[Congressional Record (Bound Edition), Volume 155 (2009), Part 1]
[House]
[Pages 772-781]
[From the U.S. Government Publishing Office, www.gpo.gov]




               TARP REFORM AND ACCOUNTABILITY ACT OF 2009

  The SPEAKER pro tempore. Pursuant to House Resolution 53 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the state of the Union for the consideration of the bill, H.R. 384.

                              {time}  1649


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the state of the Union for the consideration of the bill 
(H.R. 384) to reform the Troubled Assets Relief Program of the 
Secretary of the Treasury and ensure accountability under such Program, 
with Mr. Salazar in the chair.
  The Clerk read the title of the bill.
  The CHAIR. Pursuant to the rule, the bill is considered read the 
first time.
  The gentleman from Massachusetts (Mr. Frank) and the gentleman from 
Alabama (Mr. Bachus) each will control 1 hour.
  The Chair recognizes the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as 
I may consume.
  Mr. Chairman, the parliamentary situation must be understood. Last 
year, when we responded to the urgent pleas of the Bush administration 
to authorize the $700 billion deployment of Federal funds to unstick 
the credit markets, we resisted their insistence that all the money be 
made available rapidly, and at least said that they would have the 
right to spend the first half, but after having spent the first half, 
would have to notify Congress of any intent to spend the second half, 
and that we would have 15 days in which to consider, under expedited 
procedures, resolutions to disapprove that.
  As the Bush administration began to administer this program, many of 
us became very unhappy, in particular, we felt that they had repudiated 
commitments they had given to us to use a significant part of the fund 
to diminish foreclosures.
  We also thought it was a mistake to provide infusions of capital to 
banks without any requirements as to what was done with that capital. 
The infusion of capital was not, in itself, a bad idea, but doing it in 
a way without conditions was in error.
  Because of the dissatisfaction with that and some other aspects, we 
made it clear, many of us, to the Secretary of the Treasury that any 
requests to free up the second 350 would be voted down by the Congress, 
possibly by a sufficient majority to override a veto. The Secretary of 
the Treasury, therefore, withheld using any of those funds.
  We now have a new administration coming in, and many of us believe 
that

[[Page 773]]

the new administration should have the opportunity to spend, lend, 
deploy the 350. The main argument against it is very simple; because 
the Bush administration messed this up, we must not allow the Obama 
administration to do it.
  People talk about this program, the TARP, it is called, the Troubled 
Asset Relief Program, and they impute to it a personality. It becomes, 
in some of the rhetoric, a living organism. We can't trust the TARP. 
The TARP was bad.
  Well, the TARP is not an organism. It has no mind; it has no spirit. 
It is a set of policy tools. And at the outset, the argument that 
because the Bush administration used those tools in ways that we 
disagree with, we should deny them to the Obama administration goes 
much too far.
  If I were to follow the principle that where the Bush administration 
did things badly, I would deny the Obama administration the chance to 
do them, we would not have a State Department because I don't like the 
Bush administration's foreign policy on the whole. But I do not think 
we should therefore deprive the new President of the chance to do it.
  Instead, what we do, and here's where the parliamentary situation 
comes in. We have a vote coming under the bill that we passed last year 
on resolutions of disapproval in the Senate and the House, and they 
cannot be stopped, thanks to the way we wrote this, by the Rules 
Committee, by a filibuster or by anything else. Prior to that vote, 
many us believe we, in the House, should make clear what conditions we 
would want to impose on this if it does go forward.
  Now, I believe the Obama administration will do this better than the 
Bush administration, but I want to go more than simply believing that. 
I think it is important that we pass this bill that makes clear what we 
believe should be in it, and hope that it passes the Senate, but even 
if it does not get taken up there for a while, and we've had long 
delays, have the administration commit to it.
  Now, I'm somewhat bemused by my colleagues on the other side of the 
aisle. Trying to follow their path on this whole program has made me 
dizzy. Last year they were, at various points, ardently for it, then 
against it, then for it again. They were for it in the end only with a 
condition that had to be added to it involving insurance, which the 
Secretary of the Treasury of their administration said he did not think 
made any sense and he did not plan to include it.
  The leadership, I sympathize on the other side. They've got a 
membership that they have found hard sometimes to work with, and that 
has led the leadership to go, in my judgment, in the last year, from 
obstruction to irrelevance to self-delusion. First they said, let's not 
do anything. Then they absented themselves from negotiations involving 
the White House and the Treasury, the Senate Republicans and Democrats 
and ourselves. They just weren't there, and they wouldn't tell us what 
they thought. Then finally they felt they had to do something, so they 
said they would support the bill on condition that it include this 
insurance plan which the Secretary of the Treasury has made very clear 
to people he intended to ignore. That gave enough of them enough 
comfort to vote for the bill.
  Now, we found that leaders on the other side who supported this when 
it was for the Bush administration, now want to deny it to the Obama 
administration because they correctly realized that the Bush 
administration did not do it well.
  I know that quoting the Bible is in vogue in some circles. I'm not 
the best exegete, but I will say there is an analogy, you were told, I 
think, not to visit the sins of the father on the son, or maybe you're 
told that you should. I'll be honest and say I don't quite remember.
  But I certainly do know that when you are dealing with important 
matters of public policy and tools that you give a President, visiting 
the sins of one administration on that administration which is not only 
coming after it, but repudiated it politically would be a great 
mistake.
  Now, the last point I would make is again to emphasize. This vote 
that we will take on this bill does not free up the money. It does not 
free up the money. It does not mean the money should be spent. It will 
mean, after we have dealt with the amendment process, that if the money 
is spent, we want it spent in this way. There will be a separate vote 
on whether or not it should be spent.
  Now as I understand, I realize that my Republican colleagues in the 
leadership, on the whole, intend now to repudiate their support for 
this retroactively, but it comes too late. Punishing the Obama 
administration, denying the incoming administration the opportunity to 
deploy these resources, particularly after they have agreed, as I 
believe they will, very explicitly with what the House thinks should be 
included, would be a great mistake.
  And the last point I would make is this. If we do not pass this bill 
today, and I believe that, in a subsequent and independent decision, 
agree to release the $350 billion, we will make no progress in what is 
the single biggest economic problem we've been facing, namely, the 
foreclosure crisis, which has been the cause of so much else.
  There has been very little done in the foreclosure crisis. We have 
tried. We passed a bill. It didn't work very well. The one chance we 
have to bring relief to a substantial number of people facing 
foreclosure and, importantly, undo the economic harm that does for the 
country, because foreclosures don't just hurt the person who's losing 
the property. They have been a central cause of our economic problem, 
widely agreed upon by a wide range of economists.
  Passing this bill, and then in a subsequent vote, unrelated, but 
independent, but as part of a package, freeing up the second $350 
billion, subject to the conditions we put today, is the only way 
Members will have to see that foreclosure diminution becomes a reality.
  So I hope this bill is passed. More importantly, next week, I hope 
that if it is passed, we will then defeat the motion of disapproval.
  I reserve the balance of my time.

