Spencer Bachus

Mr. BACHUS

Mr. BACHUS. I am not opposing your amendment. I am not speaking in opposition to your amendment.

Mr. BACHUS. Mr. Chairman, I would like to take this time during this amendment to publicly thank the chairman of the full committee, Mr. Frank, for his graciousness during the markup and the hearings on this bill and for his willingness to give us real input into this bill. There are 13 components of this legislation that we are not out here on the floor asking for an amendment to because the chairman consented to their inclusion. I believe that those matters which separate us are less than those that we agree on. This was a major disaster. It is the largest natural disaster this country has faced by many times. That we are struggling on some consensus on what we do going forward is predictable, and I will say in the defense of my colleagues, we are simply saying that we don't want some of the units replaced on a one- on-one basis. We know of 2,000 units that were either vacant or slated for demolition at the time of the hurricane. It is particularly those units that Mrs. Biggert has said in her amendment do not need to be replaced. There are many displaced New Orleans residents who may choose not to come back. Others like the flexibility of the section 8 voucher. We have also not said that we want folks that are displaced off these vouchers. We are simply saying it should not be a permanent situation. The gentleman from North Carolina mentioned the word ``housing.'' We do not see this as a housing issue. We see this as a quality-of-life issue. We do not want to recreate housing projects like the one in Atlanta where 70 percent----

Mr. BACHUS. What I am speaking about, and I think there is agreement on both sides of the aisle, that when you have a housing project where a large percentage, even a majority of the young men that grow up in that housing project end up in a State penitentiary, we need to do something different. We don't need to delay. Whether it is by renovating a unit that 2 years from now is slated for demolition, we just don't think that is the wisest use of taxpayer money. And I do see that to do that, we are going to have to have vouchers and continue people on section 8 if we are to do long-term solutions. I think the gentleman from North Carolina made a valid point when he said that. That is something that should not be rejected out of hand.

Mr. BACHUS. Mr. Chairman, I thank the gentlewoman for yielding. Hurricane Katrina was a terrible tragedy for people all along the gulf coast, for the people of New Orleans, but it was a greater tragedy for those who already were living with a sense of hopelessness and despair in the public housing projects of New Orleans. For them the tragedy did not start with Katrina. It preexisted Katrina. In those housing projects, children actually slept in bathtubs for their own protection. Elderly citizens, 10 and 15 years ago, were hiding in closets. But out of what was this despair in the housing projects of New Orleans, and really in many housing projects throughout the United States, we can use New Orleans and other models throughout this country to do something better than we have done. We have a moral imperative to change the standard of public housing in New Orleans, and not only in New Orleans but throughout this country. We can do better than simply warehousing families in failed large housing projects in crime-ridden communities. Our vision should be vibrant mixed-use communities with good housing, safe streets, and strong schools. Consider these facts about what happens when you concentrate and change the face and the environment of public housing: several years ago, the New York Times reported that 70 percent of the inmates in the New York prison system came from just seven ZIP codes with large concentrations of public housing. In other words, where you are born and the environment you are born into may put you, in all likelihood, on the road to the penitentiary. When you live in a neighborhood where poverty and hopelessness prevail, it becomes a breeding ground for crime, drug use, and all that goes with it. It was the same not only in New Orleans but it was the same sense of hopelessness, despair, and high crime in the East Lake community in downtown Atlanta. The East Lake public housing project was considered so dangerous that police refused to go on patrol there. Then a visionary named Tom Cousins, an Atlanta developer, came up with an idea: Why not replace a failed project with a 21st-century approach to housing, very similar to what we have done with HOPE VI? The answer was to create a public-private partnership emphasizing mixed use. With the help of HUD, the Atlanta housing authority and Tom Cousins and others totally transformed East Lake. They tore down the old projects. Yes, they tore down the old projects. They had to demolish some of those units. This bill restricts our ability to tear down old units. There are 2,000 units in New Orleans that were not habitable that we have said we are going to go in and instead of replacing them with something new, something modern, something that offers hope, we are simply going to replace what existed there. They tore down the old projects. They built new housing, and they opened a new school. Now doctors and lawyers live next door to those whose housing is subsidized. In the old projects, there was only about a two-thirds' occupancy level. The occupancy level in New Orleans is very low because of the shoddy condition of the housing. Now 100 percent of the subsidized units are occupied, and the overall occupancy rate is 93.5 percent. But something much greater than that, occupancy levels shouldn't be our main concern. It should be the condition of the people that are living there, their standard of living. Crime in the neighborhood has gone from the worst in Atlanta, 56 out of 56, the worst of 56 precincts, down to the 11th best precinct. Now, this is an area of mixed-use public housing which is actually one of the safest areas of Atlanta. The neighborhood has literally come back from the dead. But it wouldn't have happened if we had simply gone in like we propose to do in New Orleans and put it back exactly like it existed. In the end we are serving more low-income residents than we would if we had just replaced one on one. But it isn't just happening in East Lake. Centennial Place in Atlanta is another success story, and the same transformation took place in Birmingham, and is taking place, with the Metropolitan Gardens development, a neighborhood that is now brightened by a new school, new housing, and a new YMCA. It can be done. The Housing Authority of New Orleans has been dysfunctional for nearly 50 years. There is understandably a lot of anger and mistrust among the residents of New Orleans public housing after so many broken promises. But the anger, their anger and ours, should be channeled into moving forward in the direction of decent houses and safe communities. HUD has a design for mixed-use communities similar to East Lake, Centennial, and Metropolitan Gardens. But that approach was rejected by the committee majority in favor of the one-to-one replacement of the old houses, in the same place, in the same location, in the same conditions. It is time to do better and we must. This bill does not meet our imperative to the people of New Orleans public housing. If the concern is that some residents who want to return to New Orleans may not have a home to come back to, we can make provisions for that, but not into the old communities of high crime and hopelessness and despair. One-to-one is not the only way to bring people back, nor is it the best way or the more imaginative or innovative way. What will bring people back is a good place to live where crime and fear have been replaced by hope and opportunity. Let me close simply by saying no matter what your party is, no matter what your political philosophy is, New Orleans can serve all of us as a model for improving our inner-city areas, those areas throughout America today, high-crime areas, widespread drug use, high unemployment. But more important than all those statistics, let us improve the standard of living for those people in those communities, not only in New Orleans but throughout this country. And our obligation should not end with this bill today. It ought to continue next week. We ought to continue to look at it until we do it right.

