Jim Leach

Mr. LEACH

Mr. LEACH. I thank both the gentlemen from North Carolina for their concerns, which are very thoughtful and constructive. I appreciate that. Mr. Speaker, I reserve the balance of my time.

Mr. LEACH. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 607) to amend the Truth in Lending Act to require notice of cancellation rights with respect to private mortgage insurance which is required by a creditor as a condition for entering into a residential mortgage transaction, and for other purposes, as amended.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I thank the gentleman for yielding me the time. Let me say, I also rise in support of this modest but very significant program and would commend the gentleman from Nebraska [Mr. Bereuter] for introducing the original legislation, the gentleman from New York [Mr. Lazio], who leads housing efforts on behalf of all Americans at this time in the House of Representatives, and the gentleman from Massachusetts [Mr. Kennedy] who has always spoken so eloquently on housing issues. I would only make two points, one that was underscored by Mr. Bereuter; that is, this approach is a guarantee loan program. Therefore, it involves small sums of money, leveraging quite a bit larger sums of money. In addition, it is based upon a USDA model and, in fact, is USDA administered and that model has found that there is only a 3-percent default rate, which is a rather impressive number in relationship to almost every Federal program. But what is impressive in addition is 3 percent default does not mean 3 percent losses. It means that the loan went sour but there are still recoverable parts. So the total losses to the taxpayer end up being a small percentage of 3 percent. This is, in short, one of the most extraordinary ways of leveraging housing programs in rural America. It is targeted precisely to rural America and obviously, as a representative of a rural State with a high percentage of nonurban housing stock, I am appreciative of its import. But I would also stress that this program is intended as a tie-in to other housing programs and that in the near future significant housing reform will be the subject of a full Committee on Banking and Financial Services review. We look forward, those of us from rural areas, to working closely with the distinguished chairman of the subcommittee on the endeavors that he is leading at this time. I simply want to stress again the innovation of this program, the leadership of my colleagues.

