[Congressional Record (Bound Edition), Volume 155 (2009), Part 1]
[House]
[Pages 781-791]
[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 further consideration of the bill, 
H.R. 384.

                              {time}  1803


                     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 further 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. Sires (Acting Chair) in the chair.
  The Clerk read the title of the bill.
  The Acting CHAIR. When the Committee of the Whole rose earlier today, 
60\1/2\ minutes remained in general debate. The gentleman from 
Massachusetts (Mr. Frank) has 32 minutes, and the gentleman from 
Alabama (Mr. Bachus) has 28\1/2\ minutes.
  The Chair recognizes the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. Mr. Chairman, just as in baseball, 
sometimes a player who made a great defensive play is first up. After 
his stellar role in the chair, I yield 3 minutes to the gentleman from 
Massachusetts (Mr. Capuano).
  Mr. CAPUANO. My colleague is easily impressed, but thank you very 
much.
  Mr. Chairman, we have to back up a little bit and remind ourselves 
what we are debating here. We are debating a bill that amends the TARP 
provisions. It doesn't grant $350 billion to anyone.
  There is no money attached to this bill, and I actually agree with 
many of the comments that have been made about the past 350 and the 
potential soon to be $350 billion. I have the same concerns they do. I 
may fall on the different side of the issue because, for me, I voted 
for it, not because I loved it, but because to me it was the only way 
to save the economy.
  I think some of it's working. I agree that I have the same concerns 
about the lack of reporting that has been done to us, that this 
administration has not told us how effective it has been. I agree with 
those concerns, but that's not what we are debating. The bill before us 
is an improvement on the bill that we passed, and those other concerns 
should be directed when we get that other bill, hopefully within the 
next few days, and I may actually join you when the time comes, don't 
know yet.
  It depends on whether this bill gets passed. It depends on what the 
new incoming administration says about this bill that's currently 
before us.
  But let's not forget how we had the last one. Many of us tried to add 
some of these provisions the last time. We were told by the current 
President that if those things were added he would not sign the bill. 
He would veto it and let the economy go down the tubes. We were told by 
some of our colleagues in the other body that they would not go along 
with it.
  So we were stuck with the situation. You either save the economy or 
do nothing.
  I actually respect those of us who did nothing. I wasn't sure that my 
vote was right. I am still not sure, as I stand here today. And anyone 
who is so certain that they know exactly how to fix this economy, well, 
good luck to you and God bless you, because you are much more certain 
than most Americans.
  Most of us are doing the best we can with the knowledge that we have. 
I wish I could sit here today and say to you that the hearing we had a 
few weeks ago in Financial Services provided me all the information I 
needed to make a thoughtful judgment on whether the next 350 should go 
forward.
  Instead, I was told we are not going to look at the individual 
institutions. We don't care what they do. That is an insane statement. 
No one can agree with that, yet that's what we were told.
  I have some belief and some faith that the new administration will 
feel differently. I believe this bill sets forth clear or at least 
clearer definitions of what must be in the report, clearer definitions 
of how the money should be used.
  I haven't heard one reason to vote against the bill that's before us. 
I have heard reasons to vote against potentially the next 350.
  But let's focus on the bill that's in front of us. I would like to 
hear one reason why we shouldn't specify better reporting, that we 
shouldn't strengthen oversight, that we shouldn't clearly state that 
this Congress wants something to be done directly about mortgage 
foreclosures. I haven't heard that.
  Mr. BACHUS. Mr. Chairman, I yield 4 minutes to the gentleman from New 
Jersey (Mr. Garrett).
  Mr. GARRETT of New Jersey. I thank the ranking member.
  You know, Mr. Chairman, this debate and maybe this vote is an 
exercise in futility. Our distinguished chairman has already noted in 
various media outlets that he doesn't believe that this bill is ever 
going to become law. The Senate Banking Committee chairman has declared 
that he is not even going to bother drafting similar legislation, much 
less voting on it.
  So, you might ask yourselves, why is it that we are here today? As an 
aside, the chairman said interestingly enough the other day, just 
yesterday in committee meeting, he said, to quote Harry Truman, the job 
of the President of the United States is to get people to do things 
that they should do that they would do if they had half a brain.
  Well, the Bush administration will be out of office in a week. I 
would be curious to know from the chairman who he

[[Page 782]]

thinks in the next administration lacks that ability to do the right 
thing.
  Furthermore, Mr. Chairman, it's been reported that the chairman and 
the House Democrat leadership are really here today to try to provide 
political cover, in that sense, for their Members that they know this 
TARP Program is extremely unpopular with the American public and has 
wasted millions upon millions of dollars, and so this is a political 
cover to vote on this bill today.
  President-elect Obama said on Sunday on This Week with George 
Stephanopoulos, ``I, like many, are disappointed with how the whole 
TARP process has unfolded. There hasn't been enough oversight. We found 
out this week in a report that we are not tracking where this money is 
going.''
  I agree with President-elect Obama. He is exactly right. There is a 
lack of congressional oversight, and that's been a concern of mine and 
many on this side from day one and even before the first TARP bill 
passed.
  I have taken the time to carefully review this legislation. But, 
unfortunately, when you think about the process that we have gone 
through here, as a whole, we have not done what is right. We call it 
regular order here, but for the folks at home, it just means spending 
the time that you should spend on a bill when you are spending hundreds 
of billions of dollars. That means careful review, hold hearings, hold 
a markup on the TARP.
  Perhaps if we had done that, perhaps we could have foreseen some of 
the problems that we are talking about here tonight on the first bill. 
However, the first piece of legislation was cobbled together, and this 
piece of legislation was cobbled together as well and rushed.
  Chairman Frank released this draft that we have here before us just 
this past Friday. And now so it's less than a week that we are 
considering that exact same bill here on the floor.
  I agree with the ranking member when he said that he has not seen a 
compelling case to release the second $350 billion. In fact, I haven't 
seen any case presented as to why we should be releasing the second 
$350 billion or any plan to deal with spending that $350 billion. I 
have not seen any evidence that the original $350 billion ever achieved 
its stated purpose of stabilizing our Nation's financial system.
  And, if it did, as some have suggested, then why are we here today 
going forward with this legislation? You know, the young lady who spoke 
before me from Minnesota said, rightfully so, that the Department of 
Treasury willingly admits that they pulled that original $700 billion, 
that number, out of thin air, not based on any scientific or 
mathematical analysis.
  I have already indicated I did not support the original passage of 
TARP because I believe there were alternatives at that time to spending 
$700 billion of American taxpayer dollars. Now, after what we have seen 
with TARP and how it was handled, I certainly don't believe that we 
should waste an additional $350 billion as well.
  I will say this, while the chairman is making an effort to provide 
some oversight with this legislation, such as requiring banks that 
received the funds to disclose how they are spending it, you know, if 
you dig into this bill I believe that there are provisions in it that 
will have more harm than good at the end of the day.
  They will do more harm to the economic recovery that we are all 
looking for. I will give you a couple of examples.
  I have concerns with the retroactivity provisions that apply to 
institutions that have already received funds. What about contract law, 
what about the constitutional law?
  The Acting CHAIR. The time of the gentleman has expired.
  Mr. BACHUS. I yield the gentleman 1 additional minute.
  Mr. GARRETT of New Jersey. What about the constitutional provisions 
as regards to that?
  Secondly, forcing companies that receive TARP funds to receive a 
government overseer on their boards. Amazing, a Congress that can't 
manage its own affairs is now going to have an overseer on corporate 
boards around this country. You know, an overseer today will become a 
suggestor tomorrow and eventually a dictator the next day.
  Thirdly, requiring $100 billion of the remaining TARP funds to be 
spent on the foreclosure mitigation program. This was not the initial 
reason that we did TARP. It was to get the credit markets moving again 
in this country.
  In closing, regardless of whether this measure passes or fails, it is 
almost certain that President-elect Obama will receive this request for 
the additional $350 billion with absolutely no strings attached or 
mechanism in place to ensure that the money is spent reliably. The 
House Democrat leadership failed when they passed the first bill of 
TARP, and they will fail when they give the authority to the President 
the second time.
  Mr. SCOTT of Georgia. Mr. Chairman, I yield 2 minutes to a very 
talented and energetic member of the committee, the gentlelady from 
Illinois (Ms. Bean).
  Ms. BEAN. Mr. Chairman, I rise in support of H.R. 384, the TARP 
Reform and Accountability Act.
  Thank you for yielding, and I want to thank the chairman for his 
leadership on this issue.
  Last fall this Congress faced a difficult decision. We were asked to 
provide the Treasury with $700 billion to stabilize the financial 
markets. Federal Reserve Chairman Ben Bernanke warned that the U.S. 
economy was on the verge of collapse if Congress did not act.
  Fortunately, Congress wisely put stipulations in place to protect 
taxpayer dollars. We also instructed the Treasury to provide 
foreclosure avoidance resources. Most importantly, we withheld half of 
the TARP money to allow congressional review of the first half.
  It was vitally necessary to stave off a collapse of our Nation's 
financial system and remains so today. However, this administration did 
not follow congressional instructions to utilize a portion of funds to 
address rising foreclosures. Today we have the opportunity to refine 
the use of the remaining TARP funds with this bill to make sure that we 
both stabilize our financial system and reduce rising foreclosures, 
which continue to undermine it.
  H.R. 384 requires the incoming administration to act with greater 
transparency and accountability on how funds are being used to 
stabilize markets and provide multitiered options to foreclosure 
avoidance for creditworthy families.
  In 2008, 1 in 10 homeowners were either delinquent on their mortgage 
or in foreclosure. One in six homeowners are currently upside down, 
meaning that their mortgage debt exceeds current home value.

