Barney Frank

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Well, Mr. Speaker, I yield myself 15 seconds to say I welcome the gentleman from Georgia to the cause of say-on-pay. When we debated this on March 22, 2007, he was quite critical of it. So maybe 2 years from now, he will think we should do something about excessive, incentivizing bonuses. I now yield for a question to the gentlewoman from California.

Mr. FRANK of Massachusetts. Yes. As to section 4, if they are public companies, they are covered by say-on-pay. And there may be companies not now federally regulated that may become so by decision. But as of now, if they're not federally regulated, they're not covered. Of course AIG was federally regulated by the OTS, so they would have been covered. The gentlewoman is correct. Mr. Speaker, I have no further requests for time, and I have only one more speaker. So I am going to reserve the balance of my time.

Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself such time as I may consume. There is, of course, a contradiction here. When we are talking about a power, namely, to reduce excessive risk incentivizing bonuses that the Republicans want to defend, they talk about the unelected bureaucrats. The unelected bureaucrats can't be trusted. Except the gentleman from Texas, of course, just closed by saying don't worry, the unelected bureaucrats are out there to protect us. The unelected bureaucrats in the Republican cosmology are like the Obama administration: they are either convenient whipping boys or great sources of wisdom, depending on where Republican ideology turns to them. But the gentleman from Texas just said we don't have to worry. We have those, as his colleagues called them, unelected bureaucrats to do it. But I am interested, I have noticed a number of Members have said they don't like the bonuses. Is there a Republican proposal to deal with the bonuses that are being given? Our proposal does not empower anybody to limit the amounts. The question is, is there a Republican proposal that would deal with what Paul Volcker and Ben Bernanke and the financial regulators in England and Warren Buffett and many others believe is a destabilizing tendency to give out bonuses that give you an incentive to take excessive risks, excessive in the sense that you benefit if the risk pays off and you don't lose. We want people to take risks, but we want them to take risks which balance the upside and the downside, not which just look only at the upside. And I continue to point out not in that committee, not in that 12 years they controlled this place, not during this debate today, not in the Rules Committee, we have not seen a single Republican proposal to deal with bonuses. Their position apparently is however the financial industry wants to structure bonuses, no matter what they say, that you get a bonus if it pays off in the short term and it turns sour in the long term. You get a bonus if it pays off, but you don't lose a thing if it doesn't pay off. They would leave that entirely unchanged. I think that is very dangerous to the economy, and, yes, there is a consensus among financial regulators and others that this has contributed to risk- taking. We all believe in the free-market system and the incentives. How can it be that you acknowledge that there is a system which says to people, take a risk, because it is risk-free for you? It's risk-free for the individual. It's risky for the company; and when you accumulate all those risks for the company, it's risky for the economy. We're saying, if it's risky for the company and risky for the economy, it ought to be risky for the individual. We want an alignment of risks. We don't want risk-free individuals taking big risks on behalf of those who are going to have to suffer. We have a proposal to restrain that. The Republican position on that is, do nothing. Let them keep going exactly as they have been going. Let us return, as I said the other day, to the thrilling days of yesteryear when the lone rangers will ride again, untrammeled by any set of rules. They will be able to continue to give themselves bonuses that allow them to be free of risk. That's the deal. The company will face risk. The economy will accumulate and face risk. But the decision- makers will be free of the risks' negative side; they will gain from the risks' positive side; and like rational people, they will take more risks. I reserve the balance of my time.

Mr. FRANK of Massachusetts. Yes.

Mr. FRANK of Massachusetts. Mr. Speaker, there is a little bit of an imbalance. I would ask if I could reserve for one more speaker while I work something out.

