Barney Frank

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. I did not yield to the gentleman. And that's what you see. That's the only explanation I could give for this dodge and whirlish, frankly, pattern of activity I can't fully understand. Again, he did vote for it. What we are seeing, I would say this, if you're listening to the Republican arguments today, this is the going away present to George Bush. Remember that the $700 billion was a major initiative of the Bush administration, insisted upon by Bush officials or Bush appointees: Mr. Bernanke and Mr. Paulson. At the request of the President--I put the ``President''; he's still the President--as an independent actor is the one who triggered this issue. If he had not done so and had waited a couple of weeks, no, we wouldn't be here today. We would have been following the regular order. But President Bush, at the request of President-elect Obama--but President Bush did it--triggered on Monday a 15-day period. We will have to vote early next week on whether to approve or disapprove the second TARP, and that was George Bush's approach. So we're here because George Bush, at the request of President Obama, asked us to release the second 350, and we're here because George Bush asked us to do the first 700 billion. I do not think in American history there has been as thorough a repudiation of a President by members of his own party, as we have heard from the Republican Party today and elsewhere. But they are entitled to repudiate their President. I salute their perspicacity. What they are not entitled to do by logic is to say that because the President they supported, the President they campaigned for, the President they honored, because they are so disappointed with the way he conducted one of his major initiatives that this Congress gave him, that they will deny the new President these tools. Now, I don't like the foreign policy of the Bush administration. But I don't think we should say that Mr. Obama cannot have a State Department. The TARP is not an independent organism with a spirit of its own. It's a set of tools. There was apparently unanimity in the Congress that the Bush administration did not use them well, although the gentleman from Pennsylvania on our side and others have made the point that they did some good. By the way, that's one of the interesting things on the Republican side. They have insisted, first of all, that the TARP did no good whatsoever; and secondly, that it succeeded to the point where we don't need the second half. If you read what some of them have said, that's what they said. Several quoted Mr. Kashkari as saying, ``Well, Kashkari, who's running this under George Bush, says things have been stabilized.'' Yeah. He says they've been stabilized in part because we've had this. So quote Mr. Kashkari who says this is worksome to argue that it should never have been done in the first place. Now let me address this issue of this odd thing that says we should be independent, we should assert ourselves, and what should do? We should wait for the President to give us a plan. That's an odd form of assertiveness to wait for the President to give us a plan. I didn't want to do that. Most of the House does not want to do that, and we are here to tell the President what we think has to be done. And the gentleman has engaged in one of the, I think, least persuasive techniques, a straw man. Yes, Mr. Summers did a letter, which he had up there. That is by no means the only indication that we will have. And in fact what we are getting is is a specific agreement from the Obama administration to the terms of this bill. For example, on foreclosure--and the gentleman said, and I'm baffled by this, ``we don't know what he means by `foreclosure.''' Well, he said we need the facts. You can subpoena someone to tell you what he knows. You cannot subpoena someone to be told things. You can subpoena information out of someone. You can't subpoena information into someone. There is a concept from ancient theology, which I do not impute to anybody here in defense of the House rule, called invincible ignorance. But invincible ignorance is immune to facts. It is immune to logic and cannot be overcome. We have made very clear--the gentleman from California, who's technically on this--at least 20 billion to go into the plan put forward by Sheila Bair, a Bush appointee of the FDIC. That's very specific. It's not Hope for Homeowners. It's a separate plan. Secretary Preston, a Bush appointee at HUD, has told us that there is, in the original bill, authority to buy home mortgages and that will work. So there is another specific: buy home mortgages that are in people's portfolios and reduce them, which we mentioned in the bill. The Sheila Bair plan. Now, Hope for Homeowners, the gentleman is right. We passed Hope for Homeowners, and it was too constricted. It won't work. We constricted it some; the Senate further. Now, by the way, when we were passing Hope for Homeowners, the Republican mantra was, ``This will cost us $300 billion dollars.'' Preposterous at the time. Now they are arguing, ``Well, it was too restrictive.'' They are right this time. They were wrong the first time. Part of the reason it was too restrictive is that we were concerned about this argument that we were spending too much. So we do propose here--and I hope in the recovery program--to fix Hope for Homeowners so we will have Hope for Homeowners, and we will work with the Federal Reserve to try to make Hope for Homeowners more workable. So we are talking about three specific approaches: A more workable Hope for Homeowners, which reduces principal; the Sheila Bair plan, which reduces interest; and the Preston plan, which buys up mortgages. We also intend to use more money here through Fannie and Freddie. The notion that nobody knows what we mean by mortgage foreclosure could be advanced seriously. I don't know whether that's a form of engagement that will satisfy the Republican leadership and the Republican Study Committee, to which the gentleman has to pay some attention; but we have very specific numbers, we have a commitment from the Obama administration, from Mr. Geithner, and from Mr. Summers that they will spend at least 100 billion of the 350 on mortgage foreclosure reduction. And if they can't, they will tell us in writing why they couldn't; and they will spend no less than 40. Now you could not be more specific. The gentleman knows this. This isn't a line in Larry Summers' letter. What's the purpose of pretending that you don't know that we have this commitment to at least 100 billion, no less than 40, and 100 unless they can tell us in writing why it isn't done. As far as the banks are concerned, we're very specific here. Well, one we passed the LaTourette amendment that Members here voted for. Apparently they thought it was meaningless. I didn't think it was meaningless. I thought a Republican Member, Mr. LaTourette, had a good amendment, and we made this part of the bill; and we have a commitment from the Obama administration to enforce it. Now, it is possible that the Obama administration will break its word. It is not unheard of for administrations to break their word. We believe the Obama administration will abide by its commitment to follow this bill if it's passed. I understand the skepticism on the Republican side because we're telling them that we have a commitment which we accept as valid from a new administration that they will abide by the bill as it passes the House. We haven't experienced where the bill could pass both houses and be signed and be ignored. So I understand their skepticism that a President will pay respect to a law. But again, here is the fundamental flaw. They would visit the sins of the Bush administration on the Obama administration. We still have a financial crisis, and yes, Mr. Kashkari said things have gotten better, but he didn't say this isn't necessary. Secretary Paulson thinks they're necessary, the Federal Reserve thinks they're necessary, the Obama administration thinks it is necessary to use the $350 billion wisely. We are putting limits here on how it could be used. And it is possible, and it's true. The Senate doesn't plan to pass the bill they tell us now. That is often the case. It's the first time I've heard the Republicans say that's the reason for us not to do things. But here is the point: We will pass this bill, I hope. We will then probably see the 350 made available, and I trust the Obama administration. But if they don't, hanging over their heads will be this bill in the Senate--and they don't plan to pass it now--but I believe its being there as a live option will make a difference. As to participation, no, we haven't had a markup because we are not formally constituted. If President Bush had waited and asked for this in a couple of weeks, we would have had a regular markup. Instead, we've had a very open process, and we have elicited amendments. Oddly, some would argue that because we got over 70 amendments, that shows that Members were somehow unhappy. In fact, we have accepted the great majority of those amendments, including many of those offered by Republicans. Now, many Republicans didn't offer amendments, but those that did, we have accepted some and we put others in order. So here is the issue that we come down to. The Republican leadership voted for this bill--not their whole membership, but the leadership did. They were in, they were out; but they voted for it. They then saw their administration had administrated so badly that they've decided to punish the Bush administration by denying a vital tool to the Obama administration. It's like the story of the mother who says to the teacher, ``My child is very sensitive. So if he misbehaves, smack the kid next to him because that will impress him.'' Well, Obama is the kid next to the people who misbehaved. Don't smack him. Don't tell a new President who won an election largely in repudiation of your party's candidate that you're going to deny him this tool. We think that if the 300 and--note the Republicans who opposed this haven't said that if the Obama people follow this pattern, it will be wrong. They took some shots at foreclosure. Some of the more conservative Members think we should do nothing about it. Most of them don't want to say that. The question is this: Do we tell a new President that he doesn't have the authority, or do we give him the authority with a set of rules to which he agrees?