                              {time}  1815

  Economists expect 4 million to 5 million additional residential 
foreclosures in the next 2 years. To compound the challenges facing our 
financial industry, slumping consumer spending is driving many 
retailers and small businesses under, and as they vacate their 
properties, commercial mortgage foreclosures will increase. That means 
even more toxic assets on the books of our financial institutions, 
further limiting credit.
  Credit affects every American, anyone who uses a credit card, needs a 
car or college loan, runs a business or is employed by one.
  The Acting CHAIR. The time of the gentlelady has expired.
  Mr. SCOTT of Georgia. I yield the gentlelady an additional 30 
seconds.
  Ms. BEAN. When the Treasury came to Congress last fall, our financial 
system was at the precipice of collapse. The economic challenges we 
face today would be worse if Congress had not supported the provision 
of TARP funds. But we are not out of the woods.
  I urge my colleagues to support H.R. 384 to make these necessary 
changes to TARP and vote to release the second portion of the TARP 
money so our financial system and the American businesses and families 
who rely on it can weather the existing and coming storms.

[[Page 783]]


  Mr. BACHUS. May I inquire as to how much time is left on each side?
  The Acting CHAIR. The gentleman from Alabama has 23\1/2\ minutes. The 
gentleman from Massachusetts has 26\1/2\ minutes.
  Mr. BACHUS. I temporarily reserve my time.
  Mr. FRANK of Massachusetts. In a spirit of cooperation, if the 
gentleman is short of speakers, I have a surfeit over here. I notice 
there seems to be a lack of interest over there. We can send you some.
  Mr. BACHUS. Mr. Chairman, I don't think that we need that kind of 
speaker.
  Mr. FRANK of Massachusetts. Okay. I was trying to fill the gap over 
there.
  I will yield 2 minutes to the gentleman from Maryland (Mr. Cummings).
  Mr. CUMMINGS. Thank you very much.
  Mr. Chairman, I rise to express my support of H.R. 384, the TARP 
Reform and Accountability Act, a tough piece of legislation that brings 
overdue reforms to the management of the TARP program.
  I have consistently advocated for greater accountability from 
institutions receiving aid through TARP, while stressing that expanded 
relief for struggling homeowners be included in the legislation. This 
bill achieves both.
  When the Bush administration came to us last fall seeking our 
assistance to soften the blow of the worst financial crisis since the 
Great Depression, we heeded their call. We actually passed the $700 
billion financial rescue package to save Wall Street from itself, but 
we did so under the expectation that the Bush administration would make 
good faith efforts to adhere to and enforce the accountability measures 
Congress included in the bill. We further expected that the Bush 
administration would make good on its promise to steer TARP funds to 
troubled homeowners attempting to deal with foreclosure problems.
  In its use of the first $350 billion installment of the program, the 
Bush administration has failed on both fronts. As has been aptly 
reported by the Congressional Oversight Panel created to oversee TARP, 
the Treasury Department has systematically failed to ensure that 
taxpayer dollars spent through TARP are being used as effectively and 
efficiently as possible. In fact, we have no clear idea about how the 
funds are being used.
  We have seen the results of this lack of oversight with one example, 
and that is AIG, whose president I will be meeting with tomorrow 
morning. AIG has been the beneficiary of more than $150 billion in 
taxpayer dollars, including funding from TARP, and continues to hold 
luxury junkets for its top executives and award bonuses to ``retain its 
staff.'' As if this was not bad enough, the Bush administration has 
failed to meet its commitment to use TARP to stem the tide of 
foreclosures and has refused to impose any lending obligations on 
institutions.
  I have every reason to believe that President-elect Obama will better 
manage these funds, as he says he will. H.R. 384 gives him the roadmap 
to do that.
  Mr. BACHUS. Mr. Chairman, I yield 3\1/2\ minutes to the gentleman 
from Texas (Mr. Neugebauer).
  Mr. NEUGEBAUER. I thank the gentleman.
  I want to reiterate one point that was made earlier, and I think is 
maybe one of the most important points that has been made here today, 
and that is that we don't have another $350 billion. In fact, we didn't 
have the first $350 billion, and we had to go out and borrow that money 
from our children and our grandchildren in order to do something that 
nobody has really articulated what we were trying to do. We didn't have 
a plan. There was no accountability. But we went ahead and charged on 
the credit cards of our children and our grandchildren $350 billion, 
with the assumption we would do another $350 billion.
  The issue here, and the reason it is so important, and I am 
frustrated and I do not understand, this isn't the only money that we 
have committed. The Treasury, the Federal Reserve, the FDIC, have 
guaranteed billions and billions of dollars, and we are getting into 
the trillions. A recent Wall Street Journal article said that we could 
possibly be already in this at $6 trillion. Now, even in Texas that is 
a lot of money.
  But the question here is that it is not just this $350 billion that 
we are talking about. The other side is putting together a proposal 
right now. It is a stimulus package. The new administration is going to 
bring that any day. We don't know what that number is, but it has been 
reported anywhere from $800 billion to $1.3 trillion. Again, we don't 
have that $800 billion or $1.3 trillion.
  So when you add all this together, we are talking about in the next 
few weeks here committing $1.5 trillion of the American taxpayers' 
money with no plan, with no measure of what has happened to all of 
these unprecedented things we have done.
  Then the last point I want to make here is it is unprecedented, the 
amount of interference and injection that we have put the Federal 
Government into companies all across America, and the markets are 
trying to figure out what to do with this new player in the 
marketplace. And the question is, there was no exit strategy, so at 
some point at time somebody is going to blow the whistle and say okay, 
it is time to quit doing all of this government interference, hopefully 
sooner rather than later, and then the question is what is going to 
happen to the markets as the government begins to exit this? What is 
going to happen when all of these guarantees begin to expire, when all 
of these loans that we have made begin to come due, all of these 
investments that we have made in these companies start to have to be 
paid off? And the problem is that we are doing that all on a rapid fire 
basis with no clear direction.
  Now, the American people deserve for the United States Congress that 
they just recently elected and we were sworn in, they deserve for us to 
look and deliberate and make sure that if we are going to mortgage our 
children's and our grandchildren's future, that we at least do it in a 
way that we can look them in the eye and say we believe it is in their 
best interests that we do that; that we are looking at the 
effectiveness of the program, we are looking at how people are spending 
that money, and we have a plan on how we are going to end this at some 
point in time. Unfortunately, none of those exist today.
  Mr. Chairman, I encourage Members of Congress to stop and reflect. 
Let's vote this bill down and let's look and be accountable to the 
American people. They deserve it.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2 minutes to the 
gentleman from Indiana (Mr. Donnelly) who has been a very informed 
advocate for many of the industries that operate in his district.
  Mr. DONNELLY of Indiana. Mr. Chairman, I rise for purposes of 
engaging in a colloquy with the chairman, Mr. Frank.
  Mr. Chairman, title IV of the bill regarding consumer loans urges the 
Secretary to establish or support facilities to support the 
availability of consumer loans for autos and other vehicles. Is it the 
chairman's intent that consumer loans for recreational vehicles could 
qualify under such a facility?
  Mr. FRANK of Massachusetts. If the gentleman would yield, yes, it is. 
Let me say that the language is better now because of the gentleman 
from Indiana and the gentleman from Oregon (Mr. DeFazio) and some 
others who called our attention to an inadvertently narrow definition.
  Yes, recreational vehicles play an important role in the economy and 
in the people's quality of life, and they should be included.
  Mr. DONNELLY of Indiana. The manager's amendment included language 
urging the Secretary to establish a support facility to support the 
availability of small business loans, including dealer floor plan 
financing. On December 23, the Fed announced that the TALF program 
would include new car dealer floor plan loans.
  Is it the chairman's view that the Fed should generally consider 
expanding the TALF program to support other kinds of floor plan 
financing?
  Mr. FRANK of Massachusetts. Absolutely. If the gentleman would yield, 
I

