Barney Frank

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, I support this legislation substantively. I'm also glad we're bringing it up because it helps dispel a couple of unduly negative views about us. We've just seen a great example of bipartisan cooperation. Yes, things have gotten very partisan. Some things should be partisan. More have become that way than should be. But the public has an excessive view of the extent to which partisanship dominates, because when we have cooperation between the parties and agreement it's not news. And while we have some differences, the gentlewoman from West Virginia as the ranking member of the Housing Subcommittee and the gentlewoman from California (Ms. Waters) as the chair did a lot of constructive work together, brought forward a number of pieces of legislation. Not all of them survived the last minute rush. I am hopeful under the leadership of the gentlewoman from Illinois those areas where we had some agreement, there were some that remain, that we will be able to move them. So it does show that people believe that there is more partisanship than there is, or that there are no examples of cooperation between the parties, as there are in this case. There is a view that politics is a hard and nasty business and that people are vindictive, and this is proof that that's not true. Now, the gentleman from Connecticut abandoned our committee, left for greener committee pastures. But that did not prevent us from enthusiastically helping him to pass this bill, and he deserves a great deal of credit for it. It is an idea, I believe, that came to him from constituents, and that's another good thing to know; that there were people in his district who were interested in this. And he brought it forward and worked very hard and made the necessary adjustments, as you always do in the process. So this speaks very well of the gentleman from Connecticut and of the process, that people in the country who have some good ideas can bring them to us and they can be shaped, and this is done. Finally, I am very pleased that this will lead to, I hope, more construction of rental units. A common problem that we've had for many years in our housing area was to overstress home ownership for people who needed government assistance, and under-performed with regard to building rental units. No one thing solved it all, but this is a step forward towards the construction of rental units in a way that will increase the stock of housing. And we ought to remember when we talk about providing homes for people who need assistance, ownership and having a home are not the same word. Home ownership is a part of home, in general. Rental housing is also an important part. I thank the gentleman from Connecticut and the gentlewoman from West Virginia and others for letting us take that step forward together.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, in recent years Paul Krugman has been, in my view, the single-most incisive and accurate commentator on our economy. In the New York Times today, December 17, he rebuts very effectively the partisan effort to shift blame for our recent economic crisis away from the failures of deregulation and of financial irresponsibility in the private sector issued by the four Republican Members of the Financial Crisis Inquiry Commission. It is of course the case that government policy failures played some role in the crisis, but the most egregious of these is ignored by these partisans-- the refusal of the Republicans in the Bush administration, the Federal Reserve and in Congress to support Democratic efforts to restrict the kind of irresponsible predatory mortgages that should not have been issued and which were a major cause of the crisis. As Mr. Krugman notes, ``the G.O.P. commissioners are just doing their job, which is to sustain a conservative narrative. And a narrative that absolves the banks of any wrongdoing, that places all the blame on meddling politicians, is especially important now that Republicans are about to take over the House.'' Referring to the incoming Chairman of the Financial Services Committee, Mr. Krugman sadly, but with good reason, predicts ``that he and his colleagues will do everything they can to block effective regulation of the people and institutions responsible for the economic nightmare of recent years.'' Madam Speaker, I ask that Paul Krugman's very important correction to an egregiously erroneous report be printed here. [From The New York Times, Dec. 16, 2010] Wall Street Whitewash (By Paul Krugman) When the financial crisis struck, many people--myself included--considered it a teachable moment. Above all, we expected the crisis to remind everyone why banks need to be effectively regulated. How naive we were. We should have realized that the modern Republican Party is utterly dedicated to the Reaganite slogan that government is always the problem, never the solution. And, therefore, we should have realized that party loyalists, confronted with facts that don't fit the slogan, would adjust the facts. Which brings me to the case of the collapsing crisis commission. The bipartisan Financial Crisis Inquiry Commission was established by law to ``examine the causes, domestic and global, of the current financial and economic crisis in the United States.'' The hope was that it would be a modern version of the Pecora investigation of the 1930s, which documented Wall Street abuses and helped pave the way for financial reform. Instead, however, the commission has broken down along partisan lines, unable to agree on even the most basic points. It's not as if the story of the crisis is particularly obscure. First, there was a widely spread housing bubble, not just in the United States, but in Ireland, Spain, and other countries as well. This bubble was inflated by irresponsible lending, made possible both by bank deregulation and the failure to extend regulation to ``shadow banks,'' which weren't covered by traditional regulation but nonetheless engaged in banking activities and created bank- type risks. Then the bubble burst, with hugely disruptive consequences. It turned out that Wall Street had created a web of interconnection nobody understood, so that the failure of Lehman Brothers, a medium-size investment bank, could threaten to take down the whole world financial system. It's a straightforward story, but a story that the Republican members of the commission don't want told. Literally. Last week, reports Shahien Nasiripour of The Huffington Post, all four Republicans on the commission voted to exclude the following terms from the report: ``deregulation,'' ``shadow banking,'' ``interconnection,'' and, yes, ``Wall Street.'' When Democratic members refused to go along with this insistence that the story of Hamlet be told without the prince, the Republicans went ahead and issued their own report, which did, indeed, avoid using any of the banned terms. That report is all of nine pages long, with few facts and hardly any numbers. Beyond that, it tells a story that has been widely and repeatedly debunked--without responding at all to the debunkers. In the world according to the G.O.P. commissioners, it's all the fault of government do-gooders, who used various levers--especially Fannie Mae and Freddie Mac, the government-sponsored loan-guarantee agencies--to promote loans to low-income borrowers. Wall Street--I mean, the private sector--erred only to the extent that it got suckered into going along with this government-created bubble. It's hard to overstate how wrongheaded all of this is. For one thing, as I've already noted, the housing bubble was international--and Fannie and Freddie weren't guaranteeing mortgages in Latvia. Nor were they guaranteeing loans in commercial real estate, which also experienced a huge bubble. Beyond that, the timing shows that private players weren't suckered into a government-created bubble. It was the other way around. During the peak years of housing inflation, Fannie and Freddie were pushed to the sidelines; they only got into dubious lending late in the game, as they tried to regain market share. But the G.O.P. commissioners are just doing their job, which is to sustain the conservative narrative. And a narrative that absolves the banks of any wrongdoing, that places all the blame on meddling politicians, is especially important now that Republicans are about to take over the House. Last week, Spencer Bachus, the incoming G.O.P. chairman of the House Financial Services Committee, told The Birmingham News that ``in Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks.'' He later tried to walk the remark back, but there's no question that he and his colleagues will do everything they can to block effective regulation of the people and institutions responsible for the economic nightmare of recent years. So they need a cover story saying that it was all the government's fault. In the end, those of us who expected the crisis to provide a teachable moment were right, but not in the way we expected. Never mind relearning the case for bank regulation; what we learned, instead, is what happens when an ideology backed by vast wealth and immense power confronts inconvenient facts. And the answer is, the facts lose.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. The letter you are talking about is one in which he says he doesn't have the legal authority to do it. This bill gives him the legal authority. There is no conflict. This bill now is a response to that letter. And I repeat that he has said that he is in favor of getting the legal authority to do it.

