Barney Frank

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself as much time as I may consume. Mr. Chairman, I agree with a great deal of what the gentleman from Ohio (Mr. Oxley) has said, as I agree with a great deal of what is in the bill. In the nature of parliamentary debate, we will be focusing on some specific points where I disagree, but I do not want that to obscure the fact that there is a great deal of agreement. Mr. Chairman, I yield 4\1/2\ minutes to the gentlewoman from California (Ms. Waters) who as ranking member of the minority on the Housing Subcommittee has had a major role in shaping our position and in the impact of the affordable housing front.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from New Jersey (Mr. Pascrell) to speak regarding a very important provision of the bill as it now exists.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I claimed the time in opposition to the manager's amendment because I am in opposition to a small part of the manager's amendment, and, like many Members, I have a dilemma. Much of the manager's amendment is what a manager's amendment ought to be, the result of taking into account in some cases things that happened after the bill came out of committee like the hurricanes, some refinements. It is a very good amendment. There are two small changes I would like to make. First, the manager's amendment says, unlike the bill that passed committee, that a nonprofit group may only ask for these funds and build housing with these funds if building housing is its primary purpose. Understand that that unequivocally says no faith-based institution may apply unless we have a faith-based institution that worships housing. I am not aware of any, but I do not want to be narrow-minded. There may be one. But any other faith-based institution has as its primary purpose its faith, and this excludes organizations that have been doing work. The gentleman from Louisiana correctly pointed out, well, if they have been already doing this, this does not stop them. It just means they cannot get the new money. But we want this money to be used well. There is a wealth of experience in the Catholic Church, in the Episcopal Church, in the Methodist Church, in the Jewish Community Housing For the Elderly. In other groups, the Local Initiative Support Corporation, in other groups, the Enterprise Fund, nonprofit groups, some of which have housing as their primary purpose and some do not, why do we want to say to groups that have a very successful record of building affordable housing, including church groups, that they cannot participate in this program? But that is what it does. So one thing that I would change in the manager's amendment is to say that they can do this if housing is one of their primary purposes, not their only primary purpose. It lets the faith-based groups back in. Secondly, we agree that we should prohibit the groups, and, remember, we are not talking about using the money from the Affordable Housing Fund for anything but housing. That is very clear. The Members have said, well, and I kind of slipped into this, well, political activism, et cetera. Not a penny of the affordable housing funds can be used for anything but housing; and there are strict penalties if you get caught doing that. By the way, there may be some who think that if you participate in affordable housing that it will be so profitable that it will generate funds that you can use elsewhere. When I mentioned that point yesterday, people from the Catholic Conference and the Episcopal group and all the other groups started to laugh. Anyone who has done subsidized housing knows the organizations usually wind up further subsidizing with their own funds rather than end up making money. But we are talking about now only what you can do with your own money if you use affordable housing funds for affordable housing. We have agreed to a lot of restrictions. We have agreed that with your own money, if you agree to participate in this fund, you cannot engage in any Federal election activity as it is defined in the Federal Election Campaign Act. You cannot make expenditure for any electioneering communication as defined in the Federal Campaign Act. You cannot make any lobbying expenditure except under the limits of 501(c)3. All of those we have accepted. They are in the manager's amendment as further restrictions, and we accept them. All we are saying is that nonpartisan voter registration and get-out- the-vote should be permitted uses, in other words, what the gentleman from Ohio talked about. We had the gentleman from Florida read the ACORN Plan. That plan by ACORN would have made them ineligible to participate in this fund. It was partisan. People have every right to be partisan. We have made a concession here, that, yes, we will say that if you are engaged in partisan political activity you cannot do this. Here is what will be the parliamentary situation. If this manager's amendment is defeated, I will offer as the recommittal motion 99.5 percent, textually, of the manager's amendment. It is over there at the majority's side. We will not touch it from what it now is. The only changes we will make is we will, instead of saying this has to be your primary purpose, which excludes faith-based groups, we will say it has to be one of your primary purposes. We will continue the restriction on electioneering and lobbying, et cetera, but we will say that electioneering and communications or partisanship are banned, but nonpartisan voter registration and nonpartisan get-out-the-vote are not banned. That is the question. Should we say that if you do affordable housing, you cannot also do voter registration, nonpartisan voter registration. If you are caught doing it in a partisan way, then you would lose the funds under here. You cannot do get out the vote. Again, voting and residence are very closely linked in America. You vote from your home. In some cases you might vote in your home, if you are in an elderly development. What about the people, and the gentleman from Ohio raised this. The gentleman from Ohio said, well, we are going to work on it. Yes, it has to be worked on, because right now, thanks to the demands of the Republican Study Committee, it is not there, the right to do that. If you have a housing development, you cannot, under this manager's amendment, help the old people in the development vote. You cannot invite somebody in to do voter registration. They can come in on their own, but you cannot cooperate. Again, I want to emphasize and I would say to my Republican friends, this is a bill that has a lot of bipartisan support. We have some partisan differences in other areas than housing, but this one got pretty bipartisan. What happened is this: there are people who do not like affordable housing. I have to say the gentleman from Texas (Mr. Hensarling) is not here, but he said why do you not just do vouchers instead of this. He was being honest. He is not really for the affordable housing program at all. I did look up, on June 29th this year, the House by a majority adopted an amendment to increase section 8 vouchers. The gentleman from Texas (Mr. Hensarling) voted against that. Thirty Republicans voted for it. He was not one of them. I think there are people who do not want the housing to go forward, and there are others who do not want to see an increased voter participation by people they do not think will be serious enough voters. If that is what the House wants to vote on, okay. But procedurally what you have is a bill comes out of committee; it is held up for months because a part of the Republican Party does not want to put this to a fair vote. Well, I regret that. We should have had a fair vote. I am just offering you the next best thing. It is not the same thing. It is not a clean vote, but here is the functional equivalent. Members can have two choices: they can vote against the manager's amendment and know that I will offer a recommittal motion, which will be everything in the manager's amendment except the one provision that prevents faith-based groups from participating; and the one that says no nonpartisan voter registration or the voter turnout. Alternatively, if people vote for the manager's amendment, maybe some people will be afraid: well, I do not want to look like I am not helping the people in the hurricane area, then I will offer a recommit. The recommit will make those three small specific changes in the manager's amendment. In other words, Members will have a chance to vote on everything in the manager's amendment, all the restrictions on what these groups can do with their own money, all the restrictions of what they can do with affordable housing money, put our faith-based groups in and have the voter registration be allowed. That is what will be before us. Mr. Chairman, I reserve the balance of my time.

