David Scott

Mr. SCOTT of Georgia

Mr. SCOTT of Georgia. Madam Speaker, I rise today to recognize a great achievement by students in my congressional district. Congratulations to the Jonesboro High School Mock Trial Team, which proudly represented the State of Georgia at the National High School Mock Trial Championship in Dallas, Texas, in early May. the Jonesboro team defeated 40 other schools from across the Nation to win the 2007 National Title. Mock Trial offers students the opportunity to understand the many important aspects of our legal system, including trial preparation and standard courtroom procedures. In the fall, each team begins to prepare for their local competition by preparing for trial just as real lawyers would. If a team like Jonesboro High School is so fortunate to win both county and State competitions, they have half as much time to prepare for a substantially harder competition at the national level. Even with these great challenges, the Jonesboro team persevered and achieved victory nationally and they are champions. I would like to recognize the hard work and dedication of the Jonesboro High School team by acknowledging the students and coaches who made this victory possible. The competitors were Brian Cunningham, Lindley Curtis, Kayla Delgado, Matthew Mitchell, Braeden Orr, Laura Parkhouse, Kyle Skinner, Britt Walden, Jayda Hazell, Joe Strickland, Lindsay Hargis, Jurod James, Sandra Hagans and Tabias Kelly. The Jonesboro High team was led by Anna and Andrew Cox, attorney coaches John Carbo and Deborah Benefield, Tasha Mosley and Mercer Law School student coach Katie Powers. In closing, Madam Speaker, I wish to extend congratulations to all of these outstanding individuals in achieving the 2007 National High School Mock Trial National Title.

Mr. SCOTT of Georgia

Mr. SCOTT of Georgia. Mr. Speaker, I rise to speak and to urge our colleagues to please vote and pass this passage. Now, the most important part, and, of course, all of it is very important, but there is one part that I want to emphasize that is so important on the second part; and I take quite a distaste at how the gentleman referred to that as pork, because the children's health program is not pork. In my State of Georgia, there are 273,000 children who will go without their insurance or health care if we do not pass this measure. Now, yes, we must get the funding to the troops; they are in need, and we certainly want to get the funding there. But let me just urge those in the minority on the other side of the aisle that many of these 273,000 children who are in Georgia without health insurance belong to the soldiers who are serving in Iraq, and we have been working feverishly in each step of the way to make sure we had the SCHIP program included. And I want to make sure we include this all the way, and urge the President to sign it when we get there.

