Michele Bachmann

Mrs. BACHMANN

Mrs. BACHMANN. If the gentleman would yield, I would just add to that. That statement has been repeated many times, and American people wonder exactly what that means. But it's not a standalone statement. That was something that the current Chief of Staff to the President said, but also our Secretary of State, Hillary Clinton, just last week in Brussels, advised a European audience to, Never waste a good crisis. Those were her words. Exactly what the Chief of Staff to the President said. In fact, 5 days before President Obama became President, he said that we are, ``5 days away from fundamentally transforming the United States of America.'' Judge Carter, I think you would agree with me, the last 50 days of American history we have seen a fundamental transformation of the United States of America, and Americans have questions.

Mrs. BACHMANN. If the gentleman would yield, I appreciate the remarks that you're making regarding ethics. Ethics, after all, is the study of what's right and what's wrong. That is really, if you want to get down to the brass tacks, that is what ethics is all about--what is right, what is wrong. And what the gentleman has been talking about is the behavior of Members of this body, as well as the actions that Members of this body take, that lead to what's right and what's wrong. If we look at this current economic mess that we are in the middle of, what is the morality, what are the ethics that got us into this mess, what are decisions that Members of this body made? We are taking our fingers right now--and our mothers often said to us, If you point your finger at someone, remember, there's always three fingers that point back at yourself. One thing that I think would be a credit to this body is if we examine--now, I am a fairly new Member of this body. This is just the beginning of my second term. But we need to look, how did government contribute to this economic meltdown. How did individual Members, individual Senators, individual House Members contribute to this economic meltdown. I believe that my colleague, Judge John Carter, is asking the right questions when it comes to ethics. And I commend Speaker Pelosi, who said she wanted this to be the most open, ethical Congress ever when she took the gavel as Speaker of the House. We agreed with her. We applauded her for making that statement. However, what we have seen since that time has given us great concern. The same with President Obama. He has said he wants the most open, ethical administration. But we have been very concerned about what we have seen. And I would just bring up one example of that, and that would be one of our former colleagues--my colleague, Judge John Carter, brought that up himself. Again, we don't necessarily know the answers. We aren't a court of jurisdiction here. But we are asking questions that I think the American people have the right to know. We know that the Chief of Staff of President Obama was one of our former colleagues. A very bright, intelligent man. But we wondered what was missed during the Obama team's vetting process because the Chief of Staff served on the Freddie Mac Board of Directors. Why is this important? When you look at the economic meltdown, what we often hear is that all roads lead to Freddie and Fannie. That is the government-sponsored entity that was the guarantor of all of these mortgages that are now falling--many of which are falling into disarray. Well, our former colleague, the new Chief of Staff of the President, served on the Freddie Mac Board of Directors during the time that the Freddie Mac lied about its earnings. It was a leading contributor to this current economic meltdown. The Federal Housing Enterprise Oversight Agency later singled out Freddie Mac, that Board of Directors of which the current Chief of Staff sits on. And, again, we are not condemning. We just don't know. We are asking questions. That is all we are doing. We are not trying to cast aspersions. But the Federal Housing Enterprise Oversight Agency said this; that the Board of Directors of Freddie Mac, of which the current Chief of Staff to the President sits on, contributed to the fraud that took place in 2000 and 2001 for, ``failing in its duty to follow up on matters brought to its attention.'' In other words, the Board of Directors ignored the red flags that we are waving in their faces. Later on, the Securities and Exchange Commission fined Freddie Mac $50 million for deliberate fraud for those years, 2000, 2001, 2002. The Chief of Staff currently for President Obama was paid more than $260,000, again, according to records and, again, this has to be answered, for the service that he gave while he sat on that Board of Directors for Freddie Mac. And after he resigned from that Board to run for Congress in 2002, Freddie Mac, or the troubled agency's PAC, gave the current Chief of Staff of the President, gave his campaign $25,000, the largest single gift to a House candidate. Well, again, this is incredible because currently the Chief of Staff to the President of the United States is in the process of trying to dig us out of the mess that it appears Freddie Mac started, all while he sat on the Board of Directors and information was given to that Board. Again, we don't know. And I agree with my colleague, Judge Carter, we don't know what those answers are. But surely the American people deserve to have answers. They deserve to have answers about Freddie Mac and Fannie Mae. Who knew what; what did these Board of Directors know; what did they attempt to do, what was their role in all of this? After all, they were fined by the FDIC for their failure to be diligent. Who would have suspected that that failure could have resulted in a multitrillion-dollar meltdown that has brought a terrible disservice to our country, as well as the Community Reinvestment Act. We need to know what did, for instance, Chairman Frank, who's currently the chairman of the Financial Services Committee, of which I am a member, what did he know during his time? We know that he has made statements that Freddie Mac was in good condition, Fannie Mae was in good condition, when in fact they weren't in good condition. What we need to get are answers. What did Members of Congress know about these organizations? Did they contribute or didn't they contribute to their failure? The American people know these are ethical questions because ethics is an issue of what is right, of what is wrong, and we all stand before the American people. None of us are perfect. We don't pretend to be perfect. But the American people deserve answers because we are in a very precarious situation right now and, Judge Carter, I want to thank you for bringing these questions up before the American people

Mrs. BACHMANN

Mrs. BACHMANN. It doesn't matter which person is in that office, which party.