Mr. FRANK of Massachusetts. Mr. Chairman, I first yield myself 1 minute to say I do not think it is a fair characterization of the low- income housing activities of the Catholic Church or other organizations that they are trying to back up the truck to the Treasury. In the first place, there is no debate that every penny in the affordable housing fund goes for affordable housing. The question is, what do you have to give up as a choice of doing the affordable housing. Every faith organization in America, every Protestant denomination, every branch of Judaism, and the Roman Catholic Church says we do housing, and the gentleman is right. They could simply refuse to take any money from this and go forward, because they are not eligible for money from this. Why do that? Why say to the faith-based organization, whatever happened to your belief in the importance of helping faith-based organizations? Is it over already, that romance? Because that is what we just want to change. All we want is to allow our religious organizations in part to be able to participate without stopping their voter registration and other activity. Mr. Chairman, I yield the balance of my time to the gentleman from Pennsylvania (Mr. Kanjorski).

Mr. FRANK of Massachusetts. Well, I would say to the gentleman, we agree on this. Competitive equity has got nothing to do with protecting the taxpayers, except the taxpayers who happen to own banks. That is where competitive equity comes in. The fact is that safety and soundness is what protects the taxpayers. Competitive equity has to do with fairness to competitors. That does not implicate the Treasury. Mr. Chairman, I yield such time as he may consume to the gentleman from Texas (Mr. Neugebauer).

Mr. FRANK of Massachusetts. Mr. Chairman, we have had very limited time here, so I am going to stray to another topic relative to the bill. Mr. Chairman, I yield 1 minute to the gentleman from California (Mr. Sherman).

Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from New York (Mr. Crowley), one of the most active members of the committee and very familiar with needs for housing.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Massachusetts (Mr. Lynch), who has worked in the building trades and knows this issue very well.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as I may consume. First, let me say that I am glad that the gentleman from Louisiana (Mr. Baker) indicated the status of the gentleman from Delaware (Mr. Castle), because I would not have wanted him to have been an unindicated co-contributor. I think that was very helpful. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from New York (Mr. Meeks), a very active member of the Committee on Financial Services who is very aware of the need for housing.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself 3 minutes. Mr. Chairman, the gentleman from Iowa is a thoughtful Member and the former chairman of the committee, who has been very critical of the role of GSEs, and I think this is, frankly, not so much a specific amendment as an expression of a sense that, a view that they have gotten too large. One particular aspect to the amendment seems to me to sum this up when it calls for higher minimum capital requirements as the director deems necessary or appropriate to ensure long-term institutional viability and competitive equity in the market. Now, we are all for long-term institutional viability, but competitive equity means, look, there are banks who complain that because Fannie and Freddie are perceived to have some back-up from the Congress, and let me say right now, if you are listening, if you are buying Fannie or Freddie's paper because you think I am going to vote to bail you out, sell it, and cash it in, I am not going to do that. I do not think there is a Federal guarantee. I certainly, as a great supporter of their housing role, do not plan to do that. But banks complain that they cannot meet Fannie and Freddie's price because Fannie and Freddie can borrow money more cheaply. That is part of what we are dealing with here when you talk about competitive equity. I agree that Fannie and Freddie get certain advantages in this. That is why we have virtual unanimity here. There are debates about restrictions on what happens when you go into the Affordable Housing Fund, but there is virtual unanimity about having an Affordable Housing Fund. What we are saying is there are two ways we can do this. We can reduce what we think is Freddie and Fannie's competitive advantage, or you can make sure that more of that competitive advantage is shared with the housing market, and that is the position that the majority, bipartisan majority of the committee has taken. When the gentleman from Iowa talks about competitive equity, it seems to me you are inviting the banks to say, wait a minute, that is not fair, and we do not want Fannie and Freddie to be able to do this as cheaply as possible because it is not fair to us. With regard to the powers of the regulator, the gentleman from Louisiana played a major role in this, and the gentleman from Pennsylvania was with him, and the chair and ranking member of the subcommittee. The regulator is fully empowered. The regulator within the bill is fully empowered to do whatever is necessary for safety and soundness. The regulator can raise capital in general; the regulator can decide that a particular activity is risky, and capital should be raised to compensate for that. But to go beyond and to get into competitive equity, it seems to me to be not so much a concern for safety and soundness as the philosophical question. I would also say that with all of the misdeeds of Fannie and Freddie, their safety and soundness has not been called into question. Yes, there were accounting misdeeds, and people got money who should not have gotten it, and some are being penalized as they should be, but safety and soundness has not been called into question, and this legislation further enhances what the regulator does.

Mr. FRANK of Massachusetts. I yield to the gentleman from Iowa.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield 5 minutes to the gentleman from California (Mr. Baca), one of our most energetic members on the committee, fully familiar with the need for housing in particular.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself 15 seconds to say the gentleman from Louisiana has phrased that conundrum for groups exactly correctly. I agree with the Roman Catholic Church of the United States that they should not have to make that choice, and the Episcopal Church and the Baptist. That is exactly what the Catholic Church says: We have been doing housing; do not make us choose. Mr. Chairman, I yield for the purpose of making a unanimous consent request to the gentlewoman from California (Ms. Zoe Lofgren). (Ms. ZOE LOFGREN of California asked and was given permission to revise and extend her remarks.)

Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself the balance of my time. Mr. Chairman, I have noticed a certain level of discomfort on some of my friends on the Republican side and some of my not so good friends on the Republican side. So I want to be very generous and ease their discomfort. There are people who are not happy with everything in the manager's amendment. A lot of what is in the manager's amendment a lot of us like, the preference for the gulf areas, some of the restrictions on what people do with the use of funds. There are three small provisions in the manager's amendment that are controversial. The one that says no faith-based groups can go in there, the principal purpose; and the one that says nonpartisan voter registration and nonpartisan get out the vote are not possible. So I want to tell people this: If the manager's amendment is defeated, I will offer as the recommittal motion the exact manager's amendment minus those three specifics. So if they like the manager's amendment but do not want to keep the Catholic Church out of affordable housing, do not want to have the problem that the gentlewoman from Ohio (Ms. Pryce) mentioned where they cannot take old people to the polls, and do not want to restrict nonpartisan voter registration, if the manager's amendment is defeated, everything except those three things that were in the manager's amendment will be in the recommit. And as proof of that, I have given a copy of what the recommit would then be over to the Republican side. They can look it up, as Casey Stengel used to say. They will be able to see that they can then carefully and in good conscience vote against the manager's amendment and then vote for the recommit because it will be their amendment; so they will get permission to vote for the recommit, and they will get everything in the manager's amendment except the one thing that keeps out faith-based, restricting it to people whose primary purpose is here, and the nonpartisan restriction on voter registration. All the other restrictions and everything else will be in it. So do not worry. I am making their life easier.