Mr. LEACH

Mr. LEACH. Mr. Speaker, in accordance with clause 2(a) of rule XI of the rules of the House, I am submitting for printing in the Record a copy of the rules of the Committee on Banking and Financial Services for the 105th Congress, adopted on February 6, 1997. Rules of the Committee on Banking and Financial Services, One Hundredth and Fifth Congress rule i. general provisions 1. (a) The rules of the House are the rules of the Committee and subcommittees so far as applicable, except that a motion to recess from day to day, and a motion to dispense with the first reading (in full) of a bill or resolution, if printed copies are available, are nondebatable motions of high privilege in the Committee and subcommittees. A proposed investigative or oversight report shall be considered as read if it has been available to the Members of the Committee for at least 24 hours (excluding Saturdays, Sundays, or legal holidays except when the House is in session on such day). (b) Each subcommittee of the Committee is a part of the Committee, and is subject to the authority and direction of the Committee and to its rules so far as applicable. 2. The Committee shall submit to the House, not later than January 2 of each odd-numbered year, a report on the activities of the Committee under Rules X and XI of the Rules of the House during the Congress ending at noon on January 3 of such year. 3. The Committee's rules shall be published in the Congressional Record not later than 30 days after the Congress convenes in each odd-numbered year. rule ii. powers and duties 1. The powers and duties of the Committee are all those such as are enumerated or contained in the Rules of the House and the rulings and precedents of the House or the Committee. 2. For the purpose of carrying out any of its functions and duties under Rules X and XI of the Rules of the House, the Committee, or any subcommittee thereof, is authorized-- (a) to sit and act at such times and places within the United States, whether the House is in session, has recessed, or has adjourned, and to hold hearings; except as provided in Rule XI, clause 2 of the Rules of the House; (b) to conduct such investigations and studies as it may consider necessary or appropriate, and (subject to the adoption of expense resolutions as required by clause 5 of Rule XI of the Rules of the House) to incur expenses (including travel expenses) in connection therewith. The ranking minority Member of the full Committee or the relevant subcommittee shall be notified in advance at such times as any Committee funds are expended for investigations and studies involving international travel; and (c) to require, by subpoena or otherwise (subject to clause 3(a)), the attendance and testimony of such witnesses and the production of such books, records, correspondence, memoranda, papers, and documents, in whatever form, as it deems necessary. The Chairperson of the Committee, or any Member designated by the Chairperson, may administer oaths to any witness. Subpoenas 3. (a) A subpoena may be authorized and issued by the Committee or a subcommittee under clause 2(c) in the conduct of any investigation or series of investigations or activities, only when authorized by a majority of the Members voting, a majority being present. The power to authorize and issue subpoenas under clause 2(c) may be delegated to the Chairperson of the Committee pursuant to such limitations as the Committee may prescribe. Authorized subpoenas shall be signed by the Chairperson of the Committee or by any Member designated by the Committee. (b) Compliance with any subpoena issued by the Committee under clause 2(c) may be enforced only as authorized or directed by the House. Review of Continuing Programs 4. The Committee shall, in its consideration of all bills and joint resolutions of a public character within its jurisdiction, insure that appropriations for continuing programs and activities of the Federal government and the District of Columbia government will be made annually to the maximum extent feasible and consistent with the nature, requirements, and objectives of the programs and activities involved. For the purposes of this paragraph, a government agency includes the organizational units of government listed in clause 7(c) of Rule XIII of the Rules of the House. 5. The Committee shall review, from time to time, each continuing program within its jurisdiction for which appropriations are not made annually in order to ascertain whether such program could be modified so that appropriations therefore would be made annually. Budget Act Reports 6. The Committee shall, on or before February 25 of each year, submit to the Committee on the Budget-- (a) the Committee's views and estimates with respect to all matters to be set forth in the concurrent resolution on the budget for the ensuing fiscal year which are within its jurisdiction or functions; and (b) an estimate of the total amounts of new budget authority, and budget outlays resulting therefrom, to be provided or authorized in all bills and resolutions within the Committee's jurisdiction which it intends to be effective during that fiscal year. 7. As soon as practicable after a concurrent resolution on the budget for any fiscal year is agreed to, the Committee (after consulting with the appropriate Committee or Committees of the Senate) shall subdivide any allocations made to it in the joint explanatory statement accompanying the conference report on such resolution, and promptly report such subdivisions to the House, in the manner provided by section 302 or section 602 (in the case of fiscal years 1991 through 1995) of the Congressional Budget Act of 1974. 8. Whenever the Committee is directed in a concurrent resolution on the budget to determine and recommend changes in laws, bills, or resolutions under the reconciliation process it shall promptly make such determination and recommendations, and report a reconciliation bill or resolution (or both) to the House or submit such recommendations to the Committee on the Budget in accordance with the Congressional Budget Act of 1974. Oversight Report 9. Not later than February 15 of the first session of a Congress, the Committee shall meet in open session, with a quorum present, to adopt its oversight plans for that Congress for submission to the Committee on House Oversight and the Committee on Government Reform and Oversight, in accordance with the provisions of clause 2(d) of Rule X of the Rules of the House. The Chairperson shall consult with the ranking minority Member on the formulation of the oversight plan, and the Committee may not meet to adopt the plan unless a copy of the plan has been provided to all Members not less than two days in advance of the Committee meeting.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I thank my distinguished colleague and friend for yielding me this time. Mr. Speaker, I would just like to report briefly on the banking title of the bill. This is a solid nonpartisan approach which balances consumer, taxpayer and industry concerns; less extensive than I would have like but, nonetheless, of historic dimensions. The provision will have lasting effects but, most importantly, failure to act would have led to serious disintermediation in the financial community, failure of the S&L insurance fund and new tax liability for S&L losses. This banking section, on the other hand, provides a basis for long- term banking modernization based on the existence of the strongest financial industry fund in the Nation's history. Indeed, absent a calamity with passage of this legislation, America's insured financial institutions will reach an historic first, a prefunded insurance fund capable of regenerating itself ad infinitum with interest returns likely to cover all normal losses in the system as well as normal asset growth. America's bank customers as well as our competitive international financial position are well served. I'd like to speak about Title II of the bill before the House today. This title includes important legislation for the taxpayers of the United States, customers of the financial services industry and the industry itself. While I would have preferred to be here seeking support for more comprehensive financial services reform, the pending measure provides for Congressional action on several of the most pressing issues facing banking and financial services today. The provisions of Title II are carefully balanced. They enjoy the support of the administration, the American Bankers Association, the Independent Bankers Association of America, America's Community Bankers [S&Ls], the securities industry, the Conference of State Bank Supervisors, American Financial Services Association, and the Financial Services Council. The American Council of Life Insurance and the National Association of Life Underwriters do not oppose the title. In addition, many of the concerns of the Consumers Union have been addressed to their satisfaction. It is a common sense product. Title II combines sections of several pieces of legislation the Banking and Financial Services Committee has reported out over the past 15 months. Perhaps the most important is the resolution of the last remaining issue from the savings and loan debacle of the 1980's-- refurbishing of the SAIF fund. The approach taken has received the support of the thrift and banking industries, a near miracle in itself in that S&Ls must pay a whopping multi-billion dollar, one-time assessment to the fund while the banks are required to pick up part of the S&L industry's long term FICO bond interest liabilities, with no additional contributions by the taxpayers. By our actions today Congress will be ensuring that there will be no default on the $780 million per year interest payments on the $8 billion of Financing Corporation [FICO] bonds issued as a part of the savings and loan bailout. These bonds were issued in the late 1980's to capitalize the defunct Federal Savings and Loan Insurance Corporation. So far, all principal and interest on these bonds have been paid by the private sector. This bill retains private sector responsibility for these bonds and by broadening industrial accountability guarantees against further taxpayer losses. Title II would capitalize the Savings Association Insurance Fund through a one-time assessment of $4.7 billion on the thrift industry to be followed by a sharing of the FICO interest payments by the Bank Insurance Fund [BIF] and the Savings Association Insurance Fund [SAIF]. It is important to stress that the taxpayers, who have already contributed some $130 billion directly to the bailout with another $200 million in interest payments to come, are not being called upon for any additional funding. They have paid more than their fair share. Title II also provides an important budgetary offset to the entire bill, allowing for increased spending for education, crime fighting, the war on drugs, the President's anti-terrorism proposal and other items of the Federal budget. Therefore, the taxpayers are twice saved-- once from taking on any additional spending for resolving the savings and loan bailout and second from helping fund the President's supplemental spending requests. The second section of the bill provides for significant regulatory relief for the Nation's banks, reducing duplicative and unnecessary paperwork and costs to the industry, which are inevitably being passed along to customers. While we have not added additional regulatory burdens and gone as far in one direction as the minority would have liked, we also have not gone nearly as far in the other direction as some would have hoped. In addition, the title contains a reform of the Fair Credit Reporting Act to further protect Americans from abusive invasion of privacy. This provision picks up many of the concepts approved by the House in the 103d Congress, but never enacted into law. I retain reservations about certain provisions, but on balance the burden relief and fair credit reporting sections are finely tuned, reducing regulatory costs while retaining credible consumer protections. The need for the fair credit section was apparent during a hearing before the Banking Committee last spring when several individuals gave compelling testimony about how criminal gangs used modern computer technology to steal and misuse their credit identity. One Minnesota woman dramatically told about how attempts were made to withdraw funds from her mutual fund and retirement accounts and how multiple applications for credit cards in her name were issued, based upon information somehow obtained about here credit history. Hence, an amendment was added requiring the Federal Reserve Board, in consultation with the Federal Trade Commission, to further review whether organizations which collect sensitive consumer identification information are engaged in activities which create undue potential for fraud and to recommend appropriate legislative or administrative remedies. The Committee also heard testimony from law enforcement agencies and bank regulators about the use of fictitious financial documents to scam individuals, banks, pension funds and charities. Title II makes it a Federal crime to produce or use fictitious documents fraudulently. This new anti-crime provision will be another arrow in the FBI's and Secret Service's quivers in combating financial crimes. I would like to note several specific provisions of the legislation to clarify the intent of the Congress. The amendments to the Consumer Leasing Act retain current law which provides a special rule for the type of disclosure that must be included in radio advertising of consumer leases. This special rule recognizes that all of the required disclosure cannot be provided in a short spoken advertisement. Instead it requires that radio advertisements for consumer leases refer the listener to either an 800 number or a written advertisement in order to obtain additional information. Title II also includes a House provision to require bank regulators to take appropriate actions to prevent depository institutions and depository institution holding companies from facilitating or encouraging the shifting of deposits from SAIF deposits to BIF deposits. It is the intent of Congress that this provision be interpreted and implemented by the FDIC with great care to ensure that Constitutionally-protected free speech in the commercial marketplace is not abridged. Furthermore Section 2702 requires that the FDIC impose a special assessment on SAIF-assessable deposits. This payment is due on the first business day of the first month beginning after the date of the enactment of this act and is to be paid to the FDIC on the