Barney Frank

Mr. FRANK of Massachusetts

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

Mr. FRANK of Massachusetts. I will yield myself 1 minute. The gentleman from New Jersey has built that castle in the air because I corrected his flat error. He said President-elect Obama asked for it. He did not. I said that President Bush asked for it at the request of President-elect Obama. How my correcting his error became distancing myself from the new President is beyond me. In fact, President Bush's administration did want the second $350 billion. The gentleman is wrong in saying they didn't. Secretary Paulson was deterred from doing that, however, because we told him that we were sufficiently disappointed in the way it had been administered and that if he asked for it we would probably reject it, and that only if he came to some agreement with the new President and the Congress could that go forward. So those are the facts. Yes, the outgoing administration wanted it. They withheld because they were told they wouldn't get it unless they had cooperation, and then the two administrations jointly did that. There is no distancing when I make that point. In fact, the central point here about the TARP is this: We believe quite to the opposite that we are distancing ourselves from Mr. Obama. We believe that because Bush used this badly is no reason to give Obama not a chance to use it well. I now yield 2 minutes to the gentleman from Kansas (Mr. Moore).

Mr. FRANK of Massachusetts. I thank my colleague. And we've had several hearings on this subject. Again, the timetable here has been forced by the bill we adopted last fall with the support of the Republican leadership and the President as well as the Democratic leadership. And as a concession to Members, we put in there that once the President asked for the second $350 billion it would trigger a 15-day period in which we had to act. And we believe it's important for the House to make clear what it wants to do here during that period. But we've been having hearings on this since the fall. We put into the bill last fall some good oversight. The Government Accountability Office put out a report last year very critical of the failure to demand that the financial institutions that received funds make clear what they were doing with them, and particularly to show to what extent they were re-lending. That was because we put into the bill that the GAO would be there from the first day in their offices. We had a hearing with Mr. Kashkari, the Bush appointee to run the program, and the GAO to deal with it. We had a further hearing on this subject in the fall. We then had the long hearing that the gentleman from Massachusetts talked about earlier this week to go into this in great detail on Monday. We have invited all Members as of Friday to submit amendments. A number of Members did so. In fact, I thank the Rules Committee; they have put 10 amendments in order--one was a duplicate, so 10 are in order, five from Republicans, five from Democrats. Of the Republican amendments, I intend to vote for two; I intend to vote against three. There were also amendments that we received from some Republicans that we agreed to put in the manager's amendment. The question is simply this, and it's two-fold: First, on the broader question that's not before us today, do we deny to President Obama a set of tools that this Congress voted for last fall because a great majority of Members on both sides think that the Bush administration used them poorly? If someone drives a car badly, do you sequester the car and deny it to someone else who wants to drive it? The TARP is not some living organism with a mind of its own. It is a set of policy tools. A newly elected President has asked that he be allowed to implement those tools. We say yes, but--and we are asking for some serious commitments about how it's done. So that's the first point. The second point is that this money, whether or not it is spent, will be in a separate vote. And the ranking Republican said yesterday, well, let's wait for them to tell us how they plan to spend it. No, I don't think we should do that. I think we should tell them how we want them to spend it and see if they agree. And we have been having conversations, and they do agree. We are talking about subjects that have been very familiar to Members. We are here trying to remedy defects in the Bush administration's execution of this program--nothing for foreclosures, not enough for community banks, no restrictions on what the banks that receive the money use, tougher restrictions on compensation--though I know not everybody agrees with that. The Wall Street Journal Editorial Board--which I know represents the viewpoint of many on the Republican side--was very critical today because we are asking that money be used to reduce foreclosures; they say that's a waste of money. They were scoffing, the Wall Street Journal--and again, I think that editorial reflects some of the opposition we have here--they scoffed at the notion that we want community banks to get some of the money. And they said, how can you possibly want the money to go to nonfinancial institutions? I guess the Wall Street Journal wants to be the ``Wall- Street-Only Journal,'' and any effort to deal with small businesses or automobiles, that's somehow a profanation of the temple as far as they're concerned. We have had serious discussions with the Obama administration. I believe it is important that we do two things: First of all, give the new President the right to spend the money; and, two, give him restrictions on how he spends it.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Yes. It is to say that the gentleman has a very good idea. I regret that what I believe to be obstruction kept us from incorporating it, but I will be strongly urging the administration to work with us to see that this is made a part of the overall proposal.

Mr. FRANK of Massachusetts. Mr. Chairman, I claim the time in opposition. I apologize again. The Rules Committee report was misprinted. It listed them in the wrong order, so I apologize to the gentlewoman. That's why we were reacting to a misprint. I oppose this in part because----

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. If the gentlewoman would yield, in title IV of the bill, we list some high-priority items where we expect these funds to be deployed, and we say that, if they are not deployed, we have to get an explanation in writing as to why that wasn't possible. In general, aid to municipal finance and housing, as part of that, is clearly included.

Mr. FRANK of Massachusetts. Mr. Chairman, California has been one of the epicenters of this foreclosure crisis, and the delegation has worked very closely together. One of those leading that effort is the gentlewoman from California (Mrs. Tauscher). I yield her 2\1/2\ minutes.