Mr. FRANK of Massachusetts. I yield 1 more minute to the gentlewoman, and ask her to yield it to me. This question is requiring accounting, the accounting standards require them to write down the assets. I think that's reasonable. The problem is that once that's done, too many things automatically flow from that. There used to be a show called Truth Or Consequences. Our problem is truth and consequences. I don't want to dilute the truth, but I think we can have some flexibility in the consequences. The gentlewoman has given a very good example of that. It's an issue that this Financial Services Committee will be working on. I expect to have a serious hearing on this and consideration of it, and I know the gentlewoman will be helpful to us in putting this together and deciding how to respond.

Mr. FRANK of Massachusetts. I will inform my colleague, I'm about to get the last speaker before I will close. So I now yield 2 minutes to the gentlewoman from California (Ms. Eshoo).

Mr. FRANK of Massachusetts. I yield the gentleman an additional minute.

Mr. FRANK of Massachusetts. I yield 2\1/2\ minutes to the gentleman from Pennsylvania (Mr. Sestak).

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

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. 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. 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, 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. Would the gentleman yield?

Mr. FRANK of Massachusetts. Mr. Chairman, I yield the gentleman 30 additional seconds, and ask him to yield to me.

Mr. FRANK of Massachusetts. Absolutely. This is a necessary component of our efforts to keep the American automobile manufacturers from going under. We give this authority--we reassert this authority to Treasury, and we intend to be very, very insistent that they use it.

Mr. FRANK of Massachusetts. If the gentleman would yield, absolutely. I believe that the difference in the way the TARP will be administered in the new administration and the last administration will be very glaring, and frankly, I think that one of the motivations on some of my Republican colleagues to kill this now is that they fear the contrasts that will be presented between the very responsible and effective administration of this by the new administration and the inappropriate way of the last administration.

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. 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, time is limited so I want to give myself 30 seconds to rebut the inaccuracies we've just heard. First of all, the gentleman said we've closed the process. I have no idea what he is talking about. I suspect he does not either. This is a very open process. We solicited amendments. A number of amendments were offered, a number of amendments from both parties will be made in order, a number of amendments from both parties have already been accepted in the manager's amendment. The accusation that this is closed is just wildly off base. It has been a very open process, and I would say a majority of the amendments that have been offered made sense, and we've agreed to them. And to say it is a one-person bill, in fact we have opened it up. Now, Members who did not offer amendments--I will acknowledge. If you didn't offer an amendment, Mr. Chairman, it wasn't put in the bill. But this bill has been open, and the rule tomorrow will make that clear. I now yield 2\1/2\ minutes to the gentleman from New Jersey (Mr. Pascrell) who's had a lot of input in this bill, which I guess makes it still a one-man bill.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield the gentleman 10 additional seconds. He is absolutely right, and once again, we underlined this authority and we intend to be very insistent that it be used.

Mr. FRANK of Massachusetts. If the gentleman would yield, he is absolutely correct. We think that it is a very important use of it. It's one of those things that was not done sufficiently previously, and we are convinced it will be done with this House's taking the lead in the future.

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 move that the Committee do now rise.

Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2 minutes to the gentlewoman from Wisconsin (Ms. Moore), a member of the committee.

Mr. FRANK of Massachusetts. Mr. Chairman, I will now yield 3 minutes to one of the leaders in this House on the important issue of foreclosure, the gentlewoman from California (Ms. Waters).

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks on H.R. 384 and insert extraneous material thereon.