Mr. SCOTT of Georgia

Mr. SCOTT of Georgia. Thank you, Mr. Ross. It is a pleasure, as always, to be on the floor with you and my fellow Blue Dogs. I want to talk about two issues here that relate. One, of course, is the debt, the deficit that we have; the lack of accountability, financial accountability. But I would like to talk about it from the standpoint of what is really on the minds of the American people today, and that is the situation that faces us in Iraq and what we desperately need to do. We need to do two things: One is be honest with the American people; and, two, be honest with the money that the American people send up here for us to apportion. Nowhere is that more significant than with military affairs. As I stand here, Mr. Ross, I am trying to think of the best illustration I can come up with that would kind of paint a picture for where we are. I think if we look back in history, a certain event took place around 1952 when we were in a similar position of debating this issue of who has control of military affairs or how do we deal with the issues in time of war. Is it the executive branch, or is it the Congress, and what is the role therein? This debate is heated on those two things today. The President says Congress has no role in this. Congress says we definitely do. And we are right that we do. It was borne out in a case in 1952 when there was a decision made by the Supreme Court when this issue came up on who had the right to determine whether the steel mills would be seized during a time of war, during the Korean War. And it got so hot and heavy in that debate it went to the courts. Is it the Congress or is it the President? Well, the Supreme Court ruled on that which brings us to a point here today. But in the concurrence that was written by Supreme Court Justice Robert Jackson, he said some very important, significant and prophetic words. He said that this is a case that clearly fits within the realm of Congress's responsibility in a time of war. And in his concurrence he said that when the executive branch operates in tandem with the congressional branch, with congressional authority, he said that is a time of maximum power for the President. He said, but when the President acts counter to the express constitutional authority of the Congress, he said, we enter into what he referred to then as a zone of twilight, or in essence a twilight zone which, quite ironically, is where Rod Sterling got the name for his television program ``The Twilight Zone.'' That is where we find ourselves here, in the twilight zone. He went on to say, when we enter this twilight zone, the Presidency in at its lowest ebb when it does not recognize the authority of the Congress. Our authority rests with the purse. Our authority rests with making sure that we raise and support the military. Our authority rests with legislation. And when you wrap those two things together, that is what is the embodiment of what we have captured in our resolution for financial responsibility and accountability in a time of war to make sure that the money is accounted for; to make sure when our troops are going into war, that they have the money for the armor. That is exactly why when they were sent into war by this President and this administration without the body armor, we had to amend the appropriations bill with over $200 million to get it in there, led by Democrats, led by Blue Dog Democrats, if you recall, to get the money in the budget for that. The reason that happened is, up until January, this President has had the luxury of a rollover Congress that did exactly what he wanted them to do without even a whimper or a bang. They just rolled over, gave the President everything that he wanted, and we did not do the constitutional function of oversight, of making sure that there is financial accountability and responsibility in the actions that we are giving. That is why it is important what we do today. Now this is incorporated into our presentation, into each of the bills that we have put forward. The status is now that these efforts are being worked between the House and the Senate. But I think it is very important for the public to also know that in this bill we have the accountability features in. But we also have the responsibility where we are not going to cut off any funds as long as our troops are in danger on the battlefield. It is our hope, however, that we will be responsive to the American people and bring this matter to a close in terms of the loss of life of our soldiers that are caught in the cross hairs of a civil war. Now, the Middle East is a region of vital interest, and there is absolutely no way we will ever be able to completely disappear from the Middle East, nor is that our intent. Nor is it the intent of the American people. The point is our nose has been poked into a civil war, a civil war that has been festering for thousands of years between the Sunnis and the Shiites. That is their civil war. It is not right to have our soldiers in the middle of that. That needs to be brought back and we need to enter into a more reasonable support of containment and redeployment of our troops, and in a manner that pays attention to the wear and tear on our military. Mr. Ross, it is shameful when we have to say that so many of our troops are over there for the third or fourth time. That is not right. The American people are against that. It is my hope that we will bring financial accountability and responsibility to this matter. The American people, who are very much engaged with us on this Iraq situation, are looking to Democrats; and quite honestly, they are looking to Blue Dog Democrats. They are looking to people who have fiscal responsibility and also understand that we know we are in a dangerous world. The most important thing we need for our advancement right now is to make sure we have a strong defense and we have got that, but we also want our policies to be responsive to the American people. That is what the Democrats are putting forward as we move forward on our way out of this terrible civil war that our Nation finds itself in. We are going to do exactly that. Mr. Ross, it is a pleasure to be here, and I am sure the American people fully support our efforts and understand exactly what we are talking about when we say it is time to bring financial accountability and transparency to our efforts here on Capitol Hill, and nowhere is that more important than dealing with our military affairs and the men and women serving in harm's way overseas.

Mr. SCOTT of Georgia

Mr. SCOTT of Georgia. Not just yet. This is just, again, a program designed to help very, very poor people. And you are willing to bring down the whole housing finance system just to get at it. Because this amendment would require a drastic reduction in the enterprise's portfolio holdings and subject them to micromanagement by the regulator. And the amendment would require a drastic reduction in the GSE's portfolios, which, in effect, reduces the access to competitive financing options from community banks and their home buying customers. This is a far-reaching, devastating amendment and must be rejected.