Mr. FRANK of Massachusetts. I yield myself such time as I may consume. Mr. Speaker, I salute the ``good soldier'' attitude of my friend from Nebraska. In the absence of any member on the Financial Services Committee, he agreed to stand up and read what was written. He has no way of knowing how silly it is. Nobody explained to him how inaccurate it was. For example, he says this has not gone through regular order. It is, in fact, exactly the same legislative language that was debated, amended and adopted in the House Financial Services Committee and then in conference during financial reform. It is exactly that. There is language in here that the gentlewoman from Ohio sensibly agreed to that makes it clear that organizations that have been convicted of criminal abuses can't be here, that only genuine legal services organizations can get this money and that there can be no class actions. It was carefully done. It's not the gentleman's fault. He wasn't there. I wish the people who had been there had told him that. This is the legislative language taken from a bill that went through the full legislative procedure and passed the House. In fact, there was a change because we told the gentlewoman from Ohio, who has been very diligent in this regard, that we thought it was best precisely to avoid that kind of argument and to take the language that had already been adopted in the committee, in the conference and on the floor of the House. Secondly, we are told it's going to cost extra money. No, it will not. In fact, it could save money. In the language that the House passed and the conference committee passed, we authorized $35 million for exactly this purpose. What the gentlewoman from Ohio is proposing is that we take money that has already been voted under the TARP and use it for that. The gentleman has been asked to characterize it as a ``slush fund.'' Hardheartedness has rarely come so close to the Christmas season. This slush fund is to go to working Americans who bought homes and who are facing foreclosure. Frankly, we were reasonably certain of this when we passed this earlier this year, but we now know there have been serious legal problems with the foreclosures. Some of them are merely paperwork. Others we have seen are documented abuses. You are a homeowner in trouble. You have the legal teams coming at you from the lenders, from the servicers and others. You cannot yourself afford a lawyer. You're having trouble meeting your mortgage payment. What we say is, We will give you access to a lawyer--not in the offensive way. There is no class action here. There is no legal suit that can be brought against the lenders. There maybe should be. This says, I'm being foreclosed. I don't think I should be foreclosed. They made a mistake. I paid that mortgage; or I got a modification. Somebody forgot it. All we're asking is, Can we take some money that has already been voted and let that person have a lawyer to go to court--a legal services lawyer, vetted by the local bar association--to defend him? To the Republican Party, that's a slush fund. I am appalled. I am appalled at the insensitivity and at the cruelty. By the way, I voted for the TARP money, along with Mr. Boehner, the incoming Speaker. They did it at the request of President Bush. As for the bailouts they keep flailing about, every single bailout that exists in America today was initiated by President George Bush, every single one--AIG, the TARP, the automobiles. It was George Bush who did it, and George Bush, after the election conveniently, said that it was the TARP that saved the economy from the consequences, I think, of mistakes that had been made during his Presidency. So that's the bailout they are talking about. What we are saying is this: We put an end to any new money. Given existing money, given the clear documentation that there have been abuses and errors and even, in some cases, fraud in the foreclosure process--although, in some cases, they were just paperwork errors--this is for beleaguered homeowners who are trying to save their homes, who are trying to keep themselves and their families from being kicked out the of their homes in case there was a mistake at legal assistance. If everything is in order, the lawyers can't save them. What we are saying is, given what has been documented, let's take some of the money that has already been voted in the TARP--that's right. It has no CBO score--and put it there. Secretary Geithner told me personally that he supports this. I'm sorry the letter isn't here yet, but I think Members will accept the fact that I'm telling the truth when I tell you that I spoke to the Secretary and showed him what we were doing, and he supports it. The language has gone through the full legislative process. It is language taken from the bill. I hope we will pass this and also have the $35 million. This is for the hardest-hit States, the States that have had the worst impact. The $35 million could then be used for the other States. But again, a slush fund? It's a slush fund that can't go to ACORN. I know ACORN is a real focus for them. It, of course, validates the old saying: Great obsessions from tiny acorns grow. So every time we try to help any poor people with legal assistance so they are not faced with the unfair situation of being outgunned by an array of lawyers and they don't have any lawyers themselves to defend them, ACORN gets it. ACORN can't get this money on a number of grounds. There can't be class action suits. If there is a homeowner who is convinced that he or she is being unfairly foreclosed upon and could document errors, should that person be denied legal assistance from money already voted at the request of George Bush and with the support of Mitch McConnell and with the support of the incoming Speaker and with the support of the incoming majority leader? Should they not be able to use it? I wish this weren't partisan. People tell me, Why are things partisan? I wish things weren't partisan. I wish I could eat more and not gain weight. I wish a lot of things. We are here on a partisan situation because what ought to be obvious is that money already appropriated, knowing as we do that there have been abuses in the foreclosure process, ought to be available to appoint genuine lawyers to defend people. By the way, do you know legal services lawyers? They're among the most dedicated people you'll find. These people could be making far more money in private practice, but they're there to help out. They're restricted. There can't be class action suits. They can't go to a general organization that does legal work. They have to go to a genuine legal services organization, which are often, in my case, always supervised by the State bar association--and it is a slush fund. You know, I can understand some differences of opinion, but to demean it this way--to call it a ``slush fund''--to deny ownership of the bailout, which was, of course, a Republican administration policy and to characterize it that way, all we are saying is money already voted could be made available for genuine legal assistance to help people who are facing unfair foreclosures so they can go to court. The point is that we get this demeaning characterization. You know, we are supposed to be proud of our system of justice. We are not talking about giving anybody a free pass. What we are saying is working people who are facing foreclosure ought to be able to get to court on, not equal terms with the lenders and the large organizations opposing them, but with some bare minimum of representation--and that's a slush fund. That's a political trick. I am very disappointed. We had real hopes that we could get some agreement on this. Everybody acknowledges that there have been abuses in the foreclosure process. We know there are people who can't afford lawyers. It will not cost the taxpayers any money. This is money that will be used elsewhere. It's a diversion from money that was otherwise going to be used in the TARP. It doesn't reopen the TARP. I hope it will add to the $35 million we hope we can get. It has been vetted through the legislative process. The gentlewoman from Ohio, who has been a great crusader on behalf of people in this situation, accepted our suggestion that she take the language that has already been voted on in the House. So I am disappointed, but I hope that party discipline will not prevail on the Republican side. People--particularly from those States, Ohio, California, Indiana, and Florida, where they are particularly hard hit, but everybody, because everybody will benefit if we can increase this pool--will say something that's apparently terribly radical to my Republican friends. Let's let members of legal assistance operations, supervised by their bar associations, subject to their supreme courts and the State's supervision, go to court to defend someone facing an array of high-priced legal talent when they know that they are being foreclosed upon illegally and inappropriately. And that is apparently a terrible thing to the Republican Party. I am, as I say, appalled. I hope that a sense of fairness will somehow prevail and we can pass this bill. Mr. Speaker, I reserve the balance of my time.

