Barney Frank

Mr. FRANK

Mr. FRANK. Madam Chairman, I appreciate the time from the gentleman from Missouri (Mr. Skelton), and I want to pay my deep respects to him and to the gentleman from Arizona (Mr. Stump), the Chair, and to the others. Let me just say parenthetically, I think we here all enormously enjoy this job almost all the time, but this is such a grave time that I think none of us feel confident that we are fully adequate to these terrible decisions and we are all doing our best; and I particularly admire those who have the responsibility for national security, especially because from what I have learned from our ranking member and others, there was a genuine effort to work together. We understand that the kind of differences of opinion we have among ourselves do not mean a lack of national unity, but we also understand the importance of international perception, and we all carry with us a commitment to make sure that none of this murderous gang that has launched a war on innocent people here get any comfort from our debates; and indeed, I think and I understand this, there will be less of a debate in this particular bill over one very controversial issue, national missile defense, than there might otherwise have been and there will be some day. While many regret that, I think that is an appropriate choice, and I commend the leadership on both sides for acknowledging that because we do run the risk that the people who do not understand that democracy is a strength and not a weakness might temporarily be emboldened by that. So many of us do note that we are supportive of a decision to forgo a all-out debate at this point, not because this is not an important issue, but because there will be another and better time in which to do it. I do, however, want to stress one aspect of the missile defense question. President Bush has very wide, virtually unanimous support in this country in fashioning a response to this terrorism, which is based on his recognition that it cannot be done without significant international support. Just as a physical fact, given the location of Afghanistan, this, given all of the other problems we have with this far-flung network of murderous assailants that we confront, international cooperation is very important. I was particularly struck that former President Bush made a point in a speech in Boston about the need for us to disavow any notion any might have had that America can go it alone. This reminds people why we need the rest of the world. One discordant note in this, however, potentially, would be an American decision unilaterally to withdraw from the ABM treaty in the pursuit of national missile defense. Just as many of us are today acquiescing in the decision not to have a full-fledged debate on this issue, I hope the administration, in the interest of national unity and in the interest of getting that international supportive coalition that is so critical to success, will not be on the verge of or threatening to abdicate a treaty which is so important. Cooperation from Russia and from the former Soviet states, Uzbekistan, Tajikistan, Kazakhstan, et cetera, that is very important. Cooperation with China is important. It would be, I think, a mistake if we were to make it harder to get that necessary multilateral cooperation by an excessive unilateral approach to the question of the antiballistic missile treaty. Just as many of us are deferring our views on the overall issue because we do not want anyone outside this country to misunderstand, we do not want anyone to misapprehend the degree of unity and determination there is here in America, we believe unanimously, almost, certainly in this Congress, that we have not only the right, but the moral obligation, to use whatever physical force is necessary to pursue these murderers, because it is our obligation as the nation of great strength, to prevent them from trying striking again and again and again. But we need to do that with a full respect to our own traditions. We need to show our moral as well as our physical superiority. Part of that has been correctly understood by the President of the United States and by Secretary Powell and others, a multilateral approach. So, therefore, I hope very strongly that nothing will be done in the area of missile defense in this next few months that would jeopardize the important principles of multilateralism, of getting maximum cooperation. It cannot be a good policy for us completely to disregard the views of others on that one issue, when we are so eager to have their cooperation; and we ought to have their cooperation. We are asking for something in the world's interests, as well as our own. So, again, I want to thank the ranking member, the Chair and others, for the example they are setting of cooperation.

Mr. FRANK

Mr. FRANK. Mr. Speaker, endless repetition is sometimes the bane of this place, but today and tonight it has served an important purpose. It demonstrates the resolve transcending every difference in our society, partisan, ideological, racial, regional, and religious, to demonstrate to the perpetrators of this monstrous act that they are terribly wrong in thinking that democracy is a source of weakness. We are unanimous in our resolve to demonstrate to them and to anyone else who doubts it that democracy remains a source of great strength. We will do that by waging a just war on this murderous gang, and on any governments that have been supportive of them. But we will do it in a way that will show not simply our physical superiority, but our moral superiority, because we will maintain a respect for innocent life that this gang showed no respect for. We will do it by showing that, in a democracy, we decide our public policies by the deliberative process; and no effort to blackmail or terrorize us into changing what this country decides is in our best interests, domestically or internationally, is going to work. If anything, it will backfire. And we will do it by fully empowering our security forces, who did such a wonderful job yesterday in the face of terrible adversity, to defend ourselves internally and externally in a way that is both effective and fully consistent with our own democratic traditions. Let me make explicit what a number of us have said: our fight, our war, is with the murderous fanatics who perpetrated this act. It is not with all followers of the Islamic religion, it is not with people of Arab descent who live in this country or elsewhere. We have the capacity as the greatest and strongest democracy in the history of the world to concentrate our resources in self-defense, both in the immediate sense against these murderers and in the future to protect ourselves in a way that will once again make people understand the strength of democracy.

