Doug Ose

Mr. OSE

Mr. OSE. Mr. Speaker, I am pleased to yield 3 minutes to the gentleman from Idaho (Mr. Otter), the vice chairman.

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

Mr. OSE. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I want to briefly note for the Record the deep appreciation I have for the chairman of the full committee and for the ranking member in sitting down and working out the differences that existed on this bill and allowing it to move forward in an expeditious fashion. To that list I would like to add my compliments to the gentleman from Massachusetts (Mr. Tierney), who was kind enough to host me in his district yesterday and for which I am grateful. He has been an able advocate and a staunch supporter of trying to bring some relief to small businesses, and I am grateful for the opportunity to work with him in all six of these issues. I do look forward to working with all three as this bill moves through the process and future bills come before our committee.

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

Mr. OSE

Mr. OSE. Mr. Speaker, I rise today in honor of Amanda K. Edwards. I rise today to honor her life as a constituent and as a friend of mine. Ms. Amanda K. Edwards passed away on Tuesday of this week, and I seek to commemorate her life and service to our community. Her life was cut short, as I said, on Tuesday at the age of 18. My sympathies are with her family and friends during this difficult time. She was an extraordinary young woman with a very bright future ahead of her. Amanda was a recent graduate of Maxwell High School, where she was a member of the California Scholarship Federation. She had been accepted at California Polytechnic State University, San Luis Obispo, and planned to major in ranch management. In addition to her scholastic achievements, Amanda was a rodeo queen of the Maxwell Rodeo and Stonyford Rodeo 2002. She was a member of the Future Farmers of America and the 4-H Club. Frankly, her list of accomplishments is quite impressive, but it really does not capture her true spirit. I had the pleasure of knowing Amanda. We competed together at the Colusa Western Days and together we won the Team Penning competition. It was her energy and enthusiasm that led us to victory two years in a row. She was dedicated, hard-working, but, more importantly, she was a good person, and we have too few of those. Our Nation's future rests in the hands of younger Americans such as Amanda, and, frankly, she was a great example of what lies ahead for this country in terms of the standards she set. Without a doubt, she contributed great things, not only to our community, but to each of our lives. Her passing is a tragedy and she will be deeply missed. I am grateful that she was a part of my life.

Mr. OSE

Mr. OSE. Mr. Speaker, I am in opposition to the bill, and I have a procedural question to ask as to who would claim the time in opposition.