Mr. BACHUS. Mr. Chairman, in my earlier statement I said that the one-for-one replacement is not the best way to rebuild public housing in New Orleans. In fact, it is not only not the best way, it is the wrong way, because what we are doing here is we are saying before we replace these units, before we tear them down and build a community like Centennial, or East Lake, we are going to renovate the existing structures with taxpayers' money. What that does, oh, yes, it may get people back, but it gets them back into the same failed system. They are out there. They have homes now. Let's continue to give them vouchers, let them stay, and then when we build a community that is safe, that they can be proud of, that is mixed-use, then we bring them back. I mentioned East Lake. And East Lake was, as I said earlier, was the highest crime area in the entire State of Georgia. Today it is the 11th safest precinct out of 56. One thing I didn't tell you about East Lake, the school in East Lake, prior to this development, only 31 percent of the children in that school were performing up to the State standardized testing. Today, two-thirds are, and they say within 2 years they will be at three- fourths. That is as good as any school in just about any school in Atlanta. The director of the East Lake Community Foundation, Carol Naughton, said, while East Lake did not provide one-to-one replacement, it actually ends up serving more low-income families than are served under the previous arrangement. The occupancy rate at the old East Lake was 67 percent. Today it is 93 percent, and for subsidized homes it is 100 percent.

Mr. BACHUS

Mr. BACHUS. Madam Speaker, I have come down here this morning not to really speak about the process. It is to discuss with all my fellow Members something that I think we need to make a commitment to going forward. Hurricane Katrina was a terrible tragedy for the gulf coast. It was a terrible tragedy for New Orleans. In fact, it was the greatest tragedy that we have had as far as a natural disaster in the history of our country. As far as loss of property and loss of life, it is somewhere between five and six times greater than anything we had ever experienced before. When you talk property loss, uninsured property loss, because a lot of the flooding was in New Orleans where there was not flood insurance, or along the coast where they had wind insurance but not for the surge, the storm surge, the losses are even greater. But out of a tragedy, there ought to always be opportunities. And the opportunity that we have let slip by today, and, as I said, I am more concerned about the future, and I hope that the chairman of the full committee will work with me, is for us to go back and make sure that we do right by the people of New Orleans in public housing. The New Orleans public housing was a failure. It was dysfunctional, and it had been so for 40 or 50 years. There is a philanthropist in Atlanta who has helped build a community in Atlanta called East Lake. It was the highest crime area in the State of Georgia. Today it is one of the safest precincts in the State of Georgia. He did it not by replacing one-on-one public housing units, as we are going to do in this bill. He did it by making a mixed community of renters, subsidized renters, owners and public housing units. In the State of New York, almost half of the prisoners in the State penitentiary in New York State come from public housing projects in seven ZIP codes in New York. We owe it to our citizens all over the United States, not just in New Orleans, to try to make a model, a vision in New Orleans, and correct what is a community of public housing where children actually hide in bathtubs and sleep in bathtubs at night because that is the only safe place to be. That ought not to be in America. We can change this. We know how to do it. Some of these HOPE VI projects are amazing. We didn't do this in this bill. We owe it to the American people to do it going forward.