[[Page 784]]

think that this is an important part of what the average American wants 
and needs and that this is part of the chain of employment, so I will 
be urging them to do exactly that.
  Mr. DONNELLY of Indiana. Thank you, Mr. Chairman. I urge all my 
colleagues to support this legislation.
  Mr. BACHUS. Mr. Chairman, I yield 2 minutes to the gentleman from 
Texas (Mr. Poe).
  Mr. POE of Texas. I thank the gentleman for yielding.
  I think the ranking member said it best yesterday when there were 
hearings on this that there was a time in this country when the people 
would go to the bank and borrow money from the bank. My grandfather was 
a banker for a good number of years, even back in the thirties, and 
when a person went to the bank, the bank would require sometimes that 
the bank would want to know what the money was going to be spent on, of 
all things, and then forms would be filled out and money would be 
loaned.
  Times have changed. Now the people loan money to the bank, to many 
banks, to the very special interest banks, and we know not what they 
are doing with that money, and certainly no background checks or forms 
were filled out by those banks before we gave them the money. Now we 
are being asked to do it again. We certainly don't learn our lessons.
  The cost of bailouts by this Congress last year exceeds the amount of 
the total cost of all the wars this country has been in; the American 
Revolution, the War of 1812, the Civil War, World War I, World War II, 
the Korean War, the Vietnam War, the Iraqi War, the Afghanistan War. 
These bailouts that this Congress is spending the taxpayer money on 
costs more than all of the wars put together.
  Maybe we ought to decide to do something else than continue to spend 
money that doesn't belong to us, but belongs to the American public.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2 minutes to one of 
the most informed members of our committee, the gentleman from Texas 
(Mr. Al Green).
  Mr. AL GREEN of Texas. Thank you, Mr. Chairman.
  Mr. Chairman, Dr. King, whose birthday we are about to celebrate this 
month, reminds us that the truest measure of the person is not where 
you stand in times of comfort and convenience, but rather where do you 
stand in times of challenge and controversy. Not where do you stand 
when there is no housing crisis and no unemployment problem, but where 
do you stand when unemployment is 7.2 percent, when you have lost 1 
million jobs in the last 2 months, when you have lost 2 million jobs in 
the last year. Where do you stand in times of challenge and 
controversy.
  In this time of challenge and controversy, I stand with the American 
homeowner, who is in crisis, who needs our help, who but for this piece 
of legislation will not get our help. I stand with the American 
homeowner, because this legislation provides $40 billion to $100 
billion to help homes that may go into foreclosure. In times of 
challenge and controversy, I stand with the homeowner.
  And I also stand for something else. I stand for having the TARP 
money be made accountable for. This piece of legislation deals with 
accountability. People want to know how their money has been spent.
  This legislation helps us to better understand how the TARP money has 
impacted new lending. The LaTourette amendment that passed this House 
overwhelmingly in the last session, the last time we met and had this 
bill before the House, that amendment is something that has been 
incorporated in this bill.
  So, Mr. Chairman, I thank you for a stellar job, a job well done, and 
in times of challenge and controversy, I stand with you, Mr. Chairman.
  Mr. GARRETT of New Jersey. Mr. Chairman, I yield 2 minutes to the 
gentleman from the great State of Texas (Mr. Gohmert).
  Mr. GOHMERT. Mr. Chairman, it is a pleasure to follow my dear friend 
from Texas, from Houston, the former judge in Houston. And I appreciate 
him saying he wants to stand with the homeowners. I don't think when we 
passed this bailout bill back in September we were standing with the 
homeowners, because we weren't.

                              {time}  1830

  That money got given to banks, all kind of places. We're still trying 
to find out where all of it went, and we don't know because the bill 
didn't have enough restrictions. So I appreciate the chairman trying to 
add restrictions.
  But in looking at all of this money, $350 billion still to be spent, 
with all our efforts to try to pin down the Secretary of the Treasury, 
try to keep him from giving it to his buddies and hurting his enemies 
and personal things that may or may not have happened so far in the 
last 4 months, you really want to stand with the homeowners.
  What I've been hearing from people, homeowners who got a little 
behind on payments, they got behind last summer when gas prices went 
up, many of them did, and they couldn't pay all the bills.
  So instead of having this money routed through the Secretary of the 
Treasury, as much as we might try to bind his hands, and then on around 
to maybe through banks and require them to lend, that kind of thing, if 
we provided a 2-month tax holiday where no withholding is taken out of 
the workers' check for 2 months, and then you don't take out FICA for 2 
months, then it's still more than paid for by the $350 billion. It's a 
2-month tax holiday.
  Now, President-elect Obama had said he would do exactly what this 
proposal does, except he'd have a $250,000 cap on income. I have a bill 
that doesn't propose the $250,000 cap, and it still comes in around 
$334 billion. That's what will help the homeowners. It's instantaneous. 
We don't have to put restrictions on it. We don't have to do anything 
other than let the homeowners have it.
  I've had some people tell me they want to get out from under their 
gas-guzzling car. But last summer when prices went up, the value of 
their car went down and they can't come out from under it. A 2-month 
tax holiday will do it.
  Mr. FRANK of Massachusetts. I yield 2 minutes to one of our very 
thoughtful Members, the gentleman from Illinois (Mr. Foster).
  Mr. FOSTER. I rise in reluctant support of the TARP program as 
executed to date, in optimistic support of the TARP program as it will 
executed by the Obama administration, and in full-throated support of 
H.R. 384, the TARP Reform and Accountability Act of 2009.
  While the actions we took last fall have done much to stabilize our 
system, our credit markets are still not functioning properly. 
Significant programs to reduce preventable foreclosures have not 
started, and more needs to be done.
  More than anything else, our economy runs on confidence. Confidence 
is an ephemeral thing that's easily squandered and extremely difficult 
to get back. Our financial system has been shaken to the core in ways 
that we have not seen since the Great Depression, and while I am 
certain that the actions that we took last fall helped us avert the 
abyss, we have to do more before we recover.
  And the most important elements for restoring that confidence are a 
clear and workable plan for the future, the resources necessary to 
execute that plan, and an assurance that we are all in this together, 
that the blood, sweat and tears, as well as the economic gain, will be 
equitably shared as we work out of this crisis. That is what this bill 
is about. And this second infusion of TARP money, well-spent, is 
absolutely vital to helping us restore that confidence.
  I would also like to associate myself with the colloquy regarding 
municipal bond markets. The loss of infrastructure spending due to the 
lock-up of the $2.3 trillion muni bond market is one of the most 
frustrating and tragic consequences of this financial crisis. Despite 
near-zero historical default rate, muni bonds are not trading at all, 
at rational levels or at all. Proposals to revive the muni bond 
markets, for example, with federally backed muni

