[Congressional Record (Bound Edition), Volume 155 (2009), Part 2]
[House]
[Pages 2742-2749]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          THE AMERICAN ECONOMY

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentleman from Iowa (Mr. King) is recognized for 
60 minutes.
  Mr. KING of Iowa. Madam Speaker, I very much appreciate the privilege 
to address you this evening on the floor of the United States House of 
Representatives. And I also appreciate the dialogue that takes place 
here on the floor. This is the most deliberative body anywhere in the 
world. And we have a privilege to be part of it. And as we engage in 
this debate, it is the circumstance that across this country, Madam 
Speaker, people listen in. And they're reading the newspapers and 
following the blogs and watching their cable news networks and also 
some regular TV. And as this conversation goes

[[Page 2743]]

on here, Madam Speaker, it echoes out across the entire land. And as 
this conversation echoes across the entire land, it also becomes part 
of the national dialogue, this national dialogue that takes place in 
our schools, in our churches, at the workplace, in the coffee shop, in 
the break room, across the backyard fence, on the snowmobile and 
outside doing chores.
  Over and over again, Americans interact with each other. And while 
that is going on, they talk about a lot of things that matter to them 
such as the aftermath of the Super Bowl, but also current events. And 
America is, at this point, transfixed on the current event of the--I 
think not aptly named--``stimulus plan'' that is being debated over in 
the Rotunda of the United States Senate, Madam Speaker.
  And so as this American conversation takes place, they are moving 
towards a consensus. And sometimes we don't achieve that consensus, 
Madam Speaker. But the more dialogue we have, the more facts that are 
brought to play, and in fact many Members in this body know that if 
they can bring the emotional anecdote to play, it also moves people's 
opinions.

                              {time}  1930

  The things that move people's opinions bring us towards a consensus. 
When we arrive at a consensus, that consensus, if America's consensus 
doesn't match up with the Congressional census you will see many 
Members, Madam Speaker, in this Chamber will shift their position to 
realign themselves with their constituents.
  Now, there are two ways to do this job. One way is to stand up and 
lay out the framework of the principles that we believe in as 
individual Members, and then hang on to that framework, attach to it 
the components of public policy that are compatible with the 
fundamental belief framework. That's what I believe I've done. And I 
very much like the input that I received from my constituents the 
people from my State and across the country, that adds to my knowledge 
base so that I can make a reasoned, informed decision. That's the 
approach I think the founders had in mind when they wrote this 
Constitution and established this constitutional republic, was that 
there would be representatives in this constitutional republic that 
would come here. We owe our constituents, all of them, our best effort. 
And more importantly, Madam Speaker, we owe them our best judgment. 
That's one way of doing this job here in the United States Congress.
  The other is, Madam Speaker, to take a position that you're going to 
get in front of your constituents, see where they are going, check the 
wind speed, the barometer, so to speak, and then put up a vote and take 
a position that reflects the position of your constituents. That goes 
on in this Congress too often, Madam Speaker, and it troubles me. It 
troubles me because we are elected for our effort and our judgment, and 
we owe our constituents our best judgment. But if our judgment is just 
simply to check the wind, put our finger in the air, then we're not 
offering to the system we have here the things that we should have to 
contribute.
  And I would bring a little anecdote of Robespierre to mind. He was 
pretty well established within the French revolution. He was an 
advocate for the effective and ruthless utilization of the guillotine 
to get rid of his political enemies and get rid of the aristocracy that 
he believed had drug the French down and brought about this revolution. 
But as the people marched in the streets Robespierre went to the window 
and looked out and saw the mobs marching through the streets in France. 
This would be about 1789. And he said, I'd better get in front of them 
and see where they are going for I am their leader.
  Now, that's no kind of leader that just simply tries to lead the mob 
wherever it is that they happen to be going. And some months later 
Robespierre was one of about 16,000 Frenchmen and women that found 
themselves a head shorter. But that kind of leadership didn't work very 
well for Robespierre, and it doesn't work very well for the United 
States of America.
  It's our task to have a vision for the future. We need to articulate 
that vision. We need to articulate the principles that we believe in 
and build policies around those tried and true principles that have 
created this great American Nation. It isn't going to be a giant mosaic 
of 435 Members that stick their finger in the wind and decide what 
position they're going to take that will extend their tenure here in 
the United States Congress, Madam Speaker. It's going to be the people 
who look into the future with a vision that they can sell to the 
American people and say, maybe you're not here yet. Maybe you're not 
ready to move where we need to go. But this Nation is too important to 
be a reactionary Member of Congress. We've got to be leadership Members 
of Congress. We're each elected for our leadership as well.
  So let me submit, Madam Speaker, that I look back on last year's 
vote, that vote before the election. There was a $700 billion bailout, 
without a prediction on the prospects of it's success, it simply was an 
emphatic request from then Secretary of the Treasury Paulson that he 
needed to have a checking account with $700 billion in it, all borrowed 
money, I might add, so that he could spend it at his discretion to pick 
up the toxic debt, as he described it. And that's how we ended up with 
the TARP fund.
  And so we let the first half of that out, the $350 billion. And the 
second half was contingent upon the successful deployment of the first 
half. And I've seen not the signs of success of that first half. In 
fact, our stock market has continued to tank. Our economic indicators 
are going in the wrong direction. There's $350 billion that went into 
his hand that much of it did get expended, with the other $350 billion, 
and now this Congress has approved that it go there. It only took the 
approval of one body to do that. And the Senate did that. That's a 
start on this economic stimulus component.
  But I did not hear a clearly articulated argument back then, back 
that started here on September 19 when Secretary Paulson came to this 
Congress and culminated in a vote that was in early October. I didn't 
hear clearly articulated principles that they would adhere to on how 
America was going to get back on track.
  And so I look on this continuum of mistakes that have been made, and 
I take us back to a year, and it's my recollection, it's not confirmed 
date, but about 1978 when the Community Reinvestment Act was passed and 
became law. That's a component of the flaws that we have. It was 
legislation that I think was inspired for the right reasons. I think it 
was well-intentioned, but it turned out to be a large mistake. And it 
was because there were lenders that would redline certain inner city 
neighborhoods that they decided that the value of the real estate 
wasn't going to be sustained in those neighborhoods and sometimes the 
residents didn't have a very good credit rating. So, with the 
combination of those two things they just said these whole 
neighborhoods we're not going to loan money in. People there couldn't 
buy a house. They can't buy a house. That sent the real estate value 
spiraling downward. And a blanket decision like that, by drawing a red 
line around the map was the wrong thing to do, Madam Speaker. But the 
roots of problem were created out of the good intentions of trying to 
provide for loans for residences within those neighborhoods that had 
been redlined, and the Community Reinvestment Act was born. And it was 
refreshed again in the early '90s, I believe it was 1993, brought up to 
a little more modern language.
  Once you lay down a foundation and a parameter like that, then you 
encourage the lenders to give bad loans. And when the lenders were 
giving bad loans in order to be positioned so that their portfolios 
were a certain percentage of those bad loans, doing so so they had the 
ability to expand, and we had an economy that was expanding, although, 
going to the '80s it was not. We had our farm crisis, our real estate 
crisis and our energy crisis all together in the '80s and we lost 3,000 
banks in the United States. And I remember clearly the load and the 
difficulties that we had. My neighborhood and myself included, aged 
very quickly during those

