Virginia Foxx

Ms. FOXX

Ms. FOXX. Madam Speaker, I submit the following for the Record: Branch Banking & Trust Co., Winston-Salem, NC, September 26, 2008. Hon. Virginia Foxx, House of Representatives, Cannon House Office Building, Washington DC. Dear Representative Foxx: Unfortunately, while under normal circumstances there would be a free market solution, given the publicity and psychological mindset which has been created. Congress not acting is extraordinarily risky. Therefore, an alternative to the Paulson Plan must be developed. A much more effective, far less expensive solution to the financial crisis than the Treasury Secretary presented is outlined below. It is important to recognize that the fundamental problem is in the real estate market. We have built too many houses, built too expensive houses, built houses in the wrong places, etc. We have an excess of housing inventory. Problems in the mortgage market which are causing the problems in capitals markets are being created by the problems in the real estate market. House prices in many areas have been out of line with peoples income and rental alternatives. In the long term, the price of houses is determined by production costs, people's incomes (affordability) and the relative cost of rental alternatives. Based on these factors, the price of houses in the United States on average need to fall approximately 30% from the peak of the market to sell the unsold inventory. (The numbers used here are rough approximations and vary significantly by individual market, but they make the point.) We have effectively wasted $600 billion on housing which should have been put to more productive uses such as technological investment, education, agricultural advancement, etc. Without Freddie Mac and Fannie Mae and the affordable housing program (sub prime), we could never have made a misallocation of capital of this magnitude. However, the mistakes have been made and we have to live with them. Housing prices nationally have already fallen approximately 20%. The good/bad news is approximately $500 billion of the projected $600 billion in losses have already been taken by financial institutions, and substantial capital raised to cover some of the losses. House prices need to fall another 10% or approximately $100 billion to clear the market. Ironically, if the market knew that housing prices were going to fall exactly 10%, the market would stabilize. Uncertainty about the bottom of the market is what is creating the disruption in the capital markets. The goal is to cut the effective economic cost to the buyer without cutting the price to the seller which will solve the problem in the housing market. Congress can approve a house purchase income tax credit equal to 10% of the cost of the house with some maximum (such as $40,000). This will cut the effective economic cost to the buyer without cutting the price to the seller. The tax credit would be available to anybody and would be a true tax credit in the sense that you would still get the interest deduction. The government would be sponsoring a ``fire sale'' of houses. The tax credit would only apply to existing house inventory, i.e. new houses which were completed or under construction as of September 1, 2008 and existing houses which could be proven to be on the market as of September 1, 2008. The tax credit would be available for a limited time, for example until June 30, 2009. In order to motivate rapid sales activity. Congress would approve a fixed amount of tax credit and make it available on a first come, first serve basis. For example, the amount of the tax credit could be $100 billion to the first purchasers of houses. This would force individuals to act quickly. The goal is to entice people to make real estate investments who otherwise would not and clear the housing inventory. Let me give you some concrete examples. There is a house on the road which I travel to work that has been on the market for $200,000. I am not interested in purchasing at that price. However, a 10% tax credit of $20,000 makes the effective cost of the house to me $180,000. At that cost, I would be willing to purchase the house. In addition, the tax credit makes it an even better deal since I personally hate to pay taxes. Tom, who owns the home, wants to sell his house so he can buy a new home that is a few blocks away. If he can sell his house for $200,000. he would have enough equity to buy his new house. (He sells for $200,000 and yet the house cost me $180,000.) I already have a house and do not need to have a second house to live in, so this house would be an investment for me because I think house prices will ultimately appreciate, particularly off of the 10% reduced cost base. I would be motivated to rent the house because having an empty house is not productive. I would rent it based on the $180,000 price or less because any rental income would be better than none. I may rent it to Fred and his family who are moving out of a falling-down mobile home which would improve the quality of their life. Tom would have a better house for himself and his family. Fred would have a better house for himself and his family, and I would have a good investment. The realtor who sold both houses would have more income to pay for her house and the builder would be out from under a financial bind. The bank that financed the new house would have less risk and more capital. Having an empty house is not only a waste of capital, it reduces the standard of living, Here is another concrete example. Janet and Jim who live in the northeast have long coveted a vacation/retirement house in Florida. With this once in a life time buying opportunity covered by the housing tax credit, and given that house prices in Florida have already fallen significantly, Janet and Jim would be motivated to buy that dream vacation/ retirement home in Florida and they can afford to do it at this reduced price. Because they are not ready to retire, they may put the house they have purchased up for rent for vacationers and/or for individuals living in Florida at a lower rental rate based on the cost and the fact that any rental income is better than no income. Again, this would be a good situation in that Janet and Jim would be happy, the builder would be better off financially, the bank that financed the house would be better off financially, the realtor in Florida who sold the house would be able to make her house payments and the renters or vacationers would have a better quality of life. This program can all be accomplished for $100 to $150 billion and solves the real estate problem and with it the capital markets problem. While expensive, this program is dramatically less expensive than Paulson's $700 billion dollar program. Our program would be a huge economic stimulus far more effective than sending people $100 checks so that they can eat out an extra meal. Rich people would benefit from the tax credit (this is not an egalitarian measure), but the country as a whole would tremendously benefit. All homeowners would benefit because this would stabilize housing values nationally. The interesting fact is that there are less than a million extra houses for 300 million people in American. The incentive does not have to impact the decision making of many families to have a significant impact on the U.S. economy. To understand the problem in a broader context, it is appropriate to reflect on it from a very basic perspective. My early career in the bank was devoted to financing farmers. An interesting thing happens in agricultural markets, farmers have to guess what to produce based on what they expect the price to be in the fall. Hedging helps but production can not be totally hedged. In the spring, many farmers think that soybean prices will be high in the fall so they grow a lot of soybeans. The weather is very good and soybeans production is good and soybean prices fall because there are so many soybeans. This is an economic miscalculation, and it is an unavoidable calculation because as human beings we are not omniscient. The fact that farmers would have been better off growing more sun flower seeds and fewer soybeans is not known before the process starts. The soybean market corrects almost immediately. The reason this happens is that soybean farmers have an interesting dilemma; they have soybeans which they have to do something with because they can not eat them all themselves. They can sell the soybeans or store them. If they choose to store them they have the cost of storage, the risk of physical damage and the risk that the price will be even lower in the spring. That is a risk some farmers assume and others don't, but the market quickly clears all the soybeans that are for sale, and the people that store them are making a rational economic decision based on the facts. They are at risk if the decision is wrong so they are more likely to sell. In theory the housing market should work in the same way, i.e., housing prices should have quickly fallen 30% and we should be through the market correction, particularly given that the housing market has been in a correction for over 2 years. Unfortunately. we have factors that prevent the natural free market correction process from working effectively in the housing market. One factor is human psychology in that people tend to make less rational decisions in regards to their home because of the emotional attachment (which farmers do not have for soybeans). There is probably not much we can do about this fact. The other factor is structural and it reflects on who is taking the risk. Let me give you an example. You make a loan to James who is someone you know, but not a close friend. James is buying a $200,000 house and he is willing to put $10,000 down and you loan him $190,000. You think you are safe with your investment because you think house prices always go up. Then some unfortunate events occur. James develops a drinking problem, loses his job and can not pay his mortgage home payment. Simultaneously, to your and James' surprise, the price of houses have fallen and the home that James owns that you have financed is now only worth $180,000. James has lost his total investment and has nothing else to loose at this point. You have lost $10,000 but you are highly motivated to get the house sold or rented. Since James can not lose any more, he immediately appeals to the legal system and declares bankruptcy and puts the house in foreclosure. In many states like Florida, James can delay the liquidation of his house for 12 months, and effectively live in the house free, while continuing to drink and not go back to work. The combination of the judicial system and ``do-gooders'' keep the housing market from correcting thereby causing additional losses. However. this means that Alfred, who is hardworking and honest, and would like to rent or buy the house from you, continues to live with his family in a mobile home at risk of a hurricane, while James, the alcoholic, gets to live in a nice house. In other words, the legal system acts as an impediment to normal market correction process which happens every few minutes in agricultural commodity markets. The commodity prices are constantly adjusting reflecting expectations for the values of different products and services based on imperfect human knowledge. By the way, the reason Bernanke and Paulson can not see the solution is they are making a fundamental epistelogical (thinking) error. Bernanke is thinking from economic theory and Paulson is thinking from a capital market theoretical perspective. To solve the problem, we have to deal with the real physical world, i.e., the fact that there is a physical inventory of houses that needs to be cleared and we must grasp what motivates real individuals (not theoretical collectives) to act. A carefully designed housing tax credit and ending Fair Value accounting (as currently implemented) will fix the real estate markets, capital markets and the economy. This program will likely actually increase tax revenue by stimulating the economy by increasing taxable income. There is likely to be a net gain to the government. I hope you will give this issue serious consideration. Sincerely, John Allison.

Ms. FOXX

Ms. FOXX. Mr. Speaker, I move that the House do now adjourn.

Ms. FOXX

Ms. FOXX. Mr. Speaker, you know, people often come up and say we are at an historic moment. Every moment is a part of history because at some time what we are doing is going to be recorded but we really are at another defining moment in American history here this week and this weekend. And the American people need to know that House Republicans are fighting for the right values and for what 99 percent of Americans have been telling us for the past week. I am also happy to report that most House Republicans agreed with their constituents even before they began hearing from their constituents, and that's a good thing for the American people to know because that means our resolve is even stronger than it would have been if some of our Members had been of a different mind but changed their mind once they started hearing from their constituents. House Republicans are fighting to ensure that the rescue bill, the economic rescue bill doesn't give a blank check to Wall Street at the expense of taxpayers on Main Street. People have been calling me all day today. I had a call just before I came on the floor asking me are we all right. I am here to reassure the American people that from our side of the aisle we are all right. We are doing fine, and we are standing strong. And I think it is very important that we say that. But I think also we need to say what some of the specific things we are fighting for and we are fighting against. We are fighting to make sure that we don't slide into socialism in this country. And we are fighting against the special interests, the pork barrel and the very groups that helped get us into the situation that we are in now. I want to say that we are working hard to get out of any bill that is presented here that has pork barrel provisions added by the Democrats, that would reward the people who support them and give them all their money. Let me talk about three of those groups. Number one, the trial lawyers. Believe it or not, the Democrats have figured out a way to put into this economic recovery bill a great gift to the trial lawyers, and that is something that is called around here a cram down provision. It would allow people who don't think their mortgage rate is fair to go to a bankruptcy judge and ask that bankruptcy judge to change the conditions of their mortgage. That is an abomination. But what it would do is give a lot of work to trial lawyers. We have said there is a marker here, we will not vote for any economic recovery plan that is going to do that because it would undermine the effectiveness of any economic recovery effort by making it even harder to value these securities. There is another gift in the draft presented by the Democrats to big labor. This gives Washington's powerful big labor bosses a big handout by having them have ``say on pay'' or proxy access provisions that the Democrats have added to this. And then a group that people have asked me about ACORN. There is a big gift in here to that group. It includes a giveaway that would force taxpayers to bankroll a slush fund to a discredited ally of the Democratic Party. ACORN's fraudulent voter registration activities on behalf of Democratic candidates are well known. This bill that the Democrats have presented would return any profits made in the long term from the economic rescue package partly back to ACORN. In fact, the first part of it would go to ACORN for their often- illegal help in helping Democrats get elected. I have, Mr. Speaker, a long list of their most recent scandals and unlawful activities. Seven ACORN workers were charged with committing the biggest voter registration fraud in Washington State history. That was from the Seattle Times. Another article from the Wall Street Journal, ``Late last year, a handful of ACORN canvassers in Washington State admitted that they had falsified voter registrations by illegally filling out hundreds of forms with names such as Dennis Hastert, Leon Spinks and Fruito Boy Crispila.'' I don't have time in the short time I have available to read all of these excerpts from articles, but I would like to put them all in the Record. Mr. Speaker, I want the American people to know, Republicans are fighting for you. ``ACORN is a long-time advocacy group with whom Obama was once associated. Recently, though, ACORN workers in two states have pleaded guilty to election fraud, an unlikely recipient of federal largess.'' Fox News Report, 9/26/08. ``Seven ACORN workers were charged with `committing the biggest voter-registration fraud in [Washington] state history.' '' The Seattle Times, 7/26/07. ACORN workers submitted ``just over 1,800 new voter registration forms, but there was a problem. The names were made up--all but six of the 1,800 submissions were fakes... The ACORN workers told state investigators that they went to the Seattle public library, sat at a table and filled out the voter registration forms. They made up names, addresses, and Social Security numbers and in some cases plucked names from the phone book. One worker said it was a lot of hard work making up all those names and another said he would sit at home, smoke marijuana and fill out the forms.'' Fox News Channel, 5/02/08. ``Late last year, a handful of ACORN canvassers in Washington state admitted that they had falsified voter registrations by illegally filling out hundreds of forms with names such as Dennis Hastert, Leon Spinks and Fruito Boy Crispila.'' Wall Street Journal, 7/31/08. ``Eight workers for a get-out-the-vote effort in St. Louis city and county have pleaded guilty to federal election fraud for submitting false registration cards for the 2006 election, authorities said today. The workers were employed by the Association of Community Organizations for Reform Now (ACORN), gathering voter registrations.'' Associated Press, 4/02/08. ``Acorn has had a number of missteps. This month its founder, Wade Rathke, resigned after news emerged that his brother Dale had embezzled nearly $1 million from Acorn and affiliated groups eight years ago--information the group kept from law-enforcement authorities and most members. Dale Rathke left the organization only last month.'' Wall Street Journal, 7/31/08. So how exactly will ACORN be rewarded if the Democrats get their way? Very simple: behind closed doors, ACORN-friendly language was slipped into the Democratic economic rescue proposal by Senate Banking Committee Chairman Chris Dodd (D- CT) and House Financial Services Committee Chairman Barney Frank (D-MA). Take a look: Transfer of a percentage of profits. 1. Deposits. Not less than 20 percent of any profit realized on the sale of each troubled asset purchased under this Act shall be deposited as provided in paragraph (2). 2. Use of deposits. Of the amount referred to in paragraph (1) 1. 65 percent shall be deposited into the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Regulatory Reform Act of 1992 (12 U.S.C. 4568); and 2. 35 percent shall be deposited into the Capital Magnet Fund established under section 1339 of that Act (12 U.S.C. 4569). Remainder deposited in the Treasury. All amounts remaining after payments under paragraph (1) shall be paid into the General Fund of the Treasury for reduction of the public debt. What does this mean? The Wall Street Journal breaks it down in an editorial published today: ``What we have here essentially are a pair of government slush funds created in July as part of the Economic Recovery Act that pump tax dollars into the coffers of low-income housing advocacy groups, such as Acorn.'' ``Acorn, one of America's most militant left-wing `community activist groups,' is spending $16 million this year to register Democrats to vote in November. In the past several years, Acorn's voter registration programs have come under investigation in Ohio, Colorado, Michigan, Missouri and Washington, while several of their employees have been convicted of voter fraud...'' That's right. Rather than returning any profits made in the long-term from the economic rescue package, Democrats want to first reward their radical allies at ACORN for their help-- often illegal help--in getting Democrats elected to office. Families, seniors, small businesses, and all American taxpayers deserve better than what Democratic leaders are attempting to jam down their throats. The rescue package should not become a ``Christmas tree'' for the Democratic Majority's far-left wing political agenda that seeks to shower taxpayer dollars upon groups like ACORN. On behalf of beleaguered taxpayers across the nation, House Republicans will continue to fight to remove the ACORN payback and any other Democratic poison-pills from the economic rescue package.

