Barney Frank

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. I have only one remaining speaker. I will defer until the gentleman has his last speaker.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself the balance of my time. A week ago when we debated this in committee, the author of the bill, the gentleman from Illinois (Mr. Dold), was telling people that if they joined this program they would have a tax liability. He was wrong. It wasn't his fault. He was told that that was the case. He dutifully read what he was told. You haven't heard that again because he found out that was wrong. He was also told that it was going to be $50 million disbursed. They don't seem to be clear on what that means. No, $50 million has not been spent on any individual. Fifty million has been set aside in a letter of credit if necessary in the future to pay for defaults. So this million dollars per loan is, of course, a fantasy. Now, it is true, the program has not yet had a major impact. And if it does not prove itself out, it never will. It cannot be both wildly expensive and nonexistent. It is there. If we get an agreement involving all the attorneys general of both parties, involving the regulators and the financial institutions, this will be one of the tools that will accommodate people. CBO does think there could be a loss. Their prediction is, their best guess--and they're the best objective element we have--you could get an amount of $12,000 or so per loan lost here. Not a million dollars; 12,000. It is part of a panoply of projects to try and reduce foreclosures and help the economy deal with this crisis. And for people who, and I repeat it--they don't like it--they'll send money to Brazil, they'll send money to Afghan cities, they'll send money to Iraqi security, they'll subsidize farmers at more than $250,000 a year, but $12,000 per homeowner at most is too much for them. And it isn't just for the homeowners; it is a necessary part of getting out of our economic crisis. So I hope that this is defeated. I appreciated what the gentleman from Nevada said. Yes, it can be improved. The fact that only 44 people have been involved so far means they are proceeding, appropriately, cautiously. This is a program with great promise. It may not turn out, but if a promise doesn't turn out, then it doesn't cost anything. And if it does turn out to be a workable part of an overall solution, it will be money much better spent than many of the billions my colleagues on the other side are prepared to subsidize some of their favored sacred cows as opposed to doing something that will help the whole economy. I yield back the balance of my time.

Mr. FRANK of Massachusetts. Mr. Chairman, I move to strike the last word.

Mr. FRANK of Massachusetts. First, I would repeat that I am glad to hear the support for Admiral Mullen--earlier we heard of Secretary Gates--in their warning about the deficit. I just wish that all of those who were accepting their warning on the deficit would refrain from forcing money on them that they don't want. We have people citing the military leadership and then voting for weapons systems, swelling an already swollen military budget, that they don't want. As to this amendment, I am tempted to come to the defense of the drafters of the bill, because if you read the bill, the bill purports to do what the amendment purports to do. Apparently the author of the amendment didn't think the bill did a good enough job, or somebody thought the author of the amendment, being a nice fellow, ought to get in on the credit. So this is an amendment that is either editorial refinement or political redundancy. In either case, it does not have much effect; so I urge the Members to adopt it.

Mr. FRANK of Massachusetts. Madam Chair, I move to strike the last word.

Mr. FRANK of Massachusetts. Madam Chair, I regret the fact that my colleague from Massachusetts, who is a good lawyer and a careful student of what we do, has drafted a very specific amendment aimed at a particular point. He has been answered with a lot of general rhetoric, and I don't think his point was understood. The gentlewoman simply repeated general rhetoric about the bill. He is not trying by the back door to reestablish this program. He has talked to thoughtful people, and is worried about an overreach. I think the only thing we're seeing now is pride of authorship by whoever drafted this bill for them. The gentlewoman from Illinois is, as I said, using a lot of general rhetoric, which is totally unresponsive to the very specific point my friend from Massachusetts made. With that, in the hope that if he says it again he might get them to pay attention to the specifics, I yield to my friend, the gentleman from Massachusetts (Mr. Lynch).

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Reclaiming my time, the problem is the ambiguity is substantially similar. It kills this program, but it bans things that would be substantially similar so that innovator private sector entities trying to do something would be deterred because no one could tell them what substantially similar is. I yield to the gentleman from Massachusetts.