[[Page 2744]]

years of the '80s. So the Community Reinvestment Act from 1978 didn't 
turn out to manifest itself in its negative composition because we had 
an economic crisis in the '80s that was taking banks down and requiring 
the FDIC to come in and take over the banks and make some moves to prop 
back up our financial world. And they did some moves then in the '80s 
that we haven't done here in this particular era.
  But in any case, by the time we got into the early '90s, the 
Community Reinvestment Act was re-established and refreshed; and at 
that point, things started to move. When we got into the late 1990s and 
the early 2000s, then we saw unnatural interest rates. We saw the money 
supply such that the interest rate was driven down. Part of the reason 
for that was to create an economy that would create a housing boom. So 
if you have a housing boom that's driven by low interest rates, people 
would look at that and conclude that they could build a new home or 
they could buy a high quality used home that allowed someone in that 
used home to build a new home. And the housing boom began. And it set 
up a market that exceeded the demand. And we reached the point where we 
had the highest home ownership of any time in our Nation's history. I 
remember President Bush announcing that we'd reached 68 percent of the 
people in America lived in their own homes. And I think that number got 
marginally higher after he had made that statement.
  But in any case, as this came together we had a lot of those were bad 
loans. We had bad loans that were made into these neighborhoods under 
the incentive of the Community Reinvestment Act and facilitated in a 
very large way, by Fannie Mae and Freddie Mac. Fannie Mae and Freddie 
Mac, who had been set up as a quasi-government entities, later 
privatized, and then moved towards the quasi-government agencies again, 
and here on the floor of this Congress, when the problems began to 
arise and we saw that Fannie Mae and Freddie Mac weren't capitalized 
consistent with the other lending institutions, their competitors, and 
they weren't regulated in the same fashion as their competitor lending 
institutions, that gave an unfair advantage to the Fannie Mae and 
Freddie Mac institutions who were the secondary loan market. And they 
nearly cornered the secondary loan market, the mortgage market in the 
United States.
  And we came to the floor in this Congress once in 2001, plus or minus 
a year on that one if you might, Madam Speaker. But again, and made the 
debate that we should regulate Fannie Mae and Freddie Mac more like 
other lending institutions because it was too high a risk for the 
taxpayers to take. Well, that amendment and that effort failed in those 
earlier years in this millennium, Madam Speaker.
  And then, I remember the date, it was here on this floor and it took 
place from that microphone there and that microphone over there. It was 
an amendment that was brought to the floor October 26, 2005, by 
Congressman Jim Leach of Iowa, who was and remains very well respected 
among the banking community and the lending institutions. He brought an 
amendment that would have brought Fannie Mae and Freddie Mac into the 
similar capital requirements of the banks, and the similar regulatory 
requirements of the banks.
  I think he stopped one step short with that amendment. I think he 
should have moved them towards the clear free market side of this. But 
in any case, as that amendment was debated, twice in this millennia, 
twice in this last decade at least we've had an opportunity to get 
Fannie Mae and Freddie Mac right.
  They were, again, Madam Speaker, playing off and capitalizing on the 
language in the Community Reinvestment Act that said make bad loans in 
these neighborhoods that don't have a very good value of their real 
estate. But twice we turned away from shoring up Fannie Mae and Freddie 
Mac, tightening them up, putting them back into the competitive 
marketplace. And so we found ourselves in a situation, when AIG was 
ready to go under and the $85 billion got poured in there about in that 
era, that's a little bit before that, Fannie Mae and Freddie Mac became 
very unstable and we had to step in as the Federal Government and 
nationalize the balance of Fannie Mae and Freddie Mac. Now the 
taxpayers own Fannie and Freddie. And now Fannie and Freddie don't have 
any new regulation that requires them to meet those capital and 
regulatory requirements. But we missed an opportunity to privatize them 
and regulate them according to the other lending institutions. The 
compound effect of the Community Reinvestment Act, mark-to-market 
accounting, the credit default swaps that were taking place, the lack 
of regulation on Fannie Mae and Freddie Mac and the defense that came 
from the now chairman of the Financial Services Committee, from 
Massachusetts, who stood at that microphone and debated Mr. Leach, who 
was at this microphone, and at a certain point the political center of 
gravity on that debate went towards the gentleman from Massachusetts, 
and I think the lobbying effect had an effect on the result as well, 
Madam Speaker.
  But in any case, the Leach amendment went down. That was our last 
opportunity that I know on this floor to get Fannie Mae and Freddie Mac 
right.
  So we had large financial indicators that were going in the wrong 
direction. And as this started to tumble it started to snowball down 
hill it took us to this point on September 19, when Secretary Paulson 
came to the Capitol and insisted that he have the $700 billion checking 
account to spend as he saw fit, and within those narrow parameters. 
Well, not so very narrow parameters, within a broad definition, a huge 
authorization/appropriation, and maybe the largest that had ever passed 
out of this Congress. And I'm not certain about that. But it was huge.