Ms. FOXX

Ms. FOXX. I want to thank Mr. Garrett, my colleague from New Jersey, and say that I am happy to come and join him and my other colleagues in this. I wish I were as eloquent as they have been tonight, because they have certainly described the situation we face in very, very eloquent terms. I would put it in some very plain terms, I believe. We can act in haste and repent at leisure. That is something I think the American people understand as well as they have understood the wonderful things said here. We have been told again that we must act immediately or, as Speaker Pelosi has said, we are being unpatriotic. I don't believe that. I think we are being patriotic by taking our time and holding the Speaker to the promises she made in 2006: All bills would go through regular order, go through committee, come to the floor, be allowed to be amended. It would be the most bipartisan Congress ever in the history of the Congress. We have not seen that, and the taxpayers of this country deserve that. I want to say also again, this is not a failure of our markets. It is a failure of our government, as has been said over and over and over again. As Congresswoman Bachmann has said, we have many options, contrary to what Secretary Paulson has said when he presented this to us. And to reiterate what Congressman McCotter from Michigan said, it is important that the American people know the Democrats are in charge of this Congress. They have 231 votes. It takes only 218 to pass a bill. If they want to pass a bill, they can pass any bill they want to. They have done it this whole 20 months without our help. They don't need bipartisan support for this. I would like to speak about an article from the Wall Street journal entitled ``A Mortgage Fable.'' I am not going to read this article tonight, but I do want to point out some things again, some which my colleagues have already pointed out, but just to hit some high spots. It talks about the problems, the people and the agencies that have created the problems that we are facing. I will quote here, ``But Washington is as deeply implicated in this meltdown as anyone on Wall Street or at Countrywide Financial. Going back decades, but especially in the past 15 or so years, our politicians have promoted housing and easy credit with a variety of subsidies and policies that helped to create and feed the mania. Let us take the role of political cause and financial effect.'' Again, I am going to hit the high spots here. ``The Federal Reserve. The original sin of this crisis was easy money. ``Fannie Mae and Freddie Mac. Created by government, and able to borrow at rates lower than fully private corporations because of the implied backing from taxpayers, these firms turbocharged the credit mania. They channeled far more liquidity in the market than would have been the case otherwise.'' Fannie and Freddie's patrons on Capitol Hill didn't care about the risks inherent in their combined trillion dollar plus mortgage portfolios, so long as they help meet political goals on housing, even after taxpayers have had to pick up a bailout tab that may grow as large as $200 billion, House Financial Services Chairman Barney Frank still won't back a reduction in their mortgage portfolios. ``A credit-rating oligopoly. Thanks to Federal and State regulation, a small handful of credit rating agencies pass judgment on the risk for all debt securities in our markets. Many of these judgments turned out to be wrong, and this goes to the root of the credit crisis: Assets officially deemed rock solid by the Government's favored risk experts have lately been recognized as nothing of the kind.'' ``Banking regulators. In the Beltway fable, bank supervision all but vanished in recent years. But the great irony is that the banks that made some of the worst mortgage investments are the most highly regulated.'' ``Meanwhile, the least regulated firms--hedge funds and private equity--have had the fewest problems, or have folded up their mistakes with the least amount of trauma. All of this reaffirms the historical truth that regulators almost always discover financial excesses only after the fact.'' ``The Community reinvestment Act. This 1977 law makes banks to make loans to poor borrowers who often cannot repay them. Banks that failed to make enough of these loans were often held hostage by activists when they next sought some regulatory approval.'' ``Our point here isn't to absolve Wall Street or to pretend there weren't private excesses. But the investment mistakes would surely have been less extreme, and ultimately their damage containable, if not for the political support and subsidy for mortgage credit.'' Mr. Speaker, I would like to submit for the Record the article from the Wall Street journal I just referred to, entitled ``A Mortgage Fable.'' [From the Wall Street Journal, Sept. 22, 2008] A Mortgage Fable Once upon a time, in the land that FDR built, there was the rule of ``regulation'' and all was right on Wall and Main Streets. Wise 27-year-old bank examiners looked down upon the banks and saw that they were sound. America's Hobbits lived happily in homes financed by 30-year-mortgages that never left their local banker's balance sheet, and nary a crisis did we have. Then, lo, came the evil Reagan marching from Mordor with his horde of Orcs, short for ``market fundamentalists.'' Reagan's apprentice, Gramm of Texas and later of McCain, unleashed the scourge of ``deregulation,'' and thus were ``greed,'' short-selling, securitization, McMansions, liar loans and other horrors loosed upon the world of men. Now, however, comes Obama of Illinois, Schumer of New York and others in the fellowship of the Beltway to slay the Orcs and restore the rule of the regulator. So once more will the Hobbits be able to sleep peacefully in the shire. With apologies to Tolkien, or at least Peter Jackson, something like this tale is now being sold to the American people to explain the financial panic of the past year. It is truly a fable from start to finish. Yet we are likely to hear some version of it often in the coming months as the barons of Congress try to absolve themselves of any responsibility for the housing and mortgage meltdowns. Yes, greed is ever with us, at least until Washington transforms human nature. The wizards of Wall Street and London became ever more inventive in finding ways to sell mortgages and finance housing. Some of those peddling subprime loans were crooks, as were some of the borrowers who lied about their incomes. This is what happens in a credit bubble that becomes a societal mania. But Washington is as deeply implicated in this meltdown as anyone on Wall Street or at Countrywide Financial. Going back decades, but especially in the past 15 or so years, our politicians have promoted housing and easy credit with a variety of subsidies and policies that helped to create and feed the mania. Let us take the roll of political cause and financial effect: The Federal Reserve. The original sin of this crisis was easy money. For too long this decade, especially from 2003 to 2005, the Fed held interest rates below the level of expected inflation, thus creating a vast subsidy for debt that both households and financial firms exploited. The housing bubble was a result, along with its financial counterparts, the subprime loan and the mortgage SIV. Fed Chairmen Alan Greenspan and Ben Bernanke prefer to blame ``a global savings glut'' that began when the Cold War ended. But Communism was dead for more than a decade before the housing mania took off. The savings glut was in large part a creation of the Fed, which flooded the world with too many dollars that often found their way back into housing markets in the U.S., the U.K. and elsewhere. Fannie Mae and Freddie Mac. Created by government, and able to borrow at rates lower than fully private corporations because of the implied backing from taxpayers, these firms turbocharged the credit mania. They channeled far more liquidity into the market than would have been the case otherwise, especially from the Chinese, who thought (rightly) that they were investing in mortgage securities that were as safe as Treasurys but with a higher yield. These are the firms that bought the increasingly questionable mortgages originated by Angelo Mozilo's Countrywide and others. Even as the bubble was popping, they dived into pools of subprime and Alt-A (``liar'') loans to meet Congressional demand to finance ``affordable'' housing. And they were both the cause and beneficiary of the great interest-group army that lobbied for ever more housing subsidies. Fan and Fred's patrons on Capitol Hill didn't care about the risks inherent in their combined trillion-dollar-plus mortgage portfolios, so long as they helped meet political goals on housing. Even after taxpayers have had to pick up a bailout tab that may grow as large as $200 billion, House Financial Services Chairman Barney Frank still won't back a reduction in their mortgage portfolios. A credit-rating oligopoly. Thanks to federal and state regulation, a small handful of credit rating agencies pass judgment on the risk for all debt securities in our markets. Many of these judgments turned out to be wrong, and this goes to the root of the credit crisis: Assets officially deemed rock-solid by the government's favored risk experts have lately been recognized as nothing of the kind. When debt instruments are downgraded, banks must then recognize a paper loss on these assets. In a bitter irony, the losses cause the same credit raters whose judgments allowed the banks to hold these dodgy assets to then lower their ratings on the banks, requiring the banks to raise more money, and pay more to raise it. The major government- anointed credit raters--S&P, Moody's and Fitch--were as asleep on mortgages as they were on Enron. Senator Richard Shelby (R., Ala.) tried to weaken this government-created oligopoly, but his reforms didn't begin to take effect until 2007, too late to stop the mania. Banking regulators. In the Beltway fable, bank supervision all but vanished in recent years. But the great irony is that the banks that made some of the worst mortgage investments are the most highly regulated. The Fed's regulators blessed, or overlooked, Citigroup's off-balance-sheet SIVs, while the SEC tolerated leverage of 3o or 4o to 1 by Lehman and Bear Stearns. The New York Sun reports that an SEC rule change that allowed more leverage was made in 2004 under then Chairman William Donaldson, one of the most aggressive regulators in SEC history. Of course the SEC's task was only to protect the investor assets at the broker-dealers, not the holding companies themselves, which everyone thought were not too big to fail. Now we know differently (see Bear Stearns below). Meanwhile, the least regulated firms--hedge funds and private-equity companies--have had the fewest problems, or have folded up their mistakes with the least amount of trauma. All of this reaffirms the historical truth that regulators almost always discover financial excesses only after the fact. The Bear Stearns rescue. In retrospect, the Fed-Treasury intervention only delayed a necessary day of reckoning for Wall Street. While Bear was punished for its sins, the Fed opened its discount window to the other big investment banks and thus sent a signal that they would provide a creditor safety net for bad debt. Morgan Stanley, Lehman and Goldman Sachs all concluded that they could ride out the panic without changing their business models or reducing their leverage. John Thain at Merrill Lynch was the only CEO willing to sell his bad mortgage paper--at 22 cents on the dollar. Treasury and the Fed should have followed the Bear trauma with more than additional liquidity. Once they were on the taxpayer dime, the banks needed a thorough scrubbing that might have avoided last week's stampede. The Community Reinvestment Act. This 1977 law compels banks to make loans to poor borrowers who often cannot repay them. Banks that failed to make enough of these loans were often held hostage by activists when they next sought some regulatory approval. Robert Litan, an economist at the Brookings Institution, told the Washington Post this year that banks ``had to show they were making a conscious effort to make loans to subprime borrowers.'' The much-maligned Phil Gramm fought to limit these CRA requirements in the 1990s, albeit to little effect and much political jeering. We could cite other Washington policies, including the political agitation for ``mark-to-market'' accounting that has forced firms to record losses after ratings downgrades even if the assets haven't been sold. But these are some of the main lowlights. Our point here isn't to absolve Wall Street or pretend there weren't private excesses. But the investment mistakes would surely have been less extreme, and ultimately their damage more containable, if not for the enormous political support and subsidy for mortgage credit. Beware politicians who peddle fables that cast themselves as the heroes. The last thing that I would like to say, because I want to give some more time to my colleague to New Jersey, is that one of the areas that I think has not been properly discussed in the last couple of days is the fact that Republicans have put out a set of economic rescue principles. They are on my Web site. I think they are on probably many other people's Web sites. I am only going to highlight these very, very quickly. These were put together by a working group, established by Republican Leader Boehner and released earlier this week. Again, I think it's very important to that the taxpayers know we have put them first, not Wall Street. These are the three major components, a commonsense plan to have Wall Street fund the recovery, not taxpayers. You heard that first from Republicans. ``Have Private Capital Injection to the Financial Markets, Not Tax Dollars.'' ``Immediate Transparency, Oversight, and Market Reform.'' Mr. Speaker, I would submit Economic Rescue Principles for the Record. Economic Rescue Principles Common Sense Plan to Have Wall Street Fund the Recovery, Not Taxpayers Rather than providing taxpayer funded purchases of frozen mortgage assets to solve this problem, we should adopt a plan to insure mortgage back securities through payment of insurance premiums. Currently the federal government insures approximately half of all mortgage backed securities. (MBS) We can insure the rest of current outstanding MBS; however, rather than taxpayers funding insurance, the holders of these assets should pay for it. Treasury Department can design a system to charge premiums to the holders of MBS to fully finance this insurance. Have Private Capital Injection to the Financial Markets, Not Tax Dollars Instead of injecting taxpayer capital into the market to produce liquidity, private capital can be drawn into the market by removing regulatory and tax barriers that are currently blocking private capital formation. Too much private capital is sitting on the sidelines during this crisis. Temporary tax relief provisions can help companies free up capital to maintain operations, create jobs, and lend to one another. In addition, we should allow for a temporary suspension of dividend payments by financial institutions and other regulatory measures to address the problems surrounding private capital liquidity. Immediate Transparency, Oversight, and Market Reform Increase Transparency. Require participating firms to disclose to Treasury the value of their mortgage assets on their books, the value of any private bids within the last year for such assets, and their last audit report. Limit Federal Exposure for High Risk Loans: Mandate that the GSEs no longer securitize any unsound mortgages. Call on the SEC to audit reports of failed companies to ensure that the financial standing of these troubled companies was accurately portrayed. Wall Street Executives should not benefit from taxpayer funding. Call on the SEC to review the performance of the Credit Rating Agencies and their ability to accurately reflect the risks of these failed investment securities. Create a blue ribbon panel with representatives of Treasury, SEC, and the Fed to make recommendations to Congress for reforms of the financial sector by January 1, 2009. I thank my colleague from New Jersey for allowing me to do this. I want to leave with a quote that our colleague, Trent Franks from Arizona, gave me tonight, in an e-mail. ``If you love wealth better than liberty, the tranquility of servitude than the animated contest of freedom, go from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains sit lightly upon you, and may posterity forget that you were our countrymen.'' It's from Samuel Adams, and I say to those who want to support the Paulson socialism plan, this is my message to you.