Mr. OSE. Mr. Speaker, I rise today to oppose this legislation, and I yield myself such time as I may consume. Much of this bill is useful, and it is needed reform, and I do want to commend the chairman of the full committee, the gentleman from Ohio (Mr. Oxley), and the chairman of the subcommittee, the gentleman from Alabama (Mr. Bachus) for their hard work. In fact, I fully support most of the reforms in this bill that will provide needed flexibility and stability to the insurance corporation and the deposit insurance fund. I support merging the Bank Insurance Fund and the Savings Association Insurance Fund. I support the flexibility provided to adjust reserve ratios to reflect risk, and I support the increases in protection that are provided for retirement fund accounts. However, there is something here that I cannot support, and it, frankly, in balance, outweighs the rest of the bill. That is that I cannot support a bill that places the taxpayers at greater risk without any benefit for consumers. This bill, in part, would increase the insured levels of individual accounts from $100,000 per account to $130,000 per account, and also it includes future automatic increases that would result from inflation. The fact of the matter is I do not understand why this particular provision was included when every expert has testified or written that this is, in fact, a bad idea. Let me just highlight a few quotes from some of our Nation's top experts on fiscal policy. The first I would cite is Alan Greenspan, the chairman of the Federal Reserve Board, who testified in opposition to these particular increases in deposit insurance coverages in front of both the House and Senate committees and followed up his testimony with a written letter. In his most recent testimony, Chairman Greenspan said, ``In the Board's judgment, it is unlikely that increased coverage, even by indexing, would add measurably to the stability of the banking system today. Macroeconomic policy and other elements of the safety net, combined with the current, still significant level of deposit insurance, continue to be an important bulwark against bank runs. Thus, the problem that increased coverage is designed to solve must be related to either the individual depositor, the party originally intended to be protected, or to the individual bank or thrift. Clearly, both groups would prefer higher coverage if it costs them nothing, but Congress needs to be clear about the nature of a specific problem for which increased coverage would be the solution.'' Clearly he is suggesting in no uncertain terms that this is a solution in search of a problem. The Bush administration also opposes increases in the coverage. Both Secretary of the Treasury Paul O'Neill and Under Secretary of the Treasury for Domestic Monetary Policy Peter R. Fisher have testified on this issue. Secretary O'Neill also wrote to the committee noting that, ``However, the administration continues to believe that the deposit insurance coverage level should remain unchanged. There is no evidence that an increase in the coverage level would promote competition or materially improve the ability of community banks to obtain funds. Moreover, raising coverage could weaken market discipline and increase risk to the FDIC and, ultimately, the taxpayers.'' Under Secretary Fisher said just 2 weeks ago, ``Given the lack of potential benefits for consumers or of potential improvement in banking system competition, we cannot justify the increase in the government's off-balance sheet liabilities that would result from higher deposit insurance coverage limits. These higher contingent liabilities enlarge the exposure of the insurance fund and ultimately of taxpayers to potential future losses. Moreover, increasing the overall coverage limit could weaken market discipline and further increase the level of risk to the FDIC and taxpayers.'' My colleagues will note the similarity between that last piece of quote of Mr. Fisher and Mr. O'Neill, Secretary O'Neill's. Again, I repeat, Secretary O'Neill said, ``Raising coverage could weaken market discipline and increase risk.'' Mr. Fisher said, ``Increasing the overall coverage limit could weaken market discipline and further increase the level of risk.'' However, this is not all of the people who have testified. Other leaders have also spoken up. The Comptroller of the Currency, John D. Hawke, Jr. testified, ``We see no compelling evidence that increased coverage levels would offer depositors substantial benefits. Anyone who wants to use insured bank deposits as a means of holding their wealth can do so virtually without limits, subject only to the minor inconvenience of having to open accounts at multiple banks. Despite the ability of depositors to achieve almost unlimited coverage at banks, money market mutual funds, which have some of the same features as bank transactions accounts and generally offer higher returns than bank deposits, today hold over $2 trillion. Because these funds could easily be placed in insured accounts, these facts suggest that many depositors are not concerned about the additional risk involved in holding their liquid funds in uninsured form, and that households are comfortable with the status quo.'' The Director of the Office of Thrift Supervision, Mr. James Gilleran, also testified on this subject saying, ``While I applaud efforts to increase the ability of institutions, particularly small community- based depositories, to attract more deposits, I am not convinced that increasing the insurance cap will achieve this result. I do not think this approach can be supported from a cost-benefit standpoint. Increasing the current insurance coverage level to $130,000 would incur significant costs for insured institutions, since premiums would necessarily be increased. The benefits of an increase are unclear. I have heard from many of our institutions that they see no merit to bumping up the current limit for standard accounts. In their view, projected increases in insured deposits would not lead to a substantive increase in new accounts. Moreover, individuals with amounts in excess of $100,000 already have numerous opportunities to invest their funds in one or more depository institutions and obtain full insurance coverage for their funds.'' Mr. Speaker, I want to again just repeat, the Comptroller of the Currency John Hawke says people have the ability to open multiple accounts to hold their money, and that, in fact, they seem to have personally gotten comfortable with the level of risk in excess of $100,000; and Director of the Office of Thrift Supervision James Gilleran says people have significant and ample opportunities to open accounts at multiple depository institutions and provide themselves with the insurance coverage that they might otherwise seek. Now, interestingly enough, it is not just the administration officials who are speaking out. The Financial Services Roundtable wrote to the chairman, the gentleman from Ohio (Mr. Oxley), with their concerns noting, ``We are writing in opposition to the provisions of H.R. 3717 that would raise deposit insurance coverage levels and increase premiums on all institutions. Raising coverage could weaken market discipline and increase risk to the FDIC, all insured institutions and, ultimately, taxpayers. The FDIC has said that these coverage increases could dilute the fund by as much as 13.6 basis points or $6.1 billion,'' $6.1 billion. ``We believe that this is too high a price to pay for something that could yield minimal, if any, benefit.'' This letter was signed by a former Congressman, Steve Bartlett. In addition, the Association for Financial Professionals, which represents many of the men and women in the business community who deal with finances every day, wrote just this week that, ``The deposit insurance coverage level should remain unchanged. It is not clear to us that a higher coverage limit would address funding concerns at smaller institutions. But, more importantly, we do not believe that the use of the deposit insurance system for the competitive purpose of trying to help some banks with their funding is an appropriate public policy position. Deposit insurance coverage is not a competitive issue. Coverage is intended to benefit the depositors, not banks.'' The Association of Financial Professionals chair also testified before the subcommittee of the gentleman from Alabama (Mr. Bachus) on this very issue. George Kauffman, a professor of banking and finance at Loyola University in Chicago, Illinois, also wrote on the issue, noting that an increase in coverage ``is likely to encourage some depositors to become less concerned about the financial health of their banks, and banks to take more risks, which would increase the chances of bank losses and failures.'' Many of the expert witnesses who testified before the subcommittee of the gentleman from Alabama spoke at great detail in opposition to an increase in coverage. I do not know why Members disregarded the advice they solicited. Mr. Speaker, I reserve the balance of my time.

