[Congressional Record (Bound Edition), Volume 155 (2009), Part 6]
[House]
[Pages 7649-7655]
[From the U.S. Government Publishing Office, www.gpo.gov]




                ETHICAL ISSUES THAT NEED TO BE RESOLVED

  The SPEAKER pro tempore (Mr. Maffei). Under the Speaker's announced 
policy of January 6, 2009, the gentleman from Texas (Mr. Carter) is 
recognized for 60 minutes.
  Mr. CARTER. Mr. Speaker, I appreciate being recognized for this time.
  I have been coming down here now for 2 or 3 weeks talking about fact 
that we have some ethical issues that need to be resolved, and that is 
something I think is important. I am going to try to frame that so you 
can understand why I think it is important.
  Tonight, we have been talking about Mr. Obama's budget. I just 
enjoyed immensely the argument that was just made a few minutes ago 
about energy. And I really wish, sometime it would really be nice up 
here if we could do one of these things where we talk back and forth 
and ask questions. I would like to address that a little bit, because 
it is a big part of this budget. It is going to be this huge tax 
program that is being put together, and I would like some questions 
answered.
  It seems to me that what I heard argued just a few minutes ago was 
that we have a real crisis with carbon, carbon dioxide. I think most 
Americans

[[Page 7650]]

know that we are major producers of carbon dioxide. If you don't think 
so, take a big breath and then let it out, and you will have just 
produced carbon dioxide. So I think we realize that it is kind of a 
natural process that is going on. But if we need to fix that, then we 
need to slow down the amount of carbon dioxide going out into the 
atmosphere. And as I understand the proposal is that let's say you have 
a widget plant that is belching out carbon dioxide into the atmosphere 
in record numbers because it is burning, let's just use that horrible 
substance they were discussing, coal. And even though it is being 
scrubbed for the sulfur dioxide, which the Clean Air Act dealt with, it 
is still putting out carbon dioxide, the substance that is the part of 
the fuel of photosynthesis in plants across the entire global, 
including the microscopic plants that grow in the oceans of the world, 
and it is just too much.
  Now, the plan they are proposing in the President's budget, as I 
understand it, is that they will have to pay a tax that the government 
would say this is the amount of carbon dioxide we are going to allow to 
come out of one source, and the government would determine what that 
ceiling would be. It is called a cap. And then they would say, every 
bit that you put out above that cap, we are going to tax you on it 
because we are going to use the tax money to acquire some kind of 
credits that the people are selling that don't pollute. Or maybe they 
are not even going to that. Maybe they are just saying, we are going to 
tax you so we can do research and development on new energy, which is 
what they seem to be saying tonight. If that be the case, then how does 
that tax stop that carbon emission out of that plant? I don't get that. 
Maybe someone can explain it to me.
  Now, I guess, yes, you could stop it if the tax were so onerous that 
the plant owner said the product that I am producing, and let's say on 
that particular plant rather than it being widgets it is electricity, 
that this is going to make my cost of electricity so onerous that I 
won't be able to sell my electricity so I will just shut down my 
electricity plant. That is the way economy works. At some point in time 
when the cost is such that you can't make a profit from the product 
that you are producing, maybe you would shut it down. I don't 
understand how that would help particularly the energy problems of the 
United States, and I don't think that is what would be envisioned.
  I think what would really be envisioned is that the evil corporation, 
if you will, would have to pay the tax and eat the tax. In other words, 
it would come out of their profits. Now, the evil corporation is really 
a group of American citizens and maybe other country citizens who have 
bought stock in the evil corporation, and they have invested their 
money in it in hopes that they would make a profit. And so is the 
solution that you think the corporation is going to do is that this tax 
that has been put on this coal emission is going to be paid by the 
corporation, which means by the stockholders, the owners, so they are 
just going the take less profit. At what point in time are the owners, 
that is the stockholders, going to be happy with their profit being 
reduced until they make no profit? I don't think very long. So then 
they would close down our power plant. But that is not what the 
solution is, either.
  The reality is, and it is in every case in every industry 
demonstrated every day across the world, is that tax will then go to 
the consumer of the product that that company is selling. Therefore, 
the cap tax we just heard about from our colleagues on the other side 
of the aisle would be paid by the consumer. Unless you are sitting in 
the dark watching television by candlelight, you are probably using 
electricity in your home. I say that tongue in cheek, because I guess 
you could watch television with a battery. But the facts are you are 
burning electricity every day, and you are going to pay the tax.
  Now, they are going to put a tax on oil and gas products because they 
create carbon emissions, CO2, the same as you create carbon 
emissions, by breathing. So they are going to tax the oil and gas 
industry. And guess who is going to pay the tax; the oil and gas 
industry is going to pass that tax on to the consumer. So if it is a 
nickel on a gallons of gasoline, the nickel is going to be yours to 
pay. If it is 50 cents on a gallon of gasoline, the 50 cents is going 
to be yours to pay, and the price of gasoline is going up.

