2005'',
       (F) by substituting ``qualified Midwestern disaster area 
     repair or construction'' for ``qualified GO Zone repair or 
     construction'' each place it appears,
       (G) by substituting ``after the date of the enactment of 
     the Heartland Disaster Tax Relief Act of 2008 and before 
     January 1, 2013'' for ``after the date of the enactment of 
     this paragraph and before January 1, 2011'' in paragraph 
     (7)(C), and
       (H) by disregarding paragraph (8) thereof.
       (2) Low-income housing credit.--Section 1400N(c)--
       (A) only with respect to calendar years 2008, 2009, and 
     2010,
       (B) by substituting ``Disaster Recovery Assistance housing 
     amount'' for ``Gulf Opportunity housing amount'' each place 
     it appears,
       (C) in paragraph (1)(B)--
       (i) by substituting ``$8.00'' for ``$18.00'', and
       (ii) by substituting ``before the earliest applicable 
     disaster date for Midwestern disaster areas within the 
     State'' for ``before August 28, 2005'', and
       (D) determined without regard to paragraphs (2), (3), (4), 
     (5), and (6) thereof.
       (3) Expensing for certain demolition and clean-up costs.--
     Section 1400N(f)--
       (A) by substituting ``qualified Disaster Recovery 
     Assistance clean-up cost'' for ``qualified Gulf Opportunity 
     Zone clean-up cost'' each place it appears,
       (B) by substituting ``beginning on the applicable disaster 
     date and ending on December 31, 2010'' for ``beginning on 
     August 28, 2005, and ending on December 31, 2007'' in 
     paragraph (2), and
       (C) by treating costs as qualified Disaster Recovery 
     Assistance clean-up costs only if the removal of debris or 
     demolition of any structure

[[Page 23942]]

     was necessary due to damage attributable to the severe 
     storms, tornados, or flooding giving rise to any Presidential 
     declaration described in subsection (b)(1)(A).
       (4) Extension of expensing for environmental remediation 
     costs.--Section 1400N(g)--
       (A) by substituting ``the applicable disaster date'' for 
     ``August 28, 2005'' each place it appears,
       (B) by substituting ``January 1, 2011'' for ``January 1, 
     2008'' in paragraph (1),
       (C) by substituting ``December 31, 2010'' for ``December 
     31, 2007'' in paragraph (1), and
       (D) by treating a site as a qualified contaminated site 
     only if the release (or threat of release) or disposal of a 
     hazardous substance at the site was attributable to the 
     severe storms, tornados, or flooding giving rise to any 
     Presidential declaration described in subsection (b)(1)(A).
       (5) Increase in rehabilitation credit.--Section 1400N(h), 
     as amended by this Act--
       (A) by substituting ``the applicable disaster date'' for 
     ``August 28, 2005'',
       (B) by substituting ``December 31, 2011'' for ``December 
     31, 2009'' in paragraph (1), and
       (C) by only applying such subsection to qualified 
     rehabilitation expenditures with respect to any building or 
     structure which was damaged or destroyed as a result of the 
     severe storms, tornados, or flooding giving rise to any 
     Presidential declaration described in subsection (b)(1)(A).
       (6) Treatment of net operating losses attributable to 
     disaster losses.--Section 1400N(k)--
       (A) by substituting ``qualified Disaster Recovery 
     Assistance loss'' for ``qualified Gulf Opportunity Zone 
     loss'' each place it appears,
       (B) by substituting ``after the day before the applicable 
     disaster date, and before January 1, 2011'' for ``after 
     August 27, 2005, and before January 1, 2008'' each place it 
     appears,
       (C) by substituting ``the applicable disaster date'' for 
     ``August 28, 2005'' in paragraph (2)(B)(ii)(I),
       (D) by substituting ``qualified Disaster Recovery 
     Assistance property'' for ``qualified Gulf Opportunity Zone 
     property'' in paragraph (2)(B)(iv), and
       (E) by substituting ``qualified Disaster Recovery 
     Assistance casualty loss'' for ``qualified Gulf Opportunity 
     Zone casualty loss'' each place it appears.
       (7) Credit to holders of tax credit bonds.--Section 
     1400N(l)--
       (A) by substituting ``Midwestern tax credit bond'' for 
     ``Gulf tax credit bond'' each place it appears,
       (B) by substituting ``any State in which a Midwestern 
     disaster area is located or any instrumentality of the 
     State'' for ``the State of Alabama, Louisiana, or 
     Mississippi'' in paragraph (4)(A)(i),
       (C) by substituting ``after December 31, 2008 and before 
     January 1, 2010'' for ``after December 31, 2005, and before 
     January 1, 2007'',
       (D) by substituting ``shall not exceed $100,000,000 for any 
     State with an aggregate population located in all Midwestern 
     disaster areas within the State of at least 2,000,000, 
     $50,000,000 for any State with an aggregate population 
     located in all Midwestern disaster areas within the State of 
     at least 1,000,000 but less than 2,000,000, and zero for any 
     other State. The population of a State within any area shall 
     be determined on the basis of the most recent census estimate 
     of resident population released by the Bureau of Census 
     before the earliest applicable disaster date for Midwestern 
     disaster areas within the State.'' for ``shall not exceed'' 
     and all that follows in paragraph (4)(C), and
       (E) by substituting ``the earliest applicable disaster date 
     for Midwestern disaster areas within the State'' for ``August 
     28, 2005'' in paragraph (5)(A).
       (8) Education tax benefits.--Section 1400O, by substituting 
     ``2008 or 2009'' for ``2005 or 2006''.
       (9) Housing tax benefits.--Section 1400P, by substituting 
     ``the applicable disaster date'' for ``August 28, 2005'' in 
     subsection (c)(1).
       (10) Special rules for use of retirement funds.--Section 
     1400Q--
       (A) by substituting ``qualified Disaster Recovery 
     Assistance distribution'' for ``qualified hurricane 
     distribution'' each place it appears,
       (B) by substituting ``on or after the applicable disaster 
     date and before January 1, 2010'' for ``on or after August 
     25, 2005, and before January 1, 2007'' in subsection 
     (a)(4)(A)(i),
       (C) by substituting ``the applicable disaster date'' for 
     ``August 28, 2005'' in subsections (a)(4)(A)(i) and 
     (c)(3)(B),
       (D) by disregarding clauses (ii) and (iii) of subsection 
     (a)(4)(A) thereof,
       (E) by substituting ``qualified storm damage distribution'' 
     for ``qualified Katrina distribution'' each place it appears,
       (F) by substituting ``after the date which is 6 months 
     before the applicable disaster date and before the date which 
     is the day after the applicable disaster date'' for ``after 
     February 28, 2005, and before August 29, 2005'' in subsection 
     (b)(2)(B)(ii),
       (G) by substituting ``the Midwestern disaster area, but not 
     so purchased or constructed on account of severe storms, 
     tornados, or flooding giving rise to the designation of the 
     area as a disaster area'' for ``the Hurricane Katrina 
     disaster area, but not so purchased or constructed on account 
     of Hurricane Katrina'' in subsection (b)(2)(B)(iii),
       (H) by substituting ``beginning on the applicable disaster 
     date and ending on the date which is 5 months after the date 
     of the enactment of the Heartland Disaster Tax Relief Act of 
     2008'' for ``beginning on August 25, 2005, and ending on 
     February 28, 2006'' in subsection (b)(3)(A),
       (I) by substituting ``qualified storm damage individual'' 
     for ``qualified Hurricane Katrina individual'' each place it 
     appears,
       (J) by substituting ``December 31, 2009'' for ``December 
     31, 2006'' in subsection (c)(2)(A),
       (K) by disregarding subparagraphs (C) and (D) of subsection 
     (c)(3) thereof,
       (L) by substituting ``beginning on the date of the 
     enactment of the Heartland Disaster Tax Relief Act of 2008 
     and ending on December 31, 2009'' for ``beginning on 
     September 24, 2005, and ending on December 31, 2006'' in 
     subsection (c)(4)(A)(i),
       (M) by substituting ``the applicable disaster date'' for 
     ``August 25, 2005'' in subsection (c)(4)(A)(ii), and
       (N) by substituting ``January 1, 2010'' for ``January 1, 
     2007'' in subsection (d)(2)(A)(ii).
       (11) Employee retention credit for employers affected by 
     severe storms, tornados, and flooding.--Section 1400R(a)--
       (A) by substituting ``the applicable disaster date'' for 
     ``August 28, 2005'' each place it appears,
       (B) by substituting ``January 1, 2009'' for ``January 1, 
     2006'' both places it appears, and
       (C) only with respect to eligible employers who employed an 
     average of not more than 200 employees on business days 
     during the taxable year before the applicable disaster date.
       (12) Temporary suspension of limitations on charitable 
     contributions.--Section 1400S(a), by substituting the 
     following paragraph for paragraph (4) thereof:
       ``(4) Qualified contributions.--
       ``(A) In general.--For purposes of this subsection, the 
     term `qualified contribution' means any charitable 
     contribution (as defined in section 170(c)) if--
       ``(i) such contribution--

       ``(I) is paid during the period beginning on the earliest 
     applicable disaster date for all States and ending on 
     December 31, 2008, in cash to an organization described in 
     section 170(b)(1)(A), and
       ``(II) is made for relief efforts in 1 or more Midwestern 
     disaster areas,

       ``(ii) the taxpayer obtains from such organization 
     contemporaneous written acknowledgment (within the meaning of 
     section 170(f)(8)) that such contribution was used (or is to 
     be used) for relief efforts in 1 or more Midwestern disaster 
     areas, and
       ``(iii) the taxpayer has elected the application of this 
     subsection with respect to such contribution.
       ``(B) Exception.--Such term shall not include a 
     contribution by a donor if the contribution is--
       ``(i) to an organization described in section 509(a)(3), or
       ``(ii) for establishment of a new, or maintenance of an 
     existing, donor advised fund (as defined in section 
     4966(d)(2)).
       ``(C) Application of election to partnerships and s 
     corporations.--In the case of a partnership or S corporation, 
     the election under subparagraph (A)(iii) shall be made 
     separately by each partner or shareholder.''.
       (13) Suspension of certain limitations on personal casualty 
     losses.--Section 1400S(b)(1), by substituting ``the 
     applicable disaster date'' for ``August 25, 2005''.
       (14) Special rule for determining earned income.--Section 
     1400S(d)--
       (A) by treating an individual as a qualified individual if 
     such individual's principal place of abode on the applicable 
     disaster date was located in a Midwestern disaster area,
       (B) by treating the applicable disaster date with respect 
     to any such individual as the applicable date for purposes of 
     such subsection, and
       (C) by treating an area as described in paragraph 
     (2)(B)(ii) thereof if the area is a Midwestern disaster area 
     only by reason of subsection (b)(2) of this section (relating 
     to areas eligible only for public assistance).
       (15) Adjustments regarding taxpayer and dependency 
     status.--Section 1400S(e), by substituting ``2008 or 2009'' 
     for ``2005 or 2006''.
       (e) Modifications to Katrina Emergency Tax Relief Act of 
     2005.--The following provisions of the Katrina Emergency Tax 
     Relief Act of 2005 shall be applied with the following 
     modifications:
       (1) Additional exemption for housing displaced 
     individual.--Section 302--
       (A) by substituting ``2008 or 2009'' for ``2005 or 2006'' 
     in subsection (a) thereof,
       (B) by substituting ``Midwestern displaced individual'' for 
     ``Hurricane Katrina displaced individual'' each place it 
     appears, and
       (C) by treating an area as a core disaster area for 
     purposes of applying subsection (c) thereof if the area is a 
     Midwestern disaster area without regard to subsection (b)(2) 
     of this section (relating to areas eligible only for public 
     assistance).
       (2) Increase in standard mileage rate.--Section 303, by 
     substituting ``beginning on the applicable disaster date and 
     ending on December 31, 2008'' for ``beginning on August 25, 
     2005, and ending on December 31, 2006''.
       (3) Mileage reimbursements for charitable volunteers.--
     Section 304--
       (A) by substituting ``beginning on the applicable disaster 
     date and ending on December 31, 2008'' for ``beginning on 
     August 25, 2005, and ending on December 31, 2006'' in 
     subsection (a), and
       (B) by substituting ``the applicable disaster date'' for 
     ``August 25, 2005'' in subsection (a).
       (4) Exclusion of certain cancellation of indebtedness 
     income.--Section 401--

[[Page 23943]]

       (A) by treating an individual whose principal place of 
     abode on the applicable disaster date was in a Midwestern 
     disaster area (determined without regard to subsection (b)(2) 
     of this section) as an individual described in subsection 
     (b)(1) thereof, and by treating an individual whose principal 
     place of abode on the applicable disaster date was in a 
     Midwestern disaster area solely by reason of subsection 
     (b)(2) of this section as an individual described in 
     subsection (b)(2) thereof,
       (B) by substituting ``the applicable disaster date'' for 
     ``August 28, 2005'' both places it appears, and
       (C) by substituting ``January 1, 2010'' for ``January 1, 
     2007'' in subsection (e).
       (5) Extension of replacement period for nonrecognition of 
     gain.--Section 405, by substituting ``on or after the 
     applicable disaster date'' for ``on or after August 25, 
     2005''.

     SEC. 703. REPORTING REQUIREMENTS RELATING TO DISASTER RELIEF 
                   CONTRIBUTIONS.

       (a) In General.--Section 6033(b) (relating to returns of 
     certain organizations described in section 501(c)(3)) is 
     amended by striking ``and'' at the end of paragraph (13), by 
     redesignating paragraph (14) as paragraph (15), and by adding 
     after paragraph (13) the following new paragraph:
       ``(14) such information as the Secretary may require with 
     respect to disaster relief activities, including the amount 
     and use of qualified contributions to which section 1400S(a) 
     applies, and''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to returns the due date for which (determined 
     without regard to any extension) occurs after December 31, 
     2008.

     SEC. 704. TEMPORARY TAX-EXEMPT BOND FINANCING AND LOW-INCOME 
                   HOUSING TAX RELIEF FOR AREAS DAMAGED BY 
                   HURRICANE IKE.

       (a) Tax-Exempt Bond Financing.--Section 1400N(a) of the 
     Internal Revenue Code of 1986 shall apply to any Hurricane 
     Ike disaster area in addition to any other area referenced in 
     such section, but with the following modifications:
       (1) By substituting ``qualified Hurricane Ike disaster area 
     bond'' for ``qualified Gulf Opportunity Zone Bond'' each 
     place it appears, except that in determining whether a bond 
     is a qualified Hurricane Ike disaster area bond--
       (A) paragraph (2)(A)(i) shall be applied by only treating 
     costs as qualified project costs if--
       (i) in the case of a project involving a private business 
     use (as defined in section 141(b)(6)), either the person 
     using the property suffered a loss in a trade or business 
     attributable to Hurricane Ike or is a person designated for 
     purposes of this section by the Governor of the State in 
     which the project is located as a person carrying on a trade 
     or business replacing a trade or business with respect to 
     which another person suffered such a loss, and
       (ii) in the case of a project relating to public utility 
     property, the project involves repair or reconstruction of 
     public utility property damaged by Hurricane Ike, and
       (B) paragraph (2)(A)(ii) shall be applied by treating an 
     issue as a qualified mortgage issue only if 95 percent or 
     more of the net proceeds (as defined in section 150(a)(3)) of 
     the issue are to be used to provide financing for mortgagors 
     who suffered damages to their principal residences 
     attributable to Hurricane Ike.
       (2) By substituting ``any State in which any Hurricane Ike 
     disaster area is located'' for ``the State of Alabama, 
     Louisiana, or Mississippi'' in paragraph (2)(B).
       (3) By substituting ``designated for purposes of this 
     section (on the basis of providing assistance to areas in the 
     order in which such assistance is most needed)'' for 
     ``designated for purposes of this section'' in paragraph 
     (2)(C).
       (4) By substituting ``January 1, 2013'' for ``January 1, 
     2011'' in paragraph (2)(D).
       (5) By substituting the following for subparagraph (A) of 
     paragraph (3):
       ``(A) Aggregate amount designated.--The maximum aggregate 
     face amount of bonds which may be designated under this 
     subsection with respect to any State shall not exceed the 
     product of $2,000 multiplied by the portion of the State 
     population which is in--
       ``(i) in the case of Texas, the counties of Brazoria, 
     Chambers, Galveston, Jefferson, and Orange, and
       ``(ii) in the case of Louisiana, the parishes of Calcasieu 
     and Cameron,

     (as determined on the basis of the most recent census 
     estimate of resident population released by the Bureau of 
     Census before September 13, 2008).''.
       (6) By substituting ``qualified Hurricane Ike disaster area 
     repair or construction'' for ``qualified GO Zone repair or 
     construction'' each place it appears.
       (7) By substituting ``after the date of the enactment of 
     the Heartland Disaster Tax Relief Act of 2008 and before 
     January 1, 2013'' for ``after the date of the enactment of 
     this paragraph and before January 1, 2011'' in paragraph 
     (7)(C).
       (8) By disregarding paragraph (8) thereof.
       (9) By substituting ``any Hurricane Ike disaster area'' for 
     ``the Gulf Opportunity Zone'' each place it appears.
       (b) Low-Income Housing Credit.--Section 1400N(c) of the 
     Internal Revenue Code of 1986 shall apply to any Hurricane 
     Ike disaster area in addition to any other area referenced in 
     such section, but with the following modifications:
       (1) Only with respect to calendar years 2008, 2009, and 
     2010.
       (2) By substituting ``any Hurricane Ike disaster area'' for 
     ``the Gulf Opportunity Zone'' each place it appears.
       (3) By substituting ``Hurricane Ike Recovery Assistance 
     housing amount'' for ``Gulf Opportunity housing amount'' each 
     place it appears.
       (4) By substituting the following for subparagraph (B) of 
     paragraph (1):
       ``(B) Hurricane ike housing amount.--For purposes of 
     subparagraph (A), the term `Hurricane Ike housing amount' 
     means, for any calendar year, the amount equal to the product 
     of $16.00 multiplied by the portion of the State population 
     which is in--
       ``(i) in the case of Texas, the counties of Brazoria, 
     Chambers, Galveston, Jefferson, and Orange, and
       ``(ii) in the case of Louisiana, the parishes of Calcasieu 
     and Cameron,

     (as determined on the basis of the most recent census 
     estimate of resident population released by the Bureau of 
     Census before September 13, 2008).''.
       (5) Determined without regard to paragraphs (2), (3), (4), 
     (5), and (6) thereof.
       (c) Hurricane Ike Disaster Area.--For purposes of this 
     section and for applying the substitutions described in 
     subsections (a) and (b), the term ``Hurricane Ike disaster 
     area'' means an area in the State of Texas or Louisiana--
       (1) with respect to which a major disaster has been 
     declared by the President on September 13, 2008, under 
     section 401 of the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act by reason of Hurricane Ike, and
       (2) determined by the President to warrant individual or 
     individual and public assistance from the Federal Government 
     under such Act with respect to damages attributable to 
     Hurricane Ike.

                  Subtitle B--National Disaster Relief

     SEC. 706. LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED 
                   DISASTERS.

       (a) Waiver of Adjusted Gross Income Limitation.--
       (1) In general.--Subsection (h) of section 165 is amended 
     by redesignating paragraphs (3) and (4) as paragraphs (4) and 
     (5), respectively, and by inserting after paragraph (2) the 
     following new paragraph:
       ``(3) Special rule for losses in federally declared 
     disasters.--
       ``(A) In general.--If an individual has a net disaster loss 
     for any taxable year, the amount determined under paragraph 
     (2)(A)(ii) shall be the sum of--
       ``(i) such net disaster loss, and
       ``(ii) so much of the excess referred to in the matter 
     preceding clause (i) of paragraph (2)(A) (reduced by the 
     amount in clause (i) of this subparagraph) as exceeds 10 
     percent of the adjusted gross income of the individual.
       ``(B) Net disaster loss.--For purposes of subparagraph (A), 
     the term `net disaster loss' means the excess of--
       ``(i) the personal casualty losses--

       ``(I) attributable to a federally declared disaster 
     occurring before January 1, 2010, and
       ``(II) occurring in a disaster area, over

       ``(ii) personal casualty gains.
       ``(C) Federally declared disaster.--For purposes of this 
     paragraph--
       ``(i) Federally declared disaster.--The term `federally 
     declared disaster' means any disaster subsequently determined 
     by the President of the United States to warrant assistance 
     by the Federal Government under the Robert T. Stafford 
     Disaster Relief and Emergency Assistance Act.
       ``(ii) Disaster area.--The term `disaster area' means the 
     area so determined to warrant such assistance.''.
       (2) Conforming amendments.--
       (A) Section 165(h)(4)(B) (as so redesignated) is amended by 
     striking ``paragraph (2)'' and inserting ``paragraphs (2) and 
     (3)''.
       (B) Section 165(i)(1) is amended by striking ``loss'' and 
     all that follows through ``Act'' and inserting ``loss 
     occurring in a disaster area (as defined by clause (ii) of 
     subsection (h)(3)(C)) and attributable to a federally 
     declared disaster (as defined by clause (i) of such 
     subsection)''.
       (C) Section 165(i)(4) is amended by striking 
     ``Presidentially declared disaster (as defined by section 
     1033(h)(3))'' and inserting ``federally declared disaster (as 
     defined by subsection (h)(3)(C)(i)''.
       (D)(i) So much of subsection (h) of section 1033 as 
     precedes subparagraph (A) of paragraph (1) thereof is amended 
     to read as follows:
       ``(h) Special Rules for Property Damaged by Federally 
     Declared Disasters.--
       ``(1) Principal residences.--If the taxpayer's principal 
     residence or any of its contents is located in a disaster 
     area and is compulsorily or involuntarily converted as a 
     result of a federally declared disaster--''.
       (ii) Paragraph (2) of section 1033(h) is amended by 
     striking ``investment'' and all that follows through 
     ``disaster'' and inserting ``investment located in a disaster 
     area and compulsorily or involuntarily converted as a result 
     of a federally declared disaster''.
       (iii) Paragraph (3) of section 1033(h) is amended to read 
     as follows:
       ``(3) Federally declared disaster; disaster area.--The 
     terms ``federally declared disaster'' and ``disaster area'' 
     shall have the respective meaning given such terms by section 
     165(h)(3)(C).''.
       (iv) Section 139(c)(2) is amended to read as follows:
       ``(2) federally declared disaster (as defined by section 
     165(h)(3)(C)(i)),''.
       (v) Subclause (II) of section 172(b)(1)(F)(ii) is amended 
     by striking ``Presidentially declared disasters (as defined 
     in section 1033(h)(3))'' and inserting ``federally declared 
     disasters (as defined by subsection (h)(3)(C)(i))''.

[[Page 23944]]

       (vi) Subclause (III) of section 172(b)(1)(F)(ii) is amended 
     by striking ``Presidentially declared disasters'' and 
     inserting ``federally declared disasters''.
       (vii) Subsection (a) of section 7508A is amended by 
     striking ``Presidentially declared disaster (as defined in 
     section 1033(h)(3))'' and inserting ``federally declared 
     disaster (as defined by section 165(h)(3)(C)(i))''.
       (b) Increase in Standard Deduction by Disaster Casualty 
     Loss.--
       (1) In general.--Paragraph (1) of section 63(c), as amended 
     by the Housing Assistance Tax Act of 2008, is amended by 
     striking ``and'' at the end of subparagraph (B), by striking 
     the period at the end of subparagraph (C) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(D) the disaster loss deduction.''.
       (2) Disaster loss deduction.--Subsection (c) of section 63, 
     as amended by the Housing Assistance Tax Act of 2008, is 
     amended by adding at the end the following new paragraph:
       ``(8) Disaster loss deduction.--For the purposes of 
     paragraph (1), the term `disaster loss deduction' means the 
     net disaster loss (as defined in section 165(h)(3)(B)).''.
       (3) Allowance in computing alternative minimum taxable 
     income.--Subparagraph (E) of section 56(b)(1) is amended by 
     adding at the end the following new sentence: ``The preceding 
     sentence shall not apply to so much of the standard deduction 
     as is determined under section 63(c)(1)(D).''.
       (c) Increase in Limitation on Individual Loss Per 
     Casualty.--Paragraph (1) of section 165(h) is amended by 
     striking ``$100'' and inserting ``$500 ($100 for taxable 
     years beginning after December 31, 2009)''.
       (d) Effective Dates.--
       (1) In general.--Except as provided by paragraph (2), the 
     amendments made by this section shall apply to disasters 
     declared in taxable years beginning after December 31, 2007.
       (2) Increase in limitation on individual loss per 
     casualty.--The amendment made by subsection (c) shall apply 
     to taxable years beginning after December 31, 2008.

     SEC. 707. EXPENSING OF QUALIFIED DISASTER EXPENSES.

       (a) In General.--Part VI of subchapter B of chapter 1 is 
     amended by inserting after section 198 the following new 
     section:

     ``SEC. 198A. EXPENSING OF QUALIFIED DISASTER EXPENSES.

       ``(a) In General.--A taxpayer may elect to treat any 
     qualified disaster expenses which are paid or incurred by the 
     taxpayer as an expense which is not chargeable to capital 
     account. Any expense which is so treated shall be allowed as 
     a deduction for the taxable year in which it is paid or 
     incurred.
       ``(b) Qualified Disaster Expense.--For purposes of this 
     section, the term `qualified disaster expense' means any 
     expenditure--
       ``(1) which is paid or incurred in connection with a trade 
     or business or with business-related property,
       ``(2) which is--
       ``(A) for the abatement or control of hazardous substances 
     that were released on account of a federally declared 
     disaster occurring before January 1, 2010,
       ``(B) for the removal of debris from, or the demolition of 
     structures on, real property which is business-related 
     property damaged or destroyed as a result of a federally 
     declared disaster occurring before such date, or
       ``(C) for the repair of business-related property damaged 
     as a result of a federally declared disaster occurring before 
     such date, and
       ``(3) which is otherwise chargeable to capital account.
       ``(c) Other Definitions.--For purposes of this section--
       ``(1) Business-related property.--The term `business-
     related property' means property--
       ``(A) held by the taxpayer for use in a trade or business 
     or for the production of income, or
       ``(B) described in section 1221(a)(1) in the hands of the 
     taxpayer.
       ``(2) Federally declared disaster.--The term `federally 
     declared disaster' has the meaning given such term by section 
     165(h)(3)(C)(i).
       ``(d) Deduction Recaptured as Ordinary Income on Sale, 
     etc.--Solely for purposes of section 1245, in the case of 
     property to which a qualified disaster expense would have 
     been capitalized but for this section--
       ``(1) the deduction allowed by this section for such 
     expense shall be treated as a deduction for depreciation, and
       ``(2) such property (if not otherwise section 1245 
     property) shall be treated as section 1245 property solely 
     for purposes of applying section 1245 to such deduction.
       ``(e) Coordination With Other Provisions.--Sections 198, 
     280B, and 468 shall not apply to amounts which are treated as 
     expenses under this section.
       ``(f) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Clerical Amendment.--The table of sections for part VI 
     of subchapter B of chapter 1 is amended by inserting after 
     the item relating to section 198 the following new item:

``Sec. 198A. Expensing of Qualified Disaster Expenses.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred after December 31, 
     2007 in connection with disaster declared after such date.

     SEC. 708. NET OPERATING LOSSES ATTRIBUTABLE TO FEDERALLY 
                   DECLARED DISASTERS.

       (a) In General.--Paragraph (1) of section 172(b) is amended 
     by adding at the end the following new subparagraph:
       ``(J) Certain losses attributable federally declared 
     disasters.--In the case of a taxpayer who has a qualified 
     disaster loss (as defined in subsection (j)), such loss shall 
     be a net operating loss carryback to each of the 5 taxable 
     years preceding the taxable year of such loss.''.
       (b) Qualified Disaster Loss.--Section 172 is amended by 
     redesignating subsections (j) and (k) as subsections (k) and 
     (l), respectively, and by inserting after subsection (i) the 
     following new subsection:
       ``(j) Rules Relating to Qualified Disaster Losses.--For 
     purposes of this section--
       ``(1) In general.--The term `qualified disaster loss' means 
     the lesser of--
       ``(A) the sum of--
       ``(i) the losses allowable under section 165 for the 
     taxable year--

       ``(I) attributable to a federally declared disaster (as 
     defined in section 165(h)(3)(C)(i)) occurring before January 
     1, 2010, and
       ``(II) occurring in a disaster area (as defined in section 
     165(h)(3)(C)(ii)), and

       ``(ii) the deduction for the taxable year for qualified 
     disaster expenses which is allowable under section 198A(a) or 
     which would be so allowable if not otherwise treated as an 
     expense, or
       ``(B) the net operating loss for such taxable year.
       ``(2) Coordination with subsection (b)(2).--For purposes of 
     applying subsection (b)(2), a qualified disaster loss for any 
     taxable year shall be treated in a manner similar to the 
     manner in which a specified liability loss is treated.
       ``(3) Election.--Any taxpayer entitled to a 5-year 
     carryback under subsection (b)(1)(J) from any loss year may 
     elect to have the carryback period with respect to such loss 
     year determined without regard to subsection (b)(1)(J). Such 
     election shall be made in such manner as may be prescribed by 
     the Secretary and shall be made by the due date (including 
     extensions of time) for filing the taxpayer's return for the 
     taxable year of the net operating loss. Such election, once 
     made for any taxable year, shall be irrevocable for such 
     taxable year.
       ``(4) Exclusion.--The term `qualified disaster loss' shall 
     not include any loss with respect to any property described 
     in section 1400N(p)(3).''.
       (c) Loss Deduction Allowed in Computing Alternative Minimum 
     Taxable Income.--Subsection (d) of section 56 is amended by 
     adding at the end the following new paragraph:
       ``(3) Net operating loss attributable to federally declared 
     disasters.--In the case of a taxpayer which has a qualified 
     disaster loss (as defined by section 172(b)(1)(J)) for the 
     taxable year, paragraph (1) shall be applied by increasing 
     the amount determined under subparagraph (A)(ii)(I) thereof 
     by the sum of the carrybacks and carryovers of such loss.''.
       (d) Conforming Amendments.--
       (1) Clause (ii) of section 172(b)(1)(F) is amended by 
     inserting ``or qualified disaster loss (as defined in 
     subsection (j))'' before the period at the end of the last 
     sentence.
       (2) Paragraph (1) of section 172(i) is amended by adding at 
     the end the following new flush sentence:

     ``Such term shall not include any qualified disaster loss (as 
     defined in subsection (j)).''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to losses arising in taxable years beginning 
     after December 31, 2007, in connection with disasters 
     declared after such date.

     SEC. 709. WAIVER OF CERTAIN MORTGAGE REVENUE BOND 
                   REQUIREMENTS FOLLOWING FEDERALLY DECLARED 
                   DISASTERS.

       (a) In General.--Subsection (k) of section 143 is amended 
     by adding at the end the following new paragraph:
       ``(12) Special rules for residences destroyed in federally 
     declared disasters.--
       ``(A) Principal residence destroyed.--At the election of 
     the taxpayer, if the principal residence (within the meaning 
     of section 121) of such taxpayer is--
       ``(i) rendered unsafe for use as a residence by reason of a 
     federally declared disaster occurring before January 1, 2010, 
     or
       ``(ii) demolished or relocated by reason of an order of the 
     government of a State or political subdivision thereof on 
     account of a federally declared disaster occurring before 
     such date,

     then, for the 2-year period beginning on the date of the 
     disaster declaration, subsection (d)(1) shall not apply with 
     respect to such taxpayer and subsection (e) shall be applied 
     by substituting `110' for `90' in paragraph (1) thereof.
       ``(B) Principal residence damaged.--
       ``(i) In general.--At the election of the taxpayer, if the 
     principal residence (within the meaning of section 121) of 
     such taxpayer was damaged as the result of a federally 
     declared disaster occurring before January 1, 2010, any 
     owner-financing provided in connection with the repair or 
     reconstruction of such residence shall be treated as a 
     qualified rehabilitation loan.
       ``(ii) Limitation.--The aggregate owner-financing to which 
     clause (i) applies shall not exceed the lesser of--

       ``(I) the cost of such repair or reconstruction, or
       ``(II) $150,000.

       ``(C) Federally declared disaster.--For purposes of this 
     paragraph, the term `federally declared disaster' has the 
     meaning given such term by section 165(h)(3)(C)(i).

[[Page 23945]]

       ``(D) Election; denial of double benefit.--
       ``(i) Election.--An election under this paragraph may not 
     be revoked except with the consent of the Secretary.
       ``(ii) Denial of double benefit.--If a taxpayer elects the 
     application of this paragraph, paragraph (11) shall not apply 
     with respect to the purchase or financing of any residence by 
     such taxpayer.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to disasters occurring after December 31, 2007.

     SEC. 710. SPECIAL DEPRECIATION ALLOWANCE FOR QUALIFIED 
                   DISASTER PROPERTY.

       (a) In General.--Section 168, as amended by this Act, is 
     amended by adding at the end the following new subsection:
       ``(n) Special Allowance for Qualified Disaster Assistance 
     Property.--
       ``(1) In general.--In the case of any qualified disaster 
     assistance property--
       ``(A) the depreciation deduction provided by section 167(a) 
     for the taxable year in which such property is placed in 
     service shall include an allowance equal to 50 percent of the 
     adjusted basis of the qualified disaster assistance property, 
     and
       ``(B) the adjusted basis of the qualified disaster 
     assistance property shall be reduced by the amount of such 
     deduction before computing the amount otherwise allowable as 
     a depreciation deduction under this chapter for such taxable 
     year and any subsequent taxable year.
       ``(2) Qualified disaster assistance property.--For purposes 
     of this subsection--
       ``(A) In general.--The term `qualified disaster assistance 
     property' means any property--
       ``(i)(I) which is described in subsection (k)(2)(A)(i), or
       ``(II) which is nonresidential real property or residential 
     rental property,
       ``(ii) substantially all of the use of which is--

       ``(I) in a disaster area with respect to a federally 
     declared disaster occurring before January 1, 2010, and
       ``(II) in the active conduct of a trade or business by the 
     taxpayer in such disaster area,

       ``(iii) which--

       ``(I) rehabilitates property damaged, or replaces property 
     destroyed or condemned, as a result of such federally 
     declared disaster, except that, for purposes of this clause, 
     property shall be treated as replacing property destroyed or 
     condemned if, as part of an integrated plan, such property 
     replaces property which is included in a continuous area 
     which includes real property destroyed or condemned, and
       ``(II) is similar in nature to, and located in the same 
     county as, the property being rehabilitated or replaced,

       ``(iv) the original use of which in such disaster area 
     commences with an eligible taxpayer on or after the 
     applicable disaster date,
       ``(v) which is acquired by such eligible taxpayer by 
     purchase (as defined in section 179(d)) on or after the 
     applicable disaster date, but only if no written binding 
     contract for the acquisition was in effect before such date, 
     and
       ``(vi) which is placed in service by such eligible taxpayer 
     on or before the date which is the last day of the third 
     calendar year following the applicable disaster date (the 
     fourth calendar year in the case of nonresidential real 
     property and residential rental property).
       ``(B) Exceptions.--
       ``(i) Other bonus depreciation property.--The term 
     `qualified disaster assistance property' shall not include--

       ``(I) any property to which subsection (k) (determined 
     without regard to paragraph (4)), (l), or (m) applies,
       ``(II) any property to which section 1400N(d) applies, and
       ``(III) any property described in section 1400N(p)(3).

       ``(ii) Alternative depreciation property.--The term 
     `qualified disaster assistance property' shall not include 
     any property to which the alternative depreciation system 
     under subsection (g) applies, determined without regard to 
     paragraph (7) of subsection (g) (relating to election to have 
     system apply).
       ``(iii) Tax-exempt bond financed property.--Such term shall 
     not include any property any portion of which is financed 
     with the proceeds of any obligation the interest on which is 
     exempt from tax under section 103.
       ``(iv) Qualified revitalization buildings.--Such term shall 
     not include any qualified revitalization building with 
     respect to which the taxpayer has elected the application of 
     paragraph (1) or (2) of section 1400I(a).
       ``(v) Election out.--If a taxpayer makes an election under 
     this clause with respect to any class of property for any 
     taxable year, this subsection shall not apply to all property 
     in such class placed in service during such taxable year.
       ``(C) Special rules.--For purposes of this subsection, 
     rules similar to the rules of subparagraph (E) of subsection 
     (k)(2) shall apply, except that such subparagraph shall be 
     applied--
       ``(i) by substituting `the applicable disaster date' for 
     `December 31, 2007' each place it appears therein,
       ``(ii) without regard to `and before January 1, 2009' in 
     clause (i) thereof, and
       ``(iii) by substituting `qualified disaster assistance 
     property' for `qualified property' in clause (iv) thereof.
       ``(D) Allowance against alternative minimum tax.--For 
     purposes of this subsection, rules similar to the rules of 
     subsection (k)(2)(G) shall apply.
       ``(3) Other definitions.--For purposes of this subsection--
       ``(A) Applicable disaster date.--The term `applicable 
     disaster date' means, with respect to any federally declared 
     disaster, the date on which such federally declared disaster 
     occurs.
       ``(B) Federally declared disaster.--The term `federally 
     declared disaster' has the meaning given such term under 
     section 165(h)(3)(C)(i).
       ``(C) Disaster area.--The term `disaster area' has the 
     meaning given such term under section 165(h)(3)(C)(ii).
       ``(D) Eligible taxpayer.--The term `eligible taxpayer' 
     means a taxpayer who has suffered an economic loss 
     attributable to a federally declared disaster.
       ``(4) Recapture.--For purposes of this subsection, rules 
     similar to the rules under section 179(d)(10) shall apply 
     with respect to any qualified disaster assistance property 
     which ceases to be qualified disaster assistance property.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007, with respect disasters declared after such date.

     SEC. 711. INCREASED EXPENSING FOR QUALIFIED DISASTER 
                   ASSISTANCE PROPERTY.

       (a) In General.--Section 179 is amended by adding at the 
     end the following new subsection:
       ``(e) Special Rules for Qualified Disaster Assistance 
     Property.--
       ``(1) In general.--For purposes of this section--
       ``(A) the dollar amount in effect under subsection (b)(1) 
     for the taxable year shall be increased by the lesser of--
       ``(i) $100,000, or
       ``(ii) the cost of qualified section 179 disaster 
     assistance property placed in service during the taxable 
     year, and
       ``(B) the dollar amount in effect under subsection (b)(2) 
     for the taxable year shall be increased by the lesser of--
       ``(i) $600,000, or
       ``(ii) the cost of qualified section 179 disaster 
     assistance property placed in service during the taxable 
     year.
       ``(2) Qualified section 179 disaster assistance property.--
     For purposes of this subsection, the term `qualified section 
     179 disaster assistance property' means section 179 property 
     (as defined in subsection (d)) which is qualified disaster 
     assistance property (as defined in section 168(n)(2)).
       ``(3) Coordination with empowerment zones and renewal 
     communities.--For purposes of sections 1397A and 1400J, 
     qualified section 179 disaster assistance property shall not 
     be treated as qualified zone property or qualified renewal 
     property, unless the taxpayer elects not to take such 
     qualified section 179 disaster assistance property into 
     account for purposes of this subsection.
       ``(4) Recapture.--For purposes of this subsection, rules 
     similar to the rules under subsection (d)(10) shall apply 
     with respect to any qualified section 179 disaster assistance 
     property which ceases to be qualified section 179 disaster 
     assistance property.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007, with respect disasters declared after such date.

     SEC. 712. COORDINATION WITH HEARTLAND DISASTER RELIEF.

       The amendments made by this subtitle, other than the 
     amendments made by sections 706(a)(2), 710, and 711, shall 
     not apply to any disaster described in section 702(c)(1)(A), 
     or to any expenditure or loss resulting from such disaster.

TITLE VIII--SPENDING REDUCTIONS AND APPROPRIATE REVENUE RAISERS FOR NEW 
                           TAX RELIEF POLICY

     SEC. 801. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX 
                   INDIFFERENT PARTIES.

       (a) In General.--Subpart B of part II of subchapter E of 
     chapter 1 is amended by inserting after section 457 the 
     following new section:

     ``SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN 
                   TAX INDIFFERENT PARTIES.

       ``(a) In General.--Any compensation which is deferred under 
     a nonqualified deferred compensation plan of a nonqualified 
     entity shall be includible in gross income when there is no 
     substantial risk of forfeiture of the rights to such 
     compensation.
       ``(b) Nonqualified Entity.--For purposes of this section, 
     the term `nonqualified entity' means--
       ``(1) any foreign corporation unless substantially all of 
     its income is--
       ``(A) effectively connected with the conduct of a trade or 
     business in the United States, or
       ``(B) subject to a comprehensive foreign income tax, and
       ``(2) any partnership unless substantially all of its 
     income is allocated to persons other than--
       ``(A) foreign persons with respect to whom such income is 
     not subject to a comprehensive foreign income tax, and
       ``(B) organizations which are exempt from tax under this 
     title.
       ``(c) Determinability of Amounts of Compensation.--
       ``(1) In general.--If the amount of any compensation is not 
     determinable at the time that such compensation is otherwise 
     includible in gross income under subsection (a)--
       ``(A) such amount shall be so includible in gross income 
     when determinable, and
       ``(B) the tax imposed under this chapter for the taxable 
     year in which such compensation is includible in gross income 
     shall be increased by the sum of--

[[Page 23946]]

       ``(i) the amount of interest determined under paragraph 
     (2), and
       ``(ii) an amount equal to 20 percent of the amount of such 
     compensation.
       ``(2) Interest.--For purposes of paragraph (1)(B)(i), the 
     interest determined under this paragraph for any taxable year 
     is the amount of interest at the underpayment rate under 
     section 6621 plus 1 percentage point on the underpayments 
     that would have occurred had the deferred compensation been 
     includible in gross income for the taxable year in which 
     first deferred or, if later, the first taxable year in which 
     such deferred compensation is not subject to a substantial 
     risk of forfeiture.
       ``(d) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Substantial risk of forfeiture.--
       ``(A) In general.--The rights of a person to compensation 
     shall be treated as subject to a substantial risk of 
     forfeiture only if such person's rights to such compensation 
     are conditioned upon the future performance of substantial 
     services by any individual.
       ``(B) Exception for compensation based on gain recognized 
     on an investment asset.--
       ``(i) In general.--To the extent provided in regulations 
     prescribed by the Secretary, if compensation is determined 
     solely by reference to the amount of gain recognized on the 
     disposition of an investment asset, such compensation shall 
     be treated as subject to a substantial risk of forfeiture 
     until the date of such disposition.
       ``(ii) Investment asset.--For purposes of clause (i), the 
     term `investment asset' means any single asset (other than an 
     investment fund or similar entity)--

       ``(I) acquired directly by an investment fund or similar 
     entity,
       ``(II) with respect to which such entity does not (nor does 
     any person related to such entity) participate in the active 
     management of such asset (or if such asset is an interest in 
     an entity, in the active management of the activities of such 
     entity), and
       ``(III) substantially all of any gain on the disposition of 
     which (other than such deferred compensation) is allocated to 
     investors in such entity.

       ``(iii) Coordination with special rule.--Paragraph (3)(B) 
     shall not apply to any compensation to which clause (i) 
     applies.
       ``(2) Comprehensive foreign income tax.--The term 
     `comprehensive foreign income tax' means, with respect to any 
     foreign person, the income tax of a foreign country if--
       ``(A) such person is eligible for the benefits of a 
     comprehensive income tax treaty between such foreign country 
     and the United States, or
       ``(B) such person demonstrates to the satisfaction of the 
     Secretary that such foreign country has a comprehensive 
     income tax.
       ``(3) Nonqualified deferred compensation plan.--
       ``(A) In general.--The term `nonqualified deferred 
     compensation plan' has the meaning given such term under 
     section 409A(d), except that such term shall include any plan 
     that provides a right to compensation based on the 
     appreciation in value of a specified number of equity units 
     of the service recipient.
       ``(B) Exception.--Compensation shall not be treated as 
     deferred for purposes of this section if the service provider 
     receives payment of such compensation not later than 12 
     months after the end of the taxable year of the service 
     recipient during which the right to the payment of such 
     compensation is no longer subject to a substantial risk of 
     forfeiture.
       ``(4) Exception for certain compensation with respect to 
     effectively connected income.--In the case a foreign 
     corporation with income which is taxable under section 882, 
     this section shall not apply to compensation which, had such 
     compensation had been paid in cash on the date that such 
     compensation ceased to be subject to a substantial risk of 
     forfeiture, would have been deductible by such foreign 
     corporation against such income.
       ``(5) Application of rules.--Rules similar to the rules of 
     paragraphs (5) and (6) of section 409A(d) shall apply.
       ``(e) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section, including regulations 
     disregarding a substantial risk of forfeiture in cases where 
     necessary to carry out the purposes of this section.''.
       (b) Conforming Amendment.--Section 26(b)(2), as amended by 
     the Housing Assistance Tax Act of 2008, is amended by 
     striking ``and'' at the end of subparagraph (V), by striking 
     the period at the end of subparagraph (W) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(X) section 457A(c)(1)(B) (relating to determinability of 
     amounts of compensation).''.
       (c) Clerical Amendment.--The table of sections of subpart B 
     of part II of subchapter E of chapter 1 is amended by 
     inserting after the item relating to section 457 the 
     following new item:

``Sec. 457A. Nonqualified deferred compensation from certain tax 
              indifferent parties.''.

       (d) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to amounts deferred which are attributable to services 
     performed after December 31, 2008.
       (2) Application to existing deferrals.--In the case of any 
     amount deferred to which the amendments made by this section 
     do not apply solely by reason of the fact that the amount is 
     attributable to services performed before January 1, 2009, to 
     the extent such amount is not includible in gross income in a 
     taxable year beginning before 2018, such amounts shall be 
     includible in gross income in the later of--
       (A) the last taxable year beginning before 2018, or
       (B) the taxable year in which there is no substantial risk 
     of forfeiture of the rights to such compensation (determined 
     in the same manner as determined for purposes of section 457A 
     of the Internal Revenue Code of 1986, as added by this 
     section).
       (3) Accelerated payments.--No later than 120 days after the 
     date of the enactment of this Act, the Secretary shall issue 
     guidance providing a limited period of time during which a 
     nonqualified deferred compensation arrangement attributable 
     to services performed on or before December 31, 2008, may, 
     without violating the requirements of section 409A(a) of the 
     Internal Revenue Code of 1986, be amended to conform the date 
     of distribution to the date the amounts are required to be 
     included in income.
       (4) Certain back-to-back arrangements.--If the taxpayer is 
     also a service recipient and maintains one or more 
     nonqualified deferred compensation arrangements for its 
     service providers under which any amount is attributable to 
     services performed on or before December 31, 2008, the 
     guidance issued under paragraph (4) shall permit such 
     arrangements to be amended to conform the dates of 
     distribution under such arrangement to the date amounts are 
     required to be included in the income of such taxpayer under 
     this subsection.
       (5) Accelerated payment not treated as material 
     modification.--Any amendment to a nonqualified deferred 
     compensation arrangement made pursuant to paragraph (4) or 
     (5) shall not be treated as a material modification of the 
     arrangement for purposes of section 409A of the Internal 
     Revenue Code of 1986.

         Amend the title so as to read: ``An Act to provide 
     authority for the Federal Government to purchase and insure 
     certain types of troubled assets for the purposes of 
     providing stability to and preventing disruption in the 
     economy and financial system and protecting taxpayers, to 
     amend the Internal Revenue Code of 1986 to provide incentives 
     for energy production and conservation, to extend certain 
     expiring provisions, to provide individual income tax relief, 
     and for other purpose''.

              Motion Offered by Mr. Frank of Massachusetts

  The text of the motion is as follows:

       Mr. Frank of Massachusetts moves that the House concur in 
     the Senate amendments.

  The SPEAKER pro tempore. Pursuant to House Resolution 1525, the 
motion shall be debatable for 90 minutes, with 60 minutes equally 
divided and controlled by the chairman and ranking minority member of 
the Committee on Financial Services, and 30 minutes equally divided and 
controlled by the chairman and ranking minority member of the Committee 
on Ways and Means.
  The gentleman from Massachusetts (Mr. Frank) and the gentleman from 
Alabama (Mr. Bachus) each will control 30 minutes; and the gentleman 
from New York (Mr. Rangel) and the gentleman from Louisiana (Mr. 
McCrery) each will control 15 minutes.
  The Chair recognizes the gentleman from Massachusetts.


                             General Leave

  Mr. FRANK of Massachusetts. Madam Speaker, I ask unanimous consent 
that all Members have 5 legislative days within which to revise and 
extend their remarks on this legislation and add extraneous material 
thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Massachusetts?
  There was no objection.
  The SPEAKER pro tempore. The Chair recognizes the gentleman from New 
York.
  Mr. RANGEL. Madam Speaker, today is a historic day in the United 
States Congress as the President has called on us to meet the challenge 
of the failure of the mortgage market, and our failure to do that would 
not only cause a crisis in the United States but throughout the world.

                              {time}  1045

  Seven hundred billion dollars we've asked to expose the taxpayers to 
from an administration that all I've heard in the last 8 years is that 
we have to keep government out of the free market, that government and 
regulations would strangle our economy.
  And the fact is that in such a short period of time, had it not been 
for Barney Frank and people on the other side of the aisle in trying to 
do the best we can, we leave here with a heavy conscience that if we do 
nothing then the sacrifice will be felt by employees,

[[Page 23947]]

their thrift accounts, their savings accounts, and small businesses.
  So, in a sense, we have a political gun at our heads that we can't 
afford to say that we know better, and so most of us have agreed that 
Secretary Paulson and economists have given us fair warning.
  Now, that's enough and it's complicated enough, but then we have had 
the threat of tax bills that expire at the end of the year. Companies 
that have relied on tax credits, individuals who relied on it, expire. 
And four times we sent energy bills to the other body, and four times 
they've ignored it.
  Included in these bills, of course, has always been disaster relief, 
and all of us believe these people should get it; mental health parity, 
which God knows all of us that have any sensitivity recognize that this 
inequity has to be taken care of; and of course, the alternative 
minimum tax, that no Member in this House or the other body can ever 
explain to taxpayers why this over $60 billion burden should fall on 
their shoulders because the Congress didn't think far enough ahead in 
order to adjust this tax for inflation.
  And so in a sense, Madam Speaker, we're being told that the burden 
would fall on 25 million people by the Senate, by our constituents and 
the country and entire world, by the administration if we don't have 
this $700 billion rescue bill. And I just hope and pray that sometime 
historically we might be able to regain the power that we used to have 
in the House, introduce bills, have hearings, and fully understand what 
we're doing rather than having to yield to the threat of disaster, 
whether it's fiscal or whether it's tax liability.
  I see John Tanner walking on the floor, and I do want to say that 
he's an outstanding member of our committee. He's been talking about 
the deficit for a long time, and his contribution to this package, I'd 
like to point out, has made him a proud member of our committee and the 
Congress.
  I reserve the balance of my time.
  Mr. McCRERY. Madam Speaker, I yield myself so much time as I may 
consume, and it won't be much.
  Madam Speaker, a little over 20 years ago, I made my first speech on 
the floor of the House of Representatives. Today could very well be my 
last speech on the floor of the House. I hope it's not. I hope we come 
back in a lame duck session to consider pending trade legislation, but 
this could be my last speech. And I had a real stemwinder prepared, 
Madam Speaker, but unfortunately, we only have 15 minutes of time that 
Ways and Means controls, and I have many more speakers than I have 
time.
  So, with the Speaker's indulgence, I will submit my remarks for the 
Record.
  Madam Speaker, on May 5, 1988, during Floor debate on a defense 
authorization bill, I rose as a freshman Member to address this House 
for the very first time, urging my colleagues to support an amendment 
in the name of fiscal responsibility. My very first words on the Floor 
that day warned of the dangers of the growing national debt. Over the 
two decades since, I've made scores of speeches and cast more than 
11,000 votes in this historic chamber, representing the hardworking 
taxpayers of Louisiana to the best of my ability.
  While I certainly hope we can return in November to complete action 
on our unfinished trade agenda, Madam Speaker, I rise today for what 
may be my final Floor speech as a Member of this body. As someone who 
has spent his entire career fighting for smaller government, freer 
markets, and greater economic liberty for all Americans, it is sadly 
ironic that I speak today in favor of a plan that, on its surface, 
appears to run counter to those principles.
  Indeed, Madam Speaker, this proposal seems to undermine the very 
foundations of capitalism, upending the economic incentives that drive 
entrepreneurial risk-taking. In America, we rightly celebrate our 
freedom to succeed in economic ventures. But in America, we're also 
supposed to be free to fail in those ventures, without expectation of a 
bailout from fellow taxpayers.
  By rushing in with $700 billion in taxpayer dollars to address the 
current crisis, I fear we are greatly increasing the moral hazard 
associated with economic risk-taking. I resent the level of government 
interference in the private market we see in this bill, and I hope it 
does not set a precedent that Congress follows in the future.
  Despite my grave concerns about this proposal, Madam Speaker, the 
weight of the evidence says we need to act--not to bail out the Wall 
Street titans, but instead to stabilize the credit markets upon which 
Main Street depends.
  Over recent weeks, I have listened carefully to experts on all sides 
of this issue, to constituents with a variety of strongly-held views, 
and to the voice of the U.S. Senate, which passed this emergency plan 
on Wednesday by a 74-25 vote. On balance, I am convinced that the 
Treasury Secretary needs to have appropriate authority to halt our 
Nation's slide into what could become a profound and extended economic 
downturn. If that were to occur and our financial markets were to 
collapse, I believe it could open the door to even more government 
interference in the private marketplace and to even less economic 
freedom for all Americans.
  We must not let that happen. The stakes are simply too high, and the 
risks to our economy, and our freedoms, are just too great. The 
circumstances are exigent, Madam Speaker, and, in my judgment, we need 
to act now.
  In addition to three tax provisions contained in the financial rescue 
portion of the bill--provisions dealing with the treatment of executive 
compensation, capital losses incurred by banks holding preferred stock 
in Fannie Mae and Freddie Mac, and the tax exclusion for forgiven debt 
on home mortgages--the bill before us also includes the Senate's 
comprehensive tax extenders package. This is a positive development, 
Madam Speaker, because the Senate's tax package provides more than $107 
billion in net tax relief to U.S. families and businesses.
  With enactment of this bill, we will finally resolve the tax dispute 
that has divided Republicans and Democrats for the entirety of the 
110th Congress, delaying action on the AMT patch and other tax 
extenders, including a variety of energy-related tax incentives.
  Over the past 2 years, Republicans have insisted that we should not 
have to raise taxes to prevent the tax increases that would result from 
the scheduled expiration of existing tax law. Democrats, meanwhile, 
have insisted that the House's paygo rules require us to find offsets 
for extensions of expired or expiring tax law.
  This comprehensive package--previously approved as a free-standing 
bill by the other body by an overwhelming vote of 93 to 2--represents a 
bipartisan compromise, much like the financial rescue plan to which it 
has been attached. It contains extenders provisions that are not fully 
offset--as many Democrats would prefer--but contains more offsets than 
many Republicans would like, including some on domestic oil and gas 
producers that I find particularly troubling.
  It is certainly not a perfect package, Madam Speaker, but with 
adjournment looming, it is the only package that can pass both chambers 
and actually be enacted into law.
  Specifically, this package will protect millions of middle-class 
taxpayers from falling victim to the AMT in 2008. It provides more than 
$48 billion in tax relief by extending through 2009 various expired and 
expiring provisions affecting U.S. families and businesses. And it 
contains an $18 billion package of energy-related tax incentives, 
including the creation of a new tax credit for plug-in electric 
vehicles.
  The package also contains a set of disaster-related tax relief 
provisions, including both nationwide tax relief and targeted tax 
relief for the victims of this summer's Midwestern storms and for 
victims of Hurricane Ike in Louisiana and Texas. Finally, the Senate's 
comprehensive tax package contains several non-tax provisions of 
significant interest to many Members on both sides of the aisle, 
including mental health parity and a reauthorization of the Secure 
Rural Schools program.
  All in all, this is a good, bipartisan package of tax proposals, 
Madam Speaker, and I think its inclusion improves the overall financial 
rescue package before us by providing important tax relief to our 
nation's families and businesses at a critical time for our economy.
  So today, I will cast my vote for this economic stabilization plan, 
sobered by the reality that our failure to act could have 
unprecedented, catastrophic consequences for our country and the 
economic freedoms for which I've long fought as a Member of this great 
institution.
  I yield 3 minutes to the distinguished minority whip, Mr. Blunt of 
Missouri.
  Mr. BLUNT. I thank the gentleman for yielding, Madam Speaker.
  I'm glad we're here at this work today. I do think that the bill has 
improved and the situation has clarified from Monday. We need to come 
together. We need to get this work done.

