[Congressional Record (Bound Edition), Volume 156 (2010), Part 7]
[House]
[Pages 10320-10328]
[From the U.S. Government Publishing Office, www.gpo.gov]




   MOTION TO INSTRUCT CONFEREES ON H.R. 4173, WALL STREET REFORM AND 
                    CONSUMER PROTECTION ACT OF 2009

  Mr. FRANK of Massachusetts. Mr. Speaker, pursuant to clause 1 of rule 
XXII and by direction of the Committee on Financial Services, I move to 
take from the Speaker's table the bill (H.R. 4173) to provide for 
financial regulatory reform, to protect consumers and investors, to 
enhance Federal understanding of insurance issues, to regulate the 
over-the-counter derivatives markets, and for other purposes, with the 
Senate amendments thereto, disagree to the Senate amendments, and agree 
to the conference asked by the Senate.
  The Clerk read the title of the bill.
  The motion was agreed to.
  Mr. BACHUS. Mr. Speaker, I have a motion at the desk.
  The SPEAKER pro tempore. The Clerk will report the motion.
  The Clerk read as follows:

       Mr. Bachus of Alabama moves that the managers on the part 
     of the House at the conference on the disagreeing votes of 
     the 2 Houses on the Senate amendment to the bill H.R. 4173 be 
     instructed as follows:
       (1) To disagree to the provisions contained in subtitle G 
     of title I of the House bill.
       (2) To disagree to section 202 (relating to the 
     commencement of orderly liquidation and the appointment of 
     the Federal Deposit Insurance Corporation as receiver) and 
     section 210 (relating to the powers and duties of the Federal 
     Deposit Insurance Corporation as receiver) of title II of the 
     Senate amendment.
       (3) To not record their approval of the final conference 
     agreement (within the meaning of clause 12(a)(4) of House 
     rule XXII) unless the text of such agreement has been 
     available to the managers in an electronic, searchable, and 
     downloadable form for at least 72 hours prior to the time 
     described in such clause.

  The SPEAKER pro tempore. Pursuant to clause 7 of rule XXII, the 
gentleman from Alabama (Mr. Bachus) and the gentleman from 
Massachusetts (Mr. Frank) each will control 20 minutes.
  The Chair recognizes the gentleman from Alabama.
  Mr. BACHUS. Mr. Speaker, I yield myself such time as I may consume.
  This motion to instruct directs the conferees to insist that this 
legislation end the possibility of taxpayer-funded bailouts once and 
for all by stipulating that bankruptcy is the only available option for 
liquidating a failed financial firm. The motion also requires that the 
conferees and the public, by extension, have at least 72 hours to 
review the contents of the conference report before its final approval.
  We've heard time and time again that the Democrats ``resolution 
authority'' to wind down systemically significant financial 
institutions ends the too-big-to-fail doctrine and protects taxpayers. 
That's an outrageous and false claim. Read the bills. Both the House 
and the Senate let the FDIC do the following: lend to a failing firm, 
purchase the assets of a failing firm, guarantee its obligations to 
creditors, take a security interest in its assets, and even sell or 
transfer assets that the FDIC acquired from it.
  And while the House establishes a $150 billion bailout fund to pay 
for the resolution of a failing firm, with an extra $50 billion line of 
credit with the Treasury if the original $150 billion is exhausted and 
cannot fully fund the bailout, the Senate approach is no better. The 
Senate would allow the FDIC to potentially provide trillions of dollars 
from the Treasury in order to pay off a failed firm's creditors and 
counterparties in the aftermath of its failure with the hopes that the 
funds can be recouped at some later date. But only a hope.
  The Senate bill institutionalizes backdoor bailouts that have so 
infuriated the American people by conferring on the FDIC the exact same 
tools that were used to rescue the creditors of Bear Stearns, AIG, 
Fannie Mae, and Freddie Mac with the taxpayer price tag today of over a 
trillion dollars. This would continue the misguided too-big-to-fail 
bailouts that allowed U.S. regulators to pay Goldman Sachs and other 
large European banks 100 cents on the dollar at the expense of hundreds 
of smaller institutions and companies which were considered too 
insignificant or small to save or to pay.
  The Democrats like to call their plan a ``death panel'' for large 
financial firms, but if you read the bill, in reality, it is nothing 
less than the taxpayer-funded life support to pay off the creditors of 
the failed institutions but not necessarily all of the creditors. They 
could pay some of the creditors and let others hang out to dry. We saw 
that with AIG and other bailouts.
  And don't forget the so-called too-big-to-fail institutions have only 
grown larger and more dominant through the regulator-directed but 
taxpayer-funded bailout process, a process this legislation 
institutionalizes.
  The better, more equitable approach to dealing with failed nonbank 
financial institutions--the only way to make sure taxpayers are 
protected from paying for Wall Street mistakes--is bankruptcy, first 
proposed by House Republicans. Unlike the FDIC, which can funnel 
unlimited amounts of taxpayer cash to a failing firm's creditors as 
part of a so-called resolution, a bankruptcy court has neither the 
authority nor the funds to make creditors whole. Bankruptcy is an open, 
transparent process administered according to clear rules and settled 
precedent and preferences, preferences that, in this bill, could be 
disregarded.
  By contrast, the resolution authority proposed by the Democrats would 
be carried out entirely behind closed doors with no guarantee of 
adequate stakeholder participation and protection and without a 
bankruptcy judge to ensure a fair and equitable outcome. The Democrats 
have been careful to include in their bill a provision that explicitly 
states that taxpayers will bear no losses from the government's 
exercise of resolution authority. But that promise, like the promise we 
heard in Fannie and Freddie, is an empty one, not worth the paper it is 
printed on.
  You will remember, on this floor we heard the Secretary of the 
Treasury say, $300 billion that will never be used. It was used, and 
almost another trillion dollars more was guaranteed.
  The only way to ensure that the pockets of taxpayers will not again 
be picked by Wall Street and government bureaucrats with the help of 
this Congress--a coalition which sometimes I refer to as the reckless 
and the clueless--is to insist that failing firms be resolved through 
bankruptcy.
  In conclusion, let me remind my colleagues that for 99.9 percent of 
core companies and all individuals who find themselves unable to meet 
their obligations or their creditors, bankruptcy--not a government 
bailout--is the only alternative. It ought to be the alternative for 
failing too-big-to-save corporations as well.

                              {time}  1530

  This motion to instruct would eliminate the two big to fail/too small 
to save double standard in the Democrat bill that has so infuriated the 
American people and makes bankruptcy the only option for the 
systemically significant firms, many of which created the crisis our 
economy and the American people face today. I urge my colleagues to 
support it.
  I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself such time as 
I may consume.
  Mr. Speaker, we have just seen an elephant stick wielded on the floor 
of the House. The elephant stick refers to the man who's walking around 
the Mall here in Washington carrying a big stick, and people say, Why 
do you have that big stick. He said, Well, I've got to keep away all 
the elephants, and the people say to him, Well, there aren't any 
elephants here, and he said, Right, my stick works.
  My friend from Alabama is determined to prevent from happening what's 
not going to happen, what's not authorized in the bill. It is true that 
we