                              {time}  2015

  The price of gasoline is going up.
  There is a bigger picture here you need to see. If you could look 
around this room, this gigantic House of Representatives, you would see 
leather and wooden seats, beautiful carpeting, gorgeous lights 
everywhere, all these various paintings and tapestries on the walls, 
glass, brass, steel, concrete and stone. All of that is in this room 
right here. How do you think it got here? How do you think the 
wallpaper up there got here? Did somebody bring it up here with a 
horse? Did they pack it on their back? No. They put it in a truck or on 
a train. And that truck or train delivered everything in this room to 
this building to be installed by the workers who got here in 
automobiles and pickups. So everything in this room was brought to you 
by motor fuel, including diesel fuel that burns in our trains that pull 
our freight cars. So everything in this room was brought to you by 
diesel or gasoline. So if tomorrow you were rebuilding this room, and 
if our new and wonderful ``nobody in the middle class will have to pay 
tax increase'' that we were just told by our colleagues, if that is 
there, then if it costs the wallpaper people extra money to get the 
wallpaper here because the price of diesel has gone up 20 cents a 
gallon, then the price of wallpaper is going up 20 cents a roll, or 
some equivalent, to make it up. If the brass manufacturers, if they are 
not using any kind of fuel to make brass, but they are shipping it here 
somehow magically, they are going to use diesel, because that is what 
drives our trucks. And the brass is going up, the concrete is going up, 
and the leather is going up. Everything in this room is going up 
because we have placed a new tax on fuel.
  Now, is any of that fuel not being burned? No. That fuel is still 
being burned. Is there carbon going into the atmosphere? Yes. There is 
carbon going into the atmosphere. Guess who is paying this tax? You 
are. And you're going to pay it if you make $10,000 a year, and you're 
going to pay it if you make $10 million a year because you're a 
consumer. And so the tax is going to be passed down to the consumer. So 
when you say this is not a tax on the middle class, it is a farce.
  That comes back to the issue of people need to make trustworthy 
statements when they say things around here. People need to explain 
things in a clear picture so the public can understand it. Then the 
American public needs to decide what is right and what is wrong. To me, 
I would like anybody to explain to me how this stuff would get here if 
it wasn't for a diesel truck or a train. I would like anybody to tell 
me how that would happen. Or maybe they fly an airplane in here on air 
freight, which is even more expensive and which is going to have an 
even bigger tax on it because it is a fuel guzzler and it creates 
carbon.
  So what we have been told here tonight is that there is going to be 
no tax on the middle class. Yet, people who do something that I 
wouldn't do for a living, but sit around and calculate an estimate of 
what these things might cost, are saying that this new energy tax, this 
tax on energy is going to cost every household in America $3,128 
annually. Now maybe for somebody making $250,000 a year, that hurts a 
little bit. But, boy, it hurts the heck out of the teacher in Round 
Rock, Texas, making $32,000 a year. It hurts the heck out of that truck 
driver that drives that truck that maybe makes $30,000 a year or 
$35,000 a year. If he is really a hustler, he makes $50,000 a year. 
Everything he is going to use, plus the fuel he is burning, is going to 
cost him more. And the freight charges are going up.
  So, wake up. You can't put a tax on something that everybody uses and 
not expect everybody to have to pay for the

[[Page 7651]]