                              {time}  1700

  Mr. BACHUS. I yield 4 minutes to the gentleman from Texas.
  Mr. PAUL. Although I recognize the chairman of the committee's points 
that this literally is not the appropriation, I rise in opposition to 
the bill, but I do want to speak out against this whole process of what 
we are trying to do with the bailout, not only this time but the time 
before. It is a system that has brought this country to its knees, and 
I think we haven't recognized what the cause has been, and therefore, 
we're not looking at this problem in the proper manner in order to 
solve the problem.
  There has been a lot of money involved and a lot of money spent. 
There have been appropriations that we've made here in the Congress as 
well as the trillions of dollars the Federal Reserve has used to try to 
bail out the financial industry, and nothing seems to be working.
  I think it's mainly because we haven't recognized nor have we 
admitted that excessive spending can cause financial problems. 
Excessive debt can cause some problems. Inflation--that is, the 
creation of new money and credit out of thin air--can cause a lot of 
problems, and we've been doing it for decades. It was predictable. It 
was not a surprise that we got ourselves into a financial mess because 
of a system that is deeply flawed.
  So what do we have? What have we been doing now for the last 6 months 
to a year?
  We have been spending more. We have been running up debt like we've 
never run up debt before, and we're printing money like we never have 
before. We think that is going to solve the problem. That literally has 
been the cause: too much spending, too much borrowing and too much 
inflation.
  I do want to address the subject more specifically about moral hazard 
and why the system was so deeply flawed. That is, when a Federal 
Reserve system and a central bank create easy

[[Page 774]]

money and easy credit and they have interest rates lower than they 
should be, businesspeople do the wrong things. They make mistakes. It's 
called malinvestments, and we've been doing it for a long time. It 
causes financial bubbles, and they have to be corrected.
  Actually, the recession is therapy for all of the mistakes, but the 
mistakes come, basically, from a Federal Reserve system that's causing 
too many people to make mistakes. It causes savers to make mistakes. 
Interest rates are lower than they should be, so they don't save. In 
capitalism, capital comes from savings, but for decades now, capital 
has come from the printing press, and nobody has saved.
  That contributes to what we call ``moral hazard'' as well as the 
system of the Fannie Mae and Freddie Mac system. It always had a line 
of credit. It never had to use it, but the assumption was, if we ever 
got into any trouble, the Treasury would be there, and the Federal 
Reserve would back them up. That existed for a long time, causing 
specifically the housing bubble to develop.
  Then we subsidized the insurance. The government-subsidized insurance 
program further promoted the principle of moral hazard--people doing 
things, spending money and investing in the incorrect way.
  Then with the assumption that we're all going to be bailed out, which 
we're endorsing by bailing everybody out, people say, ``Well, no sweat 
because, if there is a mistake, the government will come to our 
rescue.'' That's part of the system of the FDIC. Now, nobody can 
conceive of the notion that we could live without an FDIC, but the 
truth is that a private FDIC would never permit this massive 
malinvestment. There would be regulations done in the marketplace, and 
there would not be this distortion that we've ended up with.
  So this bill actually makes it permanent that the insurance will be 
$250,000 per depositor. Now you say, on the short run, that's pretty 
good because that conveys confidence to the system because at least we 
know that our deposits are secure. This is true. It helps in the short 
run, and generally, this is the way we work here. We always say, On the 
short run, this is going to be a benefit. On the short run, the bailout 
will help. On the short run, we will do ``this.'' Actually, on the 
short run, there is a great deal of harm that's done. As a matter of 
fact, today, the long run is here.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2 minutes to the 
gentlewoman from Wisconsin (Ms. Moore), a member of the committee.
  Ms. MOORE of Wisconsin. Mr. Chairman, I rise to enter into a colloquy 
with Chairman Frank.
  Mr. Chairman, as you know, our State housing finance agencies are 
frequently the only source of credit for first-time low- and moderate-
income home buyers. However, the frozen credit markets have cut off 
their ability to sell their mortgage revenue bonds that fund their 
activities, forcing many of them to severely cut back their programs 
and forcing others to just stop completely.
  Additionally, unlike many of the depository institutions that have 
already accessed the TARP funds from the first tranche but have not 
passed those funds on to consumers, we know that housing finance 
agencies will immediately lend any money they receive through the TARP 
directly on to potential home buyers.
  My question, Mr. Chairman, is: Recognizing the vital role that FHAs 
can play in alleviating the financial credit crisis, I want to first 
encourage the Treasury Department to use those TARP funds to purchase 
FHA mortgage revenue bonds, and I want to know if there is any 
authorization in this legislation to do so.
  Mr. FRANK of Massachusetts. If the gentlewoman would yield, in title 
IV of the bill, we list some high-priority items where we expect these 
funds to be deployed, and we say that, if they are not deployed, we 
have to get an explanation in writing as to why that wasn't possible. 
In general, aid to municipal finance and housing, as part of that, is 
clearly included.
  Ms. MOORE of Wisconsin. Well, thank you, Mr. Chairman.
  Mr. BACHUS. Mr. Chairman, I yield 2 minutes to the gentleman from 
Indiana (Mr. Burton).
  Mr. BURTON of Indiana. Mr. Chairman, not long ago, the Secretary of 
the Treasury came into our conference, and he was visibly shaken. He 
said, if we didn't pony up $700 billion in a short period of time, the 
entire economy of the United States was going to dissolve, and we would 
have a major depression. There was no plan. It was just ``give us $700 
billion.''
  Instead of talking about long-term solutions, such as tax cuts, for 
the people across the board or instead of stopping capital gains and 
doing away with capital gains taxes for a couple of years to stimulate 
investment, they said, Throw $700 billion at us, and we'll solve the 
problem.
  Well, here we are a short time later. $350 billion has been spent, 
and nobody knows where. I mean, we come down to this floor. We start 
talking about the things that have been accomplished. We still have 
people losing their homes. The financial system in this country is in 
really bad shape, and companies are going bankrupt. $350 billion has 
been spent, and nobody knows where. I know part of it went to buy a 
bank in China. I'm sure the American taxpayers really appreciate that.
  Now they're saying we've got to give another $350 billion very 
quickly or, once again, the sky is going to fall. Well, the sky has 
been falling, and it seems to me that we ought to have a plan that 
deals with the long-term financial problems facing this country. The 
long-term financial problems facing this country involve investment, 
jobs, and economic growth. The only way you're going to get economic 
growth is to stimulate the economy by creating an incentive for people 
to invest. Tax cuts. We need to cut capital gains. I don't think 
anybody is really listening, but we need to cut capital gains. We need 
to have tax cuts across the board. If we do that, I think you'll start 
to see signs of recovery in the not-too-distant future.
  In the meantime, we may have to pony up a few more hundred billion 
dollars to keep things going while this takes place, but we need an 
overall plan, not just another $350 billion thrown at the Federal 
Reserve.
  The Acting CHAIR (Mr. Murphy of Connecticut). The gentleman's time 
has expired.
  Mr. BACHUS. I yield an additional 30 seconds to the gentleman from 
Indiana.
  Mr. BURTON of Indiana. Let me just summarize by saying that we need a 
plan, a comprehensive plan, that involves not only spending this $350 
billion but also a plan that will involve tax cuts across the board and 
incentives for business to invest, such as a cut in the capital gains 
tax rate and cuts in business taxes across the board. If we do that and 
come up with a comprehensive plan, maybe we could work our way out of 
this, but we certainly cannot do it by just throwing more money at the 
problem.
  Mr. FRANK of Massachusetts. Mr. Chairman, California has been one of 
the epicenters of this foreclosure crisis, and the delegation has 
worked very closely together. One of those leading that effort is the 
gentlewoman from California (Mrs. Tauscher). I yield her 2\1/2\ 
minutes.
  Mrs. TAUSCHER. Mr. Chairman, I rise to engage in a colloquy with 
Chairman Frank. I want to thank Chairman Frank for his leadership and 
for crafting this very, very important bill.
  I've been very proud to work on this issue with my colleagues--
subcommittee Chairwoman Waters, the head of our congressional 
delegation; Ms. Lofgren and Mr. Cardoza from a neighboring district of 
mine in California.
  In California, we have among the highest rates of foreclosure in the 
country. Sixty-eight percent of the home sales in my district of Solano 
County are foreclosed properties. Home values in the Bay Area have 
fallen 40 percent since their peak in 2007. Further, thousands of my 
constituents owe more than their homes' values and have little 
incentive to stay in their homes.
  I appreciate the efforts of the chairman and of the committee to work 
to

