Randy Neugebauer

Mr. NEUGEBAUER

Mr. NEUGEBAUER. Mr. Chairman, I yield back the balance of my time.

Mr. NEUGEBAUER. Certainly I am sympathetic to the many community banks coping with real estate assets on their books that have lost their value; however, I am not sure this amendment is the best solution. This amendment would essentially allow certain banks to hide losses for up to 10 years. The practice of legislative forbearance is a dangerous one and could result in problems that only get worse because they are not properly addressed. Accounting rules function to provide a clear record of the health of the institution. This amendment does just the opposite by hiding the losses. The amortization provided by this amendment does not take effect for 2 years, when the increase in small business lending is measured; thus, it doesn't really address the current credit problems that this bill attempts to solve. This amendment creates the wrong incentive of allowing banks to hide losses for longer periods of time based on making even more loans. Instead of continuing to distort the market, the government should instead create an expansionary environment where we are lowering taxes and providing regulatory certainty and not hiding accounting losses. I urge opposition to this amendment. I yield back the balance of my time.

Mr. NEUGEBAUER. Mr. Chairman, one of the things that is interesting is that this program is designed to put more capital into the banking system. According to the Federal Reserve's April survey of senior loan officers, three factors that exerted the greatest influence on banks' business lending practices over the past 3 months were competitive pressures, the economic outlook, and the tolerance for risk in the business loan market. Lack of capital was not mentioned as one of the driving forces for lending decisions that are being made. So, basically, Mr. Chairman, what this bill tries to do is to solve a problem that, according to the Federal Reserve, doesn't exist. There is plenty of capital, but there is this competitive pressure, this economic outlook, and this tolerance for risk. Going back to my earlier point, when I traveled around the 19th Congressional District, I talked to a number of lenders. At the same time, I visited businesses in their communities. What I learned during that process is that many of the small businesses just said, Congressman, things are just too uncertain right now. We don't know what Congress is going to do with taxes. We don't know what they're going to do with this energy bill. We don't know exactly. We are trying to figure out how this new health care bill is going to impact our businesses, how it is going to impact our bottom lines. Then I went over and talked to the lenders. Many of the lenders are sitting on record amounts of cash and capital in their banks. They are looking as hard as they can for good lending opportunities. What they said is, Unfortunately, some of our customers are not creditworthy. The economy has hurt their sales, and so it wouldn't be prudent to loan those businesses more money. Others said, Our good customers, customers who are creditworthy, are not coming to us and borrowing any money because, again, of this uncertainty. So, again, our opposition to this bill is that it is not really addressing the real issue in our economy, which is needing to bring some certainty and to leave the capital in the companies, to leave the capital in the economy, instead of the Federal Government's continuing to create uncertainty and taking money out of the economy. I reserve the balance of my time.

Mr. NEUGEBAUER. Mr. Chairman, I continue to reserve the balance of my time.

Mr. NEUGEBAUER. Mr. Chairman, I yield myself such time as I may consume. I appreciate the majority leader coming and telling us that this won't cost the taxpayers any money. We have asked the majority for an updated CBO score on this bill with the revisions, and we have not seen that yet. So we don't actually know that for certain. But what we do know is that from the TARP program, there were losses incurred in the TARP program. And this program has been identified by people who are very familiar with the TARP program as another TARP program, except some people want to call this TARP II, TARP Jr. But by and large, this is another TARP program. You know, there is no question today that all of us realize that small businesses are the number one job creator in our country. Mr. Chairman, in fact, I am a small businessman. I came to Congress not from being a lifelong politician, but from creating jobs in this country, of making payrolls. I have made a payroll. I have borrowed money. I have actually been a lender. And if you really want to get the economy going back in America, as the majority has tried throwing money at the problem--and I would have thought that they would have learned by now that all this money, the trillions of dollars that they have thrown at the economy hasn't created any jobs. We still have almost 10 percent of the American people who are unemployed in this country today. The numbers show that 17 percent of the American people are either unemployed or underemployed, so throwing money at the problem isn't the answer. If you want to create jobs in America, I will tell you how you create jobs in America. Number one, you bring some certainty in America. Right now the American people are questioning what the future of their country is. They are seeing record deficits by this administration. This year alone, if we had a budget--we don't know what the deficit is going to be this year because, one, we haven't passed any appropriation bills in this Congress. And, secondly, the leadership of the majority hasn't brought a budget to the floor, and maybe they are not going to because they don't want their Members to have to take a vote on a budget that's going to say: for every dollar we're going to spend, we are going to have to borrow 42 cents. I am sure they would be embarrassed. And it would be more embarrassing if you voted for a budget like that. But the way you bring certainty to the country is, one, we are going to have to start cutting back our spending and reducing these deficits. Leaving money in the economy. As a small businessman, when I had the capital in my business, and the government wasn't taxing away my capital, I was able to take that capital and leverage it, and go to my lender, be a responsible borrower, and it would be prudent to lend to me, and we could expand our business that way. The other thing is, yesterday this body had an opportunity to do something for small business, and that was to repeal the mandate for health care that was in the Democrats' health care bill. Unfortunately, there was not enough votes, but some of our Democratic colleagues understand the same thing we do: if you want to bring certainty, create jobs in America, you take that off the backs of small businesses. So, really, I wish that this bill would do something for small businesses in this country because small businesses are the lifeblood and the engine for our country. Unfortunately, this bill will not do anything for small businesses; but it will put the taxpayers, again, at risk to underwrite and to invest in banks. You know, I figured this: it's simple back there in Lubbock, Texas, that, you know, if somebody wants to invest their dollars in a bank, let them invest their dollars in a bank. Don't take the money away from the taxpayers and invest it because the government thinks that they know what is a better program. So, again, I urge my colleagues to vote for small business, but not this bill. This bill doesn't help small business. And with that, I yield back the balance of my time.