latter of the first business day of the first month beginning after the date of enactment or such other date as the FDIC chooses, but not later than 60 days after the enactment date. Given the liquidity and regulatory difficulties that accrue to institutions with the presentation of a sudden large liability, it is the intent of Congress that the FDIC provide institutions the maximum latitude possible within the 60-day context to pay their special assessment. Section 2301 amends certain provisions governing the scope and mechanics of the audit functions for insured depository institutions. This provision eliminates the independent auditor attestation requirement for safety and soundness compliance, and allows the agencies the discretion to waive the requirement that all members--but not less than a majority--of the independent audit committee be outside directors in the case of hardship. Factors weighing in favor of a decision to grant a waiver include, but are not limited to, the following: that the institution is small, that qualified outside independent directors are unavailable, that the institution is closely held, and-or that the institution is well-managed. Further, Section 2615 prohibits Government-Sponsored Enterprises [GSEs] from certain kinds of associations with banks, credit unions and thrifts. However, it is the congressional intent that Subsection 2615(a) would not preclude a GSE from sponsoring or providing financial support to an insured credit union established by a GSE with a field of membership comprised of the GSE's present and former full-time employees. The fact that a few such employees may also be customers of the GSE should not preclude such sponsorship or financial support. I'd also like to comment on the provision of the bill which clarifies the liability of financial institutions with regard to a 1992 Environmental Protection Agency rule. Under this provision, lenders would be financially liable for environmental clean up costs only if they actually participated in the management of the firm which allegedly caused the pollution. The mere holding of a financial interest or having ownership of the property as a result of a foreclosure does not make the lender liable. Finally, I worked for inclusion in this bill of bank modernization language and within such context--preferably full-blown Glass-Steagall reform, but at a minimum greater holding company and Section 20 latitude--a provision supported by the independent insurance agents which would require all parties, including banks, which sell general insurance products to be State licensed. Regrettably these proposals have proven to be so controversial that agreement on them could not be reached in time for them to be included in this bill. These issues are not going away and will be addressed in the next session of the Congress. I realize partisanship hallmarks many end-of-the-session issues, but based on the content and context of this legislative package, I would hope support would come from both sides for final passage of the Title II provisions. In this regard, I am somewhat bewildered by the complaints from some quarters about process. Most of the provisions before the House today have been reported out of the House Banking and Financial Services Committee following extensive hearings. This Title, for instance, includes numerous sections or amendments offered by the minority side. Further changes were made within the past 24 hours in negotiations with the executive branch. Indeed, the BIF-SAIF section, arguably the most important in the bill, is basically picked up from legislation passed by the House a year ago and then reworked by the committee this past summer. The principal change from the provisions approved by the committee in July is the deletion of a Democratic-sponsored amendment to shift part of the FICO cost sharing to the taxpayer. That provision has been struck from the bill. Members of this Congress can go back to their constituents and report that they have addressed the last remaining aspect of the savings and loan debacle without any further taxpayer accountability. The other major portion of the Title incorporates regulatory relief measures approved by the committee last year. It is my view that the House Banking Committee went further than was judicious in early approaches to regulatory relief and that a number of provisions in earlier bills were properly pared back with my support because of administration and minority member concerns. Let me stress in this regard that in putting this legislation together, there has been far more minority input than on any piece of legislation considered in any of my years in the minority. This is solid non-partisan legislation. Less extensive than I would have liked, but nonetheless of historic dimensions. The provisions will have lasting affects, but most importantly, failure to act would have led to serious disintermediation in the financial community, failure of the SAIF, and new taxpayer liability for S&L losses. This banking title, on the other hand, provides a basis for long-term banking modernization based on the existence of the strongest financial industry insurance fund in the Nation's history. Indeed, absent a calamity, with passage of this legislation America's insured financial institutions will reach an historical first--a prefunded insurance fund capable of regenerating itself ad infinitum, with interest returns likely to cover all normal losses in the system as well as normal asset growth. America's bank customers, as well as our competitive international financial position, are well served.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I rise to invite my colleagues and their families to become honorary Iowans for the next few weeks as Iowa and its sons and daughters celebrate our State's 150th birthday. Come to the Smithsonian's annual Folklife Festival on the Mall to see what Iowans with midwestern understatement, are so proud of. You will discover Iowa is a State of immigrants who have come together to make a singularly diverse community. Our first citizens immigrated to Iowa across a land bridge joining North America with Asia and eventually became members of the approximately 17 different Indian tribes that resided in the State at various times in its early history. The Indian word meaning ``the beautiful land'' both describes the State and gave it its name. Iowa's Sauk and Mesquaki tribes were among the most powerful tribes in the upper Mississippi and legend has it that the famous Sauk chief Black Hawk's courageous and intelligent leadership of his people contributed to Iowa becoming known as the ``Hawkeye State.'' Although it is thought Spanish explorers may have reached Iowa first from the south, and earliest Europeans known to have visited what would become the State were the French explorers Father Jacques Marquette and Louis Joliet. They were followed by immigrants from Germany, Sweden, Norway, Holland, and Great Britain. In their turn came people from Ireland, Austria, Italy, and Czechoslovakia. Iowa entered the Union officially on December 28, 1846, as a free State, and prior to the Civil War African-Americans found the State a haven as part of the Underground Railway carrying them from slavery to freedom. Many African-Americans would settle in southeastern Iowa, most notably in Buxton, a community of almost 5,000 that was over 50 percent African-American. Buxton's social and economic institutions were fully integrated decades before the country would begin to make the effort to become so and many of the town's professionals were African-American. Although far from the great battles of the Civil War, Iowa contributed disproportionately to the Union cause in the conflict. More than 76,000 Iowans, more per capita than any other State, served in the war. One out of five of the Iowans who enlisted lost their life in the course of the war. Iowa perennially leads the Nation in literacy, school achievement tests and quality of life polls. Its vigorous economy has a sound basis in agri-business, small to medium manufacturing and a growing financial services sector. But it is the State's people that are Iowa's most important product. Herbert Hoover was a renowned engineer mining whose Presidency preceded the onset of the great depression. His humanitarian relief efforts, both as Chair of the American Relief Commission and U.S. Food Administrator on the War Trade Council during World War I, as co- founder of CARE and UNICEF, and as a leader of U.S. food relief efforts after World War II, are credited with saving hundreds of millions of lives. Henry Wallace, an agronomist who helped develop hybrid corn, served as Secretary of Agriculture and then Vice President to Franklin Delano Roosevelt. An exemplar of this country's great liberal political tradition, Wallace ran for President in 1948 as one of the most significant third party candidates in American history. Harry Hopkins, Roosevelt's chief-of-staff and personal emissary to Great Britain at the beginning of the war and later to Stalin at its conclusion was an Iowa native. So was Mamie Doud Eisenhower. Richard Nixon was stationed at the Naval Air Station at Ottumwa, IO, hometown of MASH's Radar O'Riley, and Ronald Reagan got his first job as a sportscaster in my hometown of Davenport. Iowa is justly proud of its accomplishments in scientific research. Norman Borlaug was awarded the Nobel Prize for his work on new types of wheat and in the process did as much to alleviate world hunger as anyone in this century. George Washington Carver graduated from Iowa's Simpson College and did his graduate work at Iowa State University. John Atanasoff and Clifford Berry invented the computer at Iowa State University. Grinnell College graduate Robert Noyce, who founded Intel Corp., is considered the coinventer of the computer chip. James Van Allen, an astrophysicist at the University of Iowa, discovered the radiation belts circling the earth that bear his name. Another pioneer of the final frontier, Captain James Tiberius Kirk of the Starship Enterprise was born in Riverside, IA. At the University of Iowa's magnificent medical research facility, researchers such as Drs. Antonio Damasio and Nancy Andreasen have looked inward rather than outward, using computer images derived from electron microscopes, instead of the magnified pictures caught through the mirrors of a telescope, to do groundbreaking work in mapping the human brain and studying its complexities. Illnesses from psychotic disorders to Alzheimer's disease can be better controlled and eventually cured because of their efforts. In the leadership of business and industry, Iowa boasts of such sons as Frederick Maytag, inventor and manufacturer of the appliances that have put so many repairmen on the shelf, and John L. Lewis, the founder of the United Mine Workers who did so much to humanize the conditions in that industry. In the law, Iowa was the first State in the Union to admit a woman to the practice of law, Arabella Mansfield, in 1869. Iowa University's Law School was the first public law school to graduate a woman, Mary Beth Hickey, in 1873. As for the environment, Iowans such as J. ``Ding'' Darling and Frederick Leopold brought early awareness of the planet's fragility. The arts have always been at the center of Iowa's life. The Czechoslovakian composer Anton Dvorak spent summers in Spillville and wrote his symphony ``From the New World'' there. Since then, Iowa has given such classical voices as those of Simon Estes, Emmy Award winner Mary Beth Peil, and Dame Margaret Roberti, to the world's stages. Roberti, a.k.a. Margaret Jean Nobis, opened the season at La Scala more times than Maria Callas and sang the lead in more Verdi operas than anyone in operatic history. She is the only American opera singer ever knighted by the Italian Government. Jazz immortal Bix Beiderbecke also was from Iowa, as was bandleader Glenn Miller, singer Andy Williams, the original music man--Meredith Willson--and, for a time, the Violist, Sir William Primrose. Grant Wood was born in Iowa and made the people and landscapes of his home State famous as he pioneered American regionalist art. The printmaker Mauricio Lasansky found a home at the University of Iowa. His haunting depictions of the Holocaust have helped keep alive the memory of the millions lost in Nazi death camps. Iowans have always loved the written and spoken word. The University of Iowa has long been home to the world famous Creative Writers Workshop, founded by the poet Paul Eagle. The novelists Flannery O'Connor and John Irving among others too numerous to mention chose to live for a time in Iowa City and finished further workshop participation. Iowa also claims the novelists MacKinlay Kantor and Wallace Stegner, as well as the playwright David Rabe. And two recent Pulitzer Prize winners, Jane Smiley and Jorie Graham, teach at our State universities, the former at Iowa State, the latter at the University of Iowa. As for the press, journalists like Hugh Sidey, Harry Reasoner, Tom Brokaw, George Mills and Don Kaul have ennobled their profession with common sense, historical perspective, and thoughtful wit. The actors Cloris Leachman and Marion Morrison--better know as that icon of American manhood John Wayne--are from Iowa, as is Donna Reed and the original superman, George Reeves. John Ringling and his brothers ran away from Iowa to found a circus, and Johnny Carson is an Iowan familiar to a generation of insomniacs. Jack Trice, Nile Kinnick, Bob Feller, Roger Craig, Dan Gable, and Gayle Hopkins are just a few of the world class athletes Iowa has produced. Where to put Buffalo Bill Cody on a list of eminent Iowans is unclear, but he certainly belongs there. So do the Friedman twins from Sioux City, who, writing as Abigail Van Buren and Ann Landers, have touched the lives of millions of Americans. In the final analysis, making lists like this is fun, if dangerous. Invariably many who belong on it are overlooked. Moreover, Iowans know that such lists are ultimately beside the point. They understand that the important people in all of our lives are the family members, friends, and neighbors who make our communities home. What Iowa is for its citizens who have gathered here in Washington and who will gather throughout the State this year for similar events is a celebration of Mid-American values of home and country. Our country's greatness resides in no small part in the particular virtues of each of the 50 States that are the pluribus that make our unum. This summer, on the Capitol Mall and in our cities and towns, Iowa is celebrating its unique contribution to our Untied States. All are welcome to join in.