Mr. BACHUS

Mr. BACHUS. Mr. Chairman, I move to strike the last word. Mr. Chairman, I want to commend Chairman Frank for the manager's amendment. It makes a number of changes to the bill that was passed unanimously by the Financial Services Committee 2 weeks ago. Formerly, I thanked Mr. Blunt and Ms. Pryce for their leadership on the bill. I omitted at that time to include the lady from New York (Mrs. Maloney) who obviously has been a key Member in maintaining this legislation in a proinvestment stance and ensuring that flows of capital investment are not restricted. So I thank her. As I said, the manager's amendment makes several key changes to the legislation we passed 2 weeks ago, and they are all designed to clarify existing provisions. They are made at the suggestion, as the chairman said, of the gentleman from California (Mr. Hunter) with the consent, cooperation, and assistance of the chairman of that committee, Chairman Skelton. They dramatically strengthen both the way CFIUS assures itself that companies are complying with mitigation agreements imposed as a condition of permitting a transaction and the way that CFIUS assures Congress that it is staying on top of compliance. Every single one of these changes is designed to protect national security, and it is a significant strengthening of the bill for which we all can thank Mr. Hunter and Chairman Skelton. Mr. Chairman, I urge strong support for the passage of the amendment.

Mr. BACHUS. Mr. Chairman, I would like to yield 3 minutes to the gentlewoman from Ohio. And as I do, I would like to commend her for her leadership last year when the Dubai Ports deal came to light, in shepherding that bill through.

Mr. BACHUS. Mr. Chairman, I yield myself 1 minute to simply say that as we close this debate on the main text of H.R. 556, I hope that all Members of this body recognize the benefits to our economy from the robust level of foreign investment that is coming into this country. A few minutes ago, I mentioned a company that 55 percent of it was owned by one American company, and it is Nokia, which is a Finnish company, yet 55 percent of the stock in that company is owned by American companies. So even those foreign companies are making investments in the United States. A large percentage of those companies are American-owned. You have these foreign investments in our country, foreign-owned companies, the subsidiaries of them employ 5.5 million Americans, and the average wage for those workers is $60,000. Mr. Chairman, I yield back the balance of my time.

Mr. BACHUS. Mr. Chairman, I move to strike the last word. Mr. Chairman, during this debate we have talked about, and I think correctly so, the need to attract foreign investment. And that is one thing that we bipartisanly agree on, that it is very, very important. There are barriers to foreign investment today, and I do believe it is appropriate in this legislation because this is the committee for foreign investment in the United States to look to see if there are not barriers to that foreign investment, which is chilling those investments that are so important for the economy. For that reason, I am supporting the gentleman's amendment. Now, I do want to say this, not about the gentleman's amendment, and I rise to say at this time we, in the CFIUS bill as it moves forward, have got to resist the temptation to load this bill up like a Christmas tree, and I am not talking about the gentleman from Texas' legislation, because every requirement that we put on foreign investment has a tendency to alienate those making those foreign investments. And most of the time they are our allies. In fact, even with Dubai Ports, Dubai is one of our strongest allies in the Middle East, and anyone that thinks that terminating that transaction is not without risk in the Middle East is simply naive because we took a country that welcomes our Armed Forces and is one of our strongest allies, and we basically told them, We don't trust you. And that is a problem. Alienating one's allies, scaring away investors. And as this bill moves forward, my point is national security and foreign investment are not mutually exclusive. We can have both, but we should not use this mantra of national security to undermine our economy, whether it is through a CFIUS process that foreign investors just throw up their hands and walk away from to our detriment or through regulations over excessive taxation because this money is going to go into competitive markets. So I think the gentleman from Texas and the gentleman from Massachusetts are both right in that we need to take a serious look at anything which says to foreign investors, who are basically financing our economy today, anything that is said to them that has a chilling effect on their investments. I yield to the gentleman from Texas.