                              {time}  1945

  So it brought us to this point where there was a $700 billion bill on 
the floor of the United States House of Representatives, and that bill 
passed off the floor with, I think, too many Republican votes, and I 
would have been pleased if it had had none, but there were an awful lot 
of Democratic votes as well, Madam Speaker. That was the time that this 
Congress passed the Rubicon. It was the time we had a chance to draw 
back.
  If cooler heads had prevailed and if we had gone back and had 
actually gotten a do-over on that, I do not believe the $700 billion 
bailout bill would have passed, because the American people have now 
seen what has unfolded. They expected to see the markets increase and 
stability come into our marketplace and to see capital that had been 
chased to the sidelines come back into the marketplace again. It has 
not done that. In fact, it looks like more capital has gone to the 
sidelines because money is smart, and smart money finds its way into 
the best investment at the time. Right now, that money has been scared 
out of the marketplace.
  I listened to the gentleman from Minnesota, who left the floor a 
moment ago, Madam Speaker, and he talked about the surplus that we had 
in the year 2000. That happens to be the last year of the Clinton 
administration. It is true that we had a surplus during several of 
those years, and the gentleman from Minnesota, I will say, recognized 
that he was in the process of misspeaking and backed up to say that the 
budget surplus was an accomplishment of the administration at the time. 
At least that was the implication of his words. It was not a quote. I 
don't want it to be characterized as that, Madam Speaker. Then they go 
on and argue that this deficit is a deficit that comes out of the Bush 
administration, and so here we are.
  We have a Member of Congress here who will argue and who has argued 
that the Clinton administration deserves the credit for the surplus 
that was in our budget in the year 2000 and that the Bush 
administration deserves the blame for the deficit that we have today. 
Well, all right. On the surface, maybe you can make that connection, 
and I would be happy to have this dialogue with the gentleman from 
Minnesota. Should he arrive on this floor,

[[Page 2745]]

