Jeb Hensarling

Mr. HENSARLING

Mr. HENSARLING. Thank you, Mr. Chairman. Again, I have similar concerns I had with one of the earlier amendments. I think, frankly, the gentleman from New York has a very good amendment. I will support it. I do, again, believe that there needs to be increased transparency and accountability for how these funds are used. But, again, Mr. Chairman, I have concerns, and I agree with our distinguished chairman of the Financial Services Committee that this is an important vote that we will take on the underlying legislation. But I continue to have concerns that I feel have not been addressed. Number one, although the underlying legislation--and the gentleman from New York is certainly adding more accountability and transparency to the process--although my friends on that side of the aisle take a few steps forward, they unfortunately take a number of steps backwards as well. As I look at the underlying legislation, particularly with respect to the HOPE for Homeowners program which, by the way, the Congressional Budget Office estimates is a 15 percent subsidy cost, and that could cost $675 million over 10 years, that the legislation, the underlying legislation actually eliminates borrower certifications. That a borrower has not intentionally defaulted on the mortgage or any other debt, has not knowingly or willfully and with actual knowledge furnished material information known to be false for the purpose of attaining an eligible mortgage. I mean, Mr. Chairman, that is clearly a step backwards when it comes to adding accountability and transparency to the process. In addition, the underlying legislation eliminates the requirement that an individual receiving assistance under that program verify their income by providing tax return information. So I have heard all of the wonderful words about our accountability and transparency increases within the legislation, but I haven't heard a whole lot though about the steps the underlying legislation has taken in the wrong direction. In addition, Mr. Chairman, I still am concerned about this provision that I hope that perhaps the distinguished chairman will address, the provision in the underlying bill allowing the Secretary to place board observers into ``assisted institutions.'' I mean assisted institution is defined on page eight of the base bill and it includes any institution that receives directly or indirectly, or indirectly, any assistance or benefit. I still question, again, whether or not a small business in a rural community who does business with a small community bank receiving TARP funds, all of a sudden are they going to end up having a Federal observer in their small business? Now maybe some Members would like to go down that road. Maybe they think that is a good thing. I, for one, do not. I don't believe that was probably the intention of the author of the bill. But, again, I am reading the definition in the legislation. I think it's a great concern, and Members need to pay very careful attention before they vote on the underlying legislation. With that, Mr. Chairman, I reserve the balance of my time.

Mr. HENSARLING. Mr. Chairman, I rise to claim time in opposition.

Mr. HENSARLING. Mr. Chairman, as I look at this amendment, I think the amendment is probably a good one, adding to the transparency and accountability, to the underlying legislation, but I still believe that I have a number of concerns. And to the extent that this facilitates passage of the underlying bill, again, what I perceive that we have here is buyers' remorse for many with respect to the underlying TARP Program. And what many Members, I believe, saw was, either, one, they didn't see a plan, or, number 2, the plan they thought they saw was not the plan that they saw implemented, and whatever they saw implemented they didn't see too clearly because of the transparency and accountability that most Members would want was not present. I feel that because of the exigent circumstances the legislation was, perhaps, drafted in haste. Now, the underlying legislation to which the gentleman's amendment would apply continues to have a number of underlying problems. Now, I do want to compliment the Chairman of the Financial Services Committee, who I think has added some very important accountability and transparency provisions to the underlying legislation. I think almost all Members agree that it's absolutely insane to be investing taxpayer money in these companies with no reporting requirement whatsoever, and I compliment the chairman for including that in the underlying legislation. The reporting requirement on new lending attributable to TARP is another good provision. But, Mr. Chairman, I have three major concerns dealing with the underlying legislation. Number one, if legislation still puts us on the road to picking winners and losers in our economy, express language dealing with the auto bailout, it doesn't do anything for the arts and crafts supplier in Athens, Texas, that I represent. I don't see language in the bill that's going to help them. It doesn't do anything for the aluminum and zinc die caster in Jacksonville, Texas, in my district. I don't see any express language in the legislation that helps them. On this side of the aisle, Mr. Chairman, we want to help everybody in the economy. Again, name me three industries that aren't hurting in this economy. Why, again, Mr. Chairman, does the bill pick winners and losers? Second of all, Mr. Chairman, it specifies a rather questionable foreclosure mitigation plan, one that apparently will take at least $40 billion of taxpayer funds, roughly patterned after the FDIC plan, if you read the language, one that even the FDIC admits may cost $25 billion. Mr. Chairman, people on this side of the aisle support foreclosure mitigation, too. It's called preservation of your job, expand your job opportunities, and expand your paycheck through middle-income tax relief. That's the foreclosure mitigation plan that we need to see. Then finally, Mr. Chairman, I am concerned about a provision that would permit the Secretary of the Treasury to put, quote-unquote, observers into assisted institutions. Again, I think this may speak to the haste in which the underlying legislation has been drafted. It didn't go through any markup. We didn't have any formal hearing on it, but on page 11 of the base bill, it states that the Secretary may require the attendance of an observer at, quote-unquote, any assisted institution. Well, on page 8 of the bill it defines an assisted institution as any such institution that receives directly or indirectly assistance or benefit that derives from the funds that are available. My concern, Mr. Chairman--and I don't believe it was the intent of the author of the legislation--but seemingly you could be giving the Secretary of the Treasury power to put an observer in any small business that does business with a community bank and gets a loan. We may be on the precipice of having a Secretary of Treasury, who admittedly doesn't pay his own taxes, and yet he will have the right to put an observer into small businesses to make sure they pay theirs. Again, I doubt it was the intent of the drafter of the underlying bill for that to happen, but it concerns me, Mr. Chairman, that we would have that in the base bill. And I hope Members would clearly take a look at that before approving the underlying legislation. With that, Mr. Chairman, I would like to reserve the balance of my time.