Mr. BACHUS. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I rise today in strong support of H.R. 556, the National Security FIRST Act. It makes important reforms to the process by which we ensure our national security is protected, while maintaining and welcoming a healthy flow of foreign investment into the United States. Reform of the Nation's foreign investment vetting process became an issue last year, as we all know, when the Committee on Foreign Investment in the United States, CFIUS, received criticism for failing to question the safety and security implications stemming from the Dubai Ports World's purchase of commercial operations of American ports. The bipartisan legislation we have before us today makes needed changes in the CFIUS process, changes that were highlighted by the Dubai Ports deal. It promotes executive branch accountability enforced by a requirement that the chairman and vice chairman of CFIUS sign every decision. It increases interagency coordination within CFIUS and ensures that the Director of National Intelligence does a thorough analysis of any proposed transaction without becoming part of the policy-making aspects of the review. It dramatically improves CFIUS reporting to Congress on its activities so that Congress can perform regular and much-needed oversight of the process to ensure that the CFIUS process remains vigilant, but does not unnecessarily interfere with foreign investment or discourage foreign investment. But, Mr. Chairman, of everything I would say here today, I would like to stress that the key issues we face here today transcend the Dubai Ports deal. They transcend CFIUS. They are more important than the CFIUS process. H.R. 556 meets our challenges by advancing three important objectives, while leaving the essential sound foundation of CFIUS intact. The first objective of this legislation is to continue to encourage opportunities for foreign investment in our economy. The surest way to ensure America remains strong and secure is to strengthen our economy and maintain global competitiveness. While we should never underestimate the threat to U.S. interests from economic espionage or from critical technologies falling into the wrong hands, we must also recognize that discouraging foreign investment or otherwise restricting global capital flows poses a very serious threat to our economic security and prosperity as well. The welcome mat for foreign investment must be out. In fact, last year, and we hear lots about American capital going overseas and American companies investing overseas, but last year alone, over a half a trillion, $500 billion, net inflow of foreign capital in our country, more than foreign outflows of capital. Because of the Dubai Ports situation, we have seen a fall-off on a lot of these inflows. We talk about our deficit. We talk about the need to export more. Well, in fact, foreign investment in this country, if you took away the foreign investment in this country, the recent foreign investment, it would reduce our exports by between 15 and 20 percent. The foreign-owned companies or foreign investments have created jobs in this country which result in about one-fifth of our exports today. Also, the majority of a lot of those companies are actually owned by Americans. The Wall Street Journal talks about a company today in an editorial that 55 percent of it is owned by Americans, a Swedish company. I believe it was a Swedish company. The second objective of this legislation, while we want to continue to say to foreigners investment in the United States, it is a good market, America is a good investment, we also want transparency in the process when they do invest. Many Members of Congress learned of the Dubai Ports deal when they picked up the newspaper or turned on the TV. This bill will ensure that as a matter of policy that does not happen again. CFIUS keeps Congress informed, this CFIUS legislation. Third, we need empowerment of experts best qualified to assess national security issues. To that end, this bill ensures that the Director of National Intelligence can provide important and timely input into the CFIUS process based on the most current intelligence available, and guarantees the Department of Homeland Security will be a full participant in the process. Mr. Chairman, we moved legislation very similar to this in the last session of Congress. The gentleman from Missouri (Mr. Blunt) constructed that legislation, led that effort along with the former chairman of the committee, Mr. Oxley, and Ms. Pryce from Ohio, and I would like to acknowledge at this time their contributions last year. This Congress, this body, passed that legislation last year because we wanted nothing to stand in the way of people investing in our country, creating jobs here, creating capital here, and that legislation passed unanimously. This legislation is even stronger than that legislation, and I commend Chairman Frank for having the insight and the intellect to make this one of his first priorities in the new Congress because, as we saw yesterday, when the stock market in Shanghai fell, we are in a global economy, and the worst thing that can happen in that global economy is outflows of capital from the United States. This legislation will ensure that those outflows continue to come to America to create jobs here in America. I will comment during the manager's amendment on some important changes in this legislation that have been proposed by the gentleman from California (Mr. Hunter), which I believe greatly strengthens this legislation, but let me close simply by saying this. Mr. Chairman, the world is a lot different than it was back in 1975 when President Ford first created CFIUS, and it is far different than 1988 when the outline of the current review process was established. Terrorism requires us to exercise increased vigilance, while the demands of the global economy necessitate that America compete aggressively for foreign investment capital. The siren song of protectionism is one that must be resisted if we are to be serious about maintaining America's competitive standing in the world. This bill modernizes the way CFIUS does business, ensuring that both our security and economic needs are met, but without fundamental changes which make this country a protectionist country. The foreign markets and people wanting to invest in America are watching us today, waiting to see what we do. For this reason, Mr. Chairman, I congratulate the sponsors of this legislation, and I urge the Members of this body to unanimously join together and pass this legislation and send it to the other body. Mr. Chairman, I reserve the balance of my time.