[[Page 10321]]

had bailouts, and of course, what we also have here is the latest in a 
series of stunning repudiations of the Bush administration by its 
former loyal followers. All the bailouts the gentleman mentioned, of 
course, happened under the administration of President Bush, and I 
believe President Bush's administration did the best they could with 
weak tools at the time to deal with the problem.
  What we have are ways to avoid that from happening. There is 
reference to too big to fail. No institution will be too big to fail 
under this bill. They will fail. The question is, will their failure 
lead to consequences that you should have some ability to deal with.
  We do model some of this after the FDIC. The FDIC, run by a very able 
appointee, Sheila Bair, a former aid to Senator Dole and a Republican 
appointed to the job by President Bush, had a major role in helping us 
decide how to do this, and it is to say, first of all, the institutions 
that get too far into debt will die.
  My Republican colleagues were actually right in the wrong place 
earlier this year, which is better than their usual average, when they 
talked about death panels. We are legislating death panels this year 
but for financial institutions, not elderly women. We don't have them 
in the health care bill. We have them in the financial bill. There is 
no too big to fail institution.
  I will say in the instruction motion some things that were done were 
not done as well as they should have been--that's why we go to a final 
conference--and to the extent that there are suggestions that some of 
these institutions might survive, we will clean them out. The Senate 
bill has some provisions I don't like, and section 202 of the Senate 
bill I hope to change.
  On the other hand, the notion that in this very complex system that 
we have, with the debts that are out there, to only do bankruptcy is 
simplistic. By the way, if my Republican colleagues really believe that 
bankruptcy was the only way to deal with these institutions, they would 
have an amendment or would have had an amendment to do away with the 
dissolution authority in the FDIC. The major exception of bankruptcy 
right now is in the Federal Deposit Insurance Corporation. We don't 
have simple bankruptcy for banks. We have a method given that 
particular relevance in the society on how you wind them down.
  So, there are many things in here that I agree with. As to the 
conference report being open, again here I welcome my Republican 
colleagues as converts to the cause of openness and interbranch 
negotiations. When the Republicans controlled this institution for 12 
years and had the Senate for most of that time, conferences were so 
rare that I've had to explain to Members who came during the years of 
Republicans how a conference works. Now they have become great 
advocates of an openness they never implemented themselves.
  We will have a conference, which I announced was my intention last 
year, last fall. It will be open. Things will be presented. They will 
be debated. They will be subject to amendment. They will be voted on. I 
was asked if they were going to be televised. Now, I am not the 
editorial director of C-SPAN. I hope it will be covered. I hope TV will 
be there. I hope it will be widely covered, and I think it probably 
will be given the interest.
  So, when they talk about a 72-hour requirement, I expect that we will 
beat that. The timetable I am hoping for will have this bill done in a 
couple of weeks, and it should be reported out, if we can work this out 
by a Thursday, and not come to the House until Tuesday which is more 
than 72 hours. One never knows whether there is going to be some 
emergency, what might happen. This will be a fully debated bill.
  So there are aspects of the instruction report that I agree with. 
There are aspects with which I disagree. Of course, we have to go to 
the Senate. That's why instruction motions are not binding. But I do 
disagree with two points.
  First of all, the entirely enacted allegation that this perpetuates 
bailouts, they have us confused with the situation that occurred in 
2008. I don't blame the Bush administration for these bailouts in part 
because I think some of them could have been conducted more sensibly 
and better and with more concern for the impact on the average citizen, 
but they didn't have the tools. This gives them tools that first the 
Bush administration and now the Obama administration has asked for, not 
to keep institutions alive but to put them to death in a way that does 
not cause great perturbation in the rest of the economy. There will be 
no taxpayer money expended under here. That's already done. I do not 
doubt that years from now they will take credit for what we had already 
decided to do.
  The instruction motion, in other words, is a mixed bag. Some parts of 
it I hope we will act on. The ex-ante fund we talk about of $150 
billion, recommended to us again by Chairwoman Bair of the FDIC, many 
of us thought that made sense. The Senate and the administration were 
opposed to it. It will not survive the conference. People know that. 
So, to that extent, that's going to disappear anyway.
  But saying that you only have bankruptcy and nothing else that helps 
you buffer the consequences of the failure of these institutions--and 
failures they will be, they will be hard to fail and will be 
dissolved--I think is reckless.
  So I plan to vote against the motion to instruct, and given that it 
is such a mixed bag of things and given that it's not binding, I will 
predict that the outcome is likely to be very similar no matter how 
this goes. That is, there are some things we are going to do, some 
things we have to negotiate with the Senate. We haven't got the power 
to order. So I think this will be a useful discussion, but I will go 
back to just the last central point.
  There will be no taxpayer funds, and there will be no institutions 
that are not allowed to fail. There will be an effort--and this has to 
be negotiated--to work with the Senate so that we do not simply say 
that the consequences are of no interest, and I would repeat again. 
Those who genuinely believe that only bankruptcy should be used have 
made a major concession by not applying those rules to the banking 
system. If only bankruptcy should be used, then where was the amendment 
during the process to convert the FDIC dissolution process on which 
this is modelled to a bankruptcy model?
  I reserve the balance of my time.
  Mr. BACHUS. Mr. Speaker, at this time I yield 4 minutes to the 
gentleman from Texas (Mr. Hensarling).
  Mr. HENSARLING. Mr. Speaker, the question before us, with apologies 
to William Shakespeare, to bail out or not to bail out, that is the 
question. The motion to instruct by the ranking member says no more 
bailouts. Quite simply, it cannot be said any other way. Unfortunately, 
whether you're dealing with the House bill or the Senate bill, they are 
still identifying firms that in their view are too big to fail. Now the 
phrase that is used is systemically significant, systemically risky, 
but they are identifying firms for a specific regulatory scheme, and in 
the House version, as the distinguished chairman of the Financial 
Services Committee pointed out, is a prefunded bailout fund. In the 
Senate version, they drop their prefunded, but there is an infinite 
line of credit that the FDIC can draw upon with respect to the 
Treasury. Again, if you have firms, Mr. Speaker, that are too big to 
fail, then you are saying they can't fail. If they can't fail, then at 
some point you're going to bail them out.
  Now, I've heard the distinguished chairman of the Financial Services 
Committee, the gentleman from Massachusetts, on many occasions say no 
taxpayer funds will be used. I heard him say it seconds earlier and I 
know he believes it and I know he means it, but unfortunately, the 
track record for him and many of his colleagues on that side of the 
aisle in predicting such is really not very good.
  The distinguished chairman was the same one who told us he didn't 
believe that taxpayers would be called upon to bail out Fannie and 
Freddie. Well, approximately $150 billion later, we know that Fannie 
and Freddie did have to be bailed out, that rolling the dice was not a 
good strategy.

[[Page 10322]]