Mr. FRANK of Massachusetts. Yes, the letter is on the way. I state, as a matter of fact, that I personally spoke to Secretary Geithner and he told me, as I explained it, that he supports it. Does the gentleman doubt my word?

Mr. FRANK of Massachusetts. Mr. Speaker, I yield the balance of my time to one of the single most effective fighters against unfair foreclosures on our committee and among the leaders in the Nation, the gentlewoman from California (Ms. Waters).

Mr. FRANK of Massachusetts. Will the gentleman yield?

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

Mr. FRANK of Massachusetts. Mr. Speaker, I would like to submit the following letter from the Secretary of the Treasury Timothy Geithner to Congresswoman Marcy Kaptur: Department of the Treasury Washington, DC, December 17, 2010. Hon. Marcy Kaptur, House of Representatives, Washington, DC. Dear Representative Kaptur: I am writing in support of your proposed legislation, the ``Aiding Those Facing Foreclosure Act of 2010'', H.R. 5510, as amended for consideration under suspension of the Rules. This legislation would permit the funding of legal aid and other services to struggling homeowners through the Housing Finance Agency Innovation Fund for the Hardest-Hit Housing Markets program (``Hardest-Hit Fund''). Under current law, funds available under the Emergency Economic Stabilization Act of 2008, which are being used to finance the Hardest-Hit Fund, cannot be used for legal aid services. If the legislation is enacted, I believe Treasury would have the authority to approve proposals for Hardest-Hit Fund monies that were Previously allocated to states to be used for legal aid services to homeowners. I appreciate your ongoing commitment to this critical issue.

Mr. FRANK of Massachusetts. How much time is remaining?

Mr. FRANK of Massachusetts. I know you haven't seen the letter. I told her that the Secretary told me the letter is coming. The letter is now being cleared by OMB. So we don't have the letter yet--the letter has been written--but I can tell you the Secretary says he wants it. The gentleman's discussion of the letter is totally confused--and confusing, as a consequence. Yes, there was a letter saying we don't now have the authority. This gives them the authority, which they welcome. Secondly, this does not extend the TARP at all. This does not extend the TARP in any way. And as to getting repaid, there is legislation that we added to the TARP that requires that at the end of the TARP program, 5 years from the date of it, 2013, the President must submit to us legislation that gives us a way to get it back from the financial services industry. So, yes, this will be repaid to the taxpayer by the financial services industry. By the way, the TARP is now down to a total of 25. This does not add $1 or 1 day to the TARP, either in its lifetime or in its funding. The gentleman said, well, there is money in legal services. Yes. The legal services appropriation last year was passed before we understood the extent of the mistake, the fraud, and the abuse in the foreclosure process. That is exactly right. The $400 million in legal services did not anticipate what we have since learned about abuses in the foreclosure process. Finally, the gentleman said do it through the appropriation. We have done that as well. We have asked for $35 million additional. By the way, this is not extra money. The appropriations would be additional money. But I will look forward to their support when that happens. Mr. Speaker, I would now yield 3 minutes to the gentlewoman from Ohio (Ms. Kilroy).

Mr. FRANK of Massachusetts. Will the gentleman yield?

Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself such time as I may consume. Well, apparently the gentleman from Nebraska, having denounced those bailouts, now tells us he voted for it. So it's confession time before the House. He apparently voted for the measure that he characterizes as a ``bailout'' that was such an imposition. Secondly, I have never heard anything more confusing than this discussion of the letters. Yes, the Secretary wrote and said, I don't now have the authority. And we then said, Okay. We will give you the authority.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, I join the ranking member in paying tribute to the extraordinary public service of our colleague from Missouri who really exemplifies what it means to be a legislator of integrity and commitment and effectiveness. I do, however, want to differ with his rather distorted picture of the history here when he says we went outside of regular order. This House passed the Defense bill under regular order with committee hearings and debate on the floor. We sent it to the Senate. Because some Senators objected to repealing Don't Ask, Don't Tell, which was included in the Defense bill to start with 17 years ago, it was twice filibustered. The reason we are here now is that twice Republican minorities filibustered the bill. That was the breakdown of regular order. But here we are today. Speaker Pelosi and Leader Hoyer took a very important stance and said, when the Senate asked us, we will break Don't Ask, Don't Tell off from the regular bill, but we want to be sure both passes, and that is what we are in the process of doing. To the credit of the Senate leader and Senator Lieberman, they will be voting on cloture for Don't Ask, Don't Tell tomorrow. In light of that, while there is much in this bill with which I disagree, I strongly urge those who share many of my views to vote for it. Let me be very clear, I think it is very important to repeal Don't Ask, Don't Tell. I honor the work that was done under the leadership of the gentleman from Missouri, although I have some disagreements with it. But the point is that the success of the repeal of Don't Ask, Don't Tell is tied to the success of this bill in a perfectly reasonable way. In legislatures, people need to compromise. So I am going to vote for this bill. I vote for it knowing that tomorrow the Senate will begin cloture. There will be things in this total bill that many of us will like and dislike, but I think it speaks well of the Nation and the process we are going through. And I urge those who share some of my objections to some pieces of this bill to vote for it so we can go ahead and get the whole thing done. I would also point out that even if we were to defeat this bill, much of what I don't like would happen in the appropriations bill. So I urge those who join me in having concerns about Don't Ask, Don't Tell to help us pass this bill and get this thing going.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Chairman, two pieces of legislation tell us a lot about the values of our Republican colleagues. This bill will take $114 billion in revenues out of Social Security, helping them make the case ultimately, in a kind of self-fulfilling prophecy, that we can't pay everything we want. Earlier this session, they voted overwhelmingly and killed a proposal to give each Social Security recipient $250--not $250,000 or $250 million, numbers with which they are more familiar--but $250. These are people who are going to be facing an increase in Medicare because we learned only in October that there would not be a cost-of-living increase. We couldn't afford the $14 billion to give $250 to older people who are having trouble paying their heating bills, but they can afford $114 billion that will go to everybody, including to people who make $100,000 a year, who will get eight times $250. The values of the Republican Party are revealed by this. By the way, we are in this situation because of dishonesty. When George Bush and the Republicans passed the tax cuts in 2001, they didn't want to admit the full account of how much it cost.

