Jim McGovern

Mr. McGOVERN

Mr. McGOVERN. I yield 3 minutes to the gentleman from California (Mr. Sherman).

Mr. McGOVERN. Mr. Speaker, I just want to set the record straight. It is incorrect to say that there have been no hearings on this measure. In fact, the Financial Services Committee on Tuesday held a hearing--I think it began at around two o'clock in the afternoon and went into the evening. So there has been a hearing in the committee of jurisdiction on this. At this time, I would like to yield 4 minutes to the gentleman from Massachusetts (Mr. Frank).

Mr. McGOVERN. I thank the gentleman. If I recall correctly, I did yield to the gentleman once. What I objected to was being interrupted in mid-sentence. But I will be happy to yield to the gentleman for a discourse at any time. Thank you.

Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, House Resolution 62 provides for further consideration of H.R. 384, the Troubled Assets Recovery Program Reform Act of 2009 under a structured rule. The rule makes in order the 11 amendments printed in the Rules Committee report, including a manager's amendment that incorporated many of the amendments submitted to the Rules Committee. All the amendments are debatable for 10 minutes except the manager's amendment, which is debatable for 40 minutes. The rule also provides for a motion to recommit with or without instructions. Finally, the rule contains a provision to preserve the House's ability to have a vote on the second $350 billion. The first TARP bill contained language providing for expedited consideration a disapproval resolution that provided for a vote not later than 6 days after the date Congress receives the report. However, because President Bush sent the request to Congress on January 12, the 6th day would fall on a Sunday, a day that the House is not in session. Therefore, the ability to move to proceed would expire without giving the House an opportunity to act. The language in this rule assures that the House will have that opportunity. Mr. Speaker, let me begin by saying that this is a good rule. Eleven amendments are made in order--five Republican and six Democratic. One of the Democratic amendments is the manager's amendment which incorporates parts or all of the 16 Democratic amendments and Republican amendments. Mr. Speaker, as I discussed yesterday, this bill is about the way the TARP should be spent, but it does not actually allow or preclude the release of the second round of these funds. Now, I know many of my colleagues are apprehensive about the release of these funds. I understand their concerns, and I share some of them. The Bush administration did not disburse the funds as many of us thought they promised. I believe that this bill that we are debating today and the amendments should alleviate many of these concerns. I believe that providing a blueprint for how these funds should be spent is one of the most important actions this Congress will take. We know jump-starting our economy is a top priority of this new administration and of this Congress. But we have to do it right. We must ensure that the funding goes to the right places--to the homeowners who face foreclosure, in many cases at no fault of their own, and the small businesses who don't have access to funds for their payrolls simply because the credit market is so tight. This bill, Mr. Speaker, attempts to get it right. Not only does this bill provide a blueprint on how this House believes these funds should be spent; it complements the roadmap already provided by President- elect Obama about how his administration would use these funds. The January 12, 2009, letter from National Economic Adviser-designate Larry Summers details how the incoming Obama administration will allocate these funds, and I support these goals. But like I said yesterday, Mr. Speaker, we will trust the new administration, but we need to also verify. This is a good bill that will be made better with the adoption of many of the amendments made in order under this rule. I support this rule, I support the underlying bill, and I urge my colleagues to support both the rule and the bill. I reserve the balance of my time.

Mr. McGOVERN. Mr. Speaker, I also ask unanimous consent that all Members be given 5 legislative days in which to revise and extend their remarks on House Resolution 62.

Mr. McGOVERN. Mr. Speaker, for the purposes of debate only, I yield the customary 30 minutes to the gentleman from California (Mr. Dreier). All time yielded during consideration of the rule is for debate only. General Leave

Mr. McGOVERN. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 62 and ask for its immediate consideration.

Mr. McGOVERN. Mr. Speaker, I reserve the balance of my time.

Mr. McGOVERN. I have no objection to that.

Mr. McGOVERN. The gentleman is correct.

Mr. McGOVERN. Mr. Speaker, the Bush economic policies over the 8 years have been a failure. They have been a miserable failure. We have an incredibly high number of people who have lost their jobs. December marked the second highest number of foreclosures in the history of the United States of America. We have the highest deficit and the highest debt in the history of our country. Unless we do something, something big and something bold, the economy will get worse. We have the worst economy since the Great Depression. People don't want to hear anymore speeches. People don't want to hear anymore excuses. The people of this country don't want us to stand on the House floor and say we feel your pain. What people want is action and people want smart, bold, big, effective action by this Congress. What we are doing here today is trying to put forward in blueprint so if, in fact, anymore money is going to be released as part of the TARP, that it is clear where that money will be spent. We are not content to just take the next administrations at their word. We want to make it very clear where Congress stands. This is a chance for people to decide. If you are for foreclosure relief, then you should be supporting the bill that Chairman Frank has put forward. If that's not important to you, then you can vote ``no.'' If you want accountability, then you should support this bill. If that's not important, then put it aside. If you think that the United States House of Representatives should have a say in how this money is spent, then I think you should support this bill. If not, then fine. You don't have to support it.