Mr. OSE. Mr. Speaker, I yield 4 minutes to the gentlewoman from New York (Mrs. Maloney).

Mr. OSE. Mr. Speaker, I yield 1 minute as well to the gentleman from Tennessee (Mr. Ford).

Mr. OSE. Mr. Speaker, I yield myself such time as I may consume, and I want to go back, finally, to Dr. Thomas' 21 citations. Again, I am not going to cite the remaining 18 or 19 of them, but I do want to run through his testimony here. Dr. Thomas raises the issue that ``There is absolutely no public outcry over or even widespread interest in the proposal to,'' he says, ``double the FDIC insurance limit. Most people know or should know from their banks that any couple can get multiple account coverage, and singles need only open another account at any bank via a personal visit, a telephone call, or even the Internet. There is no shortage of $100,000 insured deposit investment opportunities. Some seniors may have a preference to keep their jumbo CDs spread out among several banks in $100,000 or less amounts, even if they have the opportunity to keep $200,000 at one bank.'' This speaks directly to what the current situation is. The current situation allows people to protect themselves under the current $100,000 limit. The testimony we have had at the subcommittee from high ranking government officials, from people in the business to academia, is that increasing this limit significantly increases the risk to the insurance funds. Speaking from personal experience, I actually weathered the last time we went through this. Many of my colleagues in the real estate business did not. The fact of the matter is, it was a wholesale winnowing of the real estate business in California and it took us years to recover. My colleagues, increasing the deposit insurance coverage limit will lead to a potential for repeating that. California leads this country's economy up and down. If we increase the risk to the insurance fund by placing on our bankers the requirement to put more money to work in a quick or hasty fashion, we are going to replay the nightmare of the early 1980s and pay billions more the next time this occurs. This body does not need to fund additional billion dollar bailouts. I am in favor of 90 percent of this bill. There are good things in this bill. But when we look at the hands of Lady Justice balancing, in her case justice, in this case we are talking about the security and sanctity of the economy and deposits across this country, if we look at how that is balanced, in Lady Justice's case her hands are even. In the case of today's bill, the increase in deposit insurance skews that balance. We do not need to do this, my colleagues. This is unnecessary. Unfortunately, I am forced to go against my chairman, and I ask my colleagues to oppose this bill in its current form. Mr. Speaker, how much time do I have remaining?

Mr. OSE. Mr. Speaker, I yield the balance of my time to the gentleman from Alabama (Mr. Bachus).

Mr. OSE. Mr. Speaker, I yield myself such time as I may consume. I feel like Churchill up here when I hear the 52 to 2 vote. Mr. Speaker, I do want to say, one of the things that the gentlewoman from New York (Mrs. Kelly) mentioned was the impact on, in particular, rural communities, where we have such trouble keeping deposits in the community because of the ability to go get higher returns outside. Representing a rural community, we could have dealt with this particular issue by crafting, in my opinion, some sort of vehicle whereby banks in rural communities, under some set of conditions, could have addressed that. I regret that this idea only came to me late in the process, but I would hope that the conference committee would at least consider that in their deliberations. Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Rohrabacher). Parliamentary Inquiry

Mr. OSE. Mr. Speaker, I yield 4 minutes to the gentleman from California (Mr. Rohrabacher).