[[Page 785]]

bond insurance, represent low-hanging fruit that should be captured 
with a modest investment of TARP funds, probably the biggest bang for 
the buck of any stimulus investment that I am aware of.
  As a member of the Financial Services Committee, I look forward to 
working with the chairman and the new administration on this important 
issue. I know Members are properly skeptical of the TARP effort.
  The Acting CHAIR. The time of the gentleman has expired.
  Mr. FRANK of Massachusetts. I yield the gentleman an additional 
minute.
  Mr. FOSTER. Given how badly the Bush administration mangled this 
first infusion of TARP money, Members are extremely wary of granting 
additional funds. But thanks to the diligent work of the chairman and 
former and current members of the Financial Services Committee, this 
bill contains substantial improvements over the original bill enacted 
last fall, and I believe it is worthy of this Chamber's support.
  Mr. BACHUS. Mr. Chairman, at this time, I have no other speakers and 
would like to reserve the balance of my time until the gentleman from 
Massachusetts has no further speakers and is ready to close.
  Mr. FRANK of Massachusetts. I would yield 2 minutes to the 
gentlewoman from Florida (Ms. Corrine Brown).
  Ms. CORRINE BROWN of Florida. First of all, let me thank you, Mr. 
Chairman, for your leadership on this area.
  I voted for the TARP bill, and I've got to tell you I've been very 
disappointed in many areas; whether we're talking about student loans, 
the fact that thousands of people are losing their homes through 
foreclosure, or whether the automobile industry, they can't get money 
to buy a car. And so I want to know what safeguards do we have in this 
bill to make sure that the banks will do what we intended them to do.
  The Europeans did the same thing. They used their money to stimulate 
the economy, but yet, for every dollar they got, they had to lend it 
out.
  Mr. FRANK of Massachusetts. If the gentlewoman would yield, what we 
say in here is, first, we have adopted in this bill the LaTourette 
amendment that the House did unanimously, to go back to the money 
already given and demand an accounting. That, we think, will put some 
pressure on them.
  But more importantly, going forward we say that the Treasury may not 
make any capital infusions until they have made an agreement with the 
recipient bank as to what they plan to do with the money. And we expect 
that, in most cases, that will be re-lending.
  We also make this point. The first chunk of money went primarily to 
the very large banks. They don't lend in the ways that the gentlewoman 
wants to see loans. One of the other things we're going to do is to 
increase funding to community banks in general, which we can trust. But 
even with those banks, the community banks in which we have confidence 
about how they're going to respond, we are going to insist that there 
be an agreement beforehand as to how they will use the money.
  Ms. CORRINE BROWN of Florida. Will that include credit unions?
  Mr. FRANK of Massachusetts. Yes, it does include credit unions.
  Ms. CORRINE BROWN of Florida. My second question regarding the re-
appraisal of real estate collateral that has affected the home builders 
in our country. I have an amendment in front of the Rules Committee 
which will permit lenders to extend or modify loan terms for home 
builders, so that they could continue to pay interest, without forcing 
them to pay large sums of principal during this economic crisis. I 
understand this issue is not covered by the bill. What assurances do we 
have that we will address this issue in the future?
  Mr. FRANK of Massachusetts. If the gentlewoman would yield here, and 
I appreciate her forbearance here. It's probably beyond the scope of 
this.
  The Acting CHAIR. The time of the gentlewoman has expired.
  Mr. FRANK of Massachusetts. I yield 1 more minute to the gentlewoman, 
and ask her to yield it to me.
  This question is requiring accounting, the accounting standards 
require them to write down the assets. I think that's reasonable. The 
problem is that once that's done, too many things automatically flow 
from that.
  There used to be a show called Truth Or Consequences. Our problem is 
truth and consequences. I don't want to dilute the truth, but I think 
we can have some flexibility in the consequences. The gentlewoman has 
given a very good example of that. It's an issue that this Financial 
Services Committee will be working on. I expect to have a serious 
hearing on this and consideration of it, and I know the gentlewoman 
will be helpful to us in putting this together and deciding how to 
respond.
  Ms. CORRINE BROWN of Florida. Once again, thank you so much for your 
leadership in this area.
  Mr. FRANK of Massachusetts. I yield 2\1/2\ minutes to the gentleman 
from Pennsylvania (Mr. Sestak).
  Mr. SESTAK. I rise to make four points in support of this bill.
  First, I believe the U.S. Government response has actually been too 
timid and too slow. Let me just take, for example, the failure of this 
House on the first vote in September to pass the initial bill, TARP 
bill. As a result of that, Mr. Paulson actually backed away from the 
initial purpose of this bill, which was to actually purchase distressed 
mortgage securities and to begin to give clarity, a price to them so 
that we might have attracted by now more private investment into the 
markets. Instead he had a mistaken policy that he pursued in his panic 
of actually putting more equity direct into the market.
  I believe, therefore, you've seen things happen that others have 
taken the place of our timid response. The Federal Reserve actually has 
stepped in, just for one example, actually guaranteeing in Citicorp's 
group, hundreds of billions of dollars of distressed equities, which 
we, in the TARP program, were actually meant to salvage.
  Second, I believe that we actually have had success. We have moved 
back from the apex of financial crisis, financial panic, when for the 
first week, in that first week in October, not one bond was issued in 
the United States; the first time that has occurred in the history of 
America.
  As we step back, we've seen the overnight bank lending rate actually 
fall from historic highs, significantly downward. That is important 
because every credit card in America is tied to that rate, and 50 
percent of every adjustable rate mortgage is tied to that rate as we 
salvage a more dire consumer credit and other types of credit 
challenges.
  Third, I believe that, as we have seen some success, as we've seen 
that the 10-year Treasury securities, and as our mortgage rates have 
fallen and the dollar has strengthened, much more needs to be done, and 
that's what this bill does. It institutes the accountability that is 
absolutely critical.
  If I learned anything in the Navy, expect what you inspect. And we do 
have the right inspection regime finally in this bill.
  As we also step back and begin to get money funding to those types in 
tier 2 that need, it the commercial banks that can give it direct to 
consumers for loans and to small businesses, and as we begin to salvage 
the mortgage foreclosure, which is the long pole in the tent for the 
recovery in our economic recovery.
  And the final point is this: Again, at sea, what I learned is when 
you were in a physical storm at sea, woe be that seaman that never took 
precautions because he thought it might be unnecessary.
  We are truly in a financial storm, and the U.S. Government is the 
only one who continues to take the precautions necessary in order to 
salvage us from this storm.
  Mr. FRANK of Massachusetts. I will inform my colleague, I'm about to 
get the last speaker before I will close. So I now yield 2 minutes to 
the gentlewoman from California (Ms. Eshoo).
  Ms. ESHOO. Mr. Chairman, I rise to engage in a colloquy with the 
chairman of the Financial Services Committee, Mr. Frank.

[[Page 786]]

  When Congress originally drafted the Emergency Economic Stabilization 
Act of 2008, I worked with the chairman to ensure that local 
governments would be covered under the Troubled Assets Relief Program. 
And the reason that we needed to do this was that there were so many 
that had invested in very conservative instruments in Lehman Brothers.
  In my congressional district alone, in San Mateo County, they lost, 
or have lost $150 million in Lehman Brothers securities, and they're 
not alone. At least 19 California cities and counties, the Commonwealth 
of Massachusetts, as well as hundreds of other local governments across 
the country have incurred losses like this.
  The losses have resulted in teachers being laid off, the termination 
of ongoing construction projects, and the reduction of so many of the 
critical services that our constituents rely on every day.
  My intention today is to confirm authority granted to the Treasury 
Secretary in the Emergency Stabilization Act of 2008 and the urgency 
for the future Secretary of the Treasury to use it effectively.
  So to the chairman, does the Treasury Secretary have the authority, 
under TARP, to purchase troubled assets by local governments?
  Mr. FRANK of Massachusetts. If the gentlewoman would yield, yes, he 
does. And the purpose of this bill is not simply to confirm that the 
authority is there, but to say that we expect it to be used, and to 
demand that if it is not used we get a written explanation as to why 
not.
  And I think it should be noted, if the gentlewoman would continue to 
yield, the gentlewoman from California, earlier the gentleman from 
Virginia, most recently the gentleman from Illinois, really a fairly 
good geographic stretch, have all made the point that the 
municipalities have been the unfair victims of this financial crisis, 
and we do some things to help that in this particular legislation. We 
will be doing more. And I thank all three of them and many others who 
have brought this to our attention.
  Mr. BACHUS. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, ladies and gentlemen, in September Congress rushed to 
approve $350 billion to prevent what we were told was a doomsday 
scenario, that Secretary Paulson and Chairman Bernanke warned could 
bring down our financial system. They said, if we failed to act to 
stabilize our financial markets our banking system could cease to 
function. Very serious words. And we did act.
  Now, just last week, we approved $350 billion with an option, if 
necessary, to commit another $350 billion. Just last week, in a letter 
to Congress, to Members on both sides of the aisle, we were told by 
Secretary Paulson, and let me quote, ``We have, in fact, met our 
original, stated objectives, which were to immediately stabilize the 
financial system by strengthening financial institutions, arresting the 
wave of financial organization failures, and establishing a basis for 
recovery.''