Ms. FOXX

Ms. FOXX. I thank my colleague from Michigan for yielding time to me on this issue. I think that what the American people are seeing here again today is an exercise in futility. They want us to come here and work together to get good legislation passed, and we are trying to do that. Let me say that even the Democrats on the Senate side want us to do that. Let me share this quote from the majority leader in the Senate, the Democratic majority leader in the Senate: ``I say to my friends on the other side of the Capitol, the House, don't send us back something else. We can't get it passed. If they try to mess with our package, it will come back here, it will die, and we will have snatched defeat from the jaws of victory.'' Senate Majority Leader Harry Reid on the Senate floor, 9-23-2008. These folks don't even listen to their own party. We have what you would call a failure to communicate here. The Senate wants to get this bill passed, and the House is playing games. It's the same kind of game playing that we see day after day after day on the floor of this House. Republicans are here to work; Democrats take off the entire month of August. They don't want to work. We stayed here and worked. We wanted a good energy bill. Now we want to do something on this tax extenders bill, and what do we get? Games back. Let's listen to Senator Harry Reid. Let's get our work done. We have other important work that needs to be done, and we're wasting the time of Members on something that is dead on arrival in the Senate. That is not leadership. I want the American people to understand the Democrats are in charge of the House and the Senate. They cannot blame Republicans when they fail. They have the votes. They are in charge.

Ms. FOXX

Ms. FOXX. Mr. Speaker, this week we have been focused on what has been described as the most critical situation facing our economic status in our country since World War II. The liberals/Democrats say it is a failure of the markets. It is not a failure of the markets. It is a failure of our government. It is caused by ignoring the Constitution and by getting the Federal Government involved in things it should not be involved in. If we are about to allow the very people who got us into this mess by promoting the bad policies, especially Fannie Mae and Freddie Mac, to design the cure, then in common parlance, we are about to let the fox guard the hen house. Another point that needs to be made relative to this situation is that the Democrats in the House have been doing their best to blame House Republicans for the fact that a bill to solve this problem was not passed this week. What has to be said over and over again is that the Democrats are in charge, in control, of both Houses of Congress. They can pass any bill they want without a single Republican vote and have done so on hundreds of bills in the past 20 months, including several times today. But suddenly, the Democrats want to make this situation the responsibility of the Republicans. Most Republicans want to have no part of any further slide into socialism that the legislation the Democrats are likely to present to us will represent. The Republicans have presented alternatives that will not be allowed to be considered. But like many of my colleagues, I feel that God holds us guilty for sins of omission as well as sins of commission. Therefore, I think it is important that we raise the issues, that we discuss the situation, and that we present alternatives. One very thoughtful person has given us the benefit of his wisdom and advice in this situation, and that person is John Allison, chairman and CEO of the very successful Branch Banking & Trust, known as BB&T, which is headquartered in Winston-Salem, North Carolina. I will share some of his comments and put into the Record his letter of September 26. The letter is addressed to me. ``Unfortunately, while under normal circumstances, there would be a free market solution, given the publicity and psychological mindset which is being created, Congress not acting is extraordinarily risky. Therefore, an alternative to the Paulson plan must be developed. A much more effective, far less expensive solution to the financial crisis than the Treasury Secretary presented is outlined below.'' As I said, I won't read all of the letter, but I want to highlight some important points. He underlines these, and I do, too. ``Without Freddie Mac and Fannie Mae and the affordable housing program (subprime), we could never have made a misallocation of capital of this magnitude.'' Again, Mr. Speaker, the problem lays directly with the Democrats who pushed Fannie and Freddie and refused to allow Republicans when they wanted to bring them under control. Let me share the end of his letter. ``By the way, the reason Bernanke and Paulson cannot see the solution is they are making a fundamental epistological (thinking) error. Bernanke is thinking from economic theory and Paulson is thinking from a capital market theoretical perspective. To solve the problem, we have to deal with the real physical world, i.e., the fact that there is a physical inventory of houses that needs to be cleared, and we must grasp what motivates real individuals (not theoretical collectives) to act. ``A carefully designed housing tax credit and ending fair value accounting (as currently implemented) will fix the real estate markets, capital markets and the economy. This program will likely actually increase tax revenue by stimulating the economy by increasing taxable income. There is likely to be net gain to the government. ``I hope you will give this issue serious consideration.'' We have solutions available to us if we will follow them.

Ms. FOXX

Ms. FOXX. Madam Speaker, I agree with some of my colleagues on both sides of the aisle; we need to work on this together. We have a problem in this country in terms of our financial situation, and it should be a workout, not a bailout. However, it is important that we establish who is responsible for this happening. There is responsibility on both sides of the aisle, but it is primarily on the side of the majority in this House because they failed over the years to recognize that you cannot continue to spend, spend, spend, and not have a day of reckoning. We were given a proposal at the beginning of the week by the administration, and I liken it to a sick patient who is told by their doctor: You are going to die if you don't take this experimental treatment. If you take it, it may kill you; if you don't take it, you may die. You will have scars on your body forever. We needed a second opinion. Most people would get a second opinion if they were facing that, and that is what we have to offer the American people now, a second opinion.