  These are the same folks who also told us that the National Flood 
Insurance Program would never go broke, the crop insurance program, 
Medicare will never go broke. We've heard it before, Mr. Speaker. To 
somehow believe that ultimately taxpayers were not being called upon to 
have to bail out these firms is asking us frankly to ignore history and 
to suspend disbelief. Again, it is time to end the bailouts, and the 
motion to instruct would do that. Too big to fail becomes a self-
fulfilling prophecy. Again, in many respects, the bill ought to be 
renamed the Perpetual Bailout Act of 2010. It has the wrong scheme. 
Bankruptcy is the proper scheme.
  Now, I know the chairman has told us, well, we have death panels for 
these financial firms. Well, what happened on Chrysler and GM on their 
so-called death panels? Well, we know that Washington decided to play 
favorites. Certain creditors were benefited at the expense of others. 
Unsecured creditors, particularly the UAW, United Automobile Workers, 
somehow they jet to the front of the line. Secured creditors, they go 
to the back of the line. It creates avenues for political favoritism in 
Washington, D.C. It will again lead to Washington picking winners and 
losers.
  We know how this ends. We know that AIG refused to make counter 
parties whole. CIT was designated too big to fail. They got billions of 
dollars. They failed anyway but it was resolved quickly. It is time to 
end the bailouts. The Nation cannot afford to be on the road to 
bankruptcy. It is time to end the bailouts, Mr. Speaker, and it is time 
to approve this motion to instruct.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself such time as 
I may consume.
  I would like to yield to any of my Republican colleagues who will 
tell me why during this process they never moved to require bankruptcy 
as the way of dealing with failing banks. If bankruptcy is the only way 
to do it, why have the Republicans never proposed that we substitute 
for the current FDIC proposal bankruptcy? Well, I'm used to being 
unanswered when I ask hard questions. I think that proves the point.
  I will yield to the gentleman from Texas.
  Mr. HENSARLING. Well, I would say to the distinguished chairman that 
depositors are very different from investors, and when we have taxpayer 
money specifically at risk, it calls for a different regime.
  Mr. FRANK of Massachusetts. Well, the gentleman is wrong about that 
because, yes, depositors are different than investors and depositors 
are insured, but we have deposit insurance. If you on the other side 
generally believe this, Mr. Speaker, they would provide deposit 
insurance and then bankruptcy. The gentleman's incorrectly answered the 
question. Deposit insurance takes care of the depositors, but there are 
other things that are done to try and reduce the cost to the 
government. So bankruptcy and deposit insurance has not been the 
method.
  Mr. HENSARLING. Will the gentleman yield?
  Mr. FRANK of Massachusetts. Yes.
  Mr. HENSARLING. Is the distinguished chairman suggesting that we need 
deposit insurance for firms like Citigroup and Goldman Sachs? Is that 
what the gentleman is suggesting then?
  Mr. FRANK of Massachusetts. I would take back my time to say that's 
even by the standards of this debate wholly illogical. No, I'm not 
remotely suggesting that. What I'm suggesting is the glaring 
inconsistency between saying bankruptcy is the only way you put an 
institution out of business and the failure to apply that to the 
banking business.
  By the way, I don't mean to be rude but the gentleman mentioned 
Citicorp. There's a bank there that has deposit insurance. So maybe the 
gentleman wasn't aware that the bank there has deposit insurance.

                              {time}  1545

  Mr. Speaker, there is another error in the comments. This is that the 
bill designates institutions too big to fail as systemically important. 
That is misleading as stated.
  In fact, the bill in the House does not designate any institution as 
being systemically important. The only way an institution would be 
designated as systemically important is if it was found to be troubled. 
So there would be no situation in which an institution would have that 
label and go out and be able to do things with it.
  Under the bill that we have, only a finding that the institution is 
in difficulty triggers a systemic importance designation, and it is 
accompanied with restrictions on that institution. It is exactly the 
opposite of this being a badge to get more loans. It is publicly 
identified as a troubled institution.
  The last point I would make is this. Yes, there was flood insurance, 
Medicare, a number of things. None of them have the language we have in 
this bill. This bill has very specific language banning those things 
because we have learned from experience.
  We have learned from the experience of 2008, with all those bailouts. 
And, again, remember, every single bailout activity was initiated by 
the Bush administration. And I say that not for political purposes but 
to indicate the inherent difficulties here.
  And it was the people in the Bush administration who first said to 
us, ``Give us different tools. We have to be able to deal with putting 
these institutions out of business, but not ignore the consequences.''
  So, with that, Mr. Speaker, I reiterate: This bill very explicitly 
prevents bailouts. It designates no institution as systemically 
important. It says that regulators may step in when they find an 
institution to be troubled. And if they think that that troubled 
institution could cause damage, they don't just designate it, they put 
severe restrictions on it.
  So it is exactly the opposite suggestion that some will be too big to 
fail. They will be on notice that they have to increase their capital, 
decrease their activity. And people will be told that if that 
institution does fail under this bill, those who have invested, et 
cetera, will be wiped out.
  Mr. Speaker, I reserve the balance of my time.
  Mr. BACHUS. Mr. Speaker, I yield 4 minutes to another gentleman from 
Texas (Mr. Paul).
  Mr. PAUL. I thank the gentleman for yielding.
  Mr. Speaker, I rise in support of this motion to instruct. I think it 
is a good idea that we don't have the taxpayers bailing out eternally 
institutions that are bankrupt.
  But there is an important thing to remember, that when an economy 
gets out of kilter, the marketplace demands a correction of that. And 
that's usually called the recession. Of course, we are not discussing 
here today exactly how we get into the excesses, but we do. And, 
unfortunately, debt gets too high and mal-investment gets too 
excessive, and the market wants to correct this.
  Now, it's essential that this excessive debt be liquidated. It can be 
liquidated in two different ways. It can be written off by inflationary 
currency and paid off with bad money, or it can be liquidated actually 
through the bankruptcy process.
  So I am in strong support of this, but I also want to make a point 
here and a suggestion to the conferees that they pay attention to the 
provision in the House version of our bill dealing with the Federal 
Reserve. And that provision is called H.R. 1207, which deals with the 
auditing. And there is a difference between the Senate version and the 
House version.
  So, although we are not talking about that specifically, to me it's 
important, not only for the issue of oversight and transparency, but 
there is also an opportunity for the Federal Reserve to provide bailout 
provisions for certain organizations, as well. We are talking about 
taxpayers' funds, the appropriated funds, TARP funds and others. But 
when we come to extending loans, in a way this very much is a bailout.
  So I would like to suggest that we look at that and stand by the 
House provision. We do have 319 cosponsors of this provision.
  Mr. FRANK of Massachusetts. If the gentleman would yield, as you 
know, I

[[Page 10323]]