I would be happy to yield and have that dialogue.
  The first point I would make is that all of this spending starts here 
in the House of Representatives. There is no President who can initiate 
spending. There is no Senator who can initiate spending. According to 
the Constitution, all appropriations bills start here in the House of 
Representatives. We start them here, and they cannot be authorized and 
they cannot be spent until the majority of the House of Representatives 
approves them. Sure, we start them here. We send them to the Senate. 
The Senate passes them. They come back to a conference. We conference, 
both vote and pass them. If they pass, then they go to the President 
for his signature. Yet the House, if determined and organized and 
unwilling to cave in to the Senate or in to the White House, controls 
every penny of spending that comes through this United States 
Government--every penny of appropriations. We do it here. It is ordered 
by the Constitution.
  So it does not do for any Member of Congress or for the rest of the 
world to say, Madam Speaker, that the responsibility was in the hands 
of the President. Although, we recognize that the Presidents do exert 
significant influence on the judgment of Members of Congress and that 
they do present a budget to this floor and that they do negotiate those 
budgets, because they sit back with the veto power that gives an 
appropriate tension that helps bring out a negotiated solution most of 
the time.
  Madam Speaker, Congress has the responsibility, and the President 
cannot initiate spending, and so I will submit this: this $700 billion 
bailout plan that passed last year was on our watch. It was on my 
watch, and it was on the watch of the gentleman from Minnesota. I voted 
``no.'' He can speak to how he voted. I believe I recall that was a 
``yes.'' The $700 billion, as big a mistake as I believe it was, was 
also a mistake that was made not just by the gentleman from Minnesota 
but by the current President of the United States, who voted for the 
$700 billion plan as a Senator of the United States, and that is 
attached to him as his responsibility. He needs to answer for the $700 
billion bailout plan that gets attached to this huge stimulus package 
that he is partly the author of and the advocate of.
  So, even though the stimulus plan passed out of the House with not a 
single Republican vote, when it came time to vote for this stimulus 
plan, so to speak, the ``yes'' votes by the Republicans were a big 
goose egg up on the scoreboard. Not one Republican thought it was a 
good idea to roll out this $819 billion in spending in the stimulus 
plan from the House, which was accompanied by $347 billion in interest 
liability that goes with it.
  You have to pay interest on your debt. We are probably going to end 
up borrowing money to pay interest on the debt, and I can tell you that 
spirals downward pretty fast.
  When added to the roughly $100 billion in the Senate, the $819 
billion takes it up to about $900 billion. The interest rate that is 
out of the House side, $347 billion, is the low number. The lowest 
estimated number I can come up with, with the interest and with the 
Senate dollars in there, is $1.25 trillion in stimulus money. That 
number is $1.247 trillion. That gets coupled to the $700 billion that 
was the bailout plan from last year, the $700 billion that President 
Obama and the gentleman from Minnesota voted for. Now the $1.25 
trillion that is being debated in the United States Senate is all his. 
The President owns that. When you add that together, it rounds pretty 
handily to $2 trillion.
  Now we have a $2 trillion bailout/stimulus plan and a stock market 
that continues to tank and a financial world out there that lacks 
confidence that government has been doing the right thing since the 
election and, in fact, since before the election. We have watched our 
economy spiral downward. We have watched our market indicators spiral 
downward. We have watched our unemployment rates go up. Those 
indicators do not indicate confidence in the leadership that we have in 
the financial world.
  So the financial world, the investment world, the people who are 
putting capital in that is used to expand the productivity and the 
distribution and the market share of our companies, are pulling their 
capital out. They are increasingly holding it. They are buying bonds. I 
am sure that some of it is sewn up in the mattress by now, that some of 
it is invested in gold, that some of it is invested in foreign currency 
as well. Although, I am a bit surprised that our dollar has held up as 
strongly as it has, and that is more an indicator of the weakness of 
foreign currency rather than a reason to consider there to be strength 
in this U.S. dollar today. In any case, the supply of U.S. dollars has 
gone up, and as it has, the instability goes with it.
  So we have a $2 trillion stimulus plan that is 100 percent lock, 
stock and barrel owned by President Obama, who said to us that it is 
one leg of a multi-legged stool that has to be built in order to get 
this economy back on track again.
  Now let me submit that there are two ways to look at this economic 
situation. One of them is the Keynesian approach, which is, if 
government can pour enough money into the economy and get enough money 
into the hands of enough people who will take that money and spend 
enough of it, that it will stimulate the economy. So, if more people go 
out and buy a loaf of bread or buy a car or maybe go to the theater or 
to the ball game or maybe buy a ball glove themselves, that increased 
spending will stimulate a demand that will cause more manufacturing and 
more goods to be brought into our economy. That is the Keynesian 
approach.
  The problem with it is that, looking back in history and at the times 
when we have done such things, the actual economic numbers do not 
support the idea that pouring money willy-nilly into the economy in an 
indiscriminate fashion results in the stimulation of our economy.
  I will not argue, Madam Speaker, that there aren't some places where 
government can invest money that does stimulate the economy. One of 
those places would be investing in transportation links that open up 
development in new areas and that help goods and services move back and 
forth in a more efficient fashion. That does create economic 
development. Transportation has been the number one best tool to use to 
grow economic development throughout the history of all of humanity.
  So I do not take it all off the table, but there is much that is on 
the table that I would take off. I would not put a dollar into the 
National Endowment for the Arts and call it economic development or 
stimulus.
  Here is another piece that I was just looking at. Of the 
infrastructure funding within the stimulus package, there is language 
in there that bans that money from going into facilities that allow 
religious worship in them. To me, it looks like that is a first 
amendment violation in that we would discriminate against facilities 
that allow people to pray and to have religious worship. Maybe they've 
got a different definition of ``religious worship'' than I have, but I 
don't know of a single school where there isn't prayer that takes 
place, not just by students who are sitting there, taking a test, but 
by faculty/administration where prayer is also a part of their daily 
lives.
  I can think of the public school where my kids graduated. On the 
Friday after September 11, the superintendent invited in all of the 
pastors in the community and brought together all of the students in 
the school, K through 12. They had a prayer service there for the 
victims of September 11 and for this Nation, which was in great peril 
at the time. It was an open, full-blown prayer session in the gymnasium 
of the public school. That is worship, Madam Speaker.
  If none of those dollars could go to a public school like that 
because people prayed inside that building, I have to tell you I think 
there are folks writing this legislation who are praying on the 
constitutional rights of the American people. I would reject that 
thought process. I would find the person who

[[Page 2746]]

put that language in there--I suspect it was a staff person more than a 
Member, but the Member must have facilitated it--and I would pull them 
out root and branch. We don't need those kinds of people in this 
Congress who are going to put America's religious faith as a target and 
write it into legislation and exclude facilities from public finance 
that allow worship in them. It is an outrageous thing. It is the most 
outrageous.
  Among the other outrageous things that are in this bill or where 
there have been precedents set and parameters set: $400 million for 
education and for the prevention of sexually transmitted diseases. 
Economic stimulus plan. I wonder what economic guru and I wonder what 
department of economics would be sitting around to come up with an idea 
like that.
  I know that President Obama has said that he is familiar with the 
College of Economics at the University of Chicago, where he taught 
constitutional law. I don't know that that would be the kind of a 
policy that would emerge from a think tank at the University of 
Chicago. I suspect not.
  As for the places I have been and as for the people whom I have met, 
if I took them seriously, it would not come out of their economics 
departments either. I can't imagine the mindset of people, who have the 
public trust, drafting into legislation legislation that now is in the 
$900 billion zone, plus the more than $347 million in interest. I can't 
imagine what kind of a think tank would produce an idea that got past 
the first sentence where we would stimulate the economy by investing 
$400 million in sexually transmitted diseases. It may be a good 
program, but I can tell you, Madam Speaker, that the return on that 
investment with regard to a stimulus plan would no way in the world be 
measured in our economy by investing $400 million in sexually 
transmitted disease prevention. So that is one of those bizarre ideas. 
If that is a stimulus plan, that is not it, not for me, not for the 
taxpayers of America, and it ought to be out of there.
  I will just read from this: ``In order to control and prevent 
sexually transmitted diseases, the Centers for Disease Control used its 
budget for the following purposes:'' This is within the existing budget 
of the Centers for Disease Control. ``A transgender beauty pageant in 
San Francisco that advertised available HIV testing.'' There would be 
an economic stimulus plan within the budget of the CDC, I presume. I 
would reject that as well. The Centers for Disease Control funded an 
event also put on by the Stop AIDS Project called ``Got Love: Flirt, 
Date, Score'' that taught participants how to flirt with greater 
finesse. This our Federal tax dollars.
  It embarrasses me to read that for two reasons. One is this dialogue 
in this public sphere makes me a little uneasy. The other is that we 
have people who are entrusted, Madam Speaker, with the American 
people's tax dollars who would, with a straight face and maybe even 
under the light of day, take that money and divert it to these kinds of 
projects.
  I have a list here. I cannot bring myself to read the rest of it 
because I think that it goes downhill from there. In fact, clearly, it 
does.
  So a $700 billion bailout plan, coupled with a $1.25 trillion 
stimulus package. It is a $2 trillion approach here that is designed to 
supposedly stimulate and fix this economy. The President has said that 
he inherited a $1 trillion deficit. I do not know that it is $1 
trillion--it may be--but he also owns a $2 trillion bailout/stimulus 
plan. It is his plan. He voted for the $700 billion.