Mr. HENSARLING

Mr. HENSARLING. Mr. Chairman, I have an amendment at the desk made in order by the rule.

Mr. HENSARLING. Mr. Chairman, I thank the gentleman for yielding. Mr. Chairman, I again question why we are even here today. I observe again that those who have risen to be the largest critics of the TARP bill were the ones who wrote the TARP bill. So, number one, why weren't the standards, the accountability, the provisions that some are seeking today, why weren't they there originally? That is question number one. Question number two is: Why are we having to have a vote that turns off the spigot of an extra $350 billion of taxpayer money, as opposed to turn it on? So why are we even having to have this vote, Mr. Chairman, I think is an interesting question that the American people want to know the answer to. Now, already if you look at the actions of the Federal Reserve, if you look at the actions of Treasury, Mr. Chairman, we are already up to somewhere in the neighborhood of $7 trillion to $8 trillion of potential liability taxpayer exposure. I don't necessarily believe the taxpayer will have to pay it all. I hope and pray that the taxpayer will get some return on his investment. But to sit here and say that unless Congress somehow authorizes the incoming President to spend an extra $350 billion that we could spend ourselves, and to give him this authority, without any plan being presented whatsoever, I mean, Mr. Chairman, that's just something I don't understand. It's not something that the constituents that I represent in the Fifth District of Texas understand. Now, I do believe that the chairman is right on a couple of instances, that, yes, we need to know how institutions who are receiving TARP funds actually spend it. That's important. We need to have some kind of measurement of success to know what's actually happening here. But I look at the provisions of the strings that he's attempting to attach after the fact, when, if this was a horse leaving the barn, I don't think we've seen much left but his tail. But when I look at the strings that are being attached here, I mean, Number 1, we have explicit language here that most of us have concluded is picking winners and losers in our economy, express language dealing with the auto companies. Now, I don't want to see the auto companies fail. Nobody in America does. But name me an industry in America that isn't struggling. Is Congress so wise that they can decide which industries are deserving the taxpayer bailout and which aren't? It's one thing for the Federal Government to try to monitor the money supply, ensure that the money supply is proper, that would hopefully lift all industries, help all families, help all job creators and those who have the jobs. But it's another to start saying, well, here's the explicit plan for the auto industry. And if it's the auto industry today, is it the airlines industry tomorrow? Who is it next week? Again, how can everybody who's struggling bail out everybody else who's struggling? And what has become of all of this money? Again, it's not like this is the only $350 billion lying around. The Federal Reserve already has a number of credit facilities that are set up. We don't even know the full impact of the first $350 billion. And so now we have a plan that, as I understand, and I believe I've heard the chairman say that the Senate does not intend to vote on this, which is another reason I question the use of the House's time on this matter. But trying to have a provision that picks winners and losers in our economy and, specifically, in our housing industry as well. We know about the tragic circumstances in our housing industry. But what's going to make it even more tragic, Mr. Chairman, is to take money away from people who are current on their mortgages, or who rent, or who own their homes outright, to give the money to people who aren't current in their mortgage. Now, there's a couple of reasons people aren't current in their mortgages. Number 1, maybe it's through no fault of their own. Maybe they were duped by a predatory lender. Maybe they had a serious illness. Maybe they had a loss of job. I mean, these are serious setbacks, and I would hope that we could help these people. But, Mr. Chairman, there's a huge universe of people who engaged in predatory borrowing, out-and-out mortgage fraud. There's a universe of people who decided they would turn their homes into an ATM machine, and now they expect their neighbor to bail them out. There's a whole group who didn't really buy a home, they bought an investment and they decided to live in it, and now they expect their neighbor to bail them out. When you're struggling to pay your mortgage, Mr. Chairman, you shouldn't be compelled to have to pay your neighbors' as well. For all these reasons, this amendment should be defeated.