was for some form of that. And I guarantee, because the Senate has 
acted, we will have tough auditing provisions of the Federal Reserve in 
the final bill.
  And I do want to note to my friend from Texas that, when the 
Republicans offered a motion to recommit to the bill, they would have 
wiped out a number of things, including his audit provision. So despite 
the fact that my friend from Texas temporarily abandoned his audit 
provision to the perils of a recommittal provision, I will join with 
him in reviving it.
  And, as he knows, we have in our bill a severe limitation on this 
power under section 13(3) for making these loans. What they did with 
AIG will no longer be possible. There will be no more loans to 
individual institutions.
  But he has been the leader on the audit situation, and I intend to 
continue to work with him to make sure it is well done.
  Mr. PAUL. I thank the chairman.
  And I would just like to reemphasize that it is the responsibility of 
the Congress to commit to oversight of the Federal Reserve, something 
that we have been derelict in doing. I think the mood of this House and 
the mood of the Senate and the mood of the country is more transparency 
and more oversight.
  The provision in the Senate version is not adequate for an audit of 
the Fed. So I am encouraged that we are getting more attention because, 
ultimately, it is necessary that we understand exactly how the business 
cycle comes about and how the Federal Reserve participates in this.
  Because, under the circumstances of today, on what we are doing, we 
are prolonging our agony. And someday I would hope to see that our 
recessions--and now we are talking about depressions--are minimized and 
shortened. And I am concerned that the programs that we are working 
with today are prolonging those changes.
  So the most important thing that we can do is make sure that we exert 
our responsibilities, have oversight of the Federal Reserve, commit to 
these audits of the Federal Reserve, and not to endorse the idea that 
the Federal Reserve is totally secret, can do what they want, can bail 
out other companies and banks and foreign governments and foreign 
central banks without fully knowing exactly what they are doing.
  Once again, I thank the chairman of the committee for his support for 
auditing the Fed.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield such time as he may 
consume to the chairman of the Subcommittee on Financial Institutions, 
the gentleman from Pennsylvania (Mr. Kanjorski), who had a major and 
constructive role in this bill and was pushing for things like reform 
of the Volcker rule before it was popular in other quarters.
  Mr. KANJORSKI. Mr. Speaker, I rise maybe to make a suggestion. I know 
it may drop on deaf ears, but, you know, we are about to undertake an 
historic event, both in this institution, the Congress of the United 
States, and in the United States of America, and that is to enact laws 
by a democratic society through their elected representatives that will 
cause occasions to happen that may actually save the economy of this 
Nation or the economy of the world.
  It seems to me at this first preparation date we are awaiting the 
appointment of our conferees here on the House side, that we are 
already indicating that there will be a political flavor to this 
conference as opposed to an attempt by both sides of the aisle to find 
what is best for America and what is best for the economy of this 
country.
  Now, I suggest, and I will concede, having worked with the chairman 
and Members on the other side, the ranking members and others, for 
these last 15 or 16 months, that this is not a perfect bill or a 
perfect solution. I wish it were. But I think we will all have to wait 
until another day of a higher order to get to perfection.
  All we are trying to do here is to work in the regular order of the 
legal process to see if we can make certain that we don't bring down 
our economy or our government or the world's economy or the world 
governments. And that's what we are attempting to do.
  Now, you know, we have all these titles, and I am probably as guilty 
as others, ``too big to fail.'' And we talk about that like that's an 
easily definable entity. Well, in reality, it isn't.
  The fact of the matter is, some things are so interconnected and 
intertwined and involved in our economic system that, for all intents 
and purposes, they would appear not to be a risky organization, but 
that when you examine them and you see the tentacles that they send out 
through our society and other organizations throughout the world, that 
their failure can precipitate a failure of the economic system of the 
world.
  That's what we experienced in an organization known as AIG. You know, 
an organization in excess of 100,000 people, working in tens of 
countries around the world, had a little organization in London, 
England, called AIG Financial Products. Those 400 people were able to 
take a name, AIG, American International Insurance Group, and utilize 
that to get into the derivative business to the tune of $2.8 trillion 
without the support of adequate assets to meet their counterparty 
positions.
  And what happened? It started to fail to meet its counterparty 
positions and immediately would have put at risk most of the major 
banks of not only the United States but of the world.
  Now, when that was happening--and that occurred after other failures 
in the United States had occurred--we had several choices. We could 
have sat by and said, ``Well, the market will cure all things.'' And I 
guess if you are a purist, that's not a bad position philosophically to 
take, because it is correct. I will concede to that.
  But I am one of those people that favor affecting the market and 
taking the actions that will, in some instances, short-circuit the 
effects of the market when the effects of the market will be so severe 
on our population that it warrants such action. And that's exactly what 
happened at AIG.
  If we had sat back and allowed that to occur and the ripple effect 
around the world, we would have collapsed the economy of the United 
States and the world, probably, some of our best economists in the 
world indicated, within 72 hours. We would have been in a position of 
no one knowing what the world's economy would have looked like.
  We were called upon to take certain actions, and that was way back in 
September or October of 2008. And many of us came back to Washington 
just before our vital elections that year, and we went to work and we 
created something.
  Can I reconstruct for you gentlemen what it was about? We didn't come 
back to the Obama administration. We didn't come back to a situation--
--


                         Parliamentary Inquiry

  Mr. ISSA. Mr. Speaker, parliamentary inquiry.
  The SPEAKER pro tempore (Mrs. Halvorson). The gentleman will state 
it.
  Mr. ISSA. Mr. Speaker, doesn't our House rule require that the 
address be made to the Speaker and not to each other?
  The SPEAKER pro tempore. Members are reminded to address their 
remarks to the Speaker.
  The Chair recognizes the gentleman from Pennsylvania.
  Mr. KANJORSKI. It is certainly a pleasure to address the Speaker, and 
I will. I am sure we should adhere to the decorum of the House and the 
rules of the House, and I will definitely do that.
  I wouldn't think of calling the attention of my observations to my 
colleagues on the other side. That could be frightful if we did that 
because they may have to respond to those observations. So we won't 
call those observations.
  I was going through how we got here and why we are here. And how we 
got here was we met in rooms around this Capitol for a number of weeks, 
2 or 3 weeks, as I recall. And the President of the United States, 
George W. Bush, in his last year of presidency, or in the last several 
years of his presidency, indicated that his Secretary of Treasury and 
the Chairman of the Federal Reserve were his designees to work with 
Congress to see what we could do to

[[Page 10324]]

prevent the potential meltdown or catastrophe to the world's economy. 
And we went to work to do that.
  Now, as I recall--and I sat in some of those meetings, not all of 
those meetings--we would periodically tune the conference telephone to 
economists, Nobel Prize-winning economists around the world, of all 
political persuasions and philosophical positions. And, to my best 
recollection, there were several dozen. And to a man, or woman, not one 
of them disagreed that what we were facing was total meltdown and that 
precipitous action had to be taken.
  And the precipitous action that was taken was to provide a rescue 
package, giving unusual, incredible authority to the executive branch 
of government, to be utilized by the Secretary of the Treasury, to do 
what we could to prevent a meltdown in the United States.