Mr. NEUGEBAUER. Mr. Chairman, I rise to claim the time in opposition, although I am not opposed to the amendment.

Mr. NEUGEBAUER. Mr. Chairman, I seek time in opposition, although I am not opposed to the amendment.

Mr. NEUGEBAUER. I appreciate the gentleman's point here of trying to create a new source of capital in commercial real estate at a time when there is a significant amount of stress on our community banks. Financing for commercial real estate, particularly the smaller loan market that serves small businesses, has been limited. The commercial mortgage-backed securities market, the CMBS market, which accounted for nearly 50 percent of the commercial real estate lending in 2007, remains dormant. So while I continue to believe the $30 billion lending fund will not improve lending for small businesses, I do not oppose the gentleman's amendment. I yield back the balance of my time.

Mr. NEUGEBAUER. Mr. Chair, I am opposed to the amendment.

Mr. NEUGEBAUER. Madam Chair, I claim time in opposition, although I don't think I'm going to oppose the amendment.

Mr. NEUGEBAUER. I just wanted to clarify something that the gentleman said. I understand that the bank will disclose to the borrower that they are loaning them funds because they are participating under this program, and then the gentleman went on to say that the Treasury would then post a report on their Web site. Now, would that list the names of the borrowers? Will the Treasury report list on their Web site the names of each borrower that borrowed money under this program?

Mr. NEUGEBAUER. I yield.

Mr. NEUGEBAUER. I thank the gentleman because I was concerned about the privacy of those business owners, you know, letting the world know how much money they're borrowing. So I'm not opposed to the gentleman's amendment. I think disclosure is a good thing. I just want to make a point that there have been several discussions up here today that this is not going to cost the taxpayers any money, and only in Washington, D.C., can you go spend $33 billion and say it's not going to cost anything. The problem is, if this program is participated up to $33 billion, we don't have $33 billion, and so we're going to go have to borrow $33 billion from the Chinese to loan banks to loan to small businesses in this country. And a lot of folks I think understand that kind of how we got here was that the whole world, small businesses, individuals, and governments, have been on this borrowing and spending binge, borrow and spend, borrow and spend, and quite honestly, that's how we wove this web where we've got our financial markets in somewhat of a wrinkle right now. So, while I applaud the gentleman's amendment, I still go back to the fundamental point here that, one, this bill will not help small businesses have any additional capital, but more importantly, we are going to go spend $33 billion that we don't have, and I don't think that's the right prescription for our country. With that, I reserve the balance of my time.

Mr. NEUGEBAUER. I appreciate the gentleman. I still go back to the point, and I think that's where we get kind of in a, we're living in Wally World here in Washington, D.C., where you still have to have $33 billion. If you're going to go invest in the preferred shares of these banks, you've still got to find the $33 billion. And the truth of the matter is for every dollar we're going to appropriate or allocate in this country this year, we're going to have to borrow 42 cents of it. So I guess the question is, should we go out and hock another $33 billion for a program that many people think that there's adequate capital and liquidity already in the banking industry? Some people have been quoted as saying, well, 42 percent of the small businesses have been turned down for loans in this country. Well, you know, I was in the loan business, and everybody that came in to my borrow money from me when I was a loan officer wasn't credit-worthy or it wasn't in their best interest to leverage their business further. So I'm afraid that we're out here trying to encourage behavior that the marketplace may be already taking care of. My good friend from Georgia did make a point that the regulatory folks are sending mixed messages. I think that's a bad policy. I think the regulators need to be more consistent with their policy, again bringing that certainty because what we've heard time and time again, whether it's from the business community or from the lending community, all of this uncertainty about what Congress is doing and the regulatory reforms that are going on, all of this is creating a huge amount of uncertainty. And so what happens when we have uncertainty in the marketplace, people just sit on the sidelines. If you want to get businesses going again, if you want to get the economy going again, we've got to get the government out of the banking business. We've got to get the government out of all these huge regulations. We've got to bring economic certainty by not imposing more restrictions on companies on their health care; cap-and-trade affecting what they're potentially going to pay for energy in the future; uncertainty with our tax code, where we don't know what provisions are going to expire, what provisions aren't. And you know, wouldn't it be nice for the American people to get to see a budget of how Congress is planning to spend their money, instead of going through a daily, monthly, weekly exercise of spending money without a budget? The American people don't do their business that way. They're a little bit concerned that the United States Congress just keeps on spending money but without a budget. So, with that, I yield back the balance of my time.