tax. It is just that simple. This is not rocket science. This is basic 
logic 101.
  The reason we need to have ethical issues resolved in this House is 
because the American people need to learn to trust us to try to shoot 
straight with them. And those people who don't have a track record of 
shooting straight, at least you can make that conclusion because of 
accusations made against them, maybe you should worry about their 
leadership. Now, the question I would ask myself and you--and what my 
whole position has been on ethics issues is that these ethics issues 
need to be resolved so that you know you can trust when somebody stands 
up at that mic or that one over there or this one right here and tells 
you something, and you say, yeah, but what about that accusation? Hey, 
maybe it's not true. Okay, maybe it is not true. But it ought to be 
resolved. This body ought to resolve accusations that are made against 
the people that they have done something that is unethical.
  Now, I'm not making the accusations. I'm telling you that the 
newspapers are making the accusations, the talk shows are making the 
accusations, the TV news at 6 o'clock is making the accusations, and 
people that claim to be the watchdogs of American politics are making 
the accusations. I just want them resolved. I want the Ethics Committee 
or the courts or whoever it takes to resolve the issues to resolve the 
issues, so that when somebody stands up here and tells you there is not 
going to be a tax on the middle class, but we are going to tax every 
kind of carbon-burned fuel, when 90 percent of the fuel, probably 95 
percent of the fuel used for every purpose on the face of this Earth is 
carbon based, then do you know what? You're going to say, ``I would 
like to know if that is somebody that is very trustworthy that I ought 
to be listening to.''
  I hope that is not convoluted logic. But I sit here and ask you, if 
you assume that what these gentlemen said tonight was true, and they 
are going to use this stuff for research to come up with alternative 
fuels, you tell me when is the first truck going to be invented with an 
electric motor big enough to haul freight down the highways of the 
United States? When is it going to happen? Nobody is talking about 
that. They are not talking about it because the electric engine that it 
would take to haul the loads of freight down the interstate to bring 
stuff to your home so you have the goods and the services of this 
Nation, that electrical engine would be as big as that podium or bigger 
than the Speaker's tonight. In fact, they even make some electric 
engines that size in my district for ships in the sea. And they are 
gigantic, half as big as this room, to get the kind of torque, to get 
the kind of power out of electricity to pull a heavy load. So, think 
when you hear these things being talked about, how long will it take to 
get to a point that goods and services can be brought to you the way 
they are brought to you now without this tax being imposed upon you? I 
would submit, it is not decades. It may be centuries.
  So, I'm a little off the subject. But when you start talking about 
this budget, this is the kind of thing we want to talk about. Can you 
honestly think that you're getting a straight shot when you hear about 
some of this stuff?
  I'm very happy to see my friend from North Carolina. She is one of 
the real tough ladies in this House. Virginia Foxx is here to join me. 
And I'm glad to have her. I will yield whatever time the gentlelady may 
use up.
  Ms. FOXX. Well, I thank my colleague from Texas for starting this 
Special Order tonight and giving me a chance to come down and be you 
with you and spend some time talking about several different issues. I 
certainly agree with you that it is important for the American people 
to have faith and trust in their elected officials. And I think that 
there is a great deal of cynicism in this country. And people wonder 
what can they believe in? I think that it is important that when they 
hear us speaking on the floor, or they get letters from us, or they 
have other means of communications from us, that they know that we are 
telling them the truth.
  When I first came here, we had folks speaking on the floor almost 
every night. A group of us who were new in the Congress that year, in 
2005, were so concerned about the things that were being said that we 
established a group called the ``Truth Squad.'' And we would come down 
at night after that group would speak and set the record straight by 
giving out what we thought were true statements. They were often very 
different from the statements that were being made by our colleagues. I 
think it is important that we do this on every occasion, because 
frankly, I think in the last 3 years or so, the American people have 
really been sold a bill of goods.
  All of us would like to see things easier, better and less expensive. 
We would like to think that life would be a lot easier than it is. But 
we have challenges that we deal with every day. It is not likely that 
the government is going to be able to make our lives easier for us. 
Yet, that is what has been sold, I think, to the American people. We 
haven't had the benefit of having a large segment of the media on our 
side in order to be able to counteract some of those things that were 
said.
  I want to give a little detail, put a little meat on the bones of 
some of the things that you have been talking about in terms of what 
would this cap-and-tax plan do to us in the country? We have been told 
that everybody making less than $250,000 is not going to be taxed in 
this country and that 95 percent of the people are going to get a tax 
cut. But let's talk a little bit again about the particulars of this. 
It is actually $250,000 per couple. It is not $250,000 for an 
individual. It doesn't exempt small businesses who often are taxed at 
the individual rate. So there are some minor little details in there in 
what has been told about taxes and about the budget that has been 
presented.
  To go to your point about what the increase in taxes are going to do 
to the American people, you are absolutely right. Every single family 
is going to be paying for these ideas that are being brought up under 
the guise of ``scientific knowledge.'' I don't know about you, but I 
haven't seen any conclusive proof presented that the science can 
support this. We know that President Obama himself said, ``under my 
plan of a cap-and-trade system, electricity rates would necessarily 
skyrocket.'' So we know that is going to happen. But no one has 
explained to the American people how that is going to happen.
  There was a piece done by FOXNews just a few days ago, I think 
somewhere around March 4, where an energy analyst, Margot Thorning, 
said: ``In dollar cost terms, it is probably an additional $700 to 
$1,400 per family per year starting around 2012.'' That is right around 
the corner. So what the President says he is going to give is a tax 
cut. But that is going to amount to about $600 to $800, and at the same 
time, the families are going to be charged about $1,400 more in energy 
costs. So what the government is going to give, it is also going to 
take away.
  I think, again, what you're doing is great. I have pointed out many 
times that the North Carolina State motto is ``to be, rather than to 
seem.'' I have brought that up several times on the floor because I 
think that is what the American people want out of us here in Congress.

                              {time}  2030

  The American people don't want us to seem rather than to be; and yet 
what is being done here in the name of science and in the name of 
protecting us from the climate change that they believe is occurring is 
going to be a pretty expensive trial as to whether or not this is going 
to work. And we don't know. It is an experiment, really. It is not 
proven science. We don't know that we are causing global warming with 
carbon. We have had global warming and global cooling even before human 
beings were on the Earth.
  So I think it is a great thing that you are doing, to tie programs, 
budgets, proposals and policies to this issue of ethics because they 
are tied together and are very important. I want to commend you for 
doing that.