Mr. LEACH

Mr. LEACH. Mr. Speaker, by direction of the Committee on Banking and Financial Services and pursuant to clause 2 of rule XIII, I ask unanimous consent to file a supplemental report to House Report 104- 193, which accompanies H.R. 1858, and that such supplemental report be printed.

Mr. LEACH

Mr. LEACH. Mr. Chairman, as we all know, the Budget Resolution does not have the force of law, but is a working document Congress uses to set the spending limits and broad priorities for the appropriations process through which the spending plan for the coming fiscal year is put in place. Our action today is just the first step in that process, and, if last year is any indication, we have a lot of work ahead of us after today's votes. Each of the four alternatives considered today is itself the product of compromise and accommodation. I would venture to guess that no Member of this body will agree with every provision in any of them. While I disagree with certain of its techniques to achieve budget saving, I voted for the so-called coalition budget in frank protest to several aspects of the Republican proposal, particularly its elimination of direct student lending. In addition, the coalition budget best reflects my concerns that reforms in the areas of health care and welfare remain prudent and fair and that the Federal commitment to education in general is honored. The committee resolution may be an acceptable starting point for budget discussions, but I would place my party on notice that I can be expected in the authorization and appropriations process to object to elimination of the direct student loan program and any cuts in education. I also have doubts about the case for elimination the Department of Commerce, although reform of its functions and merger with the Special Trade Representatives', Office may be in order. While the hard work remains ahead, it is crucial that the goal of a balanced budget be advanced, but in such a way as to ensure fairness for all.

Mr. LEACH

Mr. LEACH. Mr. Chairman, I rise in support of H.R. 2406 and want to thank Mr. Lazio for his leadership on this bill. The Banking Committee, the House, and indeed the American people, are indebted to the gentleman from New York for the hard work and intellect he has put into this major reform legislation. Let me speak to several aspects of the bill. The chief goal of the legislation is to expand housing choices for low and moderate income people and to devolve power from Washington to local communities. The legislative intent is to move away from reliance on highrise public housing projects and encourage the use of housing vouchers. It is the assumption of the committee that it is cost effective, as well as compassionate, to give low and moderate income people the ability to get away from projects which too often are infested with crime and drugs and move into communities where they can raise their families in safer, cleaner environments and where they will have an enhanced ability to improve their lives. It is further the assumption of the committee that the people of the Bostons and Indianapolises and Davenports of the Nation can be trusted to more effectively and efficiently operate housing programs for the people of these communities than can those in Washington who the current law favors. Hence, the bill puts more power in the hands of those who know their localities best--the residents and local leaders who live in the communities affected. H.R. 2406 is a prime example of commonsense reform. There is nothing radical or extreme here. The committee has simply recognized that government-built slums serve nobody's interest. What is needed is decent support for decent people who can make their own choices and control their own destinies. I again congratulate Mr. Lazio for his leadership on this important legislation, and the staff of the Housing and Community Opportunity Subcommittee for the many hours they have put into this effort.

Mr. LEACH

Mr. LEACH. Mr. Speaker, today I would like to salute on the true professionals who has represented his employers' interests before Congress for almost four decades. At the end of this month, Walter B. Kirkwood will be retiring after 37 years of service in the banking industry. During this period, Walter has always conducted himself in a way that does credit to his employers and also reflects a broader concern for the public interest. Many of us came to know Walter's work and appreciate his low-key style over the many years that represented Banc One Corp. of Columbus, OH, as vice president, government affairs, and earlier while he was governmental affairs representative for American Fletcher National Bank in Indianapolis prior to its acquisition by Bank One Corp. Most recently, Walter has been ably representing Bank One Indiana Corp., the successor to American Fletcher in Indianapolis. Walter has made many contributions to the furtherance of constructive banking legislation. Among his most signal efforts was his active involvement during 1993-94 in the interstate banking and branching bill, while his boss, John B. McCoy, chairman of Banc One Corp., was serving as chairman of an industry task force on the legislation. Walter also worked successfully on key parts of the Federal Deposit Insurance Corporation Improvement Act of 1991 and several important provisions of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, to mention two other occasions when Walter's knowledge and ability came into play to produce outcomes which had the effect of modernizing America's financial services industry. The fact that Walter combines the best attributes of a vigorous advocate representing his company's and his industry's interests, coupled with a keen concern for the public interest, is attested to by the fact that he has been widely honored by his peers. Walter served as chairman of the Government Relations Committee of the former Association of Bank Holding Companies as well as chairman of the Legislative Liaison Advisory Committee [LLAC] of the American Bankers Association, a position he currently holds. On behalf of the Committee on Banking and Financial Services, I would like to thank Walter for his thoughtful advice over the years and look forward in keeping in touch.