Mr. HENSARLING. Mr. Chairman, I've listened carefully to the previous speaker and comments from our distinguished chairman of the Financial Services Committee. It's quite clear to me that, come early next week, they're certainly going to miss President Bush. I don't know who they're going to start to blame every problem in the universe on come next week. I didn't come here to engage in the blame game, but I certainly can't let the chairman's comment pass as he said something to the effect that President Obama is inheriting a problem created by President Bush. Well, as the chairman knows, there's a lot of underlying causes to the predicament we find ourselves in and I'm happy to debate them at a later time, but I would also note that the economic policy of America is determined substantially by this Congress, and the economy was doing just fine until the Democrats took over Congress. Now, Mr. Chairman, as I look at the bill that is before us, again, there are certain areas where I agree with our distinguished chairman, more accountability and more transparency tends to be a good thing. But Mr. Chairman, there is a provision in here though that says the ``Secretary may require an observer in the board rooms for institutions that receive TARP money.'' Now, Mr. Chairman, I've been around here for a few years and although I have no doubt that everybody is well-meaning in the legislation that they bring to the floor, my fear is that today's ``may'' shall turn out to be tomorrow's ``shall.'' And my fear is that today's ``observer'' will become tomorrow's ``suggester'' and next week will become ``the mandator.'' I think this is a terrible, terrible precedent. I think it bespeaks of industrial policy run by the government. I think it puts, again, one more of those slippery stones on that slippery slope to socialism. And Mr. Chairman, what are they observing? I mean, what specific policies have they been given to undertake by this United States Congress? What are they observing? And what I observe, Mr. Chairman, is that my reading of the legislation says that any ``assisted institution'' as defined by any institution that receives ``any direct or indirect recipient of assistance or benefit from TARP.'' And so I hope that the distinguished chairman of the Financial Services Committee, on his time, will enlighten us on his interpretation of how he wrote the underlying bill. Because does this mean that any business borrowing money from a bank under TARP will now be subject to an observer of the Federal Government? Does this mean anyone who has an insurance policy with AIG is now subject to an observer from the Federal Government? Since we have express language in here dealing with the auto industry, I hope the chairman will answer the question, does this mean that the Secretary of the Treasury can place an observer in every UAW union hall across the Nation if they receive monies under TARP? Now, again, I have no doubt that, although I disagree with the chairman on a number of issues, I know that his purpose is a noble one. But I also know, Mr. Chairman, that when things begin in Washington, they don't always end the way that they started. And so I would question, number one--you know, we were told at one time Social Security would be solvent forever; well, it's not. We were told that TRIA was a temporary program; well, it's not. We were told Fannie and Freddie would never be bailed out. And I'm sure those who said it meant it at the time, but circumstances change, they were bailed out. We were told that once House Democrats took over control, that they would rein in spending and balance the budget, and now we have the largest deficit in American history. So I'm fearful that this provision will grow into something that maybe it's not intended, not something that I would appreciate. And I'm also very curious why so many other accountability provisions dealing with home borrowers have seemingly fallen out of the bill, including one that the chairman agreed to earlier--I believe it was in April in the markup of the Hope for Homeowners program--when he accepted the amendment now, but seemingly is taking it out of the bill at this point. Mr. Chairman, I reserve the balance of my time.