Mrs. BACHMANN. I wonder if this bill will come to us the same way that stimulus bill came after midnight, and then we are expected to take up the debate at 9:00 in the morning. In fact, experts said we had 23 seconds per page to read that bill. It was a slap in the face to the American people to spend that kind of money in stimulus, and now you are talking socialized medicine. This is nationalizing. This administration loves to nationalize every aspect of every American industry that there is. The health care industry, which could be 18 percent of our economy, in one fell swoop, could be nationalized.

Mrs. BACHMANN. That's a tremendously powerful point that you are making, tremendously powerful. You cannot spend trillions of dollars and not see massive waste, fraud and abuse. In fact, it's so bad that a lawsuit was filed by Bloomberg Media to the Federal Reserve saying we would like the American people to see the data. Who is getting these loans out of this $350 billion, now $700 billion, that have been spent on these bailouts? Every day the Federal Reserve is spending money in bailouts, but no one knows. No one knows, no one knows who is getting these loans, what is it for? The American people deserve answers. The American people aren't getting them, and that's the kind of immorality that occurs when we have dramatic spending like we have never heard before. This is real people, real people are paying out this money. This is no joke. These are people that literally will become slaves to the government in order to pay their taxes in future years, and this is a crime for the next generation.

Mrs. BACHMANN. I think the American people would be shocked to learn, because the welfare reform that passed in the 1990s was with a Republican House and a Democrat President, President Clinton, has been dramatically effective to reduce even illegitimate rates and reduce welfare rolls and reduce costs to taxpayers all across the country. I think the American people would be shocked to learn that all of those positive reforms have been repealed in one fell swoop. In the stimulus package the Obama administration rolled back the positive reforms that Republicans, working hand-in-hand in a bipartisan way, were able to bring about for the American people.

Mrs. BACHMANN. That's correct.

Mrs. BACHMANN. I just wanted to give one illustration of this, and it caused me to think of this when you were speaking, if you take a look at just the money that's been spent in the last 50 days, just in the past 50 days, let alone the debt that the Comptroller General David Walker said the American people owe, which is $53 trillion in unfunded Federal debt liabilities, just in the last 50 days, the Obama administration and the Democrats that control the House and the Senate have spent and committed and put a burden on the back of every American household, $18,500, $18,500. So not only do the American people have to figure out how to pay their water bill and their electric bill, they have got to figure out how to come up with $18,500 just to come up with the spending of the last 50 days.

Mrs. BACHMANN. I appreciate the gentleman from Tennessee's Second Congressional District, Mr. Jimmy Duncan. He's a tremendous gentleman of the South but also a tremendous fighter for the people, the common man, who understand how they have to run their own family budget. And they look at this Congress and they look at this current Obama administration, and they are shaking their heads. In coffee shops and barber shops and beauty parlors all across the United States, Americans are disgusted because they know in their own life, they can't begin to spend that kind of money and think that their family can possibly remain afloat. And they know that they are going to suffer, that their local neighbor is going to suffer, that small businessmen are going to suffer, and suffer they will. But that does not have to be our story in the United States. It can be completely different. The House Republicans have a very positive solution to all of this, and we can come out of these economic doldrums very quickly, and the solution is this: If we would zero out capital gains, the taxes that you have to pay when you invest your money, if we would zero that out for 4 years, people would invest in this economy. And if we would take the business tax, it's the small businesses, after all, that create 70 percent of all jobs in the United States. If we would take away their crushing burden and, instead of the second highest tax rate in the world, give them about one of the lowest rates in the world, 9 percent, make that a permanent tax. Right now all across the world, nations are scared to death financially. They want to go somewhere where they can invest their money. Imagine if we would make the United States the premier place in the world to invest for business creation and advancement. We would bring jobs into the United States, high-paying jobs. Zero out the capital gains tax, 9 percent corporate tax, and then lower everyone's income tax by 5 percent. And the death tax, the most immoral tax there ever could possibly be, that Uncle Sam would reach into your coffin at the time of your death and say now you pay taxes once again. Get rid of that tax. Get rid of the alternative minimum tax. Our problem would then be finding enough workers to fill all the jobs. Someone who understands this very well is a southerner named Judge John Carter from middle central Texas, representing Texas's 31st Congressional District. He has been a champion. He understands the devastation of overspending, and he's here to bring that, Mr. Speaker, to our body.

Mrs. BACHMANN. I thank the gentleman from Missouri again, Mr. Akin. And this is a tremendous historic shift in philosophy that has occurred in the last 50 days. Again, the Obama administration, what's occurring--and this just came out in the Washington Times, ``The world loses over $50 trillion.'' The markets are responding, the markets aren't happy. When they take a look at this massive government spending and, as Mr. Akin had said, the new shift that says that government is God, what we are doing now is we are embarking on a new level of tyranny never seen before in the history of this country. And that's really the divide: liberty/tyranny. There is a constitutional scholar, Dr. Mark Levin, who's writing a book that's about to come out that talks about that chasm between liberty and tyranny. America was birthed out of liberty. We want to make sure that that continues. And a cradle of liberty was the great State of Tennessee, and hailing from the Second Congressional District of Tennessee is Mr. Jimmy Duncan, one of the great gentlemen of this body, Mr. Duncan, with his words of wisdom on spending.