[[Page 775]]

direct a portion of the TARP funds to foreclosure mitigation. I thank 
you, Mr. Chairman, for including language in this bill that will 
address areas with high foreclosure rates.
  For too long we have not addressed the root causes of this crisis. As 
we move forward with this legislation, I would like to continue to work 
with Chairman Frank and with the committee to help address the areas 
hardest hit by high foreclosure rates, declining home values, and 
rising unemployment. I believe it is important we address the crisis in 
these disaster areas.
  I ask the chairman to help me provide relief to these victims. I 
yield to the chairman.
  Mr. FRANK of Massachusetts. If the gentlewoman would yield, I 
completely agree with that statement.
  As she knows, because she was a major part of this, there is an 
amendment included in the manager's amendment that was authored by 
herself and by her colleague from California, Mr. Cardoza, whose 
eloquence on behalf of the people facing foreclosure cannot fail to 
move anyone who listens to him. That says it beyond the current 
foreclosure relief that will be in this bill, and it will be the only 
foreclosure relief we will get if this money isn't made available. We 
are mandating that a further study be made to help people who might be 
facing foreclosure in the future and to deal with the broader aspects 
of the problem.
  So I thank the united efforts of the people of California, the 
Members from California, for helping improve this bill. I give them my 
commitment that, as chairman of the committee, I will be working with 
them to go further.
  Mrs. TAUSCHER. I want to thank Chairman Frank for recognizing that 
California has been particularly hard hit, and I look forward to 
working with him and with my other colleagues to ensure that Federal 
foreclosure mitigation efforts effectively address these areas that 
have been most affected by the economic crisis.
  I urge everyone's support for the bill.
  Mr. BACHUS. Mr. Chairman, I yield 4 minutes to the gentleman from 
Texas (Mr. Neugebauer).
  Mr. NEUGEBAUER. Mr. Chairman, I think I heard the distinguished 
chairman voicing some frustration with this current administration on 
how the TARP program was put together. I think a lot of Members who 
voted for this program, including the chairman, have had second 
thoughts because we hastily gave the authority to the administration 
with no plan and, more importantly, with no exit strategy.
  I would remind the chairman that the incoming new Secretary, should 
he be confirmed and move through some issues that he may have, was at 
that table when designing the TARP program. So, if we're passing out 
blame, there may be a lot of places to pass out blame, but here is the 
most important thing:
  Everybody who voted for that has been having second thoughts because, 
quite honestly, the money didn't get spent like it was represented it 
was going to get spent. There have been some intended consequences, but 
there have also been some unintended consequences of the money we 
passed out, because we started picking winners and losers. Any time the 
government starts picking winners and losers we're going to get in 
trouble.
  The issue is what to do with this next $350 billion. Everybody kind 
of thought we were going to have some say-so over this next $350 
billion, but in fact, we're not. This bill may pass in this House. It 
will never become law. The Senate has already said they will not take 
this bill up. So what should we be doing?
  Well, on both sides of the aisle, what we should be doing here is 
coming back and doing an autopsy on how we spent the first $350 
billion, what the results of that have been, and should we even look at 
or consider the additional $350 billion.
  The American people are not very happy about this. We are passing out 
money carte blanche. We have relegated the constitutional 
responsibility of this House by just giving the administration, whether 
it's this current administration or the new administration, $700 
billion and saying, Do the best you can. I don't think anybody thinks 
that's a very good plan.
  In fact, the chairman has, in most cases, been very open and has had 
markups and has had a vetting of legislation. Quite honestly, I'm very 
disappointed. Quite honestly, in this case, this is one person's bill. 
Although this bill will not become law, one person is going to 
determine where the next $350 billion is going to go.
  What we ought to be doing is having hearings. In the past, the 
chairman has had hearings--bringing people in here and asking them to 
account for the money that has been given them. Also, talk about what 
is the best way to do that.
  Now, I did not vote for it, and I want to be clear about this. I 
voted against it twice. Some people voted for and against it. The 
chairman said we weren't clear. I'm very clear as to how I voted on it. 
I voted against it because I have a real problem of, cart blanche, 
giving people $700 billion of the American taxpayers' money with no 
plan.

                              {time}  1715

  More particularly, no accountability. We have not seen any particular 
reports. We have a gentleman from Texas who sits on an oversight board. 
He's openly said he's not sure exactly what's going on because the 
amount of information he's receiving is in question. That bothers me. 
It should bother the American people. It should bother Members on both 
sides of the aisle that we are not doing the people's business.
  The way we do this right, if we're serious about doing this right, is 
we stop this process. We put it on hold, we ask the new administration 
to step forward with a plan, we get Members on both sides of the aisle 
to look at that plan, we vote, we offer amendments, we open that 
process so that when we go back home, we can say, ``You know what? We 
think we did what was in the best interest of the American people.''
  But when you close the process, when you try to change the original 
intent of TARP, which was to use American taxpayers' resources to loan 
to or to guarantee and with the hopes of getting back--in fact, even 
people were talking about we may even make money on this. But many of 
the provisions, unfortunately, of this bill aren't intended to get any 
return on the taxpayers' money, particularly then we're moving away 
from an asset program to an entitlement program, and it deserves better 
consideration.
  I urge Members not to vote for this bill.
  Mr. FRANK of Massachusetts. Mr. Chairman, time is limited so I want 
to give myself 30 seconds to rebut the inaccuracies we've just heard.
  First of all, the gentleman said we've closed the process. I have no 
idea what he is talking about. I suspect he does not either. This is a 
very open process. We solicited amendments. A number of amendments were 
offered, a number of amendments from both parties will be made in 
order, a number of amendments from both parties have already been 
accepted in the manager's amendment.
  The accusation that this is closed is just wildly off base. It has 
been a very open process, and I would say a majority of the amendments 
that have been offered made sense, and we've agreed to them. And to say 
it is a one-person bill, in fact we have opened it up.
  Now, Members who did not offer amendments--I will acknowledge. If you 
didn't offer an amendment, Mr. Chairman, it wasn't put in the bill. But 
this bill has been open, and the rule tomorrow will make that clear.
  I now yield 2\1/2\ minutes to the gentleman from New Jersey (Mr. 
Pascrell) who's had a lot of input in this bill, which I guess makes it 
still a one-man bill.
  Mr. PASCRELL. Mr. Chairman, I want to thank the chairman for all that 
he's done to make this an accountable piece of legislation. You would 
think this is a movie out of the 1950s, TARP 2. You know, I can see 
what's happening.
  No. This is realistic. We're going to know what's going to be in the 
bill, in this legislation.
  But Chairman Frank, sales are down 30 to 50 percent in the automobile 
industry. States are losing revenue