                              {time}  1845

  You'll recall back then that six of our largest institutions 
collapsed within a month or two.
  Now, what began back in September as an emergency response to 
stabilize our financial markets has morphed before our very eyes into a 
string of taxpayer-funded bailouts. I don't think you've failed to 
notice that. I know the American people have not. Trillions of dollars 
in taxpayer-backed guarantees and loans have been extended over the 
past 5 months.
  A week after Secretary Paulson announced that the September 
legislation had met its original goals, they came back again. The 
government and his agents and his agencies are ready and are anxious to 
dole out another $350 billion in, what I call, a grab bag of free 
taxpayer money.
  But before the government and the new Obama administration can spend 
this additional $350 billion, they are required by law to submit a 
detailed plan, telling the Congress just how they intend to spend the 
taxpayers' money. They are required to tell us not only how they intend 
to spend it and what they're going to do with it, but they are to go 
into detail. I would think that means the purpose of each program, the 
amount of money, the recipients, the amounts, and perhaps whether AIG 
is included. How much is going to them?
  At a time when Americans--our families, our constituents--are 
struggling to make ends meet and to make their mortgage payments, 
that's only fair. We need to be informed. It's a duty we ought to take 
seriously. We need the facts. We need all of the facts, not just some 
talking points, not just some broad suggestions. Not only do we need to 
know and to look at it as we require them to do, but the American 
people deserve no less.
  We do know some things. We do know that special interest groups and 
their lobbyists are lined up to grab their piece of a very expensive, 
taxpayer-funded pie. They're calling on most of us, and have this week. 
They're ready. They're anxious. There is a sense of urgency there. They 
want a piece of the taxpayer.
  We know for sure that Chairman Barney Frank's bill before us today 
isn't going anywhere with or without amendments. It's not going 
anywhere. The Senate has repeatedly indicated that they have no 
intention of taking it up, much less of passing it. Is that my 
interpretation? No.
  Let me quote the chairman of the Senate Banking Committee. ``Congress 
doesn't have time to take up Chairman Frank's plan to spend the 
money.'' We've had the Paulson plan. Now we've got the Frank plan. I 
guess we've got the Obama plan, but the Frank plan is never going to 
see the light of day.
  The chairman of the Senate Banking Committee came back. He was asked 
to clarify, and he again reiterated. He said, ``Trying to flesh out a 
bill form is really impossible.'' We just don't have the time to do it. 
We're not going to do it. It's not going to happen.
  What about the detailed plan requiring the administration to tell us 
how they intend to spend these additional hundreds of billions of 
dollars of taxpayer money, which was a requirement that was essential 
in convincing Members to vote for the bill in September? We're not 
going to vote for it; we're not going to pass it unless we get attached 
to the request a detailed plan telling us where it's going, telling us 
who is getting it, telling us how much, giving us detailed terms.
  Well, Mr. Chairman, we don't have that plan. Here is what we have. 
Here is what is attached to this request for $350 billion. All we have 
are these 322 words. Mr. Chairman, that's more than $1 billion per 
word. What did we get? We got a document that basically consists of six 
talking points, some of which sound good, but they are nothing that 
inform us or the American people as to how the money will be spent.
  For example, here is what the plan says that was submitted on the 
request of the Obama administration. It will ``focus resources on 
measures that achieve goals in the most effective and efficient 
manner.'' That sounds pretty good. Let me repeat that. ``Focus 
resources on measures that achieve goals in the most effective and 
efficient manner based on current and forecasted financial market 
conditions.'' Do you know who that's going to? Do you know how much?
  Here is another one. There aren't many words here, but here are 
another 10 of them: ``TARP programs should encourage broad 
participation.'' That's not even close to a detailed plan. Perhaps 
we're supposed to rely on the incoming administration to provide us 
with these details of how they will spend the money. After all, as I 
said, they've requested the current administration to send this request 
up. Here is the plan. No. No. The new team was going to change things, 
but apparently not. It's the same old, same old. They haven't attached 
a detailed plan required by Congress for the American people or for 
this Congress.
  Although not here, instead, they've sent us a three-page letter with 
five more talking points. So I guess, maybe, you could take these, 
which are part of the thing we'll vote on and part of the five talking 
points they've sent. It was

[[Page 787]]

just one of their economic advisers who sent it.
  What was the response to that little five-page letter from one of 
President-elect Obama's advisers? Well, the congressional Democrats 
said this: ``It fails to meet our standards.'' They said that they 
needed more details than the letter provided. They've not gotten it.
  A letter is not a law, and that's why the chairman brought this 
before the Congress. A letter is not a law, so he brought this bill, 
but then the Senate said forget it.
  So, 3 months after the House has passed legislation, here we are 
without any clue as to where the money is going, with embarrassing 
consequences, and we are going to do it again. We are at it again. We 
have not learned a thing.
  Chairman Frank and the Democratic leadership, you're again on the 
floor, claiming there is no time for careful consideration under 
regular order, with a 75-page bill that was introduced less than a week 
ago. No committee markup will ever be held on this bill. Why not? I 
don't know. I wrote the chairman. I said, ``Why can't we have a 
markup?'' I've not received a response, perhaps because a markup isn't 
necessary. Amendments aren't necessary. This debate is not necessary. 
Its only purpose is to grease the skids for congressional approval of 
yet another bailout. Oh, we got some conditions; we got some terms; we 
passed a bill to nowhere; we gave it our best shot. It didn't come from 
a committee, and it's going absolutely nowhere.
  Someone talked about this wonderful opportunity we were going to have 
today to define how this money was going to be used. Well, folks, a 
bill that is going nowhere isn't much of an opportunity. It has no 
legal effect. Where should the request for this $350 billion go? I say 
back to the current administration and to the new administration until 
such time as the American people and this Congress get the facts.
  Why do they suddenly need another $350 billion? Is it another $350 
billion sedative for the stock market to calm it for a week or two? Who 
exactly gets the money--what industries? under what conditions?
  Mr. Frank has talked about foreclosures and mitigation. It's a worthy 
thing. Well, I looked to the Obama administration official and what he 
said about that, and he said, ``Hope for homeowners. Hope for 
homeowners.'' Now, Mr. Frank, the chairman, wrote, ``Hope for 
homeowners,'' and 13 lucky homeowners have received a mortgage or a 
mortgage workout, 13. I suppose and I believe that the chairman is 
going to work out a new mortgage program, but we don't know what it is. 
We don't know how much money is going to it.
  The President-elect says he is going to change the bankruptcy laws. I 
wonder how. I wonder if we shouldn't get some detail from him. He says 
he is going to make some bold changes in how this money is spent. He 
has said that he is going to see that distressed homeowners and people 
who can't pay their car notes receive relief out of this money. I would 
invite you to read those three pages. Above all, he says he is going to 
change; he is going to change; he is going to change.
  Do you know the one thing he didn't change? No details, no terms, no 
identification of recipients. He has certainly not been more 
transparent and accountable. He could have waited 5 days, and he could 
have filed a detailed plan, and he could have told the American people 
and this Congress before we voted exactly what he wanted to do, but 
instead, we get a bill that's not going anywhere, and we get to put 
some amendments in it. That doesn't sound like much of a change. In 
fact, it almost sounds like we're going backwards, because we're not 
going to pass any conditions this time, none whatsoever.
  Who gets the money? Under what conditions? We and the American people 
are going to have to wait. Then I say we vote. We need to do what's 
right, not what's popular. We need to do what's right. We need to be 
informed. Yes, there is a sense of urgency, but there also should be a 
thorough debate, and we ought to know the details of the plan. To be 
informed, we need to know the facts, and we don't have them. That's the 
bottom line, and a bill to nowhere doesn't change that.
  Mr. Chairman, there was a time not too long ago when it was the banks 
that loaned money to the people. Today, unfortunately, it's the other 
way around. Banks are asking the people to loan them money. They're 
asking our constituents, our voters--many of them struggling to pay the 
very banks that are asking again for help.
  The President-elect says that he is going to see that more bold steps 
are made to inject capital into those banks. He is going to spread it 
out. He is going to give some of the banks money that didn't get the 
money before. He is going to change some of the terms. Now, I have not 
a clue--and neither do you--as to how, but let me tell you something, 
one thing, and I will close with this:
  It is time that the banks started lending money to people, not the 
other way around. We, on behalf of the taxpayers and our constituents, 
can put a stop to this, and we can do it now. We can tell the current 
administration and the next administration ``no'' to yet another $350 
billion blank check bailout. Enough is enough.
  Thank you, Mr. Chairman.

