Barney Frank

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. I thank the gentleman for his words, and I now recognize the gentlewoman from California (Ms. Woolsey) for 2\1/ 2\ minutes.

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

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, one of the most important organizations in the district I represent in terms of providing needed service to people who deserve our help is the Southeastern Massachusetts Veterans Housing Program, Inc. This group of dedicated and compassionate individuals maintains the Veterans Transition House and the Women's Veteran Transition House. One of the things they do annually as part of their overall program is to present a Southeastern Massachusetts Veteran of the Year Award. On November 6 of this year, that award will be presented to an extremely deserving individual-- Nelson Ostiguy. Mr. Ostiguy is now the Senior Executive Aide to the very able Mayor of New Bedford, Scott Lang. The leaders of the veterans program correctly describe Mr. Ostiguy as a ``behind the scenes type of person who is always there helping out but never seeking the recognition or limelight.'' I am glad that his friends, admirers and the beneficiaries of his many good works have decided to give him a little limelight whether he likes it or not. And I am especially pleased to be able to add this tribute to him so that all of my colleagues can read about him because he is a very fitting model for others to emulate. Nelson Ostiguy joined the Marines when he was 18, and served for 4 years, including combat service in Vietnam. He was the recipient of a number of medals in recognition of his courage. After a job in the private sector, he joined the Massachusetts State Police in May 1969, and served there for 27 years, and, as in his Marine service, he received frequent decorations for his bravery and good works. Since his retirement as Lt. Colonel/Assistant Superintendent of the Massachusetts State Police, he was the Associate Director of the Harvard University Police Department, put his dedication to young people to work as a substitute teacher in the school systems of New Bedford, and, again, is now an important aide to Mayor Lang. The list of Mr. Ostiguy's affiliations is impressive, but even his resume does not convey the benefit those who know him derive from being his friends and associates. Nelson Ostiguy is an outstanding citizen who very well deserves the title of Veteran of the Year that has been bestowed upon him by his fellow veterans--which I know makes the honor particularly meaningful to him. Madam Speaker, I ask my colleagues to join in celebrating the life and work of Nelson Ostiguy on this occasion of his being honored.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. I thank the gentlewoman who has been the spark plug here. I think it is an important day, that we are dealing in a rational way with credit card legislation. I appreciate the reasonable tone of my friend from Delaware. We disagree some. I don't think anyone could reasonably characterize this as some assault on the free enterprise system. It understands the importance of credit cards and tries to work within that framework. It is important to note that what this bill does is essentially protect consumers against retroactive unfairness. When it comes to rate setting, this bill, to the disappointment of some, doesn't limit future rates. As far as the future is concerned, if proper notice is given, this bill is not restrictive. It does deal essentially with retroactivity and with honoring the consumers' wishes. The thing I want to address is one thing which seems to be a little upside down, and that is we should defer to the Federal Reserve. I want to say to some of my Republican friends, that sounds a little odd to me after hearing for years that the people must be allowed to decide, that we shouldn't defer to unelected bureaucrats. The notion that we, the elected Representatives, should defer to the Federal Reserve not on monetary policy but on a public policy matter involving what institutes fairness with credit cards, it is not an argument that I have often heard on that side. Now I understand there is nothing in the Constitution or the rules of the House that requires consistency, but I would hope we would at least note there is an element of convenience in the invocation of this argument at this point, let's defer to the Federal Reserve. No, let's exercise the powers given to us under the Constitution. And there has been a lot of talk about the Federal Reserve doing too much. Well, I think sometimes they have to act because we don't. But here we are willing to do it. But again, I want to stress the reasonableness of these proposals. They deal with retroactivity and unfair billing practices. If a credit card company follows the rules set here, they are not prohibited or restricted going forward with setting whatever conditions they think ought to be set. That, I think, is the essence of fairness, and I hope the bill is passed. I again congratulate the gentlewoman from New York for taking the lead.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, I have had the honor for many years of sharing with the Members information about awards being presented to individuals who have performed extraordinary service to others in the field of medical services. These awards are presented by ``ROFEH International--New England Chassidic Center,'' under the leadership of Grand Rabbi Levi Y. Horowitz, which provides help across the world in giving access to the first-class medical treatment that we in the Greater Boston area are fortunate to enjoy. Rabbi Horowitz himself has been a distinguished leader in the field of medical ethics, and his dedication to seeing that access to the medical services he has helped support and defend is a great asset to us all. On November 23, 2008, at the Grand Ballroom of the Boston Park Plaza Hotel, the Annual Dinner of ROFEH International-- New England Chassidic Center will honor, as it always does, two individuals who have distinguished themselves by their dedication to others, and the great skill they bring to those tasks. The ROFEH International Award goes to Dr. John B. Mulliken, and the Man of the Year Award is being presented to Mr. Herbert M. Gann. Madam Speaker, the work in the medical area organized and inspired by Grand Rabbi Horowitz is a superb example of how Americans can best work together to enhance the quality of all of our lives. To Dr. Mulliken, to Mr. Gann, and to Rabbi Horowitz and his fellow and sister workers in this endeavor, I extend my congratulations, but even more important, my thanks for what they do for all of us. Madam Speaker, I ask that these remarks be printed here along with the relevant biographical information about Dr. Mulliken and Mr. Gann. Mr. Herbert M. Gann, ROFEH International New England Chassidic Center Man of the Year Award Mr. Herbert Gann lived in Chelsea, Massachusetts until 1946 when he and his parents, Joseph and Rae Gann, and his two sisters, Beverly and Shirley, moved to Newton, Massachusetts. He graduated Newton High School in 1951 and Boston University with a BS and BA in 1955. Mr. Gann served in the United States Army in Germany from 1956-1958. Herb started working part time in Joseph Gann Inc., while in high school; continued in college and