Mr. FRANK of Massachusetts. If the gentlewoman would yield, I completely agree with that statement. As she knows, because she was a major part of this, there is an amendment included in the manager's amendment that was authored by herself and by her colleague from California, Mr. Cardoza, whose eloquence on behalf of the people facing foreclosure cannot fail to move anyone who listens to him. That says it beyond the current foreclosure relief that will be in this bill, and it will be the only foreclosure relief we will get if this money isn't made available. We are mandating that a further study be made to help people who might be facing foreclosure in the future and to deal with the broader aspects of the problem. So I thank the united efforts of the people of California, the Members from California, for helping improve this bill. I give them my commitment that, as chairman of the committee, I will be working with them to go further.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2\1/2\ minutes to one of our freshman Members, a man with great experience in municipal government, the gentleman from Virginia (Mr. Connolly).

Mr. FRANK of Massachusetts. If the gentleman would yield, that's right. And I would say some of my colleagues understandably wanted to put very severe restrictions on the recipient institutions, and we put restrictions on them. But we don't want to be so restrictive that we drive out private capital. This will only work if the public capital leverages and unlocks and reassures private capital.

Mr. FRANK of Massachusetts. If the gentleman will yield, yes, he's correct. What we, in fact, say here is that nothing should be advanced to a bank without an agreement in advance as to how it should be used. Now, we would expect a great bulk of the funds, the agreement would say, be re-lent, but that's not the exclusive purpose. There are other valid purposes. What this bill says, however, is that that would have to be clear up front as one of the permitted purposes, and we do believe that this Treasury Department, given that, yes, they would accept that as a very valid use.

Mr. FRANK of Massachusetts. I am in complete agreement, and while that would be beyond the scope of this, as the gentleman knows--I know he's not suggesting we do it here--I guarantee we will be having hearings later this year on the proposal. My own view is that some form of insurance would be there. The most unjustified risk premium being paid in America is by those municipalities that issue particularly full faith and credit general obligation bonds. I welcome the gentleman as someone with the municipal government experience that he's most recently had, and I look forward to drawing on that experience as we help correct this situation.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2 minutes to one of the most energetic and informed members of the committee, the gentleman from Georgia (Mr. Scott).

Mr. FRANK of Massachusetts. Well, Mr. Chairman, I am tempted to defend George Bush against the charge that he is un-American at this point because this was his program, but I'll defer that until later. I yield 2 minutes to the gentleman from Missouri (Mr. Clay).

Mr. FRANK of Massachusetts. If the gentleman would yield, yes, I very much agree. I think one of the most sympathetic victims of this financial crisis has been the municipalities. The capacity to finance what's necessary for the quality of the life of their constituents has been impaired by factors well beyond their control. And the gentleman is absolutely right that we have an obligation to try to come to their aid which this bill would mandate be done.

Mr. FRANK of Massachusetts. Would the gentleman yield?

Mr. FRANK of Massachusetts. If the gentleman would yield, obviously we aren't doing anything for any one company--the gentleman wasn't suggesting that we were--there are other companies. And yes, unsecured paper should be covered. Obviously we don't expect any investment by Treasury to be made irresponsibly; they have to check to make sure that it's a good investment. But ruling out the unsecured, no, that was not our intention. In fact, under the underlying bill, which we do not change, the Secretary has the authority fully to respond to that sort of situation.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2 minutes to another freshman member of the committee, the gentleman from Connecticut (Mr. Himes).

Mr. FRANK of Massachusetts. Mr. Chairman, not being a person who holds grudges, I yield 2 minutes to someone who left our committee, the gentleman from New York (Mr. Crowley).

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Okay. I was trying to fill the gap over there. I will yield 2 minutes to the gentleman from Maryland (Mr. Cummings).

Mr. FRANK of Massachusetts. If the gentleman would yield, yes, it is. Let me say that the language is better now because of the gentleman from Indiana and the gentleman from Oregon (Mr. DeFazio) and some others who called our attention to an inadvertently narrow definition. Yes, recreational vehicles play an important role in the economy and in the people's quality of life, and they should be included.

Mr. FRANK of Massachusetts. Mr. Chairman, just as in baseball, sometimes a player who made a great defensive play is first up. After his stellar role in the chair, I yield 3 minutes to the gentleman from Massachusetts (Mr. Capuano).

Mr. FRANK of Massachusetts. In a spirit of cooperation, if the gentleman is short of speakers, I have a surfeit over here. I notice there seems to be a lack of interest over there. We can send you some.

Mr. FRANK of Massachusetts. Mr. Chairman, I will use our remaining time. People may have a little difficulty reconciling the speech they just heard with the person who made it. The gentleman from Alabama last year voted for the 700 billion the second time, not the first time. He was in and out of the negotiations on it, told us he would participate, then was told he couldn't. He did finally vote for it. We ought to be clear what's happened, and I understand the need to stay at a position. The new deputy, the new whip of the Republican Party, was quoted in a publication here, Congress Daily, as saying that the gentleman from Alabama was allowed to keep his position as the ranking member because he'd agreed to engage me. Not, let me say--less I cause great problems given the obsessions on the other side--to become engaged to me. I don't want people to be confused. It was that he would engage me.

Mr. FRANK of Massachusetts. If the gentlewoman would yield here, and I appreciate her forbearance here. It's probably beyond the scope of this.