[[Page 23948]]

It's incredibly important. It seems to me that two significant things 
have happened: one, the changes in the bill that others will talk about 
and I will talk about a little bit; and two, the changes at the 
Securities and Exchange Commission and the Accounting Standards Board 
that have set forth a new way to evaluate these assets that are causing 
so much trouble in the marketplace.
  Now, where I live, nobody talks about illiquid assets. They talk 
about mortgages. They talk about how to pay the bills. They talk about 
whether they can borrow money or not, and at the end of the day, Madam 
Speaker, that's what this bill is about.
  It's not about Wall Street. It's about Main Street. It's not a 
bailout. It's a situation where American taxpayers are going to invest 
money in a way that ensures they have a return. I think with the work 
we've done here, we've not only ensured that they're likely is never 
likely to be a question of return, but beyond that, if at the end of 5 
years taxpayers would appear have lost any money, the President will 
propose and Congress will act on a set of recommendations that go back 
to the agencies that participated and say we're going to recover 
whatever was lost.
  This is a chance where American taxpayers are investing in their own 
future. This is an opportunity where people are helping stabilize a 
market. We saw a bank purchase this week where it looked like the 
government would have to be part of the purchase, but after the 
government came in and said here's how we're going to work to stabilize 
the situation, suddenly there's a market and suddenly that purchase is 
much different than it would have been without government 
participation.
  This bill allows that kind of stabilization. This bill protects 
taxpayers. This bill has every known oversight mechanism ever conceived 
of by government in it now. None of those were asked for initially by 
the administration but they're all there now, a special Inspector 
General, a board that sets policy, a congressional oversight group, GAO 
with special authority, ultimate transparency.
  This is a bill the taxpayers can look at and say this is well beyond 
the proposal that came to the Congress. It has a transparency. It has 
the oversight. It has the guarantees that taxpayers should ask for, but 
it also has lots of options, options that weren't in the original 
proposal, not just to loan money, not just to purchase mortgages and 
other securities, but to set up an insurance plan so if that's one of 
the things that would make more sense in certain areas it can be used.
  It's a critical moment.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. McCRERY. I yield the gentleman an additional 30 seconds.
  Mr. BLUNT. I'd like to put in the Record, Madam Speaker, a letter I 
received from the Secretary of the Treasury talking about the rules and 
regulations that they will pursue that will assure that eligible 
financial institutions must be established and regulated to have 
significant operations in the United States. It's not talking about 
foreign banks. Also requiring that--in the letter that they will set up 
rules and regulations so that people participating in this program 
won't benefit from this program.

                                   Department of the Treasury,

                                  Washington, DC, October 2, 2008.
     Hon. Roy Blunt,
     House of Representatives,
     Washington, DC.
       Dear Mr. Blunt: I am writing regarding the Emergency 
     Economic Stabilization Act of 2008.
       The Act requires that eligible financial institutions must 
     be established and regulated and have significant operations 
     in the United States. Furthermore, it is the intention of the 
     Department of the Treasury that all mortgages or mortgage-
     related assets purchased in the Troubled Asset Relief Program 
     will be based on or related to properties in the United 
     States.
       The Act requires the Department of the Treasury to prevent 
     unjust enrichment of financial institutions selling troubled 
     assets into the Troubled Asset Relief Program, including 
     preventing the sale of a troubled asset to the Treasury at a 
     higher price than what the seller paid to purchase the asset. 
     The Act specifies a single exemption for troubled assets 
     acquired in a merger or acquisition or a purchase of assets 
     from a financial institution that is established and 
     regulated in the United States and that is in 
     conservatorship, receivership or bankruptcy. The Department 
     of the Treasury believes this exemption is important to 
     encouraging healthy institutions to pursue acquisitions of 
     struggling institutions. Such acquisitions help to protect 
     depositors, taxpayers and the financial system.
       The Department of the Treasury will issue regulations or 
     guidelines necessary to address and manage or to prohibit 
     conflicts of interest that may arise in connection with the 
     administration and execution of the authorities provided 
     under the Act as soon as practicable after the date of 
     enactment.
           Sincerely,
                                             Henry M. Paulson, Jr.

  Mr. RANGEL. Madam Speaker, I ask unanimous consent that I be allowed 
to say farewell to my friend Jim McCrery without having it attributed 
to the allotted time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  There was no objection.
  Mr. RANGEL. I had no idea that we would be coming back here and I 
would have this opportunity, but for some of us being Members of 
Congress, and especially members of the Ways and Means Committee, it 
has been a special privilege.
  This historic committee, however, has had its ups and downs with 
partisanship, the likes of which we had not seen on the committee or in 
the House of Representatives.
  I hardly knew Jim McCrery during the years he was on the committee 
because the other side was dominated by one personality, but as soon as 
things changed and I had the opportunity to meet and talk with him as 
the ranking member, I not only found a scholar and a gentleman, but I 
found someone who loved his country and Congress more than he loved the 
partisanship.
  It wasn't as though we have been able to resolve many of the crises 
that exist in our committee, but the one thing that he did do, and it 
will continue after he leaves us, is to create a climate where we had a 
degree of respect for each other and especially when we needed that 
respect, when we disagree and our parties disagree.
  His legacy, even though he leaves, will continue to know that in this 
House no matter how frank we are politically, we still can be civil. We 
still can get things done, and even when we're not successful, we can 
work in such a manner that other people following us would know that we 
can disagree without being disagreeable.
  So, Jim, I speak for all of the Democrats on the committee, for the 
tone, for your congeniality, for your humor, for the wisdom that you 
contributed, and I know that it's been awkward for your party and mine 
at times to do the things that we wanted to do. We started off dealing 
with the Secretary Treasurer and we promised him we'd do the world. 
Unfortunately, we didn't check with our leadership on a lot of things 
that we thought we could do.
  But we will continue to do that, and I do hope that the lessons that 
you taught so many of us will continue long after you're gone.
  Madam Speaker, at this time, I yield 1 minute to the distinguished 
chairman of the Health Subcommittee, who's worked hard on the overall 
bill before us today, Chairman Pete Stark from California.
  Mr. STARK. Thank you, Mr. Chairman, and unfortunately, I have to urge 
my colleagues to vote ``no'' on this bill.
  Somebody in the press not so long ago earlier this week said eight 
out of 10 of my colleagues know nothing about economics or banking, and 
this bill shows that he was quite right.
  This bill does nothing but bail out Wall Street and large corporate 
America. It spends $800 billion that the taxpayers will end up having 
to pay for, and it does nothing for middle Americans.
  Is there a crisis in this country? Yes, there is, but there is not a 
crisis for those people who have been working, trying to pay their 
bills. There's not a crisis for your average community bank who has no 
problem with liquidity. There is not a crisis for your credit cards 
being unable to work.
  That's Paulson's way to scare us, as Colin Powell tried to scare us 
some years ago by saying if we didn't vote

[[Page 23949]]

for an ill-conceived war we'd see terrorists on the streets.
  We're getting the same kind of misinformation now, the same kind of 
rush to judgment to tell you that a crisis will occur. It won't. Vote 
``no.'' Come back and help work on a bill that will help all Americans.
  Mr. McCRERY. Madam Speaker, I want to first say how much I appreciate 
the very kind words of the gentleman from New York and appreciate very 
much the opportunity to have worked with him over the last couple of 
years. He has been more than gracious to me and to all the members of 
the committee, and so his words were heartfelt, and I very much 
appreciate them.
  With that, I yield 2\1/2\ minutes to the gentleman from North 
Carolina (Mr. Coble).
  Mr. COBLE. I thank my friend from Louisiana for yielding.
  Last week, I voted ``no'' on this bill for two reasons. Number one, I 
don't like to hurriedly vote on significant legislation. I'd rather do 
it thoroughly and deliberately.
  The second reason, my telephone calls and e-mails were overwhelming 
in opposition against the bill. On Monday I voted ``no.''
  The telephone calls and e-mails continued to be overwhelming, but 
guess what: Then in favor of the bill. Now I'm not exclusively dictated 
by telephone calls and e-mails, but neither do I dismiss them, Madam 
Speaker.

                              {time}  1100

  And I weighed this very carefully. And by having waited, I think we 
did improve the bill.
  The increase of the FDIC threshold to $250,000, a good move; the AMT 
patch that will affect favorably 21 million middle class families, a 
good move; SEC, I am told, Madam Speaker, is addressing or has 
addressed the mark-to-market issue, a good approach. Compelling 
arguments can be proffered on both sides of this issue, but I believe, 
Madam Speaker, that inaction is not an option.
  I don't believe the sky is falling. I was told that earlier and I 
refuted it. And I think when I disagree with the sky falling charge, 
that's not irregular for me to refute it.
  Now, this vote for me, I am voting ``aye'' today, and it may be 
politically damaging. And the sky may fall tomorrow, but it will fall 
upon my head; it won't fall upon anyone else's, and no one else will be 
adversely affected.
  I believe that the limited access to credit--and in many instances no 
access to credit--can certainly contribute to a crisis. And we can put 
on blinders and go one way or the other, but I think this is a bill 
that must be addressed today, it must be addressed in a positive way, 
both sides of the aisle. My friends to the left, my friends on this 
side have done a good job, I think, in crafting it, and I am pleased to 
announce that I am voting ``aye'' when the vote is called later.
  I thank the gentleman for having yielded to me.
  Mr. RANGEL. Madam Speaker, I yield 1 minute to Mr. Neal, an 
outstanding member of the Ways and Means Committee who has done a great 
job for all of us.
  Mr. NEAL of Massachusetts. First, let me thank Congressman Frank; he 
did a good job under very difficult circumstances, as did Mr. Rangel 
with the tax extenders that are part of this bill.
  This is imperfect legislation, like much legislation that comes to 
the floor of this House, but we need to pass it today.
  The national principle here is at stake. If there's a hurricane in 
Louisiana, we all come to the aid of the American family. If there's a 
forest fire in California, we all come to the aid of the American 
family. If there's a blizzard in New England, we all come to the aid of 
the American family. And that's precisely what this legislation does 
today.
  Next week, when people are having difficulty getting a car loan, 
trying to refinance their mortgage or looking at their 401(k) plan, we 
acknowledge that they are all members of the American family, and we 
attempt today to come to their aid.
  There is relief here for alternative minimum tax victims; 25 million 
people will benefit. Twelve thousand businesses are waiting for 
incentives for the R&D credit. Four million families and three million 
teachers are waiting for their deductions for education expenses. 
Thirteen million children in low-income families can finally claim the 
child tax credit.
  This is a piece of legislation that helps the American family.
  Mr. McCRERY. Madam Speaker, it's a pleasure to yield 2 minutes to the 
distinguished gentleman from Michigan, the ranking member on the Health 
Subcommittee of the Ways and Means Committee, Mr. Camp.
  Mr. CAMP of Michigan. Madam Speaker, I also want to commend the 
gentleman from Louisiana for his leadership, for his thoughtful 
approach to issues, for his service to the Ways and Means Committee and 
to the Congress, and especially for his friendship.
  I rise in support of the Senate amendment to H.R. 1424. Is this 
better than the original Paulson proposal? Yes. Is this bill perfect? 
Hardly. And this bill is better, especially for taxpayers.
  The bill resolves the remaining tax items before the Congress. After 
months of delay, the House will finally do what Republicans called for 
back in June, pass an AMT patch without increasing taxes. Without the 
patch, more than 25 million American families would pay an additional 
$62 billion in taxes. We must provide this relief sooner rather than 
later, and I'm pleased this will finally be done without raising taxes.
  By passing this bill today, Congress will extend for 2 years the wide 
array of important tax credits and deductions so many families and 
employers rely on. We are reaffirming to the auto industry and 
consumers that incentives for the purchase of alternative fuel vehicles 
will remain law. This is something I have pushed for hard in the House. 
And this new plug-in credit, like the hybrid credit that I offered in 
2005, will spur consumer demand for alternative vehicles and lessen our 
dependence on foreign oil.
  With this bill, we are providing certainty to businesses that are 
investing heavily in research and development. The Senate amendment 
extends the R&D credit through 2009 and increases the alternative 
simplified credit. This is a step in the right direction. We must make 
the credit permanent to attract high-tech businesses and compete in 
today's global economy and to keep jobs here in America. Myself and Mr. 
Levin, my colleague from Michigan, have championed legislation to do 
just that, and I look forward to making this goal a reality in the next 
Congress.
  Madam Speaker, I urge my colleagues, Republican and Democrat, to 
support this legislation so that Congress can provide stability to our 
financial system and give American workers and businesses the tax 
relief they so desperately need and deserve.
  Mr. RANGEL. Madam Speaker, there is no one in this House that cares 
more about the tax burden that we're putting on the next generation and 
the children that follow than the gentleman from Tennessee (Mr. 
Tanner). He has made a great contribution in improving this bill, and 
he continues to be a watchdog of the deficit that this administration 
has taken us in.
  I yield 2 minutes to the gentleman.
  Mr. TANNER. Mr. Chairman, I, too, want to join you in thanking Mr. 
McCrery for his work here. I have enjoyed working with you very much, 
Jim.
  I want to speak about section 134 of the bill. But before I do, I've 
just got to say that some of us in this body are so thoroughly 
disgusted with the other body right now in the way this bill has been 
handled. We've found that it doesn't take a lot of political courage to 
spend somebody else's money that can't vote. And we had, from our 
committee, the extender package paid for or offset by people who didn't 
object to the offsets. And because of the Senate rules--or the other 
body's rules and the ability for some over there to object to a 
unanimous consent request--they sent it back over here on top of a 
must-pass bill that is unpaid for and one of

[[Page 23950]]

the reasons we're in the shape we're in right now. And so I just had to 
express utter disgust and frustration with the way that it was handled 
in the other body.
  Now, as it comes to the bill, when the Secretary came over here with 
the bill, it was a bailout; it was public risk and private gain. By the 
wisdom of the body here, we put section 134 of the recoupment clause in 
which now makes it private risk and public gain, which is the way it 
ought to be. It is now a situation where we're not talking about 
bailing out Wall Street or the high flyers. If, at the end of the day, 
there is a shortfall in the Treasury of the United States, then they 
will be assessed that shortfall and the Treasury will be made whole by 
section 134 of the recoupment clause.
  What the bill does now is it attempts to protect all Americans who 
have an IRA, a 401(k), or part of a State or local government pension 
plan. That's why I'm going to vote ``yes'' even though I am so 
thoroughly disgusted with what the Senate put on it.
  Mr. McCRERY. Madam Speaker, may I inquire as to the remaining time on 
each side.
  The SPEAKER pro tempore. The gentleman from Louisiana has 6\1/2\ 
minutes remaining; the gentleman from New York has 7 minutes remaining.
  Mr. McCRERY. Madam Speaker, I yield 2 minutes to the distinguished 
gentleman from California, a member of the Ways and Means Committee, 
Mr. Nunes.
  Mr. NUNES. Madam Speaker, our economy has slowed to a crawl and 
American workers are worried about their jobs. These conditions are 
clear arguments for action by our government, and action should be 
taken.
  The question each of us needs to ask ourselves is whether or not the 
Paulson plan is the best course of action. In my view, it's not. I made 
no secret of my frustration and disapproval for the sense of panic 
instilled upon the public by Wall Street insiders and some of our 
Nation's elected leaders.
  Madam Speaker, this is not a time for panic; it's a time for 
leadership and it's a time for deliberation. Congress must not be 
confined to a timetable dictated by alarmists who see the government 
money as their only backstop again, irresponsible lending. Investors 
take risks, sometimes the risks they take are reckless. Taxpayers must 
not be liable for Wall Street risk-taking.
  Madam Speaker, the American people do not accept the allegation that 
we have only two alternatives before us: passage of this bill or 
another Great Depression. There are other options if congressional 
leaders had the courage to allow this democracy to function. We could 
debate these issues.
  We need to make certain that our Nation's lending institutions are 
the strongest in the world and that our constituents have confidence 
that they have a safe place to put their money. One way to accomplish 
this is to let the Fed purchase preferred shares with warrants. This 
would infuse capital into the market, freeing up banks to make loans 
and extend credit.
  The plan that I and others have proposed to this Congress is in sharp 
contrast to the Paulson plan and offers real protection to the 
taxpayer. Why do we need to give $700 billion to one man to play hedge 
fund god from the gilded offices of the United States Treasury? If the 
Secretary wants to run a hedge fund, he should go back to Wall Street.
  This Congress must not hand over such an enormous amount of money; it 
is simply wrong. It's irresponsible. Listen to all the pundits, all the 
financial wizards, the holier-than-thou capitalists from our Nation's 
leading institutions; they sound like they belong to the Soviet 
Politburo. When the markets are riding high, they want us to leave them 
alone. When the market crashed, they want to us nationalize their debt.
  Madam Speaker, I urge my colleagues to vote ``no.'' However, if this 
bill passes, it is my hope that the administration will focus first on 
shoring up our Nation's lending institutions.
  Mr. RANGEL. At this time, I yield 1 minute to Mr. Blumenauer of 
Oregon, one of the outstanding members of our committee, the Ways and 
Means Committee.
  Mr. BLUMENAUER. I appreciate the gentleman's courtesy and his 
leadership. And thanks to the leadership of Mr. Frank, Speaker Pelosi 
and the House Republicans, we have part of this bill before us today 
that is somewhat better, but it sadly adds $150 billion of largely 
unpaid for tax breaks, frustrating for me because many of these 
provisions like alternative energy too credits and secure rural schools 
are provisions I fought for for years and are very important.
  Madam Speaker, as members of the public and Congress learn more about 
these problems and the solutions, I must say I have never seen more 
diametrically opposed opinions, and even people explaining about the 
facts in their business. But if this bill passes, which it appears that 
it will today, it ignores the underlying problem of a housing market in 
free-fall, and it ignores the plight of six million homeowners who are 
facing foreclosure in the next 2 years.
  If there was ever a time to give the same bankruptcy protection to 
American homeowners that Donald Trump will get the next time he takes 
bankruptcy for his casinos and for his fourth vacation home, that time 
is now. It needs to be in this legislation, and I'm sadly disappointed 
that it is not. In makes long term recovery harder and more painful.
  Mr. McCRERY. I yield 2 minutes to the gentleman from Tennessee, a 
distinguished Member of this House, Mr. Wamp.
  Mr. WAMP. Madam Speaker, nobody in east Tennessee hates the fact more 
than me that I'm going to vote ``yes'' today after voting ``no'' on 
Monday. Monday, I cast a blue collar vote for the American people, 
shook the foundations of Wall Street, demanding more accountability. 
But today, I'm going to cast a red, white and blue collar vote with my 
hand over my heart for this country because things are really bad and 
we don't have any choice. We're out of choices, our backs are up 
against the wall.
  All week we fought for some improvements. And the increase in the 
FDIC limits from $100,000 to $250,000 is an improvement. The mark-to-
market changes which will allow these mortgage-backed securities to 
move and free up liquidity will help a lot because small business 
people can't meet their payroll. This month, many of them in east 
Tennessee are not going to be able to meet their payroll. Pension funds 
in east Tennessee, thousands and tens of thousands of people I 
represent are upside down and it's happening fast. The cost of inaction 
is greater than the cost of this bill.
  The $700 billion is a loan. Warren Buffet said Wednesday night it's a 
good business deal, he would take it, the government is going to get 
their money back. He knows more about this than anybody in this House, 
to be honest with you. He feels good about it. I don't like this at 
all. As a matter of fact, I hate it. It's disgusting that we would ever 
be brought to this floor to have to cast this vote, but we're out of 
options. We don't have a month to rewrite a new bill.
  Things are critical. We don't even have gas at the stations in east 
Tennessee. Economic anxiety is hurting the families. I've been 
listening to small business people all week long and they said, thanks 
for voting ``no'' on Monday and thanks for standing up for us, but 
you've got to do something.
  Congress has to act. We're out of options. Hold your hand over your 
heart and vote ``yes.''
  Mr. RANGEL. Madam Speaker, Mr. John Lewis is a subcommittee chairman 
on the Ways and Means Committee and sometimes described as ``the 
conscience of the Congress.'' I regret I only have 1 minute to yield to 
him at this time.
  Mr. LEWIS of Georgia. Madam Speaker, I want to thank my chairman for 
yielding.
  Madam Speaker, I have decided that the cost of doing nothing is 
greater than the cost of doing something.
  The fear that is gripping Wall Street has the power to shut down Main 
Street. We cannot and we must not allow this to happen. The people are

[[Page 23951]]

afraid. Their retirement savings are slipping away. Small businesses 
have no sales, no credit, and are closing their doors. People cannot 
get loans, they're losing their lines of credit. We must act. Now is 
the time to act. We must do something.
  I do not see this as a blank check. In a few months, we will have a 
new President and a new Congress. We must hold the feet of these 
financial institutions to the fire. It is with this assurance that I 
will vote ``yes'' on this legislation.
  The SPEAKER pro tempore. The gentleman from Louisiana has 2\1/2\ 
minutes remaining.
  Mr. McCRERY. Madam Speaker, I yield 2 minutes to the distinguished 
gentleman from Texas, a member of the Ways and Means Committee, Mr. 
Brady.
  Mr. BRADY of Texas. Thank you, Jim McCrery, for your leadership 
throughout the years on this issue and so many other important ones.

                              {time}  1115

  Congress must act. Our Nation faces the fiercest financial crisis in 
our lifetime, and for lawmakers entrusted with America's prosperity to 
stand by and do nothing, that's no longer an option.
  I don't like this bill any more than my constituents do. The thought 
of our interfering in the marketplace, of spending taxpayer dollars for 
irresponsible Wall Street firms, it makes my constituents angry and me 
too. But the fact of the matter is these bad loans have infected too 
much of America's economy and they threaten the world's economy as 
well. And make no mistake, if these Wall Street financial companies go 
down, our businesses and families in Texas are pulled down with them.
  Families in my district are already watching their life savings 
disappear before their eyes. I met a Texas worker. She only had $15,000 
in her savings; she lost $8,000 of it over the past 2 weeks. I talked 
to a woman who stopped me in my car as I was leaving my neighborhood, 
and she said she and her husband have a small business. Their good 
customers can't get the credit to buy their products anymore. For the 
first time in 17 years since they started their business, she is truly 
frightened. And I ask myself why should our local families, why should 
our local communities pay the price in lost jobs and lost savings 
because of Wall Street greed? Haven't these Wall Street companies 
caused enough damage?
  This is not my solution. This is not the only solution. America faces 
tough times. We're going to have to come right back in November, in my 
opinion, and bring about the reforms to stop this from happening again. 
But I am going to vote ``yes'' again to pull this Nation back from its 
economic brink and protect the families and jobs and small businesses 
in Texas.
  Mr. RANGEL. Madam Speaker, I would like to yield to Mr. Kind of 
Wisconsin for 1\1/2\ minutes.
  Mr. KIND. I thank my good friend for his courtesy and his leadership 
on this issue.
  Madam Speaker, we have before us today, because of our friends in the 
Senate, the granddaddy of all jams. They took an incredibly important 
economic rescue plan and loaded it up with a bunch of extraneous, 
unrelated items that weren't paid for. They're in essence holding a gun 
to our head today daring us to vote ``no.'' But, unfortunately, we gave 
them that gun last Monday because of the failure of this Chamber to 
act. And the credit markets are continuing to freeze up, and my concern 
is unless we take action today, many innocent people back home and 
throughout America will suffer the consequences.
  The plan we have before us today, the rescue plan, is vastly 
different from the original one sent to us by the administration. Today 
it's about protecting Main Street, not Wall Street. It's about 
protecting the American taxpayer, not CEOs' salaries. We have included 
in here important oversight, transparency, accountability provisions to 
protect the American people. And time is of the essence. But at some 
point and some time, we have to have the political will and the courage 
to start paying for things again in this country so we do not leave a 
legacy of debt for our children and grandchildren. We won't accomplish 
that today, but time is of the essence and we must move this rescue 
plan forward to avert a much wider disaster tomorrow.
  Mr. McCRERY. Madam Speaker, I reserve the balance of my time.
  Mr. RANGEL. Madam Speaker, at this time, to Mr. Pascrell from New 
Jersey, a great member of the Ways and Means Committee, I would like to 
yield 1\1/2\ minutes.
  Mr. PASCRELL. Madam Speaker, if we had approved the legislation on 
Monday, we would not have been able to pass the tax extenders package, 
which includes business and energy tax extenders. The AMT patch, we all 
worked hard on that across the aisle, whether you wanted to pay for it 
or not was the debate, and the additional disaster assistance as well 
as mental health parity. I think these are important.
  Alexander Hamilton, my idol, was very clear that there are immutable 
principles of moral obligation. Monday I voted ``no,'' and I know that 
the enemy of the good is the perfect. But since Monday we have improved 
certain parts of the bill. And there is some junk in this bill. There 
are no two ways about it. But that is not unique on this bill.
  So to help the American people, I am now supporting today's financial 
package. And it's really the McCrery-Rangel team that got me to this 
point.
  You guys have worked closely together. You are a good model and 
example for what we should be doing.
  I pray that I'm doing the right thing. I believe so in my heart. God 
bless this country. We will prevail.
  Madam Speaker, the legislation we have before us today arises at a 
vital time when Americans are suffering under a rapidly failing 
financial market and collapsing housing market.
  My ``no'' vote on Monday was among one of the most difficult votes I 
have had to cast in my 12 years as a Member of Congress.
  My goal in Congress has always been to fight for the best interest of 
ordinary Americans--to fight for the American worker, the American 
small business owner, the people who make up the heart and soul of our 
nation.
  I thought of them when I voted ``no'' on Monday because that bill 
fell short of helping those people who are suffering the most from this 
financial crisis.
  Today, I stand before you far from assured that this legislation is a 
s good as it can be but understanding that we cannot stand back and 
allow our financial markets, credit markets, housing market, pension 
plans, and small businesses to collapse under the weight of the errors 
made by Wall Street.
  Lead by Speaker Pelosi and Chairman Frank we have taken an inadequate 
2\1/2\ page proposal and developed a more substantial bipartisan piece 
of legislation which we present today.
  I support the addition of the increase to the Federal Deposit 
Insurance Corporation, FDIC. It is exactly the type of bottomup, 
community approach we need to put liquidity back in to Wall Street.
  Furthermore, if we had approved the bill on Monday we would not have 
been able to pass this tax extenders package that includes business and 
energy tax extenders, an AMT patch, additional disaster assistance as 
well as mental health parity.
  I am certainly disappointed that these provisions are not paid for 
but it would be unconscionable to allow the American people to suffer 
without this tax relief.
  Today's bill is not perfect but we have done what we needed to do for 
the American people. In truth if you gave every Member of Congress a 
chance to draft a proposal to address this crisis we would have 435 
bills in front of us today--the enemy of the good is the perfect.
  Since Monday we have improved this bill to help the American people 
and therefore I am supporting today's financial rescue package. I urge 
all my colleagues from both sides of the aisle to vote ``yes'' on 
Emergency Economic Stabilization Act of 2008.
  Mr. McCRERY. Madam Speaker, I reserve the balance of my time.
  Mr. RANGEL. Madam Speaker, at the Speaker's request, I would like to 
yield 1 minute to Mr. Sherman of California.
  Mr. SHERMAN. Madam Speaker, I thank the gentleman for 1 minute. I

[[Page 23952]]

can't possibly in that minute describe the problems with this bill. I 
hope people will pick up the blue paper that I'm distributing.
  But what they have done to the bill is they have added special tax 
breaks for those who import bows and arrows, and those who import wool, 
thus displacing American products as part of the economic recovery 
package. That's why it's not the economic recovery package. It's the 
pork-laden, earmark-laden Wall Street bailout bill. It is a bill that 
will send hundreds of billions of dollars not for bad investment 
decisions made in America but to buy toxic assets currently in the 
safes in London and Riyadh, Saudi Arabia, and Beijing. It is a bill 
that will allow million-dollar-a-month salaries, and $5 million-a-month 
salaries, to be paid to executives who have driven their firms into the 
ground and now need a taxpayer bailout. It is a bill that provides for 
an oversight board that critiques, but cannot stop anything.
  Vote ``no'' now. We will stay in town and write a good bill.
  Mr. McCRERY. Madam Speaker, I yield myself the balance of my time.
  Madam Speaker, the bill before us today, certainly the tax portion of 
the bill today, represents a compromise. These extensions of expiring 
provisions of the Tax Code have been bandied about here in the House 
back, over in the Senate, back and forth all year long, including the 
patch on the alternative minimum tax. I'm gratified that we were able 
to come together to present the tax extenders in this package because I 
believe very strongly in the overwhelming majority of those provisions. 
I think they're good, sound tax policy. Members of this House have 
voted for all of them many times over.
  So, Madam Speaker, I encourage a ``yea'' vote on this bill, 
especially for the tax extenders.
  Mr. RANGEL. Madam Speaker, I would like to yield the balance of my 
time to the gentleman from New York (Mr. Crowley).
  Mr. CROWLEY. I thank the chairman for yielding.
  Madam Speaker, this is not a rescue package solely for Wall Street 
nor is it for New York City nor for New York State. In fact, I would 
argue with you, all of my colleagues, that it will take many years for 
New York City and New York State to recover from the downturn of Wall 
Street.
  This is more about our country, about the United States, and our 
economic woes today. It's about 401(K) plans, about investment plans of 
my mother on 65th Street in Woodside, Queens. She saw that decline just 
a few days ago. This is about all of our constituents who have seen a 
loss over the past few days. It's about the health of our entire 
economy. And ladies and gentlemen, my colleagues, this is not just the 
United States. The entire world is looking at us today and looking to 
see us vote in favor of this bill.
  Would we like the luxury of more time to hold more hearings and have 
more due process? Of course we would. We'd like to have months to do 
that. But we simply don't have the time. We don't have that luxury. We 
cannot afford that.
  What we have to do, ladies and gentlemen, is do the right thing and 
vote in favor of this package.
  The SPEAKER pro tempore. The gentleman from Massachusetts is 
recognized.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield myself such time 
as I may consume.
  Madam Speaker, we have limited time here, and I want to explain to 
the Members that I will be devoting most of my time to colloquy with 
Members who have serious concerns about this bill.
  I believe this bill has a great deal more in it in a number of areas, 
including in particular avoiding foreclosures, than people have 
recognized. I at this point will insert into the Record under General 
Leave a letter from the American Banker, in which Sheila Bair, who is 
one of the best regulators we have ever had, who has been using her 
authority over the mortgages she inherited through the IndyMac failure 
to really provide foreclosure relief, and she says in this: ``The 
provision would allow the Treasury Department to provide credit 
guarantees and enhancements on whole loans.'' Ms. Bair said in an 
interview Thursday, ``They can have so much bigger bang for their 
buck.'' She asked us to put this in. We put it in. It may be obscure, 
but it in and of itself will lead to a great deal of help for people 
with mortgages.
  What I will be doing, Madam Speaker, during this debate is yielding 
time for colloquies to Members who are seeking clarification of points 
in the bill, many of them involving what is very powerful language, 
although not everything we would have liked, to mitigate foreclosures. 
I will say that I have spoken to the people at the Department of 
Treasury, including yesterday morning the Secretary himself, and I will 
be making commitments today about how we believe this bill will be 
interpreted, and I will be making no commitments that I have not 
explained to the Treasury, that the staff of the Financial Services 
Committee which has done such wonderful work has not discussed with the 
Treasury. So we will be, as I said, working with Members to clarify 
some parts of this bill because I do not think it is fully appreciated 
that it has a good deal more in it for the foreclosure issue and some 
other issues than has been recognized.

                  [From American Banker, Oct. 3, 2008]

              Bair: How to Get More Bang for Bailout Buck

                           (By Rob Blackwell)

       Washington.--Of all the provisions in the bill designed to 
     stabilize the financial markets, one of its most potent is 
     not getting enough attention, according to Federal Deposit 
     Insurance Corp. Chairman Sheila Bair.
       The provision would allow the Treasury Department to 
     provide credit guarantees and enhancements on whole loans. If 
     it were used, it would allow the government to increase 
     modifications and stabilize home prices at a much smaller 
     cost than buying the loans themselves, Ms. Bair said in an 
     interview Thursday.
       ``They can have so much bigger bang for their buck,'' she 
     said. ``You don't have an initial cash outlay, you can leave 
     them in the private sector, you can do the servicing in the 
     private sector, and you can condition them on some type of 
     modification protocol, which would get the mortgages 
     restructured faster.''
       The provision, a single sentence in the 451-page bill, has 
     attracted little attention from analysts and industry 
     representatives. Instead, they have focused on the crux of 
     the bill, which would allow the Treasury to buy and hold up 
     to $700 billion of troubled assets.
       The bill would give the Treasury secretary the power to 
     ``use loan guarantees and credit enhancements to facilitate 
     loan modifications to prevent avoidable foreclosures.''
       How that would work remains unclear. In theory, the 
     Treasury could guarantee certain types of loans--option 
     adjustable-rate mortgages, for example--and require lenders 
     that want to use the insurance to engage in loan 
     modifications first. If the reworked loan performed, the 
     government would never be involved, but if the loan later 
     defaulted, the government would take a certain amount of the 
     loss.
       Though she is supportive of the $700 billion buyout 
     facility, Ms. Bair said the provision, added at the behest of 
     the FDIC, could provide a critical alternative.
       ``It will be another tool they have in their toolkit, and 
     it will be cheaper,'' she said. ``You can provide credit 
     support to $100 billion worth of mortgages with no up-front 
     cash outlay. The exposure would be less than buying those 
     mortgages directly.''
       During her two-year tenure, the FDIC has moved from the 
     background to the forefront of the housing crisis. In the 
     past week alone it has handled the largest failure of all 
     time--the $309 billion-asset Washington Mutual Inc.--with no 
     cost to the government. It also invoked the systemic risk 
     exception for the first time in the agency's history to 
     facilitate a deal to sell most of Wachovia Corp. to Citigroup 
     Inc.
       Ms. Bair said regulators had no choice but to use the 
     exception, which was created in 1991 and required the 
     approval of the Federal Reserve Board and the Treasury.
       ``We all felt that preventive action was needed,'' she 
     said. ``It was a potential failure, driven primarily by 
     market confidence issues.''
       Ms. Bair has also been working to help pass the bailout 
     bill. After the House unexpectedly defeated the legislation 
     Monday, lawmakers scrambled for provisions to bring more 
     Republicans on board. The most notable addition would 
     increase deposit insurance to $250,000 per depositor per 
     institution.
       That provision would reassure nervous depositors that the 
     banking system is stable, Ms. Bair said, and it gets to the 
     heart of the problem: a lack of confidence among consumers, 
     bankers, and businesses.

[[Page 23953]]

       ``Raising the deposit insurance limit to $250,000 is 
     designed to address that problem of public confidence,'' she 
     said. ``Expanding that safety net for a period of time, I 
     think, will help with the Main Street depositor and also 
     provide help for banks.''
       The coverage hike would take effect immediately and would 
     expire Dec. 31, 2009. The bill explicitly says banks should 
     not face a premium hike as a result. Analysts argue that 
     Congress would have to make the higher limit permanent. Ms. 
     Bair would not take a position, except to say the FDIC should 
     have the power to raise premiums if the increase becomes 
     permanent.
       ``It's a question for Congress,'' she said. ``It could be 
     destabilizing if they lift it in 2009, but the trade-off 
     would be that banks would have to start paying premiums.''
       Overall, she said, she hopes the legislation will help ease 
     fears among financial institutions, some of which have become 
     worried about lending to each other.
       ``There is a confidence issue,'' Ms. Bair said. 
     ``Originally, liquidity issues were tied to capital adequacy. 
     Now I think liquidity issues are tied to just uncertainty. . 
     . . We are asking Main Street to have confidence in the 
     banking system. Well, I would ask the banks to have 
     confidence in the banking system and lend to each other.''
       She said a freeze on credit is only making the situation 
     worse.
       ``We acknowledge that some individual banks have 
     challenges, but overall they still have strong capital, and 
     they've built up their loan loss reserves,'' she said. ``We 
     shouldn't be freezing up and panicking.''
       Though some have argued the bailout bill does not go to the 
     heart of the issue, Ms. Bair was unequivocal in saying she 
     thought the buyout facility would help the situation.
       ``The reason for the liquidity issue is you have an asset 
     on the balance sheet where the cash flow suggests one 
     valuation, but if you have to sell it, you will be taking a 
     steep loss because the market is seizing up,'' she said. ``So 
     we will be providing a vehicle for moving those assets off 
     balance sheet for a price other than a rock-bottom distressed 
     price. We are capable of letting the government hold the 
     asset for a while before it's sold which will help ease 
     downward pressure on asset valuations. It absolutely should 
     help.''
       But she acknowledged some concern that the legislation did 
     not do enough to help struggling borrowers.
       Ms. Bair was at the forefront last year in warning that 
     lenders and servicers needed to systematically lock in low, 
     starter rates so that borrowers could continue making their 
     mortgage payments on time. More defaults would lead to 
     increased foreclosures, which would cause further 
     deterioration in the housing market. Few took her advice, and 
     the housing market continued to sink.
       If more lenders had modified loans, she said the situation 
     would still be bad, but not as dramatic.
       ``We were going to have these problems no matter what, but 
     I do think it would be less of an impact,'' she said.
       But Ms. Bair said she did not understand why Congress is 
     not doing more to assist borrowers in the bailout 
     legislation. Lawmakers debated forcing more servicers to 
     engage in systematic modifications, but ultimately did not do 
     so.
       ``I don't understand it,'' she said. ``The borrowers here 
     that are losing their houses have been this politically 
     powerless group. From the get go, politically, for whatever 
     reason, they were put in a category of they got over their 
     head and were an unsympathetic group to deal with. That is 
     not the case with all of them.''
                                  ____

                                                  October 2, 2008.
       Dear Representative: We were profoundly disappointed with 
     the House vote on Monday rejecting bipartisan economic 
     recovery legislation. We are writing today to urge the House 
     to act now to pass the Emergency Economic Stabilization Act 
     to bring stability to credit markets.
       The impact of the House action was painfully demonstrated 
     Monday when the stock market lost $1.2 trillion as the Dow 
     Jones Industrial Average fell 777.8 points, the largest 
     single-day point drop in American history. Virtually every 
     American witnessed their retirement, investment and savings 
     accounts decline steeply.
       Further, the evaporation of credit is affecting businesses 
     of all sizes and consumers and we run the risk of further 
     declines in housing values. If Congress fails to act, credit 
     markets will tighten further. Our associations' members will 
     find it more difficult--if not impossible--to secure credit 
     to finance their operations, and members' employees will find 
     it harder to get mortgages, secure auto loans, and borrow 
     money to send their children to college.
       Americans rely on credit and liquid markets to make our 
     economy function, and we will continue to see our economy and 
     the well-being of all Americans impacted unless the House 
     acts. Significant bipartisan cooperation has produced a 
     strong financial rescue plan with strong taxpayer protections 
     to help stabilize the financial system and prevent a meltdown 
     of our capital markets.
       The Senate has passed this legislation by a 3 to 1 margin. 
     We urge you to address this crisis by voting to support this 
     critically-needed measure.
           Sincerely,
       Advanced Medical Technology Association; Air Conditioning 
     Contractors of America; The Aluminum Association; American 
     Apparel & Footwear Association; American Bankers Association; 
     American Beverage Association; American Boiler Manufacturers 
     Association; and American Business Conference.
       American Chemistry Council; American Concrete Pressure Pipe 
     Association; American Financial Services Association; 
     American Forest & Paper Association; American Gas 
     Association; American Hotel & Lodging Association; American 
     Insurance Association; and American Meat Institute.
       American Rental Association; American Road & Transportation 
     Builders Association; American Trucking Associations; 
     Associated Builders and Contractors, Inc.; Associated 
     Equipment Distributors; Associated General Contractors of 
     America; Association of Equipment Manufacturers; and 
     Association of International Automobile Manufacturers.
       Business Roundtable; Chamber of Commerce of the U.S.; 
     Consumer Bankers Association; Consumer Mortgage Coalition; 
     Edison Electric Institute; Equipment Leasing and Finance 
     Association; Financial Services Forum; and The Financial 
     Services Roundtable.
       Food Marketing Institute; Housing Policy Council; 
     Independent Community Bankers of America; Independent 
     Electrical Contractors, Inc.; Independent Petroleum 
     Association of America; International Dairy Foods 
     Association; Information Technology Industry Council; and 
     International Franchise Association.
       Minority Business RoundTable; Mortgage Bankers Association; 
     National Association of Chain Drug Stores; National 
     Association of Electrical Distributors; National Association 
     of Homebuilders; National Association of Manufacturers; 
     National Association of Plumbing, Heating, and Cooling 
     Contractors; and National Association of Real Estate 
     Investment Managers.
       National Association of Realtors; National Association of 
     Wholesaler-Distributors; National Electrical Contractors 
     Association; National Electrical Manufacturers Association; 
     National Federation of Independent Business; National 
     Restaurant Association; National Retail Federation; and 
     National Roofing Contractors Association.
       National Rural Electric Cooperative Association; NPES--The 
     Association for Suppliers of Printing, Publishing and 
     Converting Technologies; Printing Industries of America; The 
     Real Estate Roundtable; Reinsurance Association of America; 
     Retail Industry Leaders Association; Securities Industry and 
     Financial Markets Association; and Software & Information 
     Industry Association.
                                  ____


                 [From the Boston Globe, Oct. 3, 2008]

   National Upheaval, Local Shudders--Credit Woes Convulse Plans of 
                             Cities, Towns

                           (By John C. Drake)

       Springfield Mayor Domenic Sarno said the city has been 
     waiting a long time to repair sidewalks and tear down 
     abandoned buildings in his financially beleaguered city. Now 
     residents will have to wait a little longer.
       With the crisis on Wall Street, the first-term mayor's 
     promises to pay for improvements on Springfield's streets are 
     on hold because raising money by floating municipal bonds in 
     this climate is prohibitively expensive, he said.
       It is the kind of problem facing dozens of communities, say 
     officials. Like a hurricane swirling offshore, the financial 
     crisis is barreling down on Massachusetts cities and towns, 
     but no one knows yet how bad the damage could be.
       Local leaders this week have been nervously eyeing bailout 
     negotiations on Capitol Hill, the freezing bond markets, 
     their falling pension fund values, and the State House, where 
     Governor Deval Patrick may eventually decide to seek local 
     aid cuts.
       The moribund credit markets are making it difficult to pay 
     for capital projects such as road work, because credit is 
     either unavailable or rates are too high, local officials and 
     municipal finance observers say. ``I'm trying to be fiscally 
     prudent while at the same time trying to drive an ambitious 
     agenda,'' Sarno said. ``It does affect Main Street, whether 
     people are calling for a pothole or a multimillion dollar 
     project they want improved.''
       Boston has so far not been affected because it usually 
     issues general-obligation bonds in February or March, said 
     the city's chief financial officer, Lisa Signori. But other 
     cities and towns were looking to enter the bond market 
     sooner.
       ``Communities that have been planning on issuing debt for a 
     large municipal project--a police station, a school, 
     infrastructure improvements--are likely monitoring the 
     situation and waiting to issue debt, waiting for the market 
     to stabilize and for banks to issue credit again,'' said 
     Geoff Beckwith, executive director of the. Massachusetts 
     Municipal Association.
       Sarno said Springfield has a wish list of capital 
     improvements totalling $470 million, with $23 million on a 
     high-priority list. Projects that could be affected range 
     from sidewalk repairs and planned demolitions of derelict 
     buildings costing tens of thousands

[[Page 23954]]

     of dollars to a major renewal for Springfield's South End 
     estimated to cost $6.2 million.
       Quincy Mayor Thomas P. Koch said funding for ongoing 
     construction of a new Quincy High School and other projects, 
     including a planned new middle school, could be affected.
       ``You don't put the bond out at once. You borrow 
     periodically and then float the bond,'' he said. 'We're 
     working with the state on an application to replace the 
     middle school and we're going to market soon with the bonds 
     for that. Some of the other improvements at other buildings 
     may just have to wait a little bit.''
       Officials at the Massachusetts School Building Authority, 
     which has committed to help dozens of communities build 
     schools, have sought to assuage concerns.
       ``The MSBA's financial obligations to school construction 
     projects will be met despite the current economic turmoil,'' 
     the authority said in a statement provided by spokeswoman 
     Carrie Sullivan on Wednesday.
       Municipal pension funds, which are invested in a vast array 
     of stocks, bonds, and other securities, are another 
     significant source of worry.
       ``Clearly this is not good news and is not a good market 
     and there will be some loss of value that will appear on the 
     books,'' Beckwith said. ``The question is, will that value be 
     recovered before the pension system needs to access those 
     assets.''
       Signori said Boston's pension board would be briefed by 
     financial advisers next week on the state of the city's 
     investments. ``Certainly, this quarter's performance is 
     important, but what you're looking at is what's happening 
     over five years or over ten years,'' she said.
       Other Boston city accounts and investments are considered 
     secure because the city collateralized them in the late 
     1990s, meaning the investments are backed up by cash from 
     other banks and not subject to ceilings on federal deposit 
     insurance.
       ``We weren't out there to make a lot on high interest 
     rates; we wanted to make sure our money was safe,'' Boston 
     Mayor Thomas M. Menino said this week. ``The city of Boston's 
     money is safe.''
       But Menino and Signori acknowledged the city's finances 
     could be hurt if revenue from motor vehicle excise tax and 
     hotel-motel excise taxes are down and if local aid takes a 
     hit. Projected local aid for Boston already had fallen $60 
     million from 2002, Signori said.
       Quincy Mayor Koch said he was worried the city's retirement 
     board could seek more city funding if its investments are 
     hurt.
       ``If the retirement board does not get back the returns 
     they anticipate, that means they're going to be asking for 
     more appropriation level on the operations side,'' Koch said 
     in a phone interview. ``That bears watching, big-time.''
                                  ____

       Section 129 of the Emergency Economic Stabilization Act is 
     intended to formalize the reporting procedures of the Federal 
     Reserve Board to its oversight committees in the House and 
     Senate when it exercises authority under Section 13(3) of the 
     Federal Reserve Act, relating to loans made to individuals, 
     partnerships and corporations under unusual and exigent 
     circumstances.
       Paragraph (a) of Section 129 directs the Federal Reserve to 
     report to its oversight committees in the House and Senate 
     within 7 days after it has exercised authority under Section 
     13(3) of the Federal Reserve Act. To facilitate congressional 
     oversight, the Federal Reserve would provide the appropriate 
     congressional committees justification for its actions under 
     Section 13(3) and explain the specific terms of the actions 
     taken by the Board, including providing information about the 
     size and duration of any lending, available information 
     concerning any collateral held with respect to such lending, 
     the recipient of warrants or other potential equity in 
     exchange for such lending, and any expected cost to the 
     taxpayer related to the Board's action.
       The Federal Reserve has used its 13(3) powers to extend 
     loans to borrowers in specific one-off transactions as well 
     as to offer several facilities that are open to a range of 
     borrowers on the same terms. Paragraph (b) of Section 129 
     provides for periodic updates by the Federal Reserve to its 
     congressional oversight committees and is intended to apply 
     to any loan or facility initiated under Section 13(3) of the 
     Federal Reserve Act, including the status of the loan or 
     facility, the aggregate value of the collateral held in 
     connection with the loan or facility, and the projected cost 
     to the taxpayers of the loan or facility.
       Paragraph (c) of Section 129 provides for the 
     confidentiality of any reports made under the section and is 
     intended to make all such reports confidential upon the 
     request of the Federal Reserve Board. Paragraph (d) makes the 
     reporting requirement under the section retroactive to March 
     1, 2008.

  At this point, Madam Speaker, I reserve the balance of my time.
  Mr. BACHUS. Madam Speaker, I yield 2 minutes to the gentleman from 
South Carolina (Mr. Barrett).
  Mr. BARRETT of South Carolina. Madam Speaker, we come here today in 
the midst of the biggest economic crisis this Nation has ever faced.
  The proposal that was put forth by the administration earlier was 
unacceptable, no accountability, no government oversight, too much 
burden on the American taxpayer. But politics is the art of the 
possible.
  This House is a place where policy and reality come together, where 
people solve problems. I was sitting right there when the vote was 
taken Monday. As soon as it went down, I turned to my colleagues and 
said, It's time to roll up our sleeves, it's time to solve this problem 
for America, and let's move forward. And we did that. I was on the 
phone with Treasury, with the administration, with Senate and House 
leadership, with the SEC. We've got suspension of mark to market. We've 
got increased FDIC insurance. We've got tax relief, AMT, child tax 
credit. This is a better bill.
  But it's tough out there. I've talked to my moms, I've talked to my 
pops, I've talked to my corporations. No matter what we do or what we 
pass, there are still tough times out there. People are hurting. People 
are mad. I'm mad. Men and women that have fought in this House, I have 
fought in this House for spending regulations and tougher restraint, 
and we have seen what has happened and where it has led us.
  Do I still have concerns about this bill? Yes. Do I still have 
concerns that it will affect the free market system? Yes, I do. But we 
have to act and we have to act now. It's our job to lead. If we don't 
solve these problems, not just these problems but Medicare and Social 
Security, if this House doesn't lead, America will fail. And if we 
don't get anything out of this conversation today, we need to 
understand that. It's about leadership. It's about moving forward.
  I've had experts on both sides say, Gresham, this is a good thing, 
this is a bad thing.

                              {time}  1130

  I asked the good Lord to give me the guidance and the wisdom to make 
the decision. I will vote ``yes,'' and I ask my colleagues to do the 
same.
  Mr. FRANK of Massachusetts. I yield 1\1/2\ minutes to the gentleman 
from Virginia (Mr. Moran) for the purpose of a colloquy.
  Mr. MORAN of Virginia. Thank you, Madam Speaker. I won't take that 
much time. I do want to thank the chairman for his masterful leadership 
on this bill, and I do want to clarify that the intent of this 
legislation is to authorize the Treasury Department to strengthen 
credit markets by infusing capital into weak institutions in two ways: 
By buying their stock, debt, or other capital instruments; and, two, by 
purchasing bad assets from the institutions, in coordination with 
existing regulatory agencies and their responsibilities under this 
legislation, as well as under already existing authorization for 
prompt, corrective action and least-cost resolution.
  Mr. FRANK of Massachusetts. Will the gentleman yield?
  Mr. MORAN of Virginia. I'd be happy to yield.
  Mr. FRANK of Massachusetts. I can affirm that. As the gentleman 
knows, the Treasury Department is in agreement with this, and we should 
be clear, this is one of the things that this House and the Senate 
added to the bill, the authority to buy equity. It is not simply buying 
up the assets, it is to buy equity, and to buy equity in a way that the 
Federal Government will able to benefit if there is an appreciation.
  I thank the gentleman for this important clarification. He is 
absolutely right.

       In implementing the powers provided for in the Emergency 
     Economic Stabilization Act of 2008, it is the intent of 
     Congress that Treasury should use Troubled Asset Relief 
     Program (TARP) resources to fund capital infusion and asset 
     purchase approaches alone or in conjunction with each other 
     to enable financial institutions to begin providing credit 
     again, and to do so in ways that minimize the burden on 
     taxpayers and have maximum economic recovery impact. Where 
     the legislation speaks of ``assets'', that term is intended 
     to include capital instruments of an institution such as 
     common and preferred stock, subordinated and senior debt, and 
     equity rights. Also, it is the intent of this legislation 
     that TARP resources should be used

[[Page 23955]]

     in coordination with regulatory agencies and their 
     responsibilities under prompt-corrective-action and least-
     cost resolution statutes.

  Mr. MORAN of Virginia. Nice going, Chairman. Thank you.
  Mr. BACHUS. Madam Speaker, I yield 1 minute to the gentleman from 
Oklahoma (Mr. Cole).
  Mr. COLE of Oklahoma. I thank the gentleman for yielding.
  Madam Speaker, everybody in this Chamber knows the right political 
vote on this package. The easy thing to do is vote ``no'' and hope the 
bill passes. Every Member knows there is no political upside to 
supporting this legislation.
  It's also easy to say that something must be done--but something 
else. Well, we all have our own preferred plans, Madam Speaker. The 
only problem is none of them get 218 votes.
  I know my colleagues on both sides of the aisle are struggling to do 
the right thing. Lyndon Johnson used to say, ``Doing the right thing 
isn't hard; knowing the right thing to do is.'' This is certainly one 
of those occasions, Madam Speaker. But I am convinced unless we act, 
the stock market will take a nose dive, economic activity will freeze, 
credit markets will dry up, people will lose their jobs.
  The real question is: Are we willing to gamble the jobs, the life 
savings, the retirement accounts, the homes and the businesses of the 
people we represent? Are we willing to risk the global, political, and 
social turmoil that will come if we have a prolonged recession or 
depression in the United States? Frankly, Madam Speaker, I am not.
  Madam Speaker, everyone in this room knows the right ``political'' 
vote on this package. The easy thing to do is to vote no and hope the 
bill passes. Every member knows there is no political upside in 
supporting this bill.
  It is also easy to say, ``something must be done--but not this.'' We 
all have our own schemes. Certainly I have my own five-point ``Tom Cole 
plan.'' I would suspend mark-to-market accounting rules, purchase 
preferred stock in institutions to protect the taxpayer, institute a 
private insurance program, limit executive compensation in companies 
that get Federal help, and raise the FDIC insured bank deposits from 
$100,000 to $250,000. There is only one problem with my plan, Madam 
Speaker, it cannot get 218 votes in this Chamber.
  Madam Speaker, I know that my colleagues on both sides of this issue 
want to do ``the right thing.'' However, as Lyndon Johnson used to say, 
``doing the right thing isn't hard, knowing the right thing to do is.'' 
I have struggled over whether passing this bill is the right thing to 
do. I do know that if it fails the stock market will take a nose dive, 
credit will freeze up and economic activity will grind to a halt. Some 
believe in time the markets will stabilize and correct themselves. I 
hope they are right.
  The real question is are we willing to gamble the jobs, life savings, 
retirement accounts, the homes and the businesses of the people we 
represent? And are we willing to risk the global political and social 
turmoil that will surely occur if there is a severe and prolonged 
recession or depression in the United States? Frankly, Madam Speaker, I 
am not.
  Madam Speaker, I am from Oklahoma, a state that has had more than its 
share of economic hardship over the years. My grandparents and parents 
lived through the Great Depression. They dealt with the hard times at 
home and the wars abroad that it spawned. My family and I lived through 
the 1980s when a banking and real estate collapse devastated Oklahoma's 
economy. I saw my State's per capita income fall from 98 percent to 79 
percent of the national average. I saw hundreds of banks close, 
thousands of businesses fail, and countless families lose their life's 
savings. I do not intend to let that happen again for the sake of 
political popularity, ideological purity, or legislative perfection.
  Madam Speaker, passing this bill is no substitute for long to 
structural reforms, appropriate legislative oversight, and the 
establishment of suitable levels of accountability and transparency in 
our financial markets. Those are issues we must confront in the next 
Congress. However, inaction in the face of the current turmoil in the 
markets is not an acceptable option. In fact, it is a huge gamble.
  Madam Speaker, I know I will be haunted by this vote for the rest of 
my political life. I know I will have to explain it again and again to 
my friends. And I will be forced to defend it in every election against 
my opponents. And I know, having made this vote, I will have to make 
other tough votes to reform our economic and political systems. However 
that is far better than the lost jobs, the foreclosed homes, the 
depleted savings, the broken businesses, the devastated lives, and the 
dangerous world that I believe will be the consequences of a failure to 
act.
  Madam Speaker, I will vote for this bill not because I wish to, but 
because I have to for the good of the people I represent. I trust that 
each of my colleagues will cast their vote in the same spirit, and I 
truly believe they will. There are no good choices here--but positive 
action is the right choice.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield 2 minutes to one 
of our leading attorneys in the House, who, representing the State of 
California, has a particular knowledge about much of what we are trying 
to do in this bill in the foreclosure area, the gentlewoman from 
California (Ms. Zoe Lofgren).
  Ms. ZOE LOFGREN of California. Madam Speaker, there's much not to 
like in this bill and there's a lot to be angry about how we got here, 
and if this passes, our job will not be done. We will have further 
efforts that will be required, especially to stabilize the housing 
market.
  I chair the California Democratic Delegation. I want to share with 
Members the communications we have received from California's Governor 
and the Treasurer of the State of California.
  The Governor tells us, and this is a quote, ``It is daunting that 
California, the eighth largest economy in the world, cannot obtain 
financing in the normal course of its business to bridge our annual lag 
between expenditures and revenues. This means that California may soon 
be forced to delay payments for critical services, such as teachers, 
law enforcement, and nursing homes. The same thing would happen to 
California cities and counties.''
  Our Treasurer, Bill Lockyer, has told us, ``For 10 days, State and 
local governments have been closed out of credit markets--long-term and 
short-term--in spite of the fact they represent no default risk and 
provide a good tax return to investors.'' He says, ``Without prompt 
Federal action to address the economic crisis, we may have no market 
access. That means the State's cash reserves will be exhausted near the 
end of October. Payments for teachers' salaries, nursing homes, law 
enforcement, and every other State-funded service would stop or be 
significantly delayed. California's 5,000 cities, counties, school 
districts, and special districts would face the same fate.''
  There is a $7 billion revenue anticipation note that the State needs 
to float to meet cash flow needs, and they cannot sell those revenue 
anticipation notes because of the credit freeze.
  Folks, what this means is that the State of California, the eighth 
largest economy in the world, will not be able to meet payroll by the 
end of this month unless we take action to unfreeze these credit 
markets. I wanted to make sure that every Californian and, really, 
every American knew.