Mr. HENSARLING. I was listening carefully to the distinguished chairman of the Financial Services Committee when he introduced the previous speaker. He said the gentleman cared passionately about the foreclosure mitigation, and apparently, other Members don't. I'm not sure who the chairman was alluding to. We certainly care about foreclosure mitigation on this side of the aisle. Mr. Chairman, there is no better foreclosure mitigation plan than keeping your job, number 1, having expanded opportunities for a better job in the future, and number 3, having a growing paycheck. That's why Republicans on this side of the aisle have supported a tax relief plan to make sure that people keep their jobs and to help small businesses. It's why people on this side of the aisle--why Republicans, Mr. Chairman--have supported a plan that would reduce the tax on future job creation--the capital gains tax, the tax on investment. It's why we have supported tax reductions for middle-income families so they can pay these mortgages. I see, unfortunately, that the chairman has left the floor, but I would also observe that over 2 million mortgages have been refinanced between the borrowers and lenders. Listen, a great tragedy has occurred in our housing market. Now the question is: With all of these losses, who is going to realize it? Is it going to be the borrowers and the lenders or is it going to be the taxpayers? So, if some believe there are other Members who don't care about foreclosure mitigation, I would say, Mr. Chairman, it appears that some Members don't care about the debt that they are placing on future generations, constraining their homeownership opportunities. They don't care about the fact that we are now looking, under this Congress, at the single largest deficit in America's history, that we are seeing red ink as far as the eye can see and that we are possibly planting the seeds for an even worse recession 5, 6, 7, 8 years from now because bad public policy decisions, Mr. Chairman, after 9/11 and after the dot-com bubble have led us to where we are today.

Mr. HENSARLING. Perhaps the chairman did not hear all of my remarks-- --

Mr. HENSARLING. I do not.

Mr. HENSARLING. Mr. Chairman, I demand a recorded vote.

Mr. HENSARLING. Again, perhaps the chairman of the committee missed some of my remarks. My concern is the way that this is drafted is we are giving the Secretary of Treasury the power to put an observer into every small business in America who borrows money from a community bank that gets TARP funds. That isn't what might happen, that is what does happen. And when the chairman says he's concerned about accountability, I wonder why doesn't that go to the borrower side. Why is he striking that portion of the bill that has borrower certification that they did not intentionally default on their mortgage? Why does this bill strike the fine or imprisonment for borrowers who make willful, false statements? Why does he strike the requirement of those who are found to have committed mortgage fraud, that they have to expunge any direct financial benefit? So it's kind of selective concern, I would say.

Mr. HENSARLING

Mr. HENSARLING. I thank the gentleman for yielding. Mr. Chairman, I must admit that I find it somewhat ironic that the biggest critics of the bailout legislation are the very people who wrote the bailout legislation. Many are shocked at the lack of transparency and what they would view as the apparent lack of effectiveness. Again, these are the people who wrote the bill. I think the bill that is before us is a tacit admission that they didn't get it right in the first place. You know, Mr. Chairman, I don't say that in trying to assess blame. There were Members on both sides of the aisle who supported that legislation in good faith. I was not among them. I supported an alternative piece. But I do say this to make the point that here is another piece of legislation being rushed to the floor. Haste makes waste. The first TARP bill was fraught with unintended consequences, and now we are here, perhaps with Son of TARP--I believe the previous speaker said-- maybe it's fraught with unintended consequences as well. Mr. Chairman, I would also ask a few questions and make a few observations. You know, if government spending money could solve the problem, we're up to about $7 or $8 trillion of potential taxpayer exposure already. Now, I don't believe the taxpayers will have to pay the entirety of the bill, but if they did, we're looking at almost $100,000 per American family. And here is another $350 billion on top of that, Mr. Chairman. And I have the question, where is the plan? Where is the incoming administration's plan for the $350 billion? And last I looked, Mr. Chairman, Congress doesn't have any extended recess scheduled until April, and certainly the majority has proven their ability to ram through legislation in 24-, 48-hour's notice. Why do we have to hand over an additional $350 billion of hard-earned taxpayer money to an administration that hasn't taken office, who hasn't even presented us a plan? Why is Congress yielding, yielding their spending prerogatives at this time? I simply don't understand it. Now, Mr. Chairman, it appears that we are given three different choices here: number one, we can vote to disallow the second $350 billion without receiving a plan. That's simply what I advocate. Some may, once again, want to give the $350 billion check to the administration. And then there's Chairman Frank's plan. We will give them the $350 billion, but we will attach certain strings to it. Now, I agree with the chairman when it comes to accountability. There are certain strings of his that I would agree with. I don't understand why you would hand over money and not at least set up some provision for knowing how it's spent or be able to measure whether or not the plan is succeeding. And I compliment the chairman for that. Outside of that, Mr. Chairman, I do not believe that I agree with his other extremes. Number one, I believe that he has a string that has the Federal Government picking winners and losers. Now, he and the previous speaker had a colloquy regarding the auto industry. Mr. Chairman, I don't know what industry isn't suffering in this economy. If it's the auto industry today, is it the airline industry tomorrow? Is it the tourist industry on Thursday? And when does Starbucks get in line? We're not helping the entire economy. This TARP legislation I believe implicitly picks winners and losers. Second of all, we start going down this road of putting government observers in the boardrooms. I mean, the government agent who observes today will suggest tomorrow, and he, I assure you, will mandate on Thursday. I've seen this before. I don't want to go down this road, Mr. Chairman. And then last but not least, taking money away from people who are current on their mortgage and giving it to people who aren't current on their mortgage is no way to work our way out of the economic peril that we find ourselves in. We need tax relief for families. We need tax relief for small businesses. We need to grow our way out of this economic crisis.