[[Page 776]]

throughout the United States of America, and we know that confidence of 
the consumer is certainly not where we would want it.
  So I request and engage in a brief colloquy regarding H.R. 384 with 
your permission.
  As you know, Mr. Chairman, the legislation we have before us is not a 
debate focused on the interest of big business. This legislation is, 
instead, unmistakably intended to serve Americans across the Nation. I 
want to commend you personally for your leadership and commitment to 
providing unambiguous directives on how the TARP funds must be used for 
ensuring that the funds will provide relief to Main Street. This is the 
difference between now and a few months ago. I want to commend you for 
this. It is a fact that the first TARP failed to meet the intent of the 
Congress. Today is our opportunity to make sure that funds flow 
directly to Americans.
  Wouldn't you agree with me, Mr. Chairman?
  Mr. FRANK of Massachusetts. If the gentleman would yield, absolutely.
  I believe that the difference in the way the TARP will be 
administered in the new administration and the last administration will 
be very glaring, and frankly, I think that one of the motivations on 
some of my Republican colleagues to kill this now is that they fear the 
contrasts that will be presented between the very responsible and 
effective administration of this by the new administration and the 
inappropriate way of the last administration.
  Mr. PASCRELL. I would agree this is night and day. I testified last 
month, as you remember, before the Financial Services Committee on the 
need to open up the credit markets for consumers. That's what we are 
all about. Title III of TARP will help to open the credit markets for 
auto loans. Specifically, it clarifies and confirms the Treasury's 
authorization to provide assistance to automobile manufacturers.
  We can provide lots of money to the Big Three. If we don't sell cars, 
if we don't have traffic in those dealers, they not only close, we have 
an extended recession in the economy.
  Most importantly, this bill will help those borrowers that have good 
credit access the necessary financing for auto loans. Wouldn't you 
agree, Mr. Chairman, that's a major problem: those who can't get credit 
aren't getting it?
  The Acting CHAIR. The time of the gentleman has expired.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield the gentleman 30 
additional seconds, and ask him to yield to me.
  Mr. PASCRELL. I yield to the gentleman.
  Mr. FRANK of Massachusetts. Absolutely. This is a necessary component 
of our efforts to keep the American automobile manufacturers from going 
under. We give this authority--we reassert this authority to Treasury, 
and we intend to be very, very insistent that they use it.
  Mr. PASCRELL. Mr. Chairman, TARP 2 also clarifies Treasury's 
authority to provide support to the financing arms of automakers for 
financing activities to ensure that they can continue to provide needed 
credit, including through dealer and other financing of consumer and 
business autos and other vehicle loans.
  This is 20 percent of our retail economy.
  The Acting CHAIR. The time of the gentleman has again expired.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield the gentleman 10 
additional seconds.
  He is absolutely right, and once again, we underlined this authority 
and we intend to be very insistent that it be used.
  Mr. PASCRELL. Mr. Chairman, it must be clear to everyone in this 
body, Democrats and Republicans, that the best way to get out of this 
recession is to encourage consumer spending, and this bill does that. 
Retail, rational consumption.
  Mr. BACHUS. Mr. Chairman, I yield 4 minutes to the gentleman from 
Texas (Mr. Hensarling).
  Mr. HENSARLING. I thank the gentleman for yielding. Mr. Chairman, I 
must admit that I find it somewhat ironic that the biggest critics of 
the bailout legislation are the very people who wrote the bailout 
legislation. Many are shocked at the lack of transparency and what they 
would view as the apparent lack of effectiveness. Again, these are the 
people who wrote the bill.
  I think the bill that is before us is a tacit admission that they 
didn't get it right in the first place. You know, Mr. Chairman, I don't 
say that in trying to assess blame. There were Members on both sides of 
the aisle who supported that legislation in good faith. I was not among 
them. I supported an alternative piece.
  But I do say this to make the point that here is another piece of 
legislation being rushed to the floor. Haste makes waste. The first 
TARP bill was fraught with unintended consequences, and now we are 
here, perhaps with Son of TARP--I believe the previous speaker said--
maybe it's fraught with unintended consequences as well.
  Mr. Chairman, I would also ask a few questions and make a few 
observations.
  You know, if government spending money could solve the problem, we're 
up to about $7 or $8 trillion of potential taxpayer exposure already. 
Now, I don't believe the taxpayers will have to pay the entirety of the 
bill, but if they did, we're looking at almost $100,000 per American 
family. And here is another $350 billion on top of that, Mr. Chairman.
  And I have the question, where is the plan? Where is the incoming 
administration's plan for the $350 billion?
  And last I looked, Mr. Chairman, Congress doesn't have any extended 
recess scheduled until April, and certainly the majority has proven 
their ability to ram through legislation in 24-, 48-hour's notice. Why 
do we have to hand over an additional $350 billion of hard-earned 
taxpayer money to an administration that hasn't taken office, who 
hasn't even presented us a plan? Why is Congress yielding, yielding 
their spending prerogatives at this time? I simply don't understand it.
  Now, Mr. Chairman, it appears that we are given three different 
choices here: number one, we can vote to disallow the second $350 
billion without receiving a plan. That's simply what I advocate. Some 
may, once again, want to give the $350 billion check to the 
administration.
  And then there's Chairman Frank's plan. We will give them the $350 
billion, but we will attach certain strings to it. Now, I agree with 
the chairman when it comes to accountability. There are certain strings 
of his that I would agree with. I don't understand why you would hand 
over money and not at least set up some provision for knowing how it's 
spent or be able to measure whether or not the plan is succeeding. And 
I compliment the chairman for that.
  Outside of that, Mr. Chairman, I do not believe that I agree with his 
other extremes.
  Number one, I believe that he has a string that has the Federal 
Government picking winners and losers. Now, he and the previous speaker 
had a colloquy regarding the auto industry. Mr. Chairman, I don't know 
what industry isn't suffering in this economy. If it's the auto 
industry today, is it the airline industry tomorrow? Is it the tourist 
industry on Thursday? And when does Starbucks get in line? We're not 
helping the entire economy.
  This TARP legislation I believe implicitly picks winners and losers.
  Second of all, we start going down this road of putting government 
observers in the boardrooms. I mean, the government agent who observes 
today will suggest tomorrow, and he, I assure you, will mandate on 
Thursday. I've seen this before. I don't want to go down this road, Mr. 
Chairman.
  And then last but not least, taking money away from people who are 
current on their mortgage and giving it to people who aren't current on 
their mortgage is no way to work our way out of the economic peril that 
we find ourselves in.
  We need tax relief for families. We need tax relief for small 
businesses. We need to grow our way out of this economic crisis.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2\1/2\ minutes to 
one of