                              {time}  1900

  Mr. FRANK of Massachusetts. Mr. Chairman, I will use our remaining 
time.
  People may have a little difficulty reconciling the speech they just 
heard with the person who made it. The gentleman from Alabama last year 
voted for the 700 billion the second time, not the first time. He was 
in and out of the negotiations on it, told us he would participate, 
then was told he couldn't. He did finally vote for it.
  We ought to be clear what's happened, and I understand the need to 
stay at a position.
  The new deputy, the new whip of the Republican Party, was quoted in a 
publication here, Congress Daily, as saying that the gentleman from 
Alabama was allowed to keep his position as the ranking member because 
he'd agreed to engage me. Not, let me say--less I cause great problems 
given the obsessions on the other side--to become engaged to me. I 
don't want people to be confused. It was that he would engage me.
  Mr. BACHUS. Mr. Chairman, thank you for clarifying.
  Mr. FRANK of Massachusetts. I did not yield to the gentleman.
  And that's what you see. That's the only explanation I could give for 
this dodge and whirlish, frankly, pattern of activity I can't fully 
understand. Again, he did vote for it.
  What we are seeing, I would say this, if you're listening to the 
Republican arguments today, this is the going away present to George 
Bush. Remember that the $700 billion was a major initiative of the Bush 
administration, insisted upon by Bush officials or Bush appointees: Mr. 
Bernanke and Mr. Paulson.
  At the request of the President--I put the ``President''; he's still 
the President--as an independent actor is the one who triggered this 
issue. If he had not done so and had waited a couple of weeks, no, we 
wouldn't be here today. We would have been following the regular order.
  But President Bush, at the request of President-elect Obama--but 
President Bush did it--triggered on Monday a 15-day period. We will 
have to vote early next week on whether to approve or disapprove the 
second TARP, and that was George Bush's approach.
  So we're here because George Bush, at the request of President Obama, 
asked us to release the second 350, and we're here because George Bush 
asked us to do the first 700 billion.
  I do not think in American history there has been as thorough a 
repudiation of a President by members of his own party, as we have 
heard from the Republican Party today and elsewhere. But they are 
entitled to repudiate their President. I salute their perspicacity.
  What they are not entitled to do by logic is to say that because the 
President they supported, the President they campaigned for, the 
President they honored, because they are so disappointed with the way 
he conducted

[[Page 788]]

one of his major initiatives that this Congress gave him, that they 
will deny the new President these tools.
  Now, I don't like the foreign policy of the Bush administration. But 
I don't think we should say that Mr. Obama cannot have a State 
Department.
  The TARP is not an independent organism with a spirit of its own. 
It's a set of tools. There was apparently unanimity in the Congress 
that the Bush administration did not use them well, although the 
gentleman from Pennsylvania on our side and others have made the point 
that they did some good.
  By the way, that's one of the interesting things on the Republican 
side. They have insisted, first of all, that the TARP did no good 
whatsoever; and secondly, that it succeeded to the point where we don't 
need the second half. If you read what some of them have said, that's 
what they said. Several quoted Mr. Kashkari as saying, ``Well, 
Kashkari, who's running this under George Bush, says things have been 
stabilized.'' Yeah. He says they've been stabilized in part because 
we've had this. So quote Mr. Kashkari who says this is worksome to 
argue that it should never have been done in the first place.
  Now let me address this issue of this odd thing that says we should 
be independent, we should assert ourselves, and what should do? We 
should wait for the President to give us a plan. That's an odd form of 
assertiveness to wait for the President to give us a plan. I didn't 
want to do that. Most of the House does not want to do that, and we are 
here to tell the President what we think has to be done.
  And the gentleman has engaged in one of the, I think, least 
persuasive techniques, a straw man. Yes, Mr. Summers did a letter, 
which he had up there. That is by no means the only indication that we 
will have. And in fact what we are getting is is a specific agreement 
from the Obama administration to the terms of this bill.
  For example, on foreclosure--and the gentleman said, and I'm baffled 
by this, ``we don't know what he means by `foreclosure.''' Well, he 
said we need the facts.
  You can subpoena someone to tell you what he knows. You cannot 
subpoena someone to be told things. You can subpoena information out of 
someone. You can't subpoena information into someone.
  There is a concept from ancient theology, which I do not impute to 
anybody here in defense of the House rule, called invincible ignorance. 
But invincible ignorance is immune to facts. It is immune to logic and 
cannot be overcome. We have made very clear--the gentleman from 
California, who's technically on this--at least 20 billion to go into 
the plan put forward by Sheila Bair, a Bush appointee of the FDIC. 
That's very specific. It's not Hope for Homeowners. It's a separate 
plan.
  Secretary Preston, a Bush appointee at HUD, has told us that there 
is, in the original bill, authority to buy home mortgages and that will 
work. So there is another specific: buy home mortgages that are in 
people's portfolios and reduce them, which we mentioned in the bill. 
The Sheila Bair plan.
  Now, Hope for Homeowners, the gentleman is right. We passed Hope for 
Homeowners, and it was too constricted. It won't work. We constricted 
it some; the Senate further.
  Now, by the way, when we were passing Hope for Homeowners, the 
Republican mantra was, ``This will cost us $300 billion dollars.'' 
Preposterous at the time. Now they are arguing, ``Well, it was too 
restrictive.'' They are right this time. They were wrong the first 
time.
  Part of the reason it was too restrictive is that we were concerned 
about this argument that we were spending too much.
  So we do propose here--and I hope in the recovery program--to fix 
Hope for Homeowners so we will have Hope for Homeowners, and we will 
work with the Federal Reserve to try to make Hope for Homeowners more 
workable.
  So we are talking about three specific approaches: A more workable 
Hope for Homeowners, which reduces principal; the Sheila Bair plan, 
which reduces interest; and the Preston plan, which buys up mortgages. 
We also intend to use more money here through Fannie and Freddie.
  The notion that nobody knows what we mean by mortgage foreclosure 
could be advanced seriously. I don't know whether that's a form of 
engagement that will satisfy the Republican leadership and the 
Republican Study Committee, to which the gentleman has to pay some 
attention; but we have very specific numbers, we have a commitment from 
the Obama administration, from Mr. Geithner, and from Mr. Summers that 
they will spend at least 100 billion of the 350 on mortgage foreclosure 
reduction. And if they can't, they will tell us in writing why they 
couldn't; and they will spend no less than 40.
  Now you could not be more specific. The gentleman knows this. This 
isn't a line in Larry Summers' letter. What's the purpose of pretending 
that you don't know that we have this commitment to at least 100 
billion, no less than 40, and 100 unless they can tell us in writing 
why it isn't done.
  As far as the banks are concerned, we're very specific here. Well, 
one we passed the LaTourette amendment that Members here voted for. 
Apparently they thought it was meaningless. I didn't think it was 
meaningless. I thought a Republican Member, Mr. LaTourette, had a good 
amendment, and we made this part of the bill; and we have a commitment 
from the Obama administration to enforce it.
  Now, it is possible that the Obama administration will break its 
word. It is not unheard of for administrations to break their word. We 
believe the Obama administration will abide by its commitment to follow 
this bill if it's passed.
  I understand the skepticism on the Republican side because we're 
telling them that we have a commitment which we accept as valid from a 
new administration that they will abide by the bill as it passes the 
House. We haven't experienced where the bill could pass both houses and 
be signed and be ignored. So I understand their skepticism that a 
President will pay respect to a law.
  But again, here is the fundamental flaw. They would visit the sins of 
the Bush administration on the Obama administration.
  We still have a financial crisis, and yes, Mr. Kashkari said things 
have gotten better, but he didn't say this isn't necessary. Secretary 
Paulson thinks they're necessary, the Federal Reserve thinks they're 
necessary, the Obama administration thinks it is necessary to use the 
$350 billion wisely. We are putting limits here on how it could be 
used. And it is possible, and it's true.
  The Senate doesn't plan to pass the bill they tell us now. That is 
often the case. It's the first time I've heard the Republicans say 
that's the reason for us not to do things.
  But here is the point: We will pass this bill, I hope. We will then 
probably see the 350 made available, and I trust the Obama 
administration. But if they don't, hanging over their heads will be 
this bill in the Senate--and they don't plan to pass it now--but I 
believe its being there as a live option will make a difference.
  As to participation, no, we haven't had a markup because we are not 
formally constituted. If President Bush had waited and asked for this 
in a couple of weeks, we would have had a regular markup. Instead, 
we've had a very open process, and we have elicited amendments. Oddly, 
some would argue that because we got over 70 amendments, that shows 
that Members were somehow unhappy. In fact, we have accepted the great 
majority of those amendments, including many of those offered by 
Republicans. Now, many Republicans didn't offer amendments, but those 
that did, we have accepted some and we put others in order.
  So here is the issue that we come down to.
  The Republican leadership voted for this bill--not their whole 
membership, but the leadership did. They were in, they were out; but 
they voted for it. They then saw their administration had administrated 
so badly that they've decided to punish the Bush administration by 
denying a vital tool to the Obama administration. It's like the story 
of the mother who says to the