[[Page 7652]]

  We have been joined by some of our very articulate colleagues here 
tonight, and I want to give them an opportunity to share their 
knowledge, their enthusiasm for this issue.
  Mr. CARTER. Let me point out, I have a poster board here. Now some 
might think I have been picking on Chairman Rangel too much, and I 
don't intend to do that, but this is to make my point. Chairman Rangel 
is in charge of taxation. That is his job. He is the tax man of this 
House.
  We have a little quote here from a real conservative news source we 
all love and adore, the New York Times, January 3, 2009, ``Rangel 
Pushed for a Donation; Insurer Pushed for a Tax Cut.'' It is written by 
David Kocieniewski. ``On April 21, 2008, Representative Charles B. 
Rangel met with officials of the American International Group, the now-
troubled insurance giant, to ask for a donation to a school of public 
service that City College of New York was building in his honor,'' and 
I will point out named after him.
  ``Mr. Rangel had already helped secure a $5 million pledge for the 
project from a foundation controlled by Maurice R. Greenberg, one of 
the company's largest shareholders and its former chief executive. And 
CCNY officials, according to the school's own records, had high hopes 
for AIG--a donation of perhaps as much as $10 million.''
  Some may have heard of AIG. It has been a little bit in the news 
lately.
  Now my point is that is an accusation made by the New York Times, not 
by me, not by any Member of this House. That is an accusation made by 
the New York Times that should be resolved because it is about our 
number one tax man, and our number one tax man along with the President 
of the United States is going to be championing the Democrat budget of 
$3.6 trillion, a number that almost defies imagination.
  We have gotten used to trillions in the last 60 days because we have 
seen lots of them. They are everywhere. This administration is throwing 
trillions around like tennis balls at Wimbledon and we are sitting here 
looking at a new little slight glitch of $3.6 trillion. I would think 
that the average American looking at this budget would like to know 
that the people that designed it and the people that put it together 
shoot straight, deal ethically with issues. And they would like to know 
that, but they have an accusation from the New York Times that says 
contrary to that.
  So is there a place to resolve that? Yes, we have one. It is called 
the Ethics Committee. But there is no action out of the Ethics 
Committee. It just kind of sits there.
  So I guess our famous Rangel rule which now is on everybody's tongue 
about special privileges for Mr. Rangel, I guess we add this to the 
Rangel rule. I don't know what else to do with it. If you have 
accusations and the Ethics Committee doesn't act, then they just go 
away. Trust me, everything is okay because the Ethics Committee hasn't 
acted. Well, I think they should.
  I will start, beauty over the beast. I have both Michele Bachmann and 
Lynn Westmoreland here, and so I will turn to Michele Bachmann to talk 
about the budget and about trusting those who are going to be giving us 
these numbers and these ideas and shouldn't we have the ethical issues 
resolved as they lead this Congress down a $3.6 trillion path.
  Mrs. BACHMANN. Mr. Speaker, I thank the gentleman from Texas, Judge 
Carter, for yielding on that point. You could not have set up this 
segment better to talk about ethics and talk about those who are 
writing our budget, that they need to live under the laws that they are 
creating. You quoted from the New York Times article that said there 
are high hopes for AIG.
  The American people had very high hopes for AIG, the largest 
insurance company in the world. They should, after all, the American 
people own AIG now. We own 80 percent of AIG. The American people have 
been forced to invest $173 billion in this company. And they just found 
out that $165 million, perhaps as much as $450 million, has been paid 
out in bonuses to some of the executives at AIG. And the American 
people are outraged. They realize that is their money, and that money 
is going out on bonuses.
  But then along came a story from CNN. And CNN said guess what, in 
President Obama's stimulus package earlier this year, we remember, that 
is the over-trillion-dollar bill that none of us were allowed to read 
because the Obama administration wouldn't release that bill until after 
midnight, and we started debate the next morning at 9 in the morning, 
contained in that stimulus bill is an interesting provision that was 
put in by the head of the Banking Committee on the Senate side, Senator 
Chris Dodd.
  Senator Chris Dodd inserted a provision into the stimulus bill that 
said essentially this: it said that the bonuses that would be given out 
to any of these companies can stay with the people who get the bonuses 
unless they are given after February 11, 2009. In other words, these 
bonuses that AIG received are prohibited by the language in the 
stimulus bill from being recouped by the U.S. Government. We are 
prohibited. Our hands are tied. This is President Obama's stimulus bill 
and the chair, the Democrat chair of the Banking Committee, inserted an 
amendment that prevented the taxpayer from recouping any bonuses that 
would be paid out to the executives.
  Now this is a curious thing because CNN also reported that the 
largest beneficiary of campaign donations in 2008 from AIG was Senator 
Chris Dodd. So Senator Chris Dodd, CNN said, was the largest recipient 
at over $103,000, managed to slip into President Obama's stimulus bill, 
which he didn't give any time for any Member of Congress to read, a 
provision that would have prevented the American people from recouping 
any of these bonuses.
  Now I think that raises questions I would suggest along the line of 
the gentleman that you've been raising about the ethical requirements 
of the people who are serving the American people.
  With that, I yield back to the Judge.
  Mr. CARTER. I yield to the gentleman from Georgia, Mr. Lynn 
Westmoreland.
  Mr. WESTMORELAND. I want to thank my friend from Texas for yielding.
  Judge, I think what we have to look at is connecting the dots. We see 
in a lot of these children's puzzle books and stuff, you connect the 
dots to see the big picture. I think if we could see the picture of all 
of these dots connected, it would be hypocrisy that has come down from 
the Democratic leadership and we could go back to even when they first 
became the majority in January of 2007, because prior to that they 
talked about they had a way of lowering gas prices. Judge, you will 
remember gas prices went to over $4 a gallon in some areas. They never 
told us how they were going to get that down. The only way that came 
down was what we did in August of that year, and really exposed the 
energy situation for what it was. And I think the speculators finally 
realized that we were serious about doing something for our own energy 
policy.
  Then if you look at the problems that Mr. Rangel has had. Just to 
list a few, the loan-subsidized apartments that he had, the fact that 
he was using letterhead to solicit some of these campaign 
contributions, the fact that he received the money from AIG and the 
other people who received some of this bailout, the fact that he didn't 
pay his taxes, if you look at that, that is not anything in itself, but 
if you connect the dots with all of the other things that are going on, 
I think that shows a picture that they did what it took to get elected.
  We can look at that with what President Obama's campaign promise was, 
that he would drive the lobbyists out of the White House. And now he is 
writing waivers. It seems like every time he does an appointment, he 
has to write a waiver because they are a lobbyist. We have Mr. Geithner 
who was approved by the Senate as the Treasury Secretary who has 
similar tax problems. So you connect all of the dots, and what seems to 
be happening is we see a chain of events that may seem separate, but 
they are really kind of all tied together.