Mr. BACHUS

Mr. BACHUS. Madam Speaker, I rise in strong support of H.R. 392, the District of Columbia and United States Territories Circulating Quarter Dollar Program Act, introduced by the gentlewoman from the District of Columbia, Ms. Norton. We are all aware of the popularity of the 50-State quarter program, which will continue through 2008. The Treasury has benefited from more than $6 billion worth of quarters taken out of circulation by serious and amateur collectors alike. The gentleman from Delaware, Mr. Castle, deserves great credit for the State quarters program. He came up with the idea, worked tirelessly through two Congresses, and brought the Treasury Department on board back in the mid-1990s. H.R. 392 would establish a quarters program for the District of Columbia and U.S. territories in 2009, after the 50-State program runs its course. This is actually the fifth Congress in which we've tried to pass this program. I managed consideration of the bill in the House in September 2000. It has passed the House in every succeeding Congress, but has never been taken up--even at the committee level--in the other body. The quarters program has immense educational value. Teachers prepare lesson plans based on each new quarter, and parents save them and discuss them with their children. H.R. 392 is a way to recognize the contributions made to the United States by people from the District of Columbia, Puerto Rico and the territories. Madam Speaker, this is good legislation, and I am glad we are taking it up as one of the first bills from the Financial Services Committee in the 110th Congress. This is bipartisan legislation, as much of the work product of the committee has been since I came to Congress, and I look forward to continuing that tradition with the new chairman, the gentleman from Massachusetts, Mr. Frank. I only hope that this time, the legislation will win full congressional approval and be sent to the President for his signature. Madam Speaker, I welcome this bill and urge its immediate adoption.

Mr. BACHUS

Mr. BACHUS. Madam Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Neugebauer).

Mr. BACHUS. That sounds very good to me. I do want to thank you for this piece of legislation because I think it is both a predictor of the past in that this committee has worked in a bipartisan way to do the right thing for both the customers of financial services and for the financial services institutions. And I am very optimistic that we will continue to work together. I am going to yield back the balance of my time. I have about a five- page statement that I will spare the body having to listen to. I do want to say this: last year this legislation came up, a similar legislation to this, both in March and July of last year; so this is basically our third shot in less than a year. It amends the Bank Secrecy Act; it amends specifically the part of that act dealing with currency transaction reports. It does not amend the part dealing with suspicious activity reports. They will continue to report to the different law enforcement agencies. What this will affect is your drug stores, your grocery stores, your retail outlets, who every day are filing these reports. It is estimated by the Financial Crimes Enforcement Network that the cost of these alone is 25 minutes spent filing each one of these reports. So this is going to be a tremendous burden taken away from them. The American Banking Association said that it will result in a savings of $187 million annually. I rise in strong support of H.R. 323, The Seasoned Customer CTR Exemption Act of 2007. H.R. 323, which I introduced with Chairman Frank, simplifies the process by which financial institutions may be exempted from filing currency transaction reports, CTRs, for seasoned customers while still ensuring valuable information is passed on to law enforcement. Twice last year, legislation similar to H.R. 323 passed the House overwhelmingly: H.R. 5341, the Seasoned Customer CTR Exemption Act of 2006 passed the House by voice vote last July. In addition, the language was included in the House-passed version of regulatory relief legislation--H.R. 3505--which passed the House last March by a vote of 415-2. H.R. 323 seeks to reduce regulatory burden caused by the Bank Secrecy Act. Specifically, the legislation requires regulators to promulgate new regulations and streamline the process by which financial institutions may be exempted from filing CTRs for seasoned customers. CTRs are required to be filed for cash transactions of $10,000 and above. This filing is required even in the case of seasoned customers-- long-time bank customers that routinely deal in large volumes of cash, but whose business dealings are well-enough understood to rule out the possibility of money laundering or the financing of terror. The Financial Crimes Enforcement Network, FinCEN, which administers the Bank Secrecy Act, received over 12 million CTRs in 2005. According to a survey conducted by the Treasury Department, more than 30 percent of these CTRs were on recurring customer transactions that were eligible for exemption for filing under existing rules. Unfortunately, the current process by which a financial institution can exempt seasoned customers is rarely invoked because it is difficult to understand, needlessly cumbersome, and subject to redundant renewals. The filing of these superfluous forms imposes an unnecessary cost on both the financial services industry and the law enforcement community. With respect to the financial services industry, according to data released last year the number of CTRs filed on an annual basis now tops 13.1 million. Even FinCEN's conservative estimate of around 25 minutes per report for filing and recordkeeping indicates the banking industry as a whole devoted about 5.5 million staff hours to handling CTRs in 2005. Based on a survey by the American Bankers Association, the industry paid around $187 million in wages for this staff time. A typical bank with $2 billion of assets filed 1,400 CTRs in 2005. These filings took 583 staff-hours, with 438 of the staffhours simply to report on long-standing customers. With respect to the law enforcement community, not only do these superfluous reports add nothing to its efforts, they actually make it more difficult for the law enforcement community to track suspicious activity by requiring it to wade through millions of pages of unnecessary paperwork. The Government Accountability Office, GAO, the Internal Revenue Service, IRS, and FinCEN have all recommended that the number of CTRs be reduced by 30 to 40 percent by simply exempting large well- established customers or so-called seasoned customers. In 1994, the GAO published a report which concluded, based upon an extensive analysis of CTRs, that the volume of reports could be substantially reduced without jeopardizing law enforcement priorities. According to that report, in 1993 the IRS, which administers the CTR program, stated that 30 to 40 percent of these reports of routine deposits by large, well-established retail businesses have no likelihood of identifying potential money laundering or other currency violations. William Fox, who headed up FinCEN from 2003 to 2006, testified as follows before our Committee: We know that some of the currency transaction reports filed by financial institutions are of little relevance in the investigation of financial crimes. We also know that depository institutions, especially our community banks, identify the time and expense of filing CTRs as the number one regulatory expense. It is clear that our efforts to encourage the exemption of routine filings on certain customers has not brought about the reductions of filings that were sought. H.R. 323 will reduce the number of CTRs by clarifying the exemption process, thereby freeing financial institutions from having to file CTRs for routine cash transactions with their long- time customers, i.e. supermarkets, fast food restaurants or warehouse stores. This will enable law enforcement to target its resources on CTRs where criminal or terrorist activity is suspected. Moreover, under the legislation, banks will still be required to report suspicious transactions engaged in by exempted businesses pursuant to the Suspicious Activity Reporting regime administered by FinCEN. Let me close by thanking Chairman Frank, Congressman Hensarling, Congressman Moore, Congressman Renzi, Congresswoman Hooley, and Congresswoman Maloney for all of their work on this legislation. Since this is the first bill that the gentleman from Massachusetts has brought to the floor in his capacity as Chairman of the Financial Services Committee, I want to congratulate him on his appointment, and tell him that I look forward to working with him to build on the record of bipartisan legislative accomplishments that our Committee has compiled over the past several Congresses. Finally, let me also thank Former FinCEN Director Fox, who deserves a lot of credit for his work on this issue. I look forward to working with the Senate and the new FinCEN Director to ensure that this important legislation is signed into law.