Mr. FRANK of Massachusetts. Not simply are they showing their values, but they said, Oh, you're going to give $250 to Warren Buffett on Social Security. They want to give $250,000 to Warren Buffett, which, to his credit, he doesn't want. In fact, the reason we are in this bind is, in 2001 and 2003, George Bush and the Republican majorities wanted to pass very large tax cuts despite their professed concern about the deficit--and we now see from this bill that their slogan is ``deficit-schmeficit''--but they didn't want to admit how much it would cost, so the CBO couldn't give us the full value of the cost. They made very bad tax policy. They did it. I voted against it. They made major changes in the Tax Code to end after 10 years, and they did that Humpty Dumpty roller coaster with the estate tax. That wackiness was their effort to hide the true amount of the hole they were burning in the deficit, so they have only themselves to blame. But let me return. They couldn't afford $14 billion to give $250 payments to Social Security recipients--and overwhelmingly, they killed it when we tried to pass it--but they can take $114 billion out of Social Security.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Norm Mineta, in a very uncharacteristic act, not for Norm, who was a great, generous man, Norm Mineta, in an act uncharacteristic for a Member of Congress, involved himself in that debate to make the point--not simply about me; I was incidental to the broader point he was making--that human rights ought to be treated as indivisible, that it is not for this group and that group, and that people should, yes, fight for themselves, but having fought for themselves, they should not stint from fighting for others. That was a lesson that Norm taught a whole lot of people in, as has been said, not an obnoxious way, a loud way, but with a genuine warmth and sincerity. As I look back at some point on my congressional career, having had the opportunity to work with Norm Mineta on that bill and having watched the way in which he dealt with it, the way in which he turned what could have been a source of anger into a lesson for all of us about the indivisibility of the fight for justice, will be one of the highlights. I thank all of those involved for bringing this forward.

Mr. FRANK of Massachusetts. Mr. Speaker, I came to the floor to do a Special Order, which I will do subsequently, but I then saw that this was on the agenda and I was moved to speak. I had the great honor of being the chairman of the Subcommittee on Administrative Law when the Japanese reparations and apology bill was passed. Norm Mineta and the late Bob Matsui approached me when I became chairman, this was several years after the report had come out, and we talked about it. I had, in college, read the case, which appalled me, when the U.S. Supreme Court denied any relief to the Japanese Americans who had been so brutally mistreated with no justification, so I was well aware of it when I came here, and I was very pleased to have the opportunity to work with two great men, Norm Mineta and Bob Matsui, to undo this. I had the enormous honor, Mr. Speaker, inspired by them, of being able to read on the floor of this House the words from that bill, ``On behalf of the Nation, Congress apologizes.'' I cannot think of a greater example of the true strength of this Nation than for us to have voted, Yes, we apologize. We did wrong. So I was very pleased to work with Norm. But here is the point I wanted to add. I had been the chairman. It was my job to do this, and we got the bill through. Several years after that, at the Japanese American Citizens League, a group of younger people offered an amendment to support the right of gay men and lesbians, people like myself, to express their love for each other by marrying. That was early in the movement for this, and there was kind of a generational divide, I believe, about what should happen. Norm Mineta, by then a senior Member of Congress, was involved. Now, he got involved voluntarily. Members here will understand. We have enough controversy here on the floor. We don't generally seek out controversies that don't involve our formal duties. Indeed, we tend to duck them. Norm Mineta intervened in that debate, not inappropriately, but in the formal sense of an intervention, and said, in words that move me to this day, that a gay man, myself, had been the chairman of the committee that brought forward this bill, and after that, how could he and how could an organization in which he played a major role deny our basic rights? Now, obviously that meant a great deal to me, but it meant something of universal appeal. Here was Norm Mineta, having worked hard and led us to deal with the grave injustice to which he had been subjected, making a point that I hope Members will understand: Injustice cannot be divided and fought by some and not by others. It cannot be that people will object only when they are treated unfairly but turn their backs when others are treated the same.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, I have been troubled by what seems to me a mistaken focus in the debate about reducing the deficit. I do agree that it is important to reduce the deficit. Indeed, Mr. Speaker, I now believe that I am more focused on reducing the deficit than many of my colleagues, including on the other side of the aisle, who have with great alacrity put deficit reduction aside in favor of a fairly indiscriminate degree of tax reductions. A couple of weeks ago, we were told that reducing the deficit was the number one priority, but reducing the taxes, particularly on the wealthiest in America, rapidly overtook deficit reduction. I hope we will get back to it. What troubles me is the extent to which people, mainly on the Republican side, but elsewhere as well, have said that what we need to do most to get the deficit down, as we should, is to reduce entitlements. That's a polite way of saying they want to cut Social Security and Medicare and Medicaid, even though Medicaid is not an entitlement. But those are the things that are on the agenda. In fact, that is neither socially or economically the sensible way to begin with the short-term--near-term deficit reduction we need. We shouldn't say short-term. We do, I believe, need some stimulus. I'm glad we are extending unemployment compensation. I wish we were doing more to help cities and States keep people on the payroll. The private sector has added jobs in these past few months. Job growth has been held down because the public sector has been forced at the State and local level to fire people. But this focus on Medicare and Social Security is mistaken economically and politically. Mr. Speaker, let me calculate; about 45 years ago, I took an economics course in graduate school from a young assistant professor named Henry Aaron. I was impressed with him then, and I've been impressed with him since. In the New York Times recently he had an article in the op ed page headlined: ``All or Nothing Equals Nothing,'' in which he argued that the focus on reducing the deficit by 2020, which is the time we've set ourselves, which is very important, is an issue that should not encompass a focus on Social Security and Medicare. He is not saying ignore Social Security and Medicare, only that a rational way to go after the deficit in the near term wouldn't focus on them. And Social Security, as he points out, Social Security is not going to be contributing to the deficit at that point. Indeed, Social Security at this point is in such good economic shape that people have decided Social Security should be a contributor to economic stimulus because we are reducing the revenue that comes into Social Security for 2 years by reducing the payroll tax. Now I think that's a useful stimulus, but I regret the fact that it was not accompanied by a binding piece of legislation that will return that money from elsewhere in the general fund so that we don't put Social Security further in the hole. But as Henry Aaron points out, yes, we should begin to look at Social Security