Ms. FOXX

Ms. FOXX. Madam Speaker, I feel certain that some of my colleagues have already broached the issue of the topic that has been consuming us around here for the last 4 days, and that has been the topic that is most being discussed on the news and I think by many Americans. I know that in speaking to my colleagues on both sides of the aisle, that we have all received many, many telephone calls about the issue of our economy. And again it is very much on our minds and it is the thing that is pretty much dominating everyone's thinking. I came tonight because last night I talked a little bit about the situation that we have and my concern about the blame game. Ever since there was the announcement that we have a problem with our economy that the President and Secretary of Treasury have announced that we need to do something drastic about our economy, there have been a lot of people pointing fingers. We've heard a lot, particularly from the Democrats, saying that this is a Republican problem, you deal with it. But as we see more and more in the news and more and more in documents, we learn that Republicans and even nonpartisan people such as Alan Greenspan when he was chairman of the Federal Reserve warned that something needed to be done about this situation or we were going to very much be in the situation that we find ourselves in and that the root of this problem was the problem with the two agencies called Fannie Mae and Freddie Mac. These are agencies that were set up many years ago to deal with helping people who were low-income people or disadvantaged people or minorities get low-income loans and be able to buy homes. We've learned again a great deal about the fact that there was insufficient oversight of those two agencies, and that when Republicans raised the issue of better oversight, more effective oversight, they were often blocked. There was an article in Friday's Washington Post by Al Hubbard and Noam Neusner entitled ``Where Was Senator Dodd?'' And the subheadlines, ``Playing the Blame Game on Fannie and Freddie.'' I would like to submit the entire article. I'm not going to read it all. Madam Speaker, let me just read a bit of it. ``Taxpayers face a tab of as much as $200 billion for a government takeover of Fannie Mae and Freddie Mac, the formerly semi-autonomous mortgage finance clearinghouses. And Senator Christopher Dodd, the Democratic chairman of the Senate Banking Committee, has the gall to ask in a Bloomberg Television interview, ``I have a lot of questions about where was the administration over the last 8 years. ``We will save the senator some trouble. Here is what we saw firsthand at the White House from late 2002 to 2007: Starting in 2002, White House and Treasury Department economic policy staffers, with support from then-Chief of Staff Andy Card, began to press for meaningful reforms of Fannie, Freddie and other government-sponsored enterprises.'' And then it goes on to talk about it. And it chronicles all of the problems that were put up to the administration when they brought these issues up. There are many, many other articles that are out, as I said, talking about this. Now, I am not one who is in favor of the plan that was brought to us by Secretary Paulson at the beginning of this week. Many of us here really believe in this country, and we believe in the principles that undergird this country. They are the rule of law, our Judeo-Christian heritage and capitalism. Those are the things that have made our country great. And it is not appropriate to turn over our economic system to the government. [From the Washington Post, Sept. 12, 2008] Where Was Sen. Dodd? (By Al Hubbard and Noam Neusner) Taxpayers face a tab of as much as $200 billion for a government takeover of Fannie Mae and Freddie Mac, the formerly semi-autonomous mortgage finance clearinghouses. And Sen. Christopher Dodd, the Democratic chairman of the Senate Banking Committee, has the gall to ask in a Bloomberg Television interview: ``I have a lot of questions about where was the administration over the last eight years.'' We will save the senator some trouble. Here is what we saw firsthand at the White House from late 2002 through 2007: Starting in 2002, White House and Treasury Department economic policy staffers, with support from then-Chief of Staff Andy Card, began to press for meaningful reforms of Fannie, Freddie and other government-sponsored enterprises (GSEs). The crux of their concern was this: Investors believed that the GSEs were government-backed, so shouldn't the GSEs also be subject to meaningful government supervision? This was not the first time a White House had tried to confront this issue. During the Clinton years, Treasury Secretary Larry Summers and Treasury official Gary Gensler both spoke out on the issue of Fannie and Freddie's investment portfolios, which had already begun to resemble hedge funds with risky holdings. Nor were others silent: As chairman of the Federal Reserve, Alan Greenspan regularly warned about the risks posed by Fannie and Freddie's holdings. President Bush was receptive to reform. He withheld nominees for Fannie and Freddie's boards--a presidential privilege. While it would have been valuable politically to use such positions to reward supporters, the president put good policy above good politics. In subsequent years, officials at Treasury and the Council of Economic Advisers (especially Chairmen Greg Mankiw and Harvey Rosen) pressed for the following: Requiring Fannie and Freddie to submit to regulations of the Securities and Exchange Commission; to adopt financial accounting standards; to follow bank standards for capital requirements; to shrink their portfolios of assets from risky levels; and empowering regulators such as the Office of Federal Housing Oversight to monitor the firms. The administration did not accept half measures. In 2005, Republican Mike Oxley, then chairman of the House Financial Services Committee, brought up a reform bill (H.R. 1461), and Fannie and Freddie's lobbyists set out to weaken it. The bill was rendered so toothless that Card called Oxley the night before markup and promised to oppose it. Oxley pulled the bill instead. During this period, Sen. Richard Shelby led a small group of legislators favoring reform, including fellow Republican Sens. John Sununu, Chuck Hagel and Elizabeth Dole. Meanwhile, Dodd--who along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton were the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008-- actively opposed such measures and further weakened existing regulations. The president's budget proposals reflected the nature of the challenge. Note the following passage from the 2005 budget: Fannie, Freddie and other GSEs ``are highly leveraged, holding much less capital in relation to their assets than similarly sized financial institutions. . . . A misjudgment or unexpected economic event could quickly deplete this capital, potentially making it difficult for a GSE to meet its debt obligations. Given the very large size of each enterprise, even a small mistake by a GSE could have consequences throughout the economy.'' That passage was published in February 2004. Dodd can find it on Page 82 of the budget's Analytical Perspectives. The administration not only identified the problem, it also recommended a solution. In June 2004, then-Deputy Treasury Secretary Samuel Bodman said: ``We do not have a world-class system of supervision of the housing government-sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision.'' Bush got involved in the effort personally, speaking out for the cause of reform: ``Congress needs to pass legislation strengthening the independent regulator of government- sponsored enterprises like Freddie Mac and Fannie Mae, so we can keep them focused on the mission to expand home ownership,'' he said in December. He even mentioned GSE reform in this year's State of the Union address. How did Fannie and Freddie counter such efforts? They flooded Washington with lobbying dollars, doled out tens of thousands in political contributions and put offices in key congressional districts. Not surprisingly, these efforts worked. Leaders in Congress did not just balk at proposals to rein in Fannie and Freddie. They mocked the proposals as unserious and unnecessary. Rep. Barney Frank (D-Mass.) said the following on Sept. 11, 2003: ``We see entities that are fundamentally sound financially. . . . And even if there were a problem, the federal government doesn't bail them out.'' Sen. Thomas Carper (D-Del.), later that year: ``If it ain't broke, don't fix it.'' As recently as last summer, when housing prices had clearly peaked and the mortgage market had started to seize up, Dodd call on Bush to ``immediately reconsider his ill-advised'' reform proposals. Frank, now chairman of the House Financial Services Committee, said that the president's suggestion for a strong, independent regulator of Fannie and Freddie was ``inane.'' Sen. Dodd wonders what the Bush administration did to address the risks of Fannie and Freddie. Now, he knows. The real question is: Where was he?

Ms. FOXX

Ms. FOXX. Mr. Speaker, it's been a few short days since we first got news of the administration's $700 billion plan to bail out the financial industry. In large part, the root cause of our current crisis is the mismanagement, failure and political cronyism at government-backed lenders, Freddie Mac and Fannie Mae. Some people are hoping to use Americans' tax dollars to bring about a government-backed solution to a problem that was essentially caused by decades of government incompetence. An article in Bloomberg entitled How the Democrats Created the Financial Crisis and the transcript from Fox News tonight shed much light on how Republicans warned of the impending problem and the responsibility of Democrats for the problem. I've heard a lot of talk about bailing out those who made very risky, even reckless decisions. My question is, what about all the American taxpayers who played by the rules? Who's going to bail them out?

Ms. FOXX

Ms. FOXX. Thank you, Mr. Speaker. ``Crony'' Capitalism Is Root Cause Of Fannie And Freddie Troubles (By Terry Jones) In the past couple of weeks, as the financial crisis has intensified, a new talking point has emerged from the Democrats in Congress: This is all a ``crisis of capitalism,'' in socialist financier George Soros' phrase, and a failure to regulate our markets sufficiently. Well, those critics may be right--it is a crisis of capitalism. A crisis of politically driven crony capitalism, to be precise. Indeed, Democrats have so effectively mastered crony capitalism as a governing strategy that they've convinced many in the media and the public that they had nothing whatsoever to do with our current financial woes. Barack Obama has repeatedly blasted ``Bush-McCain'' economic policies as the cause, as if the two were joined at the hip. Funny, because over the past 8 years, those who tried to fix Fannie Mae (FNM) and Freddie Mac (FRE)--the trigger for today's widespread global financial meltdown--were stymied repeatedly by congressional Democrats. This wasn't an accident. Though some key Republicans deserve blame as well, it was a concerted Democratic effort that made reform of Fannie and Freddie impossible. The reason for this is simple: Fannie and Freddie became massive providers both of reliable votes among grateful low- income homeowners, and of massive giving to the Democratic Party by grateful investment bankers, both at the two government-sponsored enterprises and on Wall Street. The result: A huge taxpayer rescue that at last estimate is approaching $700 billion but may go even higher. It all started, innocently enough, in 1994 with President Clinton's rewrite of the Carter-era Community Reinvestment Act. Ostensibly intended to help deserving minority families afford homes--a noble idea--it instead led to a reckless surge in mortgage lending that has pushed our financial system to the brink of chaos. Subprime's Mentors Fannie and Freddie, the main vehicle for Clinton's multicultural housing policy, drove the explosion of the subprime housing market by buying up literally hundreds of billions of dollars in substandard loans--funding loans that ordinarily wouldn't have been made based on such time-honored notions as putting money down, having sufficient income, and maintaining a payment record indicating creditworthiness. With all the old rules out the window, Fannie and Freddie gobbled up the market. Using extraordinary leverage, they eventually controlled 90% of the secondary market mortgages. Their total portfolio of loans topped $5.4 trillion--half of all U.S. mortgage lending. They borrowed $1.5 trillion from U.S. capital markets with--wink, wink--an ``implicit'' government guarantee of the debts. This created the problem we are having today. As we noted a week ago, subprime lending surged from around $35 billion in 1994 to nearly $1 trillion last year--for total growth of 2,757% as of last year. No real market grows that fast for that long without being fixed. And that's just what Fannie and Freddie were--fixed. They became a government-run, privately owned home finance monopoly. Fannie and Freddie became huge contributors to Congress, spending millions to influence votes. As we've noted here before, the bulk of the money went to Democrats. Dollars To Dems Meanwhile, Fannie and Freddie also became a kind of jobs program for out-of-work Democrats. Franklin Raines and Jim Johnson, the CEOs under whom the worst excesses took place in the late 1990s to mid-2000s, were both high-placed Democratic operatives and advisers to presidential candidate Barack Obama. Clinton administration official Jamie Gorelick also got taken care of by the Fannie-Freddie circle. So did top Clinton aide Rahm Emanuel, among others. On the surface, this sounds innocent. Someone has to head the highly political Fannie and Freddie, right? But this is why crony capitalism is so dangerous. Those in power at Fannie and Freddie, as the sirens began to wail about some of their more egregious practices, began to bully those who opposed them. That included journalists, like the Wall Street Journal's Paul Gigot, and GOP congressmen, like Wisconsin Rep. Paul Ryan, whom Fannie and Freddie actively lobbied against in his own district. Rep. Cliff Stearns, R-Fla., who tried to hold hearings on Fannie's and Freddie's questionable accounting practices in 2004, found himself stripped of responsibility for their oversight by House Speaker Dennis Hastert--a Republican. Where, you ask, were the regulators? Congress created a weak regulator to oversee Freddie and Fannie--the Office of Federal Housing Enterprise Oversight-- which had to go hat in hand each year to Capitol Hill for its budget, unlike other major regulators. With lax oversight, Fannie and Freddie had a green light to expand their operations at breakneck speed. Fannie and Freddie had a reliable coterie of supporters in the Senate, especially among Democrats. ``We now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years,'' wrote economist Kevin Hassett on Bloomberg.com this week. Buying Friends In High Places Over the span of his career, Obama ranks No. 2 in campaign donations from Fannie and Freddie, taking over $125,000. Dodd, head of the Senate Banking panel, is tops at $165,000. Clinton, ranked 12th, has collected $75,000. Meanwhile, Freddie and Fannie opened what were euphemistically called ``Partnership Offices'' in the districts of key members of Congress to channel millions of dollars in funding and patronage to their supporters. In the space of a little more than a decade, Fannie and Freddie spent close to $150 million on lobbying efforts. So pervasive were their efforts, they seemed unassailable, even during a Republican administration. Yet, by 2004, the crony capitalism had gone too far. Even OFHEO issued a report essentially criticizing Fannie and Freddie for Enron-style accounting that let them boost profits in order to pay their politically well-connected executives hefty bonuses. It emerged that Clinton aide Raines, who took Fannie Mae's helm as CEO in 1999, took in nearly $100 million by the time he left in 2005. Others, including former Clinton Justice Department official Gorelick, took $75 million from the Fannie-Freddie piggy bank. Even so, Fannie and Freddie were forced to restate their earnings by some $3.5 billion, due to the accounting shenanigans. As we noted, those who tried to halt this frenzy of activity found themselves hit by a political buzz saw. President Bush, reviled and criticized by Democrats, tried no fewer than 17 times, by White House count, to raise the issue of Fannie-Freddie reform. A bill cleared the Senate Banking panel in 2005, but stalled due to implacable opposition from Democrats and a critical core of GOP abettors. Rep. Barney Frank, who now runs the powerful House Financial Services Committee, helped spearhead that fight. Now, with the taxpayer tab approaching $1 trillion or more, we're learning the costs of crony capitalism. In the coming days, an IBD series will look into this phenomenon in greater detail--how we got here, who's responsible, and why nothing was done.

Ms. FOXX. Mr. Speaker, the American people won an important victory today, and we all should celebrate it. The Democrats finally allowed the moratorium on offshore drilling to expire. They did that because of the pressure brought on them by their constituents and by the 135 Republicans who stayed on this floor every day in August while the Democrats were on vacation, and we spoke on the floor every day before that and since then. We called to the attention of the American people every day that the Democrats are in charge of the Congress and it was under their charge that gas prices doubled. So, when someone says to you there's no difference between Democrats and Republicans, you can point to this example of leadership by Republicans and how we brought this to the American people and with this support, changed the position of the Speaker. Now we have another task before us. It is our task to inform the American public about who is responsible for the U.S. mortgage and credit problem that we are grappling with. This is not a failure of the markets. But it is a failure of government. Mr. Speaker, I would like to put in the Record an editorial from investors.com entitled ``Crony Capitalism Is Root Cause of Fannie And Freddie Troubles.'' ``In the past couple of weeks, as the financial crisis has intensified, a new talking point has emerged from the Democrats in Congress: This is all a 'crisis of capitalism,' in socialist financier George Soros' phrase, and a failure to regulate our market sufficiently. ``This is a crisis of politically driven crony capitalism, to be precise. ``Indeed, Democrats have so effectively mastered crony capitalism as a governing strategy that they've convinced many in the media and the public that they had nothing whatsoever to do with our current financial woes. ``Funny, because over the past 8 years, those who tried to fix Fannie Mae and Freddie Mac--the trigger for today's widespread global financial meltdown--were stymied repeatedly by congressional Democrats.'' And as my colleagues on both sides of the aisle tonight have pointed out, these problems have been brought on under the leaders who were Democrats when Congress was controlled by the Democrats on several occasions. ``Although some key Republicans deserve blame as well, it was a concentrated Democratic effort that made reform of Fannie and Freddie impossible.'' In fact, earlier tonight on FOX News, to their credit, they showed comments being made by Chairman Frank and Chairman Schumer about why Fannie and Freddie were great and didn't need any reform, and going back to 2001 pointed out how President Bush and members of his Cabinet pointed out we were going to have a crisis because of Fannie and Freddie. As my colleague just previously said, we don't have enough regulations of these markets, but I would say we have the wrong kind of regulations, and more and more is going to come out about that and put it where it deserves. Again, I'm going to quote some more from this article: ``Fannie and Freddie gobbled up the market. Using extraordinary leverage, they eventually controlled 90 percent of the secondary market mortgages. Their total portfolio of loans topped $5.4 trillion--half of all U.S. mortgage lending. This created the problem that we're having today.'' But they also ``became a kind of jobs program for out-of-work Democrats. ``Franklin Raines and Jim Johnson, the CEOs under whom the worst excesses took place in the late 1990s to mid-2000s, were both high- placed Democratic operatives and advisors to Presidential candidate Barack Obama. ``On the surface, this sounds innocent. Someone has to head the highly political Fannie and Freddie, right? But this is why crony capitalism is so dangerous. Those in power at Fannie and Freddie, as the sirens began to wail about some of their more egregious practices, began to bully those who opposed them. ``We now know that many of the Senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years.''