Mr. SCOTT of Georgia. I move to strike the last word. Let me see if we can put some of this in perspective for tonight as we wind down in this successful debate. Here we've got an extraordinary emergency problem affecting the very poorest of people. Not just the very poorest of people, but people who have been devastated by the worst natural disaster in the modern history of our country; and on top of that, people who have been denied and denied. What comes to my mind are those images of those individuals who lost everything standing on rooftops to get saved. In a way, they are still standing on those rooftops, without homes. And here we've got a measure to go and address that. This evening has just been an illustrative of attempt after attempt. First you wanted to make this equate to saving Social Security or raiding Social Security. Then you put this program in as being a measure to add to the deficit. Then came immigration. That wasn't enough. Then you want to restrict the means of the GSEs to have the most profitable way of arranging their portfolios. And you want to clamp down and make it so that the only investments they could get would be those at the bottom of the economic heap yielding the lowest return. Because you knew that this would not require a tax increase. You knew that this was based upon shareholders, nontaxable funds, a very creative way. And yet you tried to slam it in. Here are these Democrats raising your taxes again. But the American people are not buying that. That is not the case. Then the game comes that again, this is an entitlement, where nowhere in the legislation is it an entitlement. All of tonight just reminded me, when I remember those images of those poor people still looking for help, but what you have offered them tonight is a massive cut, cutting the legs out from under them and then condemning them for being a cripple. That's devastating. Now we come to the last amendment. Having failed all of that, my good friend from Texas says we're going to cap it. Oh, that's not going to do anything. But your fellow Congressman from Texas game down to that floor, Congressman Green and Congressman Brady asking for help, wanting to help, but no money, and here you are wanting to crimp it, wanting to cap it. Now, you say the cap doesn't mean anything, that it is going to be the lesser of 1.2 basis point average total mortgage portfolio for the prior year, or $520 million, or a lesser amount determined by the director. The director determines either the higher amount possesses a safety or soundness concern. But what this amendment actually does, it reduces the amount available in the affordable housing program from an estimated $600 million a year down to $520 million a year. But it goes more than that. It just doesn't cap that. It would also cap the amount that the $520 million, even if the actual funds under the formula exceeded the estimated $600 million a year. Chairman Frank has put a very creative measure in. He has tagged it to no set amount, he just put it at 1.2 of the basic points so it allows a free marketplace. And then it allows these GSEs and the shareholders, based upon the profit that they make, to take some of that and help the most needy among us. This has, indeed, been a tremendous debate tonight. We have been going at it since 5 o'clock this afternoon. But it has been worth it because there is no greater thing you can do for your fellow citizens than make sure they have a roof over their heads. Announcement By the Acting Chairman

Mr. SCOTT of Georgia. Mr. Chairman, I move to strike the last word. I yield to the chairman of the committee.

Mr. SCOTT of Georgia. Reclaiming my time, again, that does create a problem with your amendment. And further, another problem it creates is because under current requirements, lenders may use any legitimate form of identification, so it would compound the difficulty, because it would make it difficult, again, for community banks to use blanket liens to pledge collateral, raising costs. The point I'm trying to get at is while the intention is good, I think that when you look at all of the problems with immigration, when you look at the problem of the fact of the cottage industry of providing bogus Social Security numbers, unless you put into this feature some mechanism to check to make sure that the Social Security number is valid, then the amendment seems to be moot.

Mr. SCOTT of Georgia. Yes, I yield to the chairman.

Mr. SCOTT of Georgia. But you don't have valid Social Security number in here. And my point is this: That one of the problems we have got in immigration is there are many illegals, if you are getting at illegal immigrants, who have Social Security numbers. We would place on these this system, much like it is in the employer system, where employers will come and tell you that all of our employees are legal because they have Social Security numbers. But I will also tell you, there is a burgeoning industry within the illegal immigration area of falsified Social Security numbers. That's a big deal. So I think that this raises a very serious problem within your amendment, because if you simply say Social Security Number, you're not really getting at the problem that you feel you're getting at.

Mr. SCOTT of Georgia. Is it Social Security number, or valid Social Security number?

Mr. SCOTT of Georgia. Mr. Chairman, I move to strike the last word. Are you saying that this amendment would prevent home buyers without Social Security numbers from obtaining home loans? Is that correct?