Mr. FRANK

Mr. FRANK. Mr. Speaker, I was delighted to be given a chance to send my congratulations to the winners of the Hispanic Recognition Awards which are going to be held on August 3 in North Dartmouth, Massachusetts. The Hispanic Recognition Awards Committee has assembled a very diverse and valuable group of individuals and institutions to receive well merited recognition for their work in helping preserve Latino culture and values in the framework of our national unity. I am delighted to have a chance to share with my colleagues the work of this important organization and I ask that the names of the award winners be printed here so that they may get the recognition to which they are entitled.

Mr. FRANK

Mr. FRANK. Mr. Speaker, I demand a recorded vote.

Mr. FRANK

Mr. FRANK. Mr. Chairman, I understand this point of order. Just in case, I did have a second version that is allowed which we will get to if this point of order is sustained. I did want to make clear to people what the basis of the point of order is. The Congressional Budget Office has apparently ruled that the FHA has been making a profit off the multifamily programs; and, therefore, an amendment which would say that the FHA in the future must not make a profit, must in fact in the future set these premiums only at cost, is out of order because it is a budget charge. In other words, the basis of the point of order is a CBO ruling that the FHA has been making a profit, not the FHA, the Treasury has been making a profit off multifamily housing. That is why the National Association of Homebuilders and Realtors and others have been supportive of my amendment. But the sad fact is that given the way our rules are, I do acknowledge that my amendment requiring the FHA to set these fees at a break-even price will cost some money and it would stop the FHA from making a profit for the Treasury off multifamily housing, regrettably.

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

Mr. FRANK. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, this is a more limited amendment and it is in order because it has an offset. The offset comes from a program which has been severely criticized by the General Accounting Office. It is a program called Operation Safe Home which is run inappropriately, many of us feel, including, I must say, the General Accounting Office, by the Inspector General of HUD. Inspectors General should be checking up on other people's programs, not running their own. So it takes $5 million. What this amendment says, and it builds on what I said before, we have one of the multifamily housing programs in the FHA and it is known as 221(d)(4). The FHA is planning to raise the premiums on the 221(d)(4) program telling us that it is now running at a deficit. Remember, other multifamily programs are running at a surplus. That is why my first amendment was ruled out of order, because I tried to recapture that surplus by lowering the fees. What this amendment simply says is that when the administration raises the fees on the 221(d)(4) program, they can only raise them to break even, they cannot make a profit. The legislation defines cost, cost being what you break even at, including, obviously, an estimate of losses. This amendment is very simple. Again, it is strongly supported by the homebuilders, by the Realtors, by I think most organizations concerned with housing supply. What it says is when people go out to build housing, and we are talking here about private profit-making entities under the (d)(4) program doing unsubsidized housing, this is not housing for the very poor but housing for middle-income people, for working people, the FHA should not charge them for insurance more than the cost of that insurance. The Federal Government should not deter the construction of multifamily housing at this time of great housing crisis by charging an extra fee over and above what is needed for the program to break even. Mr. Chairman, I reserve the balance of my time.

Mr. FRANK. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, first, I believe my friend from New York may have contradicted himself. First he said we are not making money off this program, but then he said we would only be making a little. What HUD has told us is they raise it not two-tenths of a percent, but three-tenths of a percent. Now, that may not seem like a lot, but, I do not know, if your mortgage went from 7.2 percent to 7.5 percent, would you shrug that off? Costs are cumulative. It is millions of dollars. By the way, the argument, and I want to make it very clear, the structure of this amendment, the amendment says they can only charge what the statute describes as break even, as cost. And who says that that will be a money loser? CBO. In other words, the Congressional Budget Office scored my amendment. I did not ask them to. I did not run to CBO and say, boy, I really wanted you to tell me this is going to cost money. If I never heard from CBO again for the rest of my life, I would be very happy. But CBO says, wait a minute; if you tell the FHA that it can only charge break even, we are going to lose money. This is what CBO says. Then the gentleman says I am doing this for these special interests. I did notice he talked a little unkindly it seemed to me about profit- making institutions. I like one thing about housing. In almost every debate, people on the other side criticize us for not understanding the beauty of capitalism and the importance of the profit motive. But when it comes to housing, all of a sudden respect for the profit motive disappears, and the gentleman says, oh, these people want to make a profit. I am glad there are people trying to make a profit trying to build multi-family housing for working families. And these special interests, yes, there are some special interests. Let me read them. I confess. Mea culpa. The Mortgage Bankers Association of America, the National Association of Homebuilders, the National Association of Realtors, the National Apartment Association, the National Multi-Housing Council, yes, they are special interests. They are especially interested in getting housing built, and that is why they support this amendment. Mr. Chairman, I yield 2 minutes to the gentleman from North Carolina (Mr. Price).