Mr. LEACH

Mr. LEACH. Mr. Chairman, I rise to explain a series of votes on lobby reform under consideration today. Amendments, several of which meet thorough-going commonsense standards, have been introduced which I expect to vote against because they will precipitate the bill going to conference where those leading the reform movement are convinced I will be buried. National organizations from Common Cause to Ralph Nader's advocacy groups, as well as major newspapers such as the New York Times, Washington Post, and Des Moines Register have expressed concern that unless this lobby disclosure bill is passed without amendment exactly as the Senate has already approved it, lobby disclosure will wither in this Congress. Hence, it is my intention to vote against amendments to this bill with the understanding that I would expect to support the precepts underlying them in discreet, separate bills which can be brought to the floor at another time. As for now, if we pass this bill unamended, it can go to the President's desk for signature this week. If we amend it with any of the well-intentioned amendments before us, a strong possibility exists that the underlying bill will never become law. Let us thus pass the bill as is and then bring forth the approaches contained in the amendment in another context at another time.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I rise to express concern with the ``Medi- goguery'' and ``Mega-social splintering'' involved in debate of the week on the House floor. With regard to Medicare, credible arguments can be made for holding the program at current levels of spending, increasing it somewhat, or increasing it substantially. The Republican option is one of taking an approach in between the last two alternatives--that is, increasing spending at over double the projected inflation rate for the next 7 years, and in this process reforming the system so that rural counties, which now get one third the reimbursement of many urban areas, will receive an annual Medicare reimbursement increase three to six times the inflation rate. For these rural areas the Republican approach is substantially more generous than the status quo endorsed by the President. While politically attractive in the short run, the President's Medicare approach would lead to early insolvency in the system itself. The Republican approach may be more controversial, but it is thoroughly irresponsible to suggest, as has been done on the House floor, that a plan that increases per-recipient Medicare spending from $4,800 to $6,700 in 7 years implies ``gutting'' the program. Those who make this kind of fear-inducing claim should be held to account by the American public. With regard to the socially divisive argument employed by liberals in the balanced-budget debate, it is credible to make a case against a tax cut at this time or to oppose particular ingredients of the Republican tax cut approach. But when senior leadership of the Democratic party describe it as a ``tax cut for the rich,'' they are misleading the American people. It is true that the capital-gains reduction, which is designed to unlock assets and spur economic growth, disproportionately benefits high-income individuals, but it is a very small part of the Republican tax-cut package. The main ingredients are the following: A $500 per child per family tax credit for families with annual incomes under $110,000. According to the Tax Foundation, those earning below $75,000 will receive almost $87.5 percent of the Family Tax Credit; A tax credit of up to $145 to married couples who file joint tax returns to offset the current ``marriage tax penalty''; The deductibility of up to $2,000 in IRA contributions for each spouse, including homemakers; Repeal of the 1993 tax increase on Social Security benefits; The provision of tax incentives for the purchase of long-term health care insurance; The provision of a refundable tax credit of up to $5,000 for families adopting a child; and An increase over five years in the earnings limit for those receiving Social Security benefits to $30,000. The brunt of these tax cuts are clearly aimed at the middle-class. With regard to the tax cut package, two perspectives should be kept in mind: First, the Republican approach rolls back only 30 to 40 percent of the total tax increases put in place by President Clinton in 1993 and leaves untouched the increases in the top rates established by the Democrats; second, while $245 billion may seem a large sum for a tax cut, it should be seen in the context of the 7 years over which it will be spread. During this period the GNP will be in the $50 trillion range. The tax package is thus more modest and more middle-class directed than the rhetorical imagery suggested on the House floor. As for other priorities, I am convinced that the Republican approach of restricting spending increases to 3 percent a year--an inflation adjusted freeze--makes sense, although I might prefer some of the programmatic numbers to be shifted, particularly in the area of education. Whereas the rhetoric of the President's party is to accentuate age group division and thus socially divide the country, it is impressive that the changes Congress has in mind for programs like Medicare do not precipitate generational division. The argument that the young and the old have a vested interest in Democratic deficits is open to question. It is the young, after all, who will be spending their working lives paying for past legislative excesses. It is they who will benefit most from lower interest rates; they who would prefer to save for a home and to provide for their kids' education than pay taxes to legislators to take care of interest on the national debt. As for the baby-boom generation--those 40 to 55--they deserve a solvent Medicare system upon retirement. And the elderly deserve to be protected from the ravages of inflation, which so capriciously robs them of their savings. Mr. Speaker, as I have repeatedly stressed, no age group in America, young or old, has a vested interest in fiscal profligacy. But working Americans' of all ages have a stake in establishing a more responsible fiscal policy. It is simply incontrovertible that the economy will create more jobs for more people with lower interest rates made possible by lower deficits. In one sense, the difference between the parties does not appear great, with the Republicans advocating a 3 percent a year growth in spending and the Democrats 5\1/2\ percent. But since the 2\1/2\ percent differential is accumulative, the approximate $30 billion deficit difference in the first year grows to approximately a $200 billion difference in the seventh year. Over the full 7 years, the Democratic approach thus adds over $800 billion more to the deficit than the Republican alternative and leaves a gap at the end of the period comparable to the one at the beginning, whereas the Republican approach leads to a balanced budget. Finally, it would appear that the national spotlight is on the personality and ambition aspects of the issues, whereas the historic point is that the Congress is attempting to reestablish fiscal discipline. This personality interplay underscores the difficulties of hubris in the American political process. The President, for instance, appears to have made a mistake in the middle of negotiations with Congress to accede to an interview with Dan Rather in which Rather pinned him down on whether he could accept a ``clean'' continuing resolution--precisely as the President requested that the Republicans give him--with the only stipulation being a 7 year balanced budget--which from time to time the President has endorsed. Once he encapsulated his veto intention into a firm sound-bite, rational reconsideration became impossible. The pride of utterance preceded the capacity to review quietly and thoughtfully what was on the table and the best interests of the Government and average American citizen took a back seat to prideful exclamation. Likewise, Republicans should be cautioned about expressing putsch- like intentions which misunderstand the nature of the constitutional process whereby, however weak a particular legislator may perceive this President, the Presidency itself is a profoundly important institution that should not be eviscerated. Republicans may be right that a re-ordering of fiscal priorities is in order, but there is no call for delegitimizing government. The American national interest requires respect for process as well as outcome.