[[Page 777]]

our freshman Members, a man with great experience in municipal 
government, the gentleman from Virginia (Mr. Connolly).
  Mr. CONNOLLY of Virginia. I thank the distinguished chairman.
  I rise for the purpose of a colloquy with the distinguished chairman. 
I know that he shares my concern with respect to the current state of 
the municipal bond market in the United States. Following the meltdown 
of last fall, investors fled from bond markets to U.S. Treasury notes. 
As a result, our State and local governments are experiencing limited 
access to the capital markets due to the liquidity crisis.
  The double-whammy has effectively denied many of the municipal taxes 
and bond issuers across the country any ability with which to finance 
capital projects. As we already know, our partners in State and local 
governments are already facing tough financial choices, but if this 
particular issue is not addressed, it could lead to a contraction of 
the national economy to the tune of hundreds of billions of dollars at 
precisely the time we are trying to stimulate it.
  I would ask the distinguished chairman of the Financial Services 
Committee, is his understanding about the current state of the 
municipal bond market similar to that I just described?
  Mr. FRANK of Massachusetts. If the gentleman would yield, yes, I very 
much agree.
  I think one of the most sympathetic victims of this financial crisis 
has been the municipalities. The capacity to finance what's necessary 
for the quality of the life of their constituents has been impaired by 
factors well beyond their control. And the gentleman is absolutely 
right that we have an obligation to try to come to their aid which this 
bill would mandate be done.
  Mr. CONNOLLY of Virginia. I thank the chairman.
  And I would ask for his consideration of a proposal to direct the 
Secretary of Treasury to establish a program to provide direct credit 
enhancements or insurance from municipal bonds to help State and local 
governments to move forward on their civil-ready projects now on hold.
  Mr. FRANK of Massachusetts. Would the gentleman yield?
  Mr. CONNOLLY of Virginia. Yes, sir.
  Mr. FRANK of Massachusetts. I am in complete agreement, and while 
that would be beyond the scope of this, as the gentleman knows--I know 
he's not suggesting we do it here--I guarantee we will be having 
hearings later this year on the proposal.
  My own view is that some form of insurance would be there.
  The most unjustified risk premium being paid in America is by those 
municipalities that issue particularly full faith and credit general 
obligation bonds.
  I welcome the gentleman as someone with the municipal government 
experience that he's most recently had, and I look forward to drawing 
on that experience as we help correct this situation.
  Mr. CONNOLLY of Virginia. I look forward to cooperating with the 
distinguished chairman, and I thank him for his consideration and time.
  Mr. BACHUS. Mr. Chairman, I yield 3 minutes to the gentleman from 
South Carolina (Mr. Barrett).
  Mr. BARRETT of South Carolina. I thank the gentleman for yielding.
  Mr. Chairman, before coming to Congress, I owned a small furniture 
store, the best and only store in Westminster, South Carolina. We sold 
only furniture. We did one thing, and we did it pretty good.
  And before that, I was a captain in the United States Army. I had a 
pretty clear job title.
  In both organizations, I was taught to keep operations focused and 
not expand our mission beyond its initials goals.
  So what does this have to do with the legislation that we're talking 
about today? Well, unfortunately, this bill is a perfect example of 
Congress' bad habits of expanding its initial missions, a habit that 
brought us Fannie Mae and Freddie Mac, the Community Reinvestment Act, 
and guess what, the alternative minimum tax.

                              {time}  1730

  I voted for the Emergency Economic Stabilization Act to restore 
liquidity and stability into America's financial system, allowing 
American businesses to access credit so they could obtain inventory, 
buy supplies, and make payroll. I supported this act to prevent what 
many experts called an ``economic tsunami,'' and I'm glad that we 
haven't seen the widespread financial mayhem that I think was certain.
  We had to take extraordinary measures during those extraordinary 
times, but don't you think it's common sense to examine how we spent 
the first $350 billion before we even discuss how we're going to spend 
the second $350 billion? I agree with my colleagues that the first $350 
billion was spent too hastily and haphazardly, and I believe there was 
not enough oversight or planning by the Treasury Department for how 
this money was to be used. However, I fully support the efforts of this 
bill to improve transparency, oversight and disclose exactly how the 
taxpayer money is being used, but I'm extremely concerned that this 
legislation expands the goals of the Troubled Assets Relief Program and 
brings us even further from its original mission, which did not include 
providing a fund to prop up failing corporations or putting 
politically-motivated mandates on private businesses in exchange for 
government funds.
  This legislation will expand government interference in the private 
markets even more, Mr. Chairman, and I urge my colleagues to oppose 
H.R. 384.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2 minutes to one of 
the most energetic and informed members of the committee, the gentleman 
from Georgia (Mr. Scott).
  Mr. SCOTT of Georgia. First let me address a couple of points that 
the other side has mentioned. The first erroneous statement is that 
this is a one-person bill, the chairman's. Nothing could be further 
from the truth. This has been an open process. Many of the amendments 
and concerns of the other side have been added to this bill.
  Tomorrow we are going to have amendments that the chairman has made 
allowable for the other side to be debated on this bill. Many of the 
concerns that I had raised in the early part of the first expenditure 
of the first $350 billion are incorporated in this. Many of the ideas 
that Congresswoman Maxine Waters and I, in our concern about the 
housing and the home foreclosures, are a part of this bill, any number. 
We've had hearings. So I think it is very important for that statement 
to be shot down as erroneous and unfair to our distinguished chairman, 
for he has certainly had a very open process.
  Now, I've listened to the other side, and you talk about putting a 
plan together. You talk about not making the mistakes that we've made 
before. The mistakes we made before were in the hands of this 
administration, with this Treasury Department that came in and said he 
wanted the $350 billion for one thing, which was to take the spoiled 
assets off the books, he didn't use it for that. Before we could get on 
an airplane and get out of Dodge he had changed the whole plan, gave 
the banks $290 million just like that, before we could even put the 
Inspector General in place, before we could put the oversight in place.
  What this bill does is correct that mistake, puts a plan in place 
that will bring the reporting, bring the monitoring, the accountability 
and the transparency to this and will have upfront agreements on how 
these funds will be used.
  And let me just state for the record that in this morning's Politico 
there is an interesting poll that drives home the basic need and the 
substance for this bill. In that poll it says that 5 percent of the 
American people--only 5 percent of the American people--believe and 
have a great deal of trust that the Federal Government will handle its 
financial responsibilities responsibly. This measure goes right to the 
heart of that and makes sure that we put in place a way in which we 
guarantee that we will make sure that this $350 billion is handled 
responsibly.
  Mr. BACHUS. Mr. Chairman, can I inquire into the time left on both 
sides.
  The CHAIR. The gentleman from Alabama has 43\1/2\ minutes remaining;