[[Page 7653]]

  And then if you look at what President Obama's chief of staff Rahm 
Emanuel said, and I can't remember the exact words, but he said never 
let a crisis pass without taking advantage of it.
  And so if you look at this financial crisis and what has happened and 
what has taken place, look at how they are taking advantage of it with 
this $3.6 trillion budget that they are proposing, with a cap-and-
trade, which is another tax that is going to be on the 95 percent that 
he promised would never have a tax.
  If you look at the bonuses for AIG, well, the reason that they are 
getting the bonuses is because the government intervened into that 
business. If the government had not intervened and saved AIG, I don't 
know what kind of financial calamity would have been out there, but I 
promise you these guys wouldn't have gotten a bonus. So we enabled them 
to do that. So now what's the government going to do? Everybody is in 
an uproar over these bonuses being paid to these executives, as well 
they should. But now is the government going to say we have a crisis, 
we need to step in and intervene in contracts between employers and 
employees? And so this is another one of these crises, for the 
government to take one more step into our lives and into our 
businesses.
  So this is a connect-the-dot picture that we have got to keep in 
mind. This is a lot bigger than what we ever anticipated or that the 
American people would think that they were getting.
  Mr. Daschle was another one. Ron Kirk. We could go on. Ms. Waters, 
and others.
  Judge, has the Ethics Committee met, because if I remember correctly 
back in November, Speaker Pelosi said that she was going to have this 
Rangel problem resolved by the end of December of 2008. I guess she did 
that for the elections, but it is not resolved yet, and I have not even 
heard of them having a hearing.
  Mr. CARTER. I haven't heard a peep out of them. Just recently, we 
have another story that has come out from the Congressional Quarterly, 
``Waters Calls TARP Meeting for her Husband's Bank.'' This is by 
Bennett Roth, part of CQ staff.
  ``Watchdog groups claimed Waters took inappropriate actions on behalf 
of OneUnited Bank which received financial assistance from the Federal 
Government last fall. Waters, a senior member of the Financial Services 
Committee which oversees banking issues, last year requested a meeting 
between Treasury Department officials and representatives of minority-
owned banks, including OneUnited on whose board her husband, Sydney 
Williams, had previously served. He also held stock in the bank.''
  That's not our accusation, that's an accusation by a publication that 
is read regularly in the halls of Congress and informs us of what is 
going on. That is an issue that should be addressed by the body that is 
required to address it, the Ethics Committee.