[[Page 789]]

teacher, ``My child is very sensitive. So if he misbehaves, smack the 
kid next to him because that will impress him.''
  Well, Obama is the kid next to the people who misbehaved. Don't smack 
him. Don't tell a new President who won an election largely in 
repudiation of your party's candidate that you're going to deny him 
this tool.
  We think that if the 300 and--note the Republicans who opposed this 
haven't said that if the Obama people follow this pattern, it will be 
wrong. They took some shots at foreclosure. Some of the more 
conservative Members think we should do nothing about it. Most of them 
don't want to say that.
  The question is this: Do we tell a new President that he doesn't have 
the authority, or do we give him the authority with a set of rules to 
which he agrees?
  Mr. POSEY. Mr. Chair, as a new Member in the 111th Congress, I did 
not have the opportunity to vote against the Troubled Asset Relief 
Program, or TARP, when it passed last year. At the time, I raised a 
number of concerns with the program, including the enormous risk to the 
taxpayer while our Nation's budget deficit skyrockets. While the 
Secretary of the Treasury warned of catastrophic consequences if TARP 
failed to pass last year, the case has yet to be made this time that 
the remaining $350 billion ought to be spent. Let us also remember that 
after the TARP bill passed, the Treasury shifted its approach away from 
purchasing troubled assets, as expected by Members of Congress who 
voted for the bill, and focused instead on giving money to banks. 
Treasury's use of taxpayer money remains clouded and lacks clear 
results deserving yet more of our money to spend.
  I welcome this bill's requirements to increase oversight of the TARP 
program through reporting requirements and the establishment of TARP 
objectives and benchmarks. The Congressional Oversight Panel 
highlighted the Treasury's astonishing inability to explain what banks 
are actually doing with the taxpayer money that was handed over to 
them. That is unbelievable and we ought to remedy this.
  That said, we are asked to vote on a bill that ostensibly improves 
the TARP program, but is being considered in a rushed process and 
without proper deliberation. We just received a copy of the 74 page 
bill on Friday afternoon. HEW Three days later, we received a 23 page 
amendment from the bill's author. That doesn't inspire much confidence 
in this process. Many agree the frenzied passage of the TARP bill last 
fall resulted in the need to clean it up later. So today I ask: What is 
the hurry and why can't we have more deliberation on ideas to improve 
the program? In yesterday's Financial Services Committee hearing, which 
touched on this bill indirectly, we heard from panelists with some 
ideas for TARP and other economic tools worthy of discussion. Why can't 
we take time to digest these proposals and determine whether their 
ideas should be incorporated with this new version of the TARP bill?
  I doubt this bill will live up to its expectations. Recent 
discussions in Congress have rightly addressed ongoing foreclosures. 
Yet I am concerned that the bill builds on a housing program, the Hope 
for Homeowners program, whose track record is dismal. While it was 
predicted that the program would help around 400,000 homeowners, this 
$300 billion program received fewer than 600 loans for modification and 
government guarantee. The legislation before us weakens Hope for 
Homeowners requirements, such as borrower certifications and 
documentation, which are intended to reduce the possibility of the 
taxpayer having to pick up the tab. This bill does not sound like the 
solution we are looking for.
  Mr. MEEK of Florida. Mr. Chair, I rise in general support of H.R. 
384.
  The bill requires that the Treasury implement some combination of 
programs designed to mitigate foreclosures.
  This is very important to the people of my home state of Florida. 
Florida has the second highest foreclosure rate in the nation, placed 
only after Nevada. In November of 2008, one in every 173 Florida 
housing units received a foreclosure filing, nearly three times the 
national average. Broward County leads the state with over 6,800 new 
foreclosures in November, while Miami-Dade County follows close behind 
with over 6,400 new foreclosures filed in November.
  In the last economic stabilization package the Troubled Asset Relief 
Program, TARP, was created. Money for this program was supposed to go 
to help stabilize banks, and was originally thought to be used for 
lending and the prevention of foreclosures. So far, the money has only 
been used to help shore up banks, and has not actually been used to 
restructure mortgages or otherwise prevent foreclosures.
  Frank's bill H.R. 384 requires the commitment of between $40 billion 
to $100 billion to help mitigate foreclosures.
  The bill does not lay out a substantial plan to use this money to 
prevent foreclosures, but instead requires any plan created by the 
Secretary to comply with several elements, leaving the door open as to 
how exactly the funds will be used.
  While the bill grants the Treasury flexibility in designing programs 
to stabilize the industry, I will be asking the new Secretary to make 
refinancing and modifications of current mortgage notes a requirement 
for participation by any lender in a program that seeks to purchase all 
or part of a troubled asset.
  I have filed H.R. 421, which requires that lenders must attempt to 
refinance and modify the loans of their borrowers who are facing down 
foreclosure to a payment that is 30 percent or less of their gross 
monthly income to the extent that they are capable of doing so. If they 
do this, then the Treasury would be authorized to purchase the 
difference between the original note and the modified note.
  Not only would this keep homeowners in their homes, it would provide 
them with means to pay other bills, invest, and otherwise contribute to 
the economy.
  This would provide an incentive for banks to work with borrowers 
whose homes are in pre-foreclosure rather than simply giving them a 
backstop to protect their bottom line.
  Banks must document their best efforts to create these affordable 
payment plans before foreclosure if affordable payment plans cannot be 
made with the borrower.
  My concept's priority is to keep people in their homes through 
affordable payment plans and help them regain their economic purchasing 
power.
  But, the added benefit is that this program would be less costly to 
the Federal Government than one which simply buys out troubled assets 
at the full amount of the loan.
  H.R. 384 gives the Secretary of the Treasury the means to pursue this 
course of action, while also giving the Congress significant oversight 
over the people's money.
  I support H.R. 384 and hope my colleagues will join me in voting 
``yes'' on this bill.
  Mr. TOWNS. Mr. Chairman, I rise in support of H.R. 384, the TARP 
Reform and Accountability Act of 2009. This bill will improve the 
Troubled Asset Relief Program that was enacted as part of the Emergency 
Economic Stabilization Act last year by increasing the transparency of 
financial institutions use of taxpayer funds, closing certain 
loopholes, and strengthening accountability of the Program.
  The bill also requires the Treasury Department to commit significant 
funding to addressing the growing home foreclosure crisis facing our 
nation. The housing crisis is at the heart of our current economic 
problems, so this is a much needed step.
  H.R. 384 requires financial institutions which receive taxpayer funds 
to account for the use of those funds on not less than a quarterly 
basis. To date, the banks and other financial institutions which have 
received billions of taxpayer dollars have refused or been unable to 
account for how that money has been spent. That is simply outrageous, 
and I am glad this bill addresses that issue.
  The Special Inspector General for the TARP has also informed me of 
several issues which would improve his ability to hire experienced and 
talented staff in an expeditious manner. One would be to clarify that 
his office has law enforcement authority. This is clearly needed to 
ensure that his investigative staff can issue subpoenas and make 
arrests, if necessary. I believe the intent of the original legislation 
was to include this authority, so this is only a matter of 
clarification.
  Also, other Special Inspectors General have the authority to re-hire 
federal employees who have retired. That enables them to quickly hire 
experienced auditors and investigators. While this is an issue which 
needs to be examined closely, I believe it may be appropriate for the 
Special Inspector General of the Troubled Asset Relief Program to have 
similar authority.
  While neither of these provisions are included in the bill before us, 
I believe they would improve the operations of the Special Inspector 
General's office, and would hope to work with Chairman Frank to address 
them in future legislation.
  Ms. McCOLLUM. Mr. Chair, I rise today to express strong 
disappointment in the Treasury Department's failure to exercise 
oversight and accountability in its implementation of the Troubled 
Asset Relief Program, TARP, that Congress specifically required in the 
Emergency Economic Stabilization Act, EESA.
  American families are struggling as we face the most major economic 
crisis since the