                              {time}  2000

  He's advocated the 1\1/4\ trillion, even though I think that the 
President's approach to this is slightly more reasonable than that of 
the Speaker of the House, Madam Speaker, in that there's at least been 
lip service paid to the idea that there should be a little more 
stimulus in it, a little more for small business, and there should be 
less in this wish list. But when I look at the wish list, it comes to 
me this way. It appears to be the huge wish list that's been produced 
by the activist liberals in this Congress, Madam Speaker, and they 
can't seem to restrain themselves from jumping on this and putting in 
everything under the sun that they couldn't get passed when they were 
held more accountable.
  One of the former Members of the Congress who has been an effective 
leader on the other side of the aisle, from where I stand, said never 
let a crisis go to waste. Well, I have to tip my hat to that 
philosophy, however much I disagree with it. The Speaker, the 
leadership, the Chairs of the committees, both Appropriations, 
Financial Services and a number of others, have not allowed this crisis 
to go to waste. They've jumped on it with every opportunity to expand 
government, to grow government, to raise the baseline, to pour hundreds 
of billions of dollars and, in fact, cumulatively $2 trillion into this 
President Obama-owned $2 trillion bailout/stimulus plan that has no 
record of working.
  And there's a belief over on this side of the aisle--and I'd love to 
do this debate on the floor of Congress one day, maybe even today, 
maybe even tonight. There's a belief that Franklin Delano Roosevelt 
somehow saved America from the Great Depression. Well, I looked at 
that. I was taught that. I sat in the classrooms from probably eighth 
grade on where it was the mantra that FDR saved us from the Great 
Depression and won World War II. In fact, I didn't hear my parents 
rebut that either. It didn't come from the home when I began to look at 
it differently.
  I will say FDR was very, very useful in fighting and winning World 
War II. He was great for the spirit of America. He held our will 
together, and it was a hard thing to do, and he provided a high level 
of confidence in American military and our Commander in Chief that was, 
I will say, essential in winning World War II in the way that we did, 
but that doesn't equate into giving him a pass into what went on in the 
1930s.
  And I'm not here either, Madam Speaker, to advocate that my Iowa 
President, Herbert Hoover, got everything right. He got almost 
everything right up to and until the time--in his entire life, he was a 
magnificent individual, an utterly brilliant man that sometimes the 
things he touched literally turned to gold, speaking of the gold mining 
industry in Australia. His life and his history was just a never-ending 
string of success, which gave him a sense, I think, of false confidence 
that he could manage an economy, support Smoot-Hawley, and use the 
government to get us out of an economic problem.
  That set the stage for FDR to be elected in 1932, who came into this 
and began to kick off the New Deal, the New Deal that had within it a 
multitude of projects. Ones that come to mind are WPA, the CCC. There 
were a number of others. And as I watched that unfold, I went through 
the history of the New Deal, having been taught continually that the 
New Deal was what bailed us out of the Great Depression.
  And so when I was a junior in high school, I was assigned the task of 
writing a term paper, and I don't recall clearly, but I believe I had 
to select from a list of possible topics, and I think we might have 
been able to offer our own. But in any case, I chose the New Deal and 
the Great Depression and FDR because I had been convinced by the 
educators that FDR got us through the depression, and it was his 
creativity and innovativeness that saved us from that economic crisis.
  And so I began to do the homework to write that term paper, and I 
took it very seriously. It was a project for me and it was personal. It 
was personalized and it was internalized. And the big part of it for me 
was to go into the public library, the public library, the Carnegie 
library in Denison, Iowa, where I went to high school. I sat down in 
there and I began to pull the newspapers. The newspaper was a county 
seat newspaper, remains today, same newspaper, county seat of about 
6,500 people today, and they published twice a week.
  I began getting those old newspapers out, and I started when the 
stock market crashed in October of 1929, and I