Mr. FRANK of Massachusetts. Competitive equity.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield 3 minutes to the gentleman from Georgia (Mr. Lewis). Since this is a bill which in its form in the manager's amendment would interfere with voter registration efforts, there can be no more appropriate speaker on our side than the gentleman from Georgia, who, 40 years ago and more, literally risked his life to advance the rights of people to vote. And I do not think he will be deterred any more today than he was by Bull Connor.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself 2 minutes. Mr. Chairman, first, the administration has been somewhat inconsistent on this. A year ago, Secretary of HUD Jackson boasted about the fact that he was insisting Freddie and Fannie increase the extent to which they do low-income housing because we have always had affordable housing goals enforced by law. So the administration last year was insisting that Fannie and Freddie use more of their money to help low-income people. Let me say, I am not surprised. The gentleman from Texas (Mr. Paul) has been straightforward. He is one of the most intellectually honest Members of the House. Sometimes, like on casino gambling and medical marijuana, I am glad to be with him. This time we disagree. He is very clear in saying we should not be doing subsidized housing. He is quite clear. If his amendment were to pass, we would not be able to have an affordable housing program because the level of profits Fannie and Freddie generate, which we are tapping in part, 5 percent, to do affordable housing, would substantially diminish. Yes, I think people ought to be able to work to build housing; but low-income people, people working at the minimum wage, a minimum wage the gentleman does not want to raise, are not going to be able to build their own housing. People in the hurricane area who get priority, if the affordable housing bill goes through, that part of the bill goes through, hundreds of millions of dollars will be available to replace housing literally washed away in Mississippi, Alabama, Texas, and in Florida. There is no way people down there will be able to do it on their own. The gentleman has been quite explicit, and I appreciate his being honest about it. If this amendment passes, the effect will be to substantially increase the capital cost to Fannie and Freddie. They will have to pay more for capital. Once they pay more for capital, not only would the affordable housing fund disappear, but so will the ability of the Bush administration, through Secretary Jackson, to demand that they meet certain housing goals. And leave aside the affordable housing program, the Bush administration, under Secretary Jackson, is proud of what it did to order Fannie and Freddie to do more to meet affordable housing goals, to buy up mortgages for people at 80 percent of median income. I hope that the gentleman's amendment in this particular case is defeated. Mr. Chairman, I reserve the balance of my time.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself 30 seconds. The gentleman's amendment actually does not go quite far enough, but he has a germaneness problem. What he really wants to do is abolish HUD, given his philosophy. He does not think there should be a Federal housing program. Since he cannot get at HUD, he goes after Fannie and Freddie in ways that would reduce substantially what we do in housing. And, by the way, the administration's objection to this bill is not, as says the gentleman, that it is too much regulation. It is that we do not give the regulator enough powers. So the administration's position is somewhat opposite to the gentleman from Texas', not for the first time, to his credit. Mr. Chairman, I yield 1\1/2\ minutes to the gentlewoman from Florida (Ms. Wasserman Schultz).

Mr. FRANK of Massachusetts. When the gentlewoman says she is not in need of further time, I think she is being very kind to her colleagues in the Republican Study Committee. She is being very kind to our colleagues who miswrote this amendment. The only thing that I would differ with the gentlewoman is she said there are unintended consequences. No, to her they are unintended. To the people who think poor people vote too much, they were intended. But we can work together to fix it. Mr. Chairman, I yield 3 minutes to the gentleman from Pennsylvania (Mr. Kanjorski), the ranking member of the subcommittee of jurisdiction here, who has been one of the major architects of what we believe is mostly a very good piece of legislation.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, will the gentleman yield?

Mr. FRANK of Massachusetts. Mr. Speaker, I agree with the gentleman, it was never discussed in committee. That is precisely the point. The restrictive language being put forward, which would say no faith-based group could participate, has never been debated in this committee and we are not allowed to do an amendment on the floor. Yes, it is part of the manager's amendment along with a number of other things such as preference for the gulf. All we asked for was an ability to vote on some of these specific things. I agree, it was not brought up in committee. It was brought up in a private session between the Republican Study Committee and the then-majority leader. That is not an appropriate forum to be the only place where we discuss things.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. In its present form, I am, Mr. Speaker.

Mr. FRANK of Massachusetts. Mr. Speaker, the gentleman has done great work, but he said this does not bar religious groups. From October 3 to the Speaker from the Catholic bishops: ``Limiting eligible recipients to organizations that have as their primary purpose,'' which this bill does now, ``the provision of affordable housing, would effectively prevent Catholic dioceses, parishes and Catholic charities from participating.'' Secondly, none of the money here would go to those other purposes. I agree with what the gentleman said. I just do not agree with what the bill said. This is their chance to reconcile them.

Mr. FRANK of Massachusetts. Mr. Speaker, will the gentleman yield?

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, I do not want the gentleman from Georgia to wonder all day about some of these things, so I have one answer and one correction. Our response to 9/11, the gentleman's memory seems to be failing him, was to vote virtually unanimously with only one dissent to invade Afghanistan and put an end to that regime. I am sorry we were not able to catch Osama bin Laden. But I have heard few distortions as great as to say that our response to 9/11 was whatever he said. In fact, we all but one on this side voted to go to war in Afghanistan. Now, that may seem a triviality to him, but it seems to me that that was a very useful response. Secondly, the gentleman wants to know what is our answer to Social Security. It is very simple: put the money back. If Social Security receives every dollar which has been paid into Social Security and the interest that it is legally entitled to receive on that, it is fully funded until sometime in the 2040s. Now, having spent some of the Social Security surplus for the war in Iraq, for tax cuts for the very wealthy, the President now says, Well, those are just IOUs. We do not have the money. But here is my answer: put the money back. If you just put the money back into Social Security, we will be okay.