Mr. McGOVERN. Mr. Speaker, I have no further requests for time, and I reserve the balance of my time.

Mr. McGOVERN. Mr. Speaker, reclaiming my time, I thank the gentleman for his observation, but I didn't say that it was not related. The gentleman was talking about this bill as if today we're releasing this money. What this bill does is set conditions. It makes it clear what Congress' intention is on how that money should be spent if it should be released. If the gentleman or anybody else in this Chamber wants to vote against releasing additional money, they will have that opportunity at a later date. Mr. Speaker, I reserve the balance of my time.

Mr. McGOVERN. I yield to the gentleman.

Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume. I would just respond to the gentleman by saying that what we are debating today is not about releasing money. There's no money attached to this bill. In fact, all this bill does really is set conditions on any money that may or may not be released. This bill also preserves this Chamber's right to have a vote on the release of the next TARP tranche.

Mr. McGOVERN. Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution. The previous question was ordered.

Mr. McGOVERN. I am happy to yield to the gentleman from California.

Mr. McGOVERN. I would be happy to yield to the gentleman.

Mr. McGOVERN. Why don't I reserve my final close and let you yield.

Mr. McGOVERN. Mr. Speaker, I just want to close by saying that I appreciate the history lesson on Ronald Reagan and the Berlin Wall and all the other things that were mentioned. But the harsh reality is that people are suffering. As we speak, people are losing their homes. The foreclosure numbers in December were the second highest, were the second highest in the history of this country. People need help now. We need to do something now. So the point of this legislation is to help provide a blueprint for this new administration which has already outlined similar views but to basically reinforce what they have said they want to do, to help provide foreclosure relief, more accountability, to be able to help small businesses get the credit they need, so they can employ more people. We need to get this economy on the right track, and Congress should have a say in it. So I would urge my colleagues to vote ``yes'' on the underlying bill and I would urge them to vote ``yes'' on the bill. I urge a ``yes'' vote on the previous question.

Mr. McGOVERN

Mr. McGOVERN. Mr. Speaker, these are extraordinary times. This bill directs the next President of the United States on how to spend the money. And this bill specifically says that a minimum of $40 billion has to go to dealing with the mortgage foreclosure crisis in this country. So if we want to take action and make sure that the next President takes the right action, we need to support this bill. The days of delay, the days of indifference, the days of putting off our problems are gone. We have a new President and a new Congress that is going to respond to these problems and fix these problems. Mr. Speaker, I would like to yield 2 minutes to the gentleman from California (Mr. Baca).

Mr. McGOVERN. Mr. Speaker, first I want to thank the gentlelady from Michigan, my Republican colleague, for making a very eloquent case as to why the bill that Chairman Frank has put together is a bill worth supporting. At this time, I would like to yield 4 minutes to the gentlewoman from Ohio (Ms. Kaptur).

Mr. McGOVERN. Mr. Speaker, I have no further requests for time, and I reserve the balance of my time.

Mr. McGOVERN. Mr. Speaker, I just would like to make the record clear for my colleagues who are listening to this debate. Chairman Frank has held numerous hearings on this issue before the TARP legislation became law, during the implementation process, during our break. I mean, he and his incredible staff have been working nonstop monitoring this issue, letting colleagues know what is happening on this issue. So I don't want anybody to come away from this debate thinking that nothing has been going on, that no monitoring has been going on. The bill that is before us today is a product of the concern and the frustration and the disappointment with the way this administration has been implementing this.