                              {time}  1600

  Now, at all times, as I recall, those eminent economists were telling 
us that it was their opinion that even if we did these strange and 
unusual activities of empowering the President and the Secretary of the 
Treasury to borrow monies, use monies, buy assets, do all kinds of 
things, the chance of success was rated at about 50/50.
  As I recall, we worked for about 2 or 3 weeks crafting what 
originally was a three-page bill that ultimately became a 400-page bill 
and became known as the ``rescue'' bill. We brought it to the House 
floor, if all of you will recall, and it failed. And the day that it 
failed, the hour that it failed, the half hour that it failed, the New 
York Stock Exchange dropped 900 points. And finally, there was a 
realization across the country and across the world that if this rescue 
package was not passed, we probably were looking at the beginning of 
the failure of the American economic system, and we went to work to see 
if we could put a coalition together to get it passed, and that took 
another week, if I recall.
  Now, we did those things in the midst of an election. We did those 
things with a Republican President and a Democratic Congress, and it 
seems we did it pretty successfully. And we didn't call it a 
``bailout'' bill. That became a political terminology so that people 
could be misinformed, misdirected, and have a visceral reaction to what 
the Congress has done when they really didn't understand it. And what 
occurred? Well, that prevailed. Rather than calling it a ``rescue'' 
bill anymore, it became known as the ``bailout.''
  I want to correct that because I've heard that term used here at 
least a dozen or two dozen times. I asked the question, what did we 
bail out? We made extensive commitments to banks in the United States. 
To the best of my knowledge, all those banks have now repaid those 
commitments to the Treasury or to the Federal Reserve. What was the 
success of that? Most of them did not fail and our economic system did 
not fail, in totality, so it was pretty good, but we were losing 
employment and falling like a rock, the economy, to the tune of, in 
January, when the new President of the United States was sworn into 
office, this Nation lost 750,000 jobs and had been losing jobs at that 
rate for several months before and it continued several months after. 
And we started to get into, as opposed to discussing economics, free 
market situations and legalities of how we handle this problem. We got 
into a political ramble that has continued to this day. I think that's 
what I got up to address.
  If we stay on this course and this direction, the only thing that's 
going to happen at this conference committee--and ultimately the bills 
that are enacted into law and signed by the President--will be very 
limited-capacity pieces of legislation that will not nearly accomplish 
what could happen. On the other hand, I say to my friends on the other 
side and the Members and colleagues of this Congress, if we can put our 
personal prejudices, our political advantages to the side and spend the 
next 2\1/2\ or 3 weeks in an honest effort to get the best bill 
possible to reform the financial markets of the United States, and 
indeed the world, we can do something that is so historic in nature 
that we place the stability of our economy for the next 75 years as it 
was ably put together in the 1930s.
  If we don't accomplish that, what we're going to end up with is a 
temporary solution to a disastrous problem, fighting a lot of silly 
political questions which will long disappear before most of us do from 
the face of the Earth, but not accomplishing anything for the American 
people.
  So I just end this dialogue with saying this--to the gentlemen on 
both sides of the aisle, so I'm not charged with directing it towards 
one side--let's put our disagreements aside for the next 2 or 3 weeks. 
Let's listen to the chairman of the House committee and the ranking 
member. Let's listen to the chairman of the Senate committee and 
ranking member and the other 30 participants of this conference 
committee, with the commitment of doing the best we can within our 
powers to prevent this from happening, certainly in the near future, or 
potentially ever again. If we fail to do that, we will have failed our 
job.
  Mr. BACHUS. May I inquire of the Speaker as to how much time is 
remaining on each side.
  The SPEAKER pro tempore. The gentleman from Alabama has 16 minutes 
remaining, and the gentleman from Massachusetts has 7 minutes 
remaining.
  Mr. BACHUS. Madam Speaker, I yield 4 minutes to the very able ranking 
member of the Oversight Committee, Mrs. Judy Biggert.
  Mrs. BIGGERT. I thank the gentleman for yielding.
  I rise in support of the motion to instruct.
  Madam Speaker, taxpayers are tired of paying for the mistakes of 
others and fed up with bailouts. It's time for Congress to recognize 
that financial managers that drive their firms into insolvency should 
be met with bankruptcy and not bailouts.
  Unfortunately, both the House and Senate financial regulatory reform 
bills allow the government to take over any financial business 
Washington bureaucrats deem as ``too big to fail.'' In other words, if 
Federal regulators like Treasury Secretary Geithner fail to do their 
job, then these same regulators can simply take over, dismantle, or 
prop up any financial institution that they choose at taxpayers' 
expense, and that's what I would call a bailout. That's the government 
picking winners and losers in the marketplace. That's the same reckless 
approach that caused the markets to undervalue risk, inflated the 
bubble, and left taxpayers to clean up the mess when it burst. And it 
must end.
  House Republicans say ``never again,'' and we have developed a 
responsible alternative--bankruptcy. It's a fair and unbiased process, 
insulated from inappropriate political pressures, and removes taxpayers 
from the equation. During a recent hearing, Federal Reserve Bank of 
Kansas City President Thomas Hoenig agreed, calling enhanced bankruptcy 
``a process that assures everyone that the largest institutions will be 
dismantled if they fail.'' And he continued, ``I prefer a rule of law 
that takes away discretion from the bureaucrat or from the policy 
person so that in the crisis you don't have that option to bail out, so 
that you have to take certain steps to control, to prevent a financial 
meltdown.''
  Madam Speaker, I couldn't agree more. Effective financial reform must 
end the bailouts and prevent the next financial meltdown. Bankruptcy is 
central to the solution. It will give certainty to the marketplace, 
discourage risky practices, and eliminate taxpayer liability and 
political interference.
  The bottom line is that stronger, nimble and more coordinated 
regulators must do their job, exercise strong oversight, and bar 
excessive, risky, deceptive and fraudulent marketplace behavior. 
Washington shouldn't control the market; it should regulate it.
  Through smarter regulation and enhanced bankruptcy rules, we can 
prevent the next financial meltdown. Millions of American businesses 
and families that work together every day to play by the rules and 
invest wisely deserve nothing less.
  I support the motion, and I hope we will have a great conference and 
come

[[Page 10325]]

up with a bill; but I think this is an important motion to instruct to 
consider before that.
  The SPEAKER pro tempore (Mr. Jackson of Illinois). The gentleman from 
Alabama has 13 minutes remaining. The gentleman from Massachusetts has 
7 minutes remaining.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself 30 seconds to 
say that I'm intrigued. We were talking about bankruptcy, now we have a 
new concept--enhanced bankruptcy. We were told earlier that it should 
just be plain bankruptcy like everybody else. Now, apparently, there is 
something special so we get enhanced bankruptcy. Maybe we will have 
enhanced bankruptcy explained to us. And if bankruptcy is good for 
everybody, why does enhanced bankruptcy need to be done here, and what 
is it? Is it another name for doing more than bankruptcy?
  I reserve the balance of my time.
  Mr. BACHUS. Mr. Speaker, I yield 3 minutes to the ranking member of 
the Government Oversight Committee from California (Mr. Issa).
  Mr. ISSA. I thank the gentleman for yielding.
  Mr. Speaker, 3 minutes is all I need because we're going into a 
process, one in which I would like to be optimistic, one in which I 
will have 72 hours to pore over a 2,000-page bill to see where we can 
make it better.
  Mr. Speaker, I, too, like the gentleman from Pennsylvania, remember 
2008. I remember helping lead the charge against a wholesale bailout, a 
slush fund for then-President Bush to pass around $700 billion and to 
pass on to the next President a piece of that left over to spend it, 
and if you happen to get paid back, to spend it again.
  Mr. Speaker, the American people are tired of endless bailouts of the 
select few. When the gentleman spoke of AIG, AIG still owes us $100-
plus billion we'll never see back, in spite of the fact that much of 
that money went outside the country.
  I'm part of a Congress that saw the Bush administration make 
mistakes. I'm fortunate that I voted against it and I'm happy that I 
voted against it. As we go into this financial reform, I would hope 
that we remember Milton Friedman once said, Capitalism is a profit and 
loss system: the profits encourage risk-taking and the losses encourage 
prudence.
  Mr. Speaker, we must have freedom to fail in this country. We cannot 
have ``too big to fail.'' And more importantly, we cannot have the 
politicalization of the process by picking and choosing people like 
Freddie and Fannie to get $6 trillion worth of full-faith funding from 
the American people in order to guarantee what ultimately was to a 
great extent their fault. We went into a financial collapse because 
when homes became unaffordable, gimmicks were produced. The American 
people watched their government create most of those gimmicks, and even 
today the American Government continues to fund a 3.5-percent-down form 
of financing as though homes will only go up in price. So I look 
forward to working on a bipartisan basis to get this bill right in 
conference.
  Mr. FRANK of Massachusetts. I yield 3 minutes to the chairman of the 
Oversight Committee of the Financial Services Committee who has been a 
major force for stability in this system, the gentleman from Kansas 
(Mr. Moore).
  Mr. MOORE of Kansas. Mr. Speaker, I rise in opposition to the 
Republican motion to instruct but in support of the work the House and 
Senate Conference Committee will begin in crafting a final bill on Wall 
Street reform.
  For most of last year, my colleagues on the House Financial Services 
Committee, under the outstanding leadership of Chairman Frank, along 
with other committees, worked hard to produce the Wall Street Reform 
and Consumer Protection Act. The work was bipartisan; over 50 
Republican amendments were accepted along with over 20 bipartisan 
amendments. This package contains ideas put forward by Democrats and 
Republicans, as it should, creating a better and more thoughtful bill.
  While the bill is large and complex, it does some very important 
things: it ends ``too big to fail.'' It ends the need for bailouts and 
fully protects taxpayers, and it has tough new consumer investor 
protections that will better protect families' retirement funds, 
college savings, and small business owners' financial futures from 
unnecessary risks by Wall Street vendors and speculators. And something 
we were careful to do in the House bill was to make sure this new 
financial oversight system would focus on the true problems that 
created the financial crisis and not responsible actors like most 
community banks and credit unions.
  While the bill provides needed new oversight to the $600 trillion 
derivatives market, it is well balanced, allowing farmers and small 
businesses in Kansas to conduct good risk management and hedge their 
business risks in a responsible manner.
  I commend the Senate for also passing a tough financial overhaul bill 
last month.
  The conference committee should take the best ideas from both bills 
and combine them into one final bill that our colleagues can support 
and that will finally restore our constituents' trust in our financial 
system. I urge my colleagues to oppose this motion to instruct that 
serves as a distraction to the need for a well-balanced, strong 
financial reform package.