                              {time}  2045

  Is that unethical behavior? Possibly not. Possibly it is. But she is 
the chairman of the Subcommittee on Housing and Community Opportunity, 
which means that whatever housing there may be in the Obama bill, this 
$3.6 trillion Obama bill--and Lord, for that much money there ought to 
be a couple of houses in there anyway--then if that is the case, she 
would be the spokesman for the housing attitudes of the U.S. Government 
of the majority party, the Democratic Party--who run this place, by the 
way. If nobody gets it yet, the majority rules in the House of 
Representatives. So when you have 38 more votes than the other guys, 
you win, they lose. That's the way it works. If you've got one more 
vote and everybody stays with you, you win, they lose.
  So they own all of this. This Bush bashing that we hear around here, 
wake up. The man is hanging out in Crawford chasing cattle; he's not 
doing this job anymore. This is your job, the Democratic Party's job. 
They are doing this job here, with the leadership of Barack Obama, 
their President. He, with their help, proposed $3.6 trillion.
  And when it comes to housing, we must rely upon Maxine Waters, the 
leader of that subcommittee. That issue ought to be resolved. I think 
that's important.
  This is the whole point of this whole thing. You know, this banking 
thing, we are all worried to death about this banking thing. And I 
don't think any Member of Congress--or for that matter, any American--
isn't concerned about this tightening, choking down of credit that has 
taken place in the United States. And therefore, the entrepreneurial 
spirit of America is being choked down because of stupid mistakes that 
were made by the government. And let's maybe talk about those for just 
a little bit. And I will first yield to Michele Bachmann.
  Mrs. BACHMANN. I thank the gentleman for yielding. And I am wondering 
when it will be that Congress will finally have hearings on itself and 
on the culpability of Members of Congress for this housing meltdown.
  We look at individuals who were involved in shielding Freddie and 
Fannie for years from any sort of tightening, any sort of regulatory 
burden, any sort of accountability, any sort of transparency--for 
years. We look at comments that were made even by the current head of 
the Financial Services Committee. I sit on the Financial Services 
Committee. And the chairman of our committee, Barney Frank, had made 
statements when he was confronted by former Treasury Secretary John 
Snow that Freddie and Fannie were in deep trouble. And he also foretold 
of a housing collapse that he was portending on into the future for the 
United States. And the comments from Representative Frank were, don't 
worry, everything's fine; there's no problem with Freddie and Fannie. 
People knew we were looking at a meltdown.
  When are we going to have those hearings? When are we going to hear 
from Members of Congress, their culpability in bringing about this 
housing meltdown, about the Members of Congress who loosened and 
relaxed the platinum level standards of lending in our country? We had 
platinum levels of standards of lending for over 200 years in our 
country. Those lending standards were so reduced, that created our 
subprime mortgage mess. It even created a problem in prime mortgages 
because the lending standards were so reduced. That just didn't happen 
in the free market, because private businesses, they want to limit 
their risks. It was the Federal Government that forced these private 
businesses to maximize risk. With what? The promises that good old 
Uncle Sam, the chump called Joe taxpayer would bail these businesses 
out--AIG, Freddie, Fannie--if anything went wrong. We need to have a 
hearing where Members of Congress are called on the carpet for their 
involvement in leading to this housing collapse.
  I yield back.
  Mr. CARTER. And just another little news story here that broke. This 
is a former colleague of ours. He is now maybe in one of the most 
powerful positions in the United States, he is the Chief of Staff of 
the White House, Rahm Emanuel. This is from ABC News, a very 
conservative source. ``Emanuel was Director of Freddie Mac during the 
scandal. $25,000 Freddie to Emanuel equals $200 billion taxpayers to 
Freddie,'' written by Brian Ross and Rhonda Schwartz.
  ``President-elect Barack Obama's newly appointed Chief of Staff, Rahm 
Emanuel, served on the board of directors of the Federal mortgage firm, 
Freddie Mac, at a time when scandal was brewing at the troubled agency, 
and the board failed to spot red flags, according to government reports 
reviewed by abc.com. The actions by Freddie Mac are cited by some 
economists as the beginning of the country's economic meltdown.''
  ``The Federal Government this year was forced to take over Freddie 
Mac and his sister Federal mortgage agency, Fannie Mae, pledging at 
least $200 billion in public funds.'' And that is not my news story, 
that is ABC's news story.
  And of course our Ethics Committee, bless their hearts, I don't think 
they have to deal with Mr. Rahm Emanuel.

[[Page 7654]]