Ms. FOXX

Ms. FOXX. Mr. Speaker, today I want to congratulate a group of enterprising students and teachers at Ronald Reagan High School in Pfafftown, North Carolina. This month, Reagan High School launched North Carolina's first ever high school student-run credit union. This is truly an historic and groundbreaking achievement. I want to congratulate all the faculty and students at Reagan who have been involved in getting the Raider Student Credit Union off the ground. Working hand in hand with Allegacy Federal Credit Union, they have created a student-run enterprise that should make these students proud. When I recently visited the school to participate in the grand opening of the Raider Student Credit Union, I was so impressed by the students' ambition and work ethic. Many of them are pictured here with their faculty advisers. These students are a driving force in the creation of this unique and educational institution. The new credit union is a part of the Reagan High School's financial literacy program and is a partnership with a local credit union, Allegacy Federal Credit Union. Reagan High School students are operating the branch three days a week during the school's lunch period, offering withdrawal and deposit services to its members. At a time when so many Americans are struggling with family finances and with financial literacy at a low ebb, it is very encouraging to witness this school's commitment to educating students about good money management. It is exciting to observe the commitment to financial literacy and life skills among the student body at Reagan High School. I am confident that the students who participate in the day-to-day operation of the Raider Student Credit Union will emerge from their high school years better equipped to take on the financial challenges they will face as adults. Equally as important, students will come away with valuable work skills that will serve them as they enter the workplace in the coming years and that will help catapult those who are involved into successful careers. A recent survey on financial literacy found that young people are increasingly undereducated on matters of financial literacy. Financial literacy and financial education are much-needed tonics in an age of maxed-out credit cards and financial stress. Many people find themselves in financial difficulties because they were not educated about their options and various financial opportunities. I am confident that this new credit union will equip the students at Ronald Reagan High School with the financial skills to make wise decisions for their financial futures. I hope that the initiative and innovation that Reagan High School has demonstrated with the Raider Student Credit Union will inspire more schools to follow in their footsteps, not only to start credit unions of their own but to find unique ways to prepare students to take their place in our productive society. With this groundbreaking program, Ronald Reagan High School has helped to set the pace for financial education in North Carolina's high schools. It is important to note that not only is the Raider Student Credit Union the first high school credit union in North Carolina, it is also an investment in the lives and success of this school's students.

Ms. FOXX

Ms. FOXX. Well, I thank you, Congressman, my colleague from Ohio (Mr. Latta), for yielding time and for stepping in to lead this hour this evening, because we have many of our colleagues who are tied up in meetings right now dealing with the issues that we have been talking about. I heard a little bit of the comments that were made by our colleague from New York (Ms. Clarke) in the previous leadership hour. I have great respect and affection for her, but she made a couple of comments that I have a concern about that I thought it might be useful to make a couple of comments about. We will try to tie the issue of energy in with the issue of the financial situation that we are facing here in the same way. She said a comment that we don't have enough regulations on the banks and that we need more regulations. I think that most Americans now understand that one of the major problems that we have in our country with jobs going overseas is the impact of too many government regulations. We are, in many ways, regulating ourselves out of business in this country. We may have wrong regulations for banks and investment firms, may not have the right regulations for them, but I don't think it's that we don't have enough regulations for them. Again, in many ways, we have too many regulations. I was interested in Congressman Latta's comments about the fact that we had, we know, in talking about the energy issues, and our good friend T. Boone Pickens has done a lot to raise the awareness of the American people by talking about the fact that we transfer out of this country every year $700 billion, the largest transfer of wealth ever in the history of any society. It is a bit ironic that the figure that has been shared with us, that is needed for this proposed bailout, various companies on Wall Street, is $700 billion. You know, it would be really simple if this Democratic Congress had paid attention to what Republicans have been saying for the last 20 months and, say, let us start developing more American-made energy. Let us stop transferring all of that money out of this country to foreign countries, many of which don't like us, many of which are doing everything they can to destroy us. Keep that money here and let us create jobs and wealth in this country. It would be a marvelous thing for us to be able to do. The price of oil spiked up again today, the largest increase, I believe, in 1 day that's ever occurred. Well, we can have energy independence in this country. I am convinced of it, most people are convinced of it. Never before have we seen ourselves so dependent on other nations, and there is no reason for it. What we have to do, though, is use the wonderful resources that the good Lord has given us in this country and use those to our advantage. Many of us have talked over and over again, in the last 2 months, particularly, about the opportunity to drill in ANWR, in the Arctic National Wildlife Refuge. In fact, I don't think too many people have mentioned that when that refuge was set aside, there was specifically written into the bill that set it aside language that said part of that property would be used for drilling in the future. That is simply being ignored by the Democratic majority in this House. The other place that we need to be drilling is on the Outer Continental Shelf. Every other nation in the world that has oil and gas resources along their coastlines is tapping those resources for their benefit. We are the only Nation in the world where it is locked up. Now next week the moratorium, the congressional moratorium will expire, and with that we have the opportunity to make that property available for leasing. It would result in huge amounts of money for this country, coming into this country. It is projected to be $2.3 trillion. Now I happen to believe that some of that should be shared with the States, but all of that money can come into this country and we would be able to change our balance of payments once we are able to use those resources and change the whole way we operate in this country. In terms of the bill that is being worked on to be presented to us today or tomorrow, I have some grave concerns about the fact that people are saying there are no alternatives. There are lots of alternatives to simply writing a blank check to the Treasury Department. We could again be cutting the Federal budget. We could be doing lots of other things. We could arrange to bring in the private sector to help with this transition. I know many people think the situation is really dire, but part of our problem is that our colleagues who have preceded us in this Congress in the last several years, many of them have thought that the Federal Government should be doing everything, and we have gotten ourselves into a bind by trying to fund everything in the world out of Washington. If we would pay attention to the Constitution that we are sworn to uphold in this body, then we would narrow dramatically what our scope of practice is here. Last week I spoke on the floor about a bill that we were dealing with that was funding education programs. As I have said on the floor many, many times, it doesn't say anywhere in the Constitution that funding education is a function of the Federal Government. So I believe that we could solve most of our financial crises, and I have to believe we probably are in a crisis right now because that is what we have been told over and over again, but too many of the things that are brought up here are called crises and they are not, but I have to believe that if we would again pay attention to what the Constitution says and become fiscally responsible, we would not have to go into dire measures to deal with the problems when they come up. And so I want to say, and much of what we are dealing with now has to do with prices having gone up and people not being able to pay their mortgages because the price of gasoline has doubled in the last 2 years. And my colleague said before we can't blame this on the Democratic Congress. I don't have a chart out here right now but I could get one in a hurry that shows that when the Democrats took control of Congress 20 months ago, the price of gasoline started going up, the unemployment rate started going up, the number of foreclosures started going up. It really is difficult to deny that those things are coincidental. Now, I am a social scientist and I am very wary of declaring cause and effect, but the markers are simply too strong to deny the relationship of them. I think it is something that we need to continue to talk about because the bill that was passed last week by the Democrat majority did not respond to the situation that we are facing as far as energy is concerned. In fact, it did just the opposite. It made it even more difficult for us to deal with the high prices of energy in this country. You don't have to take my word for it, the editorial pages of the major newspapers and non-major newspapers of this country agree with us. I will just quote from some of them because they have said what we have said here on the floor. We can be dismissed as being partisan, but most of these newspapers are not partisan newspapers. And, if anything, they are very liberal newspapers saying these things. I am going to quote from the Waco Tribune editorial, September 22, 2008. It is entitled, ``Energy Package Stalls Out: Hastily Passed House Bill Appears Dead in the Water. ``Which is why it was doubling disappointing to survey the energy bill passed by the U.S. House last week. Swiftly engineered by House Speaker Nancy Pelosi and Democratic allies, it's a limp-wristed approach to pressing energy problems. In seeking to appease everyone, it satisfies no one, offshore drilling enthusiasts and environmentalists included.'' There is an editorial in the Buffalo News, September 22, 2008. ``This way, Democrats can claim to be opening the way to offshore drilling . . . under the restrictions included in the bill, no real drilling is likely to happen.'' An article from the Augusta Chronicle, an editorial, September 22, 2008. ``This just in: Nothing. That's what this Congress came up with after months of high fuel costs and concern over our dependence on foreign oil, and after a summer recess in which Senators and Representatives could have listened to the American people but did not. Congress came up with nothing--a fake energy exploration bill that would only weaken America. House Speaker Nancy Pelosi, who is devoting her career to blocking new energy for America, allowed a bill that would permit drilling for oil 100 miles offshore, which is prohibitive. Under the bill, coastal States could go 50 miles closer in--but have no incentive to, as the Democrats' bill doesn't share revenues with the States.'' The title is ``They've Blown a Ruse; Congress Fails Yet Again.'' This goes on and on with article after article saying why the bill that was passed was a sham and a joke. Mr. Speaker, I would like to enter into the Record the remainder of these quotes from the newspapers from this week. ``If House Democrats were looking to give Americans relief at the gas pump in the energy legislation passed on Sept. 16, they failed. In a jarring twist, the legislation offers a solution and then negates it. If Americans were hoping for at least half a loaf from this legislation, they were disappointed,'' (``Energy Legislation Less Than Half a Loaf,'' Readinq Eaqle Editorial, September 20, 2008) ``Don't be fooled by House Democrats'' disingenuous bill to lift the federal government's ban on offshore oil drilling. Rather than address a shortage of supply in the face of growing demand, the bill seeks to appease angry voters without harming the Democrats' mission to force America off fossil fuels * * * This isn't a bill intended to tap vast untapped reserves. It's a bill intended to give voters the impression that Democrats favor offshore drilling--while maintaining their opposition to it.'' (``Drilling for Political Advantage,'' Northwest Florida Daily News Editorial, September 20, 2008) ``Coming next week from Nancy Pelosi and the House Democrats: legislation that allows oil and gas drilling on the moon! The bill would have the same result as energy legislation passed Tuesday--no increase in domestic oil production--and it certainly wouldn't be any less cynical * * * The Democrats' intent here is so transparent it's embarrassing. Americans know the country needs to use all its resources to power the future and speed economic recovery. That includes offshore oil drilling--where the oil is.'' (``Let's Drill for Oil--Where There Isn't Any,'' Las Vegas Review Journal Editorial, September 19, 2008) ``Pelosi, who opposes new drilling for American oil, allowed the vote only because this summer Democrats were on the wrong side of offshore exploration, which seven in 10 Americans favor. Unfortunately, the House-passed bill is nothing more than a fig leaf for Democrats as they prepare to face frustrated voters in November.'' (``Same Old Drill: 'No- Energy' Bill Risks Voter Wrath,'' The Oklahoma Editorial, September 19, 2008) ``The sudden pro-drilling makeover of the Pelosi Democrats has always had an air--a gale, really--of election-year convenience, and the House proved it Tuesday by passing an energy bill that would put any bunko man to shame. This confidence trick won't expand domestic oil-and-gas supplies even a bit * * * As Congress runs down the clock for this term, the likelihood of reaching some grand pre-election energy bargain is vanishing fast. The House bill shows that the Pelosi Democrats simply aren't serious about expanding domestic energy supplies.'' (``Pelosi's Drilling Ruse,'' Wall Street Journal Editorial, September 19, 2008) ``Congress may as well close the windows, lock the doors and take a vacation. If the energy bill the House passed Tuesday night is any indication, the lower chamber is already out to lunch * * * The House this week finally responded, tweaking the drilling bans just enough to pass a bill that Republican leader John Boehner correctly calls `a hoax.' '' (``Energy Bill is a Dry Well,'' Bend Bulletin Editorial (OR), September 19, 2008) ``On Tuesday, House Democrats made an embarrassingly weak attempt to protect themselves * * * Therefore, House leaders produced a ``compromise bill'' and quickly moved it to a vote. It passed along largely party lines, and Democratic incumbents in tight races can claim they voted for drilling. Voters should not fall for that old trick.'' (``Democrats Drill for Political Cover,'' Roanoke Times Editorial, September 18, 2008) I want to say to my colleagues who are going to be here during this hour talking about this issue, we have many, many alternatives to giving a blank check to the Treasury. We have many, many alternatives to the bill that was passed last week by the Democrat House. Republicans know that. Republicans have presented those in the American Energy Act which we have proposed. I want to say that I for one, and I believe my colleagues are pro-American energy, and we are waiting for our Democrat colleagues to leave their anti-American energy stance and join us in being pro-American energy.