Mr. BACHUS. Madam Speaker, I yield back the balance of my time.

Mr. BACHUS. Madam Speaker, I yield 2 minutes to the gentleman from New Jersey.

Mr. BACHUS. Madam Speaker, I yield 2 minutes to the gentleman from Ohio (Mr. Gillmor).

Mr. BACHUS. Madam Speaker, I yield 3 minutes to the gentleman from Texas (Mr. Hensarling).

Mr. BACHUS. Madam Speaker, I yield to myself such time as I may consume. I want to take this occasion to first thank Mr. Frank and congratulate him. I think this is the first piece of legislation that he is bringing to the floor in his capacity as the new chairman of the Financial Services Committee. I congratulate you on your appointment to that important position, Mr. Frank.

Mr. BACHUS. Yes, I would yield.

Mr. BACHUS

Mr. BACHUS. Madam Speaker, I am happy to rise today in strong support of H.R. 188, legislation ``to provide a new effective date for certain provisions of law in Public Law 105-331,'' introduced by the gentleman from New Jersey, Mr. Pallone. Enacted in 1998, Public Law 105-331 provided for the issuance in 2004 of the Thomas Alva Edison Commemorative Coin, commemorating the 125th anniversary of Edison's invention of the light bulb. In the years between the passage of that legislation and now, leadership of the group that operates the Edison Memorial Tower in Edison, New Jersey made plans to comply with statutory requirements to raise funds to match one-eighth of the surcharges raised from the sales of the coins--about $380,000--and thus claim the surcharge funds. Unfortunately, through a series of miscom- munications, it was not made clear to the board that these must be non- governmental funds. When the error was discovered, the group moved quickly, seeking an extension of the 2-year time limit to raise those funds. Madam Speaker, on November 16 of last year, the House passed legislation similar to that which we are considering today that would have permitted an extension until the end of June. Unfortunately, during the wrap-up of the 109th Congress, the other body did not consider the legislation. However, I am confident that when the House sends this version of the bill to the Senate, it will quickly pass. It is for these reasons, and because the invention of the light bulb is as good a thing to commemorate as I can imagine, that I urge immediate passage of this legislation.