Mr. NEUGEBAUER. Madam Chair, I rise to claim time in opposition to the bill.

Mr. NEUGEBAUER. This new capital injection program is designed to operate exactly like the TARP program but without any of the taxpayer protection or oversight bodies. Now, this amendment is intended to substitute for putting the experience of the Inspector General for this type of program in charge of this new fund. Republicans had an amendment that put the Special Inspector General for TARP, or SIGTARP, in charge of the oversight of this new fund, but the Rules Committee blocked it. Really, this creates a new regulator where we had an existing regulator in place for TARP-like programs, which this is, and we think that that was a better alternative. And now we want to put someone that doesn't have as much experience with this type of program in charge of oversight, and we just don't think that's in the best interest of the taxpayers. Republicans, as I want to remind the chairman, offered a number of amendments that would have given the taxpayers much more protection even than this amendment would. Unfortunately, again--and I don't want to be redundant here, but the Rules Committee, which is controlled by the majority, only allowed one Republican amendment to be heard while we've had 16 amendments from the majority. Again, we wondered why Republican amendments to provide better protection and better oversight were blocked by the majority when I think the American people think that any kind of amendment that would have provided them more opportunity, more protection, and more oversight would have been in their best interest. We don't think that this amendment does the job that it needs to do, and therefore we're opposed to it. Madam Chair, I reserve the balance of my time.

Mr. NEUGEBAUER. I will reclaim my time because the gentleman obviously doesn't know where the $33 billion is coming from, which is part of the problem up here. People just think this money appears when you start saying I'm going to put $33 billion here or $100 billion here, $250 billion here; and nobody knows where the money is coming from. But the bottom line is we know where the money is coming from. We're going out and borrowing that money because the Treasury doesn't have $33 billion.

Mr. NEUGEBAUER. I concede to the gentleman that none of this money is coming from the TARP program; it probably should have because it's a TARP program. I want to just remind the gentleman that Neil Barofsky, the Special Inspector General who oversees TARP, said, In terms of its basic design, its participants, its application process, from an oversight perspective the Small Business Lending Fund would essentially be an extension of TARP's capital purchase program. From Elizabeth Warren, the SBLF's prospects are far from certain. The SBLF also raises the question whether, in light of the capital purchase program's poor performance in improving credit access, any capital infusion for the program can essentially jump-start small business lending. So everybody but the Democrats understands that this is a TARP program. Now, why did we want SIGTARP to have oversight? Because this is a TARP-like program. And just today it was released that SIGTARP helped bring a new lawsuit today for $1.9 billion in fraud collection with the failure of Colonial Bank. Colonial Bank received $553 million in TARP funds. To say that you're going to go out and put $33 billion into the marketplace and not suffer any losses at a time when we have over 100 banks that have already missed one dividend payment--we've had one bank that has missed six dividend payments--and that several billion dollars have already been lost from some of these banks that were defaulted and were closed after the taxpayers had put money in there. And I go back to you saying, well, it doesn't cost the taxpayers any money. I keep asking the majority, where is the $33 billion for this program coming from? I yield to the gentleman.

Mr. NEUGEBAUER. No. I would like the gentleman to answer the question----

Mr. NEUGEBAUER. I will reclaim my time if the gentleman is not going to answer my question. The question to the gentleman was, Where is the $33 billion coming from? If the gentleman wants to answer that question, I would love to yield him time. If he's not prepared to tell me where the $33 billion is coming from, then I would not yield the gentleman time.

Mr. NEUGEBAUER. No. The pay-for was to cover any potential losses, supposedly. But where is the $33 billion that you're going to invest in these banks coming from?

Mr. NEUGEBAUER. Madam Chair, I rise to claim time in opposition, although I am not opposed to the bill.

Mr. NEUGEBAUER. Madam Chair, I claim opposition to the amendment, but I am not opposed to it.

Mr. NEUGEBAUER. Well, I thank the gentleman for this commonsense amendment. It's unfortunate that we have to bring an amendment to the floor of the House of Representatives to tell government agencies to write out the instructions in plain English. But I appreciate the gentleman's amendment. I think it makes the bill better. I yield back the balance of my time.

Mr. NEUGEBAUER

Mr. NEUGEBAUER. Madam Speaker, reserving the right to object, while I do not plan to object, I just wanted to point out that by accepting the chairman's request, we are agreeing to help you fix a drafting issue with your amendment. However, Republicans also note that only one of our amendments was made in order today. So at the same time we are agreeing to help you fix your amendment--an amendment, by the way, that is considered adopted without a vote--your side has blocked all but one of our amendments from coming up. I just wanted to make sure that we are all clear on how things are handled these days in the House before we move on to this bill. With that, I withdraw my reservation.