Mr. FRANK of Massachusetts. I yield at this point to the gentlewoman from Illinois (Mrs. Biggert) to respond.

Mr. FRANK of Massachusetts. Reclaiming my time, because the gentlewoman is simply not responding, we have the same general rhetoric. The point, as my friend has pointed out, is you were introducing an ambiguity which is substantially similar so that people will be deterred from further innovator activities. I yield again to my friend from Massachusetts.

Mr. FRANK of Massachusetts. Madam Chair, I move to strike the last word.

Mr. FRANK of Massachusetts. Madam Chair, the gentleman from Texas (Mr. Al Green) in the committee offered amendments that would have provided some substantive protection to veterans. My Republican colleagues neither wanted to provide help to the veterans nor be caught not providing the help. So they came up with some study amendments that would give them the appearance of being concerned, but no reality. That was, unfortunately, adopted over Mr. Green's objections and mine, but it's part of the bill. This is in addition to what is largely a cosmetic amendment, and I see no reason to object to it or prolong the debate, so I urge everybody to vote for it. I yield back the balance of my time.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, in a very thoughtful editorial on February 24th, the Financial Times, a widely-respected voice of a responsible free market approach to the economy, expressed strong criticism of the reductions in the budget requests that were made for the Securities Exchange Commission and the Commodities Futures Trading Commission. These two agencies were given significantly enhanced responsibilities in the recently passed financial reform bill, and the Republican budget means that, most glaringly but not exclusively, derivatives will continue to lurk in the shadows of the financial system with their great potential for harm when improperly governed. The Financial Times, not given to radical thought, closed this editorial by noting that ``If the Republicans want another financial crisis, they are going about it the right way.'' Mr. Speaker, few public policy issues are as important to us as avoiding the disaster of another financial crisis and its consequent plunging of the economy as a whole into deep recession and so I ask that his important editorial from the Financial Times be printed here. [From the Financial Times, Feb. 24, 2011] Editorial: Funding Regulators The Dodd-Frank financial regulation law passed in July 2010 was a far-reaching effort to promote financial stability. Whether the legislation can achieve that goal, though, depends on how it is implemented. On this, there are some worrying signs. The House of Representatives has voted to cut funding by a third to the Commodity Futures Trading Commission. It also stripped $25m from the Securities and Exchange Commission. Squeezing two of the most important regulators jeopardises the progress made in creating a safer financial system. Too much regulation did not cause the financial crisis. In the last decade, the SEC and CFTC have anyway been stretched. Over that time, the industry's complexity and size have grown. Technology has also changed the way markets operate, and regulators are as yet inadequately equipped with tools to monitor that change. Even if the remit of these two bodies had not expanded, therefor; to cut their budgets would be ill-advised. To do so when Dodd-Frank has added to their tasks, is irresponsible. The White House understands this: the proposed 2012 budget would nearly double the CFTC's funds and increase the SEC financing by a fifth. It is imperative that the SEC and CFTC are properly resourced. They are already behind schedule in writing the regulatory detail. This strain is particularly acute for the CFTC, which is taking on a proportionately greater burden under Dodd-Frank: previously unregulated derivatives fall largely under the CFTC's purview. The current funding model is not the only option. User fees could be a viable alternative to congressional financing. Some other financial regulators already self-fund; the SEC partly does so. The futures industry has lobbied against this model for the CFTC. What matters most, however, is that regulators receive enough funding without strings attached. The pressure to cut the SEC and CFTC budgets is part of the Republican war on the White House. Dodd-Frank is not perfect, but it improves on what came before. It cannot work, however, if politicians do not support regulators' efforts. If the Republicans want another financial crisis, they are going about it the right way.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. When you get from Alaska to Florida, don't you have to pass Massachusetts, New Jersey, and North Carolina? Because the three of us think it's a terrible idea.