Mr. FRANK of Massachusetts. Mr. Speaker, I recognize myself for such time as I may consume. Mr. Speaker, I have encountered gaps between rhetoric and reality in this Chamber, never one as great as the wildly distorted description of this bill that we've got before us. Let's be very clear. There are differences between the parties here on the whole, at least as reflected in the committee vote. I think it will probably be different on the floor. There is much less difference than there used to be about one piece of it, the say-on-pay. When the say-on-pay bill came up previously in 2007--by the way, when the Republicans were in the majority prior to 2007, on this, as on many other issues, we Democrats tried to do some reforms, predatory lending being one--we got nowhere--credit cards being another. We did try, in our Committee on Financial Services, to bring this up. The Republicans used their majority not to allow it. In 2007, when we were in the majority, we did bring it to the floor, and it passed over the objection of most Republicans, and I will introduce into the Record their comments denouncing say-on-pay. But 2 years later, they have moved some. So they are now for reform on say- on-pay, many of them, although a somewhat watered-down form. I should say there is a stark difference between us remaining on whether or not any action should be taken whatsoever by the Federal Government to restrain compensation practices that inflict excessive risk on the economy. We should be very clear; this assertion that this amounts to control of all wages and prices is nonsense. There is, of course, nothing about prices at all in the bill. As to wages, what it says is that the SEC shall impose rules that prevent excessive risk- taking, and the reference to wages is only in that context. The amount of wages is irrelevant to the SEC. What this bill explicitly aims at is the practice whereby people are given bonuses that pay off if the gamble or the risk pays off but don't lose you anything if it doesn't. That is, there is a wide consensus that this incentivizes excessive risk for you a shorter time. If you're the head of a financial institution or you're one of the decisionmakers or you take actions that are risky and 1 month later it looks like they paid off and you get your money and then 6 months later it turns out it blew up, you don't lose any of the money you got. And if at the outset you take a risk and it costs the company a lot of money, that doesn't cost you anything. All we are saying is that there has to be some balance to the risk- taking. And people ask, What is excessive risk? Excessive risk is when the people who take the risk pay no penalty when it goes wrong; when they have a heads they win, tails they break even situation; when the company loses money and the economy may suffer, but the decision-makers do not. Now, one of the sillier remarks we heard was this will cause us a problem with international competition. In fact, say-on-pay, when the Republican Party overwhelmingly opposed it 2 years ago, was already borrowed from Great Britain, the United Kingdom. And we were told during 2006 that we were losing a lot of business to Great Britain, that we should cut back on Sarbanes-Oxley, for instance, because people would go to England. But England had the very proposal that they were saying was going to drive people away. In fact, today--I will read from an article from a couple weeks ago. The Prime Minister of England says they are going to adopt plans forcing banks to hold back half of all bonuses for up to 5 years to discourage excessive risk-taking. That's our major financial competitor. And the conservative opposition is critical because it's not mandatory. We have been in conversations with the European Union, the United Kingdom, with Canada, and others. This will be done on a coordinated basis. In fact, American salaries, American compensation has been much higher. So, no, there is no price control; no, there is no wage control; no, it is not a problem for international competition. And by the way, as to every institution, every credit union--you heard that rhetoric--the bill exempts any institution with less than $1 billion in assets, and it gives the SEC the authority to even raise that so there's even less. But here's the nub of it: The Republican Party has reluctantly been dragged--reality sometimes has an impact--to supporting a watered-down version of say-on-pay. Say-on-pay, by the way, says that the shareholders of the company can vote and express their opinion. The gentleman from Texas was upset that we don't have a Federal Election Commission mechanism for these votes. But why only these votes? Shareholders vote on everything. Apparently it's only when the shareholders tend to vote on pay that Republican sensibilities are trampled. We do not, in this bill, talk about the amounts. We do say the shareholders should. We say, in consultation with all the advocacy groups who represent shareholders and pension funds and elsewhere, that the people who own the company, the shareholders, should be able to express their opinion on the compensation. We go beyond that to say that we believe the Federal Government has interest--not in the level of compensation, that's up to the shareholders--in the structure. When you have, as we have seen, structures whereby companies lose lots of money, and they lose lots of money on particular deals, but the people who made those deals make money on them, that has a systemic negative impact on this society because it incentivizes much too much risk. Now, what is the Republican approach to that? Nothing. They admit that these are problems. They regret that these things are happening, but their regrets won't stop the damage. In the Republican substitute there is a watering down of say on pay, but they at least acknowledge that reluctantly. But when it comes to the practice of large corporations in the financial area structuring bonuses that incentivize excessive risk, my Republican friends admit that that's the case and lament it and are adamant that we should do nothing about it. That's the big difference. We believe that the SEC--and by the way, as to the form, it was a Republican former Member of this body, Christopher Cox, who was Chair of the SEC, proposed disclosure. He broached it first. He said we have an important public interest in knowing it. So we are going to take the form of disclosure of compensation prescribed by a Republican Member of this House as Chairman of the SEC, with his colleagues, and let the shareholders say yes or no. We are going to go beyond that and say that the SEC should look at this and say, you know, you have a situation here where people making the decisions will have an incentive to take too much risk. If you tell people that if they take a risk and it pays off they are enriched, and if it fails miserably, they don't lose anything, they will take more risk than rationally should be taken. You should not incentivize people to take risks where they can only benefit and never suffer a penalty. That's all this bill says. We will prevent that kind of thing from happening. We won't set amounts. We won't deal with wage controls. We won't do anything else, and we exempt institutions under $1 billion. So I await the Republican counter. Yes, they want to water down say- on-pay, but they reluctantly accept it, but they have zero to offer with regard to the situation of excessive bonuses. And yes, we did get some reluctant agreement that we put some limits on the people who are recipients of TARP funds, but one of those who received TARP funds prospered with those funds, paid back the funds, and are now engaging in the same risky bonus practices they had before. The Republican position, at least in committee, was to do nothing about it, zero. Ours is, have rules, not that set the limits, not that set wage controls, but simply say that you cannot structure it so that whatever level of compensation you have, you profit if the bonus pays off and you lose nothing if the bonus causes great damage to your company and the economy. Mr. Speaker, I reserve the balance of my time.

Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself 3 minutes to deal with some of these comments. First of all, I am struck by the fact that the gentleman, as he indicated in our markup, is sufficiently nervous about the political implications of opposing this bill and having the House take no action whatsoever to deal with the problem of risk-incentivizing bonuses but he wants to debate cap-and-trade and health care. They're not before us. What's before us is this bill. And when Members debate the bills that aren't there, it's an indication that they're a little shaky on the bills that are there. Secondly, yes, it does say that they can deal with all wages but not in general. The gentleman reads very selectively. The language about taking action is in this context: to determine whether the compensation structure is aligned with sound risk management, is structured to account for the time horizon of risks, and will reduce unreasonable incentives by such institutions for employees to take undue risks. It is limited in its grant of authority only to structures that incentivize excessive risk. There is no mandate here to set wages for anybody. There is no mandate to say this percentage is bonuses and that percentage is pay. It is a mandate only to act where the structure incentivizes risk, as has been recognized as part of the problem, very broadly. I will plead guilty to one issue, yes. We are not in this case taking orders from the Obama administration. And maybe having represented a party that took orders from the Bush administration, they now wish they didn't, but that's not an example I want to follow. I am not here as a Member of Congress or as chairman of a committee to do whatever the administration says. I am here for us to put our independent judgment on it. The gentleman closed with the key difference between us: the Republican position, as he articulates it--and I don't think it will be the unanimous position--is have the Federal Government take no action whatsoever to restrain the granting of bonuses that incentivize excessive risk. If they pay back that TARP money having benefited from it--and, by the way, on the bailout, every single bailout now underway happened under the Bush administration. But their position is, do nothing to deal with this. We take the opposite position. Mr. Speaker, I reserve the balance of my time.