started working full time after graduating in 1955. He worked together with his father, Joseph Gann, until his father retired in December 2000. Mr. Herbert Gann has been the owner of Joseph Gann Jewelers, in Boston since 1987. He learned charity from both his parents and is a very philanthropic person in his own right. His interest in Jewish Education started when his oldest daughter, Elisa, enrolled in Solomon Schechter Day School, in 1970. He continues to support that school along with Rashi Jewish Community Day School, Metro West Day School, and Gann Academy. He also supports the work of Combined Jewish Philanthropies. Herb and Rita Gann are members of Temple Emanuel, Congregation Beth El Atereth Israel and Congregation Agdus Achim-Anshe Sfard. Mr. Gann started going to the Rebbe's Dinners at the time they honored Reverend Louis Lourie, over 28 years ago. His interest in the Rebbe's work evolved and Mr. Gann has been on the dinner committee for many years. Herb Gann married Rita (Kaplan) Gann in 1964. Rita was hired in 1962 as the bookkeeper at Joseph Gann Jewelers and continues to work alongside her husband. They have four children and five grandchildren.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, a great deal has been written and spoken, understandably, about various efforts by the Bush administration--with and without Congressional authorization--to rescue major financial institutions. Unfortunately, a great deal of that analysis has been distorted, inaccurate, and ill-informed. In the Washington Post, Wednesday, September 10th, Steven Pearlstein once again provides a thoughtful, balanced analysis of the public policy issues involved here. I urge all Members, Madame Speaker, to read Mr. Pearlstein's analysis and keep it in mind as we deliberate going forward on these issues. As he very sensibly puts it, ``In the end, the right way to think about these rescues is not to simply ask how much they are likely to cost, but how the rescue compares to the cost of doing nothing.'' Mr. Pearlstein's insightful approach to the current economic crisis is one of the most important assets we now have, and it is one that is not being impaired by current trends. [From the Washington Post, Sept. 10, 2008] Don't Like Bailouts? Consider the Alternatives (Steven Pearlstein) First came the rescue of Bear Stearns and the Fed loans to cash-strapped investment banks. Then the government stepped in to fill the financing gap left when private lenders retreated from the college loan business. Last weekend brought the takeover of Fannie Mae and Freddie Mac. And now the Not-So-Big Three are headed our way looking for $50 billion in retooling loans. When is this going to end? The honest answer: With stock markets swinging 300 points a day and the economy diving into recession, not anytime soon. Indeed, the chances are pretty good that by year's end, Washington will have to bail out another big bank or investment house along with a bond insurer or two. And taxpayers will be called on to replenish the coffers of the federal agencies that insure private bank deposits and private pensions. Already, there's been plenty of grumbling from editorial writers and market-oriented conservatives that the country is on a slippery slope toward socialism. They also fear that these rescues will encourage reckless risk-taking in the future, creating the expectation that if bets go bad, Uncle Sam will always be there with a bailout. From the left, meanwhile, come populist complaints that government has committed enormous amounts of taxpayer money to bail out corporate fat cats and rich investors while ignoring the plight of millions of Americans facing personal bankruptcy and foreclosure. While there is validity to these concerns, they are also based on a number of false assumptions, chief among them that vast sums are expended on these rescues. History shows that rather than costing taxpayers, the rescues have often wound up making money. That was the case with the Home Owners Loan Corp., a New Deal agency that bought mortgages from banks and wound up with a small profit by the time all the loans were paid up in the early 1950s. The same was true of the controversial loan guarantees made to Lockheed and Chrysler in the 1970s. More recently, following the Sept. 11 terrorist attacks, the government set up an Air Transportation Stabilization Board that offered loans and loan guarantees to a handful of cash-strapped airlines. The agency now expects to close out its books in the black. In the case of the $29 billion that the Federal Reserve loaned J.P. Morgan Chase to take over Bear Stearns, the final cost won't be known until the Fed sells the asset-backed securities it took as collateral for the loan. So far, so good: As of June 30, those assets had an estimated market value of $29 billion. It's anyone's guess what the Fannie and Freddie rescue will cost, but at this point it looks to have been structured on terms quite favorable to the government. Although the government is yet to put a dime into the companies, it has received $1 billion worth of preferred stock and warrants for 80 percent of both companies' common stock simply for agreeing to provide backstop financing. Over the next few years, however, the Treasury will almost surely have to invest tens of billions of dollars to keep Fannie and Freddie adequately capitalized, and how much of that money will ultimately be recovered depends on how things turn out with the millions of mortgages the companies hold or have guaranteed. But if it is willing to wait until housing markets finally recover, there's a good chance the government will recoup most of its investment, along with a 10 percent annual dividend and a hefty guarantee fee. In the end, the right way to think about these rescues is not to simply ask how much they are likely to cost, but how the rescue compares to the cost of doing nothing. It's not hard to imagine, for example, that if nothing had been done, Fannie and Freddie would have been forced by nervous bondholders to hunker down and throttle back its housing-finance activities, further destabilizing financial markets and accelerating the housing market's downward spiral. Those, in turn, could have easily turned a short recession into one that was longer and deeper--one that cost Americans an extra $200 billion in lost income, several hundred thousand additional lost jobs and a net loss to the Treasury of $80 billion. Suddenly, a Fannie/Freddie rescue begins to look like a bargain. Aside from the money, of course, there is also the problem of moral hazard--the concept that unless markets are allowed to inflict the full measure of punishment on investors and executives for their bad judgments and undue risk-taking, it will only invite bad judgment and undue risk in the future. But using moral hazard to argue against the carefully structured rescues of Bear Stearns or Fannie and Freddie is a bit likely arguing that any sentence short of capital punishment is insufficient to deter bank robbery. Remember that even with the rescues, top executives at Bear Stearns, Fannie Mae and Freddie Mac lost their jobs, their reputations and most of their net worth, while long-term investors lost all but a tiny fraction of their money. It's hard to imagine that anyone will look back on those experiences and see anything but a cautionary tale.