Mr. FRANK. Mr. Chairman, I demand a recorded vote.

Mr. FRANK. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I want to congratulate my friend from New York. I think he may have qualified if we gave out Academy Awards for the best original screen play. The gentleman says $230 million. CBO says $5 million. I mean, CBO scored this amendment. Now, there was one version which they said was going to cost hundreds of millions. Yes, to do what I would most like to do across-the-board with the FHA would cost several hundred million. But this amendment deals only with the (d)(4) program where HUD has proposed to raise it by 30 basis points, three-tenths of a percent, and I got a CBO score, and it says, which is why this is in order, I have a $5 million offset. If I only had a $5 million offset for $230 million, obviously I would be out of order. Secondly, I would say the gentleman says we have to work with the Federal Credit Reform Act. I agree. That is what the amendment says. The amendment says do not raise the premiums in an amount greater than the cost, as such term is defined in section 502 of the Federal Credit Reform Act of 1990. So what this says is, live by the Federal Credit Reform Act definition of cost, and CBO says this particular amendment only costs $5 million. I had an earlier amendment that might have cost more. The gentleman succeeded in getting that one knocked out of order. This one is $5 million. It does set the principle that they should not be making a profit. Five million dollars is not a huge amount of money, but it is more than they should be getting out of multi-family housing. Mr. Chairman, I yield 2 minutes to the gentleman from Texas (Mr. Bentsen).

Mr. FRANK. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, let me say in fairness to the gentleman from New York, it is true, my concerns do not deal only with the 221(d)(4) multiple family housing program. I do object to the FHA's pricing in general. But, under the rules, the only one that could be in order now, because I needed an offset, was this narrow one. I do agree, as the gentleman from Texas has said, that this is an issue that ought to be addressed in the authorizing committee. The fact is we have a situation in which multifamily programs of the Federal Housing Administration were shut down because they said they needed $40 million more in credit subsidy, while the totality of programs in the FHA were returning many times that to the Treasury, and the analogy of the gentleman from Texas about the SEC was appropriate. So I hope the Subcommittee on Housing and Community Opportunity will address this. Getting the FHA out of the business of making a profit is a very simple and straightforward way to reduce the cost of housing, multifamily, single family, across the board. That is up to the authorizing committee. But here we can set a precedent which says, to the extent that we can control it, we will tell the FHA, live by the definition of cost in the bill, do not charge more for the insurance premium than is necessary for you to break even, and do not burden the people who are going to live in multifamily housing or any other patrons of the FHA by charging them more than would otherwise be necessary. Mr. Chairman, I yield back the balance of my time.

Mr. FRANK. Mr. Chairman, I yield 3 minutes to the gentleman from North Carolina (Mr. Watt).

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

Mr. FRANK. Mr. Chairman, first let me say that I am for the amendment, so I do not have to say anything nice about the gentleman from Indiana. But I would anyway if it were relevant. We have been sitting here for 3 days on this bill. In area after area important to the most needy people in our society, we have had a large degree of agreement that we have not been able to do what is required. We have cut funds for fighting drug-induced crime in public housing. We have not got enough in Section 8. We are about to have a rollcall in which veterans in one part of the country will be pitted against veterans in another for health care. The list of pressing unmet basic needs is very long. That is why I am for this amendment. The Space Station is a good thing in itself; but in the context in which we are operating and which we have not got the funds to provide some people with the basic necessities of housing, of health care, of a decent education, I do not think it is justified to continue to spend as much as we have been spending on the Space Station. I was a supporter of the gentleman from Indiana (Mr. Roemer) when we tried to stop it. It is obviously too late to stop it. But it is not too late to impose very stringent fiscal controls. The reason is, I would hope, clear to anyone who has been following this debate. We have not got enough money to meet the mandate of the Clean Water Act. We have not got enough money for people to be decently housed in the face of a housing crisis. We cannot provide veterans health care everywhere we want. This is an amendment that does not say the Space Station should not happen. We have lost that fight. But rather, that we have to impose fiscal restraints. If we do not impose them here, we impose them in housing, we impose them in veterans health care, and we impose them in the environment.