[[Page 2747]]

read that newspaper thoroughly, took my notes. There were no copy 
machines in those days, so I was preparing the footnotes for the term 
paper that I was writing. And then I went through newspaper by 
newspaper, turning the pages, reading the relevant articles that had to 
do with the financial situations, any layoffs that we had, any notices, 
advertisement by banks, interest rates, things of that nature.
  I actually remember the cigarette commercials stood out to me as 
being far different than they were even at that time, and as I read 
through those newspapers and tracked the beginning, the discussion, the 
dialogue, the acts of Congress and the implementation of the components 
of the New Deal, I read it all the way through twice a week, newspapers 
from October 1929 all the way up until the Japanese attacked Pearl 
Harbor, December 7, 1941. At that point, all the news became war, and 
it was impossible to track the economics in any kind of a relevant 
fashion.
  But it was a good study period to look at. October 29 to December 
1941, every newspaper, took notes, wrote footnotes, wrote a term paper 
which I wish I had it today, and I actually looked for it and can't 
find it. But in any case, when I completed that study and was ready to 
put the term paper together, I remember sitting in the room, the 
newspaper room in the library, looking up at the ceiling and thinking, 
this is far different than I thought it would be.
  I really didn't see evidence there that the New Deal had stimulated 
the economy. I didn't see evidence it had saved us from the depths of 
the Great Depression. I couldn't follow that huge vast government 
programs, government taking over entity after entity and managing an 
economy, I couldn't see the evidence that it had significantly reduced 
unemployment. I couldn't see the evidence that capital had come into 
the investment markets, and if you tracked the Dow Jones Industrial 
Average, that Dow stayed down and way down throughout the 1930s, and 
unemployment that was about 25 percent going into FDR's first term hung 
in there pretty tough all the way through. And I believe the lowest 
unemployment we had throughout that entire decade was 14 percent.
  Now, those things that I saw, that I read, when I come into something 
with a conclusion that I'm seeking to ratify with evidence and walk 
away from that having turned 180 degrees, realizing that FDR's New Deal 
plan wasn't a plan that bailed us out of the Great Depression but at 
best, at best, it can only be critiqued and analyzed to have perhaps 
diminished the depths to which we fell in the Great Depression, at the 
great cost of delaying the recovery, all of that borrowed money and the 
tax money that came away from the private sector and was poured into 
growing government, that money that went in was money that scared other 
capital out of the investment business and kept private industry from 
growing. And so government investment made private capital hesitant, 
that that was left that wasn't taxed away, and Madam Speaker, it 
delayed the recovery from the Great Depression.
  So even if FDR's New Deal diminished the depths to which we might 
have fallen if he would have done a hands-off, if he would have been a 
cool Ike, not a Hoover, if he had done that, I think we would have 
recovered quickly. I think we would have bounced back quickly, but that 
wasn't what happened.
  Government spending brought about indecision and scared capital way 
from the marketplace, and it hired government workers, many, many 
government workers. The CCC camps would be among them, and I know what 
it's like to try to hire labor when government competes against you for 
that labor. Government will always pay when you're talking about blue 
collar jobs. Government will pay the highest wages. They'll pay the 
highest benefits. They'll give the most job security.
  So if you're out there and you have a family to raise and you're 
unemployed, you're looking for a job, and you go out into the job 
market and you put out your applications and you stand in line and you 
begin to market yourself and you have a choice between going to work 
for Uncle Sam and going to work for the new entrepreneur down the road 
that just put together enough capital on a wing and a prayer to start 
up an entrepreneurial business that might grow into something 
magnificent, when government outbids the private sector for labor, they 
also, Madam Speaker, delay the recovery of a depression, of recession, 
or they diminish the growth during our bull markets in our good times 
as well.
  And that is what happened during the Great Depression. The Federal 
Government competed with the private sector for capital, by 
nationalizing, by competing for labor. When that happened, it 
diminished the inspirations of the entrepreneurs. They hired workers 
away that might have been entrepreneurs themselves but took them out of 
the labor force and the private sector. Government grew, the private 
sector shrunk, the stock market sunk and stayed flat.
  In fact, from that time in October of 1929, the Dow Jones Industrial 
Average did not recover to that level, not at all through the 1930s, 
not at all through the 1940s. Not until 1954 did the Dow Jones 
Industrial Average get back to the place where it was in October of 
1929.
  So one might even argue--in fact, Madam Speaker, I will argue--that 
not only did not the New Deal get us out of the depression, it might 
have helped bridge us marginally to get to the Second World War, but 
I'll argue the Second World War didn't take us out of it either because 
we didn't get recovered. But what did happen was the Second World War 
destroyed the rest of the world's industry, and it left the U.S., 
having been on a huge growth boom in our manufacturing and industry 
here to meet the war effort for the world and for our 16,000, mostly 
men but also women, that served in uniform during that period of time.
  So we found ourselves in a world that needed to be rebuilt, that was 
hungry for the products of industry, and with the only major industrial 
country in the world that hadn't been destroyed in the Second World 
War, and as our industry cranked out product after product, and as we 
exported overseas and as the greenback became the currency of the 
world, when all that happened, we were recovering economically. And 
that's why it took until 1954.
  So the Second World War was a big stimulus plan. We spent a lot of 
big government money, but the private sector, as we emerged from the 
Second World War, is what put the real meat on the bones and brought us 
out of that and took us through the recovery that reached that level in 
1954. And then that's the part of the economy that now that I remember 
in my life's experience, Madam Speaker.
  But we should not fool ourselves into believing that the New Deal was 
a good deal. We should instead go back and replay history, reset that 
clock and play it out. What if Coolidge had remained President? What if 
we would have set a policy from this very floor of this Congress that 
we were going to have fiscal discipline and tax relief and get as much 
money into the hands of the productive sector of the economy as we 
possibly could? That would be a very interesting exercise to reset that 
clock and game-play that out.
  I believe that we may have dropped deeper, but I also believe that we 
would have recovered much more quickly, and I believe we would be a 
stronger, more robust economy today if we had made those decisions 
then.
  So this brings us now fast forward into 2009, this day today. We're 
here watching a stock market that has tanked, that hasn't quite lost 
half of its value, but it's juggling underneath and falling below the 
8,000 floor. We have indicators that show that there are 10.5, 11 
million people, maybe more, that are unemployed and looking for work; 
although, the real unemployment numbers are marginally a little more 
than half of that number.
  We have economic indicators that mean capital is scarce and 
unemployment numbers going up. Investment capital is diminishing. Smart 
money is going to the sidelines. Demand for loans has shrunk 
substantially. It hasn't disappeared entirely. The marketing of these 
homes that were the

[[Page 2748]]

toxic debt that Secretary Paulson talked about, actually there was a 
little bump in the transfer of those, but until we work our way through 
this, this economy is not going to be back on a solid foundation.