and the problems of 30 years from now. My own view is that you do that mostly by increasing the level of income on which the tax is levied, but there is no need to begin doing that right away. I should have said this earlier, Mr. Speaker. Two of the greatest accomplishments of America in the 20th century, Social Security and Medicare, accomplished an important goal. They made it the case that poverty was no longer going to be the rule for many older people. Prior to Social Security and then Medicare, poverty was too often the reward for living long enough if you weren't rich. We have brought older people on the whole--not entirely--out of poverty. There are still enough low-income older people that I greatly regretted the fact that this House and the Senate, which are apparently ready to give multimillionaires tax breaks, couldn't support $250 per person for Social Security recipients, some of whom were wealthy but many of whom are quite poor. And I have people saying, Well, you don't want to give Warren Buffett $250. Mr. Buffett, to his credit, has objected to a $250,000 grant that he is being offered--more than that--in the tax reduction that is being offered--tax reduction from what current law would be. But Henry Aaron makes the point that focusing on Social Security is taking up a very controversial issue way prematurely. And as for Medicare, here is what he said, which is of great social and economic importance: ``To slash Medicare and Medicaid spending before reforms to the health care system bear fruit would mean reneging on the Nation's commitment to provide standard health care for the elderly, the disabled, and the poor. The only realistic way to realize big savings in the two programs is to reform the entire health care payment and delivery system in a way that will slow the growth of all health spending.'' I am asking, Mr. Speaker, that Members read this. Henry Aaron is a great economist. He has studied Social Security as well as anybody. He has studied Medicare. He makes the point that focusing almost exclusively on those--or primarily on those--as a way to end the deficit is bad social, economic, and political policy. Let me say at this point, Mr. Speaker, speaking for myself, not for Aaron, there are things we can do in the near term. If we hadn't gone into Iraq, that terribly mistaken war in which so many brave Americans suffered, we would have a trillion dollars more than we have today. We are grossly overextended in having military presence all over the world where it is needed and where it isn't. We continue to spend tens and tens of billions of dollars a year protecting Western Europe when they're not in danger and can protect themselves. So let's focus on reducing military spending, let's rationalize agriculture spending, let's put some restraints elsewhere. But as Henry Aaron correctly points out in this article, let's not make the mistake of focusing on Social Security and Medicare, prematurely in the case of Social Security, and in a socially destructive way with regard to Medicare and Medicaid. All or Nothing = Nothing (By Henry J. Aaron) Washington.--Two plans for reducing the federal deficit are now on the table. One of them, proposed by the chairmen of President Obama's debt-reduction commission, Erskine Bowles and Alan Simpson, was endorsed on Friday by 11 of the 18 panel members. The other comes from the nonprofit Bipartisan Policy Center. The two plans differ in important ways, but both put everything on the table, including not only things like tax rates and defense spending but also Social Security, Medicare and Medicaid. This approach is mistaken, and it's at the heart of why both plans are unlikely to succeed, Deficit reduction should stop debt from growing faster than gross domestic product-- and do so within the next decade. But closing the projected long-term gap between Social Security spending and revenues and materially slowing the growth in Medicare and Medicaid spending will take much longer. The Bipartisan Policy Center's proposal illustrates this temporal mismatch. It aims to prevent government debt--now equal to roughly 60 percent of gross national product from growing faster than income does. After some additional increase during the current economic slowdown, this plan would return the ratio of debt to income to below 60 percent by 2020. To that end, it would lower government spending and raise taxes by $5 trillion over that period. Its menu is replete with controversial items--including cuts in defense spending, a national value-added tax and myriad cuts in domestic spending. The most highly charged suggestions, however, are its proposed changes in Medicare, Medicaid and Social Security. The plan would convert Medicare into a voucher system under which the elderly and disabled would receive money to buy health insurance. The value of this voucher would increase more slowly than health care costs have grown for the the past half century. The proposal would also raise by two- to five-fold the states' share of part of Medicaid costs. The Bipartisan Policy Center's plan would also reduce the share of earnings that Social Security would replace for future retirees. This ``replacement rate'' is already set to decline under current law, but the plan would cut it further, by as much as 22.5 percent. The proposed changes in Social Security, Medicare and Medicaid (whose acceptance by Congress is not assured, to say the least) account for only 5 percent of the deficit reduction that the overall plan would achieve by 2020. To be sure, they promise to do considerably more in later years. But they are largely extraneous to the immediate goal of deficit reduction and debt stabilization by 2020. The president's debt-reduction commission advances even larger changes to Social Security--cuts of up to 41.5 percent--a longer list of near-term changes to Medicare and a blanket cap on the longer-term growth of overall health care spending. But approach is similar to that of the Bipartisan Policy Center's in that it relies primarily on cuts in other government spending and on tax increases to reduce the deficit. Stabilizing the debt must begin as soon as economic recovery is well established and must be accomplished over the next decade in order to prevent the ratio of debt to G.D.P. from becoming excessive. Timely deficit reduction is therefore urgent. Asking Congress simultaneously to reform three of the most important and complicated government programs only jeopardizes the solution of the more immediate problem. The Social Security challenge plays out over the next quarter-century. Early legislation to close the gap between revenues and spending is desirable, because changes will be less onerous if they are phased in. If President Obama believes that a commission could help to restore balance in Social Security, he should appoint one now, but its work could not do much quickly to help reduce the deficit. The fiscal challenge posed by Medicare and Medicaid is vastly larger and infinitely more difficult to meet than that posed by Social Security. Some modest savings in Medicare are manageable, along the lines suggested by both commissions, including increased premiums for upper-income beneficiaries and modest increases in Medicare deductibles. As for Medicaid, its benefits are already stringently limited in some states. In others, payments to providers are so low that doctors shun the program and hospitals suffer losses. To reduce Medicaid benefits now, just as the Affordable Care Act will be adding roughly 16 million new beneficiaries, would risk chaos. To slash Medicare and Medicaid spending before reforms to the health care system bear fruit would mean reneging on the nation's commitment to provide standard health care for the elderly, the disabled and the poor. The only realistic way to realize big savings in the two programs is to reform the entire health care payment and delivery system in a way that will slow the growth of all health spending, The Affordable Care Act is intended to initiate such systemic reforms. The best way to rein in growth of spending on Medicare and Medicaid is to put the provisions of that law into action, but this will take many years. The job that should not be delayed, to stop excessive growth in the federal deficit, is challenging but doable: curb tax expenditures (including tax deductions, credits, exclusions and exemptions); end at least some of the tax cuts that were enacted under President George W. Bush; enact many of the cuts in defense spending advocated by both budget commissions; limit, but not eviscerate, other discretionary spending; and gradually increase Medicare premiums for upper- income beneficiaries. Congress and President Obama should adopt a three-stage program: start deficit reduction as soon as recovery is securely under way, reform Social Security soon and resolutely carry out the Affordable Care Act so that the growth of Medicare and Medicaid can be slowed, Trying to do everything at once only makes it difficult to do anything at all.