Barney Frank

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. I will yield.

Mr. FRANK of Massachusetts. I thank you, Mr. Chairman. I now recognize for 2 minutes----

Mr. FRANK of Massachusetts. Regular order.

Mr. FRANK of Massachusetts. Mr. Chairman, I am going to yield myself 30 seconds to say: Apparently, there are two alternative strategies that the minority has in discussing this bill: one, discuss a bill that was passed 6 weeks ago; two, ignore the rules of the House and just talk whenever they feel like it. Neither one seems, to me, to advance debate. I now yield 2 minutes for serious conversation to the gentleman from Connecticut (Mr. Himes).

Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2 minutes to the gentlewoman from Nevada (Ms. Berkley).

Mr. FRANK of Massachusetts. I yield myself such time as I may consume. I heard the gentleman from Alabama say that we should not get into this business of fixing compensation. Someone claiming to be the gentleman from Alabama last year voted for legislation which included the following. It was the rescue plan. The gentleman voted for it when it passed. On page 12 of that bill, there's a heading, section 111, ``Executive Compensation and Corporate Governance.'' The gentleman from Alabama voted for this. So did the rest of the Republican leadership. They did it at the request of President Bush and of Secretary Paulson and of Chairman Bernanke, not heretofore known for their socialism. But the gentleman from Alabama voted for exactly what he now decries. It is a grant of authority to the Secretary of the Treasury to require--I'm now quoting. He shall require that the financial institution meet appropriate standards for executive compensation and corporate governance. It goes beyond much of this bill, corporate governance. The standard shall be effective for the duration of the period that the Secretary holds an equity or debt position in the financial institution. So the gentleman voted for this when the Republicans were in power. Circumstances apparently change opinions. In fact, there's also this great inconsistency. For a month now, the Republicans have been complaining that in the recovery bill we adopted a provision as the Congress which limited the reach of the government's intervention into compensation. That was the part about retroactivity. This undoes that limitation. So, in the name of limiting government, the gentleman denounces the bill that would undue the limitation that his party has been denouncing. There is a fundamental gap that can only be explained, it seems to me, by something other than the merits. Given what the gentleman from Alabama said--we've got to get the government out of this--why was he then opposed, if he was, to the language that limited its retroactive application? In fact, if you believe that one of the big arguments is that we changed the rules after the fact, he should have been for that limitation. The arguments about free enterprise and not understanding the principles are just nonsense, Mr. Chairman. We're not debating free enterprise. We're debating how best to make it work. I think Franklin Roosevelt helped save free enterprise. I think rules help save free enterprise. I think when Secretary Paulson in the Bush administration called for more regulation of credit default swaps and collateralized debt obligations, we'll probably be getting an announcement that they will be opposed to that, because that's what we are going to be going forward trying to do. Yes, the government does have a role in this, but to return to this bill, which the gentleman only briefly discussed, it does do what the gentleman voted for last fall, and by the way, the argument that the government was responsible--the gentleman said in 1999 this started. I was not going to refer to the history, but from 1995 through 2006, Members of the Republican Party controlled this Chamber, and they controlled it tightly. If, in 1999, the gentleman from Alabama, as a member of the Republican majority on the Financial Services Committee thought there was a problem, they should have done something about it. The gentleman from Alabama was, for a time later on, the chairman of the Financial Institutions Subcommittee, which had jurisdiction over lending standards. Some of us wanted to pass a bill to limit abuse of subprime lending. Yes, that happened, Mr. Chairman, in the House. It happened in 2007, after we became the majority, and let me say now I think we still have the potential for the bad loans to be made. When this House returns after the April break, we will have in committee arguments on the floor legislation that will stop precisely the kind of loans that the gentleman from Alabama decried, and I await with interest what the votes will be. I reserve the balance of my time.

Mr. FRANK of Massachusetts. If the gentleman will yield. Yes, because in AIG we had hundreds of people--yes, it does.

Mr. FRANK of Massachusetts. If it's going to reduce their lending, then they probably shouldn't return it. But there are other things that people do with it. And I understand. But if the gentleman is asking me do I understand that I'm disagreeing to some extent with the President and the Secretary of the Treasury, yes, sometimes that happens. If the gentleman would yield, the Secretary of the Treasury apparently sponsored the restriction against retroactivity. He is on the side of the gentleman from New Jersey (Mr. Garrett) against retroactivity. I am here with a bill that undoes something the Secretary of the Treasury did.

Mr. FRANK of Massachusetts. Will the gentleman yield?