                              {time}  1615

  Mr. NEUGEBAUER. It is now my pleasure to yield 2 minutes to the 
ranking member of the Judiciary Committee, the gentleman from Texas 
(Mr. Smith).
  Mr. SMITH of Texas. I thank my colleague from Texas for yielding me 
time.
  Mr. Speaker, as Congress weighs the question of Wall Street reform, 
the answer the American people want us to give is clear: ``No more 
bailouts.'' We should give that answer by passing legislation that 
sends any failing financial institution to bankruptcy, not to a Federal 
agency that might bail it out.
  The Democratic Senator who guided this legislation through the Senate 
agrees that bankruptcy must be our primary response to failing 
institutions. Bankruptcy is fair. Its rules are clear. It is 
administered transparently by impartial courts. It has existed for 
generations because of one unmistakable truth: Free enterprise without 
the possibility of failure is free enterprise without the possibility 
of success.
  The Senate improved the House bill by recognizing a role for 
bankruptcy, but it failed to give the bankruptcy courts what they need 
to make that role meaningful. As a result, the legislation's escape 
hatch from bankruptcy, one that allows agency takeovers of firms, 
threatens to become the first option under the bill.
  When agencies take over firms, we all know that they will bail them 
out. Let's finish our work. Let's close every loophole that invites a 
bailout.
  Mr. Speaker, I urge my colleagues to support this motion.
  Mr. FRANK of Massachusetts. Mr. Speaker, I reserve the balance of my 
time.
  Mr. BACHUS. At this time, Mr. Speaker, I yield 4 minutes to the vice 
ranking member of the Financial Services Committee, the gentleman from 
Texas (Mr. Neugebauer).
  Mr. NEUGEBAUER. I thank the gentleman for yielding.
  I rise in support of the motion to instruct.
  Mr. Speaker, the American people want financial reform. They don't 
want a financial reform replay. Financial regulatory reform is 
something we can all agree is needed, but we owe it to the taxpayers, 
who have picked up the tab for the endless bailouts, to get it right.
  The House and Senate bills both lead us a long way from getting it 
done right. Both the House and Senate bills give the government 
permanent authority to continue these AIG bailouts of failing firms. 
Both bills let the government continue to pick winners and losers by 
deciding which financial companies will get on the too-big-to-fail list 
and which will benefit from government backing. As it stands right now, 
these bills give the very same regulators, who, by the way, failed to 
get the job done right in the first place, more authority and more 
power. These bills don't provide real reform. They

[[Page 10326]]

only make bailouts and government protection for failure explicit and 
permanent, leaving taxpayers on the hook indefinitely.
  These bills reduce choices and increase the cost of credit. At a time 
when small businesses all across the country are having a hard time 
getting credit, we are going to take action now that will reduce the 
ability for them, leading to fewer jobs and to more unemployment in our 
country.
  Finally, these bills fail to address the two companies that have cost 
the taxpayers the most: Freddie Mac and Fannie Mae. $175 billion, to 
date, of the taxpayers' money is already invested in these two 
entities. Yet this bill fails to make any attempt at any kind of reform 
of these two entities.
  Our motion instructs conferees to fix the biggest problems with this 
bill by removing all of the new and permanent bailouts. Our motion says 
that financial companies that fail should be allowed to fail and to use 
the rule of bankruptcy law, not backroom deals, which give some 
creditors more preference over others and which give different 
treatment to different creditors. Our motion says that the regulators 
should be held accountable, that they should not being given free rein 
to pick winners and losers and to decide who is too big to fail. The 
taxpayers want the financial regulatory system fixed, but they don't 
want it fixed with permanent bailouts.
  Support the motion to instruct to remove the bailout provisions from 
this bill and insist on real protections and reforms for the taxpayers, 
for our financial system, and for our economy. Mr. Speaker, the 
American people want reform. They don't want another replay of 
bailouts. Support the motion.
  Mr. FRANK of Massachusetts. I yield myself the balance of my time.
  Mr. Speaker, I remember when the gentleman from Texas was a little 
less harsh on Fannie Mae and Freddie Mac when an important amendment 
that he offered was adopted over the objection of the Secretary of the 
Treasury, but we've all tended to evolve some on some of these issues.
  I want to repeat the central theme here: History is one of bailouts 
initiated by the prior administration. Some have been supported by this 
Congress. Some have died by the administration on its own. This bill 
prevents that legally.
  The gentleman from Texas who just spoke referred to the AIG bailout 
by the Federal Reserve or the Federal Reserve's picking one company or 
another. The power that the Federal Reserve has had for over 75 years 
to do that is repealed in this bill. The Federal Reserve is allowed, if 
there are solvent institutions that are liquid and have a 99 percent 
chance of repayment at least, to advance money based on their paper, 
but there can be no more AIGs under the Federal Reserve's authority.
  The gentleman said, Well, they can get on the list of too big to 
fail. There is no such list. There is literally no such list. This is a 
hard-held myth by the Republicans. What there is is this: If the 
regulators have been given more power to watch you and if you say the 
regulators have failed, well, they were a different set of regulators. 
The SEC today is not the SEC under the prior administration, which 
looked the other way at Madoff. This is a different and tougher SEC. 
What they do is say to an institution that's now being much more 
carefully monitored, You need to be reformed. You need to be 
restrained. You must have higher capital requirements. You must reduce 
the amount you are doing.
  So there is a tight limitation on what these entities can do. So the 
privilege of being named important is--and it's not called 
``important.'' It says you're going to be subject to stricter 
standards. People are on notice that the authorities are worried about 
you, and then it says explicitly in the bill there can be no bailouts. 
There have been prior cases of bailouts on all sides--the Congress, the 
President, both parties--but they never had this language. There is no 
example of this explicit antibailout language being flouted, because it 
never existed before, so there are no too-big-to-fail institutions.
  The question between us is this: When an institution that has gotten 
overly indebted is put out of business, as this bill requires it to be, 
do you simply do that and ignore the consequences or should there be 
some capacity in the Federal Government to look at the consequences?
  Now, again, my colleagues have not applied their own logic to the 
FDIC, and I hope that the final speaker will explain what ``enhanced 
bankruptcy'' is. Remember, we started out being told that bankruptcy 
was the answer. Bankruptcy got enhanced somewhere, and we still haven't 
heard what that ``enhanced bankruptcy'' is. We insure the depositors, 
but that's not all. The depositors are taken care of, but then there 
are costs outside of the deposit, and the FDIC is told to follow the 
least cost method, and that will sometimes mean spending some money to 
wind it down in a way that diminishes the impact.
  So, apparently, even my colleagues on the other side aren't quite as 
devoted to bankruptcy as they think. They are not prepared to put it 
into the FDIC proposal. It's a form of enhanced bankruptcy, and I hope, 
in their remaining time, they will explain it. When they offered a 
recommittal motion on this bill, Mr. Speaker, they didn't say, Let's 
fix bankruptcy or let's do this. They said, Let's kill every single 
form of consumer and financial reform.
  The gentleman from Texas was alluding to the consumer agency. They 
wanted to kill an independent consumer agency. They wanted to kill a 
fiduciary responsibility for broker-dealers. They wanted to kill a 
requirement that leverage can never go more than 15-1. This is a little 
piece of what they are trying to do. They remain opposed. Their view is 
that the regulators in prior years didn't do a good job--regulators, 
yes, who followed the nonregulatory philosophy of the prior 
administration--and they have been opposed to any single form of 
reform. They are cloaking that in an argument that they are stopping 
bailouts which are already made illegal by this bill.
  Now, the instruction motion has some things in it that Members should 
support, and it has some things that Members should not support. It is 
obviously done in a way that, I think, will have an ambiguous impact, 
and it isn't binding in any case. So what the vote is is less important 
than what the message is, and let's be very clear about the message: 
There are no bailouts allowed under this bill.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. BACHUS. Mr. Speaker, at this time I yield 3 minutes to the 
ranking member of the Capital Markets Subcommittee, the gentleman from 
New Jersey (Mr. Garrett).
  Mr. GARRETT of New Jersey. I thank the gentleman for yielding.
  Mr. Speaker, would that it be true that there are no more bailouts in 
this 1,400- or 1,500-page bill that Congress is about to be considering 
in conference. Would that it be true that the American taxpayer is 
potentially no longer on the hook, as it has been over the last year 
and a half under this administration and past, as far as the bailouts 
that are costing the taxpayers literally tens of billions of dollars. 
Would that it be true that we pass a piece of legislation and be able 
to keep in place the laws of this country for the last 200-plus years 
to protect private property rights and to protect the rights under the 
Bankruptcy Code so that investors and institutions know exactly what 
they are going to get when they invest in a company, more importantly, 
when you are a secured creditor, that that name would actually mean 
what it says: You are secured by the assets of the company.
  We certainly saw that that was not the case in the Chrysler 
situation. You had a situation where the administration basically 
stepped in, using taxpayer dollars, and used the system of saying, 
We're not going to go through bankruptcy court--as Members of this side 
of the aisle would suggest should have occurred--but we are going to 
act in an extracurricular manner and allow the secured creditors to be 
tossed aside and the assets of the company to be