                                                State Capitol,

                                  Sacramento, CA, October 2, 2008.
     Hon. Henry M. Paulson, Jr.
     Secretary of the Treasury,
     Washington, DC.
       Dear Mr. Secretary, First of all, let me commend you for 
     your leadership to enact emergency economic stabilization 
     legislation. This credit crisis has the power to grind the 
     U.S. economy to a halt if swift and decisive action is not 
     taken immediately. The federal rescue package is not a 
     bailout of Wall Street tycoons--it is a lifeboat for millions 
     of Americans whose life savings, businesses, retirement plans 
     and jobs are at stake. I have communicated this message to 
     the entire California Congressional delegation and will 
     continue to press for passage of an emergency rescue plan.
       Like many other states, California is feeling the enormous 
     effects of this crisis on our economy. California's economy 
     is dynamic and resilient, but also uniquely sensitive to 
     national and international economic conditions and 
     fluctuations in the financial markets. The credit crisis has 
     frozen investment and commerce, forcing businesses and 
     families to stop purchasing goods and services. This has 
     resulted in tens of thousands of lost jobs and billions of 
     dollars in lost tax revenue to the state.
       Most immediately, California and a number of other state 
     and local governments are experiencing the lack of liquidity 
     in the credit markets firsthand. Many states and local 
     governments have been unable to secure financing for bond 
     offerings and for routine cash flow used to make critical 
     payments to schools, local governments and law

[[Page 23956]]

     enforcement. While some states may be able to absorb a delay 
     or obtain high-interest financing through private banks, 
     California is so large that our short-term cash flow needs 
     exceed the entire budget of some states. We expect to issue 
     $7 billion in Revenue Anticipation Notes for short term cash 
     flow purposes in a matter of days.
       Absent a clear resolution to this financial crisis that 
     restores confidence and liquidity to the credit markets, 
     California and other states may be unable to obtain the 
     necessary level of financing to maintain government 
     operations and may be forced to turn to the Federal Treasury 
     for short-term financing.
       The economic fallout from this national credit crisis 
     continues to drain state tax coffers, making it even more 
     difficult to weather the continuation of frozen credit 
     markets for any length of time. I will continue to do all I 
     can to encourage passage of the emergency rescue plan.
           Sincerely,
                                            Arnold Schwarzenegger,
     Governor.
                                  ____



                                                State Capitol,

                                  Sacramento, CA, October 1, 2008.
       Dear Members of the California Congressional Delegation, 
     it's now very clear that the financial crisis on Wall Street 
     is affecting California--its businesses, its citizens' daily 
     lives and its state government's ability to obtain financing 
     to pay for critical services.
       This is how serious the situation is: our State Treasurer 
     warns that the credit market has already frozen up to the 
     point that it chills even the State of California's ability 
     to meet its short-term cash flow needs. Additionally, without 
     immediate action from you and your colleagues in Congress, 
     California will be unable to sell voter-approved bonds for 
     the highway, school, housing and water construction projects 
     that our state is relying on to help carry us through this 
     difficult economy. The state of our already-slow economy 
     makes the financial situation even more urgent.
       It is daunting that California, the eighth-largest economy 
     in the world, cannot obtain financing in the normal course of 
     its business to bridge our annual lag between expenditures 
     and revenues. This means California may soon be forced to 
     delay payments for critical services, such as teachers, law 
     enforcement and nursing homes. The same thing would happen to 
     California's counties and cities. That is, unless Congress 
     acts quickly to restore confidence in our financial system.
       I am writing to urge you to vote in favor of the Emergency 
     Economic Stabilization Act. This plan is critical to the 
     well-being of every community in California and across the 
     nation. Swift action in Congress is needed to restore 
     confidence in our financial system.
       Let's be clear, this plan is not a ``bailout'' for Wall 
     Street. To the contrary, the plan is about protecting Main 
     Street.
       We are currently witnessing the initial consequences of 
     depositors and investors withdrawing assets from a financial 
     system in which they have lost confidence and putting them in 
     FDIC-insured accounts and federal obligations. That means 
     there's little money for normal commerce, and what money is 
     available is too costly. This dramatically reduces economic 
     activity, translating into fewer jobs, lower wages, reduced 
     savings and threatened pensions. If the stabilization plan 
     fails, these outcomes will materialize in scale.
       California's businesses, both large and small, also face 
     the prospect that banks will not be able to renew loans. It 
     goes without saying that, when people and companies can't get 
     the money to buy cars, inventory goods, plant crops, expand 
     business and go to school, economic activity slows down, 
     leading to job losses, wage reductions, savings declines and 
     pension failures all along Main Street, California.
       The situation is urgent. The crisis we face demands swift 
     action and bipartisan leadership. Congress must pass this 
     economic stability plan without further delay.
           Sincerely,
                                            Arnold Schwarzenegger,
     Governor.
                                  ____


  [From the California State Treasurer Bill Lockyer, October 1, 2008]

  Treasurer Lockyer Urges Congress To Adopt Economic Recovery Plan To 
       Thaw Market for Infrastructure Bonds, Cash-Flow Borrowing

       Sacramento.--State Treasurer Bill Lockyer today warned that 
     a continuing failure by Congress to adopt a national economic 
     recovery plan jeopardizes California's ability to sell 
     infrastructure bonds and short-term notes to meet the State's 
     cash flow needs. In releasing the 2008 State of California 
     Debt Affordability Report, Lockyer made the following 
     statement:
       ``For 10 days, state and local governments have been closed 
     out of credit markets--long-term and short-term--in spite of 
     the fact that they represent no default risk and provide a 
     good tax-free return to investors. The credit market is 
     frozen because financial institutions are afraid to commit 
     capital amid enormous uncertainty. Congress and the President 
     need to adopt a responsible recovery plan, and get the job 
     done quickly.
       ``The State and local issuers need certainty that thaws 
     credit markets and eases access to crucial financing. Without 
     action, we will be unable to sell voter-approved bonds for 
     highway construction, schools, housing or water projects. 
     More urgently, because the State budget was so late, we have 
     only four short weeks to complete what otherwise would be a 
     routine revenue anticipation note sale to meet the State's 
     cash flow needs. Without prompt federal action to address the 
     economic crisis, we may have no market access to conduct that 
     short-term borrowing transaction. That means the State's cash 
     reserves would be exhausted near the end of October. Payments 
     for teachers' salaries, nursing homes, law enforcement and 
     every other State-funded service would stop or be 
     significantly delayed. And California's 5,000 cities, 
     counties, school districts and special districts would face 
     the same fate.''
       The 2008 Debt Affordability Report recounts the year's 
     turmoil in capital markets, how it affected the State, and 
     how the State responded to protect taxpayers. The report also 
     details the Lockyer-led effort to end rating agencies' 
     discriminatory treatment of municipal bond issuers. The 
     current system harms taxpayers and misleads investors. The 
     report is available at www.treasurer.ca.gov.

  Mr. BACHUS. Madam Speaker, I yield 2 minutes to gentleman from Texas 
(Mr. Hensarling).
  Mr. HENSARLING. Madam Speaker, we all understand that without action 
many of our citizens will find themselves laid off from their jobs. 
They won't be able to refinance their homes. This crisis is real.
  House conservatives know that inaction is not an option, and we have 
worked tirelessly to put different plans, ideas, and legislation on the 
table to remedy the crisis. We take some measure of pride in knowing 
that the underlying legislation has now been improved twice. We believe 
our efforts help.
  But, Madam Speaker, I still have many fears about the legislation 
before us. No one knows if this plan will truly work. We all hope it 
does. No one knows the true mount of taxpayer liability. The Secretary 
of the Treasury can go through $700 billion in no time flat and come 
right back to Congress for $700 billion more.
  I fear that this legislation still remains more of a bailout than a 
workout. I fear that it undermines the ethic of personal 
responsibility. I fear that it still rewards bad behavior and punishes 
good. But my greatest fear, Madam Speaker, is that it fundamentally 
changes the role of the government in our free enterprise economy and, 
despite its current problems, this economy remains the envy of the 
world.
  How can we have capitalism on the way up and socialism on the way 
down? If we lose our ability to fail, will we not soon lose our ability 
to succeed? If Congress bails out some firms and sectors, how can it 
say no to others?
  We must be very careful as we address this financial crisis that we 
ensure that any short-term gain does not come at the expense of even 
longer term pain, that being the slippery slope to socialism.
  Madam Speaker, the thought of my children growing up in an America 
with less freedom, less opportunity, and a lower standard of living is 
a long-term pain I cannot and will not bear. Therefore, I will vote 
again ``no'' on this legislation. I vote ``no'' with some doubt. But, 
Madam Speaker, there is a better way.
  Mr. FRANK of Massachusetts. Madam Speaker, ever mindful of the danger 
that George Bush will lead us down the road to socialism, we will be 
monitoring this very closely.
  I now yield 1 minute to the gentleman from Georgia (Mr. Marshall).
  Mr. MARSHALL. Thank you, Mr. Chairman. As I sit here listening to 
this, I realize that those watching must be very confused. It's a very 
difficult subject. It's very difficult to figure out what the right 
thing to do is. As far is I can tell, it's quite clear what the right 
thing to do is, and that is pass this bill, with all its imperfections, 
to address an underlying problem with our credit markets, which will 
have damaging long-term effects on our real economy, on jobs, on 
savings, on the dreams of Americans.
  But what Americans need to understand is that we are going to get 
through this. With all the argument, the fussing, the fighting, we are 
going

[[Page 23957]]

to get through this. This country is going to be a better country 5 
years from now, 10 years from now, than it is today. It should be 
proud. It should keep its head up. It should be confident.
  All of those who are in the lending industry, the banking industry, 
should be confident in the future of America, and comfortable with the 
idea that we need to just get back on track quickly for the sake of all 
Americans so that we can be the strong country that America deserves to 
be in the future.
  Mr. BACHUS. Madam Speaker, I yield 2 minutes to the gentlelady from 
Illinois (Mrs. Biggert).
  Mrs. BIGGERT. I thank the gentleman for yielding.
  Madam Speaker, on Monday it was with reluctance that I voted to 
oppose the earlier version of this bill. I did so not because I 
believed there was no urgent need to act. On the contrary, I believed 
we had to act quickly, but we had to do it right.
  I've fought hard to present alternatives and add taxpayer 
protections. Working with some great colleagues on both sides of the 
aisle, we offered options that ranged from insuring instead of buying 
mortgage-backed securities, to tightening the language on possible 
losses to the Treasury, to injecting capital through tax cuts for 
repatriation of foreign earnings and more. Working with Mr. LaTourette, 
we even attempted to limit the initial outlay to $250 billion so that 
Congress could come back in a month and reassess the need for the 
remainder of the $700 billion.
  Over the last few days, we've made more progress. The FDIC is raising 
its insurance limit to protect people's savings. The SEC is revising 
its mark-to-market accounting guidelines, and we have included middle 
class tax relief. But there still are many changes I would like to see. 
Unfortunately, the volatility in the market is threatening the 
financial security of my constituents and millions of American 
families, small businesses, and retirees.
  Make no mistake: the latest compromise is not the best package. It's 
the package that can move through Congress in time to protect the 
economy from lasting damage. With the clock ticking, credit markets 
seizing up, and the market swinging wildly, it is clear that the time 
for seeking better options has run out. I'm glad we held out for the 
taxpayer protections that we got. But if we don't act now, those who 
are least to blame for this mess will suffer the most.
  So it is with reluctance that I support this bill today and urge my 
colleagues to do the same. Our work is by no means complete. I look 
forward to revisiting the issue as Congress monitors the program to 
ensure that we minimize risks and that the taxpayers see a return on 
this investment.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield for a unanimous 
consent request to a gentleman from Ohio who has been very seriously 
engaged on this issue.
  Mr. KUCINICH. I rise in opposition to this bill.
  The public is being led to believe that Congress has reconsidered its 
position because we have before us a better bill than we had a few days 
ago. It is the same bill plus hundreds of new pages for hundreds of 
millions of tax breaks. What does this have to do with the troubles of 
Wall Street?
  Driven by fear we are moving quickly to pass a bill, which may 
produce a temporary uptick for the market but nothing for millions of 
homeowners whose misfortunes are at the center of our economic woes. 
People do not have money to pay their mortgages. After this passes, 
they will still not have money to pay their mortgages. People will 
still lose their homes while Wall Street is bailed out.
  The central flaw of this bill is that there are no stronger 
protections for homeowners and no changes in the language to ensure 
that the secretary has the authority to compel mortgage servicers to 
modify the terms of mortgages. And there are no stronger regulatory 
changes to fix the circumstances that allowed this to happen.
  We should have created a mechanism for our Government to take a 
controlling interest in mortgage-backed securities and use our power to 
work out a new deal for the homeowners. We could have done this. We 
should have done this. But we didn't.
  Now millions of Americans will face the threat of foreclosure without 
any help. And the numbers will soon rise for a number of reasons. Not 
only because of the Alt-A, jumbo mortgages which will soon be reset at 
higher interest rates, but because the London Interbank Offered Rate 
(LIBOR) is pushing up rates on adjustable mortgages and more than half 
of the U.S. adjustable mortgage rates are tied to LIBOR. Homeowner 
defaults will grow in significant numbers. Let's see if Congress will 
be as quick to help homeowners on Main Street as they were to help 
speculators on Wall Street.
  Now the Government will have to borrow $700 billion from banks, with 
interest, to give banks a $700 billion bailout, and in return the 
taxpayers get $700 billion in toxic debt. The Senate ``improved'' the 
bailout by giving tax breaks to people in foreclosure. People in 
foreclosure need help paying their mortgage, they do not seek tax 
breaks.
  Across our Nation, foreclosures continue to devastate our 
communities, people are losing their jobs, and the prices of 
necessities are skyrocketing. This legislation, just like the one we 
defeated last week, will do nothing to solve the problems plaguing 
American families or help them to get out from underneath the 
oppressive debt they have been forced to take on.
  Unfortunately, there has been no discussion of the underlying debt-
based economy and the role of our monetary system in facilitating the 
redistribution of wealth upwards.
  It is not as though we had no choice but to pass the bill before us. 
We could have done this differently. We could have demanded language in 
the legislation that would have empowered the Treasury to compel 
mortgage servicers to rework the terms of mortgage loans so homeowners 
could avoid foreclosure. We could have put regulatory structures in 
place to protect investors. We could have stopped the speculators.
  This bill represents an utter failure of the democratic process. It 
represents the triumph of special interest over the triumph of the 
public interest. It represents the inability of Government to defend 
the public interest in the face of great pressure from financial 
interests. We could have recognized the power of Government to prime 
the pump of the economy to get money flowing through out society by 
creating jobs, health care, and major investments in green energy. What 
a lost opportunity! What a moment of transition away from democracy and 
towards domination of America by global economic interests.
  Years ago, in a Cleveland neighborhood, I saw a hand-scrawled sign 
above a cash register in a delicatessen. The sign said: ``In God We 
Trust, All Others Pay Cash.'' The sign above the Speaker's rostrum 
reads ``In God We Trust,'' but today we are paying the cash to Wall 
Street.
  It is not as if we had no other choice but to pass this bill.

                     [From Ohio.com, Oct. 3, 2008]

             Foreclosure Victim, 90, Apparently Shoots Self

                           (By Phil Trexler)

       At the age of 90, Addie Polk found herself in foreclosure 
     this week, about to be forced from the home she's lived in 
     for nearly 40 years.
       So, with a gun in her hand, the Akron widow apparently shot 
     herself in the chest Wednesday afternoon as deputies were 
     knocking on her door with eviction papers in hand.
       While a nation reels in financial crisis from years of 
     mortgage abuse, Polk is recovering at Akron General Medical 
     Center, awaiting word on where she will live when she's 
     released.
       Meanwhile, city leaders say Polk has become Akron's 
     ``poster child'' for victims of predatory lenders.
       ``I think this is a case where we need to step in and help 
     this lady if she is so desperate to shoot herself because she 
     can't pay her mortgage,'' Akron Councilman Marco Sommerville 
     said.
       Court records show Polk took out a 30-year, 6.375 percent 
     mortgage just four years ago for $45,620 with a Countrywide 
     Home Loan office in Cuyahoga Falls. She took out a line of 
     credit that same day for $11,380.
       Her La Croix Avenue home was appraised by Summit County in 
     2004 at $31,230.
       The Countrywide branch did not return a call for comment 
     Thursday.
       Polk essentially owed the same $45,000 when the Federal 
     National Mortgage Association (Fannie Mae) filed for 
     foreclosure on her home in 2007. Fannie Mae assumed the 
     mortgage from Countrywide.
       Following foreclosure this year, Polk's six-room, 101-year-
     old home was bought by Fannie Mae at sheriffs auction for 
     $28,000.
       Her house now belongs to the lender.
       Summit County sheriffs deputies say Polk ignored multiple 
     notes and letters leading up to Wednesday's eviction. She 
     also ignored the foreclosure action filed in court.
       It wasn't until Tuesday that she called the sheriffs office 
     in disbelief. The next day was eviction day.

[[Page 23958]]

       ``I'm positive she believed the deputies were going to come 
     in, clean out the house and set her and her things on the 
     curb, because they did that decades ago. But that's not what 
     happens nowadays,'' sheriffs Lt. Kandy Fatheree said.
       ``I'm sure she had to be thinking back to the Great 
     Depression when people were set out on the street. She had to 
     be scared to death.''
       Deputies Dave Bailey, Jason Beam and Don Fatheree went to 
     the home about 1 p.m. Wednesday to meet with a Fannie Mae 
     representative and escort Polk from the house. They said they 
     had no idea the woman was 90 years old.
       The deputies' knocks were unanswered, and they were about 
     to leave because the Fannie Mae representative failed to 
     show. Then, they heard a banging noise coming from the home's 
     second floor.
       Next-door neighbor Robert Dillon heard it, too. More bangs 
     followed.
       Dillon borrowed a neighbor's ladder and climbed through 
     Polk's second-floor bathroom window and walked into her 
     bedroom. She was lying on her side, a gun next to her on the 
     bed.
       ``I'm thinking to myself, `Why does Mrs. Polk got a gun?' 
     '' Dillon said. ``After looking around, I touched her 
     shoulder and saw the blood and I said, `Shucks, she done shot 
     herself.' ''
       Dillon, 62, shouted to the deputies, who alerted Akron EMS. 
     Polk apparently shot herself more than once with a small-
     caliber handgun, police said.
       Polk and her late husband, Robert, a Goodrich retiree, 
     moved into the home in 1970. He died in 1995, but Polk 
     continued to live independently, but alone, still driving her 
     late model Chevrolet to the grocery store and church.
       She appeared to be struggling financially, Dillon said, but 
     he said she never spoke of the foreclosure action looming for 
     more than a year.
       She had no children of her own and few visitors, he said.
       ``She didn't need no help. She got around good,'' he said.
       It is unclear how Polk used the loan money. Dillon said he 
     didn't notice any work being done on the property, and 
     deputies said her front porch was soft from years of neglect.
       ``Where'd the money go?'' Dillon asked.
       Sommerville said he is working with the city and the county 
     to assist Polk with housing, once she is released from the 
     hospital.
       He said the city has been awarded more than $8 million in 
     federal grants in the wake of the mortgage crisis to help 
     cope with the crush.
       Sommerville said Polk's fate humanizes the problem for the 
     rich and poor. And he urged those facing foreclosure to seek 
     assistance through various local and county agencies.
       ``It's a sad situation,'' he said. ``She's the poster child 
     for this foreclosure crisis we are facing.''

  Mr. FRANK of Massachusetts. I yield 2 minutes to a member of the 
Committee on Financial Services, who has been very much concerned with 
the question of foreclosure, the gentleman from Georgia (Mr. Scott).
  Mr. SCOTT of Georgia. Let me first say, Chairman Frank, how much we 
all appreciate the outstanding job you have been doing on this issue.
  Chairman Frank, it's very important that as we consider this 
financial package, we make sure we do everything we possibly can to 
reduce the number of foreclosures and keep families in their homes. We 
are losing 6,300 foreclosures every single day. In this regard, I have 
been working on, and I presented to you a four-point package to reach 
this goal. At this time, I certainly want to thank my collaborator, Dr. 
James Galbraith from the University of Texas, for his advice on this.
  Essentially, what we want to do is really, quite honestly, in the 
spirit of our great Treasury Secretary, Alexander Hamilton, for I 
believe we need to give the Treasury Secretary efficient tools so that 
he will be able to allow us to be able to use a program such as our 
HOPE for Homeowners program to make sure that we are doing everything 
we do as he purchases these assets to put the ingredients in place that 
we can bring down these foreclosures and keep individuals in their 
homes, and I have presented this four-point plan to you.
  Mr. FRANK of Massachusetts. If the gentleman would yield back to me 
briefly, I thank him very much. He has been working hard on this, and 
has also not just professed this in general, but has made some specific 
suggestions.
  Of the four points, two will take separate legislation, and I will 
work with the gentleman because I am in agreement with him on them, in 
concept. Two of them, however, are, I believe, able to be accomplished 
in this bill. I have spoken to the Secretary of the Treasury and, I 
believe, working together with the gentleman, we can make sure.
  Let me just say specifically. Asset managers to support loan 
modifications will be very important for this success. The bill 
encourages the Treasury to consider the FDIC, which has been 
superlative in this regard, to play this role. Also, Treasury, under 
this bill, can buy virtually any mortgage asset, and we direct them to 
coordinate with the other agencies, like Fannie Mae and Freddie Mac and 
the Federal Home Loan Banks, and to maximize modifications through the 
program we just adopted.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. FRANK of Massachusetts. I yield the gentleman 30 additional 
seconds.
  We will expect the Secretary to use both direct assets and design--to 
provide special considerations for assets where HOPE for Homeowners or 
other programs have been used. In other words, we are directing the 
Treasurer to use his authority to maximize, exactly as the gentleman 
has proposed. We will continue to press the Secretary, and I believe we 
don't have to press too hard. He is ready to do this. And we will work 
with the gentleman on the other issues.
  Mr. SCOTT of Georgia. Let me thank you, Mr. Chairman, for including 
certainly two of those four. I deeply appreciate that. Homeowners who 
are struggling across this country appreciate that. We thank you for 
that. I want you to know that I will support the bill and I will 
encourage my colleagues to do the same.
  Mr. FRANK of Massachusetts. I will yield myself 15 seconds to say 
that the gentleman can tell his brother-in-law, Hank Aaron, he hit .500 
today, and that's pretty good in any league.
  Mr. SCOTT of Georgia. I certainly will. Thank you, Mr. Chairman.

                              {time}  1145

  Mr. BACHUS. Madam Speaker, I yield 2 minutes to the gentleman from 
New Jersey (Mr. Garrett).
  Mr. GARRETT of New Jersey. Madam Speaker, I come to the floor 
realizing that there is a problem on Wall Street that will affect Main 
Street, and I also come here today hopeful, but also realistic.
  I will not be supporting this bill today, but I know the bill will 
pass later on because so much has been added to it to get the votes. 
But I am hopeful then that all the promises that have been made by the 
proponents of this bill will come true, after we give $700 billion to 
Secretary Paulson and whoever follows him 2 or 3 months from now. The 
promise is that the markets will open up and the markets will go up and 
credit will be free-flowing soon.
  But I come here also realistic, realistic to know that if you don't 
tackle the underlying problems, we will be right back in this House 
again on this floor seeking more money and more reform. Realistic also 
to know if you don't allow for alternatives, you will not get the best 
bill. And we know that Speaker Pelosi and the White House were not open 
to listening to any alternatives, and there were alternatives out 
there. And realistic also in knowing that if you fail to investigate 
earlier enough, these problems will come up, as they have.
  Back in the spring of this year, we, my Republican colleagues, asked 
for investigations on this matter, and we were rebuffed, being told by 
the chairman, ``I do not think it is necessary that we have hearings on 
the soonest possible date.''
  Madam Speaker, I come here not in support of this bill, but in 
support of doing something, in light of the remarks of economist Robert 
Shimer, who said, ``The U.S. has long been a beacon of free markets. 
When economic conditions turn sour in other countries, we give very 
clear instructions on what to do; balance the budget, maintain free 
trade, the rule of law, and do not prop up failing enterprise.''
  He said it. I agree with him. That has always been the U.S. approach, 
and I believe it is the correct approach.

[[Page 23959]]

  But when the United States ignores its own advice in this situation, 
we reduce our credibility of this stance. Rewriting the rules of the 
game at this stage will therefore have serious ramifications, not only 
for the people of this country, but for the globe and the world as 
well. You see, Madam Speaker, the social costs of this are far, far 
greater than the $700 billion that we talk about today.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield to the gentleman 
from Illinois (Mr. Davis) for the purpose of making a unanimous consent 
request.
  Mr. DAVIS of Illinois. Madam Speaker, I rise in favor of the Senate 
amendments.
  I rise in support of the bailout proposal before us, and I do not 
voice my support without some trepidation. However, I feel that the 
state of our economy is such that we have no logical and prudent choice 
except to act and to do so now.
  Like many people across America, I am not happy about using public 
money to benefit the robber barons on Wall Street. Therefore, I am 
pleased to see the high level of independent oversight contained in 
this package. I know that many people are saying that there is no real 
help for home owners, for people facing foreclosure, and for those who 
have already lost their homes and/or their life savings. Therefore, I 
am pleased to note that this package provides for loan modifications 
which state concretely that when:
  1. The government owns the entire loan.
  2. The Secretary of the Treasury and other agencies [FDIC, Federal 
Reserve, FHFA, GSE's] must:
  A. coordinate efforts to gain ownership and control.
  B. create a Government-wide plan to maximize loan modifications.


                  I. Government has a partial interest

  The Secretary must:
  1. Work with services to modify loans under Hope for Homeowners 
programs now strengthened to: (a) Allow homeowners to refinance before 
reset, (b) provide flexibility on loan-to value-ration, and (c) speed 
up waivers for second mortgage holders.
  2. The Secretary must also fund support to services to ensure the 
ability to do loan modifications, i.e., loans to cover capital 
advances.


                II. Government has no ownership interest

  1. Will offer loan guarantees to induce mortgage holders to make 
substantial loan modifications.
  2. Applies to loans that may not be eligible for other Government 
refinancing programs.


                        III. Tenant Protections

  1. The Secretary where permissible shall permit bona-fide tenants 
current in their rent to remain in their homes.
  2. The interagency plan for maximizing loan modifications must 
include protecting Federal, State, and local rental subsidies and 
ensuring that any loan must take into account the need for operating 
subsidies.
  Madam Speaker, I know that there has been and continues to be a great 
deal of talk about sweeteners. Well I use Equal, and I am ecstatic to 
note that in this package, serious consideration is being given to the 
concept of mental health parity.
  If there is a sweetener which would have influenced my position and 
my vote, this is it. No, this is not a perfect bill and I am sure that 
some people on Wall Street will benefit; but I do believe that more 
people on Main Street will feel safer and more secure that their 
investments are being protected, that their homes and insurance 
policies will be saved and their children's futures will be more 
secure. I vote ``yes.''
  Mr. FRANK of Massachusetts. I now yield 2 minutes to the gentleman 
from Michigan (Mr. Dingell), the chairman of the Commerce Committee, 
very knowledgeable in these subjects.
  Mr. DINGELL. Madam Speaker, I rise in support of the legislation and 
commend the distinguished chairman of the committee, Mr. Frank, and our 
Speaker, Ms. Pelosi, for taking a bad bill from the Bush administration 
and turning it into a bill which protects taxpayers, contains important 
oversight provisions and ensures that there will be proper control of 
pay and no golden parachutes for executives whose recklessness has 
contributed to this crisis. Inaction is not an option here.
  I wish to commend the gentleman from Massachusetts for the 
extraordinary job he has done, and I would like to engage him in a 
brief colloquy.
  Mr. Chairman, domestic automobile manufacturers face the most 
difficult conditions they have faced in decades. We need to do 
something to help unfreeze the credit markets for that industry, as 
well as all others.
  As I read the legislation, the Secretary has authority to purchase 
from a motor vehicle finance company traditional car loans and 
mortgage-related papers such as home equity loans used to purchase a 
car or truck. Is that interpretation correct?
  Mr. FRANK of Massachusetts. If the gentleman will yield, yes, it is. 
And I believe, as he and I have discussed, that the danger to the 
purchase of automobiles is one of the great ones that we face here, and 
it is an important reason for moving this bill. Yes, I very much agree 
with what he just said.
  Mr. DINGELL. I want to thank the gentleman, and I also want to point 
out one additional point of clarification, that if the Federal Reserve 
Board would use the authority it has to address extraordinary 
circumstances in credit markets, finance companies, particularly motor 
vehicle finance companies, would have access to capital that would help 
them to finance dealer floor plans and make consumer loans.
  Would the gentleman support a decision by the Federal Reserve to make 
funds available, as long as the companies face unusual and 
extraordinary market conditions?
  Mr. FRANK of Massachusetts. If the gentleman would yield, I would say 
absolutely, because this is one which would have a double positive 
effect: It would help with the credit crisis, and it would help one of 
our most important industries in the United States from facing 
difficulties.
  Mr. DINGELL. I want to thank the gentleman, and commend him for his 
extraordinary leadership in this difficult matter. No man could have 
done a better job.
  Mr. BACHUS. Madam Speaker, I yield 2 minutes to the gentleman from 
California (Mr. Gary G. Miller).
  Mr. GARY G. MILLER of California. Madam Speaker, I rise to say I 
absolutely support free market principles. I have no interest in 
bailing out Wall Street. I think that we need to reduce the size of 
government, and I believe that government intervention should not 
occur.
  But this is not a normal situation. I have not seen anything like 
this. I wasn't around during the Great Depression, but having read 
about it, I have not seen anything like this in our financial services 
industry since then.
  Banks are not lending to banks, and if banks don't lend to banks, the 
access to credit in the private sector really is going to dry up, 
because if they won't lend to each other, they are not going to want to 
lend to the private sector.
  Small businesses in this country are starting to hurt now. I spoke to 
a friend I have known for over 30 years who is a contractor who works 
for a very large company, and the company doesn't know right now, the 
employees, that many are going to get laid off, because their lines of 
credit have been dramatically reduced, and without credit in this 
country, it is going to have an impact on businesses, and if businesses 
are impacted, they are not the bad people, they are the ones who 
provide jobs in this country.
  This bill, I will say, is not perfect, but there are not many options 
we have today, and the last thing we can afford to do is do nothing and 
let the system start to crumble.
  Small people, I say ``small'' because they are not business people, 
they are trying to work for a living, and I take the word ``small'' 
back, average people out there who are just working for a living and 
trying to make ends meet, supporting their families and paying their 
bills, they are the ones that are going to get hurt. This is not to 
bail out a bunch of fat cats on Wall Street. The people who made their 
money two or three years ago, they made their money. You can't impact 
that. We can change things in the future to change the law to make sure 
people are protected and their investments are protected and people 
don't take advantage of the system, and that has to happen.
  Now, this bill has grown in size, but much of it has to do with tax 
extenders. It is not pork. When you are talking about allowing child 
tax credits to

[[Page 23960]]

continue, like we have in the past, the alternative minimum tax patch 
to continue, research and development tax credit, teacher expense 
deductions, those things have been added to this bill and the bill has 
absolutely grown in size.
  But let's not lose the focus on what we are trying to do here today. 
The thing we are trying to do is stabilize the economy, not bail out 
individual businesses; make sure the economy can continue to run, 
people can work and businesses can operate. That is why I am rising in 
support of this bill and ask for an ``aye'' vote.
  Mr. FRANK of Massachusetts. Madam Speaker, the gentleman from 
Colorado (Mr. Perlmutter) has been one of the hardest working members 
of our committee, and I yield him 2 minutes.
  Mr. PERLMUTTER. Madam Speaker, I would like to enter into a colloquy 
with the chairman.
  Mr. Chairman, there has been a lot of discussion about making sure 
that businesses, homeowners and farmers all over this country have 
access to credit to buy inventory or finance a new home or purchase 
seed for next year's crops. We have several agencies within the Federal 
Government whose mission it is to provide credit directly to Main 
Street, to small businesses, to homeowners, to farmers and to people 
all over this country. Those agencies include the Small Business 
Administration, the Federal Home Loan Banks and the Farm Credit 
Administration.
  Mr. Chairman, will those agencies be utilized to make sure that some 
of the funding or credit provided by this legislation will go directly 
to Main Street?
  Mr. FRANK of Massachusetts. If the gentleman will yield, the answer 
is yes. The bill fully authorizes the Secretary of the Treasury to do 
that, and I and others, including the gentleman from Colorado, will be 
working to make sure that he does, and I have every intention to 
believe that they intend to.
  Mr. BACHUS. Madam Speaker, I yield 2 minutes to the gentleman from 
Connecticut (Mr. Shays).
  Mr. SHAYS. There aren't many times we get a second chance to do the 
right thing. This is the kind of vote our constituents sent us to make 
on their behalf. It is a legacy vote, one of the most important votes 
we will ever cast, a vote we will carry with us the rest of our lives.
  The majority of my constituents have voiced opposition to this bill, 
but the fact is, the financial markets lost $1.2 trillion in one day 
when we failed to act Monday afternoon. Some of that has been restored, 
but we are witnessing the possibility of our economy coming to a 
grinding halt.
  I don't intend to play Russian roulette with our economy, or my 
constituents, which is why I voted for this bill when it came before us 
on Monday, and why I will vote for it again today.
  Many of us on both sides of the aisle agree this is not a perfect 
bill. In fact, some of my financially savvy constituents have educated 
me about other ways we could intervene.
  The bottom line is this legislation is a short-term solution to 
address a longer-term problem. Those of us back next Congress, and I 
make no assumption about my own election, truly have our work cut out 
for us.
  This bill is for Main Street. It is for college and retirement 
savings and the value of homes. It is for access to car loans, student 
loans and mortgages. It is the ability of small businesses to borrow, 
expand, stock shelves, meet short-term cash needs such as payroll, and 
invest in new plants and equipment.
  The credit market is tightening, strangling our economy. Liquidity 
has dried up and money is simply not getting to the individuals and 
businesses who need it. Consumers, savers and investors are losing 
confidence.
  I am grateful the bill before us today will increase deposit 
insurance to $250,000, a recommendation I had made, so American 
depositors know their money in their bank is safe.
  This crisis requires all of us to put our country first and our 
ideology and partisanship aside. We need to pass the Emergency Economic 
Stabilization Act and then go back home and face the voters. Those of 
us who are fortunate enough to return will have to come back, roll up 
our sleeves and do everything we can to help our country grow and our 
prosperity return.
  Yesterday, the president of a community bank wrote me:

       Congress needs to understand the consequence of money 
     moving out of banks.

  Deposits enable banks to loan and expand the economy.
  Withdrawals force banks to call in loans and contract the economy 
ten-fold.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield 1 minute to my 
colleague, the gentleman from Massachusetts (Mr. Neal) from the Ways 
and Means Committee.
  Mr. NEAL of Massachusetts. I would like to thank the gentleman for 
yielding and I would like to ask him a question about the bill.
  It is my understanding that the bill is designed to give all banks, 
especially community banks, which are very important in central and 
western Massachusetts, and because they are heavily regulated don't 
have any problems, regardless of size or organizational structure, 
ordinary tax treatment for certain holdings of Fannie Mae and Freddie 
Mac preferred stock. Banks, and in particular some State-chartered 
institutions, are allowed to hold such stock in passive investment 
vehicles where the bank is the majority investor under Federal law.
  I encourage the chairman to work with the Secretary of the Treasury 
to ensure that all institutions have access to this relief, if he 
agrees it is intended to have an expansive reach.
  Mr. FRANK of Massachusetts. If the gentleman will yield, I agree 
completely. It would be a distortion of the clear meaning of this 
provision, widely supported, to do anything else but, and we will work 
to make sure that happens.
  Mr. NEAL of Massachusetts. I thank the chairman.
  Mr. BACHUS. Madam Speaker, I yield 1 minute to the gentleman from 
Indiana (Mr. Pence).
  Mr. PENCE. Madam Speaker, our Nation is confronted by a serious 
financial crisis. The President and Congress were right to act with all 
deliberate speed, and I am confident every Member of this body is 
motivated by the best interests of this country.
  It should be said that Republican leaders and my colleagues worked 
hard to improve this bill. They removed outrageous subsidies, and today 
the bank deposits of Americans are safer and the balance sheet of their 
local bank is more secure because of Republican leadership.
  But even with these important improvements, this legislation remains 
the largest corporate bailout in American history. It forever changes 
the relationship between government and the financial sector and passes 
the cost along to the American people.
  The sad part is, Madam Speaker, there are no easy answers, but there 
were alternatives. House Republicans offered an insurance program that 
would have required Wall Street, not Main Street, to pay for the cost 
of this recovery, and fast-acting tax relief to strengthen our economy 
from within.
  Teddy Roosevelt said, ``An American must face life with resolute 
courage, win victory if he can and accept defeat if he must, without 
seeking to place on his fellow man a responsibility which is not 
theirs.''
  With this bill, we place upon the American public a responsibility 
which is not theirs, bailing out financial institutions after they made 
irresponsible decisions. This we should not do.
  I urge my colleagues to join me in opposing this legislation.
  Mr. FRANK of Massachusetts. I now yield 1 minute to the Chair of the 
Capital Markets Subcommittee, who has been very carefully watching this 
situation, the gentleman from Pennsylvania (Mr. Kanjorski).

                              {time}  1200

  Mr. KANJORSKI. Madam Speaker, I congratulate the chairman on a job 
well done.
  I guess nobody is happy with this bill. I am less happy with this 
bill as it has come back from the Senate. But the reality is, we are 
facing an abyss, and it is important that this House of Representatives 
act not as a composite

[[Page 23961]]

of Republicans or Democrats but as Americans.
  America is watching us now. The world is watching America now. It is 
up to us to do the job, and this bill is the best at this time that we 
can do. I urge my colleagues on both sides of the aisle to gather today 
and get the internal courage to make a vote for what is good for 
America and not what is necessarily good for us individually or for our 
party as a single party. This is a vote for America.
  Mr. BACHUS. Madam Speaker, I yield 2 minutes to the gentleman from 
Wisconsin (Mr. Ryan).
  Mr. RYAN of Wisconsin. Madam Speaker, over the last few days we have 
heard about LIBOR, commercial papers, spreads, swaps, about the credit 
markets. This chart shows you just how bad things are in the credit 
markets. But what does any of this stuff mean? What is credit? Credit 
is confidence, it is credibility, trustworthiness in someone's ability 
to pay.
  Right now, our system is plagued with fear. There is no confidence. 
There is no trust. Lenders don't trust borrowers; sellers don't trust 
buyers.
  This bill, as flawed as it is, goes right to this issue. If it works, 
it stops that fear from spreading into outright panic.
  Will this bill prevent a recession? No, I don't think it will. But it 
will help us make sure that a recession is short and shallow, and not 
deep and long.
  I know one thing for sure. Doing nothing is the worst thing we could 
do. This is one of those once-in-a-century kind of crises, and we need 
to act to prevent it from becoming a once-in-a-century kind of a 
recession. In Wisconsin, we are already beginning to see the beginning 
of this. We are already starting to see the job losses.
  For me, this is a conscience vote. We of all people understand public 
opinion. We know it is not popular. But we see that gathering storm, we 
see it out there on the horizon. Our constituents may be outside mowing 
their lawns and looking up and seeing a sunny sky, but we see those 
storm clouds developing. And I want to know for sure that when the 
choice was made, I had made the decision to prevent that storm from 
gathering, to prevent those jobs from being lost, to protect our 
constituents from losing their retirement funds, from not getting that 
home loan, that car loan.
  I want to make sure that what we do here today snaps that fear out of 
the market and preserves those jobs, and makes sure that the bumpy road 
we are going to have is not nearly as bumpy as it would otherwise be if 
this bill fails.
  Mr. FRANK of Massachusetts. I now yield 1 minute to the chairman of 
the Appropriations Committee, the gentleman from Wisconsin (Mr. Obey).
  Mr. OBEY. Madam Speaker, I agree with my colleague from Wisconsin 
about once a century, and this is that occasion.
  For all of my 39 years in Congress, I have fought against trickle-
down economics and the mindless deregulation that has produced today's 
economic crisis. I opposed the repeal of Glass-Stiegel, which has made 
the problem so much worse.
  The boy geniuses on Wall Street do not deserve to be rescued. But if 
they fall off their perches at the top of the economic ladder, they 
will crush innocent people far down that ladder on lower rungs.
  Sometimes in life, if we are responsible, we have to clean up not 
just the messes that we have created but the messes that others have 
created as well. This is one of those times. This package will not 
prevent a severe recession. We are going to see that, but it can buy us 
more time to make more basic changes that will stand this country in 
good stead over the long haul, and I urge its adoption.
  Mr. BACHUS. Madam Speaker, I yield 2 minutes to the gentleman from 
Ohio (Mr. LaTourette).
  Mr. LaTOURETTE. I thank the gentleman for yielding.
  There is something in life called the Hobson's choice. And I never 
thought I would be here, and I think Dave Hobson who is retiring 
probably thinks it is named after him, but it is not. And what we are 
being told today is that we either give $700 billion to the Secretary 
of the Treasury because he says that is what is needed, in a plan that 
is untested, unworked; or, and if we don't just write this check, we 
are being told that all of our constituents are going to lose their 
life savings, their 401(k)s, their retirements. That is one hell of a 
choice, Madam Speaker.
  And I come today with a big problem. The big problem is, where did 
the number come from? The number, Forbes Magazine last week, Treasury 
spokeswoman: It is not based on any data point. We just wanted to 
choose a really large number. Well, you know what: $700 billion is a 
really large number.
  Last night we took an amendment to the Rules Committee, asked them to 
make it in order to stop this process, slow it down by a day. The vote 
was 8-4, along party lines. Eight Democratic members of the Rules 
Committee, who represent about 4.8 million people, told 305 million 
Americans we couldn't have a vote on that or anything else, including 
measures that are important to Democrats, such as bankruptcy and things 
of that nature.
  This bill left the House and it went over to the Senate, and they 
larded it up: $192 million for rum. I guess we got the pirate vote in 
November. $100 million for NASCAR. $81 million for Hollywood. And my 
favorite, $2 million for wooden arrows for children. Now, I want 
children to have wooden arrows, but it doesn't belong in this bill.
  And I have got to tell you, as a Republican I have never seen--I am 
finishing my 14th year--what just happened on the last vote. And we all 
know that folks back home don't pay attention to the rules. Twenty 
Republicans voted for the Democratic rule. If those 20 Republicans had 
not voted for that rule, we could have had an amendment on the floor, 
saving America $450 billion, which, as our friends like to tell us, is 
4 years in Iraq, and we could have cut the pork.
  As John McCain says, and sadly, for those 20 Republicans and those 
who aided and abetted them: we will make you famous, and you shall know 
their names. Shame on you.
  Mr. FRANK of Massachusetts. Madam Speaker, I would note that one of 
those whose names would be listed is John McCain, who voted for this 
bill in the Senate. So Mr. McCain's name would be at the head of that 
list of the 20.
  I now yield 1 minute to the gentleman from New York (Mr. Nadler).
  Mr. NADLER. Madam Speaker, I voted against the Iraq war resolution, 
the PATRIOT Act, the FISA Act amendments; and I led the opposition to 
the bankruptcy bill just a few years ago, in each case because I 
thought we were being railroaded into unwise actions through the use of 
fear tactics. But I do not believe that to be the case now. Now we face 
a very real crisis.
  The credit markets are shutting down. People will not be able to get 
car loans, loans for store inventories. There will be thousands of bank 
failures, millions of job losses. I believe we stand now literally on 
the brink of the abyss, and that we haven't seen such a situation since 
1931.
  This is in many ways a weak bill. There should have been far more 
help for people facing foreclosures. There should have been bankruptcy 
reforms. There should have been real revenues to pay for it. There 
should have been a real stimulus to the economy. But this is the only 
bill that could be agreed upon now.
  We are not sure this bill will solve the crisis, but it might. It 
will buy us time for a better solution. As between a certainty of 
catastrophe and a possibility of averting that catastrophe, I will vote 
for the possibility of averting the catastrophe. I urge everyone else 
to do so.
  Mr. BACHUS. Madam Speaker, I yield 2 minutes to the gentleman from 
Texas (Mr. Barton), who is ranking member of the Energy and Commerce 
Committee.
  Mr. BARTON of Texas. I want to thank the gentleman from Alabama.
  Madam Speaker, I rise in opposition to this bill. And I am not 
opposed to it for political reasons, I am not opposed to it for 
partisan reasons, I am not opposed to it for emotional reasons. I am 
opposed to it because fundamentally it

[[Page 23962]]

doesn't address the problem that needs to be addressed. We have a 
crisis in our financial markets, we have a crisis of confidence in our 
credit markets, and this bill only indirectly addresses those problems.
  First and foremost, from the taxpayers' standpoint, it is not paid 
for. The underlying bill is going to raise the national debt ceiling 
$1.5 trillion. That is $1,500 billion. If you add the tax extender 
package that came over from the Senate, you end up with a price tag of 
approximately $2 trillion. Absolutely nothing in the bill addresses how 
to pay for those $2 trillion that puts taxpayers at risk. Really, for 
that one reason we should vote against the bill.
  We have talked a lot about the crisis in the credit markets. My good 
friend from Wisconsin (Mr. Ryan) just put up a chart on the LIBOR rate, 
which is the overnight interbank loan rate from London. It is at 4 
percent. It was at 4.5 percent 1 year ago. It is within its normal 
range. The spread has gone up between the overnight Treasury rate and 
the LIBOR rate, but that is because the Treasury rate has gone down to 
2 percent.
  An auto loan that my good friend was talking about, the distinguished 
Financial Services chairman, the auto rate loan right now is 6.5 
percent, about what it was a year ago. The credit markets are working, 
but there are some people holding back credit, hoping that the 
taxpayers will bail them out.
  Fundamentally, we need to address the American economy. This bill 
doesn't do that. You want the value of the dollar to go up? How about 
cutting spending and lowering the deficit? You want to do something on 
auto sales? How about produce more domestic energy to bring gasoline 
prices down.
  Madam Speaker, this is not the bill to address the problem. I hope we 
will vote ``no.''
  Mr. FRANK of Massachusetts. Madam Speaker, I am glad to yield 2 
minutes to our newest member, the gentlewoman from Maryland (Ms. 
Edwards).
  Ms. EDWARDS of Maryland. Madam Speaker, if I might make an inquiry of 
the gentleman from Massachusetts.
  In my reading of the bill, I am trying to understand whether it is 
your belief that the Treasury has the authority under this legislation 
to use some portion of that $700 billion to deal directly with 
homeowners, specifically with homeowners facing foreclosure. And could 
you clarify for me the circumstances under which the Treasury has that 
authority when it wholly owns the mortgage, and when that mortgage is 
being serviced by loan servicing centers?
  Mr. FRANK of Massachusetts. If the gentlewoman will yield, the answer 
is, absolutely. And I can tell you that I have spoken to the Treasury, 
to the Secretary, to tell him that it is very important; that many 
Members will be voting for this bill only with the understanding that 
he will use that authority. And I believe he accepts that fact and will 
act on it.
  Ms. EDWARDS of Maryland. I thank the gentleman for clarifying that.
  In that case, and hearing that clarification, I rise today in support 
of H.R. 1424, the Emergency Economic Stabilization Act. I believe that 
we are just standing at a really important time in our economy. And 
while I voted ``no'' in opposition on Monday for the earlier package, 
hearing your clarification and the authority of the Secretary of 
Treasury to deal directly with addressing foreclosures that many people 
in my community are facing and across this country, I stand in support 
of the bill. I know that it is not enough, but I realize that it is 
important for us to move forward and to create the circumstances, 
whether it is bankruptcy or directly dealing with homeowners, that we 
will be able to help people save their homes.
  Mr. FRANK of Massachusetts. If the gentlewoman would yield again, I 
thank her for prodding us because thanks in part to her efforts, this 
is going to be the best we can do. And I appreciate that.
  Mr. BACHUS. Madam Speaker, I yield 1\1/2\ minutes to the gentlewoman 
from Colorado (Mrs. Musgrave).
  Mrs. MUSGRAVE. I thank the gentleman for his time.
  Some things have changed in this bill, but taxpayers will still be 
picking up the tab for Wall Street's party.
  I was proud to stand together with a group of women from both sides 
of the aisle and ask for real reform, not a temporary fix. We still 
have no fundamental reform to Fannie and Freddie, nothing that 
resembles the amendments that I supported in 2005 and 2007 that would 
have avoided this debacle in the first place.
  Instead of suspending mark-to-market, we are going to study the 
possibility of it. Instead of requiring Wall Street to purchase 
insurance on their mortgage-backed securities and work out of the 
problem, we are still bailing them out.
  I am voting against this today because it is not the best bill, it is 
the quickest bill. Taxpayers for generations will pay for our haste, 
and there is no guarantee that they will ever see the benefits. We 
should not reward bad behavior. Wall Street won't have to learn its 
lesson, and we are not doing anything to keep them from running our 
economy into the ground again.
  I urge my colleagues to join me in voting ``no'' on this bill.
  Mr. FRANK of Massachusetts. I yield for a unanimous consent request 
to the gentleman from Texas, a member of our committee, very much 
concerned with improving economic literacy, Mr. Hinojosa.
  Mr. HINOJOSA. Madam Speaker, I rise in support of H.R. 1424, the 
Senate amendment to the Emergency Economic Stabilization Act of 2008. I 
will vote ``yes.''
  No one wants to be voting on this legislation today because none of 
us want to be in the horrific economic situation in which our country 
finds itself. The greed and lack of regulatory oversight that got us 
into this mess should never have happened. However, today we have to 
deal with the practical economic reality. Inaction is not an option.
  This bill is not about bailing out Wall Street.
  It is about making sure that average Americans can continue to get 
credit for their basic needs like housing, students loans, and 
automobiles. It is about saving pensions for our retirees and making 
sure that the small businesses that are the engines of growth in my 
district can continue to get the credit they need to operate.
  This bill is not perfect and doesn't have everything I would like. 
However, the changes that have been made to the original proposal by 
Secretary Paulson address many of the concerns of my constituents. The 
changes will protect taxpayers, keep people in their homes and rein in 
huge CEO salaries.
  It will allow the American people to see where this money is being 
spent and what is being purchased. Many of the tax extenders that the 
Senate added are needed to keep our country competitive and bring tax 
relief to average Americans.


                               Pell Grant

       The Continuing Resolution included $2.5 billion to address 
     shortfalls and projected cost increases in the Pell Grant 
     Program.
       $750 million was for the FY 2007 Pell shortfall.
       $1.8 billion was to cover anticipated cost increases for FY 
     2009.
       Still needed are $2 billion to address the anticipated 
     shortfall for 2008. This has to be addressed by Fiscal Year 
     2010. Additionally, there another $1 billion may be needed 
     for 2009, which would have to be addressed by 2011.


                             Student Loans

       The frozen credit markets have affected the ability of 
     student loans providers to raise capital to offer student 
     loans.
       The Ensuring Continued Access to Federal Student Loans Act 
     (H.R. 5715) was extended through 2010. This legislation gives 
     the Secretary of Education the authority to purchase federal 
     student loans from lenders, thereby injecting liquidity into 
     the market.
       The $700 billion rescue package gives the Secretary of 
     Treasury the authority to purchase troubled assets that the 
     Secretary determines necessary for the health of the economy. 
     Freeing up the credit markets will help lenders, including 
     student loan lenders, in accessing the capital necessary to 
     make college loans.
  I urge my colleagues to support this bill today so that we can bring 
immediate stability to our markets, our credit system and the economy 
as a whole.
  Mr. FRANK of Massachusetts. I now yield 1 minute to the gentlewoman 
from Ohio (Ms. Kaptur), a former member of the committee who deserted 
us for better things.

                              {time}  1215

  Ms. KAPTUR. Madam Speaker, Mr. Chairman, and dear colleagues, do you

[[Page 23963]]

feel like a herd of bulls and bears are rushing at you? They are. The 
question is will you stand up to them?
  This approach, their approach, will not work. It won't solve the 
credit crunch nor the mortgage foreclosure challenge.
  Wall Street speculators, now the major donors in Federal campaigns, 
have used their considerable influence inside the halls of government, 
especially at the U.S. Treasury, to open up the piggy bank. Meanwhile, 
taxpayers across Main Street, who will pay the bill, will find it has 
no effect on bettering their lives as unemployment increases, 
foreclosures increase, and the squeeze on the middle class increases. 
The Treasury plan throws an ungodly amount at Wall Street. Yet all of 
our Congressional committees but for one were relieved of their duties 
as regular order was dispensed with for a very hasty action.
  We should do what we did back in the '70s, '80s and '90s and use the 
powers of the Federal Deposit Insurance Corporation and the Securities 
and Exchange Commission to address the credit crunch without costing 
the taxpayers a penny. This bill is just an end run around the American 
people 3 weeks before an election while this Congress is skittish and 
as Wall Street's investment houses conduct their biggest heist of the 
century from the U.S. Treasury and our U.S. taxpayers.
  Pray for our Republic. She is being placed in uncaring and very 
greedy hands.
  Vote ``no'' to get a real deal, not a fast deal.
  I thank you, Mr. Chairman, for yielding me 1 minute in this very 
important debate.
  Mr. BACHUS. I yield 1\1/2\ minutes to the gentlewoman from Florida 
(Ms. Ginny Brown-Waite).
  Ms. GINNY BROWN-WAITE of Florida. Madam Speaker, earlier this week on 
Monday, America hated this bill at $700 billion. Today they despise it 
at $850 billion.
  On Monday, apparently a majority in the House agreed with the callers 
and voted it down on a bipartisan basis. Yesterday I was very proud of 
the efforts of Representative Spencer Bachus who tried to bring to the 
floor a bill that would have slowed down this process, would have been 
something that I think the American public could have understood and 
fully supported.
  However, what we have before us today is the bill that the Senate 
sent to us. They sent us the same exact bill that the House rejected, 
but they added another $150 billion. It still bails out foreign banks 
and raises the debt limit $1 trillion. That is what people believe is 
business as usual here in Washington. The bill still does not address 
the issues of fear and diminished financial capacity.
  Democrat Senator Bill Nelson from my home State of Florida actually 
voted against this bill in the Senate. Like Senator Nelson, I wanted to 
see an extension of the deductibility of State sales tax and an AMT 
patch, but that should have been in a separate bill. Instead it was 
added to this piece of legislation.
  Again, this is not a bill that I believe that I can vote for on 
behalf of my constituents. I said before that a vote for this bill is a 
vote to ratified business as usual in Washington. The added sweeteners 
and earmarks were only to get more votes. If you didn't take my word on 
that then, please look at the bill now and you will have proof.
  Mr. FRANK of Massachusetts. I yield 1 minute to a member of the 
committee, the gentlewoman from Wisconsin (Ms. Moore).
  Ms. MOORE of Wisconsin. Madam Speaker, I am angry. I am angry that 
the Nation has been put in this position by clever financial wizards on 
Wall Street who operated without the necessary regulations and 
oversight for the past 8 years.
  I share the sentiments of Meyer Mishkin who during the crash of 1929 
owned a shop in New York and sold silk shirts to working men. He said 
then that it ``served those rich scoundrels right.'' Of course, his 
business went under a year later.
  Fast forward to 2008. Meyer Mishkin's grandson, an economist and 
former Fed Reserve Board member, tells us: ``To do nothing right now is 
to do what was done during the Great Depression.''
  Madam Speaker, this is not about Rolex watches and Wall Street, it is 
about watching out for the workers, families, small businesses and 
retirees in my district who will be up against the wall as a result of 
this credit crisis as it spreads to Main Street.
  Madam Speaker, I will not stand by and do nothing while this crash 
spreads to my constituents.
  Mr. BACHUS. Madam Speaker, I yield 2 minutes to the gentleman from 
Texas (Mr. Paul).
  Mr. PAUL. Madam Speaker, I rise in strong opposition to this bill 
because it won't solve our problem. It is said that we are in a 
liquidity crisis and a credit crunch and all we need is more credit. 
The Federal Reserve has already injected over a trillion dollars worth 
of credit and it doesn't seem to have helped a whole lot. Injecting 
another 600 to $700 billion will not solve the problem.
  I think one of the reasons why we are floundering around here is that 
we don't understand the problem because instead of it being a credit 
crunch, I think it is a lot more serious than that. That is, I think 
what is happening in the market today is signaling something much more 
draconian because it is probably telling us that our government is 
insolvent, that we are on the verge of bankruptcy and big things are 
starting to happen. And we don't quite understand it, so we fall back 
on the old cliches that what we need is more appropriations, more 
spending, more debt, and more credit in the market. That means more 
inflation by the Federal Reserve system. And yet, that is what caused 
the trouble.
  We want to do this it is said to prevent the recession or depression 
because that is unbearable. But the truth is you should have thought 
about that 10 or 15 years ago because the financial bubble created by 
the excess of credit and the lowering of the interest rate is the cause 
of the recession. The recession is a demand. It is a must; you can't 
avoid it. Yes, it has been papered over several times over the last 
several decades, but that just made the bubble bigger.
  The message is now you can't paper it over any longer. So the 
recession and/or depression will come.
  My sincere conviction is that by doing more mischief and not allowing 
markets to adjust, debt to be liquidated, you're going to guarantee a 
depression. It is going to be prolonged. The agony is going to be there 
for a lot longer than if you allow markets to adjust. Liquidation of 
debt. Let the bankruptcy occur, let the good assets come up, and let it 
react.
  This idea that there is not enough regulation is completely wrong. 
There is too much regulation, and lack of regulation of the Federal 
Reserve system and the exchange of stabilization.
  Mr. FRANK of Massachusetts. I now yield 2 minutes to the gentlewoman 
from California (Ms. Waters), the Chair of the Housing Subcommittee, 
who has done as much as anyone in this House to try to stave off the 
foreclosure crisis.
  Ms. WATERS. First I would like to thank Chairman Frank for the 
extraordinary work he has put into making sure we address this 
financial crisis, and do it in a way that will certainly protect our 
homeowners who are at risk.
  There are a number of Members who have been worried about whether or 
not this bill is going to protect our citizens on Main Street, as they 
refer to it. I worked with Chairman Frank and others on the modifying 
of loans portions of this bill. We have three ways by which these loans 
can be modified. People forget that when we buy up this toxic paper, 
when we buy up these nonperforming loans, we are in charge. Not only 
can we write down the principal, we can write down the interest. We can 
do the kind of loan modification that we have been urging the Hope Now 
Alliance to get done.
  In addition to that, we are coordinating the work of all of the 
agencies that own paper, whether it is the FDIC or either of the GSEs, 
Fannie or Freddie. Remember, we own them now.