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

Mr. OSE. Mr. Speaker, I yield myself such time as I may consume. Lacking any other speakers, I do want to make a few remarks. I think the gentleman from Alabama started out very accurately reflecting the broad consensus on 90 percent of this bill, and I think he closed here just this moment with a very eloquent case as to why we need to stop the free rider practice from continuing, but the free rider issue is not related to the deposit insurance level issue. They are two separate issues, and they need to be considered separately. I would just for clarification, I think the gentleman from Alabama did say that few, if any, banks had failed; and I will say that to my recollection that Continental Bank failed and that there were a lot of banks in agricultural areas around this country that failed. Manufactures Hanover I think had its doors closed, related to the risk that they undertook in taking the increase in deposits, they received subsequent to the jump up in 1982 and trying to put them to work to defray the added costs that they bore from carrying those deposits. So I agree with him on the free rider thing. But the free rider issue is separate from the deposit insurance increase issue, and I want to be clear about that. The average size in a deposit account, a demand account across this country is about $10,000, $10,000, not $100,000, not $130,000. The market sector that the gentleman from Alabama referred to as ``known as a high income sector,'' they get a lot of preferential treatment from many financial institutions. It is a marketing aspect of what those institutions do, and it works very well; but this is not about the free rider issue. This is about the added risk that comes by increasing deposit insurance levels and the cost that goes with that that a bank would have to confront. I do think, going back to the gentleman from Alabama's (Mr. Bachus) point about the retirement accounts, absolutely concur about increasing the level of coverage for retirement accounts. That money is very conservatively managed. It is a very stable source of funds. The fact of the matter is the bill takes it to a certain level I would actually advocate for taking it even further, if I had thought to put an amendment in at the committee. So I concur with the gentleman that 10 percent of the bill is causing 90 percent of the heartache here. I do want to complete my statement from earlier, and then I would be happy to reserve the balance of my time after that. Mr. Speaker, let me just point out two witnesses who presented extensive, in addition to all these others that I cited earlier, presented extensive scholarly materials to the subcommittee in opposition to an increase in the coverage levels. First was Mr. Richard Carnell who is an associate professor of law at Fordham University School of Law who testified: ``I urge Members to take a skeptical view of proposals to index or otherwise increase the $100,000 limit on deposit insurance coverage. Proponents of increasing the coverage limits stress the effects of inflation since 1980. But the 1980 level was by no means normal; adjusted for inflation, it amounted to an all-time high.'' Professor Carnell was joined by Dr. Kenneth Thomas who is a lecturer in finance at the Wharton School at the University of Pennsylvania, who listed 21 major reasons, I will not cite all 21, Mr. Speaker, but 21 major reasons to oppose an increase in the coverage limit. Among those reasons were, Dr. Thomas spoke at length on the savings and loan bailout and how increases in 1980 in the deposit insurance coverage levels led to risky behavior and even larger bailouts. Dr. Thomas highlighted the historical perspective from former FDIC and Resolution Trust Corporation chairman, and if my colleagues will recall, the Resolution Trust Corporation was the entity the Federal Government used to solve the early 1980s problem in the financial industry, the Resolution Trust Corporation Chairman Seidman, who said, ``The original intent of deposit insurance, which began with a $2,500 insurance limit, was to protect `small savers.' The primary beneficiaries of the 1980 increase to $100,000 were Wall Street firms and deposit brokers. The currently proposed increase to $200,000,'' which is not what we are talking about today, we are talking about $130,000, but the premise still holds, ``the currently proposed increase to 200,000 has nothing to do with small or even midsized savers. Besides Wall Street and other money brokers, the only beneficiaries would be very wealthy and high net worth depositors, a far cry from the small savers originally envisioned by the FDIC.'' This speaks directly to the comments of the gentleman from Alabama a moment ago about the sweeps. Dr. Thomas also noted that, ``Considering the present environment's increased level of risk exposure for the deposit insurance funds, good public policy dictates consideration of proposals that reduce, not increase, risk exposure. Any increase in the deposits covered by the FDIC will increase risk exposure to the funds.'' Mr. Speaker, I reserve the balance of my time.