Mr. FRANK of Massachusetts. Mr. Speaker, Aflac was the first publicly traded company to give shareholders an opportunity to vote on executive compensation, commonly referred to as say-on-pay. Aflac CEO Daniel P. Amos explained the company's decision to voluntarily adopt the measure by saying, ``Our shareholders, as owners of the company, have the right to know how executive compensation works. An advisory vote on our compensation report is a helpful avenue for our shareholders to provide feedback on our pay-for-performance compensation philosophy and pay package.'' The first year of the vote, 2008, 93% of the shareholders voting approved the company's pay-for-performance compensation policies and procedures. In May of this year, 97% of the shareholders voting cast ballots in favor of the compensation policies, even though the stock price of virtually all financial companies had declined--including Aflac's. The results of both shareholder votes clearly demonstrate that shareholders appreciate Aflac's philosophy of paying for performance and the company's long history of transparency. I submit the following for the Record. [From USA TODAY, July 15, 2009] CEOs Openly Oppose Push for Say-on-Pay by Shareholders (By Del Jones) Top executives have taken a relentless public thrashing as they lay off workers and fight to keep stock prices above the floor. In a suffering economy, no one seems happy with leadership, and the image of CEOs has sunk so low that their approval scores are now south of those serving in Congress. But no matter how low their image sinks, nor how shrill the outrage, executives have remained steadfast in their opposition to one thing: They are roundly against legislation that would force companies to let shareholders vote on CEO compensation packages. ``I wonder if the congressmen backing this legislation would propose similar laws governing their own compensation,'' says Steve Hafner, CEO of travel search engine Kayak. ``I'd love to vote on congressional pay and perks,'' EXEC PAY: Proposal gives shareholders non-binding say That executives oppose congressional noodling with their pay is unsurprising. What is surprising is that they are willing to go so public in their opposition, even though passage of a so-called ``say-on-pay'' law is likely, says Dawn Wolfe, associate director of social research for Boston Common Asset Management. President Obama, who co-sponsored say-on-pay legislation while in the Senate, remains in support, as is the Democrat- controlled Congress. Likewise the public at large. Focus groups have been describing CEO pay with words such as ``obscene'' and ``immoral'' rather than words like ``excessive'' or ``overly generous'' as in the past, says Leslie Gaines-Ross, chief reputation strategist at Weber Shandwick. ``Everyone I talk to understands say-on-pay legislation to be a question of when, not if,'' Wolfe says. ``There is a sense in the investment community that it is inevitable.'' CEOs have opinions like everyone else, but the public rarely sees that side because positions on anything controversial risk upsetting customers. When they feel compelled to take a stand at odds with the public, it is usually articulated by trade associations and lobbyists, so as to put CEOs and the companies they run at arm's length from controversy. Not this time, Even though say-on-pay legislation is almost a sure thing, CEOs and former CEOs contacted by USA TODAY spoke out against it, both forcefully and individually. ``Say-on-pay is just another government regulation and intrusion into free enterprise,'' says Howard Putnam, former CEO of Southwest and Braniff airlines. No one likes downward pressure applied to their pay, and in this respect CEOs are no different than professional athletes, rock stars, union members, Social Security recipients--and elected officials. Howard Behar, former president of Starbucks, asks: Why not let people vote on the salaries of government workers? He says government employee unions influence politicians, who commit huge resources to pensions and raises to get re-elected. How say-on-pay would work Say-on-pay legislation would require companies to give shareholders an up-or-down vote each year on the compensation of the top five executives of publicly traded companies. The vote would not be binding, leaving the final decision in the hands of boards of directors. However, directors are elected by shareholders and a shareholder vote against a pay package would likely pressure directors to rethink the package and make changes. The Netherlands requires binding shareholder votes on executive pay. The U.S. law would model those in Britain, Australia, Norway, Spain and France, where the vote is non- binding. Boston Common Asset Management has been pushing shareholder say-on-pay resolutions for three years, and Wolfe says she doesn't understand the CEO opposition, as there are only two examples in Britain when shareholders voted a majority against a CEO's pay: at GlaxoSmithKline in 2003 and at home builder Bellway in 2009. It may be true that most CEOs are fairly paid, she said, which means they have nothing to fear. Only 24 U.S. companies have implemented say-on-pay without legislation, Wolfe says. Of those, only Aflac and RiskMetrics did so without it first coming to a shareholder vote. The Securities and Exchange Commission continues to get feedback regarding say-on-pay at companies that have accepted government money under the Troubled Asset Relief Program (TARP). At Aflac, shareholders approved the pay of CEO Dan Amos by 93% in 2008, and that approval rose to 97% this year when Amos did not accept a $2.8 million bonus even though he had met the conditions of the bonus as set by the Aflac board. ``That tells me that (shareholders) had the ability to look beyond the price of stocks and understand,'' says Amos, who supports say-on-pay at Aflac but declines to weigh in on what is best at other companies. Giving shareholders a voice ``takes away the frustration that is out there,'' he says. ``People just want to be heard.'' Sarah Anderson, director of the global economy program for the liberal think tank Institute for Policy Studies, says say-on-pay is a first step but does not go far enough to rein in abuses. She cites oil executives who had big paydays that had nothing to do with personal performance and everything to do with spikes in oil prices. But shareholders didn't ``bat an eye'' because they were happy with rising stock prices. ``Everyone, not just shareholders, has a stake in fixing the executive compensation system,'' Anderson says. Ralph Ward, publisher of Boardroom Insider, an online newsletter about boards of directors, agrees that say-on-pay does not go far enough, because it offers shareholders ``so little substance.'' Substance or not, CEOs complain that say-on-pay is government intrusion into the private sector. Such consensus among CEOs is rare because they run very different companies that can be made winners and losers on a range of sensitive issues, from energy to health care. They lean Republican, but there are signs that they are increasingly blue, and 40% supported Democrats during the last presidential primary season, according to an unscientific USA TODAY survey. But when USA TODAY last month contacted 31 CEOs and former CEOs of large companies, 77% were against say-on-pay. Are CEOs fairly compensated? Two of the 31 CEOs declined to answer, but 24 of the other 29 (83%) said yes. Five (17%) said that, in general, CEOs are overcompensated. When asked if say-on-pay would influence CEO compensation, 76% said yes. CEO median compensation at S&P 500 companies rose 23% from 2003-2008 despite going down 7.5% to $8 million from 2007 to 2008, according to Equilar, which tracks executive compensation. John Castellani, president of the Business Roundtable, an association representing CEOs of companies with more than $5 trillion in annual revenue, says shareholders have always had the ability to enforce say-on- pay by using the shareholder resolution process. That makes legislation unnecessary, he says. The pro-business U.S. Chamber of Commerce is also against legislation. ``The decision to allow say-on-pay votes should come, as it has, through a dialogue between shareholders, directors and management, not via a Washington mandate,'' says Tom Quaadman, the chamber's executive director for capital markets. CEOs' arguments against it CEOs say the legislation would open the door to micromanagement by largely uninformed shareholders, who understand neither the competitive market forces that drive executive pay nor the complex incentives designed by experts to get the best results. The law could drive top talent to private companies and injure the ability of U.S. companies to compete in a global market, they say. ``You cannot run companies effectively through the democratic process of voting on all things,'' says Judy Odom, former CEO of Software Spectrum. ``Independent boards should be elected, and they should do their jobs.'' While most shareholders are uninformed, some are so informed that they could use a say-on-pay law to an unfair advantage, says Andrew Puzder, CEO of CKE Restaurants, which operates Carl's Jr. and Hardee's. For example, certain investors could threaten to vote ``no'' on the CEO's pay to coerce the CEO into making decisions for short-term gain, such as delaying capital investment or taking on unnecessary debt. Such tactics could temporarily boost the stock price to the detriment of the company's long-term health, he says. An argument could be made that CEO pay is excessive and does not drive performance, says Anders Gustafsson, CEO of publicly traded Zebra Technologies, which sells printing services to 90% of Fortune 500 companies. But he says CEOs have a significant impact on company performance and are being unfairly targeted in a bad economy because their pay is publicly disclosed. CEOs are not unanimous in their opinions, even where it comes to pay. Patrick Byrne, CEO of Internet retailer Overstock, says he is more concerned about CEOs influencing boards than shareholders influencing CEOs. ``The CEO is hired by shareholders. He works for them, just like a farmhand works for the folks who own the ranch,'' says Byrne, among the CEOs who support say-on-pay legislation. He says CEOs ``capture'' their boards, leaving shareholders unrepresented. Real estate developer Don Peebles, recently named by Forbes as one of the 20 wealthiest African-Americans, also supports say-on-pay. He says CEOs who have no significant ownership often have compensation packages designed to reward them on the upside, but they suffer few consequences on the downside. ``There is no real alignment of interests,'' Peebles says. But Behar says he has served on eight boards and says directors are not stupid, and they are in control of CEOs. ``How will our country be better off if CEOs earn less than $2 million a year?'' says Behar. ``Are we trying to create a country without the opportunity to get rich? We had better be careful about the buttons we push down. We may not like the ones that pop up.''