Mr. FRANK of Massachusetts. Mr. Chairman, in the Magnuson Act renewal of 2006, we set up a procedure whereby there can be a referendum in each fishery to do the equivalent of catch shares. NOAA's getting around that. There are some places I'm told where people like that. The procedure under the Magnuson Act whereby they can, by referendum, impose that remains available but it would require the approval of the men and women in the fishery. In much of the east coast, people don't like that. And what NOAA is doing is going around that referendum requirement by a new thing which they call catch shares. They can do the equivalent in another way. I am particularly puzzled to have in the Obama administration people tell us, Well, it's okay. What it does, of course, is to lead to consolidation. They say it's the same amount of income, but it goes to a small number of larger entities, and the smaller individuals are frozen out. And in the area that I represent, the fishing industry doesn't want it. So what I hope we would do is--and the gentleman's amendment does not affect that part of the Magnuson Act that would allow referenda, so that when the fishery, where the fishermen like it, they can get a system of quotas, and they can get a system of the transferable quotas. And that's what's in the Magnuson Act, transferable quotas with a referendum because they couldn't--NOAA was insisting on imposing that over the objection of fishermen. They've come up with a new system called catch shares. That's what we're banning. We leave the referendum process in place.

Mr. FRANK of Massachusetts. Will the gentleman yield?

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Will the gentleman yield?

Mr. FRANK of Massachusetts. I gather unanimous consent may be propounded to reduce debate time. I just want to stress we were told yesterday we were debating the whole government. We were then going to debate important public policy questions for 10 minutes. We're now going to get the privilege of debating important public policy questions for 6 minutes. If this is open government, I think I'm going to have to look for something else because, I think it is, as I said yesterday, a travesty. I do think we ought to make clear what we are talking about. Important public policy questions being debated for 3 minutes on each side. That, as I said, is a travesty.

Mr. FRANK of Massachusetts. Will the gentleman yield?

Mr. FRANK of Massachusetts. Well, I didn't know how long it was going to take my Republican friends to going from talking about their superior virtue to saying they were just like us. It took less time than I thought. But I would also say that, in the bills that came out of the committee that I chaired, we always had debate, and we always had open rules. But if the gentleman is saying that he now understands why the people on our side did what we did--and I often disagreed, as I said-- he got there more quickly than I thought he would, and that may be the only thing about the way they're running the House that has happened more quickly than we thought it would.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. As I understand the arguments of the chairman and the ranking member, it is we are going to get rid of these eventually, but let's not do it too quickly because we might save money prematurely. I have never heard a weaker defense for continuing to spend money, that at some point we are going to stop. So why not stop now? So I think the gentleman from Wisconsin ought to be supported.

Mr. FRANK of Massachusetts. Madam Chair, I think if we were to have a contest on your YouCut for the single stupidest thing the Federal Government could do, it would be to take $120 million more of American tax dollars and send it to subsidize Brazilian cotton farmers so we can continue to subsidize American cotton farmers. That's what we're talking about. I find it somewhat ironic that my friends who are the great believers in free enterprise and the free market think somehow there's an exception for agriculture. But whether you do or you don't, sending money to Brazilian cotton farmers at a time when we are making fundamental cuts here is problematic. It also illustrates my problem with the structure of this bill. I was hard-pressed to find offsets so we could continue to fund enforcement of securities fraud or consumer protection. Where could we have gotten the money? Well, we could have gotten it from Brazil. Instead of sending it to Brazilian cotton farmers, we could have used it for our own law enforcement. But the bill is structured to protect this. At least we cannot waste it. So let's be very clear. To protect our right to continue to subsidize American cotton farmers, we are going to subsidize Brazilian cotton farmers. Lunacy.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. I appreciate that.

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

Mr. FRANK of Massachusetts. Parliamentary inquiry. Hasn't the gentleman already spoken?

Mr. FRANK of Massachusetts. Mr. Chairman, I offer an amendment.