Christopher Dodd

Mr. DODD

Mr. DODD. I will give the Senator an additional minute.

Mr. DODD. Madam President, I yield 5 minutes to my distinguished friend and colleague from New Jersey.

Mr. DODD. Madam President, I have a unanimous consent that has been cleared on both sides. I ask unanimous consent that an additional 30 minutes be allocated for debate with respect to H.R. 1424, equally divided and controlled between the leaders or their designees, and that the debate with respect to the House message on H.R. 2095 be delayed accordingly, and that any other provisions remain in effect.

Mr. DODD. I yield 5 minutes to Senator Nelson of Florida.

Mr. DODD. Madam President, one quick thought. We are all entitled to our opinions. Pat Moynihan used to say everyone is entitled to their own opinions but not to their own facts. As I listened to my friend from Florida, Senator Nelson, talk about the executive compensation section of this bill, I must respond. As to this legislation, section 111, negotiated by Senator Max Baucus, myself, and others, let me be very clear. When Treasury buys assets directly, the institution shall observe standards limiting incentives allowing clawback and prohibiting golden parachutes. When the Treasury buys assets at auction, an institution that has sold more than $300 million in assets is subject to additional taxes, including a 20-percent excise tax on golden parachute payments triggered by events other than retirement. And also we eliminated the deduction for compensation above $500,000, and we prohibit golden parachutes at other certain institutions--anything but mild. It is the first time ever in the history of the Congress that we are actually going to pass legislation dealing with golden parachutes. More will be done, but this bill does take very concrete, specific actions in that regard. Again, you are entitled to your own opinions but not your own facts. I yield 5 minutes to Senator Kerry of Massachusetts.

Mr. DODD. Madam President, I thank my colleague from Massachusetts for an eloquent statement and a strong one.

Mr. DODD. Madam President, I yield to my distinguished friend and colleague from California 5 minutes.

Mr. DODD. If I may inquire of my good friend and colleague who has been very generous, I may ask for a little generosity in terms of time. I am running into a crunch, and I have a couple Members who may wish to speak for a couple minutes. But let me get to that point.

Mr. DODD. I absolutely agree with the gentleman from New Jersey. The scale of this undertaking is vast, and the exposure to the taxpayer must be well managed. Therefore, I urge the Secretary to look broadly for the best expertise in assisting him in managing this program.

Mr. DODD. I would say to the distinguished chairman of the Judiciary Committee that is what we intend. M. LEAHY. And the provision we have included in section 119 of the Senate's legislation, to ensure that this review is available, the word ``law,'' as it is used, means any State or Federal law, or common law interpreting such State and Federal laws?

Mr. DODD. Yes. The Senator from Vermont is correct. My understanding and intent is that this section would allow for review in the event any action by the Treasury Secretary was in violation of any State or Federal statute, or common law interpreting a statute. Mr. LEAHY: I thank the Senator. It is not our intent to permit the Treasury Secretary to quash or alter any private right of action on the part of shareholders of entities from which the Secretary purchases assets, nor allow the Secretary to confer immunity from suit any participating financial institution.

Mr. DODD. I would say to the Senator from Vermont that is correct as well.

Mr. DODD. It is. That is what we intend. Mr. LEAHY. And by agreeing with the administration's request to automatically stay on appeal injunctions issued against the Treasury Secretary for actions taken under the authority of this legislation, we have assured that existing waivers of sovereign immunity under the Tucker Act, the Contracts Dispute Act, the Little Tucker Act, the Federal Tort Claims Act, and relevant civil rights laws would apply to the Treasury Department's new responsibilities, just as these laws have applied to the Treasury Department's actions prior to the bailout measure. Is that correct?

Mr. DODD. I say to the chairman of the Judiciary Committee that is what we intend with the savings clause.

Mr. DODD. I do.

Mr. DODD. I agree with the chairman of the Judiciary Committee.

Mr. DODD. Yes, for purposes of this act, I agree that financial institution may encompass auto financing companies.

Mr. DODD. Yes, should the Treasury Secretary, after consulting with the Chairman of the Federal Reserve System, determine that purchasing auto loans is necessary to promote financial market stability and transmits such determination in writing to the Congress, then the Treasury Secretary could engage in such purchases. I am keenly aware of these issues as Chairman of the Banking Committee, which has jurisdiction over financial aid to commerce and industry and which wrote the Chrysler Corporation Loan Guarantee Act of 1979.

Mr. DODD. This is correct. As previously stated, an auto financing company could be included in the definition of financial institution and auto debt could be included in the definition of troubled assets after the appropriate steps are taken.

Mr. DODD. Yes, I completely agree that this would include holding companies of such companies listed and other companies that the Secretary may determine are eligible for this program.

Mr. DODD. Yes, it is the intent of the committee and of the Congress that this section intends that the securities of the parent or holding company of such a subsidiary would be used in the warrant. Nothing in this language is intended to exclude holding companies of subsidiaries and warrants should be exercised to the greatest extent possible for the benefit of the taxpayer.

Mr. DODD. Yes, I agree that this is the case and that it was the original intent of the committee and of the Congress to ensure that warrants are exercised to the greatest extent for the benefit of the taxpayer, to include recovery of losses and administrative expenses along with a premium set by Treasury. tax credit investments

Mr. DODD. Mr. President, I want to assure my colleague from Maryland that I read that language as allowing such purchases, if necessary, to maintain liquidity in this particular market. I want to commend him for bringing this important matter to my attention as soon as we received the original Treasury proposal. My staff informed Senator Cardin's staff that Treasury officials believed the proposal they sent to Congress authorized the purchase of such credits, and we concurred.

Mr. DODD. Mr. President, my colleague from Maryland has made an excellent suggestion for how Treasury ought to maintain liquidity with regard to the LIHTC. I thank him for his concern. The housing crisis in this country affects nearly everyone in some respect, including lower income individuals and families who cannot afford to buy homes and depend on the steady supply of affordable rental housing. My amendment to H.R. 1424 gives Treasury the authority, flexibility, and resources it needs to address this critical issue.

Mr. DODD. Mr. President, I agree with the Senator from Hawaii's interpretation of that provision.