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2623) to amend the Federal securities laws to clarify and expand the definition of certain persons under those laws.

Mr. FRANK of Massachusetts. Mr. Speaker, this is another important bipartisan bill. The gentleman from California (Mr. McCarthy) took the initiative here, and we were pleased to work with him. The Chair of the subcommittee, the gentleman from Pennsylvania (Mr. Kanjorski), is dealing with a back problem, so he's not here. But he's not dealing with a backbone problem, because this bill puts some more backbone into the antifraud laws. And what it does is, in consultation with the SEC, enhances their ability to kick people, in effect, out of the industry who have a bad record. And it makes it very clear that a past bad record or a past affiliation would still be relevant in giving the SEC the right to protect investors. We are all aware that too little has been done to protect investors. This is a step forward towards further empowering the SEC to do the job of protecting investors. Mr. Speaker, I reserve the balance of my time.

Mr. FRANK of Massachusetts. I congratulate the gentleman from California on his work. Mr. Speaker, I yield back the balance of my time.

Mr. FRANK of Massachusetts. Mr. Speaker, first I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and include extraneous material on this bill and the preceding bill, H.R. 3139.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, I yield 3 minutes to the aforementioned gentlewoman from California (Ms. Matsui), the author of the amendment.

Mr. FRANK of Massachusetts. Well, as the gentleman knows, there has been a request from the administration for a longer extension, but the gentleman conferred with the Chair of the subcommittee, the gentlewoman from California (Ms. Waters), and expressed his concern that that would put off further any chance to do this, and we agreed with that. That is why this is a 6-month extension. And the answer is, I believe the House remains committed to that. What happens in the Senate will be another issue. But it is certainly our intention, the leadership of the committee on the majority side, once again, to work with the gentleman to extend that protection, and hope that maybe things will change in the Senate. I yield again to the gentleman.

Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to the coauthor of the amendment we have been discussing, the gentlewoman from California (Ms. Speier).

Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself 3 minutes. And I would yield for a question to our colleague from Mississippi, who has been, with our support on our committee, a major proponent for protecting the people he represents in the area of wind and elsewhere. I yield to the gentleman.