[[Page 10327]]

divvied up willy-nilly as the administration and others decided they 
would have.
  Now, that's, in essence, what we will be perpetuating with this piece 
of legislation that's before us. What happened in that situation?
  Well, in that situation, you had the unions, which basically had no 
interest in that company whatsoever, end up with basically a 55 percent 
interest in the company at the end of the day, basically a gift valued 
at $4.5 billion, and Fiat was given a 20 percent stake for free to take 
it over. At the end of the day, the secured creditors who thought that 
they should have been at the front of the line, well, ended up at the 
end of the line. Instead of getting, maybe, 43 cents on the dollar, 
they ended up getting some 29 cents on the dollar and said, You should 
be happy about it.
  Why do I bring up that case? Because, basically, at the end of the 
day, Mr. Speaker, we're going to be perpetuating that same sort of 
ability for regulators to be making those same decisions going forward. 
Yes, maybe they won't be able to give it to their friends again at the 
unions like they did in this case. Maybe they will. We're really not 
sure.
  Yet, at the end of the day, we'll be perpetuating the ability to say 
to secured creditors, secured creditors, you want to make an investment 
in a company, thinking that you are secured and that if the company 
were to fail and to go into bankruptcy that you would be first in line. 
Guess what? That is not going to be the case.
  We are going to put into statute a system to say that an unelected 
bureaucratic regulator is going to say, Maybe not. Not so fast, secured 
creditor. Not so fast, investor. We're going to put someone else ahead 
of you.
  You know, that actually happened to real-life people in the case of 
the Chrysler situation where three Indiana pension funds--representing 
who?--policemen, firemen, what have you, thought they were secured 
creditors. At the end of the day, they said that they were stripped of 
their rights by a system that this bill will perpetuate. This is what 
we were trying to do.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. BACHUS. I yield the gentleman 1 additional minute.
  Mr. GARRETT of New Jersey. I appreciate the gentleman's yielding.
  We have the idea that the ``rule of law'' should mean something in 
this country, and it has meant something for the last 200-plus years, 
and the Bankruptcy Code is part of that law.
  You know, an article published in the UCLA Law School said, ``What 
happened'' over this last year and a half ``was so outrageous and 
illegal that, until March of this year, 2009, nobody even 
conceptualized it.''
  The judge in that case that I was referring to commented from the 
bench that the poor pension manager from Indiana, who was representing 
the teachers and the firemen and the like, was kind of like the 
gentleman in Tiananmen Square when the tanks came rolling over.
  Well, Mr. Speaker, I do not want the investors in this country, 
whether they be firemen or policemen or other senior citizens down in 
Florida or in other places around the country, to feel like they did in 
that case. I want them to know that their rights are protected by the 
rule of law through the bankruptcy process and not by some politically 
appointed bureaucrats or regulators who can strip them of their rights. 
That is what Republicans stand for, and that is why we are opposed to 
this language in the majority's bill.
  Mr. BACHUS. Mr. Speaker, may I inquire as to the time left on both 
sides, knowing that I have the right to close.
  The SPEAKER pro tempore. The gentleman from Alabama has 3 minutes 
remaining. The time of the gentleman from Massachusetts has expired. 
The gentleman from Alabama has the right to close.
  Mr. BACHUS. Mr. Speaker, we heard the gentleman from Pennsylvania say 
that there were really no bailouts. I think, if you submit that 
statement to the American people, they would tell you that there were 
bailouts because, in fact, there were bailouts.
  The majority has made a statement on the floor of the House in 
defense of this bill that it has all been paid back. Well, in fact, it 
has not all been paid back, and I think, on further examination, Mr. 
Speaker, we would all have to remember the inconvenient fact that AIG 
still owes the American people about $150 billion and that Freddie and 
Fannie not only owe hundreds of billions of dollars but that the 
President, back on December 25, guaranteed their obligations, which 
could run in the trillions.
  Now, in addition to all of that, a few statements by the chairman, 
Mr. Speaker.
  The chairman says that they have to be troubled, that instead of 
going through bankruptcy, they will go through this thing where you can 
guarantee their obligations, where you can take a security interest in 
them, where you can purchase their assets, where you can lend money to 
them. They have to be troubled.
  Well, who decides that?
  Well, according to the bill, the Secretary of the Treasury sits at 
the head of a small group. I think the Senate bill includes Ms. 
Elizabeth Warren, but it includes the OCC.
  Mr. FRANK of Massachusetts. Will the gentleman yield?
  Mr. BACHUS. Yes, I will yield.