                              {time}  2015

  We have to get it on a solid foundation by having solid economic 
theory here on the floor of this Congress, not the idea that a new New 
Deal is going to somehow be better than the old New Deal. And I would 
challenge, Mr. Speaker, our President to lay out some data, show me 
where the New Deal actually worked. And I understand his position that 
FDR didn't spend enough money, that if he had just spent more money, if 
he hadn't lost his nerve, if he hadn't been worried about fiscal 
responsibility, there would have been a lot bigger old New Deal that 
would have brought us out of the depression before the Second World 
War. I understand the President believes that because FDR lost his 
nerve on spending that it brought about a recession within a 
depression. That's something I had never heard before. I understand 
that's a belief. And I understand that the President of the United 
States believes that we have to construct a multilegged stool of New 
Deal-like programs in order to, in a Keynesian way, stimulate this 
economy, that we have a real political problem on our hands that is an 
economic problem on our hands that lays down a parameter here that will 
set a precedent if we go forward with this stimulus plan for the United 
States of America that we can never go back and fix again. Once you 
cross that line, once you write that mammoth check, once you obligate 
our children and our grandchildren to pay the interest on this debt--
and Lord knows if they could ever pay the principal--once you buy into 
this huge, humongous, Keynesian, multitrillion-dollar bailout/stimulus 
plan which says that government is the solution and the only answer and 
that, yes, private sector can tag along but they aren't big enough to 
make a difference. Even though some of these companies are, quote, too 
big to fail, or, more accurately, too big to be allowed to fail. If the 
private sector can be too big to be allowed to fail, how can they not 
be big enough to work us out of this calamity? How can we draw a 
conclusion that we can create jobs out there from the government side 
of this argument when the very fact that those jobs haven't been 
created in the private sector says there wasn't a demand for them, they 
weren't economically sound or smart capital would have found a way to 
create those jobs in the first place. But what we have is a self-
confident, overconfident, in fact, arrogant government that believes 
that they are the solution and that they can lead the private sector. 
And when I hear the statement come out that the CEOs of these 
corporations that receive bailout money will be limited to no more than 
$500,000 a year in compensation, it sounds like enough money to me, 
also, Mr. Speaker. But I will tell you that it's wrongheaded policy and 
it's what happens when you have the Federal Government engaging in 
providing capital into the private sector, they also begin to 
micromanage the private sector. When they micromanage the private 
sector, you get things like wage reductions for CEOs and boards of 
directors. And you get things like perhaps one day you'll see, well, a 
wage increase for the workers. Now when I hear that and I think the 
President of the United States wants to tell a company how much they 
can pay their CEOs and their board of directors, is there any principle 
there that remains that would keep, Mr. Speaker, the President of the 
United States or this Congress from telling these companies what they 
will pay their workers? If the President has enough influence in this 
Congress and holds the checkbook through the Secretary of the Treasury, 
and I'm pretty uneasy about him having our checkbook actually with his 
tax problems, but in any case, if he holds the checkbook and the 
directive of the President is that the blue collar workers on the line 
aren't making enough money per hour, if you're going to see a stream of 
capital come into the company, the lending institution, for example, 
then you're going to comply with the demands of the President. They 
don't have to be the law of the land. They don't have to be something 
that is legislation that is debated and voted up or down on the floor 
of this Congress. They only have to be the intimidation effect of we 
will make your life miserable, Mr. CEO and Board of Directors, if you 
don't comply with this verbal comment that was made by the President of 
the United States, or the chairman of a committee. That's how 
government gets in the business of managing corporations. That's how 
European socialism emerges in our private sector, a little piece at a 
time, sometimes in a veiled way and it seems to all be justified as it 
comes along and it sounds good to us because we don't want to be 
bailing out companies whose CEOs and boards of directors are taking out 
hundreds of millions of dollars in bonuses. I agree with that, that 
sentiment. I think I saw that the Wall Street executives only bonused 
themselves, in the aggregate, $20 billion last year. $20 billion? While 
we saw our stock market tank, while we saw all of our indicators go 
down and meanwhile while they're taking checks from the Federal 
Government. But it's very dangerous to be in the business, the Federal 
Government, of managing the private sector. So the alternative is we 
have to let some of them fail. There has to be a deterrent there to 
allow some of them to fail. And if we're not willing to do that, then 
European-style socialism at best here we come, faster than you can 
believe, fast enough that an historian will get whiplash watching what 
happens in this Congress.
  And as I looked at the poster that was put up on the floor, Mr. 
Speaker, the poster that says Congressional Progressives, I was about 
ready to go to that Web site, cpc.grijalva.house.gov, and I will go 
there within the next few hours, Mr. Speaker, because I have taken a 
look at these Web sites and it helps me understand what's going on in 
the minds of the folks that are voting on that side of the aisle of the 
United States Congress. So my little visit over last weekend to the 
Democratic Socialists of America Web site, and I would point out that 
is the Socialist Party of America, that little visit to that Web site 
tells me a few things. First, they make the argument that they're not 
Communists. You can get into the nuances of that, Mr. Speaker, and I 
would encourage you to look at that definitional difference. I think 
it's a nuance, the difference between their definition of socialism and 
communism, but it comes to this. They don't believe everything should 
be owned by the government. They think that there are small businesses 
that need to be run by entrepreneurs, supply and demand, barber shops 
and convenience stores, presumably, not the chains, just the 
individuals, maybe the doughnut shop down the road, some of those 
things need to be run by individuals, but by and large their statement 
very clearly is, large companies need to be run by the people affected 
by them. That is a dramatic departure from one of the huge foundations 
of what's made this country great, our free market economy.
  So we would actually see a position taken on a Web site of the 
Democratic Socialists of America that the government should make sure 
that we run these corporations for the benefits of, well, let's just 
say the people affected by them. That would mean, then, that the 
telephone customers would be the ones who would call the shots. They 
would say, here's how it benefits me, and you would make those 
decisions according to my wishes, not according to me paying by bills 
willingly. Let's just say that you had a sports bar chain. Well, then 
you'd run that for the benefit of the people that are using it. So I 
guess the drinkers would make the call there, Mr. Speaker. That's the 
philosophy that they define as different than communism, and I think 
it's a nuance. But when I look at that philosophy and I see within that 
page that they call for the nationalization of the oil industry, the 
nationalization of the refineries and I'm watching out of this Congress 
come a call for the nationalization of our auto manufacturers and 
imposing regulations on them so that