Ms. FOXX

Ms. FOXX. I thank my colleague from Texas for yielding me some time. Mr. Speaker, I think it's very appropriate that we are heralding this innovation today. I want to tie this into what we have been trying to do here on the House, what Republicans have been trying to do all this year, and that is to allow us to create more American-made energy by drilling in Alaska and drilling on the Outer Continental Shelf and using that money that we, the Federal Government would get, for the leases, to find new and exciting alternatives for our energy situation, the challenges that we face. I want to highlight again what some newspapers across the country have said about the cynical bill that was passed last week by Speaker Pelosi and the Democrats and show that this is understood all across the country. The New Hampshire Union Leader editorial said, ``Drilling for cover: Pelosi & Co.'s phony bill . . . Democrats in the U.S. House want you to think that they support expanded drilling for oil and natural gas. They don't. Their vote on Tuesday proved it . . . This bill is a total fraud. It gives access to only 12 percent of the estimated oil reserves we are currently not allowed to access. . . . The bill . . . does not allow States to share revenues from oil leases granted there. So States such as California, which faces a huge budget shortfall, have less incentive to give that approval. Democrats who have opposed expanded domestic drilling forever suddenly found themselves on the losing end of a major economic issue after gas prices hit $4 a gallon. Now they are pushing a phony drilling bill to fool the American people into believing that Democrats support new oil exploration.'' In the Honolulu, Hawaii, Star-Bulletin editorial, ``House energy bill falls short of bipartisan solution. Representative Neil Abercrombie's admirable effort to craft a comprehensive energy plan worthy of bipartisan support has been cast aside. Instead, the Democratic House leadership has pushed through a surrogate measure on a party-line vote that is doomed either in the Senate or by presidential veto, while providing Democrats political cover from voters angry about high gasoline prices. . . . The bill backed by Pelosi, a long-time opponent of offshore drilling, would keep the ban in effect within 50 miles of the shore. It would allow drilling from 50 to 100 miles from the shore if adjacent States gave their approval and would extend it beyond 100 miles with or without such approval. That means that 88 percent of the estimated 18 billion barrels of oil in waters now under drilling bans would remain off limits.'' The Washington Examiner editorial. ``Pelosi's sham editorial bill is an oily dodge.'' It says, ``The reality is this sham legislation effectively keeps the 26 year-old congressional drilling ban in place for 85 percent of all offshore petroleum reserves. Pelosi's measure allows virtually no drilling within 100 miles of U.S. coastlines, yet that's where most of the untapped resources are. ``Incredibly, that's not the worst of it. Pelosi's bill leaves in place the endless delays created via lawsuits filed by rabid environmentalists. U.S. Representative John Shadegg calls this problem the bill's 'litigation loophole.''' The Charleston, West Virginia Daily Mail editorial, ``A Drilling Bill That Does Nothing. When House Democrats came back to Washington, they quickly passed a bill that Democratic Senator Mary Landrieu of oil- producing Louisiana pronounced dead on arrival in the Senate.'' It goes on to say: ``Pelosi's plan is a slap in the face of Americans. Americans need to be as independent of foreign oil as possible. The public sees that. Yet Democrats refuse to pursue policies that will increase American oil production. This position is senseless, and it is especially so in an election year.'' The Los Angeles Times editorial: ``Wasted Energy Bill. House Democrats' push for expanded offshore oil and gas drilling was more about electoral positioning than drilling, aimed at convincing voters that the party shares their pain at the pump.'' And then an op-ed in Forbes, ``Washington's Offshore Snake Oil. On Tuesday, the House Democrats went on the record supporting an offshore drilling bill in a piece of legislation that now heads promptly over to the Senate to die.'' Mr. Speaker, I would like to put the remainder of my comments in the Record. Investor's Business Daily Editorial: ``Drill-Shy Congress . . . House Democrats have passed an `oil drilling bill that bans drilling where most of the oil is . . . On that first day of the new fiscal year, the congressional prohibitions expire on offshore drilling for oil and natural gas, as well as for the oil shale available in Western states. The Democratic-controlled, do-nothing Congress for once is frantic to do something before that deadline hits. In a big election year, with summer gas prices exceeding $4 a gallon, voters won't swallow an extension of the ban. So Speaker Nancy Pelosi on Tuesday had the House of Representatives pass legislation she unveiled less than 24 hours earlier, with Republicans blocked from offering amendments . . . But Texas Rep. Jeb Hensarling, the Republicans' Study Committee chairman, correctly called the bill `a sham' with no provision addressing the dire need for construction of new oil refineries, `no clean coal, no energy exploration in arctic Alaska, no nuclear energy and--if you read it--no exploration in the Outer Continental Shelf for energy in their bill.' '' (9/18/08)

Ms. FOXX

Ms. FOXX. I thank my colleague from Texas for yielding. We are talking about the need to improve our ability to use the energy that we have in this country and certainly to get additional energy, and I want to call to the attention of people who are paying attention to this debate something that has come out in the press which we Republicans have been saying for a long time, and it has to do with the no-energy bill that passed the House last week. I am going to hit some high spots, and, Mr. Speaker, then I would like to put the rest of the material into the Record. Mr. Speaker, the Boston Globe op-ed by Jeff Jacoby, 9/21/08, the title, ``Speaker Pelosi's Bill, a Feint of Supporting Offshore Exploration That Would Actually Make Drilling More Difficult.'' ``The bill permanently bans all drilling within 50 miles of the U.S. companies, which just happens to where most of the recoverable oil and gas reserves are.'' The Wall Street Journal editorial, ``Pelosi's Drilling Ruse.'' ``The sudden pro-drilling makeover of the Pelosi Democrats has always had an air, a gale, really, of election-year convenience, and the House proved it Tuesday by passing an energy bill that would put any bunko man to shame. This confidence trick won't expand domestic oil and gas supplies even a bit. The real game was to give vulnerable Democrats political cover by letting them vote for more offshore drilling while making more drilling all but impossible, thus appeasing the party's green wing. The House bill shows that the Pelosi Democrats simply aren't serious about expanding domestic energy supplies.'' Wall Street Journal, 9/19/08. The Oregonian from 9/17/08. This is a column by David Reinhard. ``Nancy Pelosi's Drilling Charade.'' ``Pelosi's alternative energy choice? Snake oil. How lame is the energy bill that Speaker Nancy Pelosi had House Democrats pass through the House on Tuesday? Louisiana Senator Mary Landrieu said before the vote that Pelosi's handiwork would be `dead on arrival' in the Senate.'' The title of that article is ``Pelosi's Bill is an Obvious Charade'' and appeared 9/17/08. Some other editorials. The Augusta Chronicle. ``Nothing. That's what this Congress came up with after months of high fuel costs and concern over our dependence on foreign oil and after a summer recess in which Senators and Representatives could have listened to the American people but did not. Congress came up with nothing, a fake energy exploration that would only weaken America.'' The title of that was ``They've Blown a Ruse; Congress Fails Yet Again.'' Augusta Chronicle editorial, September 21, 2008. Another one, the Northwest Florida Daily News editorial, ``Don't be fooled by House Democrats' disingenuous bill to lift the Federal Government's ban on offshore drilling . . . It's a bill intended to give voters the impression that Democrats favor offshore drilling-- while maintaining their opposition to it.'' That's in an article called ``Drilling for Political Advantage,'' September 20, 2008. It is refreshing to see that some of our newspaper folks are paying attention to what's going on in the House of Representatives and calling attention to it to the American public. Republicans did that all the month of August, calling attention to the fact that the Democrats refused to do anything to help hard-working Americans by lowering the price of gasoline. The American people deserve better than this. I am going to give one more quote from the Wall Street Journal. ``This confidence trick won't expand domestic oil-and-gas supplies even a bit . . . As Congress runs down the clock for this term, the likelihood of reaching some grand pre-election energy bargain is vanishing fast. The House bill shows that the Pelosi Democrats aren't serious about expanding domestic energy supplies.'' That, again, was in the Wall Street Journal, September 19, 2008. Republicans have a commonsense plan, it's called the American Energy Act. We believe in all of the above, conservation, alternatives, drilling for additional supply, using the money that would come from those leases to provide the alternative. ``Coming next week from Nancy Pelosi and the House Democrats: legislation that allows oil and gas drilling on the moon! The bill would have the same result as energy legislation passed Tuesday--no increase in domestic oil production--and it certainly wouldn't be any less cynical * * * The Democrats' intent here is so transparent it's embarrassing. Americans know the country needs to use all its resources to power the future and speed economic recovery. That includes offshore oil drilling--where the oil is.'' (``Let's Drill for Oil--Where There Isn't Any,'' Las Vegas Review Journal Editorial, September 19, 2008) ``Pelosi, who opposes new drilling for American oil, allowed the vote only because this summer Democrats were on the wrong side of offshore exploration, which seven in 10 Americans favor. Unfortunately, the House-passed bill is nothing more than a fig leaf for Democrats as they prepare to face frustrated voters in November.'' (``Same Old Drill: `No- Energy' Bill Risks Voter Wrath,'' The Oklahoman Editorial, September 19, 2008) ``This way, Democrats can claim to be opening the way to offshore drilling * * * under the restrictions included in the bill, no real drilling is likely to happen.'' (``Drilling Bill Lacks Substance,'' Buffalo News Editorial, September 22, 2008) ``If House Democrats were looking to give Americans relief at the gas pump in the energy legislation passed on Sept. 16, they failed. In a jarring twist, the legislation offers a solution and then negates it. If Americans were hoping for at least half a loaf from this legislation, they were disappointed.'' (``Energy Legislation Less Than Half a Loaf,'' Reading Eagle Editorial, September 20, 2008)