Mrs. BACHMANN

Mrs. BACHMANN. Thank you so much for yielding. I thank the gentlewoman from Illinois (Mrs. Biggert). She has served long and hard on the Financial Services Committee, and I know that she shares my opinion that these are historic times and we have never seen anything quite like this in the financial services sector before. Beginning in the housing industry, we watched the market just collapse and we saw the economy flat line and go down into the negative column, and women all over the United States started feeling very insecure. I think as mothers and women, that is very important to each one of us. It is a sense of security, not only for our own well-being but for the well-being of our children. I know that we look at our mothers. I look at my own mother, Jean, who lives in Anoka, Minnesota. She is going to be 78 years young in just a few months, and she is very concerned as she looks at the value of her 401(k). She, like many Americans, has opened up her statement and seen that her 401(k) has dropped by 50 percent. My mother is a wonderful woman. She does samples. When you go to the grocery store and see those sample ladies, my mother is a samples lady. She has worked all of her life, but she wants to do this because she loves people and she wants to be with people. But at 78 years of age, she may not always be able to work. And she looks at what she has worked so hard to save for. She never had a high- paying job, but my mother was extremely frugal and extremely prudent, and taught me to be the same way. There are women on fixed incomes all across the country who did the same thing. They took care of their children, raised them, scrimped and saved and clipped coupons, and now here they are, looking at their savings and seeing the value of their savings diminish before their eyes. They are very concerned, and they wonder what in the world has gotten into Congress. What in the world has gotten into this new Presidential administration. They really had high hopes for this administration, and they are looking and saying as a senior citizen, my options are limited. Maybe my husband has already passed away or my husband is infirm. What am I going to do; I can't go out and get a job. They look at this administration, and in the name of economic stimulus, they saw that this current liberal administration has legislation that is overflowing with wasteful government spending. And they might have heard about one of these wasteful projects. It is a brand new, billion-dollar high speed train that is going to go from Disneyland up to Las Vegas. A billion dollars of a widow's money to go to pay for a brand new ride essentially from Disneyland to Las Vegas. Harry Reid, the Senator from Nevada, was behind this measure, and it makes us wonder, is he more interested in making sure kids start gambling at younger ages? We also see the Speaker of the House, Nancy Pelosi, she was behind passing our nearly 1,100-page stimulus bill, brought it to the floor, and not one Member of Congress was able to read that bill before we were asked to vote on it. I don't know if any other Congress was asked to pass a bigger spending bill than this bill with less time to read it, digest it, and even know what was in it. That is not something I want to go home and tell my elderly mother or tell people back in the State of Minnesota, that is Congress is here spending more money than we have ever heard of before, money we don't have, and we are spending that money without even having a chance to read the bills. I kept my staff here until 9 at night before we were supposed to vote on the stimulus bill. I released them to go home. They had worked all day long. I kept them here until 9, hoping that the Democrats would release the bill so we would at least have a chance to read it. They went home. It wasn't until after midnight that the Democrats finally put the bill online. There was absolutely no way to read the bill. That's shameful. The American people deserve better than that. And then we see that the President is now telling 92 percent of the American people who are currently paying their mortgages on time that it isn't enough that they pay their own mortgages, now they have to pay the mortgages of the people next door who maybe took out a home equity loan or bought more home than they can afford and got out on a limb, now 92 percent of the American people are seeing their 401(k)s disappear before their eyes, or seeing jobs disappear in their city and community. And they are being told that now it is their responsibility to pay the mortgage of 8 percent of the American people. And now we have our second spending bill that has come before us, the largest budget that we have had for discretionary spending, $410 billion. It is an 8 percent increase from the last budget. I hear the Obama administration telling the average American it is time for you to sacrifice. One thing I don't see is that the Federal Government is having to sacrifice. They are not sacrificing. They are increasing their spending by a whooping 8 percent on the Federal budget, and this is what we have to see for it. We are looking at a doubling of the national debt. Here we are at $5 trillion, which worried me back in 2000. And now projected going forward 2019, we are looking at a deficit north of $20 trillion. We have never seen anything like that. In the previous hour we saw the Democrats up here speaking. And one of the charts that they had up talked about how very quickly now we are going to see Social Security spending going from having money in the bank for coming in for Social Security. Very soon we are going to go underwater and we are going to have less money coming in for Social Security than what is going out. We will be looking at having about a trillion dollars in obligations that we currently don't have money to obligate to pay for those bills. This is concerning. These are elderly, senior citizen females that are again worried about their own security. No wonder the stock market has dropped more than a thousand points since President Obama took office. No wonder more Americans are blazing mad right now, and they are saying we are not going to take it any more. So you see all across the country tea parties breaking out, people saying I can't pay these taxes any more. Every promise that was made to the American people during the last campaign by the current Obama administration on fiscal accountability has already been broken. And we only have 45 days in this administration. Every fiscal accountability promise has been broken, and it is a travesty. I called a friend of mine who is a tax accountant today; she's working really hard because all of the tax returns are going to be due now April 15. I called her to see how she's doing. And I said, tell me, what is some of the information that you're seeing; what can I tell the American people? And she told me about a tax return that she's doing. And I will close with this. I talked about elderly ladies and their concern about security. Let me tell you about a younger female American, she's just 8 years old; lovely girl, tragic story. She was born in the year 2000, and she had a wonderful family. Her father was a great patriot who wanted to serve his country. He went to Iraq. When she was 4 years old, her father was killed serving his country in Iraq. And now this little girl is receiving money from Social Security disability payments, and she's also receiving money from the United States Defense and Accounting Service which the U.S. Military annuity pays. These are the right payments that she should be getting because of the service that her father gave to her country. But with this money that's coming into this little girl, this little 8-year-old girl is paying Federal taxes on the amount of money that she is receiving as an orphan. She's not only paying Federal taxes, she is also paying what's called alternative minimum taxes. That's how out of kilter and how drastically this government is spending your money in an out-of-control fashion, that not only is this government now going to widows for more money and increased taxes, we're even reaching into the pockets of orphans to tax them with alternative minimum tax, a tax that was meant for rich people so that rich people would not escape paying taxes. Now orphans are being subject, at very low levels, for alternative minimum tax. I would repeat what we saw a reporter say on CNBC: ``Mr. President, are you listening to the American people?'' We cannot afford a doubling of our national debt. We cannot afford to impoverish America's widows. And we certainly can't afford to be taking money out of the pockets of orphans whose fathers were killed serving this country in the Iraq war. This must end. And the Obama administration must stop taxing the American people. And with that, I would yield back to the gentlelady from the State of Illinois, Mrs. Biggert.