[[Page 23964]]

We will be able to coordinate and set some standards and be able to do 
again the kind of loan modification that takes into consideration 
whatever the circumstances are of the particular homeowner. And in some 
cases, we will provide a loan guarantee. When we go in and ask some of 
the institutions to do loan modifications on entire packages, those 
that fall out and they cannot do the loan modifications on that work 
very well, we will provide the loan guarantees for them to do so.
  So for anybody who says there is nothing in this for homeowners, they 
are incorrect. Read the bill. The facts are there. This is the 
strongest part of this legislation, protecting homeowners and doing the 
kind of loan modifications that will keep people in their homes who 
have these adjustable rate mortgages even before they reset.
  Mr. BACHUS. Madam Speaker, I yield 1\1/2\ minutes to the gentleman 
from California (Mr. Daniel E. Lungren).
  Mr. DANIEL E. LUNGREN of California. Madam Speaker, in a former life 
as Attorney General of California, I was required to sign off on any of 
the debt instruments that went to market to make sure that they 
followed the laws and the Constitution of the State of California. 
Never did we have difficulty floating short-term loans in California in 
anticipation of the income revenues that would be coming in.
  However, just last night the governor of the State of California 
wrote a letter to the Secretary of the Treasury indicating that 
California may very well have difficulty floating $7 billion in short-
term loans to cover expenses. I can't recall when that ever happened 
before. The reason is the squeeze on the credit market. That ought to 
bring us some pause here.
  But more importantly, over the last 2 days I was home in my district 
and I talked with people involved with hospitals, banks, automobile 
dealers, simple folks, my 91-year-old mother whose entire future is 
wrapped up in the investments my dad left her. She has no pension. She 
has what my dad left her. When you see the volatility of the market and 
the uncertainty out there, that spreads fear among our folks back home.
  This is not a perfect bill. Certainly I don't ever argue this is a 
perfect bill, but it is the best we have right now. I would ask my 
colleagues to please support this bill.
  Those of you talking about the additional cost on the Senate side, 
the largest additional cost is fixing the AMT. It is the first time I 
have heard some of the people on my side of the aisle refer to that as 
a cost. That is giving taxpayers the kind of relief they deserve and 
preventing them from being put into higher tax brackets unnecessarily.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield 2\1/2\ minutes to 
an alumna of our committee who has been a dedicated defender of working 
class people, the gentlewoman from California (Ms. Lee).
  Ms. LEE. Madam Speaker, I thank the chairman for yielding me this 
time and for his tireless work.
  I want to thank Congressman Jesse Jackson, Jr., for associating 
himself with my remarks this morning.
  Madam Speaker, I think we need to be honest about the bill before us. 
It is a bailout. We should be honest with how we got here: reckless 
deregulation policies and greed. We should be honest about the fact 
that we don't know that this is the appropriate economic strategy. Some 
economists say yes; some economists say no. But I must be honest about 
the fact that I can't afford to risk the consequences of inaction based 
on what I know today.
  I spoke with our California treasurer this week, and he assured me 
that people will suffer greater pain, including cuts to critical State-
funded social services, county services, and schools, if we don't do 
something to stop this hemorrhaging. That is why I will vote for this 
bill today.
  As a former small business owner, I know access to credit will make 
or break your business. Without it, people will lose jobs. We will not 
magically turn the economy around, reverse the rise in unemployment, or 
end this recession which we are in now. We must be honest about that.
  But I must err on the side of caution so our seniors can have some 
confidence that their pensions are safe. And I hope that we will be 
able to prevent this financial crisis from exacting an even bigger toll 
on the everyday lives of our constituents.
  Congressman Jackson and I will continue to fight for regulatory 
reform and a direct economic stimulus package that we fought to be 
included in this bill. We must have bankruptcy reform and a moratorium 
on foreclosures. But I am glad to say that our fight has helped slow 
this bill down. Thanks to our Speaker's leadership, we have a bill 
today to extend unemployment compensation insurance on the floor. That 
is the least we can do for those in need on Main Street. I urge the 
other body to take it up immediately.
  As Senator Obama said, there will be a time to punish those who set 
this fire, but now is the moment for us to come together and put the 
fire out. Congressman Jackson and I join him in that effort and we will 
vote for this flawed but necessary legislation. It is a very difficult 
vote for both of us, but I must do everything I can to stop this 
bleeding in the lives of people living from paycheck to paycheck, that 
is if they have a paycheck.
  I am really confident that this is the right vote, but I know that it 
is not the popular vote. Thank you, Mr. Chairman. I have to thank 
Congresswoman Maxine Waters for her leadership in trying to make some 
sense out of this foreclosure mess. Hopefully we will stop the 
bleeding, but I know that we have a lot of work to do.

                              {time}  1230

  Mr. BACHUS. Madam Speaker, I yield myself 2 minutes.
  Madam Speaker, ladies and gentlemen of the House, Thomas Paine on 
December 23, 1776, said, ``These are times that try men's souls.''
  What was a problem at one time on Wall Street has become a problem 
for Main Street. What was a problem for this Congress and financial 
experts has become a problem for America.
  As late as last night, Mr. LaTourette, Mr. Latham, and I were at the 
Rules Committee for 2\1/2\ minutes urging the Rules Committee to only 
appropriate $250 billion, an enormous amount; yet they turned down our 
request. I want to thank my Republican colleagues on the Rules 
Committee for voting ``yes.''
  Our amendment said we would come back in November and we would give 
careful consideration to this. And if we needed more, if the program 
was working--and believe you me, it's been announced that it won't 
start for another 15 days whether we pass this bill today or tomorrow 
or the day after. And we could have all judged by then how it was 
working.
  But that's past. And today is today. And I will be voting today for 
this bill because it's about the pensioner and his retirement check, 
it's about the small businessman and his ability to buy materials or 
make a payroll, and it's about that student, either in school or having 
to leave school, or that student preparing for school.
  Whatever the problem was before, however you disagree with certain 
parts of this bill, our only choice is ``yes'' or ``no.'' And when a 
problem becomes an American problem, and it is, then it is time for 
Congress to take decisive action.
  I will be voting ``yes'' on this bill; not a perfect bill, but a bill 
that I am not willing to pass up because I'm not willing to risk 
capitalism and a decline into socialism if our financial markets and 
our economy collapses.
  Mr. FRANK of Massachusetts. Madam Speaker, no Member of Congress in 
my memory has worked harder and more constructively to improve and pass 
a bill than the majority whip has.
  I am pleased to yield 2 minutes to the gentleman from South Carolina 
(Mr. Clyburn).
  Mr. CLYBURN. Madam Speaker, I thank the chairman for yielding me the 
time and thank him so much for his hard work on this legislation.
  Madam Speaker, I rise today in strong support of the Emergency 
Economic Stabilization Act of 2008 and believe this bill must be 
enacted as soon

[[Page 23965]]

as possible to stop our country from falling deeper into recession.
  Today, Madam Speaker, we received information that our economy has 
lost 159,000 additional jobs. This brings the total job loss for this 
year to 760,000. But Madam Speaker, jobs are not the only thing 
Americans across this country are losing. They are losing their hold on 
the American Dream. That dream, Madam Speaker, is economic mobility and 
homeownership. Nowhere is this problem more acute than in minority 
communities.
  Madam Speaker, this is not only about Wall Street. It's about Broad 
Street and Walker Street; it's about grocery stores, beauty shops, and 
barber shops. It's about community banks and auto dealerships.
  Madam Speaker, the minority communities are hemorrhaging: jobs, 
homes, income, and most importantly credit. Consider this fact: African 
Americans received 35 percent of the subprime purchase loans issued 
from 2004 to 2007. Of these loans, 62 percent of them were reset to a 
higher rate by the end of 2008. Many of these homes' values have 
dropped by 25 percent. Access to refinancing credit is no longer 
available, and their pension plans have lost substantial value.
  These dynamics are devastating to minority communities, and I believe 
that we must pass this legislation in order to stop the hemorrhaging.
  Mr. BACHUS. Madam Speaker, I am proud at this time to yield 1 minute 
to my friend from Mississippi (Mr. Pickering), who will express not 
only his views but mine.
  Mr. PICKERING. Madam Speaker, this is my last speech, will be my last 
vote. For all of us in this institution, it will be a legacy vote.
  I came to Washington almost 20 years ago and worked in the first Bush 
administration as communism collapsed. I worked to see those countries, 
the Soviet Bloc, move to free markets and democracy. This, my last 
vote, is to preserve those things that I believe in most: a free market 
capitalist system, that if we can intervene now and stabilize what we 
preserve and keep the freedoms of our economy and the strength of our 
Nation from going into decline so that our fiscal house here doesn't 
worsen, so that our families at home aren't hurt more badly.
  This afternoon I will cast this vote, and then I will leave, and I 
will go home and I will watch my sons play high school football.
  I hope that it is with a great sense of pride in this institution 
that when a crisis came and our character was tested, we didn't do what 
was easy, but we did what was right--to save what we care about most 
deeply.
  Mr. FRANK of Massachusetts. Madam Speaker, I think I have the honor 
of speaking on behalf of the body in wishing our friend well.
  I now yield for a unanimous request consent to the gentleman from 
California (Mr. Baca).
  Mr. BACA. Mr. Chairman, thank you for all of the work that you have 
done. I'm angered, frustrated, and sad, but I believe that we've got to 
do the responsible thing. Therefore, I'm going to support the bill.
  Madam Speaker, today, I find myself frustrated, angry and sad. 
Predatory lending and greed are at the root of the current financial 
storm our Nation is facing. I voted against the bailout bill on Monday 
because I believe it did not do enough to provide direct relief to 
families that are facing foreclosure, and have been victimized by these 
practices.
  Over the past few days, I have fought vigorously to include stronger 
foreclosure mitigation provisions in a revised bill. Many of my 
colleagues joined me in an effort to include language from my bill H.R. 
4135, The Family Foreclosure Rescue Corporation Act, in any revised 
rescue plan. This language would keep more families in their homes.
  While I believe today's bill still does not do enough to protect 
struggling homeowners, I am pleased that it does include critical 
improvements in the areas of oversight and accountability. This bill 
does a better job of protecting America's taxpayers, and ensuring their 
investment is not squandered.
  But sadly, our economy is now in turmoil. We find ourselves in a 
state of quicksand, and we are sinking fast. We cannot delay action any 
longer. I will vote for this bill today. Not because it solves all our 
problems, but because I do not have a choice.
  If the credit crunch is allowed to continue, the consequences for the 
Inland Empire will be disastrous. In my district, too many families are 
facing the possibility of being homeless. Credit unions and big banks 
have limited their lending, and as a result families are at a greater 
risk of losing their homes, their jobs and their opportunities for 
success.
  Car loans have dried up, and some dealerships have closed and been 
forced to layoff workers. Student loan companies across the Nation have 
shut down or stopped participating in Federal student aid programs.
  And now, to make matters worse, we have received word that California 
needs a $7 billion emergency loan from the Government, in order to keep 
funding day-to-day operations. The consequences of doing nothing are 
too dire to imagine.
  Without immediate Federal action, California will be unable to sell 
voter-approved bonds for highway construction, schools, housing or 
water projects. And because of the extreme delay in passing the state 
budget, California's cash reserves would be exhausted by the end of 
October without this loan. This means that payments for teachers' 
salaries, nursing homes, law enforcement and every other State-funded 
service would stop or be significantly delayed. This must not be 
allowed to happen.
  Ultimately, today's bill is about providing confidence in our markets 
and stabilizing our economy. We must do this if we are to protect our 
jobs at home, stop further outsourcing, and ensure our society has 
access to the credit it needs to run.
  The market dropped on Monday because of a lack of confidence. Because 
of predatory lending and the complete lack of regulation we have seen 
from the Bush administration in the last 8 years, Wall Street has been 
allowed to run amok--and because of that the American people have 
suffered.
  I am voting for this bill today to restore that confidence. But we 
must come back and work on a more comprehensive package that will 
provide the assistance America's working families need to survive in 
these difficult economic times. I have received a commitment from the 
House Financial Services Committee that hearings will be held next 
February to examine my bill, the Family Foreclosure Rescue Corporation, 
and move it forward in the legislative process.
  The Bush administration and the rubber stamp Republicans in Congress 
are responsible for the lack of leadership and effective government 
oversight that caused this crisis, but we all must work together to get 
America back on track. I am confident that with a change of leadership, 
we will stabilize our Nation's financial markets and keep America's 
working families safe and secure.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield for a unanimous 
consent request to the gentleman from Pennsylvania (Mr. Fattah).
  Mr. FATTAH. Madam Speaker, as I did on Monday, I rise in support of 
this bill. What we did not do right, we will find the time and the 
votes and the courage to do over today.
  Mr. FRANK of Massachusetts. Madam Speaker, I now yield 1 minute to 
the gentlewoman from New York (Mrs. Maloney), a member of the 
committee.
  And I will take 10 seconds to say, yes, I understand that this is not 
everything that needs to be done. We will be back next year to do some 
serious surgery on the financial structure. But at this point, we have 
the EMT function. There's an emergency, and we have to avert serious 
harm. This is step one.
  Step two will be the serious work that we will do to prevent this 
from occurring.
  Mrs. MALONEY of New York. I thank the gentleman for his extraordinary 
leadership, and I rise to urge my colleagues to vote ``yes'' on the 
financial rescue plan. The risk of not acting is just too great for 
Americans to bear.
  Today's grim jobless number showed that the problems facing Main 
Street are mounting. If we do not pass a financial rescue package 
today, credit markets may fail and working families and businesses will 
suffer. Consumers are the lifeblood of our economy, and most families 
need access to credit to make major purchases like buying a home, a 
car, or paying for college tuition.
  Without financing, families will cut back on spending, businesses 
will see sales plummet, our economy will weaken, and even more jobs 
will be lost. A credit freeze also means small businesses may have 
trouble making their

[[Page 23966]]

payrolls. Credit card interest rates could soar, and businesses could 
be unable to borrow and create new jobs.
  This is a first step. We are continuing with hearings on Monday and 
Tuesday of next week. I congratulate Mr. Bachus for his work with the 
chairman for putting in tough safeguards for taxpayers, oversight and 
homeowners.
  The SPEAKER pro tempore. The gentleman from Alabama has 1 minute 
remaining.
  Mr. BACHUS. Madam Speaker, I reserve the balance of my time.
  The SPEAKER pro tempore. The gentleman from Massachusetts has 3 
minutes remaining.
  Mr. FRANK of Massachusetts. Madam Speaker, given the concern about 
the fiscal implications, I am now pleased to yield 1 minute to a man 
who has done as much for fiscal responsibility as anybody with whom I 
have ever served, the chairman of the Budget Committee, the gentleman 
from South Carolina (Mr. Spratt).
  Mr. SPRATT. Madam Chairman, the bill before us has been vastly 
improved over the bill sent to us, and all of those improvements are 
still here. But this bill was waylaid in the Senate to add unrelated 
matters, which is not a good way to legislate, and I do not defend it.
  But the major adds extend expiring tax cuts, which we would extend 
anyway in time, and to fix the AMT to keep it from coming down on 
middle income Americans, and sooner or later, we would adjust the AMT. 
In regular order, we would offset those tax reductions so that they do 
not add to the deficit. This bill contains only partial offsets, but 
there is remarkable improvements to the code here.
  For example, one shining example, this bill closes a gaping loophole 
and saves $25 billion, a gaping loophole in the tax code, which has 
long allowed managers of hedge funds to shelter their income in places 
like the Caymans and dodge taxation.
  One final point. Throughout, this has been called a $700 billion 
bailout, but we should bear in mind three points: first, $700 billion 
will be the gross cost if all of it is drawn down. The net cost should 
be a lot less.
  I support this bill, and will vote for it again. I congratulate the 
chairman for the fine work he's done.
  Mr. BACHUS. Madam Speaker, I continue to reserve.
  Mr. FRANK of Massachusetts. Madam Speaker, I am now proud to yield 1 
minute to the majority leader from Maryland (Mr. Hoyer) who has done a 
superb job of leadership in its best sense on this bill.
  Mr. HOYER. I thank the chairman for yielding.
  Madam Speaker and Members of this House, I said that last Monday 
would be a day of consequence. It was a day of consequence. We have 
been criticized as a body for not deciding affirmatively on Monday. 
What we did decide, however, was that initial failure should not stand 
because the crisis confronting our country was too great. And 
Republicans and Democrats together, administration and Congress, 
chairman and ranking member, each individual Member decided that 
failure was not an option.
  On Monday, the dividing line in this House was not between parties--
it was between those who believed the dangers of doing nothing 
outweighed their reservation about Monday's bill and those who had yet 
to be convinced.
  Since then, I believe that the number of the convinced that this 
action is essential has grown. Some were convinced when a vote in the 
Chamber led to the evaporation of $1.2 trillion of wealth in about 120 
seconds; some were convinced when they heard that America lost another 
159,00 jobs last month making a total of lost jobs this year of 760,000 
jobs. In a similar period 8 years ago, we had gained 1.5 million jobs--
a net turnaround of over 2.2 million jobs.
  Americans are in trouble. They're expecting us to act.
  Some were convinced by the stories like this one from a small town 
car dealer in Utah. He said this: ``I'm not going to be able to pay my 
employees next week. I can't get the kind of credit line from the bank 
that I have had through my entire career unless you do something.''
  This bill outreaches not only to minorities but to small businesses 
as well. And I thank the gentlelady from California for her focus on 
that issue and Mr. Bachus for his focus on that issue.
  What happens on Wall Street is bound up with the jobs of millions on 
Main Street, and the retirement of millions on Main Street, and the 
homes of millions in hometown America, and dreams of millions of our 
fellow Americans.

                              {time}  1245

  If disaster strikes those few square miles in Manhattan, it will 
surely spread until every one of those jobs and retirements and homes 
and dreams are put at great risk.
  This week I've heard from the Prime Ministers of Australia and Japan 
who are telling us that their people are bracing themselves, worried 
that America will not rise to the occasion. I am proud to be a Member 
of this House, and when challenged, I believe this House rises to its 
responsibilities and I believe it will do so today.
  We sing the praises of American leadership, and today, I think we 
will deserve that praise. This is the responsibility that comes with 
our duty as Representatives in the people's House. For all of those 
reasons, this bill is essential.
  So many of us have improved the administration's plan, Republicans 
and Democrats, working together, which came to us as a mere three-page 
bill, giving essentially a $700 billion blank check to the 
administration. Republicans and Democrats knew as one that that could 
not stand.
  The heart of the bill remains a plan for the government to buy up bad 
financial assets, restoring the flow of credit so essential to the 
growth and maintenance of our economy.
  But we fought to ensure that taxpayers will be the first to profit if 
and when those assets rise again in value, making the true price tag of 
this bill far, far less than $700 billion.
  In fact, Warren Buffett, one of the most successful investors in the 
history of America, has said this, ``If they do it right, and I think 
they'll do it reasonably right''--his expectation is that we will do it 
reasonably right--he said, if we do that, we'll make a lot of money, we 
being the taxpayers of America.
  So we have the opportunity not only to save our economy, to save 
those dreams of our fellow citizens, but also to make some profit.
  In addition, we made sure the financial community will be obligated 
to pay the taxpayers back for their loan.
  We restricted executive compensation because CEOs whose recklessness 
helped bring on this crisis should not receive taxpayer-subsidized 
golden parachutes or extraordinary salaries.
  We are subjecting the Treasury Secretary's decisions to strong 
oversight. Republicans and Democrats together agreed that that should 
be done.
  Finally, we will help homeowners renegotiate their mortgages to 
prevent a further flood of 2 million projected foreclosures. That's 
what this bill is about. That is the action we are asked to take today.
  On Wednesday, the Senate raised Federal insurance of bank accounts 
from $100,000 to $250,000, and also chose to add several tax cuts. I 
personally believe that raising the FDIC can be argued on both sides of 
the question, but certainly, it ought to stabilize our local banks. 
However, as all of you know, I strongly disagree with adding those tax 
provisions because the Senate has chosen to finance them with debt.
  This crisis is making it painfully clear the dangers of fiscal 
recklessness and that debt does indeed matter. A lesson, in my opinion, 
the Senate has ignored.
  But an emergency like this calls for the courage to compromise. On 
Monday, Chairman Frank said, ``If we aren't prepared to accept some of 
the things we don't like, we will not have the power to deliver for the 
people we care about.'' The chairman was absolutely right. For me, 
those people are families unable to take out a loan to buy an appliance 
or pay for college. They are Americans who have worked

[[Page 23967]]

their whole lives only to see their retirement accounts threatened. 
They are the millions of workers fearing a pink slip they did nothing 
to earn. For their sake, for their sake, we must act.
  I urge all of us to pass this legislation. I urge all of us to vote 
for this legislation. I know there will be some who will not vote for 
this legislation. I want them to know that I respect their judgment. We 
have a difference of opinion.
  On Monday, America was deeply divided, and their representative body, 
not surprisingly, was deeply divided. In the last 4 days, Americans in 
small towns, on farms, in urban areas and suburban areas have reflected 
upon the consequences of inaction, and while they have not come to the 
universal thought that we ought to pass this bill, they have told us in 
the strongest terms we expect the people's House to act in a way that 
they think best to save our economy, to protect our dreams, to make 
America whole again.
  Mr. BACHUS. Madam Speaker, I yield the balance of my time to the 
gentleman from Ohio, our leader, Mr. Boehner.
  The SPEAKER pro tempore. The gentleman from Ohio is recognized for 1 
minute.
  Mr. BOEHNER. Let me thank my colleague for yielding and thank him for 
his work and thank the work of Mr. Frank, the chairman of the Financial 
Services Committee, and Members on both sides of the aisle who have 
worked together to bring us to this point.
  We all know that we are in the midst of a financial crisis, and we 
all know that this crisis is about our neighbors. It's about our small 
businesses. It's about retirees whose savings are on the line. It's 
about the American people and their jobs. And we know that if we do 
nothing, this crisis is likely to worsen and to put us into an economic 
slump like most of us have never seen.
  We've come together on a bill that is a much better bill than it was 
when it started. It isn't the bill that I would write. It's not the 
bill that any of you would write because this bill was done in a 
bipartisan way, where Members on both sides of the aisle came together, 
worked together to build a product that we thought would help avert 
this crisis. It certainly has grown in size, but to do nothing, in my 
view, is not an option.
  The consequences of us not acting are overwhelming, and so I do 
believe that it's our responsibility to act. The American people sent 
us here to do our jobs on their behalf. They're counting on us.
  I know that some of you will disagree with the bill that we have 
before us, and I understand and respect those views. But while we have 
an imperfect product, we have a responsibility to act and to act in a 
way that we will do our best on behalf of our constituents.
  I have talked to a lot of Members on both sides of the aisle who were 
stuck in really difficult elections, and doing this bill in the middle 
of an election is complicated enough. And I've had Members worried 
about how this is going to affect their election. I told them that 
whether you vote ``yes'' or you vote ``no,'' you've got to go home and 
defend this. And it's a lot easier to defend your vote if you, in your 
own mind, will just do the right thing.
  I'm going to vote for this bill today because I think it's in the 
best interests of the American people. That's what they sent us here to 
do, and that's what I'm going to do.
  Above the Speaker's rostrum is our motto: ``In God We Trust.'' This 
is probably one of the most serious votes that any of us will ever 
cast. I've said my prayers this morning, like I do every morning, so 
that I can understand and feel better about the vote that I cast. But 
even if we pass this bill today, let's not kid ourselves. We're in the 
midst of a recession. It is going to be a rough ride, but it will be a 
whole lot rougher ride if we don't pass this bill.
  But I will say to all of you, when this bill passes today, remember 
those words, ``In God We Trust,'' because we're going to need His help.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield to the gentleman 
from Rhode Island for a unanimous consent request, with the reminder 
that the vehicle for this is the mental health parity for which he has 
worked so hard.
  Mr. KENNEDY. Madam Speaker, recognizing the end of insurance 
discrimination towards the mentally ill and praising my colleague Jim 
Ramstad and Dave Wellstone, whose father is looking down on us today in 
praise of his son for all the hard work he did to see this day come to 
pass, I urge passage of this legislation.
  Madam Speaker, I rise in support of H.R. 1424, the Emergency Economic 
Stabilization Act of 2008.
  While I do support the rescue package and commend Chairman Barney 
Frank for his work producing this legislation, I rise today to speak 
about the mental health parity bill which is included in this package.
  For those of us in Congress who have been fighting to bring greater 
fairness and equity to our insurance laws, today is the culmination of 
a long struggle.
  When we send this package to the President, we will be providing 113 
million Americans the peace of mind that comes with knowing that your 
health insurance will be there when you need it--regardless of your 
diagnosis.
  For far too long, health insurance companies have used the stigma of 
mental illness and substance abuse as an excuse to deny coverage for 
those biological disorders.
  That ends today. The Paul Wellstone and Pete Domenici Mental Health 
Parity and Addiction Equity Act of 2008 will finally outlaw the 
discrimination that is embedded in our laws and our policies.
  The passage of this legislation is one more step in the long civil 
rights struggle to ensure that all Americans have the chance to reach 
their full potential.
  There are too many people to thank individually, so I would like to 
focus on two.
  For as long as I have been in Congress, Jim Ramstad has been a 
champion for those with mental illness and substance abuse disorders. 
His advocacy on this issue has been inspiring to millions of Americans, 
and to me personally.
  He is a role model for me, both personally and professionally. This 
Congress could use far more members like Jim Ramstad, on both sides of 
the aisle. This body will miss him terribly when he retires at the end 
of this Congress.
  The other person I would like to recognize is Dave Wellstone. As most 
everyone here knows, Senator Paul Wellstone was the original champion 
of mental health parity in the Senate.
  When he passed away, many of us thought that the momentum he had 
created for this bill would go with him. But his son Dave picked up the 
torch and has carried it tirelessly to get us to this point.
  Dave, I know your father is watching us today, and I cannot imagine 
the pride he must feel. Congratulations.
  In closing, this legislation strikes a blow against the stigma and 
discrimination faced by those with mental illness. I urge all of my 
colleagues to support it.
  Mr. FRANK of Massachusetts. Madam Speaker, to close with a burst of 
redundancy, which is not inappropriate for what we've been through on 
this bill, I yield to Madam Speaker for 1 minute.
  The SPEAKER pro tempore. The gentlewoman from California is 
recognized for 1 minute.
  Ms. PELOSI. Thank you very much, Madam Speaker. I thank the gentleman 
for yielding. I thank him for being such a great maestro in 
orchestrating this legislation that we have before us, accompanied by 
so many others; Congresswoman Waters for her tremendous leadership. We 
recognize Congressman Spratt of the Budget Committee; Congresswoman 
Slaughter for her work on the Rules Committee to bring this bill to the 
floor; Congressman Rangel for his very, very important work as well and 
having a piece of this bill.
  I commend Spencer Bachus for his leadership and some of the great 
ideas that he brought to the table that first night and continued to 
bring to the discussion as we have gone ahead.
  It's been my pleasure to work with Mr. Boehner and Mr. Blunt on this 
and with my colleague Mr. Hoyer who's invested so much time; and our 
mastermind, Rahm Emanuel for his knowledge of Wall Street, his 
knowledge of Congress, and his leadership was essential in our reaching 
the point we are today.

[[Page 23968]]

  The place that we are today is to debate legislation that I think is 
much improved from the product that was here on Monday, and as we 
debate this legislation, we must do so with an eye to the future. We 
must reassure the American people that this crisis will lead to reforms 
that will strengthen their personal economic security, that the bright 
light of accountability will protect the taxpayers and ferret out the 
abuses that have led to this crisis.
  The urgency is clear. We hear it from our friends, from our 
neighbors. We hear it everywhere we turn.
  In my home State of California, officials including the Governor are 
urgently calling for Federal legislation to avoid economic catastrophe, 
catastrophe. Those urgent calls are being echoed by Democratic and 
Republican Governors from across the country.

                              {time}  1300

  While the focus has been on the Dow Jones and Wall Street, we are 
addressing the real pain felt by Mr. and Mrs. Jones on Main Street. 
They are why we must pass this legislation today.
  Seniors and those nearing retirement have watched their savings 
dwindle and their pensions evaporate. Entrepreneurs seeking a plan for 
a new business are being turned away for credit, undermining job 
creation. If you're trying to buy a car, you cannot get a car loan. If 
you're trying to sell cars, you cannot get a business loan to purchase 
inventory. If you're trying to save for your children's college 
education, you are deeply in doubt as to whether your savings will be 
there.
  And just this morning, the Labor Department announced that another 
159,000 Americans lost their jobs in September, the most in 5 years. 
Nearly 800,000 Americans have lost their jobs this year alone. These 
are the Americans we must act on behalf of today. They are not the high 
flyers on Wall Street, but our neighbors and our constituents, and they 
need our help.
  Let us be clear, the original rescue bill proposed by the Bush 
administration was unacceptable, as has been indicated by Mr. Boehner. 
It has asked us to commit $700 billion in taxpayers' money with few 
strings and no safeguards. In a bipartisan way, we rejected that 
proposal. And in our bipartisan negotiations between the White House 
and the Congress, we demanded tough additions to the bill, and they are 
contained in this legislation.
  To protect the taxpayers, we insisted upon tough oversight and 
accountability. To further protect the taxpayers, we wanted to make 
sure that as we bought this illiquid paper that Mr. Paulson was talking 
about and as we invested capital into these companies that we were 
helping to make healthy, that the American taxpayer would profit. Mr. 
Spencer Bachus was quite vocal on that subject when we met that first 
Thursday night two weeks and one day ago about, if we're going to make 
these companies healthier, why shouldn't we just invest capital in them 
so the taxpayer can benefit?
  And thanks to John Tanner of Tennessee, if this does not pay for 
itself, as some say that it can, but if there is a shortfall, the 
taxpayer will be made whole, being paid for by fees on those who have 
benefited from the program. That recoupment that Mr. Tanner put forth I 
think is a tremendous advance in this legislation and a protection for 
the taxpayer.
  We also reform CEO compensation and put an end the golden parachutes. 
Our message to Wall Street is: The party is over. No longer will you 
drive your business into the ground, take a golden parachute to safety 
and have the taxpayer pick up the tab. And thanks to Congresswoman 
Maxine Waters, this legislation will do a great deal to help families 
avoid foreclosure and enable them to stay in their homes.
  Since the bill came to the floor earlier this week, it has been 
further improved by increases in insurance for checking and savings 
accounts which protect savers, small businesses and community banks 
across America.
  I am especially pleased that the plan benefits middle income families 
with an extension of the $1,000 per couple State and local property tax 
deduction; $1,000 for those who do not itemize deduction in their 
property taxes. And I thank Jim Clyburn, our Democratic whip, for his 
leadership in this regard.
  I am also pleased that the bill includes an extension of tax cuts for 
clean and renewable energy that will create and save half a million 
good-paying jobs in America immediately. This was a part of our energy 
bill last year. It did not survive the Senate, it now has become part 
of this legislation, and it is paid for. We fought hard to include 
these critical tax cuts, again, as I said, in last year's landmark 
legislation because they are essential to job creation.
  And aren't we all pleased across America's cause for celebration that 
the legislation includes the Mental Health Parity and Addiction Equity 
Act? Patrick Kennedy and Mr. Ramstad--I hope he's here so I can convey 
to him the gratitude of the American people to both of them for their 
leadership, without which we would not be having this important 
legislation passed today. It has turned out to be the vehicle for which 
the whole package is moving.
  By requiring that illness in the brain be treated just like illness 
elsewhere in the body for insurance purposes, we're helping to end 
discrimination against those who seek treatment for mental illness. 
This legislation will also save lives.
  So there are some things in here that have been added since the other 
day that are very important, legislation that has passed the House over 
and over again, but never could make it through the Senate, and now it 
has. That doesn't take away from the fact that we've been dealt a 
mighty bad hand with the core part of this legislation, but it has been 
improved. It is a compromise, but it is just the start.
  Passing this legislation is only the beginning of our work to protect 
the economic future of the American people. With the work in these past 
2 weeks, we've seen things we never thought we would see before in 
terms of the economic insecurity of our own country. With this 
legislation, $700 billion, we have broken new ground in how we deal 
with this crisis, but we will not leave it broken. Chairman Waxman, 
Chairman Peterson and Chairman Frank will hold a series of hearings to 
determine the origin of the crisis, how regulators and business leaders 
failed to protect the public interest, and the commonsense, reasonable 
regulations needed to provide security and stability in the future.
  We must look ahead. We must look ahead to protect Americans from 
unsavory lending practices and to bring a better balance to our 
bankruptcy laws, but today we must begin by passing this bill. And as 
we do so, we must keep in mind our commitment to fiscal discipline, to 
not increasing the deficit. That's the overriding question I have from 
people--well, among others--why so much? Will it work? We'll see. What 
does it do to our opportunities to invest in the American people? Well, 
we hope it will pay for itself. And if it doesn't, then the fees will 
be there to cover it.
  But apart from that, we cannot get into the thinking that we can just 
put out all this money without the thought that it will be heaping 
mountains of debt onto our children unless we have recoupment. And so 
it is a problem for us as we go into a new presidency and a new 
Congress. But under the leadership of Mr. Spratt, and working with 
others in the House and in the Senate and with a new President of the 
United States, ``no new deficit spending'' must be our mantra.
  This is a vote with real consequences, a vote that will shape or 
begin to shape the financial stability of our country and the economic 
security of our people. It is an important vote, it's a difficult vote, 
but it is a vote that we must win for the American people. We must win 
it for Mr. and Mrs. Jones on Main Street.
  Ms. HIRONO. Madam Speaker, the emergency financial rescue package I 
am supporting today, while far from perfect, contains noticeable 
improvements on the Paulson Plan we considered on Monday. This package 
is much more balanced in favor of helping everyday people, middle-class 
families, and small businesses. The bailout package we considered on 
Monday was simply too geared toward Wall Street and the corporations 
whose

[[Page 23969]]

irresponsible practices helped create this crisis in the first place.
  This new financial rescue package raises the cap on FDIC-insured bank 
accounts from $100,000 to $250,000, which will assist families and 
small businesses while restoring Americans' confidence that their 
savings are secure.
  The new package provides tax relief for middle-class families and tax 
incentives designed to create new jobs and economic opportunities in 
Hawaii, where people have been hit hard by the economic downturn that 
preceded this financial crisis. The majority of the tax relief, tax 
credits, and tax extenders added to the package will provide direct 
relief and economic assistance to middle-class families and working 
people--such as the Alternative Minimum Tax, AMT, relief provision and 
tax credits to speed research, development, and use of renewable energy 
sources like wind and solar.
  The AMT fix, for example, will prevent some 40,000 constituents in my 
second district of Hawaii from having to pay higher taxes that were 
originally intended only to affect wealthy taxpayers.
  The renewable energy tax credits are critical to encourage investment 
in the alternative energy projects Hawaii needs to reduce our 
dependence on foreign oil.
  In addition, the bill reauthorizes for 2 years the Qualified Zone 
Academy Bonds, QZAB, program, which helps school districts with low-
income populations save on interest costs associated with financing 
school renovations and repairs. Hawaii received about $1.3 million in 
QZAB allocations in 2005, 2006, and 2007.
  Another significant provision of this bill requires insurance mental 
health parity legislation that advocates in Congress have been trying 
to pass for the past 10 years. I am an original cosponsor of this 
legislation. These provisions, included in the financial rescue 
package, will make sure that families struggling with mental illness do 
not have that challenge compounded by inadequate coverage of mental 
health care costs.
  I have voted for these energy, business, and middle-class tax relief 
measures earlier in the House. These provisions will help 30 million 
homeowners, create 500,000 American green jobs, and provide tax relief 
for well over 25 million middle-class families. Including those tax 
relief proposals as part of the financial rescue package has made the 
overall proposal more balanced, and more likely to help everyday people 
get through these difficult economic times.
  The economic downturn we are facing, resulting in loss of jobs, 
foreclosures, and families having difficulty paying for life's 
necessities, will not be fixed by this relief bill. The economic 
provisions added to the bill will help. But we need a broader economic 
stimulus package to get our economy going in the right direction again.
  I am disappointed that it appears the Senate is not taking up the 
economic stimulus package (H.R. 7110) recently passed in the House, 
which will create jobs, extend unemployment benefits, help States with 
Medicaid reimbursements, and support our Food Stamp program. This bill 
represented some $222 million for Hawaii.
  I did talk to Senator Obama about his perspective and my concerns 
about this bill. We both know that much more work remains to be done to 
address the underlying economic and regulatory problems that won't be 
fixed with this bill. We agree that new Federal investments are needed 
in transportation and clean water infrastructure as well as in 
education to enhance our Nation's competitiveness and to put people to 
work. Senator Obama also shares my concern that the cost of this rescue 
plan will not ultimately fall on the taxpayers, and he reassured me of 
his commitment to impose financial service fees to make taxpayers 
whole. With the right leadership in the White House, I am confident 
that we can make the changes needed in future legislation to protect 
homeowners and taxpayers and to reform our financial markets.
  Ms. JACKSON-LEE of Texas. Madam Speaker, I would like to thank the 
chairman of Financial Services Barney Frank for bringing this important 
piece of legislation to the floor. I rise today with the confidence 
that our system of government is strong and the constitutional 
protections of the full faith and credit of our government must protect 
Main Street America while we reform America's Wall Street.
  Many have claimed that this is a historic vote. Historic votes are 
not ubiquitous. Historic votes come about through necessity and not 
through the failures of people. This problem has persisted for a while 
and now Congress must rush before the recess to a vote. While I would 
have liked more time, time has seemingly run out.
  I would begin by saying that I had concerns about the bill that was 
presented to the Congress on Monday. After much deliberation and a 
return visit to my district, I vote ``yes'' for this bill. Given these 
dire economic times, it is the responsible thing to do to vote ``yes'' 
when the mass of Americans are suffering.
  Let me give you a picture of the tough economic times which face 
Americans. The economy is shredding jobs. The U.S. economy has lost 
jobs in every single month of 2008. In September, the economy suffered 
its biggest 1-month job loss,-159,000, in over 5 years. In total, the 
economy has shed 760,000 jobs since the beginning of the year.
  Poor labor markets are significantly increasing unemployment. Within 
the past year, the number of unemployed Americans has increased by 2.2. 
million. In September, there were 9.5 million unemployed workers, 
keeping the unemployment rate at a 5-year high of 6.1 percent. Thus, it 
has become harder for Americans to find jobs.
  The economy is faced with credit crunches. Individuals have found it 
difficult to get first or second mortgages, credit, credit cards, and 
loans, including student loans. Because of the compendium of these 
economic concerns, coupled with the drying up of the credit market, I 
have changed my vote from a few days ago from a ``no'' to a ``yes.'' I 
changed my vote because of my concern for the well-being of the 
American people.
  The first three articles of the United States Constitution address 
the three branches of Government and their enumerated powers. These 
Articles govern the legislature, the executive, and the judicial 
branches. Because there is no specific grant of constitutional 
authority for the actions that will be taking place here today, we the 
Members of Congress need to exercise oversight over the powers and 
actions of the executive. Should the executive or its agencies exceed 
the powers granted to it in the Constitution, the judicial can review 
the determinations made by the executive and the legislative branches. 
These concepts are fundamental to our Constitution and our system of 
constitutional checks and balances. These checks and balances were 
established by the Founding Fathers to reign in the unbridled power of 
the executive.
  Today we are engaged in a fundamental exercise of the constitutional 
powers extended to the Congress. Today's vote is critically important.
  Several questions come to mind when I consider the present financial 
crisis: Where was the FDIC? Where was the SEC? Where was the Federal 
Reserve?
  I have worked with leadership to offer consistent amendments, not 
once but twice unsuccessfully, that would have strengthened the 
enforcement measures over the past week to change the administration's 
proposal to make it more encompassing, effective, and better for the 
American people.
  While the present legislation is impressive, it is also impressive 
regarding what needs clarification in the present legislation. For 
example, the legislation needs clarification on its bankruptcy 
restructuring, enforcement, and judicial review. These are all issues 
that I have been very concerned about.
  Because I am concerned and desire that the maximum number of 
Americans get relief from this bill, I offered amendments yesterday. To 
ensure that this bill provides relief for Americans, I offered the 
following amendments:
  First, many are concerned about the dollar amount that will be set 
aside for those individuals facing mortgage foreclosure. Therefore, I 
asked that language be inserted into the bill so that $10 billion be 
utilized for the Secretary of the Treasury to restructure mortgages.
  Second, as Senator Barack Obama has recently stated, he is committed 
to altering the bankruptcy code in the future to assist homeowners on 
the question of restructuring their mortgages. Therefore, I believe 
that there should have been Sense of Congress language that the 
Congress should review and amend the bankruptcy code to permit 
bankruptcy judges to address the question of individual home mortgage 
restructuring. This would have sent a clear message that Congress is 
interested in helping Americans pay off their debt despite its not 
changing the bankruptcy code at this time.
  Third, there needs to be greater enforcement. In the section on 
judicial review, Section 119, there should have been language that 
specifically states that ``the courts should be able to exercise their 
discretion to grant injunctive and/or equitable relief if the court 
determines that such relief would not destabilize financial markets.''
  Fourth, the legislation should have created a new, independent 
commission to exercise oversight over what happened and the commission 
should regularly provide reports to Congress. This commission would be 
backward looking.

[[Page 23970]]

  Fifth, the legislation should have been narrowly crafted so that 
corporate executives who may be convicted of criminal malfeasance in 
the financial sector might be barred from conducting financial business 
with the Government for a period of 7 years.
  Sixth, the legislation should have permanently lifted the present 
insurance cap of $100,000 that the FDIC has established to insure funds 
stored in FDIC-backed banking institutions to $250,000. I believe that 
this has already been included in the Senate bill; but, my amendment 
would have made the change permanent.
  Seventh, in section 109, which addresses ``foreclosure mitigation 
efforts,'' the language should be changed from ``shall encourage'' to 
``shall require'' to provide stronger relief for Americans.
  Specifically, current section 109(a) states in pertinent part that 
``the Secretary shall implement a plan that seeks to maximize 
assistance for homeowners and use the authority of the Secretary to 
encourage the servicers of the underlying mortgages . . . to minimize 
foreclosures.'' I believe if the true intent is to bailout ``Main 
Street,'' the Secretary should be ``required'' to minimize 
foreclosures.
  There are certain redeeming qualities to the bill.
  I understand that H.R. 1424 establishes a Financial Stability 
Oversight Board in section 104; Oversight and Audits in section 116; 
and a Congressional Oversight Panel in section 125. Therefore, these 
sections provide some oversight over the financial crisis and help to 
add one piece to the economic puzzle.
  Without bankruptcy I offered an amendment that $10 billion should be 
set aside so that the Department of Treasury could use those funds to 
address the question of individuals facing home mortgage foreclosure. I 
considered it important to set aside money because I wanted to ensure 
that Main Street received something from this bailout and not just Wall 
Street.
  The administration has labeled the current economic situation as a 
crisis that requires emergency measures. Our vote today in favor of the 
legislation is a first attempt at addressing these dire economic times.
  Above all, my concern is to ensure that the American people receive 
the relief that they deserve. If the American people are facing 
mortgage foreclosure, it is my desire that monies be provided to them 
so that they can continue to stay in their home and pay their mortgages 
and their bills. Everyone deserves the economic dream of owning their 
own home. But the financial institutions were dilatory in their 
responsibility to assess the borrower's ability to pay for loans and 
purchase a home. It was the squandering of this responsibility and 
preoccupation with greed and avarice that has led us to where we are 
today. I am not satisfied that this bill is perfect, but this bill does 
allow Treasury to buy toxic assets from financial institutions, 
including our small and community banks. Once these toxic assets are 
purchased, the Treasury should be encouraged to restructure loans that 
are in foreclosure. This is indeed encouraging news.
  There are substantial improvements in the present version of the bill 
compared to the Bush administration proposal. However, the bill as it 
is presently written, in my view needs some clarification as to how it 
provides the necessary relief to middle-class America. There are 
provisions now that address accountability measures by requiring a plan 
to ensure the taxpayer is repaid in full, and requiring congressional 
review after the first $350 billion for future payments.
  Principally, there are three phases of a financial rescue with strong 
taxpayer protections: reinvest, reimburse, and reform. One of the 
phases is to reinvest in the troubled financial markets to stabilize 
the markets. Another, reimburses the taxpayer and requires a plan to 
guarantee that they will be repaid in full. The last is to reform how 
business is done on Wall Street. The current legislation provides for 
fewer golden parachutes and, to its credit, provides sweeping 
congressional oversight.
  There are critical improvements to the rescue plan that yield greater 
protection to the American taxpayers and even to Main Street. However, 
with the passage of this bill, it is my hope that H.R. 1424 will help 
the financial markets and make America secured. I am cautious and 
hopeful that there is enough in the bill to help Americans struggling 
with their mortgages.
  Although I have certain lingering concerns regarding this bill, I 
have voted for this bill. After meeting with an Assistant Secretary for 
the Treasury, some of my concerns were answered; others remained. For 
example, the Assistant Secretary indicated Treasury's intervention in 
the markets will afford it the opportunity to purchase toxic assets. 
After Treasury purchases these toxic assets at fair market value, it is 
expected that the purchase price will set a marker so that other 
similar classes of assets will be purchased at the same or higher price 
level. This is a positive development for banks and financial 
institutions to recapitalize themselves. By itself this would be a help 
to commercial banks that desire to sell off their toxic assets.
  In my conversation with the Assistant Secretary, he indicated that as 
time goes on, Treasury will develop guidelines for identifying and 
helping troubled small and community banks. It is intended that small 
and community banks and small, women, and minority-owned businesses 
will all be aided by this legislation. These latter institutions will 
be aided because it is expected that there will be more liquidity in 
the market available to these entities and that more credit can be 
extended to them.
  Lastly, the Assistant Secretary indicated that under sections 109 and 
110, that Treasury has every incentive to renegotiate the terms of 
troubled mortgages. Importantly, the Assistant Secretary indicated that 
not all homeowners who are facing mortgage foreclosure will be helped. 
The goal, however, is to help as many Americans as possible.
  I have drafted a letter to Chairman Frank of Financial Services, and 
I have raised several questions to which I would like answers.
  First, I have asked Chairman Frank that should something go wrong 
with this bailout, whether Congress can be called to reconvene at any 
time before or after the election.
  Second, I have asked Chairman Frank to share the constitutional grant 
of authority that would prevent the Secretary of Treasury from having 
unfettered power so that there will be a balance between the interests 
of the banks and individual homeowners.
  Third, I have asked Chairman Frank what members of Congress can 
expect in the 111th Congress regarding follow-up on this bill and the 
financial situation generally.
  Fourth, I have asked Chairman Frank to answer how members can ensure 
that community and regional banks can take advantage of this bill.
  These are critical questions that need to be answered.
  I believe that Wall Street is an important and vital part of the 
Nation's economy. I believe that the people who work there are good. It 
is a well known fact that financial markets do not always serve small 
businesses and minorities. I have personally had experiences where good 
hardworking people and small business owners were denied access to 
financial markets.
  I believe in America and I believe in its Constitution. I believe 
that this bill would allow constant monitoring and vigilance and would 
help the American people.
  I am reminded of the Preamble to our Constitution, which reads:
  ``We the People of the United States, in Order to form a more perfect 
Union, establish Justice, insure domestic Tranquility, provide for the 
common defence, promote the general Welfare, and secure the Blessings 
of Liberty to ourselves and our Posterity, do ordain and establish this 
Constitution for the United States of America.''
  I would like to end with a quote from Alexander Hamilton: ``the 
sacred rights of mankind are not to be rummaged for, among old 
parchments, or musty records. They are written, as with a sun beam in 
the whole volume of human nature, by the hand of the divinity itself 
and can never be erased or obscured by mortal power.''
  I hope that this legislation will provide the American people with 
the sun beam. It is my hope that this legislation works and that it 
serves the American people.
  Mr. SCOTT of Virginia. Madam Speaker, we obviously have a crisis in 
the financial markets. Major firms have failed and others are failing. 
We are in an economic downturn with people losing their homes, 
businesses going under, and credit drying up for small businesses and 
consumers. The current crisis is the predictable consequence of the 
failed economic policies of the last 8 years. These policies are the 
ones that have produced record budget deficits, the worst job growth 
since the Great Depression--including our ninth consecutive month of 
job losses--and the worst Dow performance in over three decades. 
Congress should address the crisis with appropriate legislation.
  The Senate bill that we considered today is not fundamentally 
different from the bill we voted on Monday, although some have 
attempted to change the name of the package from a ``bailout'' to a 
``rescue.'' The foundation of the bill remained the outlay of $700 
billion for the purchase of worthless assets. On balance, the final 
version of the bill was still not a good deal for taxpayers.
  Whether or not the bailout act we voted on today was a ``good'' deal 
rises and falls on the issue of fair value. You cannot rationally 
determine the worthiness of a purchase, without first assessing what 
the fair value is, and

[[Page 23971]]

whether you are paying more or less than that fair value. If the 
bailout legislation included a provision that would provide that the 
Federal Government would pay no more than the good faith estimate of 
the fair value for the assets, then it would be a good deal. Some of 
the assets we will be asked to buy are options, derivatives, and other 
exotic speculative investments that are in fact worthless. There is no 
public policy rationale to bail investors out of speculative securities 
that did not pay off. Since there is no commitment to calculating a 
good faith fair value price, and to paying no more than that price, 
this is a bad deal for the American people, because we will undoubtedly 
overpay for these assets. Therefore, the worthiness of the deal rises 
or falls on the commitment to limit payments to a fair value.
  I am not suggesting that establishing a fair value of these assets 
will be easy. But there are well established factors in other 
situations to determine the value of assets when selling prices or bid 
and asked prices are not available. And it is our obligation as 
protectors of the U.S. Treasury to require that no funds should be 
spent without a reasonable assessment of what we are buying.
  Furthermore we should not give unlimited discretion to buy assets at 
prices obviously higher than fair value to an administration frequently 
accused of cronyism and favoritism.
  We are dealing with three separate but inter-related problems: 
illiquidity in the credit market; insolvency of some financial 
institutions; and the hardship of homeowners. Offering fair value 
prices for assets will address the issue of liquidity. If we limited 
purchasing prices to fair value, we could purchase assets, reestablish 
confidence, wait for the markets to reinvigorate and the private sector 
could then buy assets back from the Government. Even if it took more 
than $700 billion, as long as we were paying fair value, and receiving 
assets earning more than our borrowing costs, we could be confident 
that, in the long run, this solution would at least break even, and 
would likely make money for the taxpayer even if we held the assets to 
maturity. But since the bill provides no limit on the price we pay for 
assets, we will undoubtedly overpay, and lose money on the deal. If we 
paid fair value, we could solve the liquidity crisis without any likely 
cost to the taxpayers. Unfortunately, there is nothing in the act to 
restrict payments for assets to their fair value.
  The problem with illiquidity which affects credit relates to lending 
institutions holding valuable but temporarily illiquid assets on their 
books. While there is no market for those assets, accounting regulators 
require the assets to be valued at virtually zero. Since lending 
authority is directly related to the institution's capital, this 
markdown significantly reduces lending authority, which leads to the 
credit crunch. This problem can be solved either by the government 
purchasing the assets at fair value or by a change in accounting 
regulations to allow assets to be booked at ``fair economic value'' 
rather than ``market value''. This administrative change in the ``mark 
to market'' rule would significantly increase lending authority at no 
cost to the taxpayer. In addition there are a handful of banks that 
have sufficient capital but not enough deposits to sustain lending 
authority; in those few cases, simply depositing federal funds in the 
bank would increase lending capacity.
  Another factor affecting credit is the reluctance that banks have to 
lend money to other banks; for fear that the other bank might go broke 
without notice as several recently have done. This problem can be cured 
by the issuance of ``net worth certificates'' which would guarantee the 
net worth of a bank, for a fee which would insure that there would be 
no net cost to the taxpayer. This has been done successfully in the 
past.
  There are other ways to instill confidence in financial institutions 
without spending any of the taxpayer's money. William Isaac, former 
head of the FDIC, has suggested that FDIC exercise the powers already 
granted to it by Congress. The FDIC can take emergency action and 
declare that no general creditor of a failed bank will suffer a loss if 
the bank fails. That declaration, when coming from the FDIC would, by 
statute, be backed by the full faith and credit of the United States. 
This action would be a signal to the worldwide market that the full 
faith and credit of the United States stands behind our banks, and an 
influx of capital would soon follow. Another FDIC change would be to 
increase the limit at which FDIC insures deposits from $100,000 to 
$250,000. This would limit the destabilizing impact of major 
withdrawals from banks. This provision is not controversial and is 
actually in the bill.
  Another factor which affects capital and therefore lending authority 
is the downward pressure on stock prices caused by short selling. 
Administrative action has already been taken to prohibit ``naked short 
sales'' and to restore the ``uptick'' rules.
  After the bill was defeated on Monday, I worked with other members 
who were skeptical of the bill, to propose cost-effective solutions to 
the crisis. Representative Peter DeFazio has produced a bill, the No 
BAILOUTS, Bringing Accounting, Increased Liquidity, Oversight and 
Upholding Taxpayer Security Act, that outlines administrative changes 
that could be implemented at no cost to the taxpayer. The bill directs 
the administration to implement a net worth certificates program, 
adjust mark to market valuation rules, increase FDIC insurance limits, 
and regulate short sales. These no-cost changes would be more likely to 
have an impact on the domestic credit crunch than spending $700 billion 
purchasing worthless assets from all over the world.
  Some argue that overpaying for assets will help solve the second 
problem of the crisis, the insolvency of some financial institutions, 
by providing capital to these institutions. I believe that we should 
help financially troubled companies that have a good chance of 
stabilizing and coming back with our help. Unfortunately, there is 
nothing in the bill to stop companies in no distress, or companies that 
are hopelessly insolvent, from selling their toxic assets to the 
Government, and any overpayment for assets those companies sell will 
provide no value to the taxpayer. There are more efficient ways of 
targeting financial assistance to appropriate companies than making 
overpayments to all companies.
  Congress does have an interest in assisting homeowners, but 
homeowners struggling to pay mortgages will find little comfort in this 
legislation. We should have included meaningful assistance for 
struggling homeowners in the bill. All homeowners would benefit because 
homeowners who are paying their mortgages on time have been hurt by 
home prices collapsing because of the flurry of foreclosures, and 
perspective homeowners are having difficulty finding new mortgages. The 
bill directs the Treasury Secretary to implement a plan to decrease 
foreclosures, ``to the extent that the Secretary acquires mortgages''. 
The problem is that the toxic securities that the Treasury is being 
asked to buy are not individual mortgages, but options, derivatives and 
other securities comprised of portions of hundreds and sometimes 
thousands of different individual mortgages. It is therefore unlikely 
that the Secretary will have the authority to change the mortgage terms 
and help prevent foreclosure in any significant number of actual 
mortgages.
  There are many effective ways to actually help homeowners. In 
November 2007, Representative Joe Baca introduced H.R. 4135, the Family 
Foreclosure Rescue Corporation, FFRC. Representative Baca's bill is 
based on the concept of the Home Owner's Loan Corporation, HOLC. During 
the Great Depression, this Government entity was created to buy 
troubled mortgages, and then refinance the mortgages at rates the 
homeowners could afford, preventing more foreclosures and stabilizing 
housing prices. When HOLC ended operations in 1951, it had turned a 
profit to the taxpayer. H.R. 4135 would create the Family Foreclosure 
Rescue Corporation, FFRC, to refinance loans for people currently in 
foreclosure or in serious default. Families will be able to refinance 
their mortgage through a Government administered loan with a set 
interest rate. FFRC would assist homeowners paying on the mortgages 
that back many of the toxic assets the Treasury is being asked to buy. 
Providing stability in the mortgage market is a much more direct 
solution to the foreclosure problem than overpaying for worthless 
options and derivatives backed by the bad mortgages, and this strategy 
is much more likely to help struggling homeowners. The HOPE for 
Homeowners program, a Federal program established by the housing bill 
passed earlier this year, is another program designed to directly 
assist homeowners, and Congress could do more to encourage mortgage 
holders assist their mortgage payers and themselves by utilizing the 
program. Changes to bankruptcy rules that would allow homeowners to 
renegotiate the loan on their primary residence would be another 
provision that would help homeowners.
  Although the major assessment of the core provisions of the bill 
rises and falls on the issues of fair price valuation and actual 
assistance to homeowners, there are other issues addressed in the 
legislation. The media has reported that there are provisions in this 
bill to limit executive compensation and to protect the taxpayer. The 
actual language in this bill does not support these reports. There are 
huge loopholes in the bill that allow companies to continue to pay 
executives exorbitant salaries. And, the taxpayer protections in the 
bill are flimsy. If the bailout does not pay for itself, the bill 
leaves it to a future administration to propose a bill to tax financial 
institutions to raise the money taxpayers have lost. In a