I think maybe the White House has to deal with the issues of Mr. Rahm 
Emanuel, and maybe they should. But it is the White House budget that 
we're talking about, and he is the chief policy officer of the White 
House. So I would assume that Mr. Rahm Emanuel's fingerprints are all 
over this budget. And I would expect Mr. Rahm Emanuel to be a spokesman 
for this budget. And we all can watch, in breathless anticipation, and 
see if I'm telling the truth. But let's watch and see. But those sort 
of things ought to be cleared up with the American people because at 
least one news source is saying this was the start of the crisis we're 
in, and he was right in the middle of it. So those are the kinds of 
things we have to look at.
  Mr. Scalise has joined us. I will yield such time as you would like 
to have to comment on what we're talking about here today.
  Mr. SCALISE. Well, I want to thank my friend from Texas for hosting 
this and really helping unravel the mess, as Americans all across the 
country are very frustrated, they are angry about what's happening with 
our economy, they are angry when they read about what happened with 
AIG. And then I think they get cynical when they see some of the very 
people who helped create this mess going on all of these talk shows 
over the weekend, pointing their fingers everywhere else other than 
themselves and saying it was this administration or that 
administration.
  You can find more than enough blame to go around, but if you really 
go back to the root--and I think you've started to touch on it--the 
problems that existed with Fannie Mae and Freddie Mac, going back to 
the Community Reinvestment Act, going back to the 1990s when a 
gentleman who represented part of my State from Louisiana, Richard 
Baker from Baton Rouge, who actually sat on the Financial Services 
Committee, he had the guts to go and take on Fannie and Freddie back in 
the 1990s, and he exposed all of this. And this is all out there on the 
Internet, it's information you can actually go and verify. You can look 
at those hearings--and many Americans already have. And for those who 
haven't, it would be a really good history lesson to go back and look 
at those hearings that he had as he was calling on the government to 
finally reform these institutions who were being encouraged--not by 
some bank on Wall Street, not by George W. Bush, this goes back to the 
Clinton administration--but it was people in Congress, some people who 
are right now chairmen of these very committees that have oversight, 
and he was fighting and saying we have got to reform Fannie and Freddie 
because this entire situation is going to melt down.
  We've got institutions that are encouraging people, using the 
strength of the Federal Government, encouraging people to give out 
loans to people who don't have the ability to pay. And Members of 
Congress who are in leadership positions today were giving edicts to 
Fannie and Freddie saying go out and give those loans to people who 
don't have any ability to pay, when people all across our country--
people in my district, your district--people who are playing by the 
rules today go out and want to get a home mortgage, they have to prove 
their ability to pay, they have to prove that they've got equity, they 
have to put up maybe 20 percent, they've got to fill out a bunch of 
forms. And ultimately they make their payments. Over 90 percent of the 
people in this country, even in these tough economic times today, are 
making their payments on their mortgage. Yet, you have a small group of 
people--some who actually lied on their application, but some who were 
encouraged by the Federal Government to get loans that they didn't have 
the ability to pay by these institutions, Fannie and Freddie. And 
people like Richard Baker, back in the 1990s, were saying we've got to 
reform this corrupt system. And yet, some of the very people who are 
now yelling at the top of their lungs at the top of this Capitol 
saying, blame this guy and blame that guy, they were there defending 
Fannie and Freddie. And it's all out there on the Internet, you can 
actually go and see it.
  And yet, when you look at what happened with AIG just 2 weeks ago--
and of course, again, you've got the record to go and check it--
President Obama's spokesperson was asked about the next $30 billion 
that the Federal Government released to AIG. And they said, what do you 
think about the money that AIG has already gotten so far, the $150 
billion they had already gotten; they said, do you think that that 
money has been spent properly? And the White House actually said yes. 
They said, yes, we think AIG has done good things with the money.
  Now, clearly AIG has not. AIG has been caught giving bonuses, 
hundreds of millions of dollars--up to $6.5 million for some 
executives--in bonuses with taxpayer money. And some of those very same 
people are yelling and screaming at the top of their lungs. And we are 
all outraged, but Americans that are outraged are looking at this and 
they are getting very cynical because they are saying, wait a minute, 
we can actually go back and unravel this, we can look and see some of 
these same people. And those of us who voted against the financial 
bailout last year because we knew this was the wrong approach, we knew 
giving taxpayer money to help these financial groups on Wall Street who 
made irresponsible decisions, we knew that was bad public policy, but 
yet some of those very same people who voted to give the money are now 
yelling about how the money is being spent, even though they allowed 
the money to be spent that way. It was a wrong approach then. We should 
have never done it. We're seeing how flawed that system is now. But I 
think people across the country, they do get it. They are seeing what's 
happening out there and they are realizing that some of these very same 
people that are yelling at the top of their lungs and expressing 
outrage were the ones who actually voted to give that taxpayer money 
away.
  Mr. CARTER. Reclaiming my time, you mentioned Wall Street. And Wall 
Street has taken a big hickey here lately. And you know who really took 
the hickey was the American people. And one of the things that I think 
everybody dreads doing almost as much as taking out the garbage is 
looking at their 401(k) or their pension plan after this last 60 days 
of the Obama administration and this trillion dollar leadership of this 
Democrat-led House of Representatives.
  Mr. WESTMORELAND. Can I interrupt the gentleman? It's not the last 60 
days, this is his first 60 days.
  Mr. CARTER. First 60 days, yes. Thank you for correcting me.
  And then, lo and behold, under the President's budget, taxes on 
capital gains and dividends would increase from 15 to 20 percent, 
increasing their taxes on investments by $398 billion over 10 years. So 
if the poor old guy whose 401(k) is almost used to wrap the garbage in, 
if he starts to have any kind of rally on the stock market at any time 
in the foreseeable future--at least the next 10 years--this budget we 
are being asked to pass, this $3.6 trillion budget, is going to raise 
the taxes on his poor little old beat-up 401(k), or on your pension 
plans. This is a direct tax on American families.
  And believe me, contrary to popular belief by the other side of the 
aisle, there are a lot of people in this country who make a whole lot 
less than $250,000 a year who own stock in corporations in America 
because they believe in the free enterprise system. They have invested 
in a way they feel is adequate to be good for their families, and they 
will be hit by this capital gains tax.
  I will yield to Mr. Westmoreland.
  Mr. WESTMORELAND. I thank my friend from Texas.
  You were talking about Wall Street, the large banks that got the bulk 
of this TARP money. Our local community banks and some of the smaller 
banks did not get this. And the whole reason that this Congress--and I 
didn't vote for it, but I think a reason that the people that did were 
sold a bill of goods by then Secretary Paulson that this was going to 
unfreeze the credit market, but it has not done that.
  And what has happened to the FDIC--and I'm not sure if the gentleman 
has heard this yet, but I had

[[Page 7655]]

some of my local bankers call me, going from $100,000 to $250,000, 
their premiums are going up. That is the way the FDIC is funded is 
through premiums on this deposit guarantee. And so they are going up on 
the premium. And so now they are not only having to pay a high premium 
on $100,000, but the high premium on $250,000. But here's the kicker; 
they are going to be charged a one-time fee from the FDIC on their 
deposits--I think it is, or their assets.
  To my friend from Texas, I was told today by somebody in our Georgia 
banking community that if you took all the profits of all the banks in 
Georgia and added it together, the fees that these banks were going to 
be charged would be more than the money that they made all last year. 
Now, that is a double whammy on the small community banks that have 
been basically responsible for funding our small businesses in our 
communities that have not had access to this TARP money.