Mrs. BACHMANN

Mrs. BACHMANN. And the gentleman knows that if you look at the living laboratory of history and economics of the last 100 years, you can see example after example of the Progressive Caucus, where their ideas have been implemented, and you can see the ramifications and the results of those ideas. They've resulted in millions of people's deaths by government and untold misery for generations. Where Russia was, for instance, trying to come out of its Soviet and its socialist domination to now, what the gentleman had just stated is a reverting right back to it. Tyranny, in human history, is the norm. Freedom is the exception. That's the oasis of America, the beauty of America, that throughout time, when tyranny has reigned supreme, the United States came out of the mist like a gem, like a midnight sun that came out of the darkness, and it has shone as a beautiful symbol of freedom for 230 years. And that's the question. Here we are now, 2009, will we continue to forge the link on the chain of freedom, or will this be the last link of freedom, and will the next one be broken, and will we revert back to tyranny? That's the question before us tonight, because what we are seeing is so historical, so profound that the United States has no way of continuing to look like a free country 10 years from now if we continue to implement just the concepts that we have seen implemented in the last 7 weeks.

Mrs. BACHMANN. I thank the gentleman from Iowa, Representative King, for yielding. Conversely, you had given the numbers about how the market has been tanking in the last 7 weeks since the Obama administration took over. Now, compare and contrast that to the Bush tax cuts. The first quarter after the Bush tax cuts were put into place, already we saw revenues increasing to the government and we saw an economic uptick. That's how quickly those incentives will come into place. I handed out literature this week to various colleagues to show that our economy on its own, in a miraculous way, which always happens, is already healing itself. We saw that we had about 5 million existing homes out on the market. That number has now dropped to about 3.8 million. So the housing stock is already in the process of depleting and demand is coming up. Interest rates are coming down. In some segments of our economy, we see 85 percent home sales that are being completed. So we're seeing a turnaround already in the housing market, although now with cramdown, that may change a little bit after the lesson of today. But also in the auto market, we're seeing pent-up demand building. We saw a very low number of sales that were completed in February, about 42 percent fewer sales. That's a dramatic low in auto sales; however, we're seeing pent-up demand. People want to go out and buy a car. But because of the news that they have seen come out of Washington the last 7 weeks, people have been unwilling to spend. But what is it that would turn it around? That's the positive answer and the positive solution that can be on the horizon. We could turn our economy literally around if we would do a few things: One of them would be that all of this money that has been committed, and if you go back to about January of 2008 and you take a look at all of the commitments that the Federal Government has made through both the Bush and the Obama administrations, the trillions and trillions of dollars, if we would reel that money back in that hasn't been lent yet, that hasn't been spent, if we would reel those commitments back in and not spend them, because guess what, all that spending hasn't worked yet; so how is spending $20 trillion more going to turn it around? If we would pull that in and if we would give the marketplace one thing it's been begging for but hasn't gotten: certainty. The marketplace needs certainty. And what the Obama administration has given them is buckets of uncertainty. So that's why we are seeing the economy tank. So if we do a few very simple things: One, for at least a 3-year minimum, zero out capital gains so we could get people off of the sideline, sell their assets, whether they're stock, equities, whether they're buildings, whether it's homes, sell their assets and have zero capital gains, minimum 3 years, preferably for 4 years, people would get in the game and they would start buying and selling and creating wealth because that, after all, is the genius of America. The ability to have private capital formation from which wealth comes and which you create more wealth. Number two, the United States, as Representative King knows, has about the second highest corporate tax rate, business tax rate, in the world at about 34 percent. If we would take that corporate tax rate from 34 percent down to permanently 9 percent, we would make America in this global economy, where we have an economic global malaise going on, we would become the situs to do business, and we would bring capital from all over the world because investors all over the world are looking for safety. They're looking for certainty. If you can have zero capital gains, 9 percent corporate tax rate, then for our United States citizens, cut everybody's taxes 5 percent on the margin. So you cut everybody's taxes down. And then let people know what's going to happen with the death tax. We all know the right year to die in the United States is 2010 because then you have zero estate tax. But after that President Obama wants to institute a punishing high tax rate. What we need to do is just repeal the immoral death tax. That will bring more certainty to the marketplace than anything else. Our problem, then, Representative King, would be where are we going to find the workers to find all the jobs that would be created? That brings certainty. That brings the ability to have private wealth creation, and it gives us a pro-growth, pro- prosperity climate, rather than what we have been dished out for the last 7 weeks: a graveyard economic climate.