Mr. LEACH

Mr. LEACH. Mr. Speaker, what is at issue tonight is whether Congress has the spine to stop spending dollars we do not have, not whether the President can find a spinal column and through the veto stand up for something, in this case, continued deficit financing. Here let us be clear. What the White House is blatantly engaging in is an effort to divide society along age-group lines. The President is attempting to appeal, as if he is compassionate, to the young and the old with other people's money. Yet, what young people have a vested interest in is ending the deficit. It is they, after all, that will be spending their working lives paying for past legislative excesses. It is they who want lower interest rates to buy a home, to save for their kids to go to college. What the baby-boom generation wants, those aged 40 to 55, is to have a solvent Medicare system when they retire. And what the elderly want is inflation not to rob them of their savings, as it did in the late 1970's. No age group in America, young or old, has a vested interest in fiscal profligacy. Mr. Speaker, let me stress the basics. The Republican approach includes a 3-percent-a-year increase in spending. This is not radical. It is common sense. It is an inflation-adjusted freeze. As for Medicare, it is the single largest programmatic increase in the Republican budget. It will go up at 6.4 percent a year, which in relation to inflation is equal or greater than increases in Medicare over the last decade. This is a reasonable, socially responsible set of guidelines. Like all of us, I might disagree with some of the parts, but a 7-year achievement of a balanced budget is the least Congress can do for the American people at this particular time.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I rise to attempt to put the budget impasse in an historical, economic, and constitutional context. The big secret in Washington that Republicans won't acknowledge and Democrats won't admit is that the rhetoric of the parties doesn't fit the circumstance. The change in course that is underway in Congress is neither as revolutionary as conservative leaders suggest nor as radical as the liberals would have it. It is an effort to move the ship of state gradually from a slightly left-of-center to slightly right-of- center direction. The macro-economic goal is to achieve a balanced budget in 7 years with 3 percent a year increases in Federal spending. A year ago consensus economic models pointed to a 3.1 to 3.2 percent inflation over this time period. More recently inflation projections have been revised downward, with Lester Thurow of M.I.T. startling the economic community with the declaration that inflation is dead. Whether or not Thurow's assertion as Mark Twain might quip is premature, the new Congress has put in place a program that in outline is intended to represent an inflation adjusted freeze on spending. Rather than radical, such an approach is common-sense; rather than revolutionary, it is revolution-avoiding. The question that remains in the executive-legislative dialog of the month is whether enough good will can be marshalled or enough confrontational bluff avoided to allow politicians who feed off each other to advance the common good. In this context, the Republican case to stick with firm macro-constraints would appear compelling, but flexibility to accommodate certain executive branch requested changes in priorities can credibly be considered. As long as the foundations and walls of the new programmatic discipline follow the balanced budget blueprint of Congress, the living-room furniture in the new house of Government can be rearranged. The Republicans aren't infallible; the Democrats have no monopoly on compassion. While the President has assiduously made political points with program constituencies, it is impressive to note how few issues he appears committed. Part of the President's lack of resolve may be due to the fact that he understands deficit reduction will reflect well on his Presidency, part may be due to the fact that in our constitutional system the Congress is principally delegated purse-string authority. The first and second estates of Government may be co-equal, but not in all areas. While the executive has primacy in foreign policy, decisions on taxing and spending are disproportionately the responsibility of the legislature. Nevertheless, the Presidency is always more powerful than the President and however strong or weak one assesses the current occupant of the White House, legislators should be cautioned to recognize the power of the veto and the authority of the bulliest pulpit in the world. Likewise, the President should be cautioned not to be so intent on trying to establish a macho image--what the press has reported as a White House effort to show that the President stands for something-- that accommodation with Congress becomes impossible. What the public must keep in mind in the budget showdown is that the current process is so ad hoc. Washington has no relevant modern day experience in dealing with a divided Government in which the executive branch is [[Page H 12325]] more liberal than the legislative. This leads to the a-historical phenomenon that the veto is being used or threatened to keep general levels of spending up rather than particular program levels down. For the first time in decades roles have been reversed. Congress rather than the Executive is stressing the need for overall budgetary constraint. Congress rather than the Executive is trying to veto special interest spending. Since the 1960's the impulse to spend and micromanage the Federal Government has come from a Congress where committee and subcommittee chairmen have established reputations of leadership and compassion that comes from spending other peoples money in programs under their jurisdiction. Budgets couldn't be constrained because egos couldn't be controlled. Ironically, for all the tough rhetoric America's two political parties are not that far apart, at least in relation to other Western democracies. Indeed, despite the hullabaloo of the week, statistically the difference is about 2\1/2\ percent. The Democrats favor a multi- year plan increasing Federal spending at a 5\1/2\ percent per annum clip; the Republicans 3 percent. In this regard it is noteworthy that rather than Reagan Redux, which beltway pundits have suggested is underway, the new Republicans are uniquely committed to advancing, rather than simply professing, achievement of a balanced budget. What the Reagan years were all about was a President who sought an increased defense budget while philosophically assaulting Washington's social agenda. The compromise with a liberal Congress was an increase in defense spending, but a bigger increase in social spending. Federal spending under President Reagan as a percent of GNP grew by a whopping margin, from 21\1/2\ percent to 23\1/2\ percent. Federal revenues, meanwhile, remained static, varying each year from 19\1/4\ to 19\1/2\ percent of GNP. Taxes, in other words, were realigned, not cut, and the Reagan deficit was classically liberal: spending driven. The goal of the new Congress is less governmental activism; the intent is to bring the budget into balance at a GNP level closer to that which President Reagan began in the 1980's. Despite the rhetorical division, this is a modest objective. Indeed, my guess is the new Congress which has come under such public fire for going too far is going to come under increased private criticism for not going far enough. The issue is Keynesianism as modified by demographics. Keynesian, in the sense that just as John Maynard Keynes argued that a country could deficit finance to even out downturns in the economy or deal with national emergencies, it is obligated to pay back debt in good times. And these, after all, are good times. The country is secure; employment is strong; the economy is growing. America is at peace with the world, if not quite with itself. In terms of demographics, the baby boom generation is at its productive peak. Shortly into the 21st century, sometime in its second decade--demographers suggest 2011 or 2012--the number of working Americans supporting each retired citizen is likely to decline from a 3 to 1 ratio to 2 to 1. If at that time interest on federal debt is more burdensome than Social Security obligations, it is difficult to believe Federal concerns can responsibly be addressed. As we look to the immediate future even more than the recent past, it would appear there is simply no justification for deficit financing at this time. In this context, the most emotive issue of the week--Medicare--could not be more symbolic or consequential. What makes Medicare particularly difficult in a legislative context is that it represents the conjunction of an economic reality--the fact that the Medicare system is fast becoming insolvent--and a moral imperative--the obligation to provide compassionate health care to our senior citizens at an affordable rate. While differences of judgment will always exist on systemic changes in programs of this nature, the big picture is that the new Congress has worked to establish medium-term solvency and stability of the Medicare system without sparking a generational conflict. Despite the rhetoric of division that surrounds the Republican approach, it deserves stressing that the Medicare program is authorized to grow annually at 6.4 percent, which is more than double the projected rate of inflation over the next 7 years. Relative to inflation, this decade's rate of growth of Medicare spending will thus be similar and quite probably greater than that of the last decade. Two changes of significance in Medicare are relevant for rural States, and the 1st District of Iowa in particular. The current Medicare reimbursement formula contains a differential based on the fact that rural States were early practitioners of progressive cost containment. Ironically, rather than being rewarded for prudence, citizens in rural States have found themselves penalized as yearly percentage adjustments in Medicare reimbursements accentuated differences in the country. Because of the efforts of rural State representatives--in particular, Representatives Ganske and Gunderson, and Senator Grassley--more than a third of the differential has been eliminated and a formula to reduce it further is being put in place. These changes will result in more Medicare revenues for rural States like Iowa than would have been the case under the President's approach. More needs to be done on the differential issue, but a giant first step has been taken. Indeed, many rural counties currently have per citizen Medicare reimbursement formulas of $200 to $250 per month. Under the new congressional plan the lowest reimbursement for any county in the country will soon be $350. The Medicare reimbursement base will thus be moved up over 50 percent for the most disadvantaged counties in America today and annual percentage increases for these counties will be triple the inflation rate until greater parity with higher reimbursement counties is obtained. When these adjustments are added to the innovative aspects of Medicare reform, senior citizens from rural States will in short order have a far stronger, more flexible, choice oriented system than is currently in place. The economic segregation that characterizes the current rural health care delivery system will be replaced by a much fairer, more equalitarian Medicare delivery system. The new approach adopted by the House also creates a trust fund to finance teaching hospitals and graduate medical education programs, which will be of particular significance for the University of Iowa hospital, the largest teaching hospital in the world. This change, coupled with the higher rural reimbursement figures could be critical to saving the patient treatment capacities not only of the University Hospital in Iowa City but of teaching hospitals throughout the country, particularly those in rural states. For all the vitriolic arguments on the floor and the sophisticated public opinion research that has gone into television commercials which are designed to show that the President cares about something--in this case the young and the old--the fact is that the debate is about whether to balance the budget in a sensible and socially acceptable time frame. In this regard, it should be stressed that all Americans have a vested interest in greater fiscal restraint--young Americans in particular. It is those just about to enter the work force, after all, that will find themselves paying taxes over their entire working lives to pay off the national debt for past legislation excesses. Of all the issues that should galvanize young people, the deficit should be the largest. But deficits aren't simply younger Americans' concern. Those in the so-called baby boom generation who are 40 to 55 today don't want to inherit an insolvent Medicare system when they retire. They don't want to retire when Government debt obligations are so great that the capacity to fund Medicare and Social Security is too much of a burden on too small a work force. As for those who have already retired, they don't want to see inflation ravage their savings as it did in the late 1970's. They have every reason to look at 20 to 40 years of retirement made possible by a health care system that has been advanced by modern science and made economically sound through responsible fiscal policy. [[Page H 12326]] In this regard, it needs stressing again and again that no one is going to be happy with anyone else's budget priorities. I, for one, prefer a number of aspects of the President's education approach, am appalled by the Congress's refusal to fully fund the United Nations, and would be more sympathetic than the majority in my party to NPR and the Endowments on the arts and humanities. Yet, I am convinced America must come to grips with the budget and strongly support the faster Republican timeline for deficit reduction. On process, let me stress that the Democrats have fairly criticized my party. The appropriations bills have not been completed on time. This is partly the case because of the heavy schedule earlier this year related to Republican efforts to fulfill a campaign pledge--the Contract With America. But, ironically perhaps, the primary reason for delay relates to the Republicans attempting to give the minority party expansive opportunity to amend bills brought to the floor under open rules. In a body of 435, extensive use of open rules assures a slow down of the legislative process. Finally, let me stress that at issue are not only budget balancing and spending priorities but the question of whether a politically divided American Government can work and maintain the confidence of the American people. As emotive as the issues are, we have a responsibility to see that on an orderly, fair, and timely basis they are resolved. In this process we have an even larger responsibility not to divide America with inflammatory rhetoric or undercut the stature of this chamber with irresponsible choice making. The public's business requires decency of approach as well as purpose. Now is the time for personal pride and partisan ambition to be checked at the cloak room.