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. I thank the gentlewoman. When we get to this bill, I will address the substance of the argument that the presence of someone like me will so destabilize our brave young men and women that they will be unable to do their duty. I regard that as bigoted nonsense, but I will address that more fully then. Now I want to talk about this bizarre procedural argument that we are somehow not following regular order. Madam Speaker, this amendment came up in regular order after the committee considered the bill and on the floor of the House, and it was adopted in a full vote on the floor of the House after a lot of debate. The Senate in committee adopted this amendment. The notion that the committees of jurisdiction have been deprived here is delusional. What is the procedural situation? In effect, the House, in a full debate on the floor, adopted this amendment. It went to the Senate. In the Senate, the Senate committee, by a majority, voted for this amendment and then voted the bill out, and it has been stopped twice narrowly by filibusters. It has gotten 57 and 58 votes. It has been openly debated. The notion that somehow we are the ones who are ignoring procedure when this bill gets a majority in the House after open debate on the floor, a majority in the Senate committee and is then filibustered makes no sense. Beyond that, we are told, Well, don't hold up the big bill. Well, that's the point of this. Don't Ask, Don't Tell was originally adopted as part of the military authorization of 1993. That is the regular order we followed. Some have now said, Well, the Senate would like to be able to vote on this differently from the main bill. I will say that many of us do not think that we should adopt anything until we do the whole package, but if they want to do these two bills, that's fine. Sending this over will facilitate the Senate's procedures. Now, there are at least five Republican Senators who previously, most of them, voted against cloture--one, Senator Collins, voted for it--who said they couldn't vote for it for various procedural reasons dealing with the tax agreement and the funding of the government. Those are on their way to being resolved. What we do when we pass this bill today is to say to the Senate, Okay, you can do it one way or the other as long as you do both, and we give them the chance--they already had the tax issue--to have resolved the CR, and we will get a vote on the merits. What this does is to strip away any excuse that any member of the Senate--Democrat or Republican--will have for not voting on the merits. We will strip away any justification for a filibuster. The gentleman says, Well, we didn't go through regular order. We've gone through triple regular order. A vote on the House floor is part of the consideration of the bill, as is a vote in the Senate committee and two efforts to break the filibuster. So the question is: Do you allow a filibuster and some procedural excuses from Senators who say they're for this repeal but didn't get to vote for it? We are giving them a chance to do that. This is something many House Members have long wanted to do in addition to repealing Don't Ask, Don't Tell--getting the Senate to stand up and take a straight up-or-down vote. That is what we are enabling. So I hope that the rule passes and that the bill separately passes as well.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. I must say, it is not that the young members of the military who face death, who face the destruction of their comrades, they are not the ones who are upset by this. It is our colleagues on the other side who are reputing their unease at the presence of gay and lesbian people to the young people in the military who I think are better than that.

Mr. FRANK of Massachusetts. Mr. Speaker, first let's strip away the smoke screen: the argument that we are holding up the defense bill. It passed this House over the objection of almost every Republican, and it has twice been filibustered in the Senate when the Senate leadership tried to bring it up. It is the Republican Party that has been holding it up because of their opposition to a repeal of Don't Ask, Don't Tell. So let's talk about the merits. First of all, we are told it would be a distraction to repeal it. It is a grave distraction to maintain it. People have said, the gentleman from Texas: Well, we know there are gay and lesbian people now serving. That's right. What they are telling us, Mr. Speaker, is let's have people serving who are in fear of being thrown out. How much of a distraction is that? What sense does it make to say, okay, you come in here but we are going to watch you, and you may get kicked out? And what about the money that is spent? What about the good people that are lost, translators and others? The maintenance of this policy is the distraction. The repeal of it would not be. Why are we told repeal of Don't Ask, Don't Tell would be a problem? People keep quoting Colin Powell. Let me quote him from 20 years ago when I asked him about this. I asked him if the problem was that gay and lesbian and bisexual members of the military weren't good at their jobs. He said: No, that is absolutely not the case. So let's not have any libel of the honorable gay and lesbian and bisexual people who want to serve their country and are being rebuffed by people on the other side. No one is arguing it is their fault. What we are told is that there are other people who are so offended by their very presence. The code of military justice will stay in place. Anybody who misbehaves sexually is subject to being kicked out quite summarily. We are told that their very presence will annoy people and will distract them. What does that say about our young military? The gentleman from Texas (Mr. Gohmert) said, well, anytime a military has allowed gay people in, that has been the end of civilization. Tell that to the Israeli Defense Forces. I guess he may be technically correct; they didn't change it, they have always had that. They need every human being they can get who is willing to serve, whether willing or not. And the Israeli Defense Forces have suffered no deterioration.