Mrs. BACHMANN. There was an article that came out in Congressional Quarterly last April, and it was interesting. It said with the carbon tax, it doesn't matter if you are manufacturing or if you are helping orphans in Africa. Every human activity will involve an aspect of the carbon tax. So it is very disingenuous for our new President, who stood right behind you last just Tuesday during his State of the Union message, when he looked into the camera and he told the American people if you make less than $250,000, you won't pay one dime more in tax. Now, would that that were true. I wish it was true. But we all know he contradicted himself with his own words in the same speech when he said he wants to introduce the energy tax because energy tax will impact everyone. We all remember how much fun it was last 4th of July when we were all paying well over $4 a gallon. We thought we were going to see gas at $6 a gallon, $8, $10. We didn't know where gas was going to top out. Every morning you'd get up and the first thing you would do is you'd look at your local gas station and see is it up 10 cents today, 20 cents today? The economy felt like it was out of control. I am very concerned that here we are in an economic downturn when the demand for energy is low and so we're seeing the price of gas go down accordingly. This is exactly when we should be revisiting the American energy debate. And we should open up every form of energy for exploration that there is. Coal isn't evil. Oil isn't evil. Natural gas isn't evil. Wind isn't evil. Biofuel isn't evil. Solar isn't evil. None of these forms of energy are evil. But the interesting thing is the way that the Obama administration is approaching energy, they make evil the production and use of one of the basic building blocks of our economy. That's energy. This is a warped view of America. It's not the view that we grew up with in Iowa. It was not our commonsense understanding of fairness. We don't want to punish people for trying to get ahead. We don't want to punish people for trying to succeed and have a good economy. Fairness is what we need to be about. The Tax Code today has nothing to do with fairness. The proposition you were talking about was fairness for the American people. I talk to people at all economic strata, and they say everybody should have to pay something. Everybody should have to pay something in taxes. People just shouldn't be exempt. It's not fair that just a few people pay taxes while other people don't. And the proposal that you're offering with the fair tax is one that should be debated in this House. The flat tax is one that should be debated in this House because everyone benefits by having a strong country. Everyone should have to participate in a simplified, easy-to-figure-out Tax Code where, no kidding, your tax return could be about this big and you could fill in an amount and you're done. Or you could even be simpler and just pay tax every time you go and you purchase something at the point of sale. There are a lot of ways we could do this, but it needs to be fair and it needs to be shared.

Mrs. BACHMANN. I thank the gentleman. I would love to see that circus trick performed. When does government grow and ever contract down by half? It doesn't happen. Find an example where it happens. It doesn't happen. Here is my concern about what the Obama administration may be doing. I am very concerned about the inflationary aspect. Inflation is the cruelest tax that you can inflict on anyone, especially when you have senior citizens who spent a lifetime being prudent, working hard, scraping, maybe saving 10 percent of their income in every check, putting it away, squirreling it away, helping their kids out, paying for weddings, paying for college, paying off things so you could have a nest egg. And here you maybe have $200,000 or $400,000 in the bank, or $125,000 in the bank, and then you look at the last 7 weeks America you see that your 401(k) has dropped a third in value. Maybe by this point it has dropped 50 percent in value, your 401(k). That is just with the current economic decisions we have seen thus far, before this administration has spent $20 trillion. Then you look at the Federal Reserve, which has been busy in various parts of this city printing money, 24 hours a day, 7 days a week, pumping money out into the money supply, inflating the currency. What have Americans been doing? When all of this started, the U.S. savings rate was negative 1 percent. During the Depression the savings rate was negative 1.5 percent. You know what the savings rate was in the month of January? Plus 5 percent. Why is that? Human action. Americans are scared to death about the economy, so they have taken the money that they have had and they have held it. They decided not to buy. Hence we see the anemic car sales going on, because they are scared to death. Every day we see the Obama administration saying they want to spend this many trillion, that many trillion. Now they want socialized medicine. Now they want a carbon tax. It is like more, more, more, and people have figured out this calculus doesn't add up. So if we inflate the money supply, as the Federal Reserve may do in conjunction with our current Treasury Secretary and the Obama administration, we could potentially see our dollar, if you own a dollar in 2008 and the Federal Government pumps extra dollars in, in 2009, but there is no additional productivity, there is no additional value behind those dollars, it is just paper that comes into the system, if you have $2 in your hand and no more additional worth, you really only have 50 cents. In other words, that dollar isn't worth a dollar anymore, it is only worth 50 cents. So inflation is a cruel tax. Just because your 401(k) maybe lost 50 percent of its value because of the stock market, you could see your 401(k) lose another half because of the cruel tax of inflation. That is the next policy that we need to see over the hill that may be coming with these Obama policies. I don't know if the gentleman from Iowa would like to comment.