Mr. FRANK of Massachusetts. I yield 4 minutes to the gentleman from California (Mr. Sherman).

Mr. FRANK of Massachusetts. Will the gentleman yield?

Mr. FRANK of Massachusetts. I'm sorry. The gentleman has twice asked me to yield for questions.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield my remaining time to the gentleman from California, Mr. Sherman.

Mr. FRANK of Massachusetts. I will take back my time to say that this is the bill that came out of the Financial Services Committee, and this was not out for 72 hours. It was out for much more than 72 hours. We, in fact, marked up the bill, with amendments, in an open markup last Wednesday. We voted on it on Thursday.

Mr. FRANK of Massachusetts. No. I'm sorry. The gentleman wants to debate a bill that was passed in February. He can have all of the Special Orders he wants in order to beat that dead horse, because it is a dead horse, Mr. Chairman. This bill that he does not want to debate the merits of, that he is probably prepared to vote against and is looking for some reason to, undoes what was done back then for the recipients of TARP funds. So that is the issue. This bill was marked up in committee. It was fully debated in committee.

Mr. FRANK of Massachusetts. I will yield.

Mr. FRANK of Massachusetts. I will take back my time. The bill under consideration is 5\1/2\ pages. I believe even the gentleman from Texas could have read it by now, and if the gentleman from Texas has not been able to read this 5\1/2\-page bill, I will talk long. Even if you read slow, you'll get it done. The point is that this bill undoes what he is complaining about. Note the refusal to address the subject. The complaint was that the amendment in the recovery package said that bonuses in the past given by AIG or by anybody else would not be covered by the restrictions in that bill. This undoes it. This takes it away. My colleagues on the other side are kind of like kids who have had a toy bear or a blanket, and this security blanket means a lot to them. Their security blanket is being able to complain about something that happened before the break. This bill undoes what happened before the break and makes it a nullity. They at some point, Mr. Chairman, have to outgrow the security blanket. Now, of course, here is the real problem. They do not want to vote for a bill that restricts excessive pay and unreasonable bonuses. The gentleman from Texas has now had a chance to read the bill and has a question for me about this bill.

Mr. FRANK of Massachusetts. Yes.

Mr. FRANK of Massachusetts. Mr. Chairman, I want to begin by recognizing the two Members who are the main authors of this bill, and I will begin with 2 minutes for the gentleman from Florida (Mr. Grayson).

Mr. FRANK of Massachusetts. Regular order.

Mr. FRANK of Massachusetts. Will the gentleman yield?

Mr. FRANK of Massachusetts. Who has the right to close?

Mr. FRANK of Massachusetts. I have one remaining speaker, so I will reserve my right to close.

Mr. FRANK of Massachusetts. Mr. Chairman, I will yield myself as much time as I may consume. This is really extraordinary. What you have just heard is a denunciation of something that was done by the Congress a few weeks ago and a refusal to undo it. I have never seen people, Mr. Chairman, so attached to something they hate. This is presumably a psychological disorder which I am not equipped to diagnose. The objection of the gentleman from Texas was that, when the recovery bill was passed, it was passed too quickly. We signed it that night. It included a provision that should not have been in there. This bill takes it out. It takes it out in a way that makes sure it will have had no effect, because it dealt with something in the past, and it is undone by this. Speaking about being undone, my Republican colleagues were being undone by the loss of their whipping boy.

Mr. FRANK of Massachusetts. I have twice yielded to the gentleman for questions, which I must say, in all parliamentary decorum, to me, did not seem to substantially add to the quality of the debate, because we are on this bill that he does not want to talk about. This bill was out. It was debated. It has been laid forth. We have amendments that will be considered to be adopted that were also made public for some time. Here is the point: This bill addresses what Members on the other side complained about. Apparently, they regret that fact. They would rather complain than have us undo the source of their complaints, so that is why they are dealing so unhappily with this legislation. Now let me get back to the merits of this bill. It says, if you have received capital contributions under the TARP, like AIG--AIG, by the way, was originally, of course, given money under the Bush administration, by the Bush-appointed head of the Federal Reserve and with the approval of the Bush-appointed Secretary of the Treasury. It later got TARP funds. From the Senate, from the Senator of Connecticut, we then saw restrictions. He deserves credit for adding restrictions when no one else had pushed for them. He did not get all of the restrictions that he should have gotten, which was because of other people objecting. There was a requirement that the restrictions not be retroactive. Members complained about that. This bill fixes it. Let me emphasize again: This bill undoes the exemption of retroactive bonuses from the darned language. I don't understand why people are opposed.