Mr. BACHUS

Mr. BACHUS. Madam Speaker, I rise today in support of H.R. 391, sponsored by my colleagues Congresswoman Ginny Brown-Waite and Congressman Jim Matheson, which would temporarily remove the cap on the number of reverse mortgages that may be insured by the Federal Housing Administration (FHA). The FHA reverse mortgage program, known as HUD's Home Equity Conversion Mortgage Program, or ``HECM,'' is the oldest and most popular reverse mortgage program in the country, accounting for 90 percent of the total market. It has been available since 1989 to homeowners age 62 and older and is an important tool providing seniors with much-needed cash flow. By 2010, the number of elderly Americans is expected to top 40 million. Over the next 35 years, the expected number of older seniors-- those age 85 and older--will quadruple from 3.5 million to 14 million. Besides finding safe and affordable housing, seniors face the challenge of paying for daily expenditures and rising healthcare costs. These growing financial responsibilities are coupled with a diminishing income and cash flow. The reverse mortgage product fills in this gap by enabling senior homeowners to remain in their homes and maintain financial independence. Through this program, seniors convert part of the equity in their homes into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment. Previously, the only way for a homeowner to extract cash from their home was to sell it, or to borrow against it and begin making monthly payments. The HECM program was created to serve our seniors who are ``cash poor'' but ``equity rich,'' and the majority of loan recipients are elderly widows. The funds from a reverse mortgage can be used for anything: daily living expenses; home repairs or modifications; health care expenses, including prescription drugs or in-home care; existing debts; prevention of foreclosure; and other needs. For example, a 75-year-old with a home worth $100,000 could receive a reverse mortgage loan that could payout $500 per month for almost 12 years. This loan is then repaid when the borrower dies or the home is sold. Not only do seniors face a shortage of affordable housing, but surveys show that most seniors prefer to live out their lives in the own homes. According to a study by AARP, over 80 percent of respondents indicated that they wanted to stay in their current residence as long as possible. Further, according to the National Council on the Aging, of the over 27 million households in the U.S. over 62 years of age, 82 percent live in homes that they own and over 74 percent own those homes free and clear. In 1998, Congress adopted legislation making the HECM program permanent, but set a cap of 150,000 loans that could be outstanding at any one time. Because production of HECM loans began to bump up against that cap, Congress first increased the authorization cap to 250,000 in 2005 and then to 275,000 in late 2006. However, there are indications that this increase may not be sufficient, and that this cap will stifle the ability of seniors to tap into this important equity as a way of addressing everyday needs. According to the Wall Street Journal, in Fiscal Year 2006, homeowners took out a record 76,351 reverse mortgages, which represents an increase of 77 percent over the previous year. This legislation will remove the cap on the number of reverse mortgages that can be insured by the HECM program through February 15, the date on which the current Continuing Resolution expires. This measure is similar to H.R. 2892, the ``Reverse Mortgages to Help America's Seniors Act,'' which was passed by the House by voice vote in the last Congress. While only a temporary fix, today's bill will pave the way for removal of the cap through the end of 2007. For most seniors, and most Americans, a home represents more than just a place to live. It holds treasured memories and provides economic security to support increasingly longer lives. I urge Members to unanimously support this bill so that seniors can maintain their independence and stay in their homes.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, is the question to negotiate or not negotiate? Is that the question? No, that is not the question. The question is, will the government do the negotiating, or will the private companies do it. And what will the result be? Well, we already know. We don't have to speculate. In Alabama, we have 17 companies that have negotiated and provide over 2,000 drugs to Alabamians under the present plan. Under the VA, they negotiate and they provide less than 1,300 drugs. We have all heard about Lipitor. Look at the drugs in Alabama that VA seniors cannot get. They are the most modern drugs, they are the cutting-edge drugs, they are the drugs that most seniors want. CBO says it won't bring down the cost, but it might inhibit the delivery of new drugs. You need to read that before you vote. The question is not about cost; the question is about choice. And I can tell you in Alabama, with the VA, the veterans don't have the choices our seniors have.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, I would like to address the recent enactment of the Unlawful Internet Gambling and Enforcement Act of 2006. Internet gambling legislation has been a priority for this Congress the last several years. In 2003, I sponsored H.R. 2143, the Unlawful Internet Gambling Funding Prohibition Act and have cosponsored Mr. Leach's Internet gambling bills in each of the last three Congresses. The Conference Report for H.R. 4954, the SAFE Port Act, which was enacted into law, reflects Mr. Leach's Internet Gambling Prohibition and Enforcement Act, H.R. 4411. Five years ago, there were less than 50 Internet gambling sites. Today, there are close to 2,000 sites that will generate upwards of $5.9 billion this year alone. The legislation that was enacted into law addresses the problem of illegal internet gambling through an enforcement mechanism. The new law does not change the legality of any gambling activity in the United States. The sole purpose of this law is to enforce against activities that are already illegal under the Wire Act and other Federal and State statutes. It enforces illegal gambling by preventing the use of any bank instrument--such as a credit card, check or electronic fund transfer--for Internet gambling. Though online gambling has been illegal in this country from its inception--under state law, not just federal law--we have had serious problems enforcing these laws. The advantage and the disadvantage of the Internet is that it has no borders. Nothing can stop bets and wagers from being placed using a Web site hosted in another jurisdiction. When that bet or wager causes a violation of our laws, we had no effective means of enforcement until now. Congress reviewed a number of possibilities to better enforce the law on the books. One enforcement option was to prosecute the gambler. However, enforcement against individual gamblers is a State prerogative under our federalist system. The Federal government has never claimed the authority to prosecute gamblers. And though gambling online is a misdemeanor in most States, it would be impossible for States to effectively enforce this way. The State would have to monitor people's Internet usage, which raises serious constitutional issues. Next, Congress considered ``notice-and-take-down'' measures to combat illegal Internet gambling. The Senate passed bills twice that would have authorized law enforcement to notify computer services when an illegal web site was using their services, and require them to take down or block the illegal site. Time has shown that blocking just about anything on the Internet simply does not work, though take-down orders do work for web sites hosted by domestic companies. So we have retained the notice-and-take-down option in the new law where it has a chance of being effective--for gambling web sites hosted or advertised by Internet companies based in the United States. But take-down orders, and prosecuting gambling businesses that violate State and Federal laws, are completely ineffective for Web sites hosted offshore. The U.S. legal system cannot reach offshore companies, even though their Web sites can reach U.S. consumers. So the gambling operators deliberately locate in jurisdictions that will not cooperate with the U.S. Here, existing laws reach the end of the rope. We concluded that the only real option, if we want to enforce our gambling laws in the age ofthe Internet, is to block the financial transactions that pay for illegal online gambling. Banks and payment systems located in the United States are fully within the reach of Federal law, and U.S. citizens usually have to go through them to send money over the Internet. So requiring payment systems to put in place blocking procedures allows us to effectively and efficiently stop the flow of money, even when the gambling business itself is beyond the long arm of our law. Without the money, gambling simply cannot happen. We needed to pass this law because it is the only way we can effectively enforce State and Federal gambling laws when offshore Web sites offer illegal services to our residents. This is also why the Department of Treasury and the Federal Reserve Board need to write strong regulations that will not be easily evaded. I am proud to have supported this vital law, and I look forward to working with the regulators to ensure they properly reflect Congress's intent. My only regret is that my friend and colleague Jim Leach will not be here to assist Congressman Goodlatte and others in our continued efforts.