[[Page 23972]]

Congress where there is outrage against any new tax proposal, if there 
is no political will to pay for the bailout in the middle of the 
crisis, there will be even less political will to raise taxes on 
financial institutions that may still be struggling in the future.
  The failure of the bill to limit the purchase of any assets to the 
fair value of those assets means that the bill will not effectively 
address the underlying issues: purchasing worthless assets adds nothing 
to general liquidity; overpaying for assets from all companies is an 
inefficient way to help those companies who only need temporary 
assistance to survive; and overpaying for assets does nothing for 
homeowners. Furthermore, this bill will fail to instill confidence in 
the market when it becomes apparent that the language of the bill is 
unlikely to match the public description of the bill on CEO 
compensation, foreclosure prevention and protection of the taxpayer. 
For those reasons, I regret that I was unable to support the bill.
  We should have drafted a new bill with the inclusion of many of the 
alternative proposals I have laid out in this statement. The result 
would have been a comprehensive bipartisan bill which targets our 
Federal assistance to the goals we need to address: illiquidity in the 
market, solvency for appropriate businesses, and assistance to 
homeowners.
  By spending $700 billion ineffectively on this crisis now, we will 
not have funds to respond to the next phase of our financial crisis in 
the future. For example, homeowners are continuing to lose their homes, 
and we have done very little to stem the tide of that problem. And 
because of today's vote, we will have fewer resources to address that 
problem in the future. Furthermore, we must not forget that the 
underlying problem is that we are in an economic downturn, and our 
actions must be deliberate and measured if we are going to steer our 
way out of this mess. Unfortunately, we now have $700 billion less to 
address our economic situation.
  There are many administration initiatives that require virtually no 
taxpayer money, which would have a huge impact on the banking crisis, 
the solvency of businesses, and the challenges of homeowners. We should 
have begun with proposing those no cost administrative changes, before 
we authorized the expenditure of $700 billion on a plan unlikely to 
make any difference at all.
  Mr. HOLT. Madam Speaker, I rise today in reluctant support of H.R. 
1424, the Emergency Economic Stabilization Act.
  My constituents are angry and I am too that we let our economy get to 
this point. The speculation and greed of Wall Street in recent years--
coupled with years of failures, excesses, arrogance, and 
irresponsibility of the regulatory agents, Treasury and other Cabinet 
Departments, the White House and even some in Congress--has resulted in 
the meltdown of our Nation's financial and credit markets.
  Many have passionately called for rejection of this compromise bill 
sent to us by the Senate following the rejection of the House bill 
earlier this week. There is a temptation for me to vote ``no.'' We 
could teach a lesson to Wall Street highflyers. We could teach a lesson 
to Secretary Paulson, President Bush, and the regulatory agencies. We 
could teach a lesson to the mortgage companies who entice borrowers to 
get over their heads. We could teach the Senators a lesson not to 
attach extraneous things to a financial bill. We could let the credit 
markets freeze up. We could let small businesses fail to meet next 
week's payroll. We could let college students drop out because they 
can't pay tuition. We could leave farmers, homeowners, and factories 
out in the cold. Would that teach the right lesson to the right people? 
I don't think so.
  Market turmoil is affecting more than the 78,000 New Jerseyans who 
work on Wall Street and the 266,200 New Jerseyans who work in the 
financial services sector throughout the State. There are thousands of 
my constituents who are not traders or high powered executives but 
still work in impacted industries. If left unchecked the credit crisis 
will hurt all of New Jersey, painfully affecting New Jerseyans from 
factory to financial district from farm to pharma. Furthermore, 
millions of Americans who have retired or are nearing retirement have 
seen their value of their pensions shrink. If day-to-day credit 
tightens up, Americans will not be able to get loans for college, cars, 
or a new furnace for the corner store. We need to act to ensure that 
retirement funds and pension plans are not devastated by investments 
that have lost value in a jittery market. Indeed we must act--we must 
stand behind our institutions, restore confidence in our markets, and 
protect millions of Americans who would be affected by a continuing 
collapse. That said, this bill is only one way to do that, and not the 
best way. I have worked with my colleagues to improve this bill, and I 
believe these improvements are sufficient to make the bill worth 
approving.
  There is much that should have been done and must still be done fix 
the problems in federal financial oversight agencies. The Treasury 
Department should have exercised its authority to oversee the mortgage 
markets. The Federal Deposit Insurance Corporation, FDIC, should have 
raised the insurance limit on deposits, which has not been raised for 
28 years, and created a net worth certificate program similar to the 
one that helped shore up banks in the 1980s. The Securities and 
Exchange Commission, SEC, should have prohibited short selling 
especially, naked short selling. It should have changed the mark-to-
market rule that forces banks' assets to be valued not at their long 
term worth but at what they would be sold--if only they could be sold--
for on market today. Alan Greenspan, the Chair of the Federal Reserve, 
should have followed the instructions of Congress in 1994 to regulate 
the mortgage market. Greenspan failed to act to institute oversight for 
years and years and when succeeding Chairman Bernanke finally 
recognized the need to act it was years too late. Had the Treasury 
Department, FDIC, the Federal Reserve, and SEC acted we would not be in 
this mess today. The Democratic Congress has tried to set this right 
several times. However, we failed to convince the administration to do 
what was right. Recently I have joined my colleagues in introducing 
legislation requiring the Treasury Department, FDIC, and SEC to take 
these actions and it is my hope that they will use their existing 
authority to undertake these common sense measures. Indeed some of 
those recommendations are included in this final version of the bill 
that is before us today.
  After careful and thoughtful review, I support the bill before us 
today because this legislation will help to mitigate this financial 
crisis, restore confidence in our financial institutions, and bring 
much needed liquidity to our marketplace. This bill is not, as so many 
of my colleagues have said on the floor today, a bailout that will save 
the fat cats on Wall Street. Had we accepted Secretary Paulson's 
original proposal that is exactly what it would have been. If the 
President had his way, he would have ridden a wave of fear and 
railroaded Congress into passing Secretary Paulson's original 3-page 
proposal asking for $700 billion--with no oversight--to bail out the 
financial services agencies. I did not support the original plan. The 
bill before us is a significant improvement to the original Bush-
Paulson plan. While I believe that every Member of this body has what 
they think are better ideas how to fix the problem, no one has 218 
votes for his or her plan. This is the plan we have. Legislative 
compromise is rarely pretty to watch.
  This legislation includes protections to ensure that the taxpayers' 
money is not wasted. Only half of the authorized $700 billion would 
initially be available to the Treasury Department. A strict oversight 
board would be created to monitor how these funds are being used and 
the effect it has on the economy, and to advise the Secretary of the 
Treasury Department on how these funds are used. Congress and the 
President would have to approve the release of the next $350 billion if 
it is needed. This legislation would require the Treasury Department to 
implement a plan to mitigate foreclosures and to encourage lenders to 
modify loans and mortgages to prevent foreclosures and keep people in 
their homes. The bill also helps save small businesses that need credit 
by allowing small community banks to deduct losses from investments in 
Fannie Mae and Freddie Mac stocks. It will shore up banks by increasing 
FDIC insurance to $250,000 and prevent runs on banks. Finally, we can 
expect that taxpayers will recoup most of the money spent on this 
proposal through the equity they will hold in companies helped by this 
proposal. The total cost will be much, much less than $700 billion.
  This legislation also extends a needed tax relief which, unless 
extended, would expire at the end of the year. It will provide a one 
year patch that will prevent 88,000 New Jerseyans from getting hit by 
the Alternative Minimum Tax, AMT, this year. It will retain and create 
half a million jobs and strengthen our economy by extending the 
renewable energy tax credits. It will extend essential tax cuts for 
American families helping 4.5 million Americans afford college by 
extending the tuition deduction, and extending the child tax credit. It 
will extend for 1 year my initiative that allows a property tax 
deduction for taxpayers who do not itemize on their tax returns of $500 
for single filers and $1,000 deduction for joint filers. The 
legislation helps American small businesses by extending the R&D tax 
credit and the new markets tax credit. It will also require mental 
health parity in employer-based insurance and end discrimination 
against patients seeking treatment for mental illness, an initiative 
that I have been working on since I was

[[Page 23973]]

elected to Congress. These extraneous tax provisions should not have 
been added by the Senate. Nonetheless, most of the tax cuts in this 
bill have been passed by the House several times and are not ``pork.'' 
In fact they are the same tax benefits that are currently in effect and 
that this body has passed several times.
  I do not deny that there are provisions in this bill that do not 
belong. In fact, the provisions decreasing the excise tax on Puerto 
Rican rum as well as the decrease in the excise tax on wooden arrows 
are egregious. There should not be a tax deduction for movie and 
television producers. Nor should this legislation encourage the 
production of dirty fuels like coal to liquids and oil shale. I cannot 
justify these provisions, but I will not vote against teachers being 
able to get a tax deduction for buying supplies for their students, 
against the solar tax credit which has helped New Jersey become one of 
the nation's leaders in solar energy production, or against incentives 
for businesses and individuals to donate items to schools.
  We can expect that H.R. 1424 will help American families by loosening 
the credit market. However, if we do not address the origins of this 
problem we will be forced to come back again to address the symptoms. 
The root of this problem is that bad mortgages, when mixed with the 
good mortgages, have poisoned the financial papers. We need to help 
Americans saddled with these bad mortgages. It is estimated that a 
million currently solvent mortgages will turn toxic by next year and 
further destabilize our financial institutions. It is our 
responsibility to prevent this from happening. Doing so would benefit 
the homeowners, the neighborhoods, the towns, and the investors in the 
financial district.
  I suggest that we consider a model that has been proven to help the 
homeowner, the Home Owners' Loan Corporation, HOLC. The Home Owners' 
Loan Corporation of the 1930's through the 1950's helped people with 
their mortgages. It was a Federal program that shored up a collapsing 
market and rescued a million homeowners. Incidentally, when it finally 
went out of business, it showed a net plus for the taxpayer. I will be 
introducing legislation which would create such a program. Indeed, that 
legislation should have been used instead of the Paulson-Bush approach.
  I believe that Congress should come back into session after the 
November elections to pass such a bill and to take up an economic 
stimulus package that will help those suffering on Main Street. It is 
deeply concerning to me and infuriating to our constituents that as we 
have focused on the crisis on Wall Street we have not paid comparable 
attention to American families that have been struggling for months. 
The unemployment rate has been steadily increasing, reaching 6.1 
percent this month, the highest level since 1992. This year, 605,000 
Americans have lost their jobs. Employed Americans are continuing to 
struggle with increasing energy and food costs and decreasing wages. 
Many are at risk of losing their pensions due to bad decisions made by 
Wall Street. We must deal with the bad mortgages. People want to punish 
those who behaved recklessly. There may be actual legal action. That 
may provide some satisfaction, but without today's bill it would not 
address the crisis of confidence, it would not help the people who are 
about to be hurt financially. We must deal with the long term problems: 
problems of bond traders wheeling and dealing in paper with no thought 
of the homes, factories and people behind these bonds; problems of some 
employers who show no allegiance to their workers; problems of families 
who in good times consume more than they save; problems of regulatory 
agencies that revel in the unrestrained trading. We should not wait for 
a new administration to help Americans who are suffering from this 
economic downturn and I urge my colleagues to reconvene Congress after 
the elections to address our Nation's pressing economic concerns.
  Mr. TURNER. Madam Speaker, I oppose H.R. 1424 today because it does 
not address the real problems that caused this current financial 
crisis.
  Madam Speaker, I voted against the financial bailout legislation that 
failed on Monday, with the hope that Congress could then work on 
different ideas for how to solve this problem. Instead, we have been 
given nearly the exact same proposal, with little modification, but 
with a much larger price tag. Although I support taking action to help 
correct the damage done to our markets, I believe that making the wrong 
choice today places a risky and heavy burden on American taxpayers. 
Today's legislation does not provide adequate assistance to homeowners, 
does not provide assistance to communities with large quantities of 
foreclosures, and does not prohibit the predatory lending practices 
that got us into the current crisis.
  Madam Speaker, the Treasury Secretary and the Chairman of the Federal 
Reserve have both indicated that this may not work. Further, there is 
no backup plan if this proposal does not work. When discussing this 
bailout, it is important that people keep in mind that agreeing to the 
$700 billion price tag could be only the beginning. This bailout would 
transfer billions of dollars in mortgage-backed securities to the 
federal government and provide no roadmap for what comes next. If these 
properties are foreclosed, the federal government is not prepared to 
become the Nation's largest homeowner without seriously considering how 
it will handle these mortgaged properties. If the Federal Government 
takes possession of these mortgages, questions like ``who will replace 
the roofs and windows,'' will abound.
  That is why I have introduced H.R. 7113, the Preserve our 
Neighborhoods Act, a bill which would allow communities who have been 
hit hardest by the foreclosure crisis to purchase the mortgages 
acquired by the Treasury during the course of the bailout. This would 
allow these local governments to take abandoned, blighted properties, 
and redevelop them for more productive use.
  Additionally Madam Speaker, I have joined my Ohio colleague 
Congressman Steve LaTourette in attempting to amend the current package 
to reduce the amount of the initial bailout payment, and increase 
Congress's role in allocating additional funds. Both of these 
provisions would provide some commonsense reforms to this bill--these 
provisions would add accountability to the bailout payment, and address 
a real problem that's facing local communities.
  Congressman Representing Ohio's Statement H.R. 1424 Concurring to the 
Senate A Speaker,
  But sadly Madam Speaker, these reforms are not a part of this 
package. Instead, we have essentially the same package we had before, 
only with tax credits and earmark spending. Any legislation that we 
bring forward should hold the right people accountable and prohibit the 
bad lending actions that led to this crisis. Today's bill fails in this 
respect and therefore leaves us vulnerable to the same situation in the 
future.
  While I am in favor of the tax extenders and have voted in favor of 
mental health parity, both of which are included in the current 
package, the underlying problem still remains: how does the federal 
government address the foreclosures that have led to this mess. 
Something should be done Madam Speaker. Something should be done to fix 
this problem. Unfortunately, H.R. 1424 is not the solution.
  Mr. PAUL. Madam Speaker, only in Washington could a bill demonstrably 
worse than its predecessor be brought back for another vote and 
actually expect to gain votes. That this bailout was initially defeated 
was a welcome surprise, but the power-brokers in Washington and on Wall 
Street could not allow that defeat to be permanent. It was most 
unfortunate that this monstrosity of a bill, loaded up with even more 
pork, was able to pass.
  The Federal Reserve has already injected hundreds of billions of 
dollars into U.S. and world credit markets. The adjusted monetary base 
is up sharply, bank reserves have exploded, and the national debt is up 
almost half a trillion dollars over the past two weeks. Yet, we are 
still told that after all this intervention, all this inflation, that 
we still need an additional $700 billion bailout, otherwise the credit 
markets will seize and the economy will collapse. This is the same 
excuse that preceded previous bailouts, and undoubtedly we will hear it 
again in the future after this bailout fails.
  One of the most dangerous effects of this bailout is the incredibly 
elevated risk of moral hazard in the future. The worst performing 
financial services firms, even those who have been taken over by the 
Government or have filed for bankruptcy, will find all of their poor 
decision-making rewarded. What incentive do Wall Street firms or any 
other large concerns have to make sound financial decisions, now that 
they see the Federal Government bailing out private companies to the 
tune of trillions of dollars? As Congress did with the legislation 
authorizing the Fannie and Freddie bailout, it proposes a solution that 
exacerbates and encourages the problematic behavior that led to this 
crisis in the first place.
  With deposit insurance increasing to $250,000 and banks able to set 
their reserves to zero, we will undoubtedly see future increases in 
unsound lending. No one in our society seems to understand that wealth 
is not created by government fiat, is not created by banks, and is not 
created through the manipulation of interest rates and provision of 
easy credit. A debt-based society cannot prosper and is doomed to fail, 
as debts must either be defaulted on or repaid, neither resolution of

[[Page 23974]]

which presents this country with a pleasant view of the future. True 
wealth can only come about through savings, the deferral of present 
consumption in order to provide for a higher level of future 
consumption. Instead, our Government through its own behavior and 
through its policies encourages us to live beyond our means, reducing 
existing capital and mortgaging our future to pay for present 
consumption.
  The money for this bailout does not just materialize out of thin air. 
The entire burden will be borne by the taxpayers, not now, because that 
is politically unacceptable, but in the future. This bailout will be 
paid for through the issuance of debt which we can only hope will be 
purchased by foreign creditors. The interest payments on that debt, 
which already take up a sizeable portion of Federal expenditures, will 
rise, and our children and grandchildren will be burdened with 
increased taxes in order to pay that increased debt.
  As usual, Congress has shown itself to be reactive rather than 
proactive. For years, many people have been warning about the housing 
bubble and the inevitable bust. Congress ignored the impending storm, 
and responded to this crisis with a poorly thought-out piece of 
legislation that will only further harm the economy. We ought to be 
ashamed.
  Ms. SCHAKOWSKY. Madam Speaker, I rise in reluctant support of H.R. 
1424, the Emergency Economic Stabilization Act. On Monday, the House 
failed to pass a rescue package, and the stock market dropped 777 
points--the biggest one day point drop in US. history. The impact of 
that drop wasn't just felt on Wall Street; it was also felt on Main 
Street. On Monday alone, Americans lost $1.2 trillion in the stock 
market. Almost 50 percent of Americans are invested in the stock market 
in some way, whether through retirement accounts or private 
investments, and they rely on credit and their investments to make ends 
meet.
  This legislation is about protecting people's retirement accounts and 
pension plans. In the last year, investments have declined by nearly 24 
percent, putting the retirement security of millions at risk; I am 
worried that without this package, they will continue to the downward 
spiral. This legislation is about making sure that there is enough 
credit in order for students and families to take out loans to afford 
to go to college. It is about letting businesses make their payroll. It 
is about helping people stay in their homes. That is why dozens of 
groups representing educators, colleges, the homeless, pension 
managers, and others support this legislation,
  I want to make it very clear that I think this legislation is far 
from perfect--and, like many of my colleagues, I would have written a 
very different bill. However, I believe that Monday demonstrated that 
we had to act. Years of harmful Republican policies that pushed for 
deregulation and tolerated an almost total lack of enforcement, and a 
misguided philosophy that insisted that an unregulated market can heal 
all ills, have now led us to the brink of economic collapse. And I am 
deeply concerned--and hundreds of economists agree--that the failure to 
act could lead to a major economic depression.
  Again, the rescue plan, while still imperfect, has come a long way 
from where we began. Instead of giving the President $700 billion with 
virtually no oversight or safeguards, we require Congressional review 
after the first $350 billion. And this legislation requires equity 
sharing, so taxpayers would benefit from future growth in the 
investments they have bought, and it requires Wall Street to pay back 
any losses to the Government. We are stopping forms of executive 
compensation that would encourage executives to take excessive risks, 
eliminating golden parachutes for executives who take part in the 
Government program, and cracking down on excessive compensation 
practices for the first time in history. And we include strong, 
independent oversight to protect the taxpayer, including two oversight 
boards to ensure that the Treasury Secretary is acting on good faith, 
as well as judicial review over the Secretary's actions.
  While I would have liked to see the tax provisions paid for by 
rolling back some of the President's tax cuts to the wealthiest 
Americans and closing corporate loopholes, there are also important tax 
fixes that will benefit millions of Americans and small businesses 
across the country. The legislation provides property tax relief to up 
to 30 million homeowners--extending a new $1,000 property tax deduction 
for non-itemizing couples through the end of 2009. It extends the 
qualified tuition deduction for low- and middle-income Americans. It 
extends the child tax credit, which will benefit millions of Americans 
with children age 17 and younger. It extends the Research and 
Development tax credit, which spurs innovation and job growth in the 
technology sector. And it extends critical renewable energy and energy 
efficiency tax credits to help the green economy take shape.
  This legislation also contains critical, comprehensive mental health 
parity legislation that will bring mental health insurance benefits in 
line with physical benefits. I have not held a health care meeting in 
my district without the issue of access to mental health care being 
brought up by my constituents who have faced discrimination or 
difficulty obtaining affordable care. I am proud that we are continuing 
Senator Paul Wellstone's legacy by passing a bill that guarantees equal 
access to mental health and substance abuse treatment. I also want to 
thank Representatives Patrick Kennedy and Jim Ramstad for their 
persistence and passion in passing the Paul Wellstone Mental Health and 
Addiction Equity Act.
  There is so much more we should do. I am strongly committed to 
enacting a second stimulus package that will truly benefit the American 
people. Today the House enacted 7 weeks of extended benefits for 
workers who have exhausted regular unemployment compensation, with 
workers in high unemployment states eligible for an additional 13 weeks 
of benefits. However, I believe we also need to make investments in our 
highways, bridges, transit systems, and schools; we need increases in 
food stamps benefits; and we need a crucial temporary increase in 
Medicaid payments to States. Studies have shown that those are some of 
the quickest forms of economic stimulus because those benefits and 
investments are spent quickly.
  This bill represents unfinished business. I will fight my hardest to 
make sure that we rein in the excesses of corporate America in the next 
Congress, and to see to it that this crisis does not happen again.
  Mr. TIAHRT. Madam Speaker, at the end of the day, I was sent to 
Congress in November 1994 because the people of the 4th congressional 
district of Kansas believed in the message of less Government spending, 
personal and corporate responsibility and lower taxes. Therefore, I 
remain committed to those who sent me here and opposed to the 
unprecedented power that would be given to the Federal Government 
through this bill.
  Last week, the Treasury Secretary came to Congress with a message: he 
needed $700 billion and he needed it now. I understand the need to act 
and the need to act quickly. At that time, however, I stood with my 
Republican colleagues and opposed the hasty call for an unprecedented 
blank check to the Federal Government.
  Over the weekend, Congress negotiated with the Secretary to work out 
a better proposal through several non-government based approaches. Some 
of the provisions I could support but the fact remains that a $700 
billion bailout of Wall Street is too much for our taxpayers to bear.
  On Monday, I joined with a majority of my Republican and Democrat 
colleagues to defeat this short-sighted fix that exposed Americans 
everywhere to long-term debt that could lead to an even greater 
financial crisis.
  Not wanting to be outdone, the Senate quietly inserted over a billion 
dollars worth of pork: $148 million for wool fabric producers, $2 
million for the makers of wooden arrows for children, and a $100 
million tax break to benefit NASCAR racetracks. Even Hollywood got a 
tax break gift worth nearly half a billion dollars.
  What was a three-page idea had grown in a week to more than 450 
pages.
  What it comes down to is that a $700 or $800 billion bailout with 
voluntary reforms was not a plan I could support. Worse yet, Sec. 112 
of the Senate bill, allows foreign financial institutions who hold 
troubled assets as a result of extending financing to financial 
institutions that have failed or defaulted on such financing to 
participate in this massive Government bail-out. What does this mean? 
Simply, the Federal Government has invited foreign financiers to 
participate in this bailout on behalf of every American.
  However, my decision today to oppose the Senate bill does not come 
easily. Many of us lost savings. Many employers expressed concerns 
about access to credit so they could make payroll for their workers. I 
heard from hard-working Kansans who were concerned about a downsized 
economy that could force them out of a job.
  A quick bailout fix might work for a short time, but it may not be 
long before we are asked again for more tax dollars. This is evidenced 
by recent Government bailouts of Bear Stearns, Freddie Mac and Fannie 
Mae, AIG, and the $25 billion tossed to the auto industry. A quick 
bailout fix might work for the short term, but without addressing the 
underlying problems, we will be asked again for more tax dollars.
  An economic rescue plan needs to include reforms that tie mortgage 
broker's commissions to borrowers' timely payments; a mandatory FDIC-
type insurance program for entities

[[Page 23975]]

with troubled mortgages; a suspension of ``mark to market'' accounting 
procedures; a temporarily suspension of capital gains taxes; and a 
permanent, not a temporary increase on FDIC coverage from $100,000 to 
$250,000 coupled with an increase in premiums so that the statutory 
obligation of 1.15 percent is met.
  The mandatory FDIC-type insurance program would require the Treasury 
Department to guarantee (losses up to 100%) resulting from the failure 
of timely payment and interest from mortgage backed securities 
originated prior to the date of the enactment. Such insurance, I 
believe, would provide immediate value to the securities and a 
foundation for which they could then be sold. I am disappointed this 
provision was not included as a mandatory program.
  Furthermore, instead of a Government-driven bailout, I support an 
alternative where the Government enables and coordinates a greater 
involvement of private investors. An alternative could be to allow 
companies to carry-back losses arising in tax years ending in 2007, 
2008, or 2009 back 5 years, generating a tax refund and immediate 
capital.
  These are just a few alternative provisions that I believe would be 
better than merely throwing money at a problem we hope to fix. I want 
Kansans to go to bed tonight with peace of mind and not worry about 
their savings. I am ready for this financial turmoil to calm and for us 
to focus on other important things in our lives. But I could not 
support a $700 or $800 billion bailout plan that embraces temporary 
relief while shunning long-term reform that brings lasting stability.
  I remain committed to working for a long-term solution with Democrats 
and Republicans who are willing to put the good of our country ahead of 
short-term fixes. It's the right thing to do.
  Mr. LATHAM. Madam Speaker, we have all heard from thousands of our 
constituents on this measure over the past two weeks. I spoke to one 
constituent of mine from Iowa yesterday who contacts me regularly to 
express her opinions and ideas. When discussing her opposition to this 
bill she summed up the frustrations of Iowans and the overwhelming 
majority of people across this country. She said ``the people out here 
in the heartland see this bill and bailout as a result of Washington 
talking to Washington--and not talking and listening to the real people 
beyond the beltway.''
  She hit the nail on the head. This measure today is a true result of 
Washington talking to Washington, of Congressional partisanship 
blinding the legislative process and blocking the chance for real 
common sense comprehensive solutions, and members of an administration 
that are quicker to respond to the needs and pain of Wall Street than 
the needs and reality on Main Street.
  The measure we voted on Monday was based almost exactly on the 
original plan of one man--that of Treasury Secretary Henry Paulson. 
This plan was sold to us with no guarantee of success--even from its 
author. This plan was created and based on a randomly selected price 
tag of $700 billion to the American taxpayers. When asked about why 
that number was chosen, a spokesperson for the Treasury Department 
responded in a news article last week that they came up with it because 
they wanted ``a really large number.''
  Additionally, the question has to be asked of this plan--is it 
morally right to spend hundreds of billions of dollars to reward and 
benefit those on Wall Street who were knowingly involved in risky and, 
sometimes, exotic financial investments that were hidden from the eyes 
of Federal regulators?
  Why is Washington so quick to focus on the needs of Wall Street at 
the cost of those responsible Iowans who have sacrificed, saved, and 
spent within their means?
  No wonder real America has lost faith in Washington.
  I voted against almost this same measure on Monday afternoon. It was 
a tough vote but it was the right vote. I took that vote so we could 
sit down as Americans who are truly interested in the well-being of all 
people in this Nation to find a more acceptable path--a well thought 
out common-sense path. After all, we do agree that something must be 
done to try and save this Nation and her people for what would be a 
devastating period of economic disaster.
  My hopes, and the hopes of the majority in this country, were dashed 
after the U.S. Senate not only embraced the plan we voted down earlier 
in the House, but added an even larger price tag on American taxpayers. 
And, the Senate--as only could be done in Washington--added hundreds of 
millions of dollars in pork to the bill to fund children's wooden 
arrows, race tracks and Puerto Rican and Virgin Islands rum. The Senate 
turned a deaf ear to the cries of the American people who are opposed 
to this measure and decided to add even more unwanted items to their 
tab.
  In the interest of full disclosure the Senate did add items that I 
fully support. Important provisions that could help Iowa's renewables 
industry--in wind, solar and biofuels--that could help Iowans who are 
struggling to rebuild after the devastating floods of this summer, and 
other common sense measures that include increasing FDIC insurance 
limits.
  But the foundation of the Senate bill that we are considering today 
remains the same--the randomly selected $700 billion plan that was the 
creation of one man, that empowers that one man to spend the money as 
he sees fit--yet has no guarantees for success or even realistic 
protection provisions that will close the taxpayer's check book if the 
plan is not working. I could never trust anyone person with complete 
discretion of $700 billion of taxpayer's money--no strings attached.
  As the members of this body know, I joined with a group of my 
colleagues yesterday to work to provide Washington with one last option 
other than the plan of based on a randomly selected number.
  We drafted an amendment that would give Secretary Paulson $250 
billion to use as proposed in his original plan. Even he has said that 
he could only spend at the most $50 billion a month. This gives him at 
least five months to see if his plan is working, and if it is proving 
to have success for all of America's economy, then he can return to 
Congress to request the remaining funds. While I know even $250 billion 
is unacceptable to many fiscal conservatives, the plan gave the 
American people some level of control over their tax dollars to know 
that a plan based on a randomly selected number would have to show 
success and benefits to main street before it was permitted to move 
forward beyond that additional smaller price tag.
  Our amendment also gave us time--time to come back here and discuss 
alternatives for the good of the nation as a whole.
  I believe that this amendment would have received overwhelming bi-
partisan support from the rank-and-file members whose voices were shut 
out of this process.
  Unfortunately, what has become standard operating procedure for a 
broken Congress, in a broken Washington, the members of this body--
representing the hundreds of millions of people in real America--were 
not even allowed the opportunity to vote on an alternate plan. Instead 
we are forced to consider--up or down, no committee hearings, no 
committee votes--this plan based on a randomly selected number.
  This week I have spoken with and listened to the reality of the 
economic landscape from small business employers throughout Iowa. I 
have heard from farmers, from colleges, from community governments, 
realtors, car dealerships, utility companies, and hometown bankers--
employers of hundreds of thousands of Iowans. They all have told me of 
the reality of their experiences with credit markets, the reality of 
economic turbulence, and the real fears that if nothing is done soon 
that Iowa is facing economic disaster like most of us have not seen in 
our lifetime. These are real people from real town America, who are 
doing the right things, providing good jobs for good people, who are 
leaders in their community and staples of the local economies who are 
suffering and face economic disaster not because of decisions they have 
made, but because of the decisions made on Wall Street and in 
Washington.
  It is clear to all of us that action is needed to protect our 
economy. But is this plan really the right action we should take? After 
all, supporting this bill just for the sake that we agree that action 
is needed does not guarantee that we are moving in the right direction. 
And, for those who are suffering in real America, actions we take now 
that are not fully debated and discussed could end up causing more 
economic harm over the long term.
  The events of the past two weeks--and the resulting proposal that we 
are forced to consider today--make it painfully clear to me, and 
millions of Americans, that Washington is unwilling, or incapable, of 
listening to anyone but Washington.
  That is why I must stand on principle once again today and vote 
against this measure with the hope that Washington will wake up and--
immediately following this vote--begin the responsible process of 
working together, working with the American people to find a solution 
that is well considered based on fundamental economic principles that 
addresses the real needs of real America--real main street. These are 
the principles on which our Nation was founded and these are the 
principles that we have the duty as Americans to stand up and protect.
  Mr. FORTENBERRY. Madam Speaker, the choice before us today is not 
between action and inaction.
  That is a false choice.
  Clearly there is a very serious economic challenge. The decision 
before us is whether

[[Page 23976]]

to adopt a potential $700 billion taxpayer liability to nationalize bad 
corporate debt or an alternative that may be less costly, easier to 
implement, and fairer to most Americans who have no blame for this 
mess.
  Earlier in the week, many of us said no to this, and because we said 
no, many helpful changes were made such as FDIC increases and a change 
in accounting rules that may be artificially driving down asset values.
  I know every Member is making a tough judgment call according to 
their conscience.
  But I have not heard a single Member say: ``I really believe in this. 
This will work.''
  Instead we hear: ``It stinks, it's the best we got, our problems will 
get worse, and we've got to get it done.''
  Madam Speaker, we are the legislative body. We make the law. There 
are other reasonable options that could be unpacked--hopefully 
quickly--to address falling asset value, increase liquidity, and 
provide needed capital.
  Ms. KILPATRICK. Madam Speaker, it is with significant reluctance and 
reticence that I will vote yes, on final passage, of the Economic 
Recovery Act. In the State of Michigan, which is facing record high 
unemployment, failure of businesses, and increasingly tighter credit 
markets, we must do something, right now, to ensure that the citizens, 
businesses, and organizations of the city of Detroit, the State of 
Michigan and the United States of America survive. This is not a 
perfect bill. I would have preferred that Congress explore other 
options, most of which did not involve a single dime from taxpayers, as 
was utilized during the savings and loan crisis, in a more deliberate 
manner. The provisions in the bill that ``recommend'' and ``suggest'' 
that the Secretary of the Treasury protect senior citizens, working 
families and others facing foreclosure; that ensure the utilization of 
qualified ethnic minority and women owned businesses, among others, 
need monitoring and oversight. The provisions are woefully inadequate 
and need improvement.
  My yes vote, and it is perhaps one of the most difficult votes I have 
made in my 30 years as a public servant, is a reflection of the fact 
that if Congress does not do something soon, we possibly face an 
economic Armageddon the likes of which we have not seen since the Great 
Depression. Since I voted against the first version of this bill, the 
stock market has dropped a net of over 500 points and over one trillion 
dollars in total value. Our labor market has lost over 200,000 jobs in 
the month of September. Inflation has risen to new highs. My office has 
been besieged with phone calls from hundreds of small- and medium-sized 
businesses that cannot purchase goods or services or meet their payroll 
because they cannot access their lines of credit. Parents in Michigan 
are concerned that they cannot secure student loans for their children. 
This inevitably hurts all Americans.
  The Constitution of the United States, to which each and every Member 
of Congress, the House of Representatives and the Senate, takes an oath 
to protect and defend at the beginning of each 2-year session of 
Congress. Article I, Section 9, clause seven, of the U.S. Constitution 
says ``no money shall be drawn from the Treasury but in consequence of 
Appropriations made by law.'' The Constitution also establishes three 
separate and distinct branches of government: the legislative, judicial 
and executive branches. As an Appropriator and for our U.S. House of 
Representatives, I oppose this bill's unprecedented and unparalleled 
secession of the power granted to us by the people and the Constitution 
transferred to one appointed person from the executive branch of the 
Federal Government.
  Households in Detroit, the State of Michigan, and America feel the 
rumblings of the financial earthquake beneath their feet. Unemployment 
has risen to all-time highs. Michigan is one of the leading States in 
unemployment, home foreclosures as well as business losses. The sudden, 
precipitous and dramatic slump in home values, retirement accounts and 
pensions is a prelude to worse things to come. I have fielded dozens of 
phone calls from businesses in my district from small convenience 
stores and automobile dealerships, to large corporations that are 
unable to access credit lines to make their payrolls. Without swift, 
immediate, and strong fiscal action and direction, America and 
Americans are in dire trouble.
  Again, it is impossible for parents to get student loans for their 
children attending college. It is virtually impossible to get a 
mortgage with a rate that is reasonable. It is hard to find a decent, 
paying job. Again, it is tough for businesses to get loans to purchase 
those goods, items, and services that mean the difference between 
surviving and thriving, or even making their payroll. We have lost 
hundreds of thousands of jobs in America this decade. This bill is not 
a cure-all, by any means. However, it is a start to stop the bleeding 
from which so many of our citizens and businesses suffer.
  This bill does contain several provisions for which I fought and 
support. The bill will immediately increase the Federal Deposit 
Insurance Corporation's, FDIC, limit from $100,000 to $250,000, which 
will increase confidence citizens have in our banking system and 
prevent bank runs. The home foreclosure provision allows the Secretary, 
at his discretion, to lower the interest rate and, in some cases, the 
principal of home mortgages, ensuring that more citizens will stay in 
their homes and not on the streets this winter. This bill will provide 
property tax relief to up to 30 million homeowners--extending a new 
$1,000 property tax deduction for non-itemizing couples through the end 
of 2009. Finally, the bill provides that minority- and women-owned 
businesses, along with minority professionals, at the suggestion of the 
Secretary of the Treasury, will be included as contractors and analysts 
and will hopefully get a portion of the $700 billion that will be 
utilized by Secretary Paulson to stabilize our economy.
  A key aspect of this bill that will become law is mental health 
parity for all Americans. Regrettably, too many private health insurers 
often provide less coverage for mental illnesses than for other medical 
conditions. Many insurers believe that mental health disorders are 
tough to diagnose, and that care for mental illness is ineffective, 
expensive and simply not worth the money. Thanks to this bill, all 
Americans will have access to mental health care. When mental health 
care is a part of our general health care, there is often little or no 
increase in cost to insurers. This is a most important aspect of the 
bill and is an aspect of which we all can be proud.
  While these provisions are not as strong as I would like, my 
opposition to the overall bill, or to these provisions, is not strong 
enough to risk the enormous battering that continues to hammer our 
families and our economic system. The economic consequences of inaction 
are such that the citizens and businesses of our State and our Nation 
might not survive. That is a risk that I refuse to take. I will 
continue to fight for even stronger rules and regulations as we work in 
the wake of this bill, under a new Democratic President.
  With the faith of God, with the support of the people of Michigan, 
and with the guidance and leadership of my ancestors, I will continue 
to work and fight to ensure that American families will be able to stay 
in their homes; that businesses will come back even stronger and 
employ, engage and ensure that more people have decent, fair paying 
jobs; and that Detroit and Michigan will rise to the heights that once 
made it, and America, the world's manufacturing powerhouse. My support 
of this bill is a beginning step in that direction.
  Ms. SPEIER. Madam Speaker, Wednesday night, before returning to 
Washington, I had a telephone townhall in my district with over 5500 
constituents.
  I'm here to report that they are angry.
  They are angry that the Government allowed Wall Street mega-banks and 
manipulators to act so irresponsibly that they have led our economy to 
the brink of disaster.
  They are angry that for over a decade, greed and abuse have been 
considered higher virtues than oversight and regulation.
  Madam Speaker, I'm angry, too. Because of the mess we're in, school 
districts back home have lost hundreds of millions of dollars in their 
reserve accounts. A San Bruno man who worked for 30 years at United 
Airlines is seeing his pension dissolve before his eyes. And Tony, an 
independent businessman from San Carlos, will likely have to close his 
remodeling business if he is unable to get short-term credit for 
supplies.
  Now we hear that the State of California may have to declare 
bankruptcy. These reasons are why I will vote for this bill.
  But Madam Speaker, no one should interpret this vote as approval of 
the situation we find ourselves in.
  This anger will not easily dissipate. We must commit ourselves in the 
next Congress to re-regulate the markets and repair the damage that 
years of ineptitude and inattention have wrought on our economy.
  Mr. BLUMENAUER. Madam Speaker, I do not support this economic 
recovery bill. While it is imperative that Congress act to address this 
financial crisis, this mixed bag of legislation is not the appropriate 
immediate or long-term solution. The hard work done by the Democratic 
leadership over the past week has made it better, but it's still not 
good enough. It doesn't go far enough to protect taxpayers or to help 
homeowners stay in their homes. I have been very vocal on the floor of 
the House of Representatives about my concerns that this proposal won't 
help our financial situation and may be beside the point.
  There are some extremely important provisions in the bill for which I 
have fought during

[[Page 23977]]

the past 2 years. For example, the bill extends the production tax 
credit for wind energy and investment tax credit for solar energy. It 
includes legislation I drafted to provide a tax credit for the purchase 
of small wind turbines. And it provides tax fairness so employers can 
offer the same transportation fringe benefits for bicyclists that they 
offer to employees who commute by car and public transit.
  I'm pleased that this bill will reauthorize the Secure Rural Schools 
program, which is so important to Oregon. I'm pleased that it will 
prevent the Alternative Minimum Tax from impacting millions of hard-
working, middle class families.
  The bad news is that, at a time when our national debt is at its 
highest point in over 50 years as a percentage of GDP, Senate 
Republicans chose not pay for most of the good things in this bill. I'm 
disappointed that the Senate also added a number of provisions to the 
bill that will provide incentives for coal-to-liquids and oil-shale 
fuels, which take us in the wrong direction in our battle against 
climate change.
  I hope this bill works to protect our commercial system, but I fear 
that it won't. I will continue to fight to deal with the consequences 
of added debt and poor energy investment choices. I look forward to 
closely scrutinizing the choices that the Treasury Department makes as 
a result of this legislation and working to improve the position of 
ordinary homeowners, American taxpayers, and our environment.
  Ms. ROYBAL-ALLARD. Madam Speaker, I rise in opposition to H.R.1424, 
the Emergency Economic Stabilization Act of 2008.
  There is little debate that there is a real crisis in our financial 
markets, and I share the sense of urgency felt by my colleagues as we 
look to bring stability to the financial sector and ensure the 
availability of credit to all Americans.
  I had hoped that when a new bill came to the House, it would be a 
comprehensive package that would include greater accountability from 
Wall Street, greater protections for Americans on the verge of losing 
their homes, and an economic stimulus package that would create jobs to 
strengthen our economy.
  The Senate did include important and beneficial provisions. I 
strongly support the addition of an increase in the FDIC's insurance 
cap to $250,000 and favor many of the included tax provisions such as 
renewable energy and research and development tax credits. In addition, 
I have consistently advocated for the mental health parity legislation 
that was the vehicle for this measure.
  However, despite these commendable additions, I must remain opposed 
to the underlying plan of committing $700 billion of taxpayer dollars 
to an untested plan with an uncertain outcome and inadequate 
regulations and oversight.
  While the bill begins to address the foreclosure crisis, its 
provisions are far from what many economists believe is needed to have 
a consequential impact on the American families who are losing their 
homes. To truly help stop the bleeding, I believe we must get at the 
root of the problem by including measures such as lifting the ban on 
loan modifications for primary residences during bankruptcy 
proceedings. This would enable homeowners to stay in their homes by 
renegotiating their loans. Preventing foreclosures will protect 
families, communities, and our economy.
  I am also concerned that while the measure creates a congressional 
oversight panel, the panel lacks teeth and can only make non-binding 
recommendations. If the taxpayers are expected to stomach a $700 
billion bailout, we have to insist on greater oversight authority.
  Finally, this bill is simply a temporary bandage if it does not 
include economic stimulus provisions that will create the jobs needed 
to strengthen our economy and improve the financial condition of the 
average American. While the problems on Wall Street have reached a 
breaking point, ordinary Americans have been feeling the pain of 
weakness in the economy for a very long time.
  If this legislation passes it is simply a stop gap measure. I am 
heartened by the comments of Chairman Frank who committed to reforming 
our financial regulatory and oversight system and by Speaker Pelosi 
promise that we will come back and consider stimulus proposals that 
will truly help grow our economy and positively impact those who have 
been hurt by this crisis.
  Madam Speaker, while I agree that inaction is not an option, I also 
believe we can, and must, do better than this legislation. I urge a no 
vote.
  Mr. WOLF. Madam Speaker, when the House responded to the economic 
crisis facing our country and considered a financial rescue plan this 
past Monday, September 29, the vote failed 205-228. Because of my deep 
belief that Congress must take action to restore the confidence and 
stability in the Nation's financial system and keep credit flowing to 
the people of Virginia and to households across the country, I voted 
for that legislative package and enclose for the Record my statement 
that day explaining my vote.
  I have never been more concerned about the financial future of our 
country. Following the results of the House vote, there was a record 1-
day point drop in the stock market that wiped out $1.2 trillion in 
wealth that average folks have tied up in retirement accounts, pension 
funds, and college savings. While there was a short-lived rebound on 
Tuesday, the market has continued on a downward spiral.
  The latest unemployment figures announced today showed that the 
economy shed 159,000 jobs in September, the steepest drop in 5 years 
and the ninth straight monthly decline. Also that day, world stocks 
fell to a new 3-year low. This news, combined with reports this week 
that U.S. auto sales fell in September by 27 percent from a year ago, 
points to a worrisome sign that credit is tightening and the economy is 
hurtling toward a deep recession.
  If we don't deal with this financial crisis now, foreign governments 
like China and Saudi Arabia, who already hold a significant portion of 
our debt, are waiting in the wings to buy up even more of America. We 
cannot allow China--a country that persecutes its own people because of 
their faith--or Saudi Arabia--which breeds the kind of radical ideology 
that led to the terrorist attacks on our country--to own what 
generations of Americans have worked so hard to build for their 
children and grandchildren.
  After the House's failed vote, the Senate worked to revise the 
bipartisan package. The new bill includes the base of the economic 
rescue plan voted on in the House plus additional taxpayer protection 
and tax relief provisions and was passed by the Senate 74-25 on 
Wednesday. Because I continue to believe that this Congress must act to 
restore confidence in our economy, I will vote today for this amended 
measure.
  The revised bill has significant new safeguards for taxpayers and 
important tax relief provisions that will increase the amount of bank 
deposits insured by the FDIC from $100,000 to $250,000 through 2009, to 
help stop a run on banks; protect 21 million working, middle-class 
families from getting hit with an average tax hike of $2,500 from the 
Alternative Minimum Tax, AMT, for tax year 2008; extend critical energy 
tax credits and incentives to encourage conservation and the 
development of renewable energy technologies such as wind and solar 
power; extend tax deductions on State and local sales taxes and out-of-
pocket expenses for teachers; expand the income threshold used to 
calculate the refundable portion of the child tax credit; extend a 
property tax deduction to homeowners who don't itemize, and provide tax 
relief for those in areas hit by recent natural disasters including 
hurricanes and floods.
  As in the original legislation, the revised measure authorizes up to 
$700 billion for a troubled assets relief program for the Treasury 
secretary to buy mortgages and other assets that are clogging the 
balance sheets of financial institutions and making it difficult for 
working families, small businesses, and other companies to access 
credit. While the legislation gives the Treasury secretary an immediate 
$250 billion for the program, it requires the president to certify that 
additional funds are needed, $100 billion, then $350 billion subject to 
congressional disapproval. The assets acquired by the Treasury will 
eventually be sold. Many economists believe that if they are purchased 
at appropriate discounts, it is fair to say that the Treasury will 
recoup the taxpayers' investment or could even turn a profit over the 
long-run.
  The measure also provides strong watchdog authority over the Treasury 
through an oversight board and a special inspector general to protect 
against waste, fraud and abuse. The bill also ensures that 
irresponsible corporate executives at institutions participating in the 
Treasury program will not be rewarded with multi-million dollar 
``golden parachutes'' or severance pay. The FBI continues to pursue 
corporate fraud investigations related to lenders, brokers, and 
appraisers involved in the mortgage and sub-prime loan crisis.
  I understand the concerns raised about the response to the financial 
crisis our country is facing. This package, including some provisions 
added by the Senate, is certainly not perfect. But I can't pick and 
choose from the parts. As I said in my statement after the House's 
initial vote, credit is the lifeline of our economy. Overall I believe 
this plan is vital to protect the long-term economic future of our 
country and to ensure that people in my congressional district as well 
as folks across

[[Page 23978]]

America are able to keep their jobs, get a home loan or car loan or a 
student loan to send their kids to college, and protect their savings 
and the value in their retirement accounts.
  I have always worked for the best interest of the taxpayers and 
residents of the 10th District which I represent. I am voting for this 
package because in good conscience I cannot stand by and watch the 
financial futures of the people across America tumble toward ruin not 
seen since the Great Depression. I believe this vote is the right thing 
to do at this time for our country.
  The American people are understandably angry that our Nation's 
financial condition has reached this point and I understand the worry 
that has brought. I'm angry and worried, too, and share the concerns of 
the scores of people from the 10th District who contacted me in recent 
days. I understand when folks say they don't want to ``bail out'' Wall 
Street when they see the greed and irresponsibility we've witnessed 
from some in the financial system gambling with other people's money 
and losing. Experts say that the root of the current financial crisis 
can be traced to the collapse of the sub-prime mortgage industry and 
the impact of high-risk loans on the Nation's housing industry.
  I agree and also share the concern about reports that some CEOs on 
Wall Street and top executives at Fannie Mae and Freddie Mac--which are 
now in Federal conservatorship--have gotten sweetheart deals and 
bonuses in the millions of dollars. That kind of action must not be 
rewarded and that's why I applauded the news that the FBI as well as 
the Justice Department and the Securities and Exchange Commission have 
launched investigations into potential criminal cases against firms 
accused of contributing to the market collapse.
  But I'm more worried about the people of Virginia and across America 
if we don't respond to the collapse in the credit markets in our 
country. We face a financial crisis and threat to the U.S. economy the 
proportions of which many say we haven't seen since the economic 
collapse of the Great Depression. For the past few weeks, the news has 
been filled with reports of some of the most prominent financial 
institutions in our country in free fall. Just this Monday, Wachovia, 
one of the largest banks in Virginia and perhaps a bank you or your 
family or neighbors use, was sold, and more banks are expected to fail.
  Access to credit is the lifeline of our economy. I'm worried that if 
we don't take the necessary action to shore up the Nation's credit 
system it will be the mom and dad in Herndon who won't be able to get a 
student loan to send their kids to college or buy a new house, or the 
young college graduate in Leesburg who won't be able to get a loan to 
buy a first car, or the older couple in Winchester nearing retirement 
whose nest egg in a 401(k) account is losing value, or the mom and pop 
store around the corner in Front Royal that can't get the loan to make 
payroll, or the family in Manassas who need to sell their house but 
watch as home values drop and the prospective buyer can't get a home 
loan.
  I believe this crisis calls for extraordinary action. Some say 
without action millions of jobs could be lost. I believe the 
legislative package before Congress was mis-named as a ``bailout.'' It 
is important to understand that it was a depression prevention plan to 
help restore confidence in and stabilize our country's credit system 
and ultimately the American economy. No legislation is ever perfect and 
there will be people of good will who disagree. But in tough times, it 
is the responsibility of lawmakers to act and make tough choices.
  I voted for this legislation today because I believe it was the right 
thing to do to begin the process of resolving this crisis and setting 
the country's financial institutions on sound footing. This legislation 
was a bipartisan compromise dramatically changed and improved from the 
original proposal and forged after tough negotiations between both 
political parties and the call that the measure must first and foremost 
protect taxpayers' investment and have transparency, accountability and 
oversight.
  The package fulfilled those goals by:
  Providing the Treasury secretary with authority to buy troubled 
assets currently held by financial institutions, but cut in half 
Secretary Paulson's original proposal of $700 billion in up-front, 
immediate authority. The plan would allow $250 billion in immediate 
authority, with another $100 billion available after the Secretary 
reports to Congress, and providing Congress with the authority to 
withhold the remaining $350 billion, assuring that economic assistance 
will be financed by Wall Street, not Main Street. Many economists 
predict that ultimately taxpayers will see all their investment fully 
recouped.
  Providing transparency and oversight through establishment of a 
bipartisan oversight commission, split evenly between minority and 
majority; reporting requirements to ensure proper reports to Congress 
and the public; a special inspector general; a financial stability 
oversight board; strict conflict of interest and unjust enrichment 
rules, providing that if after 5 years the Government has a net loss of 
taxpayer funds as a consequence of the purchase program, the president 
will be required to submit a legislative proposal to recoup such funds 
from program beneficiaries.
  Protecting taxpayers--not shareholders and not corporate executives--
against loss by placing taxpayers first in line to recoup losses from 
participating financial institutions in the event they fail or lose 
money.
  Prohibiting executive compensation or golden parachutes to ensure bad 
actors on Wall Street are not rewarded.
  Requiring the establishment of an insurance guarantee program that in 
lieu of purchasing assets with taxpayer funds is available to insure 
assets at no cost to the taxpayer. Costs would be fully paid for by 
participating companies, i.e., those receiving the assistance. Assets 
insured by the program would count against the total funds the Treasury 
secretary would otherwise have available to make purchases.
  In considering this package I had to answer this question: What is 
the consequence of doing nothing to help stop the hemorrhaging of the 
Nation's credit system, and even the broader consequence of a potential 
worldwide depression? I had to decide what is in the best interest of 
our country and the taxpayers and residents of this congressional 
district.
  When faced with that decision, I cast my vote for the legislative 
package. I was disappointed that the bill failed passage by a vote of 
205-228 and that a majority of my House colleagues both Democrat and 
Republican did not recognize the need to shore up our financial system 
and restore the flow of credit to help protect Main Street America.
  Just minutes after the final vote, the Dow Jones industrial average 
dropped over 700 points and closed for the day down 778 points, the 
largest one-day point drop in history. The broadest measure of the 
American stock market, the Standard & Poor's 500-stock index, fell 8.77 
percent, its biggest drop since October 1987. The failure to approve 
the legislation resulted in uncertainty and turmoil in the markets, 
eroding billions of dollars in individual savings and household wealth. 
In a few hours, an estimated $1.2 trillion in assets lost their value--
that is people's retirement accounts, pension funds, and college 
savings.
  With the failure of the legislation, it is uncertain what the next 
step will be, but the crisis in the financial markets continues, and 
congressional leaders have pledged to go back to work and negotiate a 
bipartisan solution to restore confidence in the markets and come back 
to the House for another vote. No matter what final legislation is 
enacted to help stem the current crisis, I believe Congress has lots of 
work to do in the future to reform financial market regulation so that 
our country is not faced with this kind of crisis in the future.
  The crisis in the credit markets, however, may be a symptom of a 
greater financial crisis on the horizon. We must come to grips with the 
national debt which is approaching $11 trillion. Then we must focus on 
the over $53 trillion in unfunded and unsustainable entitlement 
obligations we face as well as uncontrolled Federal spending. The 
statistics are staggering and real. Standard and Poor's Investment 
Service has indicated that the United States could lose its triple-A 
bond rating as early as 2012 if we do not take action to reverse 
course. By not dealing with this issue we are enabling foreign 
governments like China and Saudi Arabia to buy America. That is bad for 
our country.
  That's why I introduced the SAFE Commission Act, H.R. 3654, with 
Democrat Rep. Jim Cooper of Tennessee to set up a national bipartisan 
commission to put everything on the table and recommend to Congress a 
way to put our country on sound financial footing. The legislation 
requires an up-or-down vote by Congress. The Capitol Hill newspaper 
Roll Call said in an editorial that the SAFE Commission should be part 
of the discussion of any response to the financial markets crisis. 
Other newspapers and organizations across the political spectrum have 
agreed that the SAFE plan can be the way forward.
  P.S. I have based my service in Congress on the principles of honesty 
and integrity and doing what I believe is best for the people of this 
congressional district and the country.
  Mrs. MILLER of Michigan. Madam Speaker, I rise today in strong 
support of this legislation to provide some additional help to workers 
across this Nation who have been hard hit by our difficult economy.