Mr. FRANK of Massachusetts. Well, I will yield back after recalling for no particular reason the views of the British philosopher, Jeremy Bentham, who said that he thought talk of natural law was nonsense and talk of natural rights was nonsense on stilts. That is irrelevant, but it just occurred to me. Mr. Speaker, I yield back the balance of my time.

Mr. FRANK of Massachusetts. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 3139) to extend the authorization of the National Flood Insurance Program, and for other purposes, as amended.

Mr. FRANK of Massachusetts. I would just finish up by saying that the gentlewoman did talk about the problem of houses on stilts in an earthquake area. I reserve the balance of my time.

Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself as much time as I may consume. I want to acknowledge the great cooperation we have had on a bipartisan basis here, the gentlewoman from West Virginia and I. We have, as Members know, a Flood Insurance Program. It does some good, but it's become somewhat controversial. There are Members who would like to see its future extended, and I tend to agree with them. Some of our colleagues from the gulf coast on both sides have talked about extending it to, for instance, other disasters and wind. There are Members who believe that the way it works now, it causes undue hardship without providing any serious protection. There are many others who believe--and I think we could argue--that it's time to examine the whole program. This is an example, Mr. Speaker, where two groups that are sometimes in debate are on the same side; and that is, people concerned about excessive government expenditure and the environmental community. It's certainly our goal to try to discourage people from building where they shouldn't. On the other hand, we have people who years ago, in good faith built there; and they cannot be expropriated and shouldn't be. What we have decided on a bipartisan basis is that we have a program that expires in September. As Members know, the Committee on Financial Services, which has jurisdiction over this, has a fairly broad jurisdiction, including housing and, of course, the financial industry. We have been somewhat preoccupied with those other issues, mortgage foreclosures and financial regulation. We have not had the time to do the kind of thorough reexamination of flood insurance that it deserves. So what we have today as a result of an agreement is a 6-month extension of the program essentially as-is. There is one change, again in a bipartisan way. The gentlewomen from California (Ms. Matsui and Ms. Speier) and the gentlewoman from Kansas (Ms. Jenkins) came together to ask us for a provision that they believed important for their districts and many others that does no harm and can provide some protection for them. With that inclusion, we are extending it for 6 months. This will now go across the Rotunda to the United States Senate. We expect that they will be able to enact it, if not in the next couple of days, when we come back in September. What this then does is gives us a chance, when we come back in 2010, to deal with this in a comprehensive way and to do the kind of reexamination that is called for. So that's exactly where we are. I note that the gentlewoman from California has joined us, the author of one of the provisions. I will yield to her after the other side. I reserve the balance of my time.