Mr. McGOVERN. Mr. Speaker, House Resolution 53 provides for the initial consideration of H.R. 384, the TARP Reform and Accountability Act of 2009. The rule provides for 2 hours of general debate to be controlled by the Chair and ranking minority member of the Committee on Financial Services. After the general debate, there will be no further consideration of the bill except pursuant to a subsequent rule. Let me be clear: this rule provides for general debate only. The Rules Committee is meeting right now to consider amendments. Tomorrow, I expect the House will vote on several amendments, Democratic and Republican, to the bill. Mr. Speaker, I rise today in support of H.R. 384, the TARP Reform and Accountability Act. I commend Chairman Barney Frank and the Financial Services Committee for their steadfast commitment to reviving our Nation's economy. Last September, the Bush administration sounded the alarm that our financial system was dangerously close to collapse. Treasury Secretary Paulson came to Congress with an astronomical funding request that he said would free up the credit markets and would prevent a bad situation from getting worse. The Bush administration asked for a $700 billion blank check with no strings attached. Over the following weeks, Speaker Pelosi and Chairman Frank and the House Democratic leadership, along with Senate leaders and then-Senator Obama, worked with the Bush administration on a compromise that became the Troubled Asset Relief Program, or TARP. The TARP provided $700 billion in two stages--$350 billion up front and another $350 billion when requested by the administration. Now, I opposed the administration's original request for a blank check, but I voted for the compromise because I took Secretary Paulson at his word that this money would be spent where it was needed. Specifically, funding would go to homeowners and to banks that were feeling the pressures of a tightening credit market. Unfortunately, the Bush administration gave most of this money to the big banks that continue to sit on too much of the money instead of lending it out to other institutions and individuals. The stunning fact is that, of the $250 billion provided in direct assistance to banks, only $62.5 billion has been spent. That means that the banks are still sitting on $187.5 billion. In my opinion, that is simply not good enough. This economic crisis is real. This housing crisis is real, and it's not getting better. One in ten American homeowners with a mortgage was either behind in payments or was in foreclosure at the end of September. Predictions in December were that more than 8 million foreclosures, 16 percent of all U.S. mortgages, would occur over the next 4 years if nothing is done. That is quite a record for the outgoing administration. Now, Chairman Frank will be the first to say that we don't know how bad the economy would be if the first $350 billion of TARP would not have been spent by the Bush administration, but we do know that it could have been spent more wisely. The American public simply does not trust the current administration to do the right thing, and rightfully so, I should add. Through the bill we will consider later today and tomorrow, this new Congress will attempt to right the many wrongs surrounding the TARP. We not only need better oversight on the second set of TARP funds; we also need to provide a real blueprint for how these funds are to be spent. The Bush administration clearly failed on this point, but H.R. 384 is a step in the right direction. The bill before us today not only modifies the TARP and the TARP oversight, but it requires that between $40 billion and $100 billion be used for foreclosure mitigation. By March 15, 2009, the Treasury Secretary must establish a TARP Financial Stability Oversight Board approved plan to be implemented no later than April 1, 2009. Our priority is keeping American families in their homes. While I hope the Senate will pass this bill and that President-elect Obama will sign it after he takes office, it is important that we, in the House at least, signal our intent on how this funding should be spent. President-elect Obama has said that he will actually listen to and consult with Congress on important issues. And won't that be a welcome change from the current administration? I strongly disagree with those who say President-elect Obama simply requested the funds but doesn't have a plan on how to spend these funds wisely. The incoming National Economic Adviser, Larry Summers, recently sent a letter outlining President-elect Obama's priorities and expectations for the second set of TARP funds. Those priorities are reflected in the bill we will consider today and tomorrow. I will insert Secretary Summers' letter into the Record following my remarks. While we should take President Obama and his adviser at their word, we should not do so blindly. Trust but verify, and that is what we will do. Mr. Speaker, my constituents are frustrated and frightened. Many are afraid that they will lose their homes and that their lives will be turned upside down. These are good, honest, hardworking people who have fallen on hard times. Some tell me that they have been to their lenders, many times, in an effort to prevent foreclosure, only to be told, ``There is no help available. Simply wait to default.'' That's not right, and with this bill, we will address this problem. Our economy won't get better overnight, but it can get worse. This funding is needed, but we cannot release it without a plan on how it will be spent. The economy is not just about banks and investment houses. It's not just about Wall Street. It's about the small businesses and community lenders on Main Street. It's about the families and individuals trying to make a living and improve their lives on the side streets. Allowing banks to hoard taxpayer money, as the Bush administration has done, doesn't help the people in Worcester and Attleboro and Fall River. But dedicating funds to help the mortgage crisis and move money through the credit markets is exactly what is needed, and this bill will do that. I strongly support Chairman Frank's bill, and I support the incoming administration's stated goals, and I urge my colleagues to vote for this bill. The Office of the President-Elect, Washington, DC, January 12, 2009. Hon. Nancy Pelosi, Speaker, House of Representatives. Hon. John Boehner, Republican Leader, House of Representatives. Hon. Harry Reid, Majority Leader, U.S. Senate. Hon. Mitch McConnell, Republican Leader, U.S. Senate. Dear Madam Speaker, Leader Boehner, Leader Reid, and Leader McConnell: As the President-elect recently stated, ``we start 2009 in the midst of a crisis unlike any other we have seen in our lifetime.'' He strongly believes that while the American Recovery and Reinvestment plan is critical, it alone will not solve all the problems that led us into this crisis. We must work with the same sense of urgency to stabilize and repair the financial system