[[Page 23979]]

  Just today it was announced that our national unemployment rate is 
6.1 percent, terrible rate that unfortunately we would be ecstatic 
within my district.
  People are hurting and they need help.
  This bill will provide an additional 7 weeks of unemployment benefits 
for workers across the Nation and an additional 13 weeks for high 
unemployment states like my home State of Michigan.
  Earlier today we passed a $700 billion bailout for Wall Street 
companies whose bad business decisions have wreaked havoc on our 
economy.
  If we can hand over $700 billion to Wall Street we can certainly 
provide this minimum level of support to the workers who are among the 
victims of the bad actors on Wall Street.
  Let us all join together and pass this legislation that will provide 
real support for those who need it most, hard working people having a 
terribly difficult time finding work in our struggling economy.
  Mr. STEARNS. Madam Speaker, I rise today to express my reluctant and 
continuing opposition to the Emergency Economic Stabilization Act, H.R. 
1424--a bill that was hastily crafted, inadequately vetted, and has now 
been made worse by an infusion of tax extenders and narrowly targeted 
earmarks, costing taxpayers $812 billion as reported by the 
Congressional Budget Office.
  This new bill is still flawed because its basic premise is that 
taxpayers have to take over these toxic loans from ailing institutions, 
and Secretary Paulson is still granted the unprecedented authority to 
purchase almost any troubled asset or financial instrument he deems 
necessary, effectively allowing him to become a financial dictator. Tax 
expert Ryan Ellis has rightly stated that with this bill, ``Congress is 
giving a member of the executive branch virtually unlimited power for 
the entire economy.''
  The bill today is very similar to the legislation that was voted down 
only a few days ago, but this time it contains frivolous add-ons. With 
the exception of the necessary increase of the FDIC insurance limit to 
$250,000, which I am happy to see included, this bill leaves little to 
be desired for American taxpayers.
  To be specific, the Senate version of the Emergency Economic 
Stabilization Act that we are voting on today contains both energy and 
non-energy related tax extender language, targeted earmarks, and mental 
health parity legislation--provisions which have no business being 
placed into a bill which is meant to rescue our economy from a 
financial meltdown.
  The mental health parity bill that has been thrown into the 440-page 
Economic Stabilization Act federally imposes more financial 
responsibility on employers who are already struggling to pay for their 
employees' health insurance, and will come at an additional cost of 
$3.8 billion dollars. Further, the bill we are voting on today contains 
narrowly targeted earmarks which are being described as ``tax relief 
provisions.'' Buried within this 440-page bill is a temporary increase 
in the amount of rum excise tax revenue paid to Puerto Rico and the 
Virgin Islands; a 7-year recovery period for motorsports racetrack 
property; an economic development credit for American Samoa; tax 
benefits for fishermen and those who suffered from the 1989 Exxon 
Valdez oil spill; and even an exemption for certain wooden arrows used 
by children. These provisions cost millions of dollars and are not paid 
for under this bill. Also included are nearly $42 billion in tax 
increases over ten years on oil and gas production, unemployment 
insurance, and investment income.
  Madam Speaker, a bailout is still a bailout no matter which way you 
try to paint it. The American people understand full well that these 
targeted tax relief provisions were added for the sole purpose of 
winning votes, and today we are not voting on a clean bill.
  I firmly believe there are viable, alternative ways to solve our 
deep-rooted financial problems without having to utilize a taxpayer-
funded bailout strategy. Under this bill we have no way of determining 
how the Treasury Secretary will choose to price the toxic assets he 
will buy, and pricing them too low or too high will have serious 
repercussions. Some of our Nation's top economists along with my own 
colleagues have proposed far better solutions that would protect 
taxpayers and shore up our markets without rewarding Wall Street's bad 
behavior and putting us on a precarious path toward Socialism. I have 
personally proposed providing low-interest loans to these struggling 
financial institutions combined with giving taxpayers warrants so that 
they too can gain from any potential upside in our markets. I also 
support expanding the FDIC to cover all transaction accounts and put in 
place an oversight board that is separate from the Congress and the 
administration.
  The issue of a lack of adequate oversight to protect taxpayers is 
truly worrisome. Former Speaker of the House, Newt Gingrich, points out 
that a plan which relies on the sole authority of the former chairman 
of a major investment bank to distribute billons of taxpayer dollars to 
struggling private sector companies will inevitably lead to corruption 
and crony capitalism. Further, Harvard political history professor 
Julian Zelizer has said of Paulson's unprecedented new powers: ``It 
ranks with the top list of delegations of power, especially since 
there's some flexibility for Treasury in deciding what to do with all 
of this money. You don't like to give power over finance and taxes to 
people who are not democratically accountable like Congress is.''
  In a matter of 1 week we have gone from a 2\1/2\-page bill, to a 109-
page bill, and now to a 440-page bill, but no matter the increase and 
attempt at improvement, the bill is still inherently flawed. I think it 
is unfortunate that we haven't taken the necessary time to more 
carefully consider our options and to re-evaluate some of the more 
troubling financial trends that have directly contributed to this 
historic crisis For example, I question why Congress hasn't addressed 
the issue of Credit-Default Swaps, CDS--a $62 trillion, unregulated 
market that threatens to be our next financial crisis. Warren Buffett 
describes these insurance-like contracts that promise to cover losses 
on securities in the event of a default as ``financial weapons of mass 
destruction.'' The CDS market is spiraling out of control as we speak, 
and the Chairman of the SEC has started to ask Congress for the 
immediate authority to begin regulating Credit-Default Swaps which are 
intrinsically linked to subprime loans and exotic securities, but 
Congress has not acted.
  Certainly, the challenges that lie ahead of us are numerous and 
great. We are in the middle of a financial crisis of epic proportions, 
and I do hope the bill we are voting on today helps to shore up our 
markets and provide stability, but reluctantly I must oppose it. This 
legislation has been forced upon us by Secretary Paulson, and I 
question his ability to objectively implement the Treasury plan given 
his close ties to major investment banks and Wall Street. Surely 
Paulson's 25 years spent at Goldman Sachs and eventually becoming its 
chairman represents an overt conflict of interest.
  Given the fact that taxpayers are getting toxic goods and there is no 
real reform of the Community Investment Act which has forced banks to 
make loans to people who have questionable credit and cannot afford to 
pay their mortgage back, I am voting against this bill, and I pray and 
hope the future will afford us a chance to craft a better bill on 
behalf of the American people.
  Mrs. CAPPS. Madam Speaker, I rise again in reluctant support of this 
legislation.
  I spoke earlier this week about the necessity for the underlying 
economic rescue legislation and I stand by that statement. If anything, 
the events of the last week have demonstrated that point even more 
vividly.
  The credit crisis that is gripping America is choking Main Street and 
affecting Americans of all walks of life. Businesses, small and large 
alike, are finding it more and more difficult to get credit to run 
their businesses. This slowdown is costing American jobs. Just today 
the administration announced that another 159,000 jobs were lost in 
September, the largest monthly loss in more than 5 years. That means 
we've lost nearly 800,000 jobs in the first 9 months of this year.
  I share my constituents' deep anger over this situation created by 
the greed of lenders and Wall Street players, the inattentiveness of 
Federal regulators, and the overall failure of the Bush 
administration's policies. We must act quickly and this proposal to 
meet this crisis is the best option we have. I know it would be much 
easier for me to take the easier, more popular route and vote against 
this measure, but I believe that would be the wrong choice for my 
district and my country for all the reasons I laid out earlier in the 
week.
  This legislation adds a number of provisions to the economic rescue 
package the House considered on Monday, most of which are unrelated to 
the financial crisis. I support many of them and oppose others.
  First, the bill temporarily raises deposit insurance from $100,000 to 
$250,000 in federally insured banks and credit unions. This is a good 
step to increase confidence in our banking system and a long overdue 
update to this critical protection for the assets of millions of 
American families and small businesses.
  Second, the bill protects some 22 million taxpayers from the effect 
of the Alternative Minimum Tax. This is a tax provision intended to 
keep the wealthiest in our society from avoiding all income taxes but, 
because it hasn't been updated in decades, now threatens to ensnare 
millions of middle income taxpayers with higher taxes. I hope that in 
the next Congress we can permanently fix this increasingly difficult 
problem but we must at least stave off its ill effects for this year.

[[Page 23980]]

  Third, the bill includes critically important mental health parity 
legislation. It would require insurance companies to treat coverage of 
mental health services the same as other medical services. As a public 
health nurse, I know there should be no distinction in the necessity of 
treating heart disease, bone disease, or mental health disease. I have 
long supported this effort to destigmatize mental health and ensure 
that Americans suffering from mental health problems can receive 
treatment. This is an extremely positive step forward for health care 
in America.
  Fourth, the bill extends Federal support for the development of wind, 
solar, geothermal, and other renewable energy sources. I have been 
arguing for a 5-10 year extension of these provisions to encourage the 
development of alternative energy so we can finally break our crippling 
addiction to fossil fuels. Establishing a long term investment horizon 
for these efforts is critical to making that work. These extensions 
should be for longer than the 1-3 years included in this bill but they 
cannot be allowed to expire, which most would do by the end of this 
year.
  Unfortunately, included in these energy tax provisions is support for 
so-called clean coal production and shale oil extraction. The oil and 
gas industry could not possibly be more profitable and needs more 
taxpayer support like Warren Buffett needs investment advice. In 
addition, both the oil and coal industries already received overly 
generous taxpayer subsidies in the Republican's 2005 energy bill. I do 
not support these provisions and believe they should be removed or 
repealed in the next Congress.
  Also, much of the cost of these energy tax breaks are not offset so 
they will increase the already huge Bush deficits. In an effort to 
reinstate fiscal discipline, House Democrats have consistently voted to 
pay for these alternative energy production tax breaks by closing 
corporate loopholes and other measures. It's a shame the Senate cannot 
follow suit and we are faced with a take-it or leave-it choice on 
continuing these important alternative energy provisions.
  Finally, I am very concerned about the inclusion of language giving 
the Securities and Exchange Commission, SEC, the go-ahead to alter or 
suspend so-called ``mark to market'' accounting principles. The SEC 
just issued what it calls ``clarifications'' on these rules at the 
behest of the financial services industry and I believe this could be a 
big mistake. Investors simply must be able to trust that a company's 
financial statements give a clear and accurate portrait of the health 
of the company and ``mark to market'' is part of ensuring that is the 
case. I understand that today's market conditions make establishing 
prices for securities difficult, but we have to be careful that we 
don't enable the kind of opaque accounting that has led to numerous 
financial debacles in recent years.
  Despite my concerns about these provisions, I still believe it is in 
the best interests of the country to pass this legislation.
  Mr. GEORGE MILLER of California. Madam Speaker, I rise in strong 
support of the mental health parity provisions contained in H.R. 1424, 
the Emergency Economic Stabilization Act of 2008.
  These important provisions of the bipartisan legislation would not 
have been possible without the vigorous advocacy of the late Senator 
Paul Wellstone and the continued dedication and commitment of Senator 
Wellstone's family.
  In addition, I want to thank Congressmen Kennedy and Ramstad as well 
as Senators Kennedy and Domenici. Without their tireless efforts, these 
provisions would not be before us today.
  Mental illness and substance abuse affect millions of families across 
this country.
  Without treatment, those suffering from mental illness and substance 
abuse often struggle to hold a job or make ends meet.
  Today, approximately 44 million Americans suffer from mental illness, 
but only one-third receive treatment.
  A key component of this problem is that private health insurers 
generally provide less coverage for mental illnesses and substance 
abuse than for other medical conditions.
  A 2002 Kaiser Family Foundation study found that, while 98 percent of 
workers with employer-sponsored health insurance had coverage for 
mental health care, 74 percent of those workers were subject to annual 
outpatient visit limits, and 64 percent were subject to annual 
inpatient daily limits.
  The bill amends the Employer Retirement Income Security Act, ERISA, 
to prohibit employer group health plans from imposing mental health or 
substance abuse treatment limitations, financial requirements, or out-
of-network coverage limitations unless comparable limitations 
requirements are imposed upon medical-surgical benefits.
  The out-of-network coverage provisions are particularly important.
  Under this provision, if a health plan permits individuals to go to 
an emergency room for a medical condition without prior authorization; 
or an out-of-network hospital or treatment center at in-network rates 
for a medical condition, then the plan must apply the same rules to an 
individual suffering from a mental illness or substance disorder.
  In addition, the bill does not require group health plans to provide 
any mental health or substance abuse coverage.
  However, if the group health plan does offer mental health and/or 
substance abuse benefits, there must be equity between mental health 
and/or substance abuse coverage and all comparable medical and surgical 
benefits that the plan covers.
  As a result, more Americans will be able to access affordable mental 
health and substance abuse benefits.
  Nothing in the bill is intended to preempt stronger state mental 
health and substance abuse parity laws.
  The Committee on Education and Labor has analyzed each state's mental 
health and substance abuse law; it is our understanding and intent that 
this legislation will not pre-empt any of these laws.
  In other words, a state law that may contain broader or more 
favorable mental health and/or substance abuse benefit requirements 
will not be pre-empted.
  Finally, this bill directs the Department of Labor to provide 
information and assistance to individuals, employers, and states in 
order to help them comply with the requirements of this law.
  It is time to end the stigma and provide fair coverage to those in 
need.
  Mr. STARK. Madam Speaker, I rise today in strong support of providing 
much needed assistance to the millions of workers struggling to make 
ends meet.
  Unlike the Wall Street bailout we just passed, extending unemployment 
benefits will actually help to keep people in their homes. Unlike 
giving a $700 billion blank check to Henry Paulson, extending 
unemployment benefits will stimulate the economy and will bring money 
into local communities.
  Last month the economy lost 160,000 jobs--the ninth month in a row of 
job loss. Without congressional action, 800,000 workers are expected to 
lose their unemployment benefits in October. In my State of California, 
the unemployment rate is 7.7 percent and climbing. Many of these 
workers are exhausting their benefits and are unable to find work. This 
legislation will provide immediate relief to these workers.
  Today we heard a lot of bluster about Main Street. Make no mistake, 
people are struggling to pay their bills and put food on the table. 
Wall Street has already gotten their share; I urge all of my colleagues 
to make sure that we take this small step to help millions of workers 
get their share.
  Mr. CONYERS. Madam Speaker, while I am personally opposed to this 
bill, and have set forth my reasons elsewhere in this debate, the 
Judiciary Committee has nevertheless assisted the bill's drafters in an 
effort to help ensure that it does not inadvertently impair fundamental 
legal rights and protections.
  In that regard, as chairman of the Judiciary Committee, I would like 
to further illuminate Congress's intent with respect to three 
provisions in section 119 of the bill, the section regarding judicial 
review and related matters.
  First, the limitation on injunctive and other equitable relief in 
section 119(a)(2)(A). This provision is written in light of the 
expected need for the Troubled Asset Relief Program, ``TARP,'' 
established under the bill in the Treasury Department to be able to act 
quickly on its decisions to purchase particular assets in the 
marketplace.
  Accordingly, the grounds for obtaining injunctive or other equitable 
relief, which could potentially impair the efficiency of the TARP's 
response to breaking market developments, is limited to remedying 
constitutional violations, while all underlying rights, and the 
availability of monetary damages where warranted, are preserved. 
Moreover, even in cases of constitutional remedy, there are special 
provisions in section 119(a)(2)(B)-(D) for expediting resolution of the 
matter in court.
  It should be kept in mind that the bill provides for a number of 
avenues to protect against possible overreaching by the Secretary or 
the TARP, including a special Inspector General, ongoing Government 
Accountability Office review, and a congressional oversight panel. Nor 
do the limits alter the normal rules governing agency rulemaking or 
adjudication, which are not the sort of actions that require the same 
kind of rapid response envisioned for TARP's marketplace decisions.

[[Page 23981]]

  Second, the provision regarding homeowners' rights in section 
119(b)(1). This provision clarifies that a sale of mortgages or 
mortgage-backed securities to the TARP in no way impairs the claims or 
defenses of the homeowners whose mortgages are involved. All rights and 
interests of the homeowners, whether under the terms of the mortgage 
instrument or under law, are fully preserved. This means, among other 
things, that the TARP, in acquiring interests in these securities, does 
not thereby obtain the right to use any of the extraordinary collection 
methods and other recourse that is available solely to the Government, 
which it has been given for collecting fines and other debts owed 
directly to the Government which the homeowners here did not contract 
to be subject to.
  This provision does not prevent modifications to which the homeowner 
agrees, such as a reduction in interest rate, reduction in loan 
principal, waiver of fees and unpaid interest, or other forbearance 
that enables the homeowner to avoid foreclosure, continue living in the 
home, and keep the mortgage. In fact, this provision is designed to 
encourage TARP to consider such modifications whenever prudent.
  And it often will be, benefitting the investors in the mortgage-
backed debt as well as the homeowners involved. The costs of 
foreclosure to the investors--leaving aside the costs to the homeowner, 
and the community of which the homeowner is a part--will generally far 
exceed the costs to investors of a mortgage modification.
  Indeed, taking into account costs such as foreclosure expenses, 
damage to vacant homes, maintenance, the loss from sales of vacant 
property in a declining market, the net recovery by investors in a 
foreclosure situation can be a small fraction of the amount owed on the 
mortgage. Many foreclosed homes end up being sold in bulk through 
distress sales, for only a few thousand dollars each. And all of this 
feeds a vicious circle of increasing foreclosures and declining home 
values.
  Loan modifications are almost invariably better for the investors, 
who continue to receive a steady stream of mortgage payments, as well 
as for the homeowner, who is able to stay in the home, for the 
neighborhood that keeps more of its homes occupied and property values 
supported, and for the entire community that benefits from the 
homeowner's economic contributions.
  Third, the savings clause in section 119(b)(2). As written, this 
provision is a combination of two separate sentences. And the first 
sentence has two separate purposes.
  One purpose of the first sentence is to preserve current and future 
responsibility for wrongdoing, and to ensure that this legislation is 
not interpreted to relieve wrongdoers from accountability or liability 
to those whom they have harmed. The Congress is aware of civil 
litigation brought by shareholders, ERISA participants, or by or on 
behalf of financial institutions, against officers, directors, and in 
some cases counterparties whose alleged misconduct caused or 
contributed to their losses. The Congress is also aware of media 
reports of criminal investigations.
  These matters are for the justice system to resolve. The Secretary, 
and the Executive Branch in general, should cooperate as appropriate 
with public and private efforts to recover losses from wrongdoers in 
the financial market, whether those efforts are brought by a 
governmental entity, securities purchasers, employees, or the 
corporation itself, or are asserted on behalf of the corporation 
derivatively. Nothing in this Act is intended to impair any legal 
rights as against private parties to recover for or redress wrongdoing 
under Federal or State law.
  The other purpose of the first sentence is to clarify, similarly as 
with mortgage-backed securities in section 119(b)(1), that a transfer 
of nonmortgage financial assets to the TARP does not impair any of the 
underlying rights, claims, and defenses of borrowers who are not in 
privity with the TARP and have not contracted for or consented to any 
such impairment.
  This does not affect the ability of the TARP and the financial 
institution transferring the assets to contract between themselves as 
to which rights and obligations related to those assets will be assumed 
by Treasury, and which rights and obligations will be retained by the 
financial institution. Rather, it clarifies that whichever of them 
deals with the borrower going forward must do so on the same terms, and 
owes the same duties, as under the original agreement, so that the 
rights the borrower contracted for or enjoys under law are in no way 
impaired. Again, this means, among other things, that the TARP, in 
acquiring these assets, does not thereby obtain the right to use any of 
the extraordinary collection methods and other recourse that are 
available solely to the Government, which it has been given for 
collecting fines and other debts owed directly to it--which the 
borrowers here did not contract to be subject to.
  The second sentence in section 119(b)(2) addresses what has come to 
be termed ``tranche warfare''--litigation among the various categories, 
or tranches, of investors in structured mortgage-backed securities, 
each vying for primacy in any modification of terms, at each other's 
expense. This sentence clarifies that, except as established by 
contract, a servicer of pooled residential mortgages that become 
subject to the TARP, if that servicer owes any duty to ensure that net 
present value of payments on a loan exceeds anticipated recovery in 
foreclosure, owes that duty not to any individual investor or faction 
of investors, but to the investors as a whole.
  Accordingly, the servicer, in agreeing to or implementing a 
modification or workout plan shall be deemed to be acting in the best 
interests of all such investors or holders of beneficial interests if 
the servicer takes reasonable loss mitigation actions, including 
partial payments. This clarification is intended to further encourage 
modifications to mortgage loans when, in the judgment of the loan 
servicer, in the overall interests of the investors.
  Mr. MOORE of Kansas. Madam Speaker, I rise today to express my 
support, with reservations, for the Senate amendments to H.R. 1424, the 
Emergency Economic Stabilization Act of 2008.
  Our Nation is facing a crisis that we've not seen since the early 
1930s. If we do nothing, our small businesses will continue to suffer 
with limited access to credit, families will struggle to pay for 
college for their children and too many people will have to delay their 
retirement. Retirees with pension plans invested in the market will 
find they are not as secure as they hoped.
  Just today, the Government announced that 159,000 jobs were lost in 
September, the sharpest drop in jobs in over 5 years. This is the ninth 
straight month of job losses. Two weeks ago, with the economy on the 
verge of disaster, and the choking off of access to credit, Federal 
Reserve Chairman Ben Bernanke urged congressional leaders to act on 
this emergency economic rescue package by saying, ``If we don't do 
this, we may not have an economy on Monday.'' These are words no Member 
of Congress wants to hear, but it is a call to action, now.
  I voted for the original bipartisan compromise the House considered 
Monday because it took necessary steps to protect American taxpayers, 
including a recoupment provision to ensure that every dime of taxpayer 
money is paid back in full. Republican and Democratic leaders supported 
the original compromise to get our economy back on track. The bill was 
far from perfect, but it also included provisions to ensure aggressive 
congressional and judicial oversight of the rescue programs, as well as 
no taxpayer-funded ``golden parachutes'' for careless Wall Street CEOs. 
The bill would have spread out the expenditures to make sure they are 
really needed, and mandated: 48-hour posting of all transactions on the 
Internet; warrants so taxpayers share profits; aggressive foreclosure 
mitigation activities, tax provisions helping community banks; and 
independent Inspector General oversight.
  But when the House failed to pass the bill on Monday, the Dow dropped 
777 points, the largest single-day point drop in history. It cost the 
American economy more than $1.2 trillion as Americans saw their 401Ks, 
college accounts, and pension plans lose value.
  As a co-chair of the fiscally responsible Blue Dog Coalition, I have 
grave concerns about any legislation that passes off the costs to our 
children and grandchildren, adding to our $9.6 trillion debt. I would 
have strongly preferred that the Senate version of the bill had been 
written differently without all of their unrelated tax policy 
additions, but this is not about me. This is about preserving our way 
of life as a nation and restoring our economic strength. This is about 
making sure the economy doesn't crash to the extent that it might take 
decades for our children and grandchildren to put the pieces back 
together.
  Make no mistake: this crisis should not be about political 
opportunism. This is a time for Republicans and Democrats who are 
willing to put country before party, and our economic security before 
ideology, to come together and do what is in the best interest of our 
people and our country.
  I am just as upset as many of my constituents that our country is 
faced with this economic crisis. Government intervention should always 
be an option of last resort, but we are left with very few choices and 
even less time to preserve our economic stability. Inaction is simply 
not an option.
  In this difficult time, Congress must act. The Senate has spoken in a 
strong, bipartisan

[[Page 23982]]

 way, voting for this revised legislation by a vote of 74-25. The 
leadership of both parties and our two presidential candidates support 
this effort to rescue our faltering economy. In the short term, this 
relief package is an emergency line of credit, a lifeline for our 
drowning financial industry. In the long term, it's also an investment 
in bringing back a strong economy. If our economy does not recover, if 
we slide toward recession or worse, we will all suffer. I support this 
bill because I believe it's the right thing to do for our country.
  But enacting this emergency legislation is only the beginning. While 
we had to act today to preserve our economy, I will continue fighting 
for fiscal responsibility, putting an end to runaway deficits and our 
mounting $9.6 trillion debt. I will work with my Republican and 
Democratic colleagues on the House Financial Services Committee to 
aggressively investigate what went wrong in the credit markets, and 
work in a bipartisan way to improve the regulatory structure so we can 
have a modern oversight structure that will make sure firms act in a 
responsible way. We must continue to do all we can to protect the 
future economic health of the country.
  Mr. RAMSTAD. Madam Speaker, it was an amazing turn of events that 
made the treatment parity legislation Patrick Kennedy and I introduced, 
H.R. 1424, the vehicle for one of the most far-reaching bills 
considered in our lifetime.
  This legislation is a rescue bill for the U.S. economy and a rescue 
bill for the millions of Americans suffering from mental illness and 
addiction. It will also prevent a devastating tax increase on middle-
income families and job creators at a time our families and economy 
cannot afford more blows.
  This vote will mean the end of 12 long years of fighting for 
treatment parity for mental illness and addiction. This is not just 
another public policy issue: It's a matter of life or death for 54 
million Americans suffering the ravages of mental illness and 26 
million suffering from chemical addiction.
  Last year alone, more than 30,000 Americans committed suicide from 
untreated depression and 150,000 Americans died as the direct result of 
chemical addiction. On top of the tragic loss of lives, untreated 
addiction and mental illness cost our economy over $550 billion a year.
  I'm alive and sober today only because of the access I had to 
treatment following my last alcoholic blackout on July 31, 1981, when I 
woke up in a jail cell in Sioux Falls, SD. I'm living proof that 
treatment works and recovery is possible.
  But far too many people in our country don't have the same access to 
treatment that I and other Members of Congress have had.
  A major barrier for thousands of Americans is insurance 
discrimination against people in health plans who need treatment for 
mental illness or chemical addiction.
  The legislation we are passing today will end this discrimination by 
prohibiting health insurers from placing discriminatory restrictions on 
treatment for people with mental illness or addiction.
  No more inflated deductibles or copayments that don't apply to 
physical diseases.
  No more limited treatment stays that don't apply to physical 
diseases.
  No more discrimination against people with mental illness or chemical 
addiction.
  The ``Paul Wellstone and Pete Domenici Mental Health Parity and 
Addiction Equity Act'' simply provides equal treatment for diseases of 
the brain and the body.
  Providing treatment equity is not only the right thing to do; it's 
also the cost-effective thing to do.
  All the empirical data, including major actuarial studies, show that 
equity for mental health and addiction treatment will save literally 
billions of dollars nationally. At the same time, it will not raise 
premiums more than two- tenths of 1 percent, according to the 
Congressional Budget Office.
  In other words, for less than the price of a cheap cup of coffee per 
month, millions of people could receive treatment for chemical 
addiction and mental illness.
  Madam Speaker, Rep. Patrick Kennedy and I have traveled the country 
from one end to the other--holding 14 field hearings on the critical 
need for treatment parity.
  We heard literally hundreds of stories of human suffering, broken 
families, tragic deaths, ruined careers and shattered dreams--all 
because of insurance companies not providing access to adequate 
treatment for mental illness and addiction. We will change that today.
  Madam Speaker, it's time to end the discrimination against people who 
need treatment for mental illness and addiction. It's time to prohibit 
health insurers from placing discriminatory barriers to treatment.
  It's time to join the coalition of insurance companies and business 
groups that support parity because they know it's cost-effective and 
saves health care dollars.
  It's time to make this bipartisan legislation the law of the land. 
The people of America cannot afford to wait any longer for Congress to 
act.
  Mr. BISHOP of Georgia. Madam Speaker, I didn't take pleasure in 
voting yes today. But in tough times, Congress is required to make 
tough decisions. Voting for this bill is a risk, yes. But voting 
against this bill is a greater risk. Given the prevailing, dreadful 
economic trends, a bet that our economy will miraculously right itself 
on its own, without significant damage to the jobs and livelihoods of 
the people in my district and across America, is the greater risk I am 
not willing to take.
  We are facing a startling reality. Without action, student loans, 
home loans, and lines of credit for local businesses will tighten, and 
eventually be cut entirely. With no credit source from which to pay 
employees, business will impose massive layoffs. Farmers, whose 
products are so vital to the Second District economy and who depend on 
a secure line of credit during planting season, won't have a crop. 
People facing foreclosure will not be able to refinance their 
mortgages, and will lose their homes. People looking to retire will 
have to take on part-time employment, or delay retirement entirely, 
because their savings, 401(k)s and pension plans will have been drained 
of assets.
  I wish the bill we took up today was a cleaner bill. I wish we could 
have passed the bill Monday, and saved our deficit another $150 
billion. Many of the provisions added onto this bill, especially relief 
for middle class taxpayers, are needed, but they add to the bill's 
cost. And any other day, I would stand firmly opposed until those costs 
were off-set.
  But this is not ``any other day''--this is an extraordinary day, and 
these are extraordinary circumstances. The economy is on life support 
and not passing this bill would be tantamount to pulling the plug. Not 
passing it would imperil the very opportunities our society is known 
for, and that we behold as integral to American life: the chance to go 
college, run a business, own a home, enjoy retirement.
  For the poor, for those who have been financially prudent, for the 
unemployed, for those who saw their 401(k)s dwindle this is not the 
end. In the coming months, it is my hope that Congress pours as much or 
more effort into investigating the financiers whose actions 
precipitated this crisis and who walked away with millions for 
themselves, as we have put into crafting this bill. It is also my hope 
we can repair the damage done the deficit. Meantime, I encourage my 
colleagues and my constituents to join me in supporting this first step 
toward regaining our financial footing and setting in place a new 
system, one that lacks the greed and the excess that brought us to this 
point in the first place.
  Mr. UDALL of Colorado. Madam Speaker, I voted against this bailout 
package on Monday, because I took a hard look at it through the eyes of 
Coloradans, and I didn't see what they needed to see.
  What I saw was a $700 billion bailout for Wall Street banks that 
didn't do enough to reassure taxpayers that they'd get their money 
back, didn't have a sure process for holding CEOs accountable and 
limiting taxpayer-funded golden parachutes, and didn't address the 
mortgage crisis that is at the root of our economic problems and is 
forcing hard-working Coloradans out of their homes.
  Just as important, what I saw was a ``rescue'' for Wall Street that 
did nothing to begin fixing the broken financial system that led us to 
this crisis.
  As I look at the legislation we're being asked to vote on today, I'm 
deeply disappointed to say that none of that has changed.
  Instead, the Senate has sent us a bill that adds a single improvement 
to the package the House rejected, plus hundreds of pages of 
``sweeteners'' intended to win over those of us who opposed it the 
first time. Many of those ``sweeteners'' are things I support--the 
people of Colorado know I have worked long and hard for middle-class 
tax breaks and have spent my entire career as a champion for investment 
in the new energy economy.
  But no amount of ``sweetener'' changes the fact that Americans 
deserve a better solution to our economic crisis than the one we've 
already rejected.
  I have no interest in making the perfect the enemy of the good. 
Anyone who knows my work in Congress knows that I am not a ``my-way-or-
the-highway'' legislator. Because of the greed and lack of oversight on 
Wall Street, we face an unquestionably grave economic situation that 
requires Congress to act. But a better solution is still within our 
reach--one that takes immediate action to get our economy

[[Page 23983]]

back on stable footing while providing the protection, oversight, and 
fundamental reforms American families deserve.
  I am still guided by the words of the legendary basketball coach John 
Wooden, who told his players, ``Boys, be quick. But don't hurry.''
  My hope was that after the House rejected Monday's bailout package, 
we in Congress would be quick to work together, improve the 
legislation, and bring forward a revised version that would deserve and 
obtain broad support in Colorado and across the country. We had that 
opportunity until the Senate acted to re-package the old bailout bill 
in new clothing. We owe the taxpayers more than to hurry a deeply 
flawed package out the door at such tremendous cost to them.
  I believe we could have added provisions that (1) provided 
independent oversight of the Treasury's program, (2) strengthened the 
equity position of taxpayers in purchasing mortgage-backed assets, (3) 
required the government to help responsible homeowners refinance their 
mortgages, and (4) insured that taxpayers will not be on the hook for 
irresponsible compensation packages for CEOs.
  This bill claims to address these problems, but the exceptions in 
this bill swallow the rule. In short, the bill doesn't do what it 
claims to do.
  On Tuesday, stronger provisions were within our reach and we should 
have worked to secure them
  I hope--for the sake of all those people who have worked hard and 
played by the rules, only to see their retirement whittled away or 
their homes' values plummet--that this package does what its supporters 
promise us it will.
  But in the end, my responsibility is to Colorado families, and I 
continue to believe as I did on Monday, that I cannot ask them to foot 
the bill for a bailout that costs so much, with so little 
accountability, so little reform, and so little protection for them.
  Mr. HALL of New York. Madam Speaker, I rise today in support of H.R. 
1424, The Emergency Economic Stabilization Act of 2008. Since this 
House rejected an earlier plan to intervene, the bad economic news has 
kept rolling in and the dangers to Main Street businesses have 
increased. Only today it was announced that 159,000 American jobs were 
lost in September alone. This kind of news combined with the tremendous 
declines we've seen in the markets only underscores our need to take 
action.
  I continue to share the anger of most Americans about the need to 
take these unprecedented steps, but I remain more convinced today that 
we must act decisively to contain this economic contagion before it 
spreads into the far reaches of our economy and leaves lasting damage.
  Although this bill added an important provision to increase the 
insurance guarantees on personal deposits by the FDIC and a number of 
tax provisions, it remains similar to the package that I reluctantly 
supported earlier this week. While this bill is far from perfect, I 
believe it addresses the economic crisis in a responsible way that 
helps Wall Street while still looking out for Main Street and 
protecting our tax dollars.
  This bill would still institute limits on executive compensation and 
golden parachutes for the executives of companies that take part in the 
plan. It puts in place real oversight, from the courts, from Congress 
and from a new Inspector General's office and finally installs 
significant Government supervision and regulation of the companies that 
helped to put us in the situation we're in now.
  It also puts in place mechanisms to make sure that taxpayer dollars 
will be protected to the maximum extent possible. To the extent that 
our investment is not recouped, the President will have to come up with 
a plan to make sure that the companies taking out this Government loan 
will have to pay back the American taxpayer.
  The financial industry is of great importance to New York State, 
which relies on our financial institutions for a significant percentage 
of tax revenue and jobs. The Hudson Valley is particularly vulnerable 
to difficulties on Wall Street, and I fear that the workers, small 
business owners, and families in my district will face severe economic 
ramifications if we do not stem the tide of this financial crisis. That 
is the primary reason that I feel I must vote yes today.
  In fact, the ripples of the credit crisis are already impacting some 
of the small businesses in my district. Jeff Conston, owner of Dutchess 
Recreational Vehicles in Poughkeepsie, contacted me to tell me that his 
customers are finding it very hard to get financing to purchase the 
equipment he sells. He has 34 employees who handle sales, parts and 
service for his dealership. He urged us to get this financial rescue 
plan passed so the financing for his customers and his business can 
start flowing again.
  Another local businessman, William L. Spearman, Chief Executive 
Officer of the Mid-Hudson Valley Federal Credit Union in my district, 
told me that while his credit union's balance sheet remains strong, his 
members are so concerned about our financial system that they are 
withdrawing money just to put it in their mattresses. In his view, the 
financial system is frozen and we need to pass this bill to provide 
confidence to his members and to get the system moving again.
  Overall, I am pleased that the legislation sent back from the Senate 
includes some important tax relief provisions that I believe Congress 
should pass this year. Chief among this is a one year ``patch'' that 
will protect thousands of middle class families from being hit by the 
AMT this year. Last year over 30,000 families in my district paid AMT, 
and this bill will ensure that an additional 70,000 families in my 
district will not also be obliged to pay it. I wish we had the support 
to permanently fix the AMT, and help the middle class families that are 
still subject to it, however once again the ``patch'' legislation that 
we consider today is the best legislation that we can pass at this time 
and I will support it.
  I am also grateful that this legislation contains a number of tax 
breaks to help individuals and small businesses. Given the economic 
troubles we are in the midst of, tax breaks for research and 
development and for teachers who use their own money to purchase 
supplies for the students are desperately needed and could not come at 
a better time.
  This bill also includes some important provisions to help shore up 
our economy in the long term by moving us away from imported fossil 
fuels and toward energy independence. The critical tax incentives in 
this bill for wind, solar, hydropower, marine energy, and the purchase 
of advanced plug-in hybrid vehicles will create thousands of green jobs 
here in America that can't be outsourced, help cut consumer energy 
costs, and give individual families and businesses the power to help 
fight climate change and end our dependence on foreign oil. Although I 
am deeply disappointed by the inclusion of incentives for coal to 
liquids technology and tar sands and oil shale exploration, which will 
not meet these goals, this package is still critical to our future and 
worthy of support.
  Passage of this plan is only a first step. What created this crisis 
was the Bush administration's and previous Congress's failure to stem 
reckless behavior on Wall Street, and we cannot allow that lapse in 
oversight to be repeated. I am pleased that the Committee on Oversight 
and Government Reform will begin hearings soon on the causes of this 
crisis and that there is acknowledgement that we must work to make more 
fundamental investments in the true engine of our economy, American 
workers, innovation, and small businesses, in order to more permanently 
strengthen our prosperity. Congress must remain vigilant, aware of how 
this tremendous authority is being exercised by the administration and 
in the markets, and ready to intervene at the first hint of abuse or 
ineffectiveness.
  Ms. SCHWARTZ. Madam Speaker, as the American people have witnessed 
over the past several days, the instability in the financial markets 
requires immediate attention.
  The longer this instability continues, the harder it will be for 
employers to meet payroll, for retirement plans to meet their 
obligation to retirees, and for families to access the credit they need 
to pay for college, for a car, for a home, or for just getting by.
  The road has been difficult, but the risk posed to everyday Americans 
is simply too great not to act.
  My constituents and I were appalled when President Bush asked us to 
hand over $700 billion with no oversight, no accountability, and no 
reforms to the fundamentally flawed policies that allowed this crisis 
to occur.
  Due to bipartisan cooperation--and now compromise between the Senate 
and the House of Representatives--this economic recovery proposal is 
fundamentally different than the proposal first brought to us by 
President Bush.
  Today, we have an economic recovery proposal before us that will 
protect the interests of hardworking Americans by:
  Restoring investor confidence in our economy and the financial 
markets;
  Protecting taxpayers by requiring full transparency of actions taken 
by the Treasury Secretary, creating a strong oversight board appointed 
by Congress, and establishing an independent Inspector General to 
guarantee compliance;
  Ensuring fiscal responsibility by making resources available in 
installments that require congressional and Presidential approval, and 
guaranteeing that the financial services industry repays any losses to 
the U.S. Treasury;

[[Page 23984]]

  Helping distressed homeowners avoid foreclosure by facilitating loan 
modifications; and
  Limiting the compensation for the corporate executives that created 
this crisis by eliminating multimillion dollar golden parachutes.
  I will vote for the proposal before us today because I believe that 
the current economic crisis requires action by Congress.
  It is unfortunate that the Senate took this opportunity to add 
unrelated measures to this bill.
  These measures include items that I have strongly supported--such as: 
mental health parity; Alternative Minimum Tax relief; property tax 
relief; the personal deduction for higher education expenses; 
incentives for energy conservation and the development of alternative 
and renewable energy; and the extension of current tax policies that 
encourage innovation and help U.S. companies compete internationally.
  I support these proposals and I appreciate that they will become law 
by our action today. But, I believe that we should have--and could 
have--covered the cost of these provisions, had the Senate not acted 
first.
  It is also embarrassing that just a few Senators would use this 
critical economic recovery proposal to enact narrowly targeted tax 
benefits--risking passage and angering American taxpayers who have 
rightfully called for reform of such practices
  Nonetheless, action is required to stabilize our financial markets. 
We must begin the process of economic recovery by making credit and 
capital available to families and businesses of all sizes to meet their 
obligations and move this country forward.
  There is still more to do. We must focus on the regulation of our 
financial markets, strong enforcement, and sound fiscal policies in 
Government and in the private sector that are all necessary to restore 
our economy to one of prosperity, opportunity and growth--not just for 
a few--but for all Americans.
  Mr. UDALL of New Mexico. Madam Speaker, 4 days ago, I opposed a 
bailout plan that did too little for homeowners, too much for 
executives, and nothing to prevent Wall Street from repeating the 
mistakes that got us into this crisis. That bill would have put the 
U.S. taxpayer on the hook for $700 billon to bail out Wall Street, the 
very people whose irresponsibility helped to undermine America's 
economy and threaten the jobs and life savings of millions of American 
families.
  Make no mistake: America faces a serious crisis. We must do 
something, but we cannot let fear drive our decision-making. Our 
solution should meet the demands of the day without producing more 
suffering in the future. We have the time to get this right, but the 
proposal we considered on Monday had significant problems.
  At that time, I suggested several commonsense changes to Monday's 
bill. Those changes have not been made.
  I said we must do more to protect taxpayers. Today's bill still falls 
short.
  I said we should do more to protect responsible homeowners and their 
neighbors from foreclosures and plummeting property values. This bill 
still falls short.
  I said we must ensure executives who ran their companies into the 
ground cannot walk away with millions in taxpayer-funded golden 
parachutes. This bill still falls short.
  And I said that while American taxpayers continue to struggle we 
should not bail out foreign companies whose governments are doing 
nothing. Again, this bill still falls short.
  Perhaps most importantly, this legislation does nothing to protect us 
from facing a similar crisis in the future. Today's situation is the 
direct result of a culture in Washington that allowed Wall Street to 
gamble with America's future. This legislation sends the message that 
when Wall Street's gambles do not pay off, the taxpayer will bail them 
out. Imagine for a moment that you send a friend into a casino and tell 
him: if you win, you keep the winnings; if you lose, I'll pay your 
losses. You would expect nothing but irresponsibility, and that is 
exactly what this bill will give us. We need commonsense rules to 
protect against that irresponsibility, and this bill provides none.
  For all these reasons, I will vote against today's proposal, just as 
I voted against very similar legislation 4 days ago. The only 
difference between this bill and the bill we rejected on Monday that 
has anything to do with America's financial markets is an increase in 
FDIC insurance limits. This may do something, but it is nowhere near 
enough to justify supporting today's bill.
  Whether or not this legislation passes today, Congress must keep 
working on a new framework for our financial system. Experts have 
produced good proposals on a variety of issues. Some have even passed 
this House. But we also need to begin working on a systemic overhaul of 
our regulatory structures, our financial rules, and the incentives that 
govern our markets. In this hour of crisis, we have a rare opportunity 
to protect future generations from the turmoil we have seen. We must 
seize this opportunity.
  Unfortunately, the Senate has chosen to add unrelated provisions 
rather than fixing a deeply flawed proposal. I want to note that my 
vote today does not suggest any disagreement with the important package 
of tax cuts that was added in the last few days. I have consistently 
supported tax cuts for the middle class, including fixes for the 
Alternative Minimum Tax. I have advocated mental health parity 
legislation, and voted for it repeatedly. I have fought for tax credits 
to spur green industries and produce jobs. And I have worked to protect 
the Secure Rural Schools and Payment In Lieu of Taxes programs that 
would be extended by this bill. However, even with these provisions, I 
cannot support a $700 billion taxpayer bailout--a plan that will have a 
large and widespread impact for generations--that has been rushed 
through with so many serious flaws and so many problems left 
unaddressed.
  Today's vote is difficult, but I believe it is what's right for New 
Mexico's Third Congressional District, and the people of New Mexico and 
our Nation.
  Mr. VAN HOLLEN. Madam Speaker, many of my constituents are current or 
former employees of Government Sponsored Enterprises, GSEs, that 
provide residential mortgage services on behalf of the Federal 
Government. These employees are concerned that the Treasury Secretary's 
newly authorized control over their organizations may compromise their 
retirement benefits. I have consulted with Congressman Barney Frank, 
the Chairman of the Financial Services Committee, regarding this issue. 
Chairman Frank has assured me that in drafting this legislation he was 
careful to ensure that the Secretary's control over these GSEs will 
have no impact upon the retirement benefits of the rank-and-file 
employees who are not regarded as ``executives'' under the regulations 
of the Securities and Exchange Commission. I greatly appreciate the 
Chairman's work to protect the benefits of these hard working 
employees.
  Madam Speaker, I reluctantly supported this economic rescue plan on 
Monday, and I will do so again today. Not because I like it. I don't. 
Not because it is popular. It isn't. And certainly not because I think 
responsible taxpayers have any obligation to bail out Wall Street. They 
don't. Instead, I will support this plan because I believe that acting 
decisively now will almost certainly mean less cost to taxpayers and 
less pain on Main Street than allowing this credit crisis to get worse.
  In what history will record as the final verdict on 8 years of the 
Bush administration's failed economic policies, allowing this credit 
crisis to spread to Main Street would dry up existing lines of credit, 
cause more small businesses to fail, put more people out of work, place 
more retirees' pensions at risk, and accelerate the current downturn in 
our fragile economy. We simply cannot allow that to happen.
  Let's be clear: This legislation is a far cry from the original, 
three-page, blank check proposal Secretary Paulson submitted to 
Congress. Whereas the Paulson proposal had no oversight, no limits on 
executive compensation or golden parachutes, no help for homeowners, no 
upside for taxpayers, and no requirement that the President submit a 
plan to Congress to recoup the full amount of the taxpayers' money from 
participating institutions should any amount of the initial outlay not 
be recovered after 5 years' time, this legislation contains all of 
those protections.
  Additionally, as a result of the Senate's action last night, the bill 
we are considering today also includes a 1-year patch for the AMT to 
ensure 25 million additional Americans are not snared by this tax; $18 
billion in renewable energy incentives (paid for by eliminating 
subsidies to the oil and gas industries) to accelerate our transition 
to a 21st century green economy; and mental health parity legislation 
that will end the shameful history of insurance discrimination suffered 
by those whose conditions affect the brain, rather than the rest of the 
body. This revised package also contains bipartisan legislation I 
introduced to end the ISO AMT crisis affecting tens of thousands of 
law-abiding Americans by providing permanent relief from that 
universally condemned corner of our code. And it further protects our 
citizens' savings by temporarily increasing the cap on FDIC-insured 
accounts to $250,000.
  Like any legislation of this magnitude, there are provisions I do not 
support, other provisions I thought should be included, and still 
others I would have changed. For example, the renewable energy title 
includes several incentives that in my view fall outside the definition 
of ``renewable,'' and the tax title contains a number of narrowly drawn 
provisions that

[[Page 23985]]

detract from the larger purpose of this legislation. Additionally, the 
final bill failed to include a measure I support to allow bankruptcy 
judges to modify mortgages on primary residences the same way they are 
currently able to modify mortgages on second homes and investment 
properties. Furthermore, the Senate package was not fully paid for and 
for that reason will unnecessarily add to our national debt. And 
finally, I personally would have preferred that that this rescue plan 
include some immediate regulatory reforms, recognizing that more 
comprehensive reform will follow congressional hearings that begin next 
week. Nevertheless, our citizens can be assured that Congress is 
determined to get to the bottom of what caused this mess and act 
promptly to make sure this kind of crisis never happens again.
  Mr. WELDON of Florida. Madam Speaker, many of my constituents have 
called and written me in opposition to the current plan to deal with 
the Nations financial crisis. I consider this to be one of the most 
serious and important issues I have dealt with in my 14 years in the 
House.
  My father was born in 1919 into a poor working class family in New 
York City. During his most critical formative years from the time he 
was 10, until he went off to fight in WWII, all he knew was the 
deprivation of the great depression. He and his brothers and sisters 
regularly went to bed hungry, on many nights dinner consisted of a 
choice of either a ketchup or a mustard sandwich.
  He was a good student, nonetheless had to drop out of school at age 
15 so he could go to work, often making only pennies a day, but his 
family needed food. After the war he met my mother and had a family and 
was never able to go back to school.
  One of the things that emerged from his experience was a tremendous 
amount of appreciation for having a good job and the importance of 
saving and preparing for retirement. Those enduring values he passed on 
to me.
  Today, our Nation is faced with what is being described by many 
economists as the worst financial crisis since the great depression. 
With the decline in the housing market there are many banks and other 
financial institutions that have been adversely effected. This has 
caused many of these banks to have to stop or reduce lending money. 
Many banks have gone bankrupt.
  There is no question that this problem was started by the Federal 
Government's efforts to modify lending rules to allow those with lower 
incomes and poor credit scores to purchase homes, often with no money 
down. The inappropriate and meddling actions by the Government-
sponsored entities Fannie May and Freddie Mac laid the groundwork for 
this crisis and it was made worse by unscrupulous Wall Street Bankers 
and mortgage brokers.
  What started as a housing market decline has now become a credit 
crisis effecting global finance, and it is beginning to affect the 
retirement savings of millions of Americans and our national economy. 
Many companies are starting to find it difficult to get financing and 
we are starting to have leaders in finance and business tell us that if 
this is not contained we may begin to see spreading business failures 
and unemployment.
  It is against this backdrop that Treasury Secretary Paulson and the 
head of the Federal Reserve Ben Bernanke originally proposed a plan 
that calls for the U.S. Treasury to purchase with cash many of these 
mortgage backed securities held by these banks. Many of the assets are 
backed by real estate, but because there is no market for them today 
the bankers are being told they are worthless under the new accounting 
rules put in place after the Enron scandal.
  Banks loan out money at a ratio of 10 to 1. For every 100 dollars of 
assets they have on their books they are able to make $1,000 in loans. 
The banks that now hold these mortgaged backed securities have seen the 
value of many of these plummet to zero which has wiped out hundreds of 
billions of dollars of capital from their balance sheets. This has 
taken trillions of dollars out of the capital markets because of this 
10:1 ratio. If you were a bank and on your balance sheet was a $100 
million dollars worth of mortgage backed securities that the 
accountants are telling you it is worth zero then you can't do $1 
billion in loans.
  The Paulson Plan called for purchasing these mortgage-backed 
securities with cash. I was not happy with the original plan put forth 
by the Secretary. It called for providing him unfettered access to $700 
billion.
  The bill I voted for on Monday September 29th and which failed to get 
a majority was a significant improvement over Secretary Paulson's 
original proposal. It reduced by half the amount of cash he could 
access without coming back to Congress. It required that he also 
develop an option other then asset purchase that included offering 
insurance to back up the value of these mortgage securities. It also 
had strong restrictions on excessive executive salaries for many of 
these troubled companies. No golden parachutes.
  Despite the improvements in the bill it did not get my support 
because I liked it. I voted for it because I was concerned that 
inaction was too risky. My preferred approach was that proposed by 
former FDIC Chairman William Isaac. This plan was never given a vote.
  Since that failed House vote, the Senate took up the bill and it has 
added some good things. There are several extensions of existing tax 
breaks that help families and businesses that were due to expire. Two 
important items are the coritinuation of sales tax deductibility for 
the people of Florida and the increase of FDIC insurance to $250,000. 
It also has a provision to modify the alternative minimum tax. If this 
provision is not enacted over 20 million families in America will be 
saddled with huge tax increases next year at a time when they can least 
afford it.
  Unfortunately, the Senate put in several unnecessary items as well 
such as earmarked tax breaks for special interests. Despite the many 
flaws in this bill it is the only bill that I will be given a chance to 
vote on by the Democrat leadership. In light of the very serious 
problems in our economy, I will give it my support with a yes vote.
  I realize that there are many like-minded conservatives in District 
15 of Florida and around the country that disagree. I am reminded at 
this time of the great controversy surrounding the drafting of the 
Constitution and its ratification at the birth of our Nation.
  Today, the Constitution is revered and it has served out Nation well 
for over 200 years. But the debate surrounding its drafting and 
ratification was highly controversial with many patriots at the time 
being strongly opposed to it.
  Time will determine if this financial rescue package will serve our 
Nation well. I am concerned that we are heading into a recession. This 
package if it works well will likely not allow us to avert a recession, 
but may allow us to avert a depression.
  Mr. FRELINGHUYSEN. Madam Speaker, I rise in support of H.R. 1424, the 
Emergency Economic Stabilization Act of 2008.
  Our Nation is facing unprecedented challenges and Congress needs to 
act, with bipartisanship, to restore confidence in our financial 
markets and get our economy back on the right track. People are 
depending on the Government to help restore stability.
  This legislation before us today, passed by the Senate Wednesday, is 
substantially improved from the version this House rejected on Monday.
  Some of my concerns from the earlier bill have been addressed, but 
not all. But I am in Washington to look for the best deal for the 
taxpayers.
  The most significant change is that this rescue package now includes 
Alternative Minimum Tax relief for my constituents in New Jersey, not 
just relief for Wall Street.
  The previous bill presented the taxpayer with a huge bill. This 
measure contains real relief for the hard-working New Jersey families 
and I commend the Senate for including what House Democrats have 
resisted.
  My colleagues, no one likes the concept of an unprecedented and 
expensive Federal Government intervention in our financial markets. But 
the cold, hard reality is that this rescue package, however oversized, 
is designed to shield millions of Americans from economic shock waves 
from problems they did not create.
  Our economy is built on credit and we need to get credit back into 
the markets.
  There can be no doubt that our financial markets are in crisis, 
suffering from a number of problems:
  (1) Banks and other financial institutions have billions of dollars 
of bad housing-related debt on their books, to the extent that many are 
technically insolvent.
  (2) But we also have a problem stemming from a serious crisis of 
confidence that has frozen the credit system. Financial institutions 
are, in essence, ``hoarding'' capital. Most are not lending money.
  As a result, we see credit markets which are limiting the ability of 
people and businesses to borrow. It's a crisis that is affecting a wide 
range of Americans: Employees working for businesses dependent on 
available credit to cover payroll or buy inventory; retirees who count 
on their stocks and other investments to pay their bills and for future 
expenses; workers who have built pension funds and 401(k)s for their 
future security; families who have seen their home values drop 
precipitously, and their nest eggs are directly related to that value; 
families trying to buy homes or cars or secure student loans for 
college; men and women who work every day to keep their small 
businesses afloat. Without reliable credit, they cannot stay in 
business, let alone create jobs.