Mr. FRANK of Massachusetts. Yes, it would be very appropriate. As Members know, we have been a little busy with the financial material, but we are probably not going away for a while this calendar year. And yes, I know the gentlewoman from California, who chairs the subcommittee which has jurisdiction, is very interested in this and does plan to have some hearings.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, one of the saddest and most important parts of our job is to attend funerals for the extraordinary young men and women of our districts who have lost their lives in the service of our country. A few years ago I attended such a funeral in the town of Raynham, Massachusetts, where I heard about a particularly impressive young man, Sgt. Jared C. Monti--of the U.S. Army, who died in Afghanistan in a valiant effort to save his comrades. I was struck then by the impact this young man had had on virtually everyone who knew him, and the magnitude of our loss as a community was clear. Last week we learned that he has been awarded the Medal of Honor for the bravery of this effort to save others. Madam Speaker, to his family and others who loved and were warmed by this young man, the conferring of this award is, as his father said, ``very, very bittersweet.'' They relive now the pain they felt when they learned of his death, but they now have the knowledge that I hope will be comforting at some level at some point that the rest of the world now knows what a wonderful man he was, and the pride they felt in his accomplishments now become a matter in which our whole country takes pride. Madam Speaker, to the family and friends of Jared Monti, I again extend my deepest condolences, and to his memory I extend the salute that is the least we as a grateful nation can do for a young man who quite literally gave his life in defense of others, and I ask that the article about Sgt. Monti from the Taunton Daily Gazette be printed here, so that his example can be widely understood and appreciated. [From the Taunton Daily Gazette, July 27, 2009] Department of Defense Report Details Raynham Soldier's Heroism (By Jessica Scarpati) Raynham--On Sept. 17, President Barack Obama will present Army Sgt. 1st Class Jared C. Monti's parents, Paul and Janet, with the Medal of Honor, the nation's highest military award. Only five Medals of Honor have been bestowed, all posthumously, for service in Iraq and Afghanistan. The final act of courage by the Raynham man is retold through a Department of Defense report and interviews with his family: Evening fell, but the desert sun had cooked the earth Army Staff Sgt. Jared C. Monti traipsed with his soldiers and their 70-pound packs. Even at dusk, the air still boiled in the northeastern mountains of Afghanistan and sweat streamed down Monti's muscular 5-foot-5 frame. They were out of water. They radioed for more. North of where he stood on the plateau, Monti, 30, could see the enemy compound he and the 15 other soldiers in his group were sent to scout out June 21, 2006. In his 12-year military career, the Raynham soldier had been lauded by superiors in his military records for his ``endless potential'' and ``uncompromising courage.'' That day would be no different, except that Monti's final act of bravery--running into a combat zone to save a wounded comrade--would end with the ultimate sacrifice. Monti, a member of the elite 10th Mountain Division, was on his second tour in Afghanistan and that day was part of an advance scouting group--sent ahead of a larger force pushing into a valley in the Nuristan province, his father said. More troops were coming behind them to rid the valley of Taliban insurgents. Staff Sgt. Patrick L. Lybert, 28, of Wisconsin, finished filling his water bottle and was lying down behind a stone wall with another soldier, according to the military report. Monti slid down and sat behind a nearby rock and chatted with two other soldiers. A third group collected behind another rock wall. No one heard the clicks and rumbles of the grenade launcher above them 50 meters away. The blasts began. The first rocket-propelled grenade exploded on their plateau, followed by a hurricane of bullets from assault rifles and machine guns coming from in front of and behind them. The group ran to the rock where Monti sat, hesitating to return fire. There were allies--possibly American soldiers-- in that direction. He grabbed the radio and shouted back to the command center. They were under attack and needed air support. They couldn't climb down from the plateau--the way down was too steep. It would kill them. Behind Monti, one of his soldiers, a private, screamed. He was shot in the back and his wrist was gashed open--probably by a grenade fragment. The private, whose name the Department of Defense redacted in the report, crawled toward the group with Monti. He was bleeding and disoriented. Another soldier put pressure on the wrist wound while someone yelled for the medic. Lybert leaned over the stone wall and fired back at the insurgents and rockets exploded around them. ``You couldn't see anything but muzzle flashes and pops through the trees,' said one staff sergeant, who was not identified in the report. Monti was firing back, positioning the men and shouting in the radio, doing what he did best--commanding everything at once. He was their expert at calling in air attacks to precise locations, which was what they needed--now. Everyone was there except for Pvt. Brian Bradbury, a 22- year-old from Missouri. He had to still be farther up--he hadn't made it behind the rocks. Monti and the soldiers shouted his name. The explosions drowned them out. Lybert rose again from behind the rock to fire. He was shot. One bullet in his face. He collapsed. Someone yelled that Lybert wasn't moving. Blood was pooling beneath his body. They continued firing, trying to ward off the insurgents closing in on their team from the east and west. Bradbury was still nowhere to be found. Monti called for his men to cover him. He would not let the young private remain out there alone. Seconds passed. Bullets blasted the plateau. Monti dropped back. He turned back into the fire. Grenades exploded. Monti screamed. ``Help me!'' he shouted. Bradbury had been wounded when a grenade landed nearby earlier, injuring his arm and shoulder. Another grenade had hit Monti as he dashed across the ridge to Bradbury, severely wounding his arm, leg and midsection. He was 20 meters from his team. He screamed in pain. They fired at the insurgents as a fellow sergeant tried to dash toward him. The sergeant ducked as more explosions came. He was 10 yards away. He heard Monti gasp his last words. ``Tell my family I love them,'' he said.