Mrs. BACHMANN. You know, it was just last week that the Wall Street Journal reported the estimate that the premium would be an additional 2 percent on a mortgage. That's what the cost would be if this cramdown legislation goes through. So if someone qualifies for a 6 percent mortgage, now they would be looking at an 8 percent mortgage. What that does is it takes scores of people out of being able to qualify for a mortgage, just adding to the cost. And for what? Over 92 percent of all Americans are responsible. They're working. They're paying their mortgages on time. And when you look at the trillions and trillions and trillions of dollars that have been thrown at this housing problem, and you have 92 percent of Americans paying their mortgages on time, when you look at these tens of trillions of dollars now that are being thrown at this, I think we could probably be paying those mortgages off, multiple times, of the people who were in trouble. It is so much money. It is so unfathomable. I think that's why you see the American people running scared right now, because they aren't getting certainty out of Washington, D.C. What they're getting is uncertainty. And we have a completely different message. We have a message meaning fairness. We have a message of hope, where we can turn the economy around. We've done it before. We can do it again. We cut people's capital gains tax, we cut the corporate business tax. We cut their marginal tax. Why do we do all that? Because we want simplicity and we want fairness for people in the tax code. Everybody should have to pay something. But it needs to be fair.

Mrs. BACHMANN. Let's remember, there is no free lunch here. That's what Milton Friedman, the great economist said. There is no free lunch, because when a judge writes down, let's say, the multimillionaire went out and bought that million dollar and a half house, now the fair market value is $500,000 now. So the bankruptcy judge, with a stroke of the pen, said ``voila,'' now you only owe 500,000 when before you thought you were going to get a million and a half. The banker gave you a million and a half. What happened to that million dollars? Where did it go? Well, remember, when the banker gave that money out and got the house back in collateral and got the promise from the borrower that the borrower was going to pay back that million and a half plus interest, the banker sold the right to that mortgage. He packaged it up in mortgage-backed securities and he sold those securities. So now those mortgage-backed securities, which kind of started this whole meltdown in the first place, because we are worried about their valuation, now we have mortgage-backed securities that we thought were toxic before and in trouble before? Now these mortgage-backed securities, after this bill that was passed in this Chamber today, have just been made radioactive. There is no one who will touch these mortgage-backed securities. So in a very odd, circuitous sort of way, this administration, and those that run the House and run the Senate, have just guaranteed that mortgage-backed securities are worth even less than they were worth before today. So who is going to pay for this loss? Eventually these insurers and these bondholders, because there was a carve out for AAA bond holders in this bill. I don't know if you are aware of that, but if you are a AAA bondholder, you skate on this bill. You don't have to pay for the losses. But if you are anything else, a BB bondholder, you lose on this deal. And so where will these people go, these insurers go? People will go to the claims court, and they will make an application at the U.S. Claims Court. Guess who will be paying the claims? The United States taxpayer, the forgotten man, the chump at the end of the stick will be the United States taxpayer who ends up paying the freight on all of these big ideas. At the end of the day, you have graveyard economics. And what we know is that there is a better way out of this. There is a positive ending. We don't have to have a sad ending. That's the grief that I think we have been living with these last, 6, 7 weeks. We have seen a very sad ending to our economy, but we know there is a great ending to the economy. There is a completely different alternative that we can offer the American people.

Mrs. BACHMANN. Thank you to the gentleman from Iowa for yielding. I think you are stating it very well. There is a strong, bold, philosophical divide. One has faith in the people, faith in the future, faith in the Constitution, faith in the pillars of American exceptionalism, the rule of law, the sanctity of the contract. Those are pillars of freedom that America was built on that caused our greatness, that gave us a pro-growth economy, that was the envy of the world. On the other side of the equation we have our brethren on the liberal side who have a completely different faith. Their faith is in the state. Their faith is in big government. They said this is the new era of big government. They have embraced socialism with both arms. They love socialism. They can't get enough of it. They want to make sure that the American people will have their fill of socialism, so much so today I had farmers in my office who told me just a few years ago crop insurance was 33 percent provided for by the State, just a few years ago. Today, 80 percent of all crop insurance is purchased through the Federal Government. Why? Because the Federal Government subsidizes that rate, and so they are crowding out private insurers for crops and they are becoming the new game in town. Just like what we saw the liberals do here in Congress with those who give out student loans. They didn't like the idea that private banks and companies offered and made student loans. No, that wasn't good enough. The liberals that run Congress wanted to make sure that the government gives out student loans. Where is their faith? Their faith is in government. Now what do we see with health care? It just roils those liberals to have private health care and private pay of health care. They can't stand it. What do they want to make sure we have? They want to make sure we have socialized medicine, and as quick as possible, so quick that in this stimulus bill that you spoke of, Representative King, that not one person in Congress read before we voted on it, one hour of debate before we were forced to vote on this bill, we couldn't even ask questions hardly on this bill and we were forced to act on it. There is a rationing board, a Federal rationing board for Federal health care. Not only that, all Americans will have to have their health records, including their mental health records, all poured into one health record per person, and 600,000 entities, not people, 600,000 entities will have access to every American's health records. This Congress, led by the liberals who have more faith in the state, more faith in government than in the American people, has decided that everyone's private health records will now be naked before the world; that 600,000 entities will now have access to every American's private health records, including chart notes from therapists if they go to see a mental health professional. That is the faith that we see from the liberals that run this Congress. That is the future that they have defined for Americans. That is not the future that I hear when I go back to the Sixth District of Minnesota. The great people in Minnesota, just like the great people in Iowa, are working pretty hard these days. They are pretty nervous these days. They have faith in themselves, in their fellow man. They go to their churches. They are praying. They are seeking relief. And they are concerned about what they are seeing come out of Washington, D.C. I just want the American people to know, there are a few of us here in Washington that still believe in American exceptionalism, that still believe in our Constitution, and that still believe in the greatness and the future of this country and that it lies in the hard work and innovation of the American people, and we are not going to give up that level of freedom. I yield back to the gentleman.