[[Page 23986]]

  With that said, I recognize that many people may not like the 
expensive rescue plan. But we have no alternative but to approve this 
legislation and do it quickly.
  Madam Speaker, the package that this House rejected, on a bipartisan 
basis, on Monday was much stronger than the original proposal offered 
by the Treasury Secretary 2 weeks ago. That bill cut the Treasury's 
upfront spending authority in half, included several important taxpayer 
protections, limitations on executive bonuses, improved bipartisan 
oversight and deleted ``slush fund'' financing for such partisan groups 
as ACORN, and trial lawyer giveaways.
  I am pleased that the package before us today is vastly improved over 
Monday's bill. That legislation, in effect, handed the American people 
nothing but a huge bill to pay. This measure protects middle income 
Americans from tax increases and gives businesses the financial support 
they need to create and maintain jobs.
  Specifically, we are shielding tens of thousands of New Jersey 
taxpayers from the unfair Alternative Minimum Tax increase.
  New Jersey has the highest per capita rate of citizens subject to the 
AMT in the country. Without this fix approximately 1.6 million 
residents of New Jersey, including over 141,000 families in my 
district, would be subject to the AMT this year. The provisions 
included in the Emergency Economic Stabilization Act will prevent 
approximately an additional 100,000 residents of my district from 
paying this unfair tax.
  It is never a ``good time'' to raise taxes, but I cannot imagine a 
worse idea in times of economic slowdown.
  The bill also expands Federal Deposit Insurance Corporation 
protection for bank accounts to $250,000 per account from $100,000. 
This provision is designed to send a strong signal to depositors, 
individuals and small businesses alike, that their money is backed by 
the United States Government.
  The bill also includes:
  Tax relief for middle-class families and American businesses--the 
engine of job creation. These include credits and deductions for 
college tuition, children, and research and development.
  The extension of renewable energy tax incentives designed to build 
momentum toward reducing our dangerous dependence on foreign oil.
  Landmark mental health ``parity'' legislation which will increase 
health care coverage for Americans suffering with mental illness.
  I am also encouraged that the Securities and Exchange Commission, 
SEC, has issued accounting guidelines that allow banks to move away 
from ``mark-to-market'' accounting rules that artificially undervalue 
good mortgage assets and have helped aggravate this economic crisis.
  My colleagues, I am confident that, given additional time, we could 
make even more improvements to this legislation after we listen further 
to our constituents. However, it has become very apparent to me that we 
do not have additional time.
  We are in ``panic mode'' brought about by the unwise use of leverage, 
poor accounting rules, program trading, an explosion in the use of 
financial instruments, and lax regulation of our markets.
  Credit markets have frozen. Americans everywhere are feeling the pain 
through their businesses, through their jobs, through their inability 
to get a mortgage, or a loan to buy a car, complete a home renovation, 
or finance a college education.
  As I stated initially, our economy faces historic and unprecedented 
challenges. Congress must take swift, decisive and bipartisan action to 
restore immediate confidence to the markets and set our economy back on 
the right track.
  This is a rescue package designed to shield millions of Americans 
from catastrophic shock waves of problems they did not create.
  We need to vote yes, and we need to vote now.
  But even after this vote, our work is not done. We need aggressive 
oversight over the actions of the Treasury and the Federal Reserve and 
more transparency in our financial markets.
  I urge passage of H.R. 1424.
  Mr. RAMSTAD. Madam Speaker, I rise in support of the revised economic 
recovery bill.
  The inclusion of the mental health parity bill, major tax relief and 
bank deposit, FDIC, insurance increases caused me to reconsider my 
position and I believe there's too much at stake to let the legislation 
fail.
  The revised bill is a recovery bill for the economy and a recovery 
bill for millions of Americans suffering the ravages of mental illness 
and addiction.
  This revised legislation will also protect 22 million middle-income 
taxpayers from the enormous tax increases of the Alternative Minimum 
Tax, AMT.
  Madam Speaker, the revised bill also extends research and development 
tax credits to create jobs and renewable energy credits to reduce our 
dependence on foreign oil. The revised bill also includes higher 
education deductions and child credits to help families and students.
  Also, the revised bill increases bank deposit insurance limits, FDIC, 
to $250,000 to protect depositors and help small businesses that need 
credit.
  Madam Speaker, I will vote for the revised economic recovery plan to 
help Minnesota's working families, seniors and small businesses during 
this historic crisis in our economy. The credit crisis is real, and 
it's destroying jobs, retirement savings and the American dream.
  Mr. TERRY. Madam Speaker, I rise in support of H.R. 1424 because it 
is, in my opinion, our last opportunity to save jobs, save small 
businesses, and I pray prevent a collapse of our economy. I believe 
that is what we are facing today.
  I have heard from hundreds of Nebraskans who have contacted me by 
phone, email, or have just come up to me when I was home. All of them 
are angry. Angry at the greed, arrogance, and just plain reckless 
nature of Wall Street. Angry at Congress and the administration who 
have now proposed using taxpayers' dollars to bail out those greedy 
investment bankers, traders, and CEOs. People have every right to be 
angry at these self-important Wall Street executives who cared more 
about themselves by making a quick buck no matter the risk or lack of 
ethics just so they could earn multi-million dollar salaries.
  Madam Speaker, I share that anger. Maybe even a little more, as my 
constituents have transferred their anger onto the one who they can 
reach out to--me. I have to admit that listening to their anger and 
fright, sharing their true feelings, but knowing that I have the 
responsibility as their Representative in Congress to do something to 
help them, has increased my frustration to a level I've never 
experienced before as a Member of Congress. Still, something must be 
done. Inaction may be ``something,'' but it is not the answer.
  I now know that to save ourselves we must also save the pigs. Those 
greedy pigs on Wall Street don't deserve help from hard-working 
Americans. But allowing them to fail will cause so many other 
businesses that conducted their business in good faith, ethically and 
conservatively to lose access to credit, lose business, and eventually 
maybe have to close their doors. Yes, even in Nebraska, far away from 
Wall Street. I have heard from several business leaders in Omaha who 
say they will have to lay off some employees if liquidity in our 
financial system is not restored. One business owner told me they are 
at risk of shutting their doors and every employee will be laid off. My 
vote today is to help the people of Nebraska, protect their jobs, and 
protect their savings.
  So, is this bill the best answer? Probably not. I prefer stimulating 
the economy by eliminating or suspending the capital gains tax, 
providing an incentive to purchase of homes with a tax credit, 
transferring the toxic mortgage debt to the free market, using 
insurance to cover future debt, and encouraging the Federal Reserve to 
release more money to central banks for increased liquidity. I also 
support suspending an arcane federal accounting rule mandated on 
publicly traded companies known as ``mark to market''.
  The mark to market rule forces firms to report the current market 
value of an asset. So when no market exists at a point in time for an 
asset then its value is zero or next to zero. But the asset has value 
and will have more value in the future. The rule is unforgiving and has 
caused companies to declare they are bankrupt--when they are really 
worth more.
  Madam Speaker, the first bill brought to Congress by Treasury 
Secretary Paulson on Monday, September 22, was insulting. The bill 
would have given Secretary Paulson complete control over $700 billion, 
no questions asked, no transparency, no accountability, and no 
punishment of the hogs on Wall Street.
  After several listening sessions with Members our leadership began 
negotiations with Secretary Paulson. These talks were painful and long 
with many starts and stops and a premature declaration of done deal. 
After several days, a true deal was announced. Some of the good ideas 
by Members to improve the bill were included, but very few.
  I knew we could do a much better job to protect the taxpayers and I 
felt the responsibility to continue to try. I also knew that I could 
vote ``no,'' and allow the bill to fail. Then, maybe then, the 
administration would listen.
  That's exactly what happened. I voted against it and once again 
offered seven provisions to the White House and leadership to make it a 
better bill. Those improvements included suspension of mark to market, 
more

[[Page 23987]]

use of FDIC insurance, and reinstating the so-called ``uptick'' rule. 
The first two priorities were agreed to and made a part of the final 
bill.
  This bill prohibits the use of tax dollars for executive severance 
packages, creates a board of directors to approve of the Secretary of 
Treasury's decisions spending tax dollars, greater oversight by 
Congress, slowing the release of tax dollars, allowing the SEC Chairman 
to waive the mark to market rule when no market exists for a particular 
asset (the SEC chairman agreed to do so), and providing insurance to 
limit the taxpayer's risk of loss where the Government purchased toxic 
debt.
  Finally, I want to thank a number of individuals in the Omaha 
community who took the time to talk to me about the bill and legitimacy 
of the crisis. They made me better informed about this problem from a 
Nebraska perspective, thereby allowing me to step back and be more 
thoughtful on how to proceed. Your advice and assistance was much 
appreciated.
  Madam Speaker, this is not the perfect solution, it's not even a good 
one, but it is the solution before us today. And I will support it 
because I can't look into the eyes of someone who has just lost their 
job and say, ``I did nothing to help.''
  Mr. DINGELL. Madam Speaker, on Monday I urged my colleagues to 
support economic recovery legislation, and I continue to urge them to 
do so today. When I voted against the Gramm-Leech-Bliley Act in 1999 I 
warned my colleagues that the Government would one day be called upon 
to rescue failing financial institutions. As angry as I am that my 
prediction was accurate, I know that on this day inaction is not an 
option. I still have reservations about this legislation. I do not 
believe it sufficiently addresses the financial services industry 
deregulation that allowed this crisis to happen, and I do not believe 
that it does enough for struggling families. However, I know that the 
people of this country cannot afford to go another day without action.
  After our failure to pass this legislation on Monday the stock market 
suffered the greatest one day decline in its history. The Wall Street 
executives and investment bankers that got us into this mess surely 
took a hit, but so too did individual retirement accounts and state 
pension funds. For example, the State of Michigan estimates that 
individual investors in the state have lost over $27 billion in the 
stock market in the last year, and the Michigan Pension Fund lost $2.3 
billion on Monday after the House voted down this plan. Should Wall 
Street decline further and the value of the dollar continue to fall, it 
will mean greater unemployment, even higher prices for basic 
commodities, and access to credit for things like college education or 
home improvements will be even harder to obtain. The impact on the 
broader economy will be felt by every American.
  In fact, the lack of credit in the marketplace is already affecting 
some parts of the broader economy. Auto sales were down 27 percent in 
the past year, in part because consumers cannot get access to credit 
for car loans. The automobile financing companies are not responsible 
for the current credit crisis, but they will be eligible to participate 
in this program to obtain the credit they need to keep vehicle sales 
strong. This week I learned about a financially sound manufacturing 
company in Michigan that is seeking a mortgage to replace its current 
building, which it has outgrown, with a new facility that will allow 
the company to expand its operations and add much needed jobs. This 
company is struggling to even find a bank willing to loan it money. 
Small and medium-sized businesses did not cause this crisis, but unless 
this crisis is addressed and the credit markets are restored they will 
find themselves unable to do business.
  Despite my lingering concerns that this is not the best possible way 
to address this crisis, we clearly have to act to avert a much larger 
economic failure. In the months ahead, we can continue to revisit these 
issues and work together to adopt measures that restore the regulatory 
structure that is supposed to protect the financial system from this 
kind of failure, and that provide much needed assistance to the hard-
working men and women who are suffering because of the economic climate 
created by irresponsible parties on Wall Street and here in Washington. 
I urge my colleagues to support the legislation before us today as a 
matter of great national urgency.
  Mr. COOPER. Madam Speaker, I would like to submit for the Record a 
letter of support for the economic rescue plan currently before 
Congress submitted by the Business Roundtable.

                                          Business Roundtable,

                                  Washington, DC, October 1, 2008.
     To: Members of Congress
     Re: Economic Rescue Plan
       The failure to pass emergency legislation to rescue the 
     U.S. financial system will put our entire economy at risk. 
     The resulting turmoil in equity markets has already wiped out 
     hundreds of billions of dollars in household wealth and the 
     retirement savings of the American people. But the impact of 
     this crisis extends well beyond the financial industry.
       As business leaders representing companies that generate 
     more than $5 trillion of U.S. GDP--more than one-third of the 
     U.S. economy--we are already seeing the damage spread to 
     every sector of our economy. Credit is being shut off to both 
     small businesses trying to meet payroll and families 
     struggling to pay college tuition bills. Retail sales are 
     declining each week as consumer confidence collapses. More 
     business failures, job losses and significantly higher 
     unemployment loom on the horizon.
       Further delay will only increase these adverse impacts on 
     America's economy. We urge Congress to act immediately to 
     pass bipartisan legislation to stabilize the U.S. financial 
     system and contain the damage to our broader economy while 
     that opportunity still exists. The American people have 
     always risen to whatever economic challenges they have faced, 
     and with swift congressional action we can meet this crisis 
     and restore our economy to its historic path of strong growth 
     and rising prosperity.
           Sincerely,
         Enrique O. Santacana, President and Chief Executive 
           Officer, ABB Inc.; Miles D. White, Chairman and CEO, 
           Abbott; William D. Green, Chairman & CEO, Accenture; 
           Evan G. Greenberg, Chairman and Chief Executive 
           Officer, ACE Group; Gary C. Butler, President and CEO, 
           ADP; Ronald A. Williams, Chairman and CEO, Aetna Inc.; 
           Klaus Kleinfeld, President and CEO, Alcoa Inc.; John E. 
           McGlade, Chairman, President, and CEO, Air Products and 
           Chemicals, Inc.; James L. Wainscott, Chairman, 
           President & CEO, AK Steel Corporation; Thomas J. 
           Wilson, Chairman, President & CEO, Allstate Insurance 
           Company; Lee Styslinger, III, Chairman & CEO, Altec, 
           Inc.; Michael G. Morris, Chairman, President and Chief 
           Executive Officer, American Electric Power Company, 
           Inc.
         Kenneth I. Chenault, Chairman and CEO, American Express 
           Company; James M. Cracchiolo, Chairman and Chief 
           Executive Officer, Ameriprise Financial; James T. 
           Hackett, Chairman, President & CEO, Anadarko Petroleum 
           Corporation; Paul W. Jones, Chairman and CEO, A.O. 
           Smith Corporation; G. Steven Farris, President, Chief 
           Executive Officer and Chief Operating Officer, Apache 
           Corporation; Steven F. Leer, Chairman & CEO, Arch Coal, 
           Inc.; Patricia A. Woertz, Chairman, CEO & President, 
           Archer Daniels Midland Company; Charles G. ``Chip'' 
           McClure, Chairman, CEO and President, ArvinMeritor, 
           Inc.; Dean A. Scarborough, President & CEO, Avery 
           Dennison; Ronald L. Nelson, Chairman & CEO, Avis Budget 
           Group; Riley P. Bechtel, Chairman & CEO, Bechtel Group, 
           Inc.; Stephen A. Schwarzman, Chairman and CEO, The 
           Blackstone Group.
         W. James McNerney, Jr., Chairman of the Board, President 
           and Chief Executive Officer, The Boeing Company; Robert 
           A. Malone, Chairman & President, BP America Inc.; 
           Michael T. Dan, Chairman, President & CEO, The Brink's 
           Company; John A. Swainson, CEO, CA, Inc.; Harold D. 
           Boyanovsky, President and CEO, Case New Holland Inc.; 
           James W. Owens, Chairman and CEO, Caterpillar, Inc.; 
           Kathryn V. Marinello, Chairman and Chief Executive 
           Officer, Ceridian Corporation; Dave O'Reilly, Chairman 
           and CEO, Chevron Corporation; H. Edward Hanway, 
           Chairman and Chief Executive Officer, CIGNA 
           corporation; Muhtar Kent, President and Chief Operating 
           Officer, The Coca-Cola Company; Mayo A. Shattuck, III, 
           Chairman, President & CEO, Constellation Energy; David 
           F. Dougherty, President and CEO, Convergys Corporation.
         Douglas W. Stotlar, President & CEO, Con-way Inc.; 
           Wendell P. Weeks, Chairman and Chief Executive Officer, 
           Corning Incorporated; Eric C. Fast, President & Chief 
           Executive Officer, Crane Co.; Michael J. Ward, 
           Chairman, President & CEO, CSX Corporation; Tim Solso, 
           Chairman & CEO, Cummins Inc.; Robert W. Lane, Chairman 
           and CEO, Deere & Company; James H. Quigley, Chief 
           Executive Officer, Deloitte Touche Tohmatsu; Robert S. 
           Miller, Executive Chairman, Delphi Corporation; J.T. 
           Battenberg, III, Chairman, CEO--Retired, Delphi 
           Corporation; Andrew N Liveris, Chairman & CEO, The Dow 
           Chemical Company; Chad Holiday, Chairman and CEO, 
           DuPont; J. Brian Ferguson, Chairman and Chief Executive 
           Officer, Eastman Chemical Company.
         Antonio M. Perez, Chairman and CEO, Eastman Kodak 
           Company; Alexander M. Cutler, Chairman and CEO, Eaton 
           Corporation; John C. Lechleiter, President and CEO, Eli 
           Lilly and Company;

[[Page 23988]]

           James S. Turley, Chairman and Chief Executive Officer, 
           Ernst & Young LLP; William G. Walter, President and 
           Chief Executive Officer, FMC Corporation; Lewis Hay, 
           III, Chairman and Chief Executive Officer, FPL Group, 
           Inc.; Jeffrey R. Immelt, Chairman & CEO, GE; G.R. 
           Wagoner, Jr., Chairman and Chief Executive Officer, 
           General Motors Corporation; Marshall O. Larsen, 
           Chairman, President & CEO, Goodrich Corporation; Dinesh 
           C. Paliwal, Chairman & CEO, Harman International 
           Industries, Inc.; David M. Cote, Chairman and Chief 
           Executive Officer, Honeywell International Inc.; 
           Brendan McDonagh, CEO, HSBC North America Holdings Inc.
         Mike McCallister, President and Chief Executive Officer, 
           Humana Inc.; Samuel J Palmisano, Chairman, President & 
           CEO, IBM Corporation; John V. Faraci, Chairman and 
           Chief Executive Officer, International Paper; Steven R. 
           Loranger, Chairman, President and CEO, ITT Corporation; 
           Steve Roell, Chairman and CEO, Johnson Controls, Inc.; 
           Timothy P. Flynn, Chairman & CEO, KPMG; Edmund F. 
           Kelly, Chairman, President and CEO, Liberty Mutual 
           Group; Stuart H. Reese, Chairman, President and CEO, 
           MassMutual Financial Group; Harold McGraw III, 
           Chairman, President and CEO, The McGraw-Hill Companies; 
           John H. Hammergren, Chairman and CEO, McKesson 
           Corporation; David B. Snow, Jr., Chairman & CEO, Medco 
           Health Solutions, Inc.; Gregory Q. Brown, President & 
           Co-CEO, Motorola, Inc.
         John A. Luke, Jr., Chairman & CEO, MWV Corporation; 
           Thomas C. Nelson, Chairman, President & CEO, National 
           Gypsum Company; Jerry Jurgensen, Chief Executive 
           Officer, Nationwide Mutual Insurance Company; Dan 
           Ustian, Chairman, President & CEO, Navistar; Ted 
           Mathas, President & CEO, New York Life Insurance; C.W. 
           Moorman, Chairman, President and CEO, Norfolk Southern 
           Corporation; Daniel R DiMicco, Chairman and CEO, NUCOR 
           CORPORATION; Steve Odland, Chairman & CEO, Office 
           Depot, Inc.; Michael H. Thaman, Chairman and CEO, Owens 
           Corning; Richard L. Wambold, Chairman and CEO, Pactiv 
           Corporation; Jeffrey B. Kindler, Chairman and CEO, 
           Pfizer Inc.; Steve Angel, Chairman and CEO, Praxair, 
           Inc.
         Dennis M. Nally, Chairman and Senior Partner, 
           PricewaterhouseCoopers; Larry Zimpleman, President and 
           Chief Executive Officer, Principal Financial Group; 
           A.G. Lafley, Chairman of the Board and Chief Executive 
           Officer, The Procter & Gamble Company; Ralph Izzo, 
           Chairman of the Board, President & Chief Executive 
           Officer, Public Service Enterprise Group Inc.; Henry R. 
           Silverman, Chairman, Realogy Corporation; Keith D. 
           Nosbusch, Chairman & CEO, Rockwell Automation; Brenda 
           C. Barnes, Chairman and CEO, Sara Lee Corporation; 
           James H. Goodnight, CEO and Founder, SAS; Fred Hassan, 
           Chairman and Chief Executive Officer, Schering-Plough 
           Corporation; J. Patrick Spainhour, CEO, ServiceMaster 
           Global Holdings; George Nolen, CEO, Siemens 
           Corporation; Edward B. Rust Jr., Chairman and CEO, 
           State Farm Insurance.
         Lewis B. Campbell, Chairman, President and Chief 
           Executive Officer, Textron Inc.; Marijn E. Dekkers, 
           President and CEO, Thermo Fisher Scientific; Tom Lynch, 
           Chief Executive Officer, Tyco Electronics; Edward D. 
           Breen, Chairman and CEO, Tyco International; Jim Young, 
           Chairman, Union Pacific; Louis R. Chenevert, President 
           & Chief Executive Officer, United Technologies 
           Corporation; Ivan Seidenberg, Chairman and CEO, 
           Verizon; Dan Fulton, President and CEO, Weyerhaeuser 
           Company; Jeff M. Fettig, Chairman and CEO, Whirlpool 
           Corporation; Steven J. Malcolm, Chairman, President & 
           CEO, The Williams Companies, Inc.; Anne M. Mulcahy, 
           Chairman and Chief Executive Officer, Xerox 
           Corporation; William D. Zollars, Chairman, President & 
           CEO, YRC Worldwide.

  Mr. CONYERS. Madam Speaker, today the House of Representatives will 
vote for the second time this week on Secretary Paulson's flawed 
bailout legislation. His plan lacks the core principles needed to 
improve the economy. To be a viable plan, the legislation must include 
(1) enacting a moratorium on foreclosures, (2) restructuring mortgages 
to make them more affordable, and (3) prohibiting interest rate 
increases associated with subprime loans. These initiatives can be 
achieved without spending one dollar of the taxpayer's money. In 
addition, empowering the Federal Deposit Insurance Corporation to 
guarantee all depositors and bond holders would provide immediate 
liquidity to credit markets.
  If the Congress acts imprudently today, we may end up draining our 
national treasury of over $700 billion in resources without curing our 
economic ills. Such a decision could effectively tie the hands of the 
next President and kill universal health care and job programs before 
they are ever drafted.
  I agree with former World Bank chief economist Joseph Stiglitz and 
other leading economists that action must be taken to tackle the 
problem posed by the tightening of the credit market. I simply disagree 
with the administration's proposed solution.
  Although it hasn't been reported in the mainstream media, there are 
real legislative alternatives to this bailout that have been vetted by 
some of the best economic minds in the Congress.
  One plan, offered by Representative Peter DeFazio and other members 
of the so-called ``Bailout Skeptics'' Caucus, proposes some common 
sense changes to Securities and Exchange Commission rules and Federal 
Deposit Insurance Corporation policies. I have cosponsored this 
legislation because I believe it will efficiently free-up capital, 
protect the taxpayer, and give the next President the fiscal 
flexibility he will need to address the dire problems brought about by 
the current economic slowdown.
  Another plan, proposed by billionaire financier George Soros, mimics 
a successful model used in Norway and Sweden. The plan would inject 
credit into the markets in a direct and low-risk manner by empowering 
the Treasury Department to purchase preferred stock and discounted 
common stock from faltering lenders. I called for this type of direct 
capital deployment measure earlier this week, because it would provide 
the taxpayers with a tangible return on their investment and keep toxic 
mortgage-backed securities off the government's books.
  On top of these plans, I and many of my progressive colleagues have 
continually advocated for bankruptcy reform that would give judges the 
freedom to renegotiate home mortgages during court proceedings. 
National Assistance Corporation of America CEO Bruce Marks and I agree 
that this reform is a necessary component of any bailout plan.
  Most Americans have never heard of any of these alternative proposals 
because they have only been presented with a single, flawed narrative--
either accept this bailout plan or tempt economic catastrophe. This is 
a false choice that, unfortunately, has been successfully peddled by 
the President's fear-mongers and broadcast by a compliant media.
  The tactic being used by Paulson creates an atmosphere of fear. The 
events of the last two weeks are reminiscent of the days leading up to 
the adoption of the Patriot Act, and to the invasion of Iraq--times 
where fear-mongering dampened the careful and deliberate consideration 
of alternative courses of action. This time, instead of scaring the 
American people with tales of weapons of mass destruction or planes 
piloted by terrorists, the President bullies the taxpayer with dire 
warnings of a credit freeze that will bring our economy to its knees.
  There are serious options for dealing with this crisis that don't 
involve giving away billions to the richest, most irresponsible 
businessmen. My vote against the bailout today is not a do-nothing 
vote; it is a vote for a real solution. We cannot afford to repeat the 
mistakes of the past. Detroiters, Michiganders, Americans, and billions 
of people around the world are depending on us to get it right.
  Mr. MORAN of Virginia. Madam Speaker, under the Emergency Economic 
Stabilization Act of 2008, the Treasury Department's Troubled Assets 
Relief Program (TARP) will have the ability to support the financial 
system through the purchase of securities and through investing in 
equity/preferred securities. I strongly believe equity infusion if used 
wisely will have greater benefits for our economy and yield higher 
returns to American taxpayers.
  A strong consensus among financiers and economists has developed 
supporting these conclusions. George Soros, Joeseph Stigliz, Bradford 
Delong, Paul Krugman, John Makin, Alex Pollack, Lucien Bebchuk, and 
Edmund Phelps are a sample of the bipartisan expertise that has 
contributed to the debate and strongly support the finding that using 
capital infusions rather than distressed asset purchases alone will 
have a far greater re-invigorating effect on our economy.
  If done effectively, equity infusions will introduce 10 to 12 times 
the amount of the initial government investment into our credit 
markets. This means that capital infusions of $700 billion would yield 
credit flow effects totaling $8.4 trillion. In contrast, distressed 
asset purchases of $700 billion yield credit flow effects of only $700 
billion. Capital infusions could give us 12 times the support for the 
communities and small businesses that badly need credit.
  The capital infusion approach would involve using Warren Buffett type 
investment strategies and would result in the government owning equity 
interests in the institutions which are assisted. If these government 
investments do

[[Page 23989]]

only half as well as Buffett's investments in distressed institutions 
such as Goldman Sachs, U.S. taxpayers will earn as much as $200 billion 
profit when the financial sector recovers. This is far beyond any 
forecast return to taxpayers from buying distressed assets. In fact the 
difference for taxpayers of the two methods could be as large as $375 
billion. This will result in lower taxes longer term and better health 
care, better schools, and a cleaner environment. Because it is sound, 
transparent and effective, it will restore global confidence in the 
U.S. economy.
  I attach three articles from George Soros, Lucien Bebchuk, and Joseph 
Stiglitz, to be included in the Record.

                [From the Financial Times, Oct. 1, 2008]

                    Recapitalise the Banking System

                           (By George Soros)

       The emergency legislation currently before Congress was 
     ill-conceived--or more accurately, not conceived at all. As 
     Congress tried to improve what Treasury originally requested, 
     an amalgam plan has emerged that consists of Treasury's 
     original Troubled Asset Relief Programme (Tarp) and a quite 
     different capital infusion programme in which the government 
     invests and stabilises weakened banks and profits from the 
     economy's eventual improvement. The capital infusion approach 
     will cost tax payers less in future years, and may even make 
     money for them.
       Two weeks ago the Treasury did not have a plan ready--that 
     is why it had to ask for total discretion in spending the 
     money. But the general idea was to bring relief to the 
     banking system by relieving banks of their toxic securities 
     and parking them in a government-owned fund so that they 
     would not be dumped on the market at distressed prices. With 
     the value of their investments stabilised, banks would then 
     be able to raise equity capital.
       The idea was fraught with difficulties. The toxic 
     securities in question are not homogenous and in any auction 
     process the sellers are liable to dump the dregs on to the 
     government fund. Moreover, the scheme addresses only one half 
     of the underlying problem--the lack of credit availability. 
     It does very little to enable house owners to meet their 
     mortgage obligations and it does not address the foreclosure 
     problem. With house prices not yet at the bottom, if the 
     government bids up the price of mortgage backed securities, 
     the taxpayers are liable to lose; but if the government does 
     not pay up, the banking system does not experience much 
     relief and cannot attract equity capital from the private 
     sector.
       A scheme so heavily favouring Wall Street over Main Street 
     was politically unacceptable. It was tweaked by the 
     Democrats, who hold the upper hand, so that it penalises the 
     financial institutions that seek to take advantage of it. The 
     Republicans did not want to be left behind and imposed a 
     requirement that the tendered securities should be insured 
     against loss at the expense of the tendering institution. The 
     rescue package as it is now constituted is an amalgam of 
     multiple approaches. There is now a real danger that the 
     asset purchase programme will not be fully utilised because 
     of the onerous conditions attached to it.
       Nevertheless, a rescue package was desperately needed and, 
     in spite of its shortcomings, it would change the course of 
     events. As late as last Monday, September 22, Treasury 
     secretary Hank Paulson hoped to avoid using taxpayers' money; 
     that is why he allowed Lehman Brothers to fail. Tarp 
     establishes the principle that public funds are needed and if 
     the present programme does not work, other programmes will be 
     instituted. We will have crossed the Rubicon.
       Since Tarp was ill-conceived, it is liable to arouse a 
     negative response from America's creditors. They would see it 
     as an attempt to inflate away the debt. The dollar is liable 
     to come under renewed pressure and the government will have 
     to pay more for its debt, especially at the long end. These 
     adverse consequences could be mitigated by using taxpayers' 
     funds more effectively.
       Instead of just purchasing troubled assets the bulk of the 
     funds ought to be used to recapitalise the banking system. 
     Funds injected at the equity level are more high-powered than 
     funds used at the balance sheet level by a minimal factor of 
     twelve--effectively giving the government $8,400bn to re-
     ignite the flow of credit. In practice, the effect would be 
     even greater because the injection of government funds would 
     also attract private capital. The result would be more 
     economic recovery and the chance for taxpayers to profit from 
     the recovery.
       This is how it would work. The Treasury secretary would 
     rely on bank examiners rather than delegate implementation of 
     Tarp to Wall Street firms. The bank examiners would establish 
     how much additional equity capital each bank needs in order 
     to be properly capitalised according to existing capital 
     requirements. If managements could not raise equity from the 
     private sector they could turn to Tarp.
       Tarp would invest in preference shares with warrants 
     attached. The preference shares would carry a low coupon (say 
     5 per cent) so that banks would find it profitable to 
     continue lending, but shareholders would pay a heavy price 
     because they would be diluted by the warrants; they would be 
     given the right, however, to subscribe on Tarp's terms. The 
     rights would be tradeable and the secretary of the Treasury 
     would be instructed to set the terms so that the rights would 
     have a positive value.
       Private investors, including me, are likely to jump at the 
     opportunity. The recapitalised banks would be allowed to 
     increase their leverage, so they would resume lending. Limits 
     on bank leverage could be imposed later, after the economy 
     has recovered. If the funds were used in this way, the 
     recapitalisation of the banking system could be achieved with 
     less than $500bn of public funds.
       A revised emergency legislation could also provide more 
     help to homeowners. It could require the Treasury to provide 
     cheap financing for mortgage securities whose terms have been 
     renegotiated, based on the Treasury's cost of borrowing. 
     Mortgage service companies could be prohibited from charging 
     fees on foreclosures, but they could expect the owners of the 
     securities to provide incentives for renegotiation as Fannie 
     Mae and Freddie Mac are already doing.
       Banks deemed to be insolvent would not be eligible for 
     recapitalization by the capital infusion programme, but would 
     be taken over by the Federal Deposit Insurance Corporation. 
     The FDIC would be recapitalised by $200bn as a temporary 
     measure. FDIC, in turn could remove the $100,000 limit on 
     insured deposits. A revision of the emergency legislation 
     along these lines would be more equitable, have a better 
     chance of success, and cost taxpayers less in the long run.
                                  ____


               [From the Financial Times, Oct. 1st, 2008]

 The Rescue Plan: Direct Capital Investments Would Be Better For Both 
                         Markets And Taxpayers

                          (By Lucian Bebchuk)

       Most immediate reactions to the defeat of the emergency 
     legislation in the House of Representatives seem to assume 
     that, facing a choice between approval and government 
     inaction that could bring about a financial meltdown, the 
     House irresponsibly and irrationally opted for the latter. 
     But the defeat of this particular bill hardly leaves us with 
     inaction as the only alternative.
       The bill was defeated at least partly because of its 
     inability to gather sufficient public support due to its 
     evident flaws. Congress can and should adopt quickly a bill 
     that would address these flaws and consequently enjoy strong 
     public support.
       There is widespread recognition of the depth of the crisis 
     and the need for governmental intervention. Why was the bill 
     nonetheless defeated? Because there is an equally widespread 
     recognition that spending $700 billion on purchasing (and 
     insuring) toxic paper would be a highly flawed form of 
     intervention.
       During the week preceding the vote, it has become evident 
     that the government's contemplated plans for valuing troubled 
     assets would lead to a quagmire. Opposition to the bill grew 
     due to expectations that purchasing toxic paper could well 
     result in massive complexities, large giveaways, and 
     substantial public losses.
       At the same time, recognition has grown that, 
     notwithstanding these large costs, the proposed plan would 
     fail to provide the financial sector with capital infusions 
     that would be as immediate, large, and appropriately targeted 
     as needed. Because the bill would provide financial firms 
     with extra capital largely through overpaying for troubled 
     assets (or under-pricing insurance for such assets), it would 
     provide capital only following the consummation of complex 
     and time-consuming processes and cannot be counted on to 
     supply capital where and when it would be most useful.
       Suppose that a financial firm runs into trouble, needs a 
     substantial infusion of capital within days, and is viewed by 
     the government as important to save. Even if the rejected 
     bill were in effect at present, it would not provide the 
     government with effective tools to deal with such a 
     situation. For one thing, purchasing the many types of 
     troubled assets the firm may own through the bill's 
     contemplated valuation procedures would require a long delay.
       Consider the government's recent infusion of capital into 
     AIG. Facing the risk of AIG's collapse, the government 
     provided $85 billion right away and received in return an 
     agreed upon set of debt and equity instruments. Had the bill 
     passed on Monday and AIG subsequently needed assistance, the 
     funds authorised by the bill might not be usable for such 
     capital infusion by the government. Purchasing the large and 
     highly heterogeneous portfolio of troubled assets owned by 
     AIG through valuation processes would not provide an 
     effective and timely form of intervention.
       The passage of the defeated bill thus would not have 
     effectively dispelled the financial markets' worries. To do 
     so, Congress should not reconsider the rejected bill but 
     rather pass an authorization for the treasury to infuse 
     capital into financial firms. The same big, market-reassuring 
     number can be used: $700 billion. But the bill, which I 
     expect to obtain wide public support, should focus on

[[Page 23990]]

     and permit direct capital investment of the authorised funds.
       The Treasury's direct capital investments should be guided 
     by the objectives of restoring stability to the financial 
     markets and protecting taxpayers. When a firm is solvent and 
     undercapitalised, the Treasury should insist on getting a set 
     of new capital securities that would provide the government 
     with adequate return on its investment.
       In cases in which a firm is insolvent and not merely 
     undercapitalised, the Treasury should still be permitted to 
     make a capital investment if it views the firm's continued 
     operations as necessary to avoid disruption to the financial 
     markets. Taxpayer losses from the legislation would be 
     limited to such cases, and these losses would be kept to a 
     minimum by the government's investing in such cases only on 
     terms effectively enabling it to take over the firm's equity.
       It would be perfectly fine for Congress to include 
     authorisation to purchase toxic assets in the adopted 
     legislation. But the bill should not contemplate that such 
     purchases would be a primary form for injecting capital to 
     financial firms, and it should allow such purchases only if 
     they are done at fair market value.
       Financial markets should be reassured that the Treasury is 
     equipped with the best tools for addressing distress in 
     financial firms and for shoring up these firms' capital. 
     Congress should move quickly to adopt legislation authorizing 
     the use of $700 billion for infusing capital into financial 
     firms. If it does, Monday's defeat of the proposal to spend 
     $700 billion on purchasing toxic paper might turn into a 
     blessing.
                                  ____


                   [From The Nation, Sept. 26, 2008]

                            A Better Bailout

                        (By Joseph E. Stiglitz)

       The champagne bottle corks were popping as Treasury 
     Secretary Henry Paulson announced his trillion-dollar bailout 
     for the banks, buying up their toxic mortgages. To a skeptic, 
     Paulson's proposal looks like another of those shell games 
     that Wall Street has honed to a fine art. Wall Street has 
     always made money by slicing, dicing and recombining risk. 
     This ``cure'' is another one of these rearrangements: 
     somehow, by stripping out the bad assets from the banks and 
     paying fair market value for them, the value of the banks 
     will soar.
       There is, however, an alternative explanation for Wall 
     Street's celebration: the banks realized that they were about 
     to get a free ride at taxpayers' expense. No private firm was 
     willing to buy these toxic mortgages at what the seller 
     thought was a reasonable price; they finally had found a 
     sucker who would take them off their hands--called the 
     American taxpayer.
       The administration attempts to assure us that they will 
     protect the American people by insisting on buying the 
     mortgages at the lowest price at auction. Evidently, Paulson 
     didn't learn the lessons of the information asymmetry that 
     played such a large role in getting us into this mess. The 
     banks will pass on their lousiest mortgages. Paulson may try 
     to assure us that we will hire the best and brightest of Wall 
     Street to make sure that this doesn't happen. (Wall Street 
     firms are already licking their lips at the prospect of a new 
     source of revenues: fees from the U.S. Treasury.) But even 
     Wall Street's best and brightest do not exactly have a 
     credible record in asset valuation; if they had done better, 
     we wouldn't be where we are. And that assumes that they are 
     really working for the American people, not their long-term 
     employers in financial markets. Even if they do use some 
     fancy mathematical model to value different mortgages, those 
     in Wall Street have long made money by gaming against these 
     models. We will then wind up not with the absolutely lousiest 
     mortgages, but with those in which Treasury's models most 
     underpriced risk. Either way, we the taxpayers lose, and Wall 
     Street gains.
       And for what? In the S&L bailout, taxpayers were already on 
     the hook, with their deposit guarantee. Part of the question 
     then was how to minimize taxpayers' exposure. But not so this 
     time. The objective of the bailout should not be to protect 
     the banks' shareholders, or even their creditors, who 
     facilitated this bad lending. The objective should be to 
     maintain the flow of credit, especially to mortgages. But 
     wasn't that what the Fannie Mae/Freddie Mac bailout was 
     supposed to assure us?
       There are four fundamental problems with our financial 
     system, and the Paulson proposal addresses only one. The 
     first is that the financial institutions have all these toxic 
     products--which they created--and since no one trusts anyone 
     about their value, no one is willing to lend to anyone else. 
     The Paulson approach solves this by passing the risk to us, 
     the taxpayer--and for no return. The second problem is that 
     there is a big and increasing hole in bank balance sheets--
     banks lent money to people beyond their ability to repay--and 
     no financial alchemy will fix that. If, as Paulson claims, 
     banks get paid fairly for their lousy mortgages and the 
     complex products in which they are embedded, the hole in 
     their balance sheet will remain. What is needed is a 
     transparent equity injection, not the non-transparent ruse 
     that the administration is proposing.
       The third problem is that our economy has been supercharged 
     by a housing bubble which has now burst. The best experts 
     believe that prices still have a way to fall before the 
     return to normal, and that means there will be more 
     foreclosures. No amount of talking up the market is going to 
     change that. The hidden agenda here may be taking large 
     amounts of real estate off the market--and letting it 
     deteriorate at taxpayers' expense.
       The fourth problem is a lack of trust, a credibility gap. 
     Regrettably, the way the entire financial crisis has been 
     handled has only made that gap larger.
       Paulson and others in Wall Street are claiming that the 
     bailout is necessary and that we are in deep trouble. Not 
     long ago, they were telling us that we had turned a corner. 
     The administration even turned down an effective stimulus 
     package last February--one that would have included increased 
     unemployment benefits and aid to states and localities--and 
     they still say we don't need another stimulus. To be frank, 
     the administration has a credibility and trust gap as big as 
     that of Wall Street. If the crisis was as severe as they 
     claim, why didn't they propose a more credible plan? With 
     lack of oversight and transparency the cause of the current 
     problem, how could they make a proposal so short in both? If 
     a quick consensus is required, why not include provisions to 
     stop the source of bleeding, to aid the millions of Americans 
     that are losing their homes? Why not spend as much on them as 
     on Wall Street? Do they still believe in trickle-down 
     economics, when for the past eight years money has been 
     trickling up to the wizards of Wall Street? Why not enact 
     bankruptcy reform, to help Americans write down the value of 
     the mortgage on their overvalued home? No one benefits from 
     these costly foreclosures.
       The administration is once again holding a gun at our head, 
     saying, ``My way or the highway.'' We have been bamboozled 
     before by this tactic. We should not let it happen to us 
     again. There are alternatives. Warren Buffet showed the way, 
     in providing equity to Goldman Sachs. The Scandinavian 
     countries showed the way, almost two decades ago. By issuing 
     preferred shares with warrants (options), one reduces the 
     public's downside risk and insures that they participate in 
     some of the upside potential. This approach is not only 
     proven, it provides both incentives and wherewithal to resume 
     lending. It furthermore avoids the hopeless task of trying to 
     value millions of complex mortgages and even more complex 
     products in which they are embedded, and it deals with the 
     ``lemons'' problem--the government getting stuck with the 
     worst or most overpriced assets.
       Finally, we need to impose a special financial sector tax 
     to pay for the bailouts conducted so far. We also need to 
     create a reserve fund so that poor taxpayers won't have to be 
     called upon again to finance Wall Street's foolishness.
       If we design the right bailout, it won't lead to an 
     increase in our long-term debt--we might even make a profit. 
     But if we implement the wrong strategy, there is a serious 
     risk that our national debt--already overburdened from a 
     failed war and eight years of fiscal profligacy--will soar, 
     and future living standards will be compromised. The 
     president seemed to think that his new shell game will arrest 
     the decline in house prices, and we won't be faced holding a 
     lot of bad mortgages. I hope he's right, but I wouldn't count 
     on it: it's not what most housing experts say. The 
     president's economic credentials are hardly stellar. Our 
     national debt has already climbed from $5.7 trillion to over 
     $9 trillion in eight years, and the deficits for 2008 and 
     2009--not including the bailouts--are expected to reach new 
     heights. There is no such thing as a free war--and no such 
     thing as a free bailout. The bill will be paid, in one way or 
     another.
       Perhaps by the time this article is published, the 
     administration and Congress will have reached an agreement. 
     No politician wants to be accused of being responsible for 
     the next Great Depression by blocking key legislation. By all 
     accounts, the compromise will be far better than the bill 
     originally proposed by Paulson but still far short of what I 
     have outlined should be done. No one expects them to address 
     the underlying causes of the problem: the spirit of excessive 
     deregulation that the Bush Administration so promoted. Almost 
     surely, there will be plenty of work to be done by the next 
     president and the next Congress. It would be better if we got 
     it right the first time, but that is expecting too much of 
     this president and his administration.

  Ms. JACKSON-LEE of Texas. Madam Speaker, I would like to thank the 
chairman of financial services Barney Frank  for bringing this 
important piece of legislation to the floor. I also rise with a sense 
of the solemnity of this moment. However, I rise today with the 
confidence that our system of government is strong and the 
constitutional protections of the full faith and credit of our 
government must protect Main Street America while we reform America's 
Wall Street.
  The first three articles of the United States Constitution address 
the three branches of government and their enumerated powers. These 
articles govern the legislature, the executive, and the judicial 
branches. Because

[[Page 23991]]

there is no specific grant of constitutional authority for the actions 
that will be taking place here today, we the members of Congress need 
to exercise oversight over the powers and actions of the executive. 
Should the executive or its agencies exceed the powers granted to it in 
the Constitution, the judicial can review the determinations made by 
the executive and the legislative branches. These concepts are 
fundamental to our Constitution and our system of constitutional checks 
and balances. These checks and balances were established by the 
Founding Fathers to reign in the unbridled power of the executive.
  Today we are engaged in a fundamental exercise of the constitutional 
powers extended to the Congress. Today's vote is critically important.
  Several questions come to mind when I consider the present financial 
crisis:
  Where was the FDIC?
  Where was the SEC?
  Where was the Federal Reserve?
  I have worked with leadership to offer consistent amendments, not 
once but twice unsuccessfully, that would have strengthened the 
enforcement measures over the past week to change the Administration's 
proposal to make it more encompassing, effective, and better for the 
American people. While the present legislation is impressive, it is 
also impressive regarding what needs clarification in the present 
legislation. For example, the legislation needs clarification on its 
bankruptcy restructuring; enforcement; and judicial review. These are 
all issues that I have been very concerned about.
  Because I am concerned and desire that the maximum number of 
Americans get relief from this bill, I offered amendments yesterday. To 
ensure that this bill provides relief for Americans, I offered the 
following amendments:
  First, many are concerned about the dollar amount that will be set 
aside for those individuals facing mortgage foreclosure. Therefore, I 
asked that language be inserted into the bill so that $10 billion be 
utilized for the Secretary of the Treasury to restructure mortgages.
  Second, as Senator Barack Obama has recently stated, he is committed 
to altering the Bankruptcy Code in the future to assist homeowners on 
the question of restructuring their mortgages. Therefore, I believe 
that there should have been Sense of Congress language that the 
Congress should review and amend the Bankruptcy Code to permit 
bankruptcy judges to address the question of individual home mortgage 
restructuring. This would have sent a clear message that Congress is 
interested in helping Americans pay off their debt despite its not 
changing the Bankruptcy Code at this time.
  Third, there needs to be greater enforcement. In the section on 
judicial review (section 119), there should have been language that 
specifically states that ``the courts should be able to exercise their 
discretion to grant injunctive and/or equitable relief if the court 
determines that such relief would not destabilize financial markets.''
  Fourth, the legislation should have created a new, independent 
commission to exercise oversight over what happened and the commission 
should regularly provide reports to Congress. This Commission would be 
backward looking.
  Fifth, the legislation should have been narrowly crafted so that 
corporate executives who may be convicted of criminal malfeasance in 
the financial sector might be barred from conducting financial business 
with the government for a period of seven (7) years.
  Sixth, the legislation should have permanently lifted the present 
insurance cap of $100,000 that the FDIC has established to insure funds 
stored in FDIC-backed banking institutions to $250,000. I believe that 
this has already been included in the Senate bill; but, my amendment 
would have made the change permanent.
  Eighth, in section 109, which addresses ``foreclosure mitigation 
efforts,'' the language should be changed from ``shall encourage'' to 
``shall require'' to provide stronger relief for Americans.
  Specifically, current section 109(a) states in pertinent part that 
``the Secretary shall implement a plan that seeks to maximize 
assistance for homeowners and use the authority of the Secretary to 
encourage the servicers of the underlying mortgages . . . to minimize 
foreclosures.'' I believe if the true intent is to bailout ``Main 
Street,'' the Secretary should be ``required'' to minimize 
foreclosures.
  Can you clarify how this legislation has any enforcement? I 
understand that H.R. 1424 establishes a Financial Stability Oversight 
Board in section 104; Oversight and Audits in section 116; and a 
Congressional Oversight Panel in section 125. However, none of these 
sections appear to provide penalties or sanctions for non-compliance.
  I intend to have the following questions answered:

       Ms. JACKSON-LEE of Texas. Can you explain why the 
     bankruptcy provisions were removed from the bill?
       Ms. JACKSON-LEE of Texas. Without bankruptcy I offered an 
     amendment that $10 billion dollars should be set aside so 
     that the Department of Treasury could use those funds to 
     address the question of individuals facing home mortgage 
     foreclosure. I considered it important to set aside money 
     because I wanted to ensure that Main Street received 
     something from this bailout and not just Wall Street. Can you 
     explain what provisions in the bill would ensure that the 
     monies are spent on persons in mortgage foreclosure?
       Ms. JACKSON-LEE of Texas. Can we add report language 
     indicating to the Secretary how monies are to be used when it 
     comes to Americans in mortgage foreclosure and can we add 
     language that the Secretary should attempt to restructure the 
     mortgages of homeowners that are in mortgage foreclosure?
       Ms. JACKSON-LEE of Texas. The Administration has labeled 
     the current economic situation as a crisis that requires 
     emergency measures. Because these are ``exigent'' 
     circumstances that are in need of correction, what in the 
     bill prevents the Secretary from using all the $350 billion 
     by January 2009?
       Ms. JACKSON-LEE of Texas. Above all, my concern is to 
     ensure that the American people receive the relief that they 
     deserve. If the American people are facing mortgage 
     foreclosure, it is my desire that monies be provided to them 
     so that they can continue to stay in their home and pay their 
     mortgages and their bills. Everyone deserves the economic 
     dream of owning their own home. But the financial 
     institutions were dilatory in their responsibility to assess 
     the borrower's ability to pay for loans and purchase a home. 
     It was the squandering of this responsibility and 
     preoccupation with greed and avarice that has led us to where 
     we are today.
       There are substantial improvements in the present version 
     of the bill compared to the Bush administration proposal. 
     However, the bill as it is presently written, in my view 
     needs some clarification as to how it provides the necessary 
     relief to middle-class America. Frankly, the bill provides no 
     panacea to our present economic woes. Our markets will have 
     the full faith and credit of the United States.
       There are provisions now that address accountability 
     measures by requiring a plan to ensure the taxpayer is repaid 
     in full, and requiring Congressional review after the first 
     $350 billion for future payments.
       Principally, there are three phases of a financial rescue 
     with strong taxpayer protections: reinvest, reimburse, and 
     reform. One of the phases is to re-invest in the troubled 
     financial markets to stabilize the markets. Another, 
     reimburses the taxpayer and requires a plan to guarantee that 
     they will be repaid in full. The last is to reform how 
     business is done on Wall Street. The current legislation 
     provides for fewer golden parachutes and, to its credit, 
     provides sweeping Congressional oversight.
       There are critical improvements to the rescue plan that 
     yield greater protection to the American taxpayers and even 
     to Main Street. However, with a ``pause'' we can help the 
     financial markets and make America secure. I still have 
     concern that there is enough in the bill to help Americans 
     struggling with their mortgages. Is there some bright hope 
     you can share with me to relieve me of my anxiety?
       Ms. JACKSON-LEE of Texas. Chairman Frank, on many 
     occasions, you have reiterated the concern of the American 
     people, which we both share, the wish that this legislation 
     had stronger and more comprehensive relief for home owners 
     facing foreclosures. Please elaborate on your interest, 
     willingness, and commitment for us to work together to 
     introduce and pass stronger and more comprehensive housing 
     foreclosure legislation in the next Congress?
       Thank you, Mr. Chairman, to you and your staff, for your 
     commitment to this issue.

  Ms. ESHOO. Madam Speaker, I rise today to express my support for H.R. 
1424 the Emergency Economic Stabilization Act.
  Nearly two weeks ago the President presented legislation to Congress 
requesting a $700 billion recovery package, with the Treasury Secretary 
empowered to set the rules for all transactions. The bill included no 
safeguards, no transparency, no accountability, and no oversight. This 
plan was wrong for the American people and we rejected it.
  The House, through bipartisan negotiations, completely reshaped the 
bill to include three crucial elements to rebuild our financial system. 
One, we reinvested in troubled financial markets to stabilize our 
economy and insulate Main Street from Wall Street. Two, we guaranteed 
that the taxpayer will be first in line to be reimbursed through 
ownership shares and asset recovery as the plan begins to work. 
Finally, the bill reformed how business is done on Wall Street 
including the prohibition of golden parachutes.
  While I voted for the bill, it failed to gather the necessary votes 
for it to pass. Following the vote I returned home this week and saw,

[[Page 23992]]

not only in my District, but all over the country, the negative effects 
of our continued inaction. Already, our commercial and consumer credit 
markets are drying up and if we continue to do nothing, the ability for 
my constituents to obtain home mortgages, car loans, student loans, 
loans for small businesses, or even credit cards will become highly 
difficult or impossible. Even more financial institutions and 
businesses could fail and millions could lose their pensions and 
retirement savings, thousands of jobs could be lost, and large parts of 
our economy could cease to function. The repercussions would be far 
greater than the cost of a financial rescue program.
  Not only have small businesses and families felt the effect of the 
credit crunch, my home state of California is feeling it. According to 
our State Treasurer, Bill Lockyer, this current crisis threatens to 
deplete California's cash reserves. Without those reserves the state 
will be unable to pay teachers, first responders, or nursing care 
workers. Additionally, he thinks without action the state, ``. . . will 
be unable to sell voter-approved bonds for highway construction, 
schools, and housing or water projects.'' If we don't pass this bill 
the effects will almost immediately be felt throughout the country and 
the world.
  H.R. 1424 includes strong independent oversight and transparency 
through an establishment of an independent bipartisan board to provide 
oversight, review and accountability of taxpayer funds. The Government 
Accountability Office will have a presence at Treasury to oversee the 
program and conduct audits to ensure strong internal controls, and to 
prevent waste, fraud, and abuse. There will be an independent Inspector 
General to monitor the Treasury Secretary's decisions in regard to this 
program and all transactions will be posted online for the public to 
review.
  Rather than giving the Treasury all the funds at once, the 
legislation gives the Treasury $250 billion immediately, then requires 
the President to certify that additional funds are needed ($100 
billion, then $350 billion, subject to Congressional disapproval) and 
there are limits on golden parachutes for executives whose companies 
participate in the program. We will help homeowners by allowing the 
government to change the terms of mortgages to help reduce the 2 
million projected foreclosures in the next year. It will also assist 
school districts, cities and counties who held investments in failed 
institutions.
  The bill temporarily raises the FDIC insurance cap to $250,000 from 
$100,000. It also includes three additional pieces of legislation that 
are critical to the health of our economy and our constituents. This 
legislation will extend tax credits and incentives that are important 
to encourage innovation and entrepreneurship. It extends tax benefits 
to the renewable energy industry. Solar and wind energy, fuel cells, 
and biofuels are but a few of the technologies that will benefit from 
the legislation that we are considering today, and they will all play a 
role in our nation's energy future. While I remain committed to totally 
eliminating the Alternative Minimum Tax, this bill includes a ``one-
year fix'' that will prevent an additional 25 million American 
taxpayers from being subject to the AMT on their 2008 tax returns and 
it will reduce or eliminate the AMT obligation for 121,033 tax filers 
in my Congressional District. Finally, the legislation includes the 
Paul Wellstone and Pete Domenici Mental Health Parity and Addiction 
Equity Act, which will provide for equity in the coverage of mental 
health and substance use disorders when compared to medical and 
surgical disorders.
  The vote I took earlier this week was as tough as any I've ever taken 
during my time in Congress and today's vote will not be any easier. I 
will vote ``yes'' because I believe it's the right thing do for our 
country.
  I believe doing nothing is a higher risk to our country and would 
hurt millions of Americans across the nation. I didn't come to Congress 
to hurt people. My ``yes'' vote is to help restore confidence in our 
economy, help move the country move forward, protect taxpayers, help 
Main Street, protect pensions, protect 401Ks, and restore our credit 
markets and, with no rewards for those whose greed and foolishness have 
so jeopardized our economy.
  Mr. CHABOT. Madam Speaker, I rise in opposition to the bill we are 
considering today.
  This week marks a critical point in our Nation's history for a number 
of reasons, but none more important than redefining the appropriate 
role for government in our market system.
  There is no doubt that we must stabilize our financial markets as 
quickly as possible. But, in my view, asking cash-strapped Americans to 
pay more than $700 billion to bail out an industry, some of whom were 
reckless, is just wrong and sets a dangerous precedent.
  We need a targeted approach to respond to this crisis. One that 
provides those troubled institutions with the capital they need to 
start lending again. Yet, we also need standards in place to hold these 
institutions accountable to prevent this crisis from repeating itself 
in the future.
  H.R. 1424 sets government on a new and dangerous course. Gone are the 
days of personal responsibility. Gone are the days where executives are 
held responsible for bad decisions. Gone are the days when the market 
determines success or failure. After today, taxpayers will be 
responsible for everyone's decision.
  Equally disturbing, in my view, is the fact that this legislation 
makes no substantive reforms to prevent a repeat of what caused this 
financial meltdown in the first place. Last fall, the House passed, 
with my full support, H.R. 3915, the Mortgage Reform and Anti-Predatory 
Lending Act. This would have been an important step towards bringing 
more restraint and oversight to the lending industry. Unfortunately the 
Senate took no action so it never became law. Are those important 
reforms in this bill? No.
  We have a duty to the hardworking families who act responsibly on a 
daily basis to be prudent with their tax dollars. I remain unconvinced 
that the bill we are considering today fulfills this obligation. That's 
why I'll be voting no.
  Mr. STARK. Madam Speaker, I will be voting no on this bill. I 
recently read in the press that 8 out of 10 of my colleagues know 
nothing about economics or banking. This bill shows that account is 
quite right.
  This bill does nothing but bail out Wall Street and large corporate 
America. It spends $800 billion that taxpayers will end up having to 
pay for and it does nothing for middle-income Americans.
  Is there a crisis in this country? Yes there is. But this is not the 
solution for those people who have been working and trying to pay their 
bills.
  There is not a crisis facing your average community bank which has no 
problem in liquidity. There is not a crisis for your credit cards--
endangering their ability to work.
  This rushed bailout package is nothing more than President Bush's 
Treasury Secretary Paulson's way to scare us as Colin Powell tried to 
scare us some years ago by saying if we didn't vote for an ill-
conceived war, we'd see terrorists on the street.
  You're getting the same kind of misinformation now--the same kind of 
rush to judgment--to tell you that a crisis will occur. It won't. Vote 
no, and let's come back and help work on a bill that will help all 
Americans.
  Mr. MOORE of Kansas. Madam Speaker, I rise today in support of taking 
action to help community banks, which are an important part of our 
financial landscape, in Kansas and across the country.
  One of the lessons learned from the current financial crisis is that 
financial institutions that rely on core deposits are in the best 
position to weather a financial storm. One thing banking regulators can 
do to help banks attract and retain more core deposits is to recognize 
that certain deposits that may technically be considered as 
``brokered'' nevertheless function like core deposits.
  This situation occurs, for instance, when insured depository 
institutions exchange funds, dollar-for-dollar, with members of a group 
of insured depository institutions, where each member of the group sets 
the interest rate to be paid on the entire amount of funds it places 
with other group members. Such an arrangement enables a member of the 
group to offer its customers a convenient means to obtain access to 
FDIC insurance on large deposits by working solely with the bank with 
whom the customer has a relationship. As a result, the bank is able to 
accept the large deposits without having to post collateral, which in 
turn makes more funds available to meet the credit needs of the bank's 
community.
  Regulators could take several constructive steps within the current 
law governing brokered deposits. First, the FDIC could permit banks 
that become adequately capitalized (and therefore need a waiver from 
the FDIC to accept brokered deposits) to continue accepting funding 
through the arrangement described above while a waiver request is 
pending. Second, the FDIC could recognize that such finding is stable 
and should be permitted as a general matter when the FDIC reviews a 
waiver request. Third, it would be appropriate for the FDIC to exclude 
such funding from the category of ``brokered deposits'' if the FDIC 
elects to charge a bank a higher insurance premium due a heavy reliance 
on brokered deposits.
  If the FDIC were to take these steps, banks--and, in particular, 
community banks--would be in a better position to attract and retain 
large deposits, thereby providing additional liquidity that the banks 
can use to make loans that are so vitally needed by our Nation's 
communities.