[[Page 778]]

the gentleman from Massachusetts has 40 minutes remaining.
  Mr. BACHUS. Mr. Chairman, I yield 4 minutes to the gentleman from 
Georgia (Mr. Price).
  Mr. PRICE of Georgia. I want to thank the gentleman from Alabama for 
his stellar leadership on this issue.
  Well, Mr. Chairman, here we are, another $350 billion, $350 billion. 
Now, I don't want to overstate the obvious, but Mr. Chairman, that's 
money that we don't have.
  In addition to that, the process points that have been made I think 
are incredibly important. We haven't had any appropriate committee 
work. We've had a discussion, but there hasn't been the hearings 
devoted specifically to this bill. There hasn't been a markup. We 
haven't had the opportunity in committee to amend this bill, to have 
Member input. Members haven't had the opportunity to provide input into 
the development of the legislation. The mere fact that there are 70 
amendments filed with the Rules Committee, 50 of them from Democrats, 
clearly demonstrates that Members on both sides of the aisle have 
concerns about this legislation and ideas that they would like to 
share.
  We've seen bailout after bailout after bailout, yet our constituents 
have felt no relief. We cannot, in good conscience, allow the 
government to dig deeper into their pockets and spend their money 
without giving their elected Representatives the opportunity to be 
heard.
  Fundamentally, Mr. Chairman, we're talking about examining a vital 
role. What's the vital issue that says a lot about what we believe our 
government role ought to be? We're being asked to entrust Treasury with 
the authority to spend an additional $350 billion, a huge sum of money, 
and allowing them to take on additional risk to the taxpayers by 
pursuing modifications that have not yet proven to be a wise 
investment.
  Now, we can all agree that the oversight of the initial TARP program 
has been wanting, there's no doubt about that; that's evidenced by the 
fact that Treasury completely shifted the original purpose of the 
program without consultation or consequence. Treasury has failed to 
answer basic questions, they have struggled to track the billions of 
taxpayer dollars, and they seem to have no way to measure the success 
of this program.
  When Secretary Paulson initially approached Congress with an urgent 
request for funding and broad authority to stabilize the economy, a 
representative from the Treasury admitted that they were arbitrarily 
picking a number. In fact, when we asked a senior member at the 
Treasury Department how did they arrive at $700 billion, do you know 
what they said, Mr. Chairman? They said, ``We needed a really big 
number.'' Well, that's not terribly encouraging as to how to arrive at 
the amount of taxpayer money that they are putting at risk.
  There have been no indications that the last tranche of funding is 
needed, indeed, to further stabilize the economy. There have been no 
emergency meetings to explain why this money is necessary and how it 
would be used effectively to justify this release. In fact, just a few 
days ago Mr. Kashkari described our financial system as ``fundamentally 
more stable'' than when we began.
  Ultimately we have seen, through the failures of the TARP program and 
the Hope for Homeowners Program, that the government isn't the solution 
to all of our problems. Again, we've seen bailout after bailout, but 
there doesn't yet seem to be any relief for constituents and taxpayers. 
It's because of the hasty passage of the TARP program in the first 
place that we're now in the position to consider sweeping changes to 
the program.
  The regular democratic process in order would ensure that all Members 
of Congress can make their voice heard on this very important issue. To 
say that there isn't time to have a markup is not only disingenuous, 
Mr. Chairman, it simply is not true. We should take the time necessary 
to ensure that we are truly acting in the best interests of the 
American people. Perhaps if we had taken the time to allow for markup 
and evaluation initially, we would not be in the situation that we find 
ourselves now.
  Rather than entrenching our government with $350 billion of 
additional debt, I think it's time that we start considering positive 
solutions that embrace American values, American principles, and 
American solutions, none of which appear in the underlying bill.
  Mr. FRANK of Massachusetts. Well, Mr. Chairman, I am tempted to 
defend George Bush against the charge that he is un-American at this 
point because this was his program, but I'll defer that until later.
  I yield 2 minutes to the gentleman from Missouri (Mr. Clay).
  Mr. CLAY. I thank the chairman for yielding, and I wanted to engage 
in a colloquy with the chairman.
  There is a provision in your amendment that helps the automobile 
rental industry finance debt secured by their fleets. This does not 
help the one company which is located in my district that uses 
unsecured commercial paper to fund the acquisition of their automobile 
fleet. Therefore, this omission puts them at a competitive 
disadvantage. And I understand that this was an unintended consequence, 
and I am asking for a minor correction.
  Mr. FRANK of Massachusetts. If the gentleman would yield, obviously 
we aren't doing anything for any one company--the gentleman wasn't 
suggesting that we were--there are other companies. And yes, unsecured 
paper should be covered. Obviously we don't expect any investment by 
Treasury to be made irresponsibly; they have to check to make sure that 
it's a good investment. But ruling out the unsecured, no, that was not 
our intention. In fact, under the underlying bill, which we do not 
change, the Secretary has the authority fully to respond to that sort 
of situation.
  Mr. CLAY. I thank the chairman for the explanation and appreciate 
your cooperation.
  Mr. BACHUS. Mr. Chairman, I yield 4 minutes to the gentleman from 
California (Mr. Royce).
  Mr. ROYCE. I guess part of my concern here is philosophical, but I 
think that ideas have consequences, and bad ideas have bad consequences 
in policy. And specifically what I worry about here are two challenges 
that the U.S. faces; one is a budget deficit right now which, when we 
look forward, it's going to be about 7 percent of GDP. And with the 
Fed's balance sheet continuing to expand, I think it's now at about $2 
trillion.
  With the promise of another stimulus package coming, which will be 
somewhere between $800 billion and $1 trillion, we are becoming 
increasingly dependent upon our rescuers. Now, in this case our 
rescuers are the American taxpayers and U.S. debt purchasers, most of 
them overseas. Why worry about this? Well, I think one of the reasons 
we have to be concerned is that eventually bond investors might begin 
to reconsider purchasing that U.S. debt, they might begin to second 
guess that. And that consequence would really be catastrophic. Avoiding 
such a scenario would require us, then, to take a step back from where 
we are and require us to begin to eliminate unnecessary spending and 
not go forward with compounding the problem with the deficits.
  But beyond the impact of the budget, there is a second concern that I 
have, and that's the ill effect of this bailout trend in terms of the 
rapidly increasing role that government is playing inside financial 
firms, that it's playing in the board rooms. And I will just cite this 
December 17 article in the Wall Street Journal entitled, ``U.S. 
Ratchets Up City Oversight.'' And in that story they describe the 
active role that regulators are playing in the day-to-day operations of 
the financial institution.
  Earlier this week, headlines focused on an effort by U.S. banking 
regulators to encourage Citigroup to shake up its board and to replace 
its chairman, Win Bischoff. And they said this would be an effort to 
restore confidence in the beleaguered financial giant. But then as the 
argument is put forward, one of the leading candidates is Richard 
Parsons, who is Time Warner's chairman, and he is a member of 
Citigroup's