Ms. FOXX

Ms. FOXX. Mr. Chairman, I want to thank my colleague from California for yielding me time. He made a couple of comments earlier, I won't try to repeat everything that he said, but he asked a question; he doesn't know why we're here dealing with this bill that normally would be under suspension and certainly wouldn't be a rule bill, but I agree that we know why we're here: it's to fill time because the majority has so little of consequence for us to deal with when we should be dealing with consequential things such as the American Energy Act. However, I want to also point out the fact that this bill is not going to solve all of the problems of the world. It's not going to create the alternative energies that we need. I read the Constitution. I read it fairly frequently. Yesterday we celebrated Constitution Day. And I have searched in vain for the word ``education'' there. Nowhere did our Founding Fathers just think that the Congress of the United States should be involved in education. That was an issue that they thought best left to the States, and I think it is best left to the States and is not something that we should be dealing with here in the Congress. Almost every day someone from the majority party comes to the floor and decries the deficit that we're facing. Well, one of the reasons that we're facing a terrible deficit is because the majority party is involved in everything and many things it should not be involved in, especially in education. That is something we should leave to the States. If we did that and left the hardworking people's money at the State level, we would be able to do a lot more than we're currently doing. But I want to point out the fact that we should be dealing with the American Energy Act. We had a chance this week to do that, and we refused. Bipartisan passage of the American Energy Act would demonstrate to the world that America will no longer keep its rich energy resources under lock and key as the Democrats want to do. Not only will it help bring down the price of gasoline now, but it will make needed investments in the alternative fuels that will power our lives and our economy in the future. Now as my colleague also mentioned earlier, there's been a very fine survey done. Mr. Chairman, I would like to submit the entire survey for the Record today. I want to just point out some of the things that came out in the survey that my colleague had not pointed out. This survey was launched in July by the Republicans on the Education Committee. It was provided via the Caucus Web site and was sent to education stakeholders all across the country. We asked those people to give us their reactions and the impact on the high cost of energy to the schools. Ninety percent of the people who responded indicated that high gas prices are having an impact on schools in their community. Ninety-six percent of these respondents demanded that Congress do more to address the energy crisis. ``Nearly half of the respondents reported that high fuel costs have forced schools in their community to cut field trips and after-school activities; one-third of respondents reported that high costs forced schools to limit bus routes, and nearly a quarter of respondents reported that rising energy costs have led to higher school lunch prices.'' We don't need to create more programs to encourage students to go on field trips. They're not going to be able to go on field trips because there's no money to buy gas for the buses to take them on field trips. This is just one of the most ridiculous things that we've been talking about in this session of Congress. ``Since Democrats took control of Congress''--and I'm quoting again from the survey--``in January 2007''--they took control of Congress, and I think it's very important the American people know who's in charge--``the energy crunch has been swift and severe. Gas prices have risen from an average of $2.33 per gallon in the first days of the Democrat majority to more than $3.75 per gallon today while diesel prices--particularly important for school transportation purposes--have risen from $2.44 a gallon to more than $4 per gallon today.'' Even the liberal New York Times has talked about the problem that the schools are facing. We don't usually find ourselves agreeing with the New York Times on issues, but they talked about the pain that schools are feeling. ``As the cost of diesel fuel has soared well past what many districts budgeted for last spring, school officials are rethinking their transportation needs, making big-ticket spending cuts and a host of surgical trims.'' They go on to quote, ``In a national survey of superintendents released in July by the American Association of School Administrators, 99 percent said that rising fuel costs had forced across-the-board cuts.'' This was the New York Times, September 5, 2008. Here we are setting up programs, new programs, that cost a lot of money in bureaucracy and administration to try to do something we could do very, very easily by passing the American Energy Act. That's all within our power here to do, and here are some individual comments in their own words from Americans who demand energy reform. This is from Robert in Hamilton, Ohio: ``Yes, drill, build new refineries, solar, nuclear and anything else to break the dependence on foreign oil.'' That is exactly the position of Republican Members of this House. We want to break our dependency on foreign oil and we can do this. We are pro-American energy. Our colleagues, the Democrats, are anti-American energy. They will not do things that help us increase the supply in this country. Here's another comment from Lori from Middletown, Ohio: ``I work at (a local) Head Start program. Our families are struggling to get their children to preschool. They must choose between gas in the car or food in many cases.'' I listened to these platitudes by our colleagues across the aisle, and frankly, they sound pretty hollow to me when we hear comments like this. The American people are suffering. They are doing nothing. Another comment from Reeves in Gastonia, North Carolina: ``The rising cost of energy is impacting our school district in many ways: pupil transportation, employee travel, staff development, cost of goods/ services, et cetera. It is getting increasingly difficult to reduce costs and not have an impact on the instructional day.'' Again, the American people are hurting and the Democrats are turning a deaf ear. From Thomas from Joelton, Tennessee: ``We have to increase the supply of domestic oil. When my family grew in size, I did not reduce the amount of food provided to each member, I increased the supply. Gasoline is the same way.'' The American people are very, very smart and the Democrats are selling them short. They understand the issue. They understand that the issue is supply and demand, and this report concludes: ``Education stakeholders overwhelmingly report they are being hurt by the energy squeeze and demand that Congress do more. But instead of doing more, rank-and-file Democrats voted overwhelmingly with their leadership to kill a Republican measure that would have given schools relief and continue to block a comprehensive plan to bring down fuel prices. The House Republicans' `back-to-school' energy survey confirms a New York Times report from earlier this month: `School officials are rethinking their transportation needs, making big-ticket spending cuts and a host of surgical trims.' How much longer will the Democrat-led Congress wait to give them--and families, seniors, and small businesses--the relief they are demanding from today's high energy costs?'' It is time that the Democrats listened to the will of the American people and provide an opportunity for us to provide more supply for the American people and give relief to them. I say to them again, you're either pro-American energy or you're anti-American energy. So far, the position you've taken is anti- American energy, and I don't believe that's where the American people want you to be. Strapped: Students and Schools Pay the Price for Democrats Failed Energy Policies summary and key findings A survey launched in late July by House Republicans has yielded some eye-opening results as the Democratic leadership of the 110th Congress has refused to allow a vote on the House Republicans' American Energy Act (H.R. 6566), which aims to lower gas prices by increasing production of American energy, encouraging more conservation and efficiency, and promoting the use of more alternative and renewable fuels. The survey--provided via the Education & Labor Committee Republican caucus' website--was made available to education stakeholders across the country, from parents and students to teachers and administrators and sought their input on the impact of today's high gas prices on schools, colleges, and universities as the 2008-09 academic year begins. Key findings of the survey follow: 90 percent of the survey's nearly 1,000 respondents indicated that high gas prices are having an impact on schools in their community. 96 percent of respondents demand that Congress do more to address the energy crisis. Nearly half of respondents reported that high fuel costs have forced schools in their community to cut field trips and after-school activities; one-third of respondents reported that high costs forced schools to limit bus routes, and nearly a quarter of respondents reported that rising energy costs have led to higher school lunch prices. In spite of these stark findings, the Democratic leadership of the House has refused to schedule the American Energy Act for a vote and defeated Republican proposals on June 4, June 26, and September 16, 2008 to assist schools feeling the greatest impact from high energy costs. In fact, the Democrat-led Education & Labor Committee has not even held a single hearing on this issue. schools feel the pain of high energy costs American families, seniors, and small businesses are hurting amid high gas prices and heating costs that are poised to rise this fall and winter. But they are not alone. As schools across the country settle into the 2008-09 academic year, they too are feeling the pain of today's energy crunch. Indeed, from elementary and secondary schools to community colleges and universities, schools at every level are grappling with this crisis and making all-too-often painful adjustments just to get themselves through the year. Since Democrats took control of Congress in January 2007, the energy crunch has been swift and severe. Gas prices have risen from an average of $2.33 per gallon in the first days of the Democratic Majority to more than $3.75 per gallon today, while diesel prices--particularly important for school transportation purposes--have risen from $2.44 per gallon to more than $4.00 per gallon today. Simply put, the surge in energy costs has been dramatic, and the Majority has yet to offer the ``commonsense plan'' to lower gas prices then-Minority Leader Nancy Pelosi (D-CA) promised during the 2006 campaign season. Instead, the Speaker and her colleagues in the Democratic leadership have offered one ``no energy'' bill after another--proving themselves more interested in votes to provide political cover for vulnerable Democrats than they are in giving the American people an ``all of the above'' energy strategy to lower fuel costs. And all the while, families, seniors, small businesses, and--yes--schools are left to pay the price . . . literally. Earlier this month, the New York Times put the pain schools are feeling into perspective: ``As the cost of diesel fuel has soared well past what many districts budgeted for last spring, school officials are rethinking their transportation needs, making big-ticket spending cuts and a host of surgical trims. ``Some districts are eliminating field trips and after- school buses. Many are consolidating routes, causing some students to walk farther to their stops and others to lose their buses altogether. They are holding off on new teachers, counselors and textbooks, and teaming with neighboring districts for prekindergarten, special education and private school transportation . . . ``In a national survey of superintendents released in July by the American Association of School Administrators, 99 percent said that rising fuel costs had forced across-the- board cuts.'' (New York Times, ``Fuel Prices Squeeze School Districts,'' September 5, 2008) house republicans launch innovative ``back-to-school energy survey'' To help understand the scope of this problem, House Republicans launched a web-based initiative in late July focused on how high energy prices are impacting schools all across the nation. Housed at the Education & Labor Committee's Republican website, this survey gathered input from school officials, teachers, and families over a period of six weeks to determine the extent of the energy crisis for schools at all levels--input that Republicans hope will provide both parties even more of an incentive to come together in these final days of the 110th Congress and pass an ``all of the above'' plan to increase American energy production, encourage more efficiency and conservation, and promote the use of alternative and renewable fuels. The survey follows: 1. Are high gas prices having an impact on back-to-school preparations in your community? Yes, a very significant impact. Yes, somewhat of an impact. No, not much of an impact. No, not at all. 2. If you answered ``yes'' above, how are your local schools coping with high energy prices? Limiting bus routes. Cutting field trips/after-school activities. Increasing school lunch prices. Moving to a four (or fewer) day week. Expanding online course offerings. Other (please describe below). 3. Should Congress be doing more to lower gas prices and promote long-term American energy independence? Yes. No. No comment. 4. Additional comments: 5. Name: 6. E-mail (optional): 7. City, State: 8. May we share your story with others? Overstretched Schools Want Action from Democratic Congress The above-referenced New York Times article depicts the types of problems being experienced nationwide. In fact, according to the ``back-to-school'' energy survey, 90 percent of all respondents indicated that high gas prices are having an impact on schools in their community (72 percent responding that gas prices are having ``a very significant impact,'' with 18 percent responding that they are having ``somewhat of an impact''). The most common ramifications of high fuel costs are cutting field trips and after-school activities (provided by 48 percent of respondents), limiting bus routes (33 percent), and increasing school lunch prices (23 percent). As a result, nearly every respondent to the survey (96 percent) indicated that Congress should be doing more to lower gas prices and promote long-term American energy independence. Congress, however, has not answered the call, in spite of the fact that House Republicans unveiled the comprehensive American Energy Act to lower fuel prices nearly two months ago. Democrats also turned back a House Republican effort to provide more funding to assist schools dealing with high energy costs. House Republican Proposals for Reform Defeated by Democratic Majority As the recently-completed survey suggests, schools across the country are feeling the pain from rising energy costs. Even before the survey was launched, however, House Republicans attempted to provide more assistance to those schools feeling the greatest pain from today's energy crunch. On June 4, 2008, the Democratic leadership scheduled for House consideration the 21st Century Green High-Performing Public School Facilities Act (H.R. 3021), a bill that takes $20 billion in taxpayer dollars away from low-income students and students with disabilities and creates a massive, unproven school construction program run by bureaucrats in Washington. During consideration of the legislation, Rep. Cathy McMorris Rodgers (R-WA) offered a motion to recommit proposal to allow schools that have seen their energy costs rise by more than 50 percent since January 4, 2007--Rep. Pelosi's first day as Speaker--to use funds under the bill to help cover their energy expenditures. Unfortunately, Democrats killed the proposal, leaving the schools to fend for themselves. (Rollcall Vote 378, with 225 Democrats voting against the proposal.) On June 26, 2008, during consideration of the Saving Energy Through Public Transportation Act (H.R. 6052), Democrats blocked a Republican proposal to assist rural schools and students. The measure--offered by Rep. Greg Walden (R-OR)-- would have required that in any area where school bus services are being cut back because of high fuel prices, the funds under the Democratic bill must be used to help restore those services. Walden's proposal gave preference to rural and suburban areas where school buses have to travel greater distances to transport students. (Rollcall Vote 466, with 217 Democrats voting against the proposal.) On September 16, 2008, Democrats turned back a bipartisan plan--co-sponsored by 38 Democrats, 24 of whom inexplicably voted against it--that would have aided schools suffering from the effects of the energy crisis as well. During consideration of the Democrats' so-called Comprehensive American Energy Security and Consumer Protection Act (H.R. 6899), Rep. John Peterson (R-PA) offered a bipartisan plan he originally authored with Rep. Neil Abercrombie (D-HI) to begin taking steps toward lower gas prices and energy independence. The plan, in part, would have enabled states to enter into revenue-sharing agreements with the federal government as part of increased energy production far off of their coasts. Under the bipartisan plan, states would be permitted to use revenues to increase funding to schools feeling the impact of the energy crunch. But once again, the Democratic Majority blocked the plan, depriving schools of critical funding to help them cope with rising energy costs. (Rollcall Vote 598, with 216 Democrats voting against the proposal.) In Their Own Words: Americans Demand Energy Reform Following is a sampling of remarks left by respondents to the ``back-to-school'' energy survey detailing exactly what parents, teachers, and students are facing while the Democratic Congress refuses to act on meaningful legislation to bring down gas prices and other energy costs: ``Yes, drill, build new refineries, solar, nuclear and anything else to break the dependence on foreign oil.''-- Robert from Hamilton, OH. ``I work at [a local] Head Start program. Our families are struggling to get their children to pre-school. They must choose between gas in the car or food in many cases.''--Lori from Middletown, OH. ``The rising cost of energy is impacting our school district in many ways: pupil transportation, employee travel, staff development, cost of goods/services, etc. It is getting increasingly difficult to reduce costs and not have an impact on the instructional day.''--Reeves from Gastonia, NC. ``What are schools to do? The price of diesel, which most school buses use, is even higher than the price of gasoline. The option of passing or even sharing the cost of the fuel increase with the consumers (parents) is not an option. Levies are increasingly more difficult to pass. Field trips and busing for athletics are either eliminated or the parents are charged a fee to help offset the transportation cost. Lengthening the school day and providing a 4-day week is vehemently opposed by many parents who do not want to pay for child care for that 5th weekday the child would not be in school. Freezing wages and cutting back on insurance benefits for teachers and support personnel deters people from teaching at a time when the country desperately needs to be focusing on Math, Science and Technology so its students are better prepared for employment in our global economy . . . I repeat--what are schools to do?''--Shari from Medway, OH. ``We cannot believe Congress went on vacation. We must have a complete policy. Drill for oil, build new refineries, build nuclear plants, and anything else that will work. Everything is being affected, cost of groceries and all other goods. Please help. Keep up the fight for us. We need an energy policy.''--Ruth from Vacaville, CA. ``We have to increase the supply of domestic oil. When my family grew in size, I did not reduce the amount food provided to each member, I increased the supply. Gasoline is the same way.''--Thomas from Joelton, TN. ``As an educator I am very concerned on the impact of budget cuts for all students and staff operating in our school system.''--Tessa from Waleska, GA. ``Being a rural community where most of the students come to school on buses, high fuel prices cause a big problem.''-- Edward from Wapato, WA. ``The high price of fuel and energy costs [has] significantly reduced the amount of funding we have for educating our children to be competitive in a world class economy.''--Pam from Medical Lake, WA. ``Every school child that I know has had their bus route increased. My 6 year old is now on the bus for more than 2 hours a day.''--Claudia from Stevenson Ranch, CA. ``This year we may not be able to go on any field trips because the school bus rates have gotten so expensive. Families are having a tough time as it is. It is sad because the kids are missing out on those experiences.''--Tar from DeLand, FL. Conclusion Education stakeholders overwhelmingly report they are being hurt by the energy squeeze and demand that Congress do more. But instead of doing more, rank-and-file Democrats voted overwhelmingly with their leadership to kill a Republican measure that would have given schools relief and continue to block a comprehensive plan to bring down fuel prices. The House Republicans' ``back-to-school'' energy survey confirms a New York Times report from earlier this month: ``School officials are rethinking their transportation needs, making big-ticket spending cuts and a host of surgical trims.'' How much longer will the Democrat-led Congress wait to give them--and families, seniors, and small businesses--the relief they are demanding from today's high energy costs?