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, earlier this month, America lost one of the outstanding people to have served in this House. Steven Solarz was a Member of the House from 1974-1992, and no Member either in my personal experience or in my reading of history was a more effective and constructive leader in foreign policy as a Member of the House. Too often, Members of Congress, especially the House Members, distinguish themselves in the foreign policy field mostly in a negative way. Sometimes that is a very good thing because these Members are preventing things from happening that shouldn't happen. But there is a tendency to demagogue and to play to public dislike of foreigners. Steven Solarz was a role model for those who think that Members of the House have a constructive role to play in foreign policy. Without ever having risen to the chairmanship of the Foreign Affairs Committee, he made himself an extremely significant positive force in foreign policy, for human rights, and for constructive American relations with a wide range of nations. He understood the importance of our being strong when we had to be, and of our being open and generous when that was called for. Madam Speaker, Steve Solarz was a personal friend of mine for many years, and I suppose that people could claim that I have exaggerated the greatness of the role he played because of that. So I was particularly pleased to see that one of the best students of Congress, Norman Ornstein, expressed eloquently and cogently the importance of the role Steve Solarz played in foreign policy as a House Member, in his December 8, 2010 article in Roll Call. Madam Speaker, as an example that I believe all Members ought to aspire to, I ask that Norman Ornstein's deserved tribute to Steven Solarz's foreign policy leadership be printed here. [From Roll Call, Dec. 8, 2010] Rep. Solarz Was a Leader Worth Remembering (By Norman Ornstein) This is the season for farewell addresses from many lawmakers leaving at the end of the 111th Congress. Some speeches, such as those of Sen. Ted Kaufman (D-Del.) a few weeks back and of Sen. Chris Dodd (D-Conn.) last week, are particularly poignant, reflecting decades of dedication to the Senate and reverence for its traditions (if a touch too much deference to its existing rules and too little concern for how the contemporary abuse of the norms have distorted those traditions and call for modest but meaningful tweaks in those rules). But their eloquence underscores how elections, while bringing necessary change for a democracy and reaffirming popular will, also result in the departure of some of the most solid citizens of the Congressional village. The loss of expertise, insight and institutional memory--not to mention fundamental decency--that comes with the departures, some voluntary and some not, of people such as Reps. John Spratt (D-S.C.), James Oberstar (D-Minn.) and Ike Skelton (D-Mo.) and Sens. George Voinovich (R-Ohio), Judd Gregg (R-N.H.) and Evan Bayh (D-Ind.), among others, is painful to those of us who care about Congress. Then there are other losses. Former Rep. Steve Solarz (D- N.Y.) died last week at age 70, after a four-year battle with esophageal cancer. While he received prominent obituaries in the Washington Post and the New York Times, chances are many new and not-so-new Members of Congress who weren't around in the 18 years that Solarz served in the House, from 1975 to 1993, were either unaware of his passing or paid little attention to it. As a start, they should go back and read those obituaries, and then make a note to read his wonderful book, ``Journeys to War and Peace: A Congressional Memoir,'' which will be published next year. I wrote a foreword for the book, in which I noted my striking experiences on visits to the Philippines and Cambodia; in each case, when I met with academics, high government officials and others, I was asked frequently, ``Do you know Steve Solarz?'' In the Philippines, actually, the question was, ``Do you know Steve Solarz personally? He helped save my country from dictatorship.'' In Cambodia, it was whether I knew the Steve Solarz who was instrumental in saving Cambodia from the murderous excesses of the Khmer Rouge. Solarz was not a secretary of State, a Senator or even the chairman of a powerful committee. He was a rank-and-file House Member who, by the force of his personality, a remarkable work ethic, a political savvy, an articulateness unmatched in contemporary politics, a commitment to democracy and human rights mixed with hard-headed sense of reality, and a willingness to work across the aisle to accomplish mutual goals, had a greater effect on the world than most secretaries of State, Senators and chairmen of powerful panels. Solarz traveled the world, but not with Congressional delegations; he went alone. American embassy personnel dreaded his arrival; they would not have to arrange trips to the souk or the rug store, but would instead have to keep up with 18-hour days choreographed by Solarz to include meetings with the foreign minister, the defense minister, the intelligence chief and the key opposition figures. When he scoped out situations and found corruption, abuse of power and worse, he used his skills and connections to relentlessly push for change. Back in Washington, D.C., his office became a home away from home for dissident leaders from around the world who got short shrift elsewhere. As a consequence, to pick one example, Solarz probably had better ties with the Kurdish leaders in Iraq than any other American. Solarz's shining moment, perhaps, was on the House floor during the stirring debate over whether to authorize the use of force against Saddam Hussein after his invasion of Kuwait, i.e., the first Gulf War. There were dozens of emotional and wrenching speeches as Members struggled with the decision about whether to send young Americans to war, and perhaps to death; at the time, there were predictions of potential mayhem in the desert. When liberal Democrat Solarz stood up and spoke in favor of the authorization, it was truly a riveting moment. Everyone stopped to listen. He was powerful and eloquent, and he did as much as anyone to shape the outcome. There are few examples in which an individual lawmaker has any effect, much less one that is consequential, from a speech on the House floor. It is hard to imagine another Solarz emerging in a political system that is now so polarized that a powerful an opinion leaders and statesmen like Sen. Dick Lugar (R-Ind.) cannot persuade his own party colleagues to vote for the new Strategic Arms Reduction Treaty. It is even harder to imagine a House Member throwing himself into peripatetic travel to every corner of the globe and trying to shape events and outcomes in the world without being shredded by cable news and anonymously funded campaign attack machines, or finding ways to build unlikely and persuasive partnerships across every partisan and ideological divide. But it is not impossible to imagine some new Members of both parties persuaded by Solarz's example to take some trips abroad despite the predictable criticism of junkets and the equally predictable partisan flak, and to think about core values of freedom, human rights and America's national interest as transcending petty partisan interests. At least I like to think is not impossible.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, before proceeding to the topic I plan to discuss, I do have to comment on the gentleman from Florida. It is striking the extent to which Republicans are siding with the Central Bank of China and the Chinese Government in objecting to American Federal Reserve actions taken in our self-defense. There are some debatable aspects of this. I think what the Fed is doing is very wise. But what the gentleman just said we have seen from elsewhere. ``This could lead to trade disputes with other nations because of its effect on our currency.'' Yes, the major other nation making that argument is China, which deliberately undervalues its currency, and is objecting because a potential side effect of what the Fed is doing to stimulate employment could be to reduce our currency vis-a-vis theirs. This notion that taking the side of these other countries in trade disputes, given the extent to which many of them have unfairly abused trade rules, seems to me quite shocking. And I am continually surprised that my Republican colleagues side with China, with Germany, and with other foreign central banks in their criticism of the Fed because of the effect it could have on our currency. But I wanted to talk about the censure of our colleague, Mr. Rangel of New York, because I voted for a resolution amendment that would have had him be reprimanded, and then voted against censure. And I think my constituents are entitled to know why. Mr. Rangel did things he should not have done. And he should have been reprimanded. I do not believe, however, that they rose to the very severe level of censure. In my mind, a reprimand is