Mr. OSE

Mr. OSE. Mr. Speaker, I move to suspend the rules and agree to the resolution (H. Res. 424) paying tribute to the workers in New York City for their rescue, recovery, and clean-up efforts at the site of the World Trade Center.

Mr. OSE. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on House Resolution 424.

Mr. OSE. Mr. Speaker, I ask unanimous consent that the gentleman from New York (Mr. Fossella) be permitted to control the time on House Concurrent Resolution 424.

Mr. OSE

Mr. OSE. Mr. Speaker, due to a loss in the family, during the week of May 6 through May 10 I was in California and unable to cast a vote on Rollcall votes 127 through 158. Had I been present I would have voted in the following manner: Rollcall votes 127-133, Aye; Rollcall 134, No; Rollcalls 135 & 136, Aye; Rollcalls 137-141, No; Rollcall 142, Aye; Rollcalls 143-152, No; Rollcalls 153-156, Aye; Rollcall 157, No; Rollcall 158, Aye.

Mr. OSE

Mr. OSE. Mr. Speaker, tonight, Tim Raney will be recognized for his service as a councilman in my hometown of Citrus Heights, California. Though the peaceful transition of officials into and out of elective office is not a unique occurrence in this great nation, this particular event is worthy of our recognition. Tim Raney was elected to the Citrus Heights City Council in November of 1996, on the same ballot that a proud community voted to make formal its desire to become an incorporated city. Tim was an active leader in the drive for Citrus Heights cityhood, an effort that was more than a decade in the making, going to the United States Supreme Court to affirm the right of its residents to self-governance. As a member of the first city council, Tim and the four other council members were responsible for negotiating the contracts for police and public safety services, garbage and waste management services, and all other services that make a city responsive to its citizens. In his six years on the council, he was a tireless advocate for the community. He served on the Sacramento Transportation Authority, Sacramento Regional County Sanitation District, and the Sacramento Metropolitan Fire District. In 1998, then Governor Pete Wilson appointed him to the Commission on Local Governance for the 21st Century. From naming a blue-ribbon panel to improve school test scores, to championing economic development issues and working to bring consensus to regional transportation issues, his mark on the community is clear. As Councilman Raney steps down from the city council to pursue professional goals and commit more time to his growing family in their new home, he does so as more than a former councilman. He will be remembered as one of the founders of the City of Citrus Heights, and as a solid example of a true public servant.

Mr. OSE

Mr. OSE. Mr. Speaker, I rise today to honor the men and women who work hard everyday to provide quality health care for the elderly, disabled and mentally ill. May is National Community Residential Care Month, and I can't think of a better way to pay tribute to these men and women. Community care providers offer medical, social, and nutritional assistance to those in need. They are committed professionals who work hard to create comfortable environments for people who are unable to care for themselves in their own homes. More importantly, these professionals work hard to boost the self- confidence of those whose confidence is often broken as a result of their dependence on others. By caring and interacting with those in need, they have enriched the lives of those who they help. Again, I want to congratulate all the men and women in this field of work. The United States Congress certainly appreciates the valuable service they provide. We thank you for the job you do and for the compassion that you bring to your field.