Mrs. BACHMANN. If the gentleman would yield. Imagine what your business would have been like had a judge been able to come in and open up that contract that you had with a purchaser of your product and of your service, and let's say your margin, your profit was maybe 2 percent or 6 percent. And you have a judge come in and alter those terms, let's say, to 10 percent. What happens to your margin? It's gone. You're not only working for free, you're paying that person to work for them. That's what we saw happen today on the floor of this body. We saw contracts opened so that any margin that people were making, it's gone. It's gone. And so, what we're doing is we're violating that pillar of American exceptionalism which is the sanctity of the contract, and the pillar of freedom that says that we will keep contracts inviolate, and we will observe the rule of law. What do people trust in? Why would people make a contract in the future? What business would do that? Because now this Congress has set a standard that says, no longer will your word be your bond.

Mrs. BACHMANN. I thank the gentleman for yielding. What's amazing about this bill, this cramdown bill, this historic bill that was passed today, is that potentially who are millionaires, who received loans and the multimillion dollar level of loans, literally could have received a loan with zero down. So they could have gone into a home, they had absolutely no skin in the game, zero money down. In fact, they could have had a negative-equity loan, which means they could have gotten money back at closing. So they could have had zero down with money back at closing and then they could have gone and taken out a home-equity loan based on the value of their property. This was happening. I mean, let's not forget, just as recently as 2005 we were seeing housing prices go up and up and up. Remember, half of the houses that went into foreclosure were investor homes. So people were out there going into homes, thinking they were going to flip them, getting in so highly leveraged, and they got into this game. And now, if you own that property, you will be able to go, and you don't even have to answer your phone if on your caller ID you see it's your lender, you don't even have to pick that phone up and talk to your lender. Under this legislation we are going to start seeing television commercials where its plaintiffs' bankruptcy attorneys saying call me, call me, call me. I can get you a better deal on your house. We are seeing all those ads on TV now. You don't have to pay your tax bill, I will get you off the hook. You don't have to pay your credit card bill. Don't worry, I will get you off the hook, but the one thing, I was born in Iowa, just like our great representative, one thing we learned when we were growing up, we have to pay our bills. Because if we don't pay our bills, our grandparents taught us somebody else is going to, and that's tantamount to stealing. What I saw today in this cramdown bill reminded me of the 10 commandments and what the 10 commandments teaches to all people in all cultures, and that's that we shouldn't take what doesn't belong to us. When I look at this legislation and it makes clear that people can go before a bankruptcy judge, they can get a false valuation on their home and have their whole debt essentially wiped out. And if they sit on that home for 5 years, they could walk away and skate on a profit at somebody else's expense, I don't know what else you call it. I have no idea what else to call it. I just know this is immoral. This bill that passed today is nothing short of immoral and people should be ashamed of putting their name on this bill.

Mrs. BACHMANN

Mrs. BACHMANN. Mr. Chairman, of the foundational policies of American exceptionalism, the concepts that have inspired our great Nation are the sanctity of private contracts and upholding the rule of law. This cramdown bill crassly undercuts both of these pillars of American exceptionalism. Why would a lender make a 30-year loan if they fear the powers of the Federal Government will violate the very terms of that loan? They will only make those loans at a great cost both to the borrower and to our society. Surely as day follows night, we will witness yet another nail in the coffin of home developers who already are reeling under the burden of poisonous government policies. Experts currently estimate that the additional cost due to this risk of the cramdown bill would raise mortgage rates as much as two full percentage points or would substantially increase required down payments. This is the last thing homeowners need, the last thing our economy needs. There are responsible homeowners all across America who are living within their means, who are making honest representations on their loan applications, who are paying their debts, and who are working hard to achieve the American dream. Let's not disadvantage them.