Mr. HENSARLING

Mr. HENSARLING. Mr. Speaker, may I inquire how much time remains on both sides?

Mr. HENSARLING. Mr. Speaker, at this time I would like to yield 2 minutes to the gentleman from Georgia, the incoming chairman of the Republican Study Committee, Dr. Price.

Mr. HENSARLING. Mr. Speaker, at this time I would yield 1 minute to the gentlewoman from Michigan (Mrs. Miller.)

Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to a dear friend, a great protector of our Constitution, one of the great champions of the taxpayer, the gentleman from Florida, (Mr. Feeney).

Mr. HENSARLING. Mr. Speaker, at this time, I am happy to yield 1\1/2\ minutes to the distinguished ranking member of the Armed Services Committee, the gentleman from California (Mr. Hunter).

Mr. HENSARLING. Mr. Speaker, may I inquire how much time remains on both sides.

Mr. HENSARLING. Mr. Speaker, at this time I am pleased to yield 2 minutes to the gentleman from Illinois (Mr. Roskam).

Mr. HENSARLING. Mr. Speaker, we have one speaker remaining, so we would reserve at this time.

Mr. HENSARLING. Mr. Speaker, may I again inquire as to how much time is remaining on both sides, please.

Mr. HENSARLING. Mr. Speaker, I yield myself an additional minute. Everybody agrees that the auto industry needs to reorganize, but the question that is before this body is: Is it going to reorganize at the risk of investors or is it going to reorganize at the risk of the poor, beleaguered taxpayer? Is it going to take voluntary capital from investors at risk or involuntary capital from taxpayers that is placed at risk? The taxpayer can take no more. We are seeing the largest nominal deficit in the history of our Nation. The unfunded obligations of the average American family are over $400,000. Bailout mania has had thousands of dollars of obligations to them. We want the Big 3 to survive, but they've got to get down their labor costs. They've got to convince the American consumer that their products are worthy of their investment. They must reorganize, but another bailout at the taxpayer expense is not the answer, particularly when small business does not enjoy the same benefit. This bill should be voted down.

Mr. HENSARLING. Mr. Speaker, at this time, I yield myself 3 minutes. No one in this Chamber wants to see the Big 3 automakers fail. No one. The loss of these automakers would be a tragic circumstance for our economy. There is no doubt. Mr. Speaker, I ask the question that I asked of the chairman of the Big 3 automakers, and that is: Name me three industries that are not hurting in this economy that could not be helped, sustained and made more profitable by the infusion of $15 billion? Stone cold silence at the witness table. Mr. Speaker, everyone in every industry is hurting in this economy. Why the automakers? Why not the airlines? Why not the home builders? Why not the restaurants and the hotels? They do not have a monopoly on economic misery. If our purpose here today is to preserve jobs, I'm wondering why the money is not destined for the small businesses of America. This year, a half a million small businesses that are employing an average of 10 workers will fail. Small business is the job engine of America, not just the small businesses that may be attached to the automakers in the industry but all small businesses. Jacksonville Industries in my district in Jacksonville, Texas. Kenneth Framing in Athens, Texas. Now, I suspect nobody in this Chamber has heard the names of those businesses, but we've all heard the names of the Big 3 automakers, and we know that they've had the ability to spend $50 million to lobby this Congress this year. I don't deny them their first amendment opportunities to petition the Congress for the redress of their grievances. But, Mr. Speaker, are they getting the money and small business isn't getting the money merely because we have not heard the names of the small businesses and because they're working hard to put food on their tables to sustain their families and because they don't have $50 million to spend on lobbying expenses? I think there must be a better way. Indeed, it would be one thing if we knew for a fact that this money somehow would solve the problem, but we don't. Independent analysts in the auto industry tell us, if demand does not pick up for the domestic auto industry, $15 billion, $35 billion, $75 billion, and $105 billion will not solve the problem. It will not solve the problem.

Mr. HENSARLING. In that case, Mr. Speaker, I would like to reserve the balance of my time.

Mr. HENSARLING. Mr. Speaker, at this time, I'm happy to yield 1 minute to the gentleman from Arizona (Mr. Flake).