                              {time}  2100

  So what has happened is the big banks and the FDIC and the others who 
have let this situation get way out of hand are here again sticking 
their money down and getting the investors and the shareholders from 
these local banks their money. And these banks are owned by local 
people.
  I know we're getting short on time, but I want to thank you for doing 
this. And I think we need to remember that we need to continue not only 
with some of these ethics that you brought up, but we need to connect 
all these dots and get the clear picture of where this new 
administration and this larger majority is trying to take this country.
  Mr. CARTER. Well, I agree.
  Reclaiming my time, I thank Mr. Westmoreland for pointing that out. 
And, actually, I have talked to my community banks too, and they are 
very concerned about the massive increase in their assessment by FDIC 
and the fact they're going to have to pay a premium. But also what's 
really sad is they're the guys who made good loans. See, what people 
don't realize is that these community banks can hold their heads up 
high. They're not asking for TARP money because they didn't make bad 
loans. They stuck to the banking principles that their boards of 
directors made, and they stayed away from the pressure, with some 
exceptions, but in the vast majority of the cases across this country, 
the community bank system made sound, good business decisions. And now, 
unfortunately, because of the way it works, they are going to have to 
pay the penalty for those people who went off and made bad loans.
  Now, we understand and I think our bankers will tell you they 
understand that's how the FDIC works and it's a program that they rely 
upon. But it still is part of that old ``'taint fair'' system that you 
and I have been talking about for the last couple of days.
  I want to bring up just one more thing that's in this budget that I 
think is going to be a real issue for some awfully important people in 
this country. This budget that they've got out here caps the value of 
itemized deductions at 28 percent for those who have income over 
$250,000 married or $200,000 single, which will reduce charitable 
giving in this country by $9 billion. You know, I don't know why in the 
world you would want to hit the charities, the Cancer Society, the 
Heart Fund, the First Methodist Church, or the Third Baptist Church, 
why you would want to hit those people's pocketbooks to fund $3.6 
trillion, but to me, that's questionable. We ought to be questioning 
that, and we ought to be saying why in the world do we have to 
basically put a burden on charities? And then tomorrow, tomorrow, we're 
supposed to vote on a bill to pay volunteers with taxpayer dollars. So 
we're going to pay volunteers with taxpayer dollars rather than 
encourage private sector donors to take care of community problems that 
they all work hard to take care of. This is nuts. This is European 
socialism at its best.
  Americans have hearts of gold. One of the things that the American 
people liked that Ronald Reagan said about them was he reminded them 
that deep down inside every American there burned that flame of liberty 
and freedom that made them good people who were all heroes because they 
got up in the morning and they went to work and they took care of their 
families. And yet it seems that whoever put together this budget 
doesn't view America that way. They view it differently.
  Finally, something that I have been appalled with forever is taxing 
death. A guy works all of his life. He pays his taxes. He takes care of 
his bills. He works double shifts and works hard. He acquires some 
property, and that property gains value, whatever the property may be. 
And he's happy because he's been an honest taxpaying citizen. And then 
he dies, and lo and behold the United States Government wants to come 
in and tax him on his death.
  Now, I have a good friend, and I'm not going to use his name because 
I don't have his permission to use it, but he is from Clayton, New 
Mexico, and he'll know who he is, who had a beautiful ranching 
operation in Clayton, New Mexico, when I knew him at Texas Tech 
University and he was a buddy of mine. And he had two really nice 
ranches in that area, the home place and another ranch. I ran into him 
in Rocksprings, Texas, a while back, and I asked him how he was doing, 
and he said, ``Well, I'm living in Texas now. I'm ranching in Texas.''
  I said, ``What happened to Clayton, New Mexico?''
  He said, ``The taxman took it.'' He said, ``When my dad died, I had 
to sell land, and the only land I could sell was the home place, which 
was the best place; so that only left me with our worst little ranch. I 
traded that for a small place down here in Texas, and I'm down here 
scratching out a living on about a third of what my daddy worked and 
fought for and my great-grandaddy and my grandaddy died for in fighting 
to tame that part of New Mexico.''
  I don't know. I find that's pretty offensive to me. Why does the 
United States Government deserve to put the fourth generation of that 
family out of the ranching business so they can tax a guy that has 
already paid his taxes? But that's headed our way in this new $3.6 
trillion budget.
  I'm not going to tonight go into the rest of the examples that I have 
here. We'll go into those another time. But I hope I've made it clear 
that my purpose to get up and talk about these ethical problems is not 
to make the kind of accusations that were made two Congresses ago 
against the Republican Party about ``culture of corruption'' because I 
don't think that's appropriate. I am only pointing out there are issues 
that have been raised by the watchdogs of this Congress, the press, 
that should be resolved.
  Mr. Speaker, I appreciate your patience and thank you for this 
evening.

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