Mr. LEACH

Mr. LEACH. Mr. Speaker, we are today in a democratic debate about the size and role of government. It is important and involves a need for comity of purpose on all sides. Nevertheless, despite differences on the question of whether and how fast governmental budgets should be balanced, let us not lose sight of the fact that this is a blessed country which can manage its affairs peacefully and democratically. I stress this point because on another continent last week, the Government of Nigeria executed the playwright Ken Saro-Wiwa and eight other human rights activists. A generation ago in her seminal work ``The Origins of Totalitarianism'' Hannah Arendt noted that one of the hallmarks of totalitarian regimes is the capriciousness as well as the anonymity of death. It is therefore incumbent on democratic legislatures throughout the world to register dissent against political atrocities of this kind, and shine the spotlight of decency onto the regimes responsible. The international community cannot allow individuals of conscience to disappear unnoted from the face of the Earth. Names must be named and deeds recorded. The courage of Ken Saro-Wiwa, a Nobel Peace Prize nominee and the President of the Movement for the Survival of the Ogoni Peoples, as well as Barinem Kiobel, Saturday Dobee, Paul Levura, Nordy Eawo, Felix Nuate, Daniel Gbokoo, John Kpuinen, and Baribor Bara must be acknowledged and remembered. Like Socrates, forced to drink hemlock because of his alleged corrupting influence on the youth of Athens, Ken Saro-Wiwa was found guilty of crimes committed by others because his enlightened human rights advocacy was said to have created the environment that fostered societal misdeeds. As the lessons of Socrates' life and the injustice of his death 2\1/2\ millenia ago are recalled, we as public officials in a free society must today demand accountability for the execution of these 20th century Nigerian citizens of conscience. In referencing this human rights tragedy, I do not mean to divert attention from the importance of the debate this evening, but this Congress, despite our problems, remains the principal legislative beacon of freedom in the world. We are obligated to resolve our differences. We are also obligated to put our problems in perspective. Important differences of judgment exist, but we can reach a consensus without putting a gun to anyone's head. We are, after all, Americans.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I yield myself 2 minutes. Mr. Speaker, before the House this afternoon is H.R. 117, the Senior Citizens Housing Safety and Economic Relief Act. The bill is designed to address the physical and economic needs of senior citizens. On physical grounds, it is intended that seniors not be required to live with those who have brought drugs and crime into their housing projects. It is imperative to give seniors not only a safe environment in which to live, but one in neighborhoods where they have been brought up in a community with their past and current families. In cities in particular, it is thus designed to halt gray flight. For this initiative, I would compliment Mr. Blute, who introduced this approach in bill form, and Mr. Flanagan, who has been such an advocate of this change. The second group of senior citizens this legislation--which was put together by the excellent work of Representative Rick Lazio, chairman of the Housing and Community Opportunity Subcommittee--would help are those whose major asset is the house in which they have lived for many years, in which they have raised their family and in which they hope to continue to live, as long as they are physically capable of doing so. Many of these elderly home-owning persons are facing financial pressures which can be eased by allowing them to enter into so-called reverse mortgages through which they can remain in their homes while receiving either a lump sum payment or monthly payments based on the value of their homes. Mr. Speaker, I yield 3 minutes to the gentleman from New York [Mr. Lazio] to explain this program.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and include extraneous material on H.R. 2399, the bill just passed.