Mr. FRANK. Mr. Chairman, I yield myself such time as I may consume. I want to talk here in this amendment about the Federal Housing Administration, the FHA. Earlier this year, this House passed a bill to reduce the fees that were charged to people trading in stocks. The rationale was that the stock fees charged through the SEC were bringing in more than it cost to administer the program, and so we put through a substantial reduction in that cost. In fact, what happened is that the FHA is following a similar pattern. The FHA statute, which I reference in this amendment, defines cost. Cost is the break-even point for the FHA. We have been told that the FHA cannot engage in subsidizing programs. In fact, and it is a mark of great disappointment to many that this Congress and this administration have allowed the multifamily FHA programs to lapse for want of a $40 million credit subsidy as it is called. And what has happened is that we now learn that while the FHA is claiming it has to shut down some programs for credit subsidy, it is in fact overcharging elsewhere. This amendment simply says that the FHA can no longer overcharge and make a profit for the Treasury on these multifamily programs but must stay at cost. Mr. Chairman, I reserve the balance of my time.

Mr. FRANK

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

Mr. FRANK. Mr. Chairman, I repeat that the gentlewoman's chairmanship of the Subcommittee on Housing and Community Opportunity has been a very constructive one, because we have been building, I think, a very important record on the importance of housing and moving forward. I do have to say on the specific question of authorization, I mentioned it only because the gentlewoman from New York who is no longer here said, ``Well, I was the ranking member, we could do this.'' And my response was well, I am ready. Because I would say this to the gentlewoman, while there is a June 30 date in the bill which says we must authorize by June 30, or the funds revert, the funds start being subject to this restriction on October 1. So I would ask the gentlewoman from New Jersey (Mrs. Roukema), could she then schedule a hearing and markup? We probably cannot pass it by October 1, and we are about to go out. But I would hope as soon as we come back in session we could have such a markup so we could get this. Mr. Chairman, the reason is this: This will be going to conference in September. I would hope the conference committee, which will have to ultimately decide whether to earmark it or not, would have the benefit of at least some committee deliberation on this substance.

Mr. FRANK. Mr. Chairman, will the gentlewoman yield?

Mr. FRANK. Mr. Chairman, I demand a recorded vote.

Mr. FRANK. Mr. Chairman, first, I would point out the ranking member does not set the committee agenda. The committee has been in existence since January or February. The majority has not brought this item forward for us to debate. Secondly, I thought the gentlewoman was making my argument. Of course I understand it is already authorized. That is why I do not think we need to force communities to do it. It is fully authorized. Some communities are doing it. The difference between us is not whether this is not in some places a good idea, but whether Congress should retreat from the notion of a block-granted HOME program with reliance on local judgment and take for the first time the wrong step, I think, of mandating the specifics. I would be glad to have the committee bring it up, but I do want to point out to the gentlewoman, she is a member of the majority. It is up to them to bring something forward. The problem is this says the committee and House and Senate. It is not only up to the committee. If we do not get legislation through as of October 1, this gets mandated and the communities cannot enjoy the previous flexibility, and that is what I object to.

Mr. FRANK. Mr. Chairman, will the gentlewoman yield?

Mr. FRANK. Mr. Chairman, there is a technical point and a more substantive one. The technical point is this: the gentleman from New York says that if the legislation is not authorized, then the money does go back to the recipient municipalities the way my amendment says. The problem is that that does not happen in the bill until June 30, 2002, and this appropriation becomes effective on October 1. So from October 1 of 2001 until June 30, the money will be mandated and not available freely. The gentleman said well, he would hope, recognizing it was the President's priority, they would authorize it. I know that motivates many on the gentleman's side. But the President's priority was not to have the Patients' Bill of Rights of Ganske-Norwood-Dingell, and the President's priority has been a different campaign finance reform. I am pleased to say from time to time this House constitutionally differs with Presidential priorities, and the argument that something is not a Presidential priority, as my friend from Michigan has said, is not an argument. So I think if the gentleman concedes that we should not be doing this without authorization, then he has it backwards, because his amendment language says as of October 1, if my amendment does not pass, there is this mandate and the mandate stays in effect for most of the fiscal year. I think that is the wrong way to deal with it.

Mr. FRANK. Mr. Chairman, will the gentleman yield?

Mr. FRANK. My question was just this: Since the appropriation begins October 1, but the lapsing of the mandate kicks in June 30, 2002, what happens if the authorizing committee and the Congress do not pass the legislation then as of October 1? Is the mandate in effect and it ends on June 30, or does it never go into effect?

Mr. FRANK. Mr. Chairman, if the gentleman would yield further, there is a time gap, because the appropriation kicks in October 1.