Mr. SCOTT of Georgia. Mr. Chairman, I move to strike the last word. Mr. Chairman, I want to talk about this amendment very, very briefly, but just prior to getting to that, I wanted to make a very, very important point about the previous amendment, because I think it is very, very important for the record to reflect, for there was denial about the REAL ID Act and its implications on the gentleman from Georgia's amendment. It is very important that I read the language in the bill, in the amendment, that the gentleman from Georgia had previous to this. It says on page 2, starting at line 3, that a driver's license or identification card issued by a State, a State that is in compliance with title II of the REAL ID Act of 2005, title II of division B of Public Law 109-13; 49 USC 30301 note. That is the language that is in the bill. The REAL ID is in the bill. Now, it is there. This is the amendment. This is what we are voting for. The REAL ID is in the language. Now I want to spend the remainder of my time on the gentleman from Texas' amendment. Let us talk about your amendment, the gentleman from Texas, Mr. Sessions. That disclosure that you are requiring, you must admit first of all it is a highly speculative cost. Number two, it does not provide a benefit to consumers. It will add another disclosure to an already cumbersome settlement process, further confusing the homeowners and the home buyers. Again, these are basically poor people who we are trying to help who have been victims of a hurricane. We are also going to, in the process after that first year, apply it to States so that they can apply their own criterion. But, Mr. Sessions, where your amendment really causes a problem is in the broader community of the housing financial market. For example, your amendment would also make it difficult for a Federal Home Loan Bank, for example, to make advances or loans to a community bank member based on a blanket lien on the bank's overall mortgage portfolio, thus raising mortgage costs. These community banks depend on these advances to provide home buyers with competitive credit. So, again, in each of the previous amendments, I cannot understand for the life of me why the Republicans want to so overreach to basically undermine the entire housing financial market just to get at this one small effort to help low income people get relief and get some assistance in becoming homeowners, in the rental capacity as well as the construction of new homes.

Mr. SCOTT of Georgia. Mr. Chairman, I move to strike the last word. Mr. Chairman, to my distinguished friend from Georgia, whom we served in the legislature together there in Georgia, whom I respect greatly, but I have got to disagree with this amendment, with all due respect. First of all, we already have this in an accepted amendment by Mr. Boozman that requires that recipients of housing assistance under the bill's Affordable Housing Fund be able to demonstrate with sufficient evidence that they are lawfully present in the United States. That is sufficient. It is already in there. But let me just point out the real problems and the complexities with this REAL ID. First of all, the REAL ID Act would have States implement new standards, new technology, and new procedures for processing and approving driver's license applications by May of 2008. On March 1 the Department of Homeland Security issued 162 pages of proposed REAL ID regulations acknowledging this one undeniable fact, that compliance by May 2008 would be in their statement an ``impossible task.'' So we could not even do it. By the time the comment period closed last week, the Department of Homeland Security had received over 12,000 comments opposing what the gentleman from Georgia is talking about. The proposed cost for the states, by DHS's own estimation, would be $23.1 million that would be added if the gentleman from Georgia's idea would be incorporated. Only $40 million has been appropriated so far, an amount that wouldn't even begin to cover the costs in one State alone, which would be, let's say, Maine, where the estimate for compliance there is $180 million. The astronomical cost of this mandate is not our only concern with the gentleman from Georgia's amendment. REAL ID requires that States would have to link their DMF databases with every other State in the Union, raising major concerns about privacy issues and security risks of a nationwide interoperable system. The amendment by the gentleman from Georgia may be well intended, but it would throw our entire system on top of its head and would not even begin to even deal with this issue that is already being dealt with in a more appropriate way by Mr. Boozman's amendment, which has been accepted. We have got to ensure that all of our identity documents are secure, but REAL ID will not work in its current form. We need to bring together DHS, DOT, States, and experts in privacy, civil liberties, constitutional rights to establish national standards that will protect both our national security and the privacy of American citizens. This amendment would not deal with that, so we must urge everyone to oppose it. Finally, my point is that immigration is, indeed, a big issue. It is a complex issue, and we are going to deal with that. But, again, you have tried it with the veterans. You have tried it with the debt. You tried it with restricting portfolios. You have even tried to tie it to Social Security and the veterans. And now you are trying to tie this immigration fight onto this simple program to try to bring some affordable housing to the most needy people that need it in our country and especially those that have been devastated from the hurricanes down in Louisiana and in Mississippi. So, Mr. Chairman, I urge defeat of this amendment. Vote ``no'' on the gentleman from Georgia's amendment.