to address his primary concern: that we maintain the flow of credit that families and businesses depend on to keep our economy strong. It was that concern that led the President-elect to support the financial rescue plan back in September. If we had not all acted together--Democrats and Republicans--this economic crisis would have already become an economic catastrophe, with even more jobs lost and more businesses closed. But the President-elect also shares the frustration of the American people that we have seen too little effect from this rescue plan on jobs, incomes, and the ability of responsible homeowners to stay in their homes. He believes the American people are right to be angry with the way this plan has been implemented. President-elect Obama believes there has been too little transparency and accountability; too much upside for financial institutions and executives who acted irresponsibly without providing enough help for small business owners, families who are struggling to keep their jobs and make ends meet, and innocent homeowners. That will change when President-elect Obama takes office. Today, he is asking for the authority to implement the rest of the financial rescue plan because the American people need to know that going forward our government has the resources to do whatever is necessary to stabilize our financial system and protect our economy from a potential catastrophe. With the first half of the rescue package now committed, President-elect Obama believes the need is imminent and urgent. We cannot afford to wait. It is important that we act both quickly and wisely. The President-elect is committed to using the full arsenal of tools available to us to get credit flowing again to families and businesses. He will ask his Department of Treasury to put in place strict and sensible conditions on CEO compensation and dividend payments until taxpayers get their money back. He will also direct them to ensure that assistance goes not just to large financial institutions, but that we put forward a comprehensive effort to get funds flowing again to community banks; the small business owner who has perfect credit but can't get a loan to make payroll; the student who can't get financial assistance for college; and the consumer who wants to buy a car. He will also do more to help Americans who are seeing their home values plummet as a result of this foreclosure crisis. And he will make sure that the American people can see how and where this money is spent so they can hold us accountable for the results. Those are the changes the American people are demanding, and those are the changes that President-elect Obama is committed to making happen. In particular, he will call for: 1. Use Our Full Arsenal of Tools to Get Credit Flowing Again to Families and Business: The President-elect believes we must take all necessary steps to protect the integrity of our financial system and prevent the failure of financial institutions that would have catastrophic effects of our economy. We must also do everything in our power to ensure our efforts are more directly reaching Main Street. It is neither right nor sound economic policy to allow the small businesses that are responsible for more than two-thirds of job creation and entrepreneurs and who have worked hard and played by the rules to be victims of this credit crisis that they were not responsible for creating. We will work in close cooperation with the Congress, the Federal Reserve and other agencies to strengthen financial institutions and restart lending for small businesses, auto purchases, and municipalities. 2. Reform Our System of Oversight, Regulation and Management of Financial Crises: President-elect Obama is committed to ensuring a full and accurate accounting of how the Treasury Department has allocated the funds spent to date and going forward. And we will report on a continuous basis the earnings and repayments the federal government receives from fmancial institutions who have been recipients of financial rescue assistance. We will work with Congress to strengthen oversight and move quickly to reform a weak and outdated regulatory system to better protect consumers, investors and businesses. And we will operate as one government with strong coordination among all major financial regulators. He has asked his Treasury Department and economic team to analyze the recommendations of the Congressional Oversight Panel and other oversight bodies and implement those we believe will make the program more effective. And since this is a global crisis, we will work with the G-8 and within the G-20 to ensure international coordination on recovery, financial and regulatory policies. 3. Launch a Sweeping Effort to Address the Foreclosure Crisis: The President-elect has directed his White House and Cabinet to work with Congress immediately to implement smart, aggressive policies to reduce the number of preventable foreclosures by helping to reduce mortgage payments for economically stressed but responsible homeowners while also reforming our bankruptcy laws and strengthening existing housing initiatives like Hope for Homeowners. Confronting this challenge is an absolute imperative if we are to restore the health of our housing sector and the financial system as a whole. 4. Impose Tough and Transparent Conditions on Firms Receiving Taxpayer Assistance: The President-elect has directed his Treasury Department to monitor, measure and track what is happening to lending by recipients of our financial rescue assistance. We will ensure that resources are directed to increasing lending and preventing new financial crises and not to enriching shareholders or executives. Those receiving exceptional assistance will be subject to tough but sensible conditions that limit executive compensation until taxpayer money is paid back, ban dividend payments beyond de minimis amounts, and put limits on stock buybacks and the acquisition of already financially strong companies. Finally, our actions must always support rather than impede the orderly restructuring of our financial system. 5. Maximize the Role of Private Capital and Plan for Exit of Government Intervention: We will invest taxpayer money only when sufficient private capital cannot be attracted. We will seek to replace investments made by the U.S. Government with private investment as quickly as possible. President-elect Obama believes it is not too late to change course, but it will be if we don't take dramatic action as soon as possible. We cannot allow the failures of the past to prevent us from doing what we must to secure America's future. The President-elect is committed to working closely together with the Congress on all aspects of our financial recovery plan--both for fmancial stability and for jobs and economic growth--until we, together, help our nation pass through this economic storm. Sincerely, Lawrence Summers, Director-designate, National Economic Council. I reserve the balance of my time.