[[Page 779]]

board, but he also happens to be a member of President-elect Barack 
Obama's transition economic advisory board.
  Additionally, it should come as no surprise, I think, that earlier 
this week Citigroup announced it would support legislative efforts to 
allow bankruptcy judges now to rewrite mortgage contracts. Now, that's 
a provision that would restrict the flow of capital into the mortgage 
market, it would increase the cost certainly going forward of obtaining 
a mortgage for anybody. And traditionally the financial press has 
called this a ``cram down'' provision that's been adamantly opposed by 
the financial institution. Now we have $45 billion of taxpayers' cash, 
we have a $249 billion taxpayer guarantee for bad assets on the balance 
sheets of the institution. And the institution, which now has seen this 
bureaucratic control within the firm reverse itself on a position, and 
I begin to wonder if political pull is going to replace market forces, 
if government bullying is going to determine the actions that firms are 
going to take. And this is my second concern. Because, to me, a major 
reason we're in dire financial straits is the market distortions caused 
by bureaucratic and regulatory manipulation of the quasi public 
entities. We've had 16 hearings where we've heard the Federal Reserve 
Board, we've heard the Treasury warn over the last few years about 
Fannie Mae and Freddie Mac. And these institutions took on that 
excessive risk. It was Congress that encouraged it and prevented the 
regulation that the Treasury wanted in order to prevent it.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2 minutes to 
another freshman member of the committee, the gentleman from 
Connecticut (Mr. Himes).
  Mr. HIMES. Mr. Chairman, I rise today in support of H.R. 384, a bill 
to reform the TARP program.
  Let us be absolutely clear, had our markets functioned, had our 
regulators done their job, had our leaders been sufficiently vigilant, 
neither the TARP program nor its reform would be necessary. But 
extraordinary times demand extraordinary measures.
  Four months ago, the TARP was deemed necessary. Yesterday, in 
committee, we heard from a long line of experts who urged us to grant 
the new President authority to use the remainder of the TARP funds. On 
this question, perhaps people of good faith may disagree, but there can 
be no disagreement that if those funds are to be authorized, this House 
has an obligation to oversee their use.

                              {time}  1745

  We owe it to the American taxpayer to closely watch how their money 
is used and to assure that it is neither wasted nor used for private 
benefit. This bill, at great long last, offers that assurance.
  As importantly, there can be no disagreement that after providing 
relief to industry after industry, it is time to get to the heart of 
the matter: American moms, dads, and children, and the homes that they 
live in. This bill, none too soon, mandates and funds a national 
comprehensive foreclosure relief plan that will finally address the 
root cause of this crisis, the housing problem. As the saying goes, 
better late than never.
  When the sun goes down today, another 7,000 American families will 
have lost their home. The same will be true tomorrow. We cannot delay. 
We must act to save the very core of the American Dream.
  I commend Chairman Frank for his leadership on this bill, and I urge 
my colleagues to stand for smart oversight and for the beleaguered 
American homeowner.
  Mr. BACHUS. Mr. Chairman, I yield 2 minutes to the gentleman from 
California (Mr. Campbell).
  Mr. CAMPBELL. Mr. Chairman, I would like to have a colloquy with the 
chairman of the committee.
  Mr. Chairman, the Emergency Economic Stabilization Act was intended 
to apply to financial institutions, I believe, without regard to their 
form of ownership: public, private, mutual associations. Is that your 
understanding? Is that correct?
  Mr. FRANK of Massachusetts. If the gentleman will yield, Mr. 
Chairman, he's absolutely correct. The form of ownership should have no 
relevance to the decision here.
  Mr. CAMPBELL. But yet many mutual, bank, and insurance holding 
companies have been unable to even apply for TARP funds because of the 
Treasury's not coming out with a term sheet that would enable them to 
apply, even those that can issue nonpublic preferred stock. Would you 
agree that the Treasury should be encouraged to come out with those 
term sheets?
  Mr. FRANK of Massachusetts. If the gentleman would yield, he 
understates my view when he says they should be encouraged. I believe I 
will be glad to join with him in insisting that they do that. And, 
frankly, we don't want any form to be disfavored and certainly not the 
mutual form, which has a great deal in terms of our history to commend 
it. So the gentleman is absolutely right, and I think on this one we 
can be pretty certain that, particularly if the House gives the kind of 
endorsement to it that I suspect that it will, we'll be able to 
accomplish that.
  Mr. CAMPBELL. Thank you, Mr. Chairman.
  On one other point, there are people who say that a financial 
collapse didn't happen, and, in fact, it didn't. You don't get credit 
for bad things that don't happen. I would argue that the financial 
collapse was imminent were it not for this bill and also for the 
extraordinary monetary actions of the Fed. But as we go forward with 
the additional $350 billion, I would think that we should be 
leveraging. My concern is not that it's too much, that it's too little, 
and leveraging private funds by----
  Mr. FRANK of Massachusetts. If the gentleman would yield, that's 
right. And I would say some of my colleagues understandably wanted to 
put very severe restrictions on the recipient institutions, and we put 
restrictions on them. But we don't want to be so restrictive that we 
drive out private capital. This will only work if the public capital 
leverages and unlocks and reassures private capital.
  Mr. CAMPBELL. Thank you, Mr. Chairman. We'll get a lot more benefit 
for this if it's more like matching funds and we encourage private 
capital to go in and the public capital comes with it.
  With that, Mr. Chairman, I stand in support of this bill and its 
provisions.
  Mr. FRANK of Massachusetts. Mr. Chairman, not being a person who 
holds grudges, I yield 2 minutes to someone who left our committee, the 
gentleman from New York (Mr. Crowley).
  Mr. CROWLEY. I think I thank the chairman for yielding.
  Mr. Chairman, I wish to enter into a colloquy with the chairman.
  Mr. Chairman, I seek to clarify language in the underlying TARP 
legislation. As you know, New York has been battered by the financial 
crisis, and unemployment, like in most States, has been drastically 
increasing.
  It is my understanding that TARP recipients can use TARP funds to 
provide funds to local small businesses to free up capital, preserve 
jobs, and support wages of their employees during these difficult 
times. Is that correct?
  Mr. FRANK of Massachusetts. If the gentleman would yield, he is 
absolutely correct. We think that it is a very important use of it. 
It's one of those things that was not done sufficiently previously, and 
we are convinced it will be done with this House's taking the lead in 
the future.
  Mr. CROWLEY. I thank the chairman.
  Just one additional statement, and you can correct me if I'm wrong.
  Am I correct in saying there is nothing in the TARP that prevents 
banks, such as Amalgamated Bank in New York, from applying for TARP and 
using these funds to support wages of workers as well as create jobs 
through the lending of funds to people and small businesses in the 
communities as well as providing some safety net during these difficult 
times?
  Mr. FRANK of Massachusetts. If the gentleman will yield, yes, he's 
correct. What we, in fact, say here is that nothing should be advanced 
to a bank without an agreement in advance as to how