Mr. SCOTT of Georgia. Thank you very much. Let's get this right now. Anybody with any just basic common sense of how our investment system works in this country knows that if this amendment were effected here, if you were to put this amendment on any other enterprise, to dictate to that enterprise that your portfolio must exist at the lower yielding end of returns, you know good and well that that is not going to be helpful to that enterprise.

Mr. SCOTT of Georgia. Let me explain carefully what the juice is of what we're squeezing out. Your amendment, by limiting the portfolio, does an important thing to bring the juice out. It threatens the viability of Fannie Mae and Freddie Mac by bringing the juice out by what I mean is by limiting their portfolios to less liquid, lower yielding assets, which eliminates their ability to cross subsidize affordable housing products using the earnings of their more diverse----

Mr. SCOTT of Georgia. Mr. Chairman, I move to strike the last word. The gentleman from New Jersey (Mr. Garrett), I don't know what his intention is, but this is probably the most terrible of all of the amendments to come before us tonight. This amendment not just guts the affordable housing program, this amendment guts Fannie Mae and Freddie Mac as a viable enterprise. And it would have significant adverse effects on the entire U.S. housing financial system. Now, here's what the amendment does that I understand. It would require that the new GSE regulator restrict Fannie Mae and Freddie Mac's portfolio holdings to only mortgage and mortgage-backed securities that exclusively support affordable housing. That is devastating. Particularly mortgages that are extended to households who are having incomes below the median income. Mr. Chairman, that's like taking an orange and squeezing all of the juice out of it and then passing it off to somebody to get orange juice out of it. You are squeezing out of this operation the ability for it to have a very healthy, market-driven portfolio by restricting it to the lower elements of our economy, where there is no juice. The portfolios of Fannie Mae and Freddie Mac play an important role in stabilizing the supply and reducing the cost of mortgage credit totally within the whole housing financial industry. So enter this effort, just to go after, I have never seen anything like it.

Mr. SCOTT of Georgia. Mr. Chairman, what I am saying is that there is very serious hypocrisy here that must be pointed out so the American people can make plain and understand the debate that is before us. This issue has nothing to do with tax increases, nothing to do with raiding Social Security savings and nothing to do with anything dealing with the debt. And my whole point is that the reason it's so hypocritical is the opposition on this side has done so much to destroy Social Security, to raise the debt and not respond. And then to pour this on the backs of this little program that we have targeted to poor people is about as hypocritical as you can get.

Mr. SCOTT of Georgia. Reclaiming my time, I'd like to get into this dance just a little bit myself, because here we've got this little program that we're trying to offer to help the very, very poor. To show you how desperate the opposition is on the other side, they want to segue this program as a saviour for Social Security, when they spent the last 2 years trying to kill Social Security with private accounts. And then to try to use, when you mentioned the Blue Dog Coalition, I want you to know I'm a member of the Blue Dog Coalition, and I take offense to that particular point. Nobody has been working harder to bring down the deficit that you all created. Let the record speak for itself. How can you even think to take this little poor program here that we're trying to help, would get low income housing, and then claim it to try to use it to try to offset the deficit, when, in fact, we had over a $3 trillion deficit, and under your control of this Congress for the past 4 years, since 2001, you and this President sitting in the White House has borrowed more money from foreign governments and foreign nations, yes indeed, you weren't here, your party, than all of the previous 42 Presidents put together, in other words, since 1789. Announcement By the Acting Chairman

Mr. SCOTT of Georgia. I move to strike the requisite number of words. I will yield a word to my distinguished chairman.

