[Congressional Record (Bound Edition), Volume 155 (2009), Part 16]
[Senate]
[Pages 21404-21405]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     FINANCIAL MARKETS AND HOUSING

  Mr. ISAKSON. Mr. President, last night the President of the United 
States, in the preface to his address on health care, addressed our 
economy and the current state of affairs. I think he made a very 
accurate assessment that we had hit the bottom and we were on the 
bottom. The question that lies before us is how we move from the bottom 
in this economic time back to a period of prosperity.
  Although unemployment applications for benefits are down, they are 
still extraordinarily high. In my State of Georgia, unemployment is 
10.3 percent. In the United States of America, the average home--47 
percent of them--is worth less than is owed upon the house. That is a 
very bad situation which over a protracted period of time will continue 
to suppress consumer confidence and keep us at a low point in our 
economy.
  There are many ideas about what should be done, but I want to talk 
tonight about two things. One is something that has already been done 
by this Senate and the House and signed by the President and one is 
something I hope between now and November 30, the Senate, the House, 
and the President can do.
  First, in terms of what we have done. Senator Conrad of North Dakota 
joined with me in introducing a piece of legislation known as the 
Financial Markets Crisis Commission. I enjoyed a lot of support for 
that, including from the distinguished Senator from Rhode Island. The 
appointees have been made. It is a bipartisan commission, has a budget 
of $5 million, has subpoena powers--everything the 9/11 Commission 
had--and has an unbridled charge to investigate every aspect of the 
financial markets, whether it is the rating agencies, the investment 
bankers, the regular bankers and traditional bankers, the GSEs such as 
Freddie Mac and Fannie Mae, every component, and report back to us by 
the end of next year, which is right after the midterm elections, on 
what it finds happened that caused the economic collapse that began 
last September and continued to mushroom until late March of this year.
  There are some who are talking of a rush to judgment in terms of 
financial regulation. But I hope we will take a pause, give this 
commission time to act, and let's find out what a forensic audit tells 
us of what happened in America in our financial markets, and let's 
respond to that after we have all the facts. I think a rush to 
regulatory judgment under what one might think, for the best of 
intentions, caused the problem could have the unintended consequence of 
having a more difficult impact on the economy than it should.
  I think this body and the House acted wisely. I appreciate the 
President having signed it expeditiously, and I commend the majority 
leader, the minority leader, the Banking Committee chairman, the 
ranking member, the Speaker of the House, the Republican leader in the 
House, and the majority leader in the House for making outstanding 
appointments.
  The appointees to this commission could not be elected officials and 
they could not work for the government. They have to be people 
knowledgable in the field of finance. They are 10 of the brightest 
minds in our country. I have my ideas. I am sure the Presiding Officer 
has his ideas. I think every Member of the Senate has ideas about what 
did go wrong last year and what we need to do to correct it.
  But let's get all the facts on the table. Let's get a forensic audit 
so when we move we move with due knowledge and in due course. The 
biggest mistake in Sarbanes-Oxley a number of years ago was a rush to 
judgment in reaction to Bernie Ebbers and

[[Page 21405]]

Ken Lay. Sarbanes-Oxley, although needed and appropriate, reached 
further probably than it should have in a number of cases. The same 
potential lies again in terms of financial reform if we move too 
quickly or precipitously or without all of the information. So in the 
interest of our economy, let's wait for this report to come back before 
we rush to judgment.
  Now, secondly, on the 30th of November, the first-time home buyer tax 
credit that passed this body last July and was amended in February 
expires. The first-time home buyer credit is a byproduct of an original 
bill I introduced along with a number of Members of the Senate to 
provide a $15,000 credit to anybody buying and occupying a home in 
America as their principal residence. It got parsed down and finally, 
in negotiations, became a first-time home buyer credit only, means 
tested for incomes of $150,000 or less. It has had a positive impact on 
the market.
  But America does not have a first-time home buyer problem. America 
has a move-up-crisis problem. Right now, no one who is in a house in 
the middle of the market, from $200,000 to $600,000, can sell their 
house. Transferees from Georgia to the State of Washington or from 
Rhode Island to Florida are frozen. They cannot sell in Rhode Island to 
buy in Florida. They cannot sell in Atlanta to buy in Washington State.
  The housing market is literally at gridlock. The majority of sales 
being made in the last few months are short sales and foreclosures, 
which is depressing further the value of housing. The few direct arm's-
length sales that are taking place are, in fact, spurred on at the 
lower end of the market by the first-time home buyer credit.
  So I ask the Senate to think for a second: What happens on December 1 
of this year when that credit goes away to the housing market? Well, I 
will tell you. I used to be in that market. The worst month of the year 
is December, to begin with. Housing purchases are seasonal, and in the 
winter, December, January, and February are always the low months. If 
you take away the single impetus that exists, what do you have? Nothing 
more than short sales and foreclosures and a continuing decline in 
equities and values.
  But if before that expiration date takes place the Senate could take 
a legitimate look at what is in the best interest of moving our economy 
off the acknowledged bottom where we are today, it is fixing the one 
thing that led us into our difficulty, and that was the collapse of the 
housing market.
  I would submit if we took the $8,000 housing tax credit for first-
time home buyers, extended it to $10,000, made it eligible to anybody 
who bought and occupied a house as their principal residence, whether 
it was their first purchase or their tenth purchase, we would move more 
real estate and move more impetus to the housing market than it has 
seen in the past 24 months. As we do that, consumer confidence comes 
back, equities and values come back, the borrowing power of the 
American public comes back, and our economy comes back. Failure to do 
so and we remain in a quagmire where we are today, which is no 
legitimate sales, declining values, a loss of equity, and a continuing 
high unemployment rate and a continued depressed marketplace.
  So as we come back from our August break, as we begin to look 
forward, as we look at the end of the year, as we look at those things 
that are terminating, those things that need to be considered, let's 
pause for a second and realize the good that the tax credit has done so 
far, as limited as it was, and let's make it better. Let's extend it to 
July 1. Let's make it $10,000. Let's take the means test off. Let's 
give an impetus to the move-up market. If we do, values will return, 
unemployment will go down, our economy will turn, and consumer price 
confidence will go up. I would submit it is a part of the main solution 
we need to take an economy that is on the bottom and move it back 
toward equilibrium and prosperity for America.

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