[[Page 2749]]

they do not have the latitude to clearly and freely make a profit 
without the government telling them what to do, then I read through the 
Democratic Socialists of America and they say we are an active 
political party but we do not advance candidates on our ticket because 
our legislative wing is the Progressive Caucus in the United States 
Congress. I'll say it again. Our legislative wing is the Progressive 
Caucus in the United States Congress. That's right off the Democratic 
Socialists of America Web site. So go there. I think that's the 
Congressional Progressives that was the poster that was here and that's 
what I want to check. But I know that on that list there are 72 Members 
of Congress, one Member of the United States Senate, a self-professed 
socialist, 72 Members in this Congress who constantly are advocating 
for the policies that I read on the socialist Web site. The link is 
there. They claim the link. The Progressive Caucus has the Web site and 
it names the people and the Members, and today they hold gavels and 
they're Chairs of committees, full committees, Chairs of subcommittees. 
These are the people that are advocating the policies that scared the 
living daylights out of the American people in the aftermath of World 
War II. And we quit saying words that are considered to be pejorative 
about folks who want to collectivize our American economy and assets.
  And so, Mr. Speaker, I think it is important that you, all Members of 
this Congress and the American people go visit those Web sites, do a 
little research, dig into it themselves and then listen to the debate. 
Because once you understand the source of the ideas, then it's easier 
to understand where this is going. And we can see piece by piece, 
component by component, how this is being linked together, how 
Americans are losing their freedom piece by piece, how we're trading 
our freedom off for dependency one government policy at a time. A 
perfect example would be the SCHIP legislation that passed off the 
floor of this house today on its way to the President's desk. It may 
have been signed by now. I saw the giddy glee with which some people 
were applauding when that passed. I will tell you, it makes me sick at 
heart, Mr. Speaker. The SCHIP program, I describe it as Socialized 
Clinton-style Healthcare for Illegals and their Parents. And it is. It 
lays a foundation stone for socialized medicine in America. It was 
passed out of this Congress first in 1997. And I supported it as a 
State Senator. We took it up to 200 percent of poverty. I didn't have 
the understanding of how the machinery of politics churns us through 
year by year, decade by decade and generation by generation and brings 
us inevitably to a point where SCHIP at 200 percent of poverty, 
designed to help needy children and needy families that couldn't pay 
for the health insurance and made enough money that they didn't qualify 
for Medicaid, all under the right kind of motives, both sides, 
Republicans and Democrats, was brought first out of the floor of this 
Congress a little over a year ago, not at 200 percent of poverty but a 
family of four, all families that is a standard, at 400 percent of 
poverty, brought to this floor, passed off this floor with a straight 
face over to the Senate. 400 percent of poverty. That in my State would 
have paid a subsidy for health insurance premiums in families of four 
that made $106,000 a year, while we're charging people alternative 
minimum tax because that's taxing people that are too rich, and 70,000 
families in America would qualify to pay the rich man's tax, the 
alternative minimum tax, 70,000 families, and at the same time qualify 
to have the health insurance for their children subsidized by the 
taxpayer. We've crossed the line, gone across that line over into a 
huge foundation stone for socialized medicine.
  Well, it came back to this Congress, we shot it down, the President 
of the United States, President Bush, vetoed the SCHIP bill. Now it 
came back to us today, the conference report, that set simply a 300 
percent of poverty to avoid the criticism. There are waivers in there 
that allow States like New Jersey and New York to go to 400 percent of 
poverty, or more, and the restraints are not there so that they can 
write more waivers and essentially it is health insurance for children 
and children of millionaires do qualify for this bill that passed the 
floor today. Children of millionaires will have their health insurance 
paid for by middle-income and low-income and upper-income taxpayers 
when it can't be justified. This bill that passed off of here today 
takes at least 2.4 million children off of private sector insurance and 
puts them over onto the public dole. And when you get to that point, 
you have reached a foundation stone for socialism, Mr. Speaker, and 
that's the essence of my discussion today.
  I thank the Speaker for his indulgence, and I would yield back the 
balance of my time.

                          ____________________