Mr. SCOTT of Georgia. I very much appreciate that. It is very important that I clear this up. First of all, there is no inclusion of taxes here. This money is coming from the shareholders. It's coming from the shareholders of these GSEs. That's exactly where it's coming from.

Mr. SCOTT of Georgia. I am asking if he would yield for a moment to let me correct something, if he would.

Mr. SCOTT of Georgia. Would the gentleman yield just for a clarification.

Mr. SCOTT of Georgia

Mr. SCOTT of Georgia. Mr. Chairman, I move to strike the last word. In response to the gentleman's amendment, let me just try to cut through a lot of this to get to exactly why we oppose this amendment and why it's important. And again, this amendment is again designed to obliterate the program. Now, it's very important for us to understand, we're dealing right now with a very volatile housing market. We're dealing with a situation where the subprime market has melted down. We're dealing with a situation where we've had record foreclosures. We're dealing with a situation where the area we're targeting this to go to first for the first year has suffered the worst natural disaster, where people are homeless as we speak. There is a need for government. We have a constitutional responsibility to take care of the public interests. If there ever was a need for the public interest, it is needed in affordable housing. We do not need this kind of amendment that in effect does this, all the studying he may want to say, and I respect the gentleman from North Carolina. I do not question his motives, and I do not dislike him as a person. I just dislike greatly his amendment because his amendment goes, again, at the effort to cut this bill, which is totally designed for the least of us, for people that can't afford it, for people that need our help. That's why we have this measure, and when you look at the marketplace, you cannot apply the activities of the free marketplace dealing with housing and put all of the convertibles you want to put on it as it applies to middle class or upper class individuals. We're not dealing with people with money. We're dealing with people that don't have any money. That's why we're providing this measure to them. So that if your amendment goes into effect, in effect you will be requiring the Director to determine if the GSE's allocations to the fund will decrease the availability or affordability of credit to home buyers or will increase the costs to home buyers. If the Director determines that the GSE's allocation to the fund will decrease the availability or affordability of credit to the home buyer will increase the costs to the home buyers, the requirement to allocate amounts to the funds shall be terminated. All of that power you are putting arbitrarily into a person's hands to say, on his whim, kill the program, done with the program, based upon what he sees and what he says. That's why this bill, this amendment, must be defeated, and we recommend strongly a ``no'' vote on your amendment for that reason.

Mr. SCOTT of Georgia. Mr. Chairman, I move to strike the last word. Mr. Chairman, I really believe that it is so comical to see our friends on the other side of the aisle come up with the various and different ways to so-called ``skin this cat'' and gut the bill. This is very clever way my great friend from Texas, whom I have great respect for (Mr. Hensarling), but, Mr. Chairman, let me just read for the Record exactly what his amendment says so that we can really fully understand the lengths to creative linguistic judgments that they will go to cleverly try to skin the cat and gut the bill. Mr. Hensarling says his amendment will permanently eliminate the Affordable Housing Fund contributions in the case of certain factors in the bill that, as written, merely require a suspension of fund contributions. And two, also requires permanent eliminations of the Affordable Housing Fund contributions if a determination is made that such contributions are contributing to an increase in the cost of mortgages to home buyers. Putting the issue in a considerably complex box. Now, we know from the dynamics of economics what is happening in our society today, especially in the housing market. We know what the ravages of Hurricane Rita and Katrina has done to the area which we are targeting the bill. We also know that there is no segment in society that is most impacted and in need of affordable housing than the very, very poor, those people who need the help. This is where this bill is being targeted. And his amendment would prevent the reinstatement of affordable housing funds when a GSE's financial problems temporarily cause a suspension of funds contributions is resolved, and would also create a new condition to shut down the fund that could arbitrarily result in the permanent elimination of the Affordable Housing Fund. That is exactly what the gentleman's amendment does, and that is exactly why we need to defeat it.

Mr. SCOTT of Georgia. Will the gentleman yield for one moment, please? Who better to deal with affordable housing than Fannie Mae and Freddie Mac?