Barney Frank

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Madam Chairman, I have a parliamentary inquiry.

Mr. FRANK of Massachusetts. The gentleman is a member of the committee defending the committee's product. I believe he has the right to close; is that correct?

Mr. FRANK of Massachusetts. Madam Chairman, I thank my friend and colleague for yielding. And I want to say, as I said to the gentleman from California (Mr. Campbell), people are saying why are you making this exception. We are making this exception because we think this ought to be the rule. And we are dealing with this now because we have time problems in this area and in the area of the gentlewoman from Ohio. But it is our intention to pass legislation before the end of the year, I think on a bipartisan basis, that will make this a rule for the whole country. So this is not singling out any one area except for the fact that we face time restraints, as the gentleman from California did and the gentleman from Ohio did. So I want to thank my friend for bringing this forward. And I want to make it clear this is the first step of what we believe will be a general policy of preserving affordable housing.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, if the gentleman would yield to me, I would say that I share the chairman of the Armed Services Committee's desire that the intent of Congress be clear. I also note the chairman has identified a technical error in the Senate amendment which should be corrected involving required reports of presidential decisions. I will work to accomplish a correction of this error, and I agree with the gentleman's statement of what the legislation intended and in the specific incidents that he cited.

Mr. FRANK of Massachusetts. If the gentleman would yield to me, I'm glad to say, yes, I will work with the gentleman to ensure that this technical and clarifying change is made, and I agree with him the best way to do that is through the conference on the National Defense Authorization Act. And while this technically falls in the jurisdiction of the Financial Services Committee, I am deviating from the script I was given to say that I think the besetting sin of this place is an excessive concern about turf. The people who put jurisdiction ahead of substance really should think better. So I am delighted to be able to provide an example of intercommittee cooperation with my very good friend whom I admire, the gentleman from Missouri, and I will look forward to his correcting this error in that conference with the blessing, I believe, of our committee.

Mr. FRANK of Massachusetts. Mr. Speaker, I thank the gentlewoman for her leadership on this bill. This legislation began last year when she was the ranking member of the Subcommittee on Domestic and International Monetary Policy, which you, Mr. Speaker, now chair, and in a bipartisan way we've brought forward this bill. A brief history here. The administration, I think, made an error in granting authority to the company, Dubai Ports World, to take over seaports. They should have anticipated the reaction. I think it was a mistake to let Dubai buy those ports and I'm glad that that was dropped, but I think there was an overreaction. Foreign direct investment is a very good thing for our country. It is a source of jobs. I remember when I first came here in the early 1980s one of our major goals on the Democratic side, with a lot of Republican support, was to get more foreign direct investment. We had a bill we called the domestic content bill. It was to require that a certain percentage of each car sold in America be made in America, and the purpose of that was frankly to help get Japanese, at that time, automakers to come here. People should understand foreign direct investment means we're talking direct investment as opposed to buying our bonds or buying financial instruments. It means putting money in here that creates jobs, and it ought to be something welcomed. In a few cases, there could be a problem, but the general rule should be that we welcome foreign direct investment. Now, after the Dubai Ports and the reaction to it, concern grew in the rest of the world that we were not fully supportive of foreign direct investment, and there was this view that we had scared it away. I mention that because there are some who have incorrectly reported this bill, the CFIUS bill as we call it, the bill giving statutory reform to the Committee on Foreign Investments in the U.S., as an effort further to restrict foreign direct investment. That is the exact opposite of the truth. We've worked very closely here, not just with the Secretary of the Treasury, Mr. Paulson, a great supporter of foreign direct investment, but also with the Financial Services Forum headed by the former Secretary of Commerce, Don Evans. He's been a real leader in this effort. This is an effort by the Congress to make clear that we welcome foreign direct investment as a rule, but we will have procedures in place to prevent those exceptional examples where it might be problematic, where it might cause a security problem. So I, again, want to stress this is the Congress of the United States reaffirming that foreign direct investment is a good thing for our economy, and it is our belief that the structure we have set up will help move things quickly. By the way, Mr. Speaker, people won't be required to go through the CFIUS process, but they will be given assurance if they do that they can go forward. Now, that's very important for people making investments. So this is a wholly supportive operation, and I thank the gentlewoman from New York and the gentlewoman from Ohio who have worked hard on this; the minority whip, the gentleman from Missouri, who is one of those who helped lead the fight for this. This is a genuine bipartisan bill. We passed it last year, and it's something that I know you will find it hard to believe, Mr. Speaker, after we passed the bill, somehow the United States Senate was unable to do that. I know that will cause some surprise to you, but there we are. This year, it's different. We passed the bill, and the Senate under the leadership of the Senator from Connecticut, Mr. Dodd, has passed a very similar bill, not identical, but they're close. I prefer in a few details what we have, but given the nature of the legislative process, we thought the best thing to do in consultation with the Secretary of the Treasury and with both parties was to accept the Senate version. So this is accepting the Senate version, but we're accepting the Senate version of our version because what the Senate did was to make some fairly small changes in the bill that we adopted last year. Now, with that, Mr. Speaker, I'm ready to yield. My understanding is that the chairman of the Armed Services Committee, who is concerned about this bill, wanted to raise a technical point. So I would ask the gentlewoman from New York if she would yield to the gentleman from Missouri for the purposes of his and I having a colloquy. Mrs. MALONEY from New York. Mr. Speaker, I yield to my distinguished colleague, Ike Skelton, as much time as he may consume.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Speaker, I ask unanimous consent to manage the time in lieu of the gentlewoman from New York (Mrs. Maloney).

Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself 2 minutes. The gentlewoman from Illinois decided to get into another bill, the FHA bill, and made a couple of statements about it, one of which is inaccurate and one of which is incomplete. The inaccurate one is to suggest that it has been held up because of the fact that we want to use some of the money that will be generated by the bill, by specifically removing the cap on home equity mortgages, for affordable housing. I understand her objection to our trying to spend some money for more affordable housing construction, but that is not what held up the bill. We ran into a dispute between those people who do the home equity mortgage servicing and the AARP over the fees to be charged. We adopted an amendment; it was a bipartisan amendment. Our colleague from Georgia, Mr. Marshall, and the gentlewoman from Florida (Mrs. Ginny Brown-Waite) offered an amendment, and that led to a dispute. I asked that the groups try to work this out, and they have done that, so we are now able to come to the floor with that bill. But we then ran out of time because of the appropriations process. But what held that bill up was that dispute over funding. Secondly, the gentlewoman said we passed this very good bill last year. We passed a bill last year, and I voted for it because, with the other party then in control, we couldn't make it better. But here is the major difference between that bill and the bill we will bring forward regarding subprime. Under the bill we passed last year and under the position of the gentlewoman from Illinois, people with weaker credit who make all of their payments will be charged more. I think it is inappropriate for the Federal Government to do that. The FHA, under the bill that was passed last year, would extend credit to borrowers with weaker credit, would guarantee their mortgages but charge them more. Under our bill, because we don't think that the Federal Government ought to charge people more if they are meeting their responsibilities, we cross-subsidize, and we say, if you have weaker credit, your initial payments will be higher. But if you make your payments for 5 years, you will get all of the money back, and I look forward to debating that difference. I don't think we should be penalizing people, and I don't think people making $40,000 a year who are diligent in making their payments ought to pay more than us. Mr. Speaker, on this resolution, I yield such time as he may consume to the gentleman from Maryland (Mr. Cummings) who was the main sponsor of this important resolution.

Mr. FRANK of Massachusetts. Mr. Speaker, will the gentlewoman yield?

Mr. FRANK of Massachusetts. In the fall. As the gentlewoman knows, this period is appropriations period, except for the voucher bill where we had gotten in line. But I would hope that we can work in committee on the subprime. I would note, by the way, that 2 years ago, the current ranking member of the full committee was the chairman of the Subcommittee on Financial Institutions, and he was pretty far along in conversations with my two colleagues from North Carolina, Mr. Watt and Mr. Miller. And frankly, I think if we had not been interfered with from above, we might have gotten a bill a couple of years ago, I think we can pick up where we left off. I am optimistic we can do a bill this fall.

Mr. FRANK of Massachusetts. Mr. Speaker, I yield back the balance of my time.