Mr. FRANK

Mr. FRANK. I have a minor correction to the leader. There will be no more votes on the floor, but there will be five more votes in the Committee of Financial Services so we can get it done. So please come back.

Mr. FRANK. Would the gentleman yield?

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. I thank my friend from Michigan who then and now has been a leader in the effort to protect the civil liberties which are so important to us. I had the distinct honor of standing on this floor and presenting that bill as chairman of the subcommittee, and I remember today the emotion I felt then and feel now when I read the words ``on behalf of the Nation, Congress apologizes.'' The ability to admit a mistake is a sign of greatness, and I felt privileged then that we did it. People have talked about the lessons, and they are important. And we should draw on some of them. One is that abandoning your principles in the face of a threat is a temptation which ought to be resisted. It's easier for us today than it was in 1948 to be very critical of those who locked up our former colleagues Bob Matsui and Norm Mineta and many, many other totally innocent Americans, Americans of Japanese descent, but we're talking about Americans, people born in this country, American citizens. But at the time, the notion that the security of the Nation trumped everything else looked like a pretty good argument. J. Edgar Hoover was right, but he wasn't running for office; Earl Warren was. Franklin Roosevelt was. Very few elected officials stood up against that. And that's one of the lessons we ought to draw. It is much too easy to give in to the temptation to say, ``Well, we're in trouble. Protections of individual rights, civil liberties, they're for the good times.'' And obviously, there are some analogies to today. Now, things are much better today. We haven't done today anything like that. But there are lessons still that we have to look at. Another is that if you are going to try to protect yourself, as you have a right to do, don't do it en masse, don't say there is this whole group of people, and we're not going to stop and decide whether this or that individual did something wrong; we're going to look at some essential characteristic of their being, and on that basis we're going to penalize them. We're going to restrict them. We're going to segregate them. Now, obviously, being locked up in a camp for years is a far, far greater wrong than not being able to fly on an airplane. But the fact that it was much worse to lock people up doesn't justify us restricting people's travel rights because of the ethnic group they belong to or because of a mass fear. So yes, we should be proud of having realized this mistake. Talk about history. I was in college in the 1950s when I read the case, I think it was Korematsu, in which the U.S. Supreme Court said it was perfectly constitutional to do what was done. And I was appalled. I was a college junior, and I said, ``Boy, this is my country. I didn't know we did things like this.'' And I came here eager to participate in its undoing, and I felt I was very lucky to be chairman of the subcommittee, along with my colleague from California who was then on the Judiciary Committee, Mr. Lungren, to be able to bring that bill forward. But I also understand that I had the benefit of hindsight. I had the easy decision to make. As we legitimately congratulate ourselves today for having recognized 20 years ago a mistake that we made 65 years ago, let's leave a little energy for resolving that we don't do it again. Let's, as we talk about the folly of 1943, be very determined not to repeat it even in a smaller measure and with fewer people. I believe that we have had government policies in the past couple of years since the terrible mass murders of 2001 that have also failed to live up to our ideals of protecting individuals. Not on the same scale, I acknowledge that, and I think it's a mark of progress. But let's do what we can from this day forward so that no one 20 years later or 40 years later has to apologize to any extent because we let our legitimate need for self-defense diminish us from our principles.