[[Page 23993]]


  Mr. EVERETT. Madam Speaker, in the years since I was first sworn in 
to office in 1993, our Nation has faced a number of major challenges 
that required tough and courageous decisions. I have always believed 
public service to be the noblest of calling. I still believe in the 
concept of ``citizen statesmen'' as envisioned by our Founding Fathers 
who recognized that private citizens motivated to serve in Congress 
were vital to the future of our Nation. I came to Washington not as a 
politician, but as a businessman ready to make tough votes for the good 
of the country. I believe my final vote to pass the Emergency Economic 
Stabilization Act is such a vote.
  The impact of nearly a decade of granting home loans that were doomed 
to fail has reached a crisis point in our economy. The combined weight 
of hundred of billions of dollars in low value mortgages has created an 
economic aneurysm that is beginning to burst and usher in the collapse 
of our financial markets and take with it many American jobs. The 
national media have repeatedly spun this dilemma as one that solely 
afflicts ``Wall Street.'' This is simply not accurate.
  Many Americans believe this is a cry of Chicken Little and that it is 
not their problem, and we should let the markets fail and let the 
consequences fall as they may. However, if we allow our markets to 
fail--no one will be insulated from the impact. Our whole economy is 
underpinned by the availability of credit. Without access to credit, 
banks fail, businesses are forced to layoff workers or close 
altogether, and even people with good credit cannot get loans for cars, 
college, new homes, or other essential needs. We are already seeing 
that universities are having trouble accessing their funds, 
municipalities are experiencing losses in property taxes since mortgage 
banks can not pay on foreclosed homes, and lack of availability of 
bonds for infrastructure and other local needs. Soon our farmers will 
be getting ready to start planning for next year's crop--and there is 
fear they will not have access to the credit necessary to plant next 
year's crop. We have already seen food prices increase over the last 
few years, and that pain will have been nothing if farmers do not have 
the necessary credit.
  As a conservative Republican, I believe in a free market and less 
government intervention. However, these are extraordinary circumstances 
that will impact all of us. Many Americans might not have felt the 
effects directly yet and hopefully they will not because of the action 
being taken today. This legislation includes safeguards to protect 
taxpayers, not making the total amount of funds available at once, 
ensuring that there are no golden parachutes, and holding executives 
accountable.
  I cannot leave office taking any position that is counter to the best 
interest of our Nation. I would have preferred to not have the Federal 
Government intervention, but failure to act to shore up our economy 
would allow far greater damage to millions of average Americans and 
hundreds of thousands of Alabamians. I have been honored to serve the 
Second District these 16 years and would never have thought one of my 
last votes in Congress would have been on this type of legislation. 
Very few things are easy in politics, and I have thought long and hard 
on this difficult issue, and I believe that voting in favor of the 
Emergency Economic Stabilization Act is the necessary thing to do.
  Mr. SHUSTER. Madam Speaker, this is one of the most difficult and 
complex issues I have had to deal with in my 8 years in Congress. I am 
proud of my no vote on Monday against the original rescue plan. My no 
vote enabled me to push this legislation forward towards an improved 
and positive bill. This is a different bill. It is an improved bill.
  I have pushed as far as I can and we are at the point where the only 
two directions we can go from here are backwards or nothing. Neither is 
an option.
  I share the anger of my constituents that we have been forced into 
this economic crisis by Wall Street greed and irresponsible lending by 
Freddie Mac and Fannie Mae. But we cannot let our anger cloud our 
judgment.
  Over the past 5 days, I have been hearing from more and more of my 
constituents who are beginning to feel the pain of the economic crisis 
we are entering. I am convinced that my constituents will feel that 
pain grow if we do not act, and that pain will be felt in job losses.
  Therefore, I have decided to support this economic recovery effort. 
Make no mistake, this bill is a far better deal for American taxpayers 
than what was originally brought to the House floor. My colleagues and 
I fought hard to include additional taxpayer and market driven 
protections that will restore trust in our banks, including raising the 
FDIC insurance limit to protect my constituents' bank accounts. My vote 
is the right decision for my constituents and America, not for 
political popularity.
  Mr. FEENEY. Madam Speaker, I would like to quote Financial Services 
Chairman Barney Frank, author of this bailout bill, ``The free market 
failed, it's up to government to fix the problem.''
  It is important that we understand the how we got here in order to 
address a solution to the problem. Who and what caused the subprime 
bubbles and the current economic crisis?
  Treasury Secretary Alan Greenspan in 2005 said:
       If Fannie Mae and Freddie Mac ``continue to grow . . . they 
     potentially create ever-growing potential systemic risk down 
     the road . . . we are placing the total financial system of 
     the future at substantial risk.''
  During a Financial Services Committee legislative markup on May 24, 
2005, the Hensarling/Feeney Amendment was offered to protect taxpayers 
from crushing bailouts of Fannie Mae and Freddie Mac.
  The Hensarling/Feeney Amendment established a new regulator to:
  (1) repeal the Congressional charters of Fannie Mae and Freddie Mac
  (2) create a bank-like secondary mortgage market, and
  (3) establish new charters for limited purpose mortgage 
securitization entities that could be auctioned off competitively.
  I voted YES but the Democrats unanimously voted NO and killed reform 
and taxpayer protection.
  Why?
  Leading Democrat Barney Frank said in 2003:
       These two entities--Fannie Mae and Freddie Mac--are not 
     facing any kind of financial crisis.
       The more people exaggerate these problems, the more 
     pressure there is on these companies, the less we will see in 
     terms of affordable housing.''
  After billions in accounting scandals at both Fannie Mac and Freddie 
Mac, Barney Frank said in 2004:
       I don't see anything in your report that raises safety and 
     soundness problems.
       I have seen nothing in here that suggests the safety and 
     soundness are an issue. And, I think it serves us badly to 
     raise safety and soundness as kind of a general [inaudible] 
     when it does not seem to be an issue.
  Democratic leader Maxine Waters said:
       Through nearly a dozen hearings that we were, frankly, 
     trying to fix something that wasn't broke. Mr. Chairman we do 
     not have a crisis at Freddie Mac, and in particular Fannie 
     Mae under the outstanding leadership of Mr. Frank Rains.
  I also voted in 2005 to cut off a $2 billion line of credit from U.S. 
taxpayers to Fannie Mae and Freddie Mac.
  Today, the same people who protected the corrupt and out-of-control 
Fannie Mae and Freddie Mac are proposing a $700 billion bailout of Wall 
Street speculators.
  Barney Frank and other Democratic leaders revised the Community 
Reinvestment Act in 1995, forcing Fannie Mae and Freddie Mac, and all 
American lenders to make risky loans to people in poor communities. 
Loans were given regardless of the borrower's ability to pay!
  And, ACORN, a corrupt left wing ``community group'' engaged in 
extensive voter registration fraud across this country, was given 
taxpayer money to extort banks and lenders into making more bad loans.
  Taxpayer money was used to browbeat lenders to make non-creditworthy 
loans.
  Since the economic credit crisis began, we were told by Secretary 
Paulson and Barney Frank that:
  1. The $152 billion ``stimulus'' package would resolve the American 
economic problem. (I predicted it is a silly ``rain dance,'' having no 
long term stimulus)
  2. The Bear Stearns taxpayer bailout would resolve the credit crisis.
  3. The Fannie/Freddie bailout in July would totally resolve the 
financial crisis and the U.S. Treasury would not have to take over 
Fannie Mae and Freddie Mac. (I voted no and predict bigger problems for 
America)
  4. The federal government takeover of AIG, the largest insurer in 
America, would end this global crisis.
  The current $700 billion bailout, touted by Treasury Secretary 
Paulson and Chairman Barney Frank, fixes none of the fundamental 
structural problems the federal government is responsible for.
  Buying troubled assets on Wall Street balance sheets does NOT 
stimulate American banks on Main Street in Central Florida to increase 
lending and credit.
  It adds short term money, which banks will HOARD, as they are 
required to increase reserves and make fewer loans to healthy consumers 
and businesses.
  It does NOT privatize Fannie Mae and Freddie Mac.
  It does not repeal the community Reinvestment Act.
  It creates a huge new bureaucracy which may control lending in 
America and become

[[Page 23994]]

the largest leap toward socialism in my lifetime.
  What we must do (now or later) to save American freedom and our 
economy.
  1. Stop naked short selling of bank stocks--Predatory investors, 
including foreigners, sell stocks they don't own to drive down the 
price of the stock, which they can later buy cheaper and profit.
  This kills bank equity and forces banks to stop making loans in order 
to meet material reserve requirements.
  2. Guarantee bank deposits in excess of $100,000 and bank creditors--
This will bolster bank share prices and lead to more immediate lending 
to families and small businesses.
  3. Issue guaranteed network certificates in exchange for bank 
promissory notes--This will get banks to save lending restrictions and 
give them time to work through the real estate mess.
  4. End ``mark to market'' accounting rules--Banks and institutions 
that hold packages of securitized mortgages cannot sell those packages 
because in this environment there are NO buyers. But those mortgages 
are secured by real estate worth some value, even if it is not 100 
percent of the loan value.
  These mortgages are not worth zero, just because there is no market 
to buy them during this crisis. Banks have to count such mortgage 
holdings as ZERO asset reserves. Every dollar a bank counts as reserves 
would result in $10 in lending ability today.
  Mark these assets at ``fair market value.''
  5. Jump start private purchase of mortgage securities--Don't buy $700 
billion in troubled mortgage securities with taxpayer money. have an 
auction for private investors using private money to make such 
purchasers. To start buyer activity, grant buyers a zero percent 
capital gains tax--not the 28 percent tax Senator Obama proposes, but 0 
percent.
  Most mortgages will be purchased without any taxpayer exposure.
  6. Establish a privately funded insurance model for mortgage backed 
securities--Holders of these securities would pay risk-based premiums 
to fully fund a guarantee of asset values, without taxpayer exposure.
  7. Unleash the American Economy--Immediately pass comprehensive 
energy policy that will put hundreds of billions of dollars into the 
American economy overnight.
  Congress should pass free trade legislation including agreements with 
Columbia, Panama, and South Korea to help American exporters.
  Without delay, Congress should kill the built-in Democrat tax 
increases which are scheduled to raise taxes on Florida families by 
$3,040 a year.
  Finally, the Paulson/Frank bailout bill raises the Federal 
Government's debt to $11.3 trillion--a 26 percent increase. In the less 
than two years Democrats have controlled Congress, the national debt 
has jumped over $8,000 for every man, woman, and child in America. Can 
we afford two more years of that behavior?
  Mr. LANGEVIN. Madam Speaker, we are meeting today to again consider 
the Emergency Economic Stabilization Act--a critical piece of 
legislation, but one that none of us look forward to voting on. During 
this difficult economic crisis, I am proud of this Congress for coming 
together at a crucial moment to reach a bipartisan compromise to rescue 
not only our financial markets but our entire economy. However, no one 
is celebrating today about the tough decisions that had to be made.
  Over the last two weeks hundreds of Rhode Islanders have contacted my 
office expressing serious concerns about the proposal and a firm belief 
that the taxpayers' needs must be a priority. I share their anger and 
frustration that for far too long, many on Wall Street were given carte 
blanche to make increasingly risky investments--investments which, in 
some cases, the firms themselves didn't even fully understand. There is 
plenty of blame to go around, from Wall Street and mortgage lenders to 
government regulators and Congress. Unfortunately, the actions of these 
firms do not take place in a bubble: they are inextricably linked to 
the every day transactions of every day American families. Our economy 
is in dire shape and drastic action is needed. If we do not act now, a 
domino effect could easily trigger major job losses and a significant 
period of economic downturn with negative consequences not just on Wall 
Street, but on every street in our country.
  This crisis originated with faulty lending practices and the creation 
of subprime mortgages made to people who often could not afford to pay 
them back. These subprime mortgages were then pooled together into 
packages that were transformed into highly-rated securities purchased 
around the world. The eventual collapse of the subprime mortgage market 
infected the prime mortgage market, which in turn poisoned the entire 
financial system. In response, Treasury Secretary Hank Paulson proposed 
a plan under which the Federal Government would buy--at a deep 
discount--so-called ``toxic'' assets, which currently no one is willing 
to buy. These assets include home mortgages which have been bundled 
into such complex packages that there is great uncertainty about their 
underlying value. Secretary Paulson considers these purchases to be 
investments by the federal government, which could return a substantial 
proportion of their value to American taxpayers once the market has 
settle down.
  I recognize the urgency of the situation and understand that 
Secretary Paulson and all responsible government leaders are trying to 
ward off even worse outcomes. This year, we have seen the fall of some 
of the largest investment banks in the world--Bear Stearns, Lehman 
Brothers, and Merrill Lynch--and the last two standing--Morgan Stanley 
and Goldman Sachs--last week chose to be switched over to commercial 
banks, seeking greater protection at the price of greater regulation. 
Meanwhile, the federal government loaned $85 billion to American 
International Group, Inc., AIG, the 18th largest company in the world, 
when it was unable to access credit for its daily operations. On 
September 26, we also saw the biggest bank failure in our country's 
history when Washington Mutual collapsed. One week later, Wachovia had 
been bought out by another bank. Even Bank of America recently decided 
it would no longer extend new lines of credit to McDonald's 
franchisees, which have been turning a profit for years and run a clean 
balance sheet.
  When the credit market seizes up at the highest levels, it is not 
just a problem for Wall Street. It quickly impacts all of us, making it 
harder for average families to secure car loans, home loans or mortgage 
refinancing. It means that small business owners can't access the quick 
capital they need to make payroll or invest in their companies. It 
impacts the student loan market, where more than 50 firms have 
abandoned or cut back their student loan programs. And it threatens the 
pensions and savings that our retirees are counting on. While no one 
wanted to be in this position, I do believe that passing this rescue 
plan is essential for Rhode Island families.
  However, I have been vocal about my own concerns with the 
Administration's original proposal, and early on I outlined priorities 
that must be included in any bill I would be able to support. I am 
pleased that the legislation before us today is a vast improvement over 
the initial plan Secretary Paulson presented, and it contains 
significant protections for families across the country who had nothing 
to do with creating this crisis but are feeling its effects in many 
ways. First, this bill protects taxpayers by requiring strong 
Congressional oversight over expenditures under the plan; giving 
taxpayers a share of profits in participating companies; and requiring 
a President to ensure taxpayers are repaid in full, with Wall Street 
making up any difference. Furthermore, we have endured that CEOs do not 
benefit from risky behavior by severely limiting executive compensation 
and ``golden parachute'' packages for any firms that take advantage of 
the government assistance. Finally, the bill requires the government to 
implement a plan to reduce foreclosures as it buys troubled financial 
assets like mortgage backed securities.
  At its core, H.R. 1424 authorizes $700 billion for the Treasury 
Department to buy distressed mortgage-backed securities, expiring on 
December 31, 2009. Of that total, $250 billion would be for immediate 
release, with another $100 billion upon a presidential certification of 
need. The final $350 billion could be made available if the president 
transmits a written report to Congress requesting the funds, and 
Congress would have the right to disapprove this last installment. 
Spending authority would be overseen by a new Financial Stability 
Oversight Board, which will review the Treasury Department's actions 
and its effects on the financial markets and the housing market, and by 
a special inspector general office to conduct and supervise audits and 
investigations of the actions taken under this bill. Treasury must also 
report to Congress 60 days after it begins using this authority, and 
every 30 days thereafter.
  Furthermore, H.R. 1424 establishes a joint congressional oversight 
panel to review the current state of the financial markets and the 
regulatory system. This panel will submit a report on the current 
regulatory system and its effectiveness at overseeing the participants 
in the financial system and protecting consumers. This provision is 
critical, since going forward, we must ensure that our financial sector 
is no longer allowed to put ordinary Americans in danger by pursuing 
high-risk behavior with little to no oversight. We must investigate 
companies that took advantage of lenient regulation or possibly acted 
outside of

[[Page 23995]]

federal regulations entirely. And we must learn from our mistakes, 
establishing new regulations and ensuring the laws already on the books 
are enforced.
  Madam Speaker, in just the four days since the House defeated the 
original economic recovery bill, we have already seen clear signs of 
what awaits our country if we do not take action today. Within hours 
after that first vote, the Dow Jones Industrial Average lost nearly 800 
points, its biggest point drop in history. The markets have remained 
shaky, threatening the financial holdings and retirement savings of 
millions of American families. Meanwhile, anxiety continues to rise in 
industries across the country, from agriculture to manufacturing. 
Countless businesses, small and large, are having trouble securing 
credit for everyday operations and they are terrified of what the 
future might hold. Car loans are becoming more expensive, mortgages 
more difficult to obtain. And on Monday, Wachovia limited the access of 
nearly 1,000 colleges and universities to their own funds invested with 
the bank.
  These are troubling warning signals of the potential for real 
economic catastrophe if we do not come together as a Congress and show 
the real leadership on difficult issues that our constituents expect. 
This is not an easy vote for any of us, but I am convinced that it is 
the right one. I know it is not a perfect bill, but rarely is there a 
perfect solution to such a complex and troubling set of problems. I 
believe the revised measure before us today is somewhat improved over 
the original version, largely due to the inclusion of an increase in 
FDIC coverage for bank accounts from $100,000 to $250,000. 
Unfortunately, I am disappointed that the tax extenders legislation--
which I was happy to support when its costs were fully paid for--has 
been added to this bill without sufficient offsets. Nonetheless, I will 
again cast a vote in favor of this package because it is too important 
to fail again.
  Madam Speaker, let me close by assuring my colleagues and my 
constituents that if I thought the bill before us today was nothing 
more than a hand-out to high-flying Wall Street investors who suddenly 
found themselves in trouble and decided they didn't like losing money, 
I would be the first in line to cast a no vote. Unfortunately, this 
problem is much bigger and much less selective about whom it might 
hurt. We need to take action, and we need to do it now. This 
legislation represents a good, bipartisan solution to a situation none 
of us wanted to find ourselves in. I want to thank speaker Pelosi, 
Chairman Frank and many other colleagues for their tireless work on 
this bill. I encourage all my colleagues to vote for this bill.
  Ms. RICHARDSON. Madam Speaker, I rise in support of H.R. 1424. I want 
to commend Chairman Barney Frank of the Financial Services Committee 
for his hard work, leadership, insight, and guidance throughout this 
process.
  The Congress and Senate did not come to the decision of supporting 
this legislation lightly. All of my colleagues on both sides of the 
aisle participated in numerous Caucus meetings and conference calls 
with Secretary Paulson, and Federal Reserve Chairman Bernanke. We took 
into consideration the views of renowned economists, and we considered 
numerous legislative proposals. After much deliberation we came to the 
conclusion that this legislation was the best bipartisan effort to 
contain strict oversight to prevent repeating this crisis, limit 
executive compensation, initiate provisions for mortgage stabilization, 
and ensure protections that taxpayers deserve.
  This legislation is a rescue plan. Main Street is hurting because 
small businesses do not have access to credit, which they depend on to 
cover the cost of their daily operations, including payroll. Likewise 
parents and students cannot get student loans, so it is clear that the 
financial crisis is hitting every street corner in America.
  Perhaps what has been lost in this debate is the effect that this 
crisis has had on our municipalities and local governments. Many of 
these municipalities and local governments had their investments tied 
to these Wall Street institutions. In California public entities have 
at least $300 million at stake; in fact San Mateo has lost $150 
million. If our local governments fail, they will not be able to 
provide the most basic services (i.e.--police & fire services, trash 
collection, and education).
  I recognize that this is a difficult decision for many of my 
colleagues. Historians have said these are dire times only second to 
the Great Depression. I urge my colleagues to act now, and support this 
critical piece of legislation that will stabilize our residential 
neighborhoods, small businesses across this country and our economy.
  Mr. COSTELLO. Madam Speaker, four days ago I voted against the 
historic $700 billion bailout legislation proposed by President Bush 
and Treasury Secretary Paulson. It seemed clear to me that the message 
sent by that bill's defeat was that we needed to slow and consider 
other alternatives to deal with the problems facing our economy. 
Numerous professional economists and other experts, including William 
Isaac, former head of the Federal Deposit Insurance Corporation, FDIC, 
have said that we could provide the confidence the credit markets need 
in other, less expensive ways.
  Unfortunagtely, that message fell on deaf ears. The Senate leadership 
took the Bush/Paulson proposal and added $100 billion in tax breaks and 
other so-called incentives. While I do support expanding FDIC insurance 
limits to $250,000, I do not see how making a $700 billion bill an $800 
billion bill benefits our economy. What these additions cannot do is 
hide the fact that at its core, this bill is the same as the one the 
House rejected Monday, and I will vote against it.
  Madam Speaker, I understand that many Americans are uneasy about the 
state of our economy. I share their anxiety. But I am equally anxious 
about the long-term ramifications of this legislation. I think it is 
highly possible that this bill will make our economic problems worse in 
the long run. While we should take action, we should act prudently and 
with a thorough review of our options. We have failed to do this, and I 
cannot vote to expend $800 billion in taxpayer dollars without absolute 
confidence in the course being taken. I will again vote no.
  Mr. ETHERIDGE. Madam Speaker, I rise in support of H.R. 1424, the 
Emergency Economic Stabilization Act of 2008, as amended by the Senate. 
Today, the United States faces the most significant financial crisis 
since the Great Depression. Homeowners, small businesses, retirement 
savings plans, and community banks--American people from every walk of 
life--are put at risk by the turbulence in our financial sector. This 
bill puts us on the right path to recovery for our economy.
  If there was any question whether action is necessary, one needs to 
look no further than the stock market reaction to Congress' inaction on 
Monday. Leading up to that vote, I spoke with the leaders of some of 
North Carolina's local and state banks and credit unions about the 
effect of this crisis on the communities they serve. While I wish that 
this action was unnecessary, the financial system's problems call for 
strong steps. If lending does not resume, Americans will be unable to 
grow their small business, buy a car, pay for college, or buy a home. 
Without action, this financial crisis will threaten the entire American 
economy.
  Like the bill we voted on earlier this week, H.R. 1424 is a vast 
improvement over the blank check that the Bush Administration 
originally proposed. This bill contains key provisions, negotiated by 
Democratic leaders in Congress, to ensure this bill benefits Main 
Street. As I demanded when an economic recovery plan was first 
proposed, this bill protects taxpayer money, provides help for 
struggling homeowners, prevents Wall Street CEOs from gaining a 
windfall at taxpayer expense, and provides the accountability and 
oversight that have been missing. While it contains strict oversight 
provisions, the plan also contains the flexibility needed to address a 
problem of this magnitude.
  First and foremost, this plan protects taxpayer money. Democratic 
leaders made sure that the public will share in the benefit of the 
economic relief provided by adding provisions that allow taxpayers to 
share in profits if a financial institution we invest in grows healthy 
in the future. To ensure Main Street is not left with the bill for Wall 
Street's problems, H.R. 1424 calls for a plan to require financial 
institutions to repay any losses to the government in the future. I am 
also pleased that this bill now temporarily increases the amount of 
money insured by the Federal Insurance Corporation from $100,000 to 
$250,000 for one year. This provision insures taxpayers' savings and 
boosts public confidence in our banks. Finally, H.R. 1424 looks after 
the taxpayers bottom line by requiring that any profit resulting from 
this plan be used to reduce the growing national debt.
  In order to further ensure that assistance benefits Main Street, the 
Emergency Economic Stabilization Act of 2008 will help ensure those who 
have been hurt by the economic downturn and predatory lending practices 
can remain in their homes when possible. The bill authorizes new loan 
guarantees and credit enhancement to prevent foreclosures, and requires 
a plan to encourage mortgage servicers to modify loans through the 
Federal Housing Administration's Hope for Homeowners and other 
initiatives.
  H.R. 1424 makes sure that Wall Street executives do not profit 
excessively from the government assistance provided. It includes

[[Page 23996]]

limits on executive compensation and golden parachutes not only for 
institutions that the government buys, but also for those holding loans 
that are supported by this bill. It holds executives accountable for 
statements they have made about their company's financial strength, 
forcing those promise gains that later turn out to be false or 
inaccurate to repay the taxpayer.
  Congress has also increased oversight and transparency in this bill. 
Rather than providing $700 billion in one lump sum, H.R. 1424 
authorizes an initial $250 billion so that we can see how the plan 
works. Another $100 billion is available with Presidential 
notification, and the remaining $350 billion requires Congressional 
action to be released. H.R. 1424 requires public disclosure, within two 
days, of purchases made by the Secretary, and provides a strong 
oversight board with authority over the Treasury Secretary's actions. 
Additionally, H.R. 1424 establishes an independent Inspector General to 
monitor the use of the Secretary's actions. Additionally, H.R. 1424 
establishes an independent Inspector General to monitor the use of the 
Secretary's authority. Given the extent and range of the problems in 
our financial markets, it is critical that the Treasury Secretary have 
a variety of tools to address these problems. H.R. 1424 includes a 
Republican proposal that gives the Treasury Department the option to 
guarantee companies' troubled assets, including mortgage-backed 
securities, purchased before March 18, 2008, with insurance that is 
paid for through risk-based premiums paid by the financial industry.
  The Emergency Economic Stabilization Act of 2008 also provides tax 
relief for millions of Americans while spurring business investment and 
innovation in renewable energy. While we support the financial system 
that enables our families and businesses to grow, we should also 
address the tax burden they face.
  H.R. 1424 includes critical tax relief for families facing the 
Alternative Minimum Tax, AMT. The AMT was originally intended to ensure 
that the nation's wealthiest taxpayers were not able to avoid paying 
taxes altogether. However, because the AMT is not indexed for 
inflation, today millions of middle income Americans who pay their 
taxes as required would see a huge tax increase. H.R. 1424 raises the 
exemption limits and protects 25 million middle-class families across 
the country, including more than 30,000 taxpayers in my district, from 
this extra tax.
  The Emergency Economic Stabilization Act of 2008 will benefit the 
families of millions of children by expanding the child tax credit to 
those earning $8,500 a year in 2009. This bill also helps families by 
extending the state and local sales tax deduction, and will help over 4 
million families better afford college by providing a tuition 
deduction. As a former superintendent of schools, I am pleased that 
this legislation includes a tax deduction that will save money for more 
than 3 million teachers when they pay for classroom supplies and 
expenses. The bill also includes an additional $400 million for Quality 
Zone Academy Bonds to help states and localities address school 
construction and renovation needs.
  This bill provides critical support in the form of tax breaks and 
incentives to the small businesses that form the backbone of our 
economy. This bill extends the Research and Development Tax Credit for 
two years to spur American innovation and business investment as well 
as a two year extension of the 15-year straight-line cost recovery for 
leasehold improvements and qualified restaurant improvements.
  Developing alternative energy sources and reducing our dependence on 
foreign oil is one the most critical challenges facing our country. 
H.R. 1424 will increase the production of renewable fuels and renewable 
electricity, and encourage greater energy efficiency. This bill 
features an eight-year extension of the investment tax credit for solar 
energy and a multi-year extension of the production tax credit for 
other sources of alternative energy like biomass, geothermal, 
hydropower, and solid waste. With millions of Americans struggling to 
afford rising gas prices, H.R. 1424 includes tax incentives for the 
installation of E-85 pumps for flex-fuel vehicles, and a $3,000 tax 
credit toward the purchase of fuel-efficient, plug-in hybrid vehicles. 
There are also incentives for incorporating energy conservation in 
commercial buildings and residential structures. The energy provisions 
in H.R. 1424 will help create and preserve more than 500,000 good-
paying green collar jobs at a time when our economy is struggling and 
unemployment is at a five-year high.
  Finally, H.R. 1424 contains language I have supported to expand 
access to mental health care for all Americans. My home state of North 
Carolina was one of the first states to adopt a mental health parity 
law back in 1991, and last year the State Legislature expanded and 
strengthened its mental health parity provisions. I support the efforts 
of North Carolina's mental health professionals in bringing this issue 
to the forefront of our State's agenda, and I am pleased that we are 
following suit today in passing this bill. H.R. 1424 simply requires 
those insurers or group health plans who do chose to cover mental 
health to do so on an equal basis with other covered health needs. This 
will ensure that those in need can get the treatment that is medically 
necessary, without creating an undue hardship on employers or insurers. 
As health care consumes an increasing percentage of America's income, 
it is critical that we provide support for all medical needs.
  I support H.R. 1424, Emergency Economic Stabilization Act of 2008 as 
amended by the Senate, and I urge my colleagues to join me in voting 
for its passage.
  Mr. DICKS. Madam Speaker, amid the sharp debate over the Emergency 
Economic Stabilization Bill being considered this week in Congress we 
have heard dire predictions from both extremes warning of a financial 
Armageddon if we don't approve the bill or of squandering billions of 
taxpayer dollars if we do. Beyond the intense rhetoric though, there is 
a growing body of evidence of serious impacts in every American 
community this month as the shrinking credit market has already 
affected consumers' ability to buy cars, purchase inventory for their 
businesses, afford college loans, and obtain home mortgages.
  And it's only going to get worse until Congress takes some action 
that will have a direct effect on the credit markets and on our 
confidence in the integrity of the U.S. banking system.
  Unfortunately in the search for an appropriate remedy, I fear that 
``perfect'' may have become the enemy of ``good.'' Warren Buffet put it 
bluntly in an interview when he was asked his opinion of the 
legislation we're considering this week. He said ``I don't think it's 
perfect, but I don't know that I could draw one that's perfect. I would 
rather be approximately right than precisely wrong. And it would be 
precisely wrong to turn it down.''
  The Gallup poll conducted this week for USA TODAY indicated that more 
than half of all Americans--56 percent--say their financial situation 
has already been harmed by the financial meltdown of the 2 weeks, with 
20 percent of our population saying they have been seriously harmed. 
The longer term outlook is even more gloomy.
  In Washington State, the failure of one of our biggest banks--
Washington Mutual--last week has been a local reminder of the gravity 
of this crisis, as was the Wachovia failure a few days later. Thousands 
of financial industry employees, including Washington Mutual employees 
in the Puget Sound area, will likely lose their jobs in this collapse, 
which has largely resulted from bad decisions made by executives that 
most Americans consider to be grossly overpaid. It's understandable for 
Americans to be angry and to oppose any direct bailout of Wall Street.
  But a lot of the people who are being hurt by this crisis today are 
not overpaid bankers or stock market executives. They are working class 
families in our towns whose small businesses can't get credit for 
inventory or payroll and people down the street who are not able to 
obtain a car loan to replace a broken down automobile.
  Economists remind us that auto sales are typically one of the first 
indicators of economic trouble. Last month, car sales dropped by 27 
percent from September 2007, the slowest pace of auto purchases since 
1991. The chief economist at J.D. Power and Associates, Bob Schnorbus, 
estimates that the credit crunch alone is responsible for more than 
40,000 people being denied loans every month. And as the crisis has 
deepened in recent weeks, even people with good jobs and credit are 
having difficulty arranging auto financing.
  The financial disruption is also affecting student loans--the primary 
way through which we as a nation open the doors of higher education to 
middle and lower class Americans. The buyout of Wachovia has limited 
the access of nearly 1,000 colleges to $9.3 billion the bank has held 
for them in a short-term investment fund. Many of these schools are 
struggling to meet their payrolls and other commitments, including 
scholarships, as we start another school year.
  Over the longer term, if credit contracts further, so will the 
availability and affordability of student loans. If it closes the doors 
of higher education to American kids, this short-term financial crisis 
has the potential to result in a long-term loss of competitiveness in 
the global marketplace.
  Small businesses are also feeling the burden. As my colleagues know, 
small businesses account for roughly half of the nation's total 
economic output and employ about 40

[[Page 23997]]

percent of the total U.S. workforce. The chief economist for the Small 
Business Administration noted in an interview this week that these 
businesses are either being denied capital to grow and add jobs or they 
are simply afraid to seek capital because they are scared of the 
direction of the economy. More than anything else, cutting off capital 
to small businesses will be an enormous drag on the economy and job 
creation over the long term.
  The credit squeeze is already having a downstream impact on our 
economy. Consumer spending this quarter appears to be declining for the 
first time in 17 years. Last month, unemployment reached a 5-year 
high--6.1 percent--and new filings for unemployment hit the highest 
level since just after the September 11th attacks. Factory orders are 
down, and manufacturing activity has fallen to the lowest level in 
seven years.
  Two major employers in the rural areas in my district--Port Townsend 
Paper and Grays Harbor Paper--are victims of this loss of confidence. 
These firms, both critical to employment in their respective cities, 
have stated that they are already taking steps to protect themselves 
from a recession, holding off on investments and new hires as they 
prepare for a decline in sales.
  So with mounting evidence that the impact of this crisis is being 
felt well beyond Wall Street, I am supporting this bill. I am not doing 
so in order to boost the salaries of Wall Street executives, but so 
that janitors and nurses and secretaries and teachers and car dealers 
in my district can keep their jobs. I am supporting this bill so that 
kids and their parents will still have the access to affordable loans 
to go to college--an advantage I had as a young man.
  I am not suggesting this is a perfect solution. But like Warren 
Buffet, I would rather be approximately right than precisely wrong. And 
I am absolutely convinced that we must take action very soon before the 
credit crisis deepens and before it affects the lives and livelihoods 
of even more of our friends and neighbors. The time to act is now. This 
is the only option before us. We must pass it.
  Mr. MEEK of Florida. Madam Speaker, my constituents didn't cause this 
economic mess, but if our action to this crisis is inaction, they would 
disproportionally bear the brunt of this financial meltdown. The credit 
market would severely tighten, preventing consumers with excellent 
credit scores from purchasing a new automobile, sending a son or 
daughter to college, or refinancing their mortgage to avoid 
foreclosure. Pension funds would erode, putting senior citizens from 
our community in an impossible financial situation. Layoffs would be 
felt throughout south Florida, and inflation would erode buyers' 
purchasing power. The Department of Labor reported today that the 
American economy lost 159,000 jobs in September, bringing the total 
number of jobs lost in 2008 to 760,000.
  A Wall Street banker will never bear the brunt of this economic 
downturn like a small business owner, high school teacher, or law 
enforcement officer struggling to get by in this economy. To stabilize 
our economy and insulate Main Street from Wall Street, we must reinvest 
in the troubled markets, reimburse the taxpayer by requiring the plan 
to be repaid in full, and reform how business is done on Wall Street by 
enacting strict oversight measures and limiting excessive compensation 
for CEOs and executives.
  Florida is ground zero for the housing foreclosure crisis, and this 
legislation provides property tax relief for up to 30 million 
homeowners nationwide and allows the Government to now work more 
directly with loan service providers to make problem loans more 
affordable.
  I have significant reservations about this financial recovery 
legislation, as do many of my Democratic and Republican colleagues. 
This is a vote that I did not cast lightly, but knowing that families, 
retirees and small business owners were suffering along Main Street, I 
was left with no option but to support the package.
  Mr. THORNBERRY. Madam Speaker, deciding how to vote on this issue has 
been among the most difficult votes I have cast in Congress. The 
economic condition and well-being of every American will be affected.
  I continue to be uncomfortable with the degree of government 
intrusion into our economy that this bill would authorize. I also 
continue to be concerned about the economic consequences to all 
Americans if some sort of action is not taken. It is balancing those 
two positions that make this vote an extremely difficult one.
  The bill is better now than it was earlier. The increase in the 
amount of deposits that can be insured by the FDIC will help bring 
significantly more capital into all banks--those that are troubled and 
those who have not made the risky loans that precipitated this crisis. 
The SEC announcement ``clarifying'' the mark-to-market accounting rules 
could help unleash billions of dollars that were sidelined. Both of 
these changes will help bring more private capital into the system so 
that the entire burden of stabilizing troubled institutions does not 
fall on the taxpayers.
  If the asset purchase program is managed competently, the cost to the 
taxpayers should be far less than the $700 billion authorized, as both 
the Office of Management and Budget, OMB, and the Congressional Budget 
Office, CBO, have said.
  The other major consideration for me is that if this bill does not 
pass, a far worse bill probably will. I would like to write this bill 
differently and to have other options considered. I have little doubt, 
however, that if this improved bill does not pass today, the next bill 
will veer to the left in an attempt to attract more Democratic votes 
and will result in more government intrusion and a higher cost to the 
taxpayers.
  As I weigh my concerns about the level of government intervention 
with my concerns for the economic consequences of inaction or of a far 
worse bill, I have decided that it is in the best interests of the 
Nation for this bill to pass so that hopefully the economic recovery 
can begin.
  There is a crisis of confidence in our credit system, and there is a 
real danger that if it spreads, Americans all across the country will 
not be able to get car loans, home mortgages, or loans to operate their 
businesses. There is even a danger that some may not be able to 
withdraw their money from various retirement accounts. The result could 
be a severe recession, greater unemployment, and consequences that all 
Americans will feel.
  It is likely that the United States will face more economic problems 
in the days ahead even with this bill. We will never know what bigger 
problems might be averted. But, in my view, the potential consequences 
of not acting outweigh the deep reservations I have about this 
proposal.
  I understand that any measure will be somewhat unfair in that those 
who took the excessive risks and made unwise decisions will be 
protected from the full consequences of their decisions. Unfortunately, 
some degree of unfairness is inevitable, but calculations of fairness 
must also consider what is best for the whole country.
  Finally, a tax bill was added to this measure. It would have been 
better to have kept the two bills separate. I strongly support 
extending current tax law so that Americans will not face a tax 
increase, which would be a huge blow to economic growth. However, I am 
not pleased with the numerous special interest tax provisions that are 
included and are exactly the kind of thing that understandably 
frustrates the American people about their government.
  A former minister in my home church used to say that ``Sometimes you 
have to put aside your principles and do what's right.'' I believe at 
this extraordinary time passing this flawed bill is the right thing to 
do.
  Mr. CLYBURN. Madam Speaker, I rise today in strong support of the 
Emergency Economic Stabilization Act of 2008 and believe this bill must 
be enacted as soon as possible to stop our country from falling deeper 
into recession. Today, Madam Speaker, we were informed that our economy 
lost jobs for the ninth month in a row. This brings the total jobs lost 
this year to 760,000. But, Madam Speaker, jobs are not the only thing 
Americans across this Nation are losing; they are losing their hold on 
the American Dream. That dream, Madam Speaker, is upward economic 
mobility and home ownership. Nowhere is this problem more acute than in 
minority communities.
  Madam Speaker, this bill is about more than Wall Street; it is about 
Broad Street and Walker Street. It is about grocery stores, beauty 
salons, barber shops, community banks, and automobile dealerships.
  Madam Speaker, minority communities are hemorrhaging jobs, homes, 
income, and most importantly, credit. Consider this fact, African 
Americans received 35 percent of the subprime purchase loans issued 
from 2004-2007; of these loans 62 percent of them will reset to a 
higher rate by the end of 2008. Many of these homes' values have 
dropped by 25 percent, access to refinancing credit is no longer 
available, and their pension plans have lost substantial value. These 
dynamics are debilitating to minority businesses and communities.
  These powerful and destructive economic forces coupled with a lost of 
liquidity on Wall Street have led to the greatest reduction of wealth 
in the minority community since the Great Depression.
  That is why I am here today. I believe this bill must pass. We must 
ensure that the minority communities do not just survive but thrive.

[[Page 23998]]


  Mr. CARNAHAN. Madam Speaker, I rise today in support of the Emergency 
Economic Stabilization Act 2008 for a second time.
  Thousands of my constituents in Missouri have contacted me to share 
their anxiety and anger about the financial crisis we are facing. I too 
am angry about the current economic crisis in our country--angry about 
those who caused it and those who have bungled solutions.
  Year of de-regulation of the financial markets, coupled with lax 
oversight by the Bush administration of these institutions, has had 
devastating effects on the lives of many Missourians.
  I strongly opposed the original Bush/Paulson Bailout Plan that was 
basically a blank check with no accountability for an industry that 
made poor decisions. But the risk of taking no action is too great and 
too dangerous for our economy, and the financial stability of all 
Americans.
  We must pass this legislation, even with its imperfections, to unlock 
the credit market that is essential to both individuals and businesses. 
Without a properly functioning credit market, small businesses, the 
backbone of Missouri's economy, risk not making payroll. Americans will 
have increasing difficulty obtaining car loans, home loans, farm loans, 
student loans, as well as other forms of credit upon which we all rely.
  I have heard from many Missourians concerned about the effect of 
tightened money-lending standards. From the hardworking couple just 
about to retire who have watched the value of the retirement savings 
dramatically decline over the past month to the family who needs to buy 
a new car but cannot qualify for a loan because of the freeze in the 
credit market.
  The economic downturn is also hitting our small businesses. In my 
hometown of St. Louis, Feld Chevrolet, a St. Louis leader for over 27 
years, has shut its doors because the lender stopped financing the 
dealership's inventory.
  Stories like these make it clear we have a responsibility to act 
before the credit crisis further undermines our economy.
  Without decisive action, most economists have noted that the 
situation will only worsen, credit markets will freeze, Main Street 
will suffer, and Missouri families will struggle.
  My constituents as well as yours will not be able to make basic home 
and car loans. Small businesses will not be able to make their 
payrolls, and credit card interest rates will soar.
  The legislation before us today is a vast improvement over the 
original proposal put forward by the Bush administration, which gave 
unprecedented and unchecked authority to the Secretary of the Treasury 
to spend $700 billion. We have made it clear that Congress does not 
write blank checks to Wall Street.
  This legislation will require the Government to develop an emergency 
line of credit to reduce foreclosures as it buys troubled financial 
assets, allows the Government to purchase other types of mortgages to 
unfreeze the credit market, and allows the Government to purchase 
certain troubled assets form pension plans to ensure individual 
retirement security.
  This bipartisan proposal will help insulate the American people and 
Main Street from the crisis on Wall Street as we stabilize the markets. 
It will also, protect taxpayers by ensuring public investments reap any 
profits and the financial industry is responsible for any short fall 
and it ends excess compensation for executives of participating 
financial institutions.
  Following, the House vote last Monday, the stock market plunged an 
historic 777 points, costing the American economy $1.2 trillion. 
Americans across the country saw their 401Ks, pension plans and savings 
account lose value. This was a loud wake up call that we must take 
swift and decisive action.
  The legislation we are considering today is no longer focused on just 
a bailout of Wall Street; more importantly it is a buy-in so that we 
can turn our entire economy around and help hard working Americans.
  In no way are we out of the woods. Times are and will continue to be 
difficult, but I believe passage of this bill can help us get back on 
track and help prevent our economy from spiraling out of control. These 
times will certainly demand additional steps and common sense 
leadership to get America back on her feet again.
  I urge my colleagues to vote for this bill.
  Ms. MOORE of Wisconsin. Madam Speaker, I am angry.
  I am angry that we have been put in this position by clever financial 
wizards on Wall Street who operated without the necessary regulations 
and oversight for the past eight years.
  I am angry that we are being asked to clean up a mess that could have 
been prevented if it weren't for corporate greed and lax government 
oversight.
  I share the sentiments of Meyer Mishkin, who during the crash of 1929 
owned a shop in New York that sold silk shirts to working men. He said 
then that it ``served those rich scoundrels right.''
  But a year later, as the Wall Street crash spread to the rest of 
America, Mr. Mishkin's own store went out of business and he never held 
a steady job again.
  Fast forward to 2008. Meyer Mishkin's grandson, an economist and 
former Fed Reserve Board member, tells us ``To do nothing right now is 
to do what was done during the Great Depression.''
  Madam Speaker, this is not about Rolex watches and Wall Street. It's 
about watching out for workers, families, retirees and small businesses 
in my district who will be up against the wall by this resulting credit 
crisis as it spreads to Main Street.
  If we don't act and the credit markets seize up, we risk a situation 
in which people can't get mortgages, stores are unable to finance their 
inventory, local governments are unable to continue to finance 
services, and employers are unable to make payroll and start laying off 
workers and dropping shifts. We are already beginning to see the 
effects in my district and across the country.
  We could say ``let's sit back and do nothing''.
  But that is taking a huge risk with my constituents' economic 
futures. Look at it this way: If your foolish neighbor accidentally 
sets his apartment on fire, you could just let it burn and say that it 
serves him right. But the truth is, you live in the same apartment 
building: unless you call the fire department and use taxpayer funds to 
have it put out, in a short time your apartment is going to be 
destroyed by that same fire.
  This bill is not perfect, but improvements have been made and 
protections and accountability have been added to it over the past two 
weeks. Now CEO's will be prohibited from collecting ``golden 
parachute'' payments or huge bonuses based on their company's stock 
price if their institutions want to participate. Also, since the 
federal government will become the owner of many troubled mortgages, 
the bill directs the Treasury Department to try to help some of those 
homeowners stay in their homes by easing the terms of the loan in ways 
that might prevent foreclosure and eviction. And if this works as it 
should, taxpayer outlays should be recouped--and perhaps even a profit 
turned--as the federal government sells the mortgages back into the 
market over time.
  Madam Speaker, I had family who lived through the Great Depression, 
and I know that when the wider economy tailspins into a depression, it 
is poor and working families who are hit the hardest. I am not willing 
to stand by and do nothing while this crash spreads to my constituents.
  Ms. McCOLLUM of Minnesota. Madam Speaker, I rise in support of the 
inclusion of the Paul Wellstone and Pete Domenici Mental Health and 
Addiction Equity Act in H.R. 1424, and I congratulate my friend and 
colleague, Congressman Jim Ramstad, for this achievement. Without his 
courage and dedication to fairness, this bill would not be before us 
today.
  It is long past time that American families have access to the care 
they need. This bill ends discrimination against patients seeking 
treatment for mental illness or addiction by requiring that benefits 
that are offered for physical health are also available for mental 
health.
  Mental illness left untreated affects all facets of our society and 
costs our economy over $150 billion annually. Mental illness affects 50 
percent of the homeless population in Minnesota, 70 percent of those in 
our juvenile justice system, and those with the highest unemployment 
rates. Health care costs double when diabetes and heart disease 
patients have co-morbid depression, and patients with mental illness 
and substance abuse disorders are often less responsive to treatment. 
In addition, the burden that mental illness places upon the health and 
productivity of our nation has long been underestimated. One in five 
adults and one in ten children have a mental illness. And over one-
third of our returning service members from Iraq and Afghanistan suffer 
from mental health problems.
  We have all been affected in some way--ourselves, a family member, a 
friend or colleague--by mental health or substance abuse. This is an 
issue I hear about in my district a lot, both from those inspired by 
Senator Wellstone's passion for this issue and those willing to share 
their stories to make change.
  We all know the current system is unfair. People should not have to 
forego essential treatment because of cost when care could mean 
improvements to their quality of life and productivity.
  Parents should not end up with an emergency room bill they can't pay 
because they

[[Page 23999]]

rushed their daughter to the hospital after a suicide attempt, or watch 
their child suffer after being released from a residential center 
because insurance coverage ended--not because his treatment was over.
  And our servicemen and women returning from Iraq should not be handed 
a 1-800 number to treat a mental illness.
  As we look to reform our health care system, mental health and 
physical care can no longer be looked at as separate entities. It is 
morally right, and good for both our economy and our health care 
system. I urge my colleagues to support this bill and I yield back my 
time.
  Madam Speaker, our country is facing an economic crisis and America's 
families are living with it everyday. If proof is needed, today, the 
Labor Department released new employment statistics revealing that 
159,000 American jobs were lost in September. So far this year more 
than 750,000 American jobs have been lost. In September alone, more 
than 1.5 million Americans are working part-time jobs because they 
cannot find full-time work. The wages of American workers are stalled 
and with inflation at 5 percent it means most working Americans have 
effectively taken a pay cut. These are hard times for working families.
  This report translates into real pain not just for Main Street, but 
for every family that sits around the kitchen table deciding how to 
make ends meet. We are seeing jobs at risk, credit frozen, business 
activity stalled, and the pensions and college funds of hard working 
Americans at risk. This is an economic crisis and the time for Congress 
to act is now.
  On September 29th, the House failed to pass the economic rescue 
package. I voted for that bill and I have no regrets. As a result of 
the failure of that bill to pass, the stock market went into an 
immediate free-fall resulting in a $1.2 trillion loss of value. That 
translated into seniors losing their retirement, workers losing their 
jobs, and confidence being lost in the American economic system which 
exacerbates the downward economic spiral.
  What Congress is once again attempting to do today is pass an 
emergency package that will provide $700 billion to the Treasury 
Department to buy mortgage-backed securities, sometimes referred to as 
``toxic paper,'' that is strangling the credit market for companies, 
small business, and families. This credit crisis is real and we are 
seeing it manifest itself in the inability of consumers with good 
credit to get auto loans, banks refusing to lend to banks, and 
municipalities unable to access financing for needed projects like 
roads, hospitals and water treatment plants. The entire credit system 
is frozen and it will require action by Congress to salvage our economy 
after years excess, abuse, and corruption by Wall Street.
  The American people, seeing this rescue package with a $700 billion 
price tag, should be angry. I am angry. My office has received 
thousands of calls from constituents who are furious, but anger should 
not be an excuse for inaction. Many of these calls, even the majority, 
have warned me of the evils of what they call a ``socialist 
intervention.'' Many advocated that a better solution would be to keep 
government out of the crisis and let the market solve its own problem 
even if the outcome is a complete economic meltdown. In my estimation, 
such an argument is both irrational and irresponsible.
  The bill before the House today is a critical first step towards 
stabilizing the economy and preventing financial disaster for millions 
small businesses, families and seniors. I support this rescue package 
because Democrats, Republicans, and the Secretary of the Treasury, 
along with the Chairman of the Federal Reserve, came together and 
worked tirelessly, putting politics aside, and put the people's needs 
first in addressing this serious crisis.
  This bill provides $700 billion to buy mortgage-backed securities. 
These are assets with value bundled with distressed assets that will be 
purchased by the government so they can be taken off the books of 
financial institutions, restoring confidence and trust in the 
institutions, and allowing for liquidity to return to the credit 
market. This is not an ideal solution, but it is not a giveaway either. 
This $700 billion is a Federal investment that will buy assets that 
possess value and many experts say taxpayers could break even or earn a 
profit in the end. In the meantime serious oversight, accountability, 
and government regulations have been added to protect the taxpayer. 
There is strong language to help homeowners in financial distress to 
prevent home foreclosure which again makes this bill very important and 
relevant to American families in trouble. Also, I am very pleased that 
prohibitions on golden parachutes for executives from companies 
benefiting from this legislation have been put in place.
  Finally, this legislation is not the end of Congress's efforts to 
address the causes of this crisis, only the beginning. Next week I will 
participate in Oversight and Government Reform Committee hearings to 
explore the root causes of this economic disaster. Where there is 
identifiable malfeasance recommendations for criminal investigation and 
prosecution should be made to the Justice Department. Wall Street's 
high flyers whose excesses and corruption violated the law must be held 
accountable.
  While this package is not perfect, it is Congress's best effort to 
address this economic crisis. A new provision in this bill that I 
support is a temporary increase for insured deposits under the Federal 
Deposit Insurance Corporation from $100,000 to $250,000. This increase 
in deposit insurance is intended to allow for additional liquidity in 
lending and restore confidence for depositors that their money is safe.
  There are other aspects of this bill that were added by the U.S. 
Senate which I strongly object to because they are giveaways to special 
interests. Tax breaks for special interests like NASCAR, the rum 
industry, and the manufacturers of children's arrows is an egregious 
abuse of the legislative process to pass out favors. These giveaways 
result in a $107 billion reduction in revenues to the Federal 
Government meaning more deficit spending.
  My preference would have been to strip these provisions from the 
bill. These pork barrel provisions, if absolutely necessary, should 
have been offset and paid for to eliminate deficit spending. The 
Senate's irresponsible inclusion of these earmark tax giveaways is an 
example of how the other body is out of touch with the needs of 
ordinary Americans.
  This week, concluding with today's vote, the Congress--Democrats and 
Republicans--will take action not seen since the Great Depression to 
intervene to restore confidence in the markets. If successful the 
result will be to avoid dramatic and damaging pain for America's 
families of every income level and geographic location. Doing nothing 
to address this emergency situation would be a decision to condemn the 
U.S. economy and the American people to years of stagnation and hard 
times.
  Following the passage of this bill and its signing into law, there 
must commence a new era of government responsibility, oversight, 
accountability, and, when necessary, regulation of the financial 
markets. The Reagan era of deregulation for markets and labeling 
government as the problem is over. We have seen how this philosophy has 
mutated into the grotesque excesses of Wall Street's elite and their 
massive concentration of wealth. It has infected our economy with a 
financial pathogen that is now destroying small businesses as well as 
the lives of families and the communities they live in.
  The next Congress--the 111th Congress--will have a duty to institute 
unprecedented and tireless oversight of not only this rescue effort, 
but all the excess in the market place, from Wall Street to the 
pharmaceutical industry, and beyond. The Bush administration's 
abdication of its duty to regulate and its endless campaigns of 
misinformation on innumerable issues has eroded the trust American's 
once had in their Federal leaders. From the falsehoods that led this 
Nation to war in Iraq to the current corruption scandal in the Justice 
Department, this White House has destroyed the American people's 
confidence in government. This administration's failure to regulate 
Wall Street and protect taxpayers is just another example of misplaced 
priorities and a costly lack of leadership.
  My vote for H.R. 1424 is a vote to protect the jobs, pensions, 
college accounts, and the savings of millions of hard working 
Americans. This important step must be followed with a new commitment 
to accountability and government oversight. I will be working to make 
sure this rescue package not only helps restore our economy, but 
returns every dollar we invest back to taxpayers.
  The SPEAKER pro tempore. All time for debate has expired.
  Pursuant to House Resolution 1525, the previous question is ordered.
  The question is on the motion by the gentleman from Massachusetts 
(Mr. Frank).
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. FRANK of Massachusetts. Madam 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, this 15-
minute vote on the motion to concur will be followed by a 5-minute vote 
on suspending the rules and passing S. 3197.
  The vote was taken by electronic device, and there were--yeas 263, 
nays 171, as follows:

[[Page 24000]]



                             [Roll No. 681]

                               YEAS--263

     Abercrombie
     Ackerman
     Alexander
     Allen
     Andrews
     Arcuri
     Baca
     Bachus
     Baird
     Baldwin
     Barrett (SC)
     Bean
     Berkley
     Berman
     Berry
     Biggert
     Bishop (GA)
     Bishop (NY)
     Blunt
     Boehner
     Bonner
     Bono Mack
     Boozman
     Boren
     Boswell
     Boucher
     Boustany
     Boyd (FL)
     Brady (PA)
     Brady (TX)
     Braley (IA)
     Brown (SC)
     Brown, Corrine
     Buchanan
     Calvert
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Capps
     Capuano
     Cardoza
     Carnahan
     Carson
     Castle
     Clarke
     Cleaver
     Clyburn
     Coble
     Cohen
     Cole (OK)
     Conaway
     Cooper
     Costa
     Cramer
     Crenshaw
     Crowley
     Cubin
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Tom
     DeGette
     DeLauro
     Dent
     Dicks
     Dingell
     Donnelly
     Doyle
     Dreier
     Edwards (MD)
     Edwards (TX)
     Ehlers
     Ellison
     Ellsworth
     Emanuel
     Emerson
     Engel
     Eshoo
     Etheridge
     Everett
     Fallin
     Farr
     Fattah
     Ferguson
     Fossella
     Foster
     Frank (MA)
     Frelinghuysen
     Gerlach
     Giffords
     Gilchrest
     Gonzalez
     Gordon
     Granger
     Green, Al
     Gutierrez
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     Herger
     Higgins
     Hinojosa
     Hirono
     Hobson
     Hoekstra
     Holt
     Honda
     Hooley
     Hoyer
     Inglis (SC)
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Johnson, E. B.
     Kanjorski
     Kennedy
     Kildee
     Kilpatrick
     Kind
     King (NY)
     Kirk
     Klein (FL)
     Kline (MN)
     Knollenberg
     Kuhl (NY)
     LaHood
     Langevin
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Loebsack
     Lofgren, Zoe
     Lowey
     Lungren, Daniel E.
     Mahoney (FL)
     Maloney (NY)
     Markey
     Marshall
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McCrery
     McGovern
     McHugh
     McKeon
     McNerney
     McNulty
     Meek (FL)
     Meeks (NY)
     Melancon
     Miller (NC)
     Miller, Gary
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murtha
     Myrick
     Nadler
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Pelosi
     Perlmutter
     Peterson (PA)
     Pickering
     Pomeroy
     Porter
     Price (NC)
     Pryce (OH)
     Putnam
     Radanovich
     Rahall
     Ramstad
     Rangel
     Regula
     Reyes
     Reynolds
     Richardson
     Rogers (AL)
     Rogers (KY)
     Ros-Lehtinen
     Ross
     Ruppersberger
     Rush
     Ryan (OH)
     Ryan (WI)
     Sarbanes
     Saxton
     Schakowsky
     Schiff
     Schmidt
     Schwartz
     Scott (GA)
     Sessions
     Sestak
     Shadegg
     Shays
     Shuster
     Simpson
     Sires
     Skelton
     Slaughter
     Smith (TX)
     Smith (WA)
     Snyder
     Solis
     Souder
     Space
     Speier
     Spratt
     Sullivan
     Sutton
     Tancredo
     Tanner
     Tauscher
     Terry
     Thompson (CA)
     Thornberry
     Tiberi
     Tierney
     Towns
     Tsongas
     Upton
     Van Hollen
     Velazquez
     Walden (OR)
     Walsh (NY)
     Wamp
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Weldon (FL)
     Weller
     Wexler
     Wilson (NM)
     Wilson (OH)
     Wilson (SC)
     Wolf
     Woolsey
     Wu
     Yarmuth

                               NAYS--171

     Aderholt
     Akin
     Altmire
     Bachmann
     Barrow
     Bartlett (MD)
     Barton (TX)
     Becerra
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blumenauer
     Boyda (KS)
     Broun (GA)
     Brown-Waite, Ginny
     Burgess
     Burton (IN)
     Butterfield
     Buyer
     Capito
     Carney
     Carter
     Castor
     Cazayoux
     Chabot
     Chandler
     Childers
     Clay
     Conyers
     Costello
     Courtney
     Culberson
     Davis (KY)
     Davis, David
     Davis, Lincoln
     Deal (GA)
     DeFazio
     Delahunt
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doggett
     Doolittle
     Drake
     Duncan
     English (PA)
     Feeney
     Filner
     Flake
     Forbes
     Fortenberry
     Foxx
     Franks (AZ)
     Gallegly
     Garrett (NJ)
     Gillibrand
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Graves
     Green, Gene
     Grijalva
     Hall (TX)
     Hastings (WA)
     Hayes
     Heller
     Hensarling
     Herseth Sandlin
     Hill
     Hinchey
     Hodes
     Holden
     Hulshof
     Hunter
     Inslee
     Issa
     Jefferson
     Johnson (GA)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Jordan
     Kagen
     Kaptur
     Keller
     King (IA)
     Kingston
     Kucinich
     Lamborn
     Lampson
     Latham
     LaTourette
     Latta
     Linder
     Lipinski
     LoBiondo
     Lucas
     Lynch
     Mack
     Manzullo
     Marchant
     Matheson
     McCarthy (CA)
     McCaul (TX)
     McCotter
     McDermott
     McHenry
     McIntyre
     McMorris Rodgers
     Mica
     Michaud
     Miller (FL)
     Miller (MI)
     Moran (KS)
     Murphy, Tim
     Musgrave
     Napolitano
     Neugebauer
     Nunes
     Paul
     Payne
     Pearce
     Pence
     Peterson (MN)
     Petri
     Pitts
     Platts
     Poe
     Price (GA)
     Rehberg
     Reichert
     Renzi
     Rodriguez
     Rogers (MI)
     Rohrabacher
     Roskam
     Rothman
     Roybal-Allard
     Royce
     Salazar
     Sali
     Sanchez, Linda T.
     Sanchez, Loretta
     Scalise
     Scott (VA)
     Sensenbrenner
     Serrano
     Shea-Porter
     Sherman
     Shimkus
     Shuler
     Smith (NE)
     Smith (NJ)
     Stark
     Stearns
     Stupak
     Taylor
     Thompson (MS)
     Tiahrt
     Turner
     Udall (CO)
     Udall (NM)
     Visclosky
     Walberg
     Walz (MN)
     Westmoreland
     Whitfield (KY)
     Wittman (VA)
     Young (AK)
     Young (FL)

                              {time}  1322

  So the motion was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________