[[Page 780]]

it should be used. Now, we would expect a great bulk of the funds, the 
agreement would say, be re-lent, but that's not the exclusive purpose. 
There are other valid purposes. What this bill says, however, is that 
that would have to be clear up front as one of the permitted purposes, 
and we do believe that this Treasury Department, given that, yes, they 
would accept that as a very valid use.
  Mr. CROWLEY. I thank the chairman for the colloquy.
  Mr. BACHUS. Mr. Chairman, may I inquire as to how much time is 
remaining?
  The Acting CHAIR. The gentleman from Alabama has 33\1/2\ minutes 
remaining. The gentleman from Massachusetts has 35 minutes remaining.
  Mr. BACHUS. Mr. Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, I will now yield 3 minutes 
to one of the leaders in this House on the important issue of 
foreclosure, the gentlewoman from California (Ms. Waters).
  Ms. WATERS. Mr. Chairman, I rise in support of H.R. 384, the TARP 
Reform and Accountability Act of 2009, and I would like to thank our 
chairman, Chairman Frank, for his hard work and his leadership on 
drafting this most important piece of legislation.
  As a Congress, we have experienced numerous disappointments with the 
TARP program's implementation, most notably the Treasury's refusal to 
use TARP funds for loan modifications and homeowner relief. The need to 
address the foreclosure crisis head on is why I lend my support to H.R. 
384 and its requirements for foreclosure mitigation.
  When we passed the first TARP bill last year, we intended for the 
Treasury to use its unprecedented authority to remove toxic assets and 
nonperforming loans from the marketplace, modify mortgages, and 
increase the availability of credit. To date, no TARP funds have been 
used or directed to systematic loan modification or increased lending.
  Foreclosures are affecting homeowners, renters, and communities. 
Homelessness levels are rising as a result of renters who have 
dutifully paid rent on time being evicted from their homes because the 
owner is in foreclosure. Stopping foreclosures is key to reducing 
homelessness, helping the economy to recover, and rebuilding 
communities.
  H.R. 384 has the components homeowners, mortgage servicers, and 
lenders need to effectively confront the foreclosure crisis. The bill 
provides from $40 to $100 billion for funding foreclosure mitigation. 
We may need a larger funding level for foreclosure mitigation, perhaps 
up to $70 billion; however, I appreciate the chairman's efforts to 
direct resources to this crisis.
  The bill also provides several alternatives for foreclosure 
mitigation, such as a systematic mortgage modification program, whole 
loan purchasing, buy-down of second mortgages, reduction of costs in 
the Hope for Homeowners Program, and incentives and assistance to 
servicers to modify loans.
  But most importantly, in the manager's amendment, the bill will now 
require implementation of the systematic foreclosure prevention and 
mortgage modification program that I've been calling for since last 
year. On the first day of the 111th Congress, I introduced H.R. 37, the 
Systematic Foreclosure Prevention and Mortgage Modification Act of 
2009, to give the power of law to the successful systematic mortgage 
modification program developed by the Federal Deposit Insurance 
Corporation and currently in use at the IndyMac Federal Bank, where it 
has resulted in over 5,000 IndyMac borrowers avoiding foreclosures. I 
applaud Chairman Frank for including this legislation in H.R. 384.
  The housing crisis must be corrected through our efforts with TARP. I 
believe that H.R. 384 will finally put us on track to addressing the 
foreclosure crisis. I support H.R. 384, the TARP Reform and 
Accountability Act of 2009, and I urge my colleagues to vote ``yes.''
  Mr. BACHUS. Mr. Chairman, I yield 5 minutes to the gentlewoman from 
Minnesota (Mrs. Bachmann).
  Mrs. BACHMANN. Mr. Chairman, I would like to thank the gentleman from 
Alabama for yielding a few minutes to me.
  It's a tremendous honor to be able to sit on the Financial Services 
Committee. It's been the center of the universe the last 2 years 
dealing with this crisis that's very real that is impacting not only 
individuals but businesses, people who are looking at the loss of their 
life savings, loss of their greatest capital asset: their home. We know 
that this is a strong reality. But we also realize the magnitude of the 
tremendous amount of taxpayer resources that have been devoted to this 
effort.
  Initially we were told by the Treasury Secretary that in effect a 
financial Armageddon would ensue if this body did not, in fact, pass a 
bailout of gargantuan proportions. We were told $700 billion is what 
the Treasury Secretary would need to have in order to offer an 
effective front to stave off, in essence, the four horsemen of the 
apocalypse for our financial markets.
  We've seen a tremendous roller coaster occur in 2008 regarding our 
financial markets. For the first $350 billion, the first tranche going 
forward, what have we seen? This week in the Financial Services 
Committee, we had testimony before our committee from the 
administration. Questions were asked: Where has the first $350 billion 
gone? Who are the recipients of the first $350 billion? What did the 
money get spent on? What were the answers that we received? What is the 
effectiveness of that money? Did the American taxpayer receive value 
for $350 billion that's already been expended?
  Mr. Chairman, not only did we not receive answers to those questions, 
we didn't receive answers to the very basic question of what will the 
next administration do with this next request for $350 billion? We 
don't have a full accounting of that either. And what is the reason? 
Again, Mr. Chairman, we're told to do just exactly what we were told 
with the last $350 billion: Trust me. Trust me. That didn't work so 
well for us last time. We were rushed into this. There wasn't 
oversight. There weren't strings attached. Once again with the next 
$350 billion, this Congress is being told that we will have to go out 
and borrow $350 billion because the American people need to know we 
don't have $350 billion in the bank right now, or like my father-in-law 
says to my mother-in-law, ``Elma, I have to go to the backyard and 
shake the money tree to get the money out.'' There isn't money there in 
the bank. We have to go and borrow money that we don't have. And who 
pays that back? It's the American taxpayer. I think, Mr. Chairman, we 
need to have some very basic answers to our questions before we go 
forward with this extraordinary request.
  We are being forced to vote without details on how this $350 billion 
will be spent, but the trouble is we haven't held even a single hearing 
on the merits or the necessity of releasing the second tranche because 
the House is proceeding as though the decision has already been made to 
release the second $350 billion without holding any substantial debate 
on whether or not such a release is the appropriate step for 
stabilizing the financial markets and getting these markets moving 
again.
  Congress handed the Treasury Secretary a $700 billion blank check. 
Let's just be clear about that. The original bailout was passed, and we 
were told that the $700 billion was essentially a big number. It was 
picked out of thin air, but it was needed to calm the markets. Now, I 
think most Americans would be appalled to learn that that was the 
truth. But we also need to recognize the United States Treasury doesn't 
even have to spend every penny of that money. Many experts, even 
Secretary Paulson himself, stated that was the case.
  But here we are again and the House is moving forward with a 
preemptive decision that jumps ahead of this very fundamental question, 
and it's this: Is it even necessary to release the second tranche for 
the state of our financial markets?

                              {time}  1800

  We remain unconvinced, many of us, that the case hasn't even been 
made

[[Page 781]]

that it is. This bill is attempting to make sweeping changes to the way 
that TARP must operate. I would agree with my colleagues on both sides 
of the aisle that TARP has very serious flaws, many of which were 
predicted by many of us on both sides of the aisle, and we should look 
at ways to address the flaws.
  But Congress should not be forced to rush to vote on this bill the 
way that we are being forced to rush on it today. Congress was rushed 
into this gargantuan decision, and we need to take the time to be 
deliberative.
  Mr. FRANK of Massachusetts. Mr. Chairman, I move that the Committee 
do now rise.
  The motion was agreed to.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Capuano) having assumed the chair, Mr. Murphy of Connecticut, Acting 
Chair of the Committee of the Whole House on the state of the Union, 
reported that that Committee, having had under consideration the bill 
(H.R. 384) to reform the Troubled Assets Relief Program of the 
Secretary of the Treasury and ensure accountability under such Program, 
had come to no resolution thereon.

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