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Speaker, one of the gravest errors that political leaders can make is to let politics get in the way of fundamental health needs. The clearest example of this that I know of in today's world is the insistence by the People's Republic of China on blocking membership for Taiwan in the World Health Organization. During the bird flu epidemic, the exclusion of Taiwan from the WHO was an interference with our ability as a global community to provide maximum protection for people against this terrible disease. There is of course a strong moral reason against excluding the millions of people from Taiwan from the benefits that they would receive from WHO participation. But for those for whom morality and respect for other human beings is not enough reason to overcome an effort to gain political advantage, self-interest should dictate to the PRC support for Taiwanese accession to the World Health Organization. This is especially the case now that travel between Taiwan and other places, including those under PRC rule has greatly increased. Ideology and sovereignty are no defense against germs and viruses. The World Health Organization does very important things in defense of humanity against illness, but its ability to perform that role is hampered by the exclusion of Taiwan from the World Health Organization and in all of our interests, I believe that our Government should be taking every possible step to ensure that the World Health Organization extends to Taiwan full membership.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. You have heard about the merits; let me talk about the personal politics. I just ran over here from a hearing that I called at the request of the Republicans on the Financial Services Committee because I was trying to accommodate them. To have this brought up attacking our district as an ambush with no notice, with no discussion when we are trying to do business, when I spent all week trying to work with this administration, and I know all the people on that side didn't like it. I am about to go to conference on the flood insurance bill, and a number of Members on both sides of the aisle have come to me and said we have this issue and that issue. I have promised to give every consideration. To have this kind of a political attack on an important issue to our district with no notice in the midst of our trying to conduct other business is not worthy of the traditions of this House. And I would be glad to discuss this at other times. But I would just advise that if this is the precedent that we are setting, that we no longer decide that a Member knows best what is in his or her district, I will be glad to learn that today.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. I yield 1 minute to a member of the Ways and Means Committee, the gentlewoman from Nevada (Ms. Berkley).

Mr. FRANK of Massachusetts. I yield 1 minute to another member of the committee, the gentleman from Indiana (Mr. Carson).

Mr. FRANK of Massachusetts. I accept that we should. The imbalance is not intentionally done, just we're better at time management. I now yield 3 minutes to one of the leading members of our committee in the preparation of this bill, the gentleman from North Carolina (Mr. Watt).

Mr. FRANK of Massachusetts. I now yield 1\1/2\ minutes to the Chair of the Small Business Committee and a member of our committee, the gentlewoman from New York (Ms. Velazquez).

Mr. FRANK of Massachusetts. I yield 1 minute to a very active member of the committee, the gentleman from Florida, Mr. Klein.

Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1 minute to my colleague from Massachusetts (Mr. Lynch), a valued member of our committee.

Mr. FRANK of Massachusetts. I now yield to an alumnus of our committee, the gentleman from New Jersey (Mr. Sires), 1 minute.

Mr. FRANK of Massachusetts. Mr. Speaker, I yield for the purpose of making a unanimous consent request to the gentleman from Connecticut (Mr. Shays). (Mr. SHAYS asked and was given permission to revise and extend his remarks.)

Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1 minute to the majority leader.

Mr. FRANK of Massachusetts. Would the gentleman yield to me at this time?

Mr. FRANK of Massachusetts. Mr. Speaker, I am glad now to yield to my neighbor, the gentleman from Rhode Island (Mr. Langevin), 1 minute. (Mr. LANGEVIN asked and was given permission to revise and extend his remarks.)

Mr. FRANK of Massachusetts. Mr. Speaker, yet another very active and important member of our committee, the gentleman from New York (Mr. Meeks). I yield him 1 minute.

Mr. FRANK of Massachusetts. The gentleman from Georgia has been a diligent advocate for a sensible public policy, and I admire both his diligence and his grasp of the issue. He is correct. Nothing in this title changes existing Federal law with respect to the authority of the Office of Thrift Supervision and the Office of the Comptroller of the Currency's preemptive authority, and their right to regulate and oversee a depository institution's products and services marketing and distribution system, and they do obviously have definitional authority under this legislation.

Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1 minute to a very diligent member of the committee, the gentleman from New Hampshire (Mr. Hodes).