Mrs. BACHMANN

Mrs. BACHMANN. Thank you. I want to thank the feisty gentlelady from North Carolina, from the Appalachian region, who sets the new standard for all of us for what we need to do to be sympathetic not only to the principles of the constitutional founding of this Nation, but sympathetic to the future of this great country. That's what we're all about here tonight, we're about growth, the future, where we're going to go. And what we're very disappointed in is the bill that came before this body today. I think that there were intentions here that were meant to help people that were in homes to be able to stay there, but the unintended consequence could be that we could be killing the housing industry once and for all. We've seen a proposal from our President that said that he wants to limit mortgage interest deductions for people that have a combined gross income of $250,000 or more. That may seem like a great thing. That may seem like those are people who can well afford their homes and don't have to pay for interest deductions. Well, one thing that we know will happen, in all likelihood, from what we've seen in history when the luxury tax was introduced back in the late eighties, immediately what happened is we saw the boat industry go down, we saw the fur industry go down, we saw the jewelry industry go down. Well, so what we might say. The ``so what'' is that average normal Americans lost jobs by the droves. And so immediately Congress had to come back and reverse that ill-thought out legislation so that we could bring those economies back online, and they did. Now, once again we're seeing history repeat itself. And we're very concerned because we're seeing not only an attack on people who have managed to be able to create wealth and who have managed to have capital formation--that's the genius of the United States, private capital formation; you're able to collect money that belongs to you, hold on to it, use that money, put it at risk, create a business, create a service, create products that help all Americans and people around the world. That's the genius of the United States. Private ownership of property. What did cramdown do today? It did just the opposite. It eviscerated pillars that exemplify American exceptionalism, and it's this; it eviscerates the sanctity of the private contract and it eviscerates the rule of law. What are we without the rule of law? What are we without private contract? When a person goes to a bank and asks for a loan to buy a home, when that happens, that's a private contract between a borrower and between the lender. Today, this body, the United States Congress, said no to those private contracts. It said that now an American can go ahead and go and file in a bankruptcy court, and a bankruptcy judge could open up that private contract and reset the terms, completely reset the terms. What will that mean? That will mean, in the future, what lender in their right mind is going to lend to someone to buy a house if they know that a bankruptcy court will come back in and re-think this whole arrangement, perhaps to the detriment of the lender, and the lender may be left holding the bag. And if he isn't, certainly the forgotten man of the private taxpayer will be left holding the bag. This is something that I found out today that I couldn't believe. You can have someone literally, under this bill, buy a $1.5 million home, and in some of these markets--southern California, Las Vegas--you can easily buy a $1.5 million home. And you could have seen that $1.5 million home lose value so that today maybe it's only worth $500,000. If you have that borrower go into bankruptcy court today, based upon today's fair market valuation, the bankruptcy court can go in, take your $1.5 million loan, reduce it down to $500,000. What happens to the borrower? They can sit in that house for 5 years. Once the 5 years is up, let's say that home has gone back up now, it's worth $1.5 million again, then the buyer can go sell that house and they pocket that million dollars. What about that million dollars? Do they have to take it on their income? Absolutely not, they don't; there is no income tax consequence. Is there a capital gains consequence? Under current law, $500,000 of that gain would be tax free; in other words, that borrower would just skate. The lender was left hanging, the taxpayer was left hanging, but that borrower, who was able to live in that house for 5 years, takes $500,000 in cap gains free, no tax consequences--what a deal if you can get it--and of the remaining $500,000, they pay the cap gain on that. Amazing.

Mrs. BACHMANN. Yes.

Mrs. BACHMANN. There's only one person left at this point to bail out. And what the President and what the majority that runs the House and Senate have said, it's up to the American taxpayer. It is the forgotten man of the American taxpayer who is the one who is on the hook for every single one of these boondoggles that we have seen introduced in Washington over the last 7 weeks, it is the forgotten man of the taxpayer. And what's worse, under this legislation that came through today, you can take what's called the Truth in Lending Act, and the Truth in Lending Act says something like this; if in that example that I gave of someone who takes a house, they buy it for $1.5 million, it's now worth $500,000, the bankruptcy judge says now you only owe $500,000 on this house, that person can go ahead and they can comb through the Truth in Lending Act. And if the bank that made that loan, instead of giving two copies of the loan to the borrower, they only give them one copy, that lender is in violation of the Truth in Lending Act. Do you know what that means? That means that the lien that the bank has against that house, it goes away because the bank missed a technicality. So that because the bank missed a technicality, that person with the $1.5 million home that they're now getting for $500,000, they've just gotten a free home. I mean, they owe nothing on it because that bank has just lost their loan that they had, their lien on the property, and this borrower skates away. Here's another thing that's even worse. Let's say that guy or girl had a $1.5 million home, they take out a home equity line of credit for $1.5 million against that house, they go out, they buy a yacht, they buy a BMW, they take their kids and they go down to Orlando, they do any number of things, so they take that money and they spend it. Guess what? Same result. They will owe nothing because if not every jot and tittle of that Truth in Lending Act is followed, that borrower cannot only see their loan principal reduced, they can see it vanish and go away. This is beyond belief. It reminds me of that television show ``Deal or No Deal,'' you know. You keep looking to see if some banker has violated some technical provision so you can get a free house. It seems like we're now in the business of turning normal Americans into crooks, where we're going to encourage normal Americans to just stop making payments on their home. Why? Because they can get a better interest rate; they can get a reduced principal; they can get terms that are up to 40 years with zero interest. Just think of the inducements. Shouldn't we be inducing Americans to make growth decisions, good decisions? These are graveyard economics for the future of our country. And think of the lessons that we're giving to the next generation about how to conduct your financial affairs.

Mrs. BACHMANN. Doctor, what would you think? I mean, this will be a job killer. As I said, this is graveyard economics. We will not only see, I believe, a continued diminution, if we follow the Obama administration's new calculus on the economy, we will see our senior citizens, I believe, continue to reduce the valuation in their 401(k)s. That's not the future I want to see. I will yield to the gentlelady from North Carolina.