the House telling a Member that he or she has done things that were wrong. But when you get to censure, and if you look at the historical precedents here, you are going beyond simple bad acts. You are talking about, at least in one instance, a serious character defect. You are talking about someone who was a bad person. The Ethics Committee itself said that the gentleman from New York (Mr. Rangel) was not trying to enrich himself. He was careless, he was sloppy, he was too zealous in trying to get money at a public university for a center in his name, but it would not have redounded to him personally financially. So I do agree he should have been reprimanded. But I do not think, given the acknowledgment that he was not trying to personally enrich himself, that he should have been censured. I was also struck that the Republican cochair of the Ethics Committee--and I honor the members of the Ethics Committee. They do a very difficult job. They were very fair about the procedures, and I honor them for that, the gentlewoman from California and the gentleman from Alabama. But he said that if Mr. Rangel had comported himself differently--go back and look at this--if Mr. Rangel had comported himself differently during these discussions, he might have been reprimanded instead of censured. That's inappropriate. The punishment voted by this House for behavior should not be affected by what goes before. But there is another element of what goes before in the process, and there is another element of this that I need to address. I think I am the only Member still serving in the House who was in fact reprimanded. And I want to deal with those who consider reprimand a slap on the wrist, saying, well, a reprimand was no big deal. Mr. Speaker, it is a big deal. I am very proud of my service in this House. I am about to start my 31st year of service. And I am very proud of many of the things I have done. But reports of my service will include the fact that I was reprimanded 20 years ago for things that were done 24, 25 years ago. And that is not something that anyone ought to consider simply a slap on the wrist. I bear the stigma of having been reprimanded. I am enormously proud of serving in this wonderful body that embodies democracy. It is an enormous source of pride to me that hundreds of thousands of my constituents choose to have me serve here on their behalf. And to have marred that record, of which I am generally proud, with a reprimand means a great deal to me. So I would just say in summary that given what Mr. Rangel did, given that he did things that he should not have done, but not for the purpose of enriching himself, they were careless, they were occasionally overreaches, but not, again, for his personal enhancement financially, given what we have traditionally reprimanded people for and what we have censured people for, reprimand was the appropriate response. And I would have voted for a reprimand, and I voted for an amendment that would have made it reprimand. But I did not think that you should trivialize censure by censuring someone for the kind of behavior Mr. Rangel engaged in. And I would remind people again, from my own personal experience--and by the way, while he is not here, I assume that former Speaker Gingrich, who was also reprimanded by this House, would share my view--that having been reprimanded is not some slap on the wrist. I do not understand, Mr. Speaker, how anyone who shares the pride that I feel in serving in this body, and having been selected by American citizens to make the laws of this country, could trivialize something like a reprimand.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, I continue to be appalled by the spectacle of much of the conservative political movement in America attacking the man George Bush first appointed to head the Federal Reserve for his efforts to promote faster economic growth and a greater reduction in unemployment. Ben Bernanke's role in trying to cope with the economic disaster that the Obama Administration inherited from the Bush Administration has been productive and courageous. Consistently, he has refused to listen to conservatives, mostly although not entirely from the right, objecting to his efforts to provide the financial support needed for economic growth to go forward. Predictions that this would lead to ruinous inflation have proven baseless; the notion that this would lead to enormous losses in federal funds have also been refuted. Despite the record of success that the Fed has shown in these efforts, despite the fact that inflation is nowhere in prospect, despite the fact that when challenged by Republican Members of the Financial Services Committee in a series of hearings we held Mr. Bernanke was able to refute--easily--any suggestion that these measures could get out of control, documenting that he has thoughtful plans for containing them--despite all of this, leading conservatives have decided for reasons I cannot fathom, to join China, Germany, and other foreign nations in assailing Mr. Bernanke for efforts to improve our economic condition. The notion that a fear of inflation, given the current statistics, should prevail over efforts to stimulate economic activity and reduce unemployment is baffling, and if fully understood by the American people, will be certainly rejected. Yesterday, Madam Speaker, I inserted into the Record powerful arguments in defense of Mr. Bernanke from the New York Times Editorial Board and Martin Wolf of the Financial Times. I wish to add today to that list of thoughtful people who are defending the Federal Reserve Chairman against the China-German-right-wing Republican attack, an editorial from the Boston Globe, and a thoughtful article from one of our leading economists, Professor Alan Blinder of Princeton, himself a former Vice Chair of the Fed. A Global Chorus of Kvetchers The Federal Reserve's attempt to stimulate economic growth by purchasing $600 billion worth of long-term Treasury bonds over the coming eight months may not produe the hoped-for spurt in lending and investment. Cash-rich banks and other corporations seem worried more about anemic demand than the cost of money. But whatever the domestic effects of Fed Chairman Ben Bernanke's use of monetary policy to ward off deflation, the vehement criticism of the move from other countries is way off base. China, Germany, and Brazil have led the complainers' chorus. Tellingly, all three enjoy significant and growing trade surpluses. During the run-up to the G-20 summit in South Korea, they accused the Fed of a stealthy form of currency manipulation. In the case of China, the pot is calling the kettle black. China's propping up of the yuan in currency markets has been flagrant. The G-20 summit, which ended Friday, was justly panned for the failure of the world's leading economic powers to agree on measures to prevent each other from deliberately undervaluing their currencies to promote exports and discourage imports. Charges and countercharges abounded. Nonetheless, it was a positive sign that Chinese President Hu Jintao agreed to take specific actions to boost his country's domestic consumption of goods. This could herald a significant shift for an economy geared toward maximizing exports. And President Obama got the better of the argument about the Fed's effort to stimulate growth and create jobs in the United States. No one could refute Obama's contention that a ``strong recovery'' in America ``is the most important contribution the United States can make to global economic recovery.'' The disputes within the G-20 involve nettlesome matters and cannot be resolved quickly, The most positive sign to come out of the summit was a broad awareness of the need for continued consultation and cooperation to avoid a repeat of the protectionist policies that exacerbated the Great Depression. In those consultations, US officials are entitled to be unapologetic about defending the Fed's effort to promote growth in the US economy as an effort that serves the longterm interests of China, Germany, Brazil, and many other countries.