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, the House Financial Services Committee last week voted out by a large margin a bill to improve the way in which people who rent are treated under our Section 8 Voucher Program. Madam Speaker, I believe that one of the contributing causes to the housing crisis that led to the economic crisis we now face was an insufficient recognition of the importance of decent rental housing, and the consequent push of people who were not economically suited to the task into homeownership. On July 5th, in the New York Daily News, former New York Mayor Ed Koch and a former aide of his, Robert Weiner, wrote an excellent article about the importance of this program. We are not yet finished with trying to improve the way in which renters are treated by federal policies, and this very thoughtful article by Ed Koch and Robert Weiner reminds us of how important it is to continue that job. [From the Daily News, July 5, 2009] Renters Across America Need More Help From Congress (By Ed Koch and Robert Weiner) While the recent anti-foreclosure bill signed by President Obama is of assistance to the homeowners affected by the current financial meltdown, the bill and its $13.6 billion of housing recovery money have ignored the nearly one-third of American households who rent, including more than 2 million households in New York City. All these people also have a dream of having and staying in a home--and they also need help from Congress, on the double. Over the course of the last generation, things have gotten progressively worse for renters--and the deep recession has added insult to injury. When Congress passed the Housing and Community Development Act in 1974, the law included a goal of closing the gap between the rising cost of housing and the slower rate of increase in wages. The Koch Amendment to that bill--which established that a family should pay no more than 15%-20% of their income in federally assisted housing, and that a voucher (we now call this a Section 8 voucher)--would cover the difference. After a compromise with the Senate, the cap was set at 25%. Over the years, the successful program has been whittled away by special interest groups and misdirected priorities. In 1983, the percentage of a family's income that could go towards rent was increased to 30%. That may sound like a small but necessary increase given federal budgetary constraints. However, many families that get Section 8 are paying upwards of 40% and 50% of their income because they cannot find an apartment that meets the established rent cap. It's not just the size of the individual voucher that's the problem; it is the overall scope of the program. The federal Department of Housing and Urban Development estimates that 3 million families will receive aid under Section 8 this year. The number of individuals in need is far greater. The New York City Housing Authority reports there are 127,825 New York families on the wait list. Their hopes for affordable housing are dependent on the chance that their number is picked out of a hat. The Federal Housing Administration advocates that a family should spend no more than 30% of their income on housing. In 2006, according to the U.S. Census Bureau, more than half of renters exceeded this guideline, with almost a quarter of renters spending more than 50%. The situation is particularly dire in New York, where nearly one in three New Yorkers use half of their income on rent. It shouldn't surprise us that one very immediate consequence of all this is homelessness. New York City alone, there has been a 65% increase in the use of homeless shelters since 1998 and a 23% increase since 2002. Even at these record numbers--36,218 were in shelters as of May 31--a shelter, though a wonderful resource, is not a permanent home, and shelters only house a tiny fraction of the homeless. While a virtually immeasurable number, the New York City Coalition for the Homeless believes homelessness this decade is ``the greatest since the Great Depression.'' In Congress, Reps. Maxine Waters (D-Cal.) and Barney Frank (D-Mass.), the chairs of the House Housing Subcommittee and the full Financial Services Committee, are moving forward with Section 8 housing reform after the July 4 recess. The White House and Congress can help the third of Americans who rent by going back to the guidelines set by the Housing Act of 1974--increasing the availability of Section 8 housing vouchers, assuring that families pay no more than 30% of their income on housing and using the rent limit as a model for other low income housing. This would not be a bailout for renters, but a return to the protection needed to enable people to pay their rent and remain in their homes. Congress must make sure that all citizens, including renters, who are often the poorest Americans, have roofs over their head. That's not too much to ask in America. Koch is a former mayor of New York City and member of Congress. Weiner was legislative assistant to Koch.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, I know that there is a debate about when the world began; and there are some who think it began 4,000 years ago and some who think that it began earlier. We have a rare specimen today of people who think it began on January 20, 2009, who do not think anything happened before that, who do not remember the years of Republican rule where many things went wrong. Now they're talking about the economic recovery bill. Ben Bernanke, who was the chairman of the Council of Economic Advisers, appointed by George Bush--that happened before January 20, so you may not have remembered it, I would say to my friends on the other side--but he told the House Financial Services Committee that unemployment would be higher if it was not for the economic recovery bill. That was Ben Bernanke. In his report, he twice cited examples of it. And as to this argument that the bill was of no use, I debated this bill in February with Republican Members of Congress when they scoffed at the notion that there was something in it for police and fire. I was very pleased today to be notified that 23 police officers will be added to two of the communities in my district, Fall River and New Bedford, directly as a result of the economic recovery plan. Magnify that nationally, it's 10,000.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. I thank the chairman of the Ways and Means Committee for his leadership on this issue, which has been sustained. The question is not whether or not we should be working to see that public housing residents require the skills, et cetera, that will help them, but how to do it. The community service requirement is a slapdash, honored in the breach. It's a mandate resisted and resented by the people who have to administer it. We have in the bill that we voted out of committee today by a large vote, bipartisan vote, the reform of the voucher system, which both the public housing and for vouchers includes the Moving to Work program, which is a sophisticated and balanced way to do this and provides funding for it. Those who administer public housing want to do that. They want to help people do this. But imposing on them the requirement to do work, imposing on people who are already underfunded the obligation to mandate whether every public housing resident is doing 8 hours of leaf raking and snow shoveling doesn't help anybody. It advances nothing. And it gets in the way of efficient administration. We will do this the right way. And this is the wrong way, according to everyone who has been involved in a serious way with it.