Mr. LEACH

Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I would like to thank the gentleman from Florida [Mr. McCollum] for his hard work on this bill. This bill is a testament to his judgment and stick-to-itiveness. I would also like to thank the ranking member, the gentleman from Texas [Mr. Gonzalez], and the ranking member of the financial institutions subcommittee, the gentleman from Minnesota [Mr. Vento], who is also the original cosponsor of the provisions included in the regulatory relief bill for all of his efforts in resolving this matter. This bill was considered as one section of the regulatory burden relief bill that was reported favorably out of the Committee on Banking and Financial Services this past June. The reason for moving this section independently from the regulatory burden relief bill is that the moratorium on class action lawsuits which was passed earlier this Congress (H.R. 1380) expires on October 1, 1995. In committee consideration the provisions of this bill received widespread support on both sides of the aisle. In addition, in an inverted process manner, extensive negotiations have taken place with the other body and several modifications to the House Banking Committee product have been made. This bill addresses certain changes to the Truth in Lending Act due to the flood of class action lawsuits that followed the decision in Rodash versus AIB Mortgage Co. This relief is necessary because of the ambiguity surrounding the proper treatment of a number of fees under current law and the extremely low tolerance for lender flexibility in fee disclosure. For example, in the Rodash case the court held that a $22 courier fee is a finance charge under the Truth in Lending Act. Because the creditor had treated the courier fee as part of the amount financed instead of as a finance charge, the court held that the lender disclosures violated the law. And because the courts have held that a loan is rescindable under the Truth in Lending Act for even minor disclosure variance, the borrower has the right to rescind up to 3 years from consummation of the loan. Hence, numerous class action lawsuits have been filed in the wake of the Rodash decision, which exposes the mortgage industry to extraordinary liability that may threaten the solvency of the industry. Here let me stress that this issue is not a matter of nondisclosure or industry efforts to mischievously mislead borrowers. All fees were disclosed to the consumer in these cases. The issue is whether the fees were categorized in one particular way under one particular statute. The problem is that an honest mistake of no consequence to any of the parties involved has become the subject of shark instincts of the plaintiff's bar. This Congress, above all institutions in society, has an obligation to respect and advance the rule of law. As a general benchmark, caution should be applied to changing law in such a manner [[Page H 9515]] as to affect existent litigation. But I know of few instances of litigious which reflect more the unnecessarily litigious nature of America at this time. Sometimes a litigant may be right on a small point, but desperately wrong in the big perspective. That is the case here. The bar that has brought this class action effort should be chastised, not rewarded. Out of common sense this Congress must act. Again, I would like to commend the Members who worked on this time- sensitive legislation. Mr. Speaker, I yield to the gentleman from Texas [Mr. Gonzalez], the distinguished ranking member of the full committee.

Mr. LEACH. Mr. Speaker, I ask unanimous consent that the Committee on Banking and Financial Services be discharged from further consideration of the bill (H.R. 2399) to amend the Truth in Lending Act to clarify the intent of such Act and to reduce burdensome regulatory requirements on creditors, and ask for its immediate consideration in the House.

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

Mr. LEACH

Mr. LEACH. Mr. Chairman, I would begin by saying I have the deepest respect for my distinguished friend from Vermont. This is a very profound issue. There will be bipartisan support. There is also going to be bipartisan opposition. Here let me express some of my concerns about the amendment of the gentleman. In the abstract, all of us are concerned about one or another Federal program or agency. For some it might be national security. For others agriculture, health care or the arts. That does not mean it is appropriate for Congress to single out parts of agencies in this kind of hamstringing way. The precedent that is established in this kind of approach is very troubling for this body to manage. But in the specific, and much more importantly, the gentleman from Vermont and others in both parties evidenced such powerful opposition to the Mexican initiative that was considered in February and January and March that it became a factor in this House refusing to deal with the issue. And so this House looks at this issue from the perspective of refusing to deal rather than having taken an active position of either consent or opposition. I may have differed with the gentleman then and now. But, with the understanding that bad news could always break out at any time, it is clear that to date the Mexican initiative appears to be working. The Chairman of the Federal Reserve Board, for instance, testified this morning before the committee that both the gentleman from Vermont and I sit on, that it is working maximally. This Member believes it has probably moved from a 60- to 70-percent likelihood of success to an 80- to 90-percent likelihood of success. Indeed, from an American perspective, the embarrassment could be that we will be making a great deal of money on the loans and loan commitments we have made, with our lending charges being almost twice the cost of borrowing from the Federal Treasury. Here, let me stress, not only, if the program works, will we be making money, but we will be avoiding socially diversive consequences in the country of Mexico, which could have precipitated massive flows of illegal immigrants which would have been costly to the United States taxpayer and to our own system of governance. The irony is that this amendment, as it is brought before this body, disallows the United States of America from using the Exchange Stabilization Fund to defend the dollar. The irony also is that we might be precluded from actually receiving a profit on the risk we have taken with the Mexican initiative. Both of these are counterproductive circumstances. Those are not the only ironies that are troubling, Mr. Chairman. For a Congress that favors, presumably, stability in the world, we by this approach would be introducing a new, massive element of instability in exchange rates. For a Congress that wants to be cohesive, we make it very difficult to be credible if we attempt to seek punitive actions against those responsible for policy the leadership of this Congress signed off on. By the leadership, I mean the leadership of both parties. Mr. Chairman, I recognize we have an honest difference of opinion on the Mexican policy, but this approach has the effect of standing as much as a vote of no confidence against the Speaker and the majority leader and minority leader as it does the President of the United States. Mr. Chairman, let me also stress that if we look at the Mexican issue, it strikes me this administration gets pretty good marks for how it handled the crisis once it developed. The marks, if one is taking a historical perspective, if one is bent on criticizing the administration, that are less than good relate to the reasons that the crisis was precipitated in the first place. On those grounds, the administration, particularly in 1994, could come under a reasonable criticism. However, for what has been done in 1995, in my judgment, there is an excellent chance this will be considered one of the great successes, not failures, of this administration. Let me also say that I think it is important to look to the future. As we look to the future, it is self-apparent that the international community did not have at its disposal the right kinds of equipment and capacities to deal with a crisis of this nature. We marshalled, maximally, a $50 billion worldwide system of support, 40 percent of which came from the United States. It is clear that this war for economic stability in Mexico stretched the resources of the international community. We do not have the capacity to fight in tandem two stabilization wars, or three or four of similar magnitude. The challenge for this body is, instead of sniping at a past decision--which in my belief represented an act of extraordinary courage from a President reeling with weakness, from this Congress which was new, and from a presidency in Mexico which was also new and that responded collectively with surprising wisdom; the challenge for this body is to develop ways for the international community to share in the kinds of obligations that come into place when this kind of crisis emerges in the future. Instead of sniping, what we ought to be looking at are constructive efforts to improve both international law and international institutions to take the burden off the publics of individual countries. While the risk in the Mexican initiative was put disproportionately on the United States public, it looks, at this point, as if it was well merited and as if it is going to produce a profit. Mr. Chairman, I would only say to my distinguished colleague from Iowa, this amendment should, respectfully, be defeated.

Mr. LEACH. Mr. Chairman, reserving the right to object, I would only suggest that a moment be given to the gentleman from Vermont [Mr. Sanders] to explain the meaning of his amendment. I have read both amendments. They have a similar objective and are dissimilarly flawed, but, nonetheless, flawed, but I think the gentleman ought to be given the right to explain the difference. Mr. Chairman, I withdraw my reservation of objection.

Mr. LEACH. Mr. Chairman, based on the fact that two Members, one from each side, have read an amendment that is not the amendment under consideration, I ask unanimous consent that the Clerk read the amendment that is under consideration before this body.

Mr. LEACH. Mr. Chairman, I appreciate the gentleman's offer, but I do not.

Mr. LEACH. Without doubt, this is an amendment as written that has that effect, and it should be on those grounds alone, however one stands in the Mexican issue, defeated.