Mr. FRANK of Massachusetts. Mr. Speaker, on that I demand the yeas and nays.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Chairman, we've just heard one of the least persuasive arguments that we have ever heard in this body. We hear them repeatedly. People who are opposed to doing something use the argument that we shouldn't do it, even though they're objecting to it on its own basic grounds because it doesn't go far enough. If, of course, it went far enough, they would be even more upset, Mr. Chairman. The argument that if you cannot solve every problem for everybody, you should not try to improve the situation for large numbers of people is never what people really think. It is always advanced by people who don't want fully to defend the position they take. The objection is to accommodating the many millions of Americans for whom Spanish is the primary language. I have to say, I do not understand the impulse to make life harder for others when making it easier for them has no cost to us. I represent a large number of people who speak English. Nobody has ever said to me, you know what? My life is now more difficult because people who speak primarily Spanish can get a refund. What is the impulse that drives us to object to making life easier for many of our hardworking fellow citizens in some principle when it comes at no cost to us? And by the way, I have a large number of people for whom Portuguese is a primary language. I do not think they will tell me, when I go back to march in parades in that area, we're very upset because you supported allowing tens of millions of our Spanish-speaking friends this advantage and you didn't do everything for us. It is, of course, reasonable for a community to take into account large numbers. And so again, I am really troubled by this lashing out at our fellow citizens when it comes at no cost to the rest of us. You talk about benefit cost analysis. What is the cost, it's minimal, of letting people who work hard who have trouble with the English language? And as the gentleman from New York has pointed out, overwhelmingly the younger people learn English. No one who has had any association with an immigrant community has any doubt about the accuracy of what he said. The young people learn English, they become the translators and interpreters for their parents and their grandparents. There are people who came to America out of love for this country and they work hard, and they are much more comfortable, particularly reading sort of technical information, in the language they grew up with than the new language. Their children and those who come after will speak English. Why do we want to make their lives harder? Why this objection to trying to ease the transition for these people? I very much hope this amendment is defeated. I would hope we would say we are a better country than to begrudge people who have taken the difficult decision to immigrate to make their lives better, this very small accommodation. I thank the gentleman for yielding to me.

Mr. FRANK of Massachusetts. I was struck when the gentleman of Florida said, why should we do this at the expense of other people? That's the crux of the disagreement between us. It doesn't come at the expense of other people. The fact that the largest single linguistic minority gets an ability to do this in their own language, which will, by the way, also probably increase tax collection, so it probably is an offset and it probably makes money for the Federal Government. But the gentleman's phrasing ``at the expense of,'' that's what troubles me. It does not come at my expense if we reach out to hardworking people who have trouble with English.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. The Vice President has violated a number of rules, maxims, constitutional provisions; but he has clearly violated one that I would have thought him wise enough and old enough to understand. No matter how difficult the situation in which your own misactions have put you, and no matter what kind of a corner you have gotten yourself into, try to avoid saying something that no one will believe. When the Vice President offered his justification for his refusal to follow the fundamental principle of openness, he made a statement that no one would believe. Apparently, in this case, even he didn't believe him, which was a new reach for him. He is now trying to take it back. The gentleman from Ohio said to be careful what you wish for. Well, here is what I wish for, I would say to my friend from Ohio: a Vice President of the United States who will follow the law, who will not show contempt for the norms of a democracy.

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Mr. Chairman, might I inquire, who has the right to close?

Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself 3 minutes. Mr. Chairman, sic transit gloria Oxley. Mike Oxley, my Republican predecessor, is barely gone, when one of his great works is being trashed by his former colleagues. Indeed, as I look at this assault, the gentleman from New Jersey started out talking about small business, but small business clearly appeared to be the stalking horse here. He talked about the New York Stock Exchange. They don't deal with small business. He talked about Sarbanes-Oxley in very negative terms broadly. His complaint is not about small business, but about Sarbanes-Oxley in general. If you analyze what the gentleman said, it was an assault on Sarbanes-Oxley. Now, Sarbanes-Oxley was passed by a Republican House and a Democratic Senate. It was signed and claimed as a great triumph by our Republican President, George Bush. I am sad for President Bush. No Child Left Behind, Sarbanes-Oxley, immigration, Medicare part D, even the war in Iraq. Mr. Chairman, are there no Bush policies left that can escape the assault of the Republican Party? I am inclined to think that there are only two Bush policies left that command strong support on the Republican side: illegal wiretapping and torture. Everything else they appear to have abandoned. In fact, 10 days ago, the Secretary of the Treasury, Secretary Paulson, explicitly disagreed with the gentleman from New Jersey on the need for this amendment and said, no, we don't want to do this now. This is working. What is working is a couple of days ago the Chairman of the Securities and Exchange Commission, our former colleague Mr. Cox, said, we don't need legislation. We are in the process of changing this. All five of the Commissioners appeared, and none of them asked us for legislation. Mr. Cox specifically said it is not needed. This is a vote of no confidence in Chris Cox and the SEC. They have said, yes, we should change this. We have more time. It is in a deferment period, and the SEC is in the process, along with the Public Company Accounting Oversight Board, of winding this down, of making it easier. Mr. Cox was asked just yesterday, well, what is this going to cost small business? He said, we don't know yet, because we are changing it already for the big businesses that have to pay. But we are going to look at that, and we will make adjustments. So Chris Cox, on behalf of a unanimous SEC, three Republicans, two Democrats, along with the Republican Secretary of the Treasury Mr. Paulson, says we are fixing this. Please do not at this point legislate. Of course, what we see is, if you listen to the gentleman from New Jersey, this is the beginning of an assault on Sarbanes-Oxley in general, because much of his speech was not about small business, it was about Sarbanes-Oxley in general, which he does not like and thinks is a terrible burden and is driving people overseas. It is not driving small business overseas. Nobody argues that. It is not driving small businesses off the New York Stock Exchange; they were never on it. So this is step one in the assault on Sarbanes-Oxley. It is an unnecessary assault because the SEC, under Chairman Cox, with a Republican majority and Secretary Paulson are already trying to fix this problem.

Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?

Mr. FRANK of Massachusetts. Mr. Chairman, I claim the time in opposition.

Mr. FRANK of Massachusetts. I voted against No Child Left Behind. I understand that. You have got nothing with Bush, and I understand that. I just felt sorry for the poor man being abandoned so much.

Mr. FRANK of Massachusetts. Let me make the substantive argument here. Law enforcement in America is not totalitarian. It is not authoritarian. It requires a buy-in by those regulators. And that's why this amendment would do so much damage. There is, of course, a disconnect between the amendment which hides behind small business and the broader attack on Sarbanes-Oxley that we have heard from the two speakers. But here's where the connection comes in. The SEC, with the full backing of Secretary Paulson, all these Republican nominees, Secretary Paulson from Goldman Sachs, Chris Cox and the others, they understand that Sarbanes-Oxley was overwritten in the regulatory phase. They are writing it down, but they don't want people to just think this is chaos. They have asked us explicitly, the Secretary of the Treasury and the SEC, the Republican appointees, to let them work this out. They agree that it needs to be reduced. But if you start now with Congress piecemeal amending it, the degree of consensus they are trying to reach in the business community will erode. If people think, oh, we got one amendment through, we got this piece out, then there will be others who want another piece, people who have always resented it. And Mr. Cox has been very careful to try to get, for instance, unanimity in the commission because he wants people not to think this is a chance he's saying, it's going one way, it's going the other. And to begin now to whittle away at his authority, when he is in the process of doing exactly what critics of Sarbanes- Oxley as it now stands say they want to do, undermines his ability to reform this in an orderly way.

Mr. FRANK of Massachusetts. The gentleman is simply wrong. He made it very clear. I am quoting him almost verbatim when I say they said: We will find out from scaling back in general how much it will save, and then we will be able to tell you how much the savings will be. No, I am not yielding any more because this is just not a debatable issue. The five commissioners didn't say simply ``we don't know.'' They said, ``We don't know as of now, but we will know better once we have had this experience.'' I want to go back and respond, the gentleman from Florida said the SEC is fiddling while capital markets burn. I don't think Chris Cox is fiddling.

Mr. FRANK of Massachusetts. I yield to the gentleman from New Jersey.

Mr. FRANK of Massachusetts. The fact is that I will not allow my time to be diverted by internecine Republican warfare. You don't like George Bush's bill that he signed. You don't think that Oxley did a very good job. You are upset at your own leadership procedurally. You think Chris Cox doesn't know what he is doing. You disagree with Paulson. Mr. Chairman, they can fight it out. I would like to discuss substance. I'm not here to get even for past grievances that Republicans have with other Republicans. Again, the gentleman from Florida's assault has nothing to do with this amendment, but it is relevant in this sense: It shows that what we have here is the beginning of an attack on Sarbanes-Oxley. The IPOs, small business don't do IPOs. Small business hasn't left America to go to England. That is the clear indication of what is up. Now to get back to the substance, Chairman Cox and the other members of the commission said we agree it went too far in the regulation. We are scaling it back. We are scaling it back first for the big businesses who will be affected by it, and we will learn from that scaling back how much it will help smaller businesses. Again, the gentleman from New Jersey quite unfairly mischaracterized what the commissioners said. The commissioners didn't say ``we don't know,'' period. They said we don't know now because we expect to get experience from the reductions in the scaling back we have already ordered, and that will tell us how that will help small business.

Mr. FRANK of Massachusetts. Regular order, Mr. Chairman.