Mr. OSE

Mr. OSE. Mr. Speaker, I am troubled by various provisions in the Farm Security Act of 2002 (H.R. 2646). Today, I would like to mention one specific provision, which appears in four titles in the bill--in Titles I, Commodity Programs (Sec. 1601); Title II, Conservation (Sec. 2702); Title VI, Rural Development (Sec. 6103); and Title X, Miscellaneous (Sec. 10105). As Chairman of the Government Reform Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs, I have responsibility for oversight over regulatory reform and paperwork reduction measures. This includes compliance with the due process notice and comment provisions of the Administrative Procedure Act (APA) and the centralized review and approval provisions of the Paperwork Reduction Act (PRA). H.R. 2646 exempts certain Agriculture regulations both from the APA's due process protections for affected parties and the PRA's required review and approval by the Office of Management and Budget (OMB). Under the PRA, OMB is charged with assuring practical utility to all information collections imposed on the public. Also, the PRA includes a public protection clause, which assures that the public cannot be penalized for not providing information in unauthorized paperwork. The Department of Agriculture has one of the worst track records in terms of compliance with the PRA. In fact, Agriculture has had the most or second most number of violations of the PRA in each of the last several years--116 in Fiscal Year (FY) 1999, 96 in FY 2000, and 67 in FY 2001. On April 11, 2002, an Agriculture witness at our Subcommittee's annual hearing on the PRA was unable to answer our questions about its mis-management of the paperwork it imposes on the public. Agriculture promised explanations by the next day; however, I have received nothing to date. In addition, last May, I wrote OMB Director Daniels and Interior Secretary Norton asking them to work with Agriculture to eliminate duplication of reporting, especially for farmers. Sadly, there are no results to date. The Joint Explanatory Statement of the Committee on Conference includes no justification for this significant change in regulatory and paperwork promulgation procedures. This is unacceptable.

Mr. OSE

Mr. OSE. Mr. Speaker, I rise today to honor a constituent of mine, Fred Lewis Mason on the occasion of his 100th birthday. Mr. Mason was born on March 30, 1902 a half mile North of Stonyford School in Glenn County. Throughout his long life, Fred Mason has lived in different areas in the North State, yet always seemed to relocate back to the community of Stonyford. During the last hundred years, Fred Mason has been a farmer, member of the United States Forest Service, and eventually retired from the County of Colusa. An active member of his community, Mr. Mason has been a member of the Snow Mountain Lodge #271 for 78 years, the Eastern Star Lodge for 75 years, a past member of the Maxwell Fire Department, and former Grand Marshall for the Maxwell Rodeo Parade. Among the long list of Mr. Mason's achievements is the instrumental role he played in the development of the new Grapevine outside of Stonyford as well as his work to improve roads throughout Colusa County. Mr. Speaker, Fred Mason has lived through experiences that most can only read about in history books and throughout he has remained a dedicated member of his community. He has been a loving husband, father, grandfather, and great-grandfather. On the occasion of his 100th Birthday, he is more than deserving of this recognition and I urge my colleagues to join me in honoring this truly remarkable man.

Mr. OSE

Mr. OSE. Mr. Speaker, I rise today to honor a constituent of mine, Jack Barrett. Mr. Barrett has been a resident of Colusa County in Maxwell since his birth 72 years ago. During World War II there was a manpwoer shortage in Maxwell and Jack was ``drafted'' into the Maxwell Fire Protection District at the age of 12 year old, while still in the 8th grade. At the time the Maxwell Fire Trucks would drive by the school and pick up the young men in order for them to assist in fighting fires. Since that time, Jack Barrett has faithfully served the Maxwell Fire Department and has provided excellent service to the citizens of the Maxwell Community for more than 60 years. In 1955 Mr. Barrett was appointed Assistant Chief and has loyally and dutifully served in that capacity until his retirement in February of 2002. Jack Barrett is a staunch example of a public servant and I stand here today to recognize his dedication to his community, his devotion to the Maxwell Fire Department, and his steadfast commitment to public service.

Mr. OSE

Mr. OSE. Mr. Speaker, I rise today to honor the men and women who work hard everyday to provide quality health care for the elderly, disabled, and mentally ill. May is National Community Residential Care Month, and I can't think of a better way to pay tribute to these men and women. Community care providers offer medical, social, and nutritional assistance to those in need. They are committed professionals who work hard to create comfortable environments for people who are unable to care for themselves in their own homes. More importantly, these professionals work hard to boost the self- confidence of those whose confidence is often broken as a result of their dependence on others. By caring and interacting with those in need, they have enriched the lives of those who they help. Again, I want to congratulate all the men and women in this field of work. The U.S. Congress certainly appreciates the valuable service they provide. We thank you for the job you do and for the compassion which you bring to your field.