Ms. FOXX

Ms. FOXX. Madam Speaker, the speaker just before me just admitted that the jobs that have been lost primarily have been lost while the Democrats have been in control of this Congress. They continue their assault on the American family with their energy bill, which doesn't help American families who are hurting at the pump. This new bill results in an $85 tax hike on consumers. Our constituents have been looking to us for relief. That bill does not bring the relief they need. Skyrocketing gas prices have taken a dramatic toll on almost every area of our lives. Families have had to adjust by tightening budgets. Schools adjust by cutting field trips and textbook purchases. Small businesses are watching their profits shrink, while making tough decisions about expanding their company or being able to make their payroll. This is has all occurred under the Democrats' watch in the last 20 months. The House Republican plan increases production of American-made energy in an environmentally safe way. It promotes new, clean and reliable sources of energy, while cutting red tape and increasing the supply of American-made fuel and energy. The Republican plan encourages greater energy efficiency by offering conservation tax incentives to Americans who make their home, car, and business more energy efficient. The House Republican plan helps American families combat the increase cost of energy. I invite my colleagues on the other side of the aisle to join us in bringing real solutions to the energy crisis.

Ms. FOXX

Ms. FOXX. Mr. Speaker, I want to say that I wish that what the gentlewoman had said was true. I wish that the bill that passed yesterday would do something to bring down the price of gasoline. If that were true, it would have had a unanimous vote. Instead, Republicans voted against it and many Democrats voted against it because we know that the bill is going absolutely nowhere. It was simply cover for Democrats who are in tight election races. It is a cynical, cynical ploy on behalf of the Democrats, and I am so sorry to see that because I think ultimately people will be held responsible for the cynical ploys that they perpetuate against the American people. With that, Mr. Speaker, I urge all Members to support the passage of S. 171. I yield back the balance of my time. Announcement by the Speaker Pro Tempore

Ms. FOXX

Ms. FOXX. No, it could not.

Ms. FOXX. I'd be happy to.

Ms. FOXX. As, I think, most people in this country know, it is the House of Representatives. The founders specifically gave the power to the House of Representatives to start revenue bills. It is, of course, the House and the Senate which must vote on all bills, but it is the House of Representatives that must begin revenue bills.

Ms. FOXX. I will yield for a question from my colleague from Michigan.

Ms. FOXX. Well, I thank my colleagues tonight for being here on the floor, and especially, I thank my colleague from Georgia for leading this Special Order. We've talked a little bit about the Constitution; we've touched on it. Our colleague from Tennessee is bringing wonderful energy to this issue of energy tonight, and I am so grateful for his being here because, as he said, he generally is not a very partisan person. He doesn't come here and talk very vociferously about issues that are before the House. He's doing it now, and you can tell he is really is passionate about this because this is a passionate issue for many of us. Today is Constitution Day, and I think it's very important that we highlight some issues related to the Constitution as they relate to what happened on this floor last night and as to what has been pointed out tonight. We have not followed the Constitution in the way that we should have followed it. We haven't followed the way the House has operated in the past. We haven't even followed the promises that were made by the Speaker in 2006 when she said this would be the most open Congress, that this would be the most fair Congress. Bills should go to committee. They should come to the floor and be amendable, but none of that has happened. One of the things that bothers me the most about our not dealing with issues as they relate to the Constitution is how the Congress is trying to blame our President for everything bad that has happened in the last 2 years. When I go out and talk to schoolchildren especially, I point out to them that the first article in the Constitution, article I, is about the Congress. That is not an accident. The founders wanted the Congress to be the strongest part of our government. We have three branches of government--the legislative, the executive and the judicial branches. They intended the Congress to be the most important. We're the ones who pass the laws. We're the ones who can make things happen in this country and who can make things happen in a hurry, but what the Democrats, who are in charge of the Congress and have been for the past 20 months, want to keep doing is saying, ``It's not our fault that these things are happening. It's not our fault.'' Ladies and gentlemen, it is their fault, and the blame has to be laid solely at their feet. Not only are they not taking on the responsibility to create more American-made energy, which will help every American in this country, but they seem to be almost anti American energy. We have been proposing that we be pro American energy. They are not.

Ms. FOXX. The President does not have the power to wage war without the consent of the Congress, and he could not fund any effort. He couldn't fund any department in the Federal Government without the consent of the Congress. So, again, the founders set it up that way. They wanted the Congress to be the most powerful branch of the government, and the Congress is the most powerful branch. What has happened in the last 20 months since the Democrats have been in charge of the Congress? Let's look at the unemployment rate. It has gone up. It was very, very low in January of '07. It has gone up over a percentage point, in fact, about a percentage point and a half since the Democrats have been in control. Look at the price of gasoline and how it has gone up since they have been in charge. What were they doing as these gas prices were going up? Voting on bills like declaring National Passport Month, National Train Day, Great Cats and Rare Canids Act where we appropriated either $20 million or $50 million to other countries to help them identify rare cats in their countries. Then the favorite of most people is the Monkey Safety Act, which also appropriated, I think, about $50 million to teach people how to handle monkeys safely in this country. The Congress, the Democrat-controlled Congress, has abrogated its responsibility for taking care of this situation. It has turned its back on the average American, and that is a shame. Last night, what happened was that a sham bill passed in this House with very little support from our side and with many Democrats voting against it. That was nothing but cover for Democrats. Even the media here in Washington, D.C., the liberal media, has said that. It is only so that Democrats can go home and say, ``I voted for more drilling.'' That's what the Republicans have been asking for, and I voted for more drilling. What's even worse is that 24 of the Democrats who had signed onto this bipartisan bill, introduced by Representative John Peterson, who is a Republican from Pennsylvania, and Representative Neil Abercrombie, who is a Democrat from Hawaii--the bill is called the Peterson- Abercrombie bill. We offered that as an alternative. It's not a perfect bill. There are a lot of problems with it, but we thought surely the 39 Democrats who were cosponsors of that bill would have voted for it. No. Only 15 of them voted for that bill, and 24 of them voted against it, but they tell their constituents that they are working hard to bring an alternative to the situation. I just want to quote a couple of them on what they said. Representative Nancy Boyda, Democrat of Kansas, a freshman here, was a cosponsor of the Peterson-Abercrombie bill, but she voted against it when given the opportunity last night. She said in a press release, though, on the 4th of September: ``I've been working with a large bipartisan group of representatives to develop a comprehensive, commonsense energy bill. Our Peterson- Abercrombie bill will provide sorely needed relief for Kansas families. It will help create energy independence for America and millions of jobs to help stabilize our struggling economy,'' press release, Representative Nancy Boyda, Democrat of Kansas. Now, what our Democratic colleagues think they can do is to tell their constituents one thing and do another on the floor of the House. We are not going to let that happen. We are going to tell the American people what is going on here. Speaker Pelosi has said it will be okay if these people campaign against her and blame her for not having energy legislation. They can go out and promise it, but they don't have to do anything. We have Representative Baron Hill, Democrat of Indiana. This is in a press release from his office on the 14th of August 2008 while we were in the midst of being up here every day, telling the American people what the Democrats were doing. This is what his press release said: `` `I hope this bipartisan Peterson-Abercrombie bill will, indeed, be brought to the floor for a vote when we return to Washington in September,' Hill said. `It would provide immediate relief while also bolstering the development of new energy sources in order to move this country closer to energy independence,' '' Representative Baron Hill. You know, folks, they were right about the Peterson-Abercrombie bill. It would have helped, but that's not what they voted for last night. They voted for a bill that creates an illusion of doing something and does absolutely nothing. The last one I'm going to quote is a newspaper article that talks about Representative Steve Kagen, also a freshman, who is a Democrat from Wisconsin. This is a newspaper article from the Herald Times in Wisconsin on 9/13/08: ``Kagen, who signed onto the bill Tuesday, said the Abercrombie- Peterson bill `really is a comprehensive energy policy and a roadmap forward. That bill has the balance in investing in renewable sources. It raises royalty fees from those who are drilling, and it doesn't limit drilling to four or five States.' '' The title of that article was ``Congress Sitting on Energy Hot Seat.'' Ladies and gentlemen, we have to hold people accountable for doing what they promise to do in this country. Republicans were held accountable in 2006, not just for not doing what they had promised. What we were held responsible for was being part of a party that has a philosophy that we stand for some things. We need to hold these people responsible. The other thing that I think needs to be pointed out, and this was pointed out during the month of August several times, but not in exactly this way; but the Democrats, while letting average working Americans, all Americans, actually, suffer from the high price of gasoline, but particularly our working friends who are paying high prices and struggling, struggling every day to make ends meet and make it in this country, obey the law and do what is right, the Democrats came to the Congress saying we are going to work every day. We think the Republicans haven't done all they should do. We are going to work every day. But from the first of August until the end of December they plan to work 14 days. Fourteen days, ladies and gentlemen. While you are suffering, wondering how you are going to pay your bills, they are going to go home the end of next week after having worked this week, 4 days last week, maybe only 4 days this week. It may end up being only 13 days. It may end up being only 12 days. They are going to go home and leave you wondering how are you going to pay the bills, pay for the gasoline and deal with the challenges that face you and your family. That is unacceptable to us as Republicans. That should be unacceptable to every American. We must hold them accountable, and we must make them stay here until we have an energy policy that will bring relief to the American people. Now I want to yield back to my colleague from Georgia, Mr. Westmoreland.

Ms. FOXX

Ms. FOXX. Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.