[[Page 790]]

Great Depression. Thousands of Minnesotans have lost their jobs or face 
foreclosure on their homes. Late last year, Congress, in consultation 
with the Bush administration, acted swiftly to pass EESA to 
aggressively address the financial crisis. The Troubled Asset Relief 
Program under this legislation was enacted so the Treasury Department 
could buy bad assets of financial institutions--including mortgage 
debt--to thaw credit markets and increase confidence in the financial 
system. The first $350 billion dollars of funding under the TARP were 
disbursed to the U.S. Treasury Department with the understanding that 
the funds to financial institutions would be tied to strong oversight 
and transparency to ensure maximum effectiveness in helping struggling 
Americans.
  Unfortunately, the Treasury Department has ignored the original 
intent of the TARP. Instead of buying bad debt and stemming housing 
foreclosures, the Treasury has enacted the Capital Purchase Program, 
which has dumped billions into the banks in the hope of thawing the 
credit markets. This decision was matched with a complete failure to 
conduct oversight for the funds. Treasury has implemented none of the 
oversight of financial institutions that was called for in EESA.
  Reports released this month from the Congressional Oversight Panel, 
COP, created by Congress to act as a watchdog, state, ``The recent 
refusal of certain private financial institutions to provide any 
accounting of how they are using taxpayer money undermines public 
confidence.'' The Treasury Department's failure to hold financial 
institutions accountable means that American taxpayers have no idea 
what these institutions have done with hundreds of billions of dollars 
of taxpayer money. This is outrageous betrayal of the public trust and 
the intent of Congress.
  While I appreciate the need for flexibility to go forth in response 
to this crisis, there is no excuse for an absolute failure to ensure 
accountability in the use of a massive taxpayer funded account. As 
Congress debates whether to release the second half of the TARP funds, 
an additional $350 billion, I urge the highest scrutiny and strongest 
demands of oversight for the Treasury Department and its plans for the 
remaining funds. The American people deserve nothing less. I appreciate 
Chairman Frank and President-Elect Obama's calls for increased 
accountability and transparency in the implementation of the TARP and 
look forward to working with the 111th Congress to enact timely, 
effective policy to address the foreclosure crisis, protect taxpayers, 
and boost our economy.
  Mr. BLUMENAUER. Mr. Chair, last fall, I opposed the initial round of 
financial recovery spending on the grounds that there were too many 
unknowns about what, and who, our federal dollars were financing. 
Subsequent events, which revealed that many recipients continued to 
hold back from making the loans necessary for economic recovery, 
justified my initial position.
  With H.R. 384, Congress is beginning this process to recover and 
renew America's economic strength with a new administration. Further 
congressional action is necessary because the efforts to date have been 
off the mark. This bill is the first step to providing guidance to the 
new administration, which has already learned many of the lessons from 
the past administration's failed effort.
  I have come to this juncture today with an even greater sense of 
urgency than even last fall. Thanks to this legislation we can provide 
hope to American families. This legislation puts stronger oversight 
mechanisms in place and requires the Treasury Department to reach 
enforceable and measurable agreements on the use of TARP funds. The 
legislation also places strong limitations on executive compensation, 
provides strong foreclosure relief, and includes significant incentives 
that will aid homebuyers struggling to refinance their loans. For these 
reasons, H.R. 384 deserves my support.
  Mr. RYAN of Wisconsin. Mr. Chair, the Emergency Economic 
Stabilization Act of 2008, passed last October, not only granted the 
Treasury the authority to use $350 billion in public funds to prevent a 
collapse of the financial system, but it also greatly expanded the 
Federal Reserve's policy toolkit in addressing the crisis through a 
somewhat obscure, but important, provision of the legislation. The bill 
authorized the Fed to begin paying interest on the reserves that 
commercial banks hold with the central bank. This ability has 
essentially allowed the Fed to establish a ``floor'' for the federal 
funds rate, the main lever of its economy-wide monetary policy stance, 
even while it greatly expands the provision of liquidity to various 
segments of the financial markets to address the crisis. To this end, 
the Fed has been increasing the asset side of its balance sheet through 
a variety of lending facilities and asset purchases. The scope of its 
lending has also been amplified by frequently invoking emergency powers 
under the Federal Reserve Act's ``unusual and exigent circumstances'' 
clause, which it has used to justify lending to important, non-
depository financial institutions.
  The Fed has made it clear that it will continue to expand its balance 
sheet to make sure that credit is available to consumers and small 
businesses and the integrity of the overall financial system is 
preserved. In recent months, for instance, the Fed has established new 
and innovative lending facilities intended to boost the flow of funding 
to the commercial paper market and key asset-backed security markets, 
it has committed itself to purchasing billions of mortgage-backed 
securities in order to keep mortgage rates low for the health of the 
housing market, and it has continued to play a key role in providing 
assistance to systemically important financial institutions. These 
actions on the part of the central bank have, in fact, come very close 
to replicating the original intent of the TARP program. And these 
actions, along with the deployment of the initial $350 billion of TARP 
funding, have shown signs of being effective--the economy is still in a 
precarious state, but a systemic, and catastrophic, collapse of our 
financial and credit markets has been avoided.
  My fear is that the second $350 billion in TARP funding will go far 
beyond the original mission of preserving overall financial market 
stability, and instead will be used to fund a heavy-handed, neo-
industrial policy. Various industries have already marshaled their 
lobbyists for a claim on these public dollars. And with our Federal 
budget expected to reach historic levels this year, we cannot risk more 
public funds to be squandered.
  In light of the Fed's vastly expanded policy options for addressing 
key sources of market turmoil going forward and their relative 
effectiveness--combined with the very real risk that more TARP funding 
will be used for an industrial policy--I am voting against the release 
of the second half of TARP funds. Although I am concerned about the Fed 
moving into new and expanded policy territory, that concern is temperer 
by the fact that the Fed is relatively insulated from politics and 
lobbyists and is more singularly focused on the stability and health of 
the financial system, which was my foremost reason for approving the 
original TARP funding last October.
  Ms. McCOLLUM. Mr. Chairman, I rise today to express my support for 
the TARP Reform and Accountability Act (H.R. 384). I thank Chairman 
Frank and the House Leadership for their hard work on this legislation, 
which brings focus, accountability, and transparency to the 
implementation of the Troubled Asset Relief Program, TARP, to make it 
an effective tool to stabilize and revive our economy.
  Our country faces the bleakest economic forecast since the Great 
Depression of the 1930s. Today, millions of Americans are struggling to 
find jobs, keep their homes, and pay their bills. Last fall, to prevent 
the collapse of our financial markets, the 110th Congress swiftly 
passed the Emergency Economic Stabilization Act (EESA). With this 
measure, Congress entrusted the Bush administration's Treasury 
Department with $350 billion from the Troubled Asset Relief Program to 
purchase bad debt--including mortgages--from financial institutions in 
order to thaw credit markets and increase confidence in the financial 
system. Unfortunately, in implementing the TARP, the Bush 
Administration failed to address housing foreclosures, resume the flow 
of credit, or perform oversight of financial institutions receiving 
assistance under the TARP.
  As the 111th Congress considers releasing an additional $350 billion 
in TARP funds to the Treasury Department under the Obama 
administration, we must be assured the additional money will be spent 
responsibly and transparently.
  The TARP Reform and Accountability Act addresses fundamental flaws in 
the implementation of ``TARP I'' by closing loopholes and enforcing 
strict accountability and transparency. The act ensures that TARP funds 
aid American families at risk of losing their homes as originally 
intended by Congress by mandating foreclosure relief and making 
improvements to the Hope for Homeowners program. In addition, stringent 
executive compensation limits for all past and future TARP assistance 
will prevent taxpayer dollars paying for corporate bonuses.
  Once again, I thank Chairman Frank for his leadership and urge my 
colleagues to join me in supporting this important, timely legislation.
  The Acting CHAIR. All time for general debate has expired.
  Under the rule, the Committee rises.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. Al 
Green of Texas) having assumed the chair, Mr. Sires, Acting Chair of 
the

[[Page 791]]

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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