                              {time}  1630

  Mr. FRANK of Massachusetts. The statement that the Senate bill 
includes Elizabeth Warren is breathtaking. I do not believe the Senate 
bill refers to Elizabeth Warren.
  Mr. BACHUS. Well, I will withdraw that statement. I am glad to hear 
that it does not.
  Now, let me ask you this. This bill, and I'm going to quote from 
section 210, it says that the FDIC is authorized to borrow up to 90 
percent of the fair value of the failed firm's total consolidated 
assets. Ninety percent of the total consolidated assets.
  Now, Mr. Speaker, I would ask the chairman, maybe he can give us this 
figure or review my figures. But the largest corporation in America, 
Bank of America, which would qualify under this program has total 
assets of $2.34 trillion. That means that the FDIC could borrow $2 
trillion.
  Now, I would ask this: Where do they borrow it from? But, more 
importantly, if they borrow $2 trillion to allow Bank of America to go 
into this process, if they are not paid back, who pays it? And the 
answer is: the taxpayers, a $2 trillion investment right there.
  The SPEAKER pro tempore. All time has expired.
  Without objection, the previous question is ordered on the motion to 
instruct.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to instruct.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. BACHUS. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, this 15-
minute vote on the motion to instruct will be followed by 5-minute 
votes on motions to suspend the rules with regard to House Resolution 
1330, H.R. 5278, and H.R. 5133, if ordered.
  The vote was taken by electronic device, and there were--yeas 198, 
nays 217, not voting 16, as follows:

                             [Roll No. 343]

                               YEAS--198

     Aderholt
     Akin
     Alexander
     Austria
     Bachmann
     Bachus
     Bartlett
     Barton (TX)
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonner
     Bono Mack
     Boozman
     Boucher
     Boustany
     Brady (TX)
     Bright
     Broun (GA)
     Brown (SC)
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Camp
     Cantor
     Cao
     Capito
     Carter
     Cassidy
     Castle
     Chaffetz
     Childers
     Coble
     Coffman (CO)
     Cole
     Conaway
     Connolly (VA)
     Courtney
     Crenshaw
     Culberson
     Davis (KY)
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Djou
     Dreier
     Duncan
     Edwards (TX)
     Ehlers
     Emerson
     Fallin
     Flake
     Fleming
     Forbes
     Fortenberry
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Giffords
     Gingrey (GA)
     Gohmert
     Goodlatte

[[Page 10328]]


     Granger
     Graves
     Griffith
     Guthrie
     Hall (TX)
     Halvorson
     Harper
     Hastings (WA)
     Heinrich
     Heller
     Hensarling
     Herger
     Hodes
     Hunter
     Issa
     Jenkins
     Johnson (IL)
     Johnson, Sam
     Jones
     Jordan (OH)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kirkpatrick (AZ)
     Kline (MN)
     Lamborn
     Lance
     Latham
     LaTourette
     Latta
     Lee (NY)
     Lewis (CA)
     Linder
     LoBiondo
     Lucas
     Luetkemeyer
     Lummis
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     Markey (CO)
     McCarthy (CA)
     McCaul
     McClintock
     McCotter
     McIntyre
     McKeon
     McMorris Rodgers
     McNerney
     Mica
     Miller (FL)
     Miller (MI)
     Minnick
     Mitchell
     Moran (KS)
     Murphy, Tim
     Myrick
     Neugebauer
     Nunes
     Olson
     Owens
     Paul
     Paulsen
     Pence
     Perriello
     Peterson
     Petri
     Pitts
     Platts
     Poe (TX)
     Posey
     Price (GA)
     Putnam
     Radanovich
     Rehberg
     Reichert
     Rodriguez
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Rooney
     Ros-Lehtinen
     Roskam
     Royce
     Ryan (OH)
     Ryan (WI)
     Scalise
     Schauer
     Schmidt
     Schock
     Schrader
     Sensenbrenner
     Sessions
     Shadegg
     Shimkus
     Shuster
     Simpson
     Skelton
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Space
     Spratt
     Stearns
     Sullivan
     Taylor
     Teague
     Terry
     Thompson (PA)
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walden
     Wamp
     Westmoreland
     Whitfield
     Wilson (SC)
     Wittman
     Wolf
     Young (AK)
     Young (FL)

                               NAYS--217

     Ackerman
     Adler (NJ)
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boccieri
     Boren
     Boswell
     Boyd
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Carson (IN)
     Castor (FL)
     Chandler
     Chu
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Conyers
     Cooper
     Costa
     Costello
     Critz
     Crowley
     Cuellar
     Cummings
     Dahlkemper
     Davis (AL)
     Davis (CA)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutch
     Dicks
     Dingell
     Doggett
     Donnelly (IN)
     Doyle
     Driehaus
     Edwards (MD)
     Ellison
     Ellsworth
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Foster
     Frank (MA)
     Fudge
     Garamendi
     Gonzalez
     Gordon (TN)
     Grayson
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hare
     Hastings (FL)
     Herseth Sandlin
     Hill
     Himes
     Hinchey
     Hinojosa
     Hirono
     Holden
     Holt
     Honda
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson Lee (TX)
     Johnson (GA)
     Johnson, E. B.
     Kagen
     Kanjorski
     Kaptur
     Kildee
     Kilroy
     Kind
     Kissell
     Klein (FL)
     Kratovil
     Kucinich
     Langevin
     Larsen (WA)
     Larson (CT)
     Lee (CA)
     Levin
     Lewis (GA)
     Lipinski
     Loebsack
     Lofgren, Zoe
     Lowey
     Lujan
     Lynch
     Maffei
     Maloney
     Markey (MA)
     Marshall
     Matheson
     Matsui
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McMahon
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Miller (NC)
     Miller, George
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy (NY)
     Murphy, Patrick
     Nadler (NY)
     Napolitano
     Neal (MA)
     Nye
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor (AZ)
     Payne
     Perlmutter
     Peters
     Pingree (ME)
     Polis (CO)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Richardson
     Ross
     Rothman (NJ)
     Roybal-Allard
     Ruppersberger
     Rush
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shea-Porter
     Sherman
     Shuler
     Sires
     Slaughter
     Smith (WA)
     Snyder
     Speier
     Stark
     Stupak
     Sutton
     Tanner
     Thompson (CA)
     Thompson (MS)
     Tierney
     Titus
     Tonko
     Towns
     Tsongas
     Van Hollen
     Velazquez
     Visclosky
     Walz
     Wasserman Schultz
     Waters
     Watt
     Waxman
     Weiner
     Welch
     Wilson (OH)
     Woolsey
     Wu
     Yarmuth

                             NOT VOTING--16

     Barrett (SC)
     Berkley
     Calvert
     Campbell
     Davis (TN)
     Harman
     Higgins
     Hoekstra
     Inglis
     Kennedy
     Kilpatrick (MI)
     Kosmas
     McHenry
     Miller, Gary
     Quigley
     Watson


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). There are 2 minutes 
remaining in this vote.

                              {time}  1702

  Ms. FUDGE, Messrs. HOLDEN, CRITZ, PETERS, Ms. BEAN, Mr. FARR, Ms. 
RICHARDSON, Messrs. BUTTERFIELD, DONNELLY of Indiana, WILSON of Ohio, 
Mrs. MALONEY, Messrs. TIERNEY, CARSON of Indiana, MARSHALL, COOPER, 
FATTAH, ANDREWS, AL GREEN of Texas, Ms. WASSERMAN SCHULTZ, Messrs. 
SCOTT of Georgia, PAYNE, ROSS, BERRY, ELLISON, BISHOP of Georgia, 
SHERMAN, DRIEHAUS, LANGEVIN, CLYBURN, Ms. SLAUGHTER, Mr. WELCH, Ms. 
SUTTON, Messrs. WEINER, SCOTT of Virginia, and RUSH, and Ms. ESHOO 
changed their vote from ``yea'' to ``nay.''
  Messrs. SULLIVAN, RODRIGUEZ, CONNOLLY of Virginia, and BOEHNER 
changed their vote from ``nay'' to ``yea.''
  So the motion to instruct was rejected.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________