Mr. BACHUS

Mr. BACHUS. Mr. Speaker, it is with great admiration that I rise today to recognize the 25 years of public service that Chairman Oxley has bestowed upon this body. He is a dedicated and hard-working public servant whose leadership as Chairman of the Financial Services Committee has been exemplary. Under Chairman Oxley's leadership, the Financial Services Committee enjoyed an unprecedented level of collegiality and comity that permitted us all to work together and get things done. Chairman Oxley has a series of legislative successes few others can rival. When investor confidence was at a low, Chairman Oxley restored confidence in our financial markets by authoring the landmark Sarbanes- Oxley Act. This legislation established tough new standards to ensure corporate accountability to all American shareholders. In addition Chairman Oxley was responsible for the passage of The Fair and Accurate Credit Transactions Act, or FACT Act, which gave consumers new identity theft protections and also improved credit report accuracy. Chairman Oxley also spearheaded efforts to reform our nation's deposit insurance system and modernize our check clearing process which brought our antiquated systems into the 21st century. These achievements will have a positive impact on our financial services system for generations to come. Aside from his leadership in the House, Mike Oxley has been a true mentor and friend. Fortunately, this is not a retirement for Mike Oxley but a beginning of a new chapter in his career. I look forward to working with him in whatever his future endeavors may be. Although I am losing a colleague and fellow Member, Linda and I look forward to many years of continued friendship with Mike and his wife Pat.