Peter Welch

Mr. WELCH of Vermont

Mr. WELCH of Vermont. I thank the gentleman from New York, my colleague on the Rules Committee. I thank my friend from Texas, also a colleague on the Rules Committee. The legislation before us is long overdue. It's about jobs, about energy efficiency and energy independence, and it's about restoring our confidence that we can produce jobs and produce energy that's clean, environmentally sensitive and strong and durable to help move our economy ahead. This transition language would allow us to extend about $42 billion in tax incentives. Mr. Speaker, I'm a skeptic oftentimes on tax incentives because they are frequently given to industries that are mature and profitable at the expense of taxpayers. An example of that, of course, is the $13 billion in tax breaks that continue to go to the oil industry that has been doing extremely well with the high price of oil. Tax incentives properly should be focused on emerging technologies, and emerging industries, where our country, where our companies, our small businesses can use the boost in order to develop the new technologies that will solve a problem that we have, the need for energy, the need for clean energy, and the need to create jobs and energy independence here in this country. This legislation will do that. I will give just an example. In Vermont, Jeff and Dorry Wolf are two folks who moved to Vermont in 1998, and they had a dream. The dream was they could create a company that would build renewable energy. They got involved in solar energy. And their company, when they started it, at a time when this was a pipe dream, has now become one of our big companies in Vermont. It's become a leader in solar technology. It is doing work all around the country. And these incentives are critical to its continuation. So, Mr. Speaker, I urge us to pass this rule so that we can pass the underlying legislation, move towards energy independence, create jobs here in this country, and clean up our environment.

Mr. WELCH of Vermont

Mr. WELCH of Vermont. I yield the gentleman an additional 30 seconds.

Mr. WELCH of Vermont. Mr. Speaker, I want to make three points. First, in response to the concerns expressed by the gentleman from Arizona (Mr. Flake), I want to assure him, as well as my colleagues, that the Armed Services Committee intends today to file their explanatory statement. This is on the, incidentally, Duncan Hunter defense authorization bill. They want to file their explanatory statement before the bipartisan DOD authorization is considered on the floor. So Members are going to have an opportunity to read in the Congressional Record all the information that they want, including anything related to so-called ``earmarks.'' Second, I want to speak to the energy concerns that were discussed by the gentleman from Texas. I understand the argument he's making. It's been made by him and his colleagues, and in fact, many of the arguments that were made were incorporated into the energy legislation that did pass this House for an all-of-the-above approach to energy, and I can appreciate that some Members here do believe that drilling is the way to go and almost the only way to go. And I can understand the political appeal that has been embraced by my friends on the other side to use every occasion to speak, whether it is on a credit card bill, whether it's on a veterans bill, doesn't matter the nature of the bill that they want to give their pitch about oil. And they've done it. We've listened, and we've passed legislation that does incorporate all of the above. But the third point I want to make is this: this legislation that has been brought to the floor by Congresswoman Maloney raises a fundamentally, profoundly important question for this Congress. Are we going to stand by hands off while the credit industry, most recently exhibited by Wall Street, basically plunders our economy, picks the pockets of consumers, has their way, tramples on the rights of individuals and families, disregards the needs of the middle class, all in the name of whatever it is in and however much money it is they can make? Or is Congress going to assert its role as the representatives of the people and establish a level playing field so that people can have access to the credit that they need in a way that companies are going to make a fair profit, the old, the elderly, the people on the margin aren't going to be ripped off? It's really that simple, and we can debate about what the fine points are in any kind of consumer protection legislation, and reasonable people can disagree on both sides of the aisle. But the fundamental question for this Congress is, are we going to do anything or not? And the whole reason we have this extraordinary spectacle of these Wall Street titans, billionaires, now coming in to Congress saying they're going broke and give us $700 billion, and oh, it's not for us, it's because we want the economy to work for the people who are on the dead- end side of these mortgages, why did that happen? It happened because in many ways the Federal Trade Commission, the Federal Reserve, the Office of Thrift Supervision, the executive branch of government abdicated any responsibility that it had to stand up for people who needed an active government on their side. What Congresswoman Maloney's legislation says very simply is, Enough. Enough. Enough abuse. It's over; the free ride is over. We're going to have some fair rules, consumer protections. You get notice of what your bill is going to be. You can't change the interest rate arbitrarily. A contract is a contract both ways, and if there's an obligation to pay your credit card, which there is, there's an obligation on the part of the credit card company to abide by explicit terms and conditions in a contract. So this legislation is a first step, in my view long overdue, for Congress to stand up and say that there are going to be some basic rules of fairness, some basic rules of the road that are going to protect everyday citizens. Credit is essential to our economy, and that's a point my friend from Texas made and he's right, and it's a useful and important tool for individuals and families. But there have to be fair rules, and one family up against a monolith of the credit card industry, there's got to be somebody on the side of that family, and that's got to be the United States Congress. I urge a ``yes'' vote on the previous question and on the rule.

Mr. WELCH of Vermont. That is correct.

Mr. WELCH of Vermont. Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.

Mr. WELCH of Vermont. Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentleman from Texas (Mr. Sessions). All time yielded during consideration of the rule is for debate only. I yield myself such time as I may consume. I also ask unanimous consent that all Members be given 5 legislative days in which to revise and extend their remarks on H. Res. 1476.

Mr. WELCH of Vermont. Mr. Speaker, H. Res. 1476 provides for consideration of H.R. 5244, the Credit Cardholders' Bill of Rights Act of 2008 sponsored by Congresswoman Maloney. This rule provides for 1 hour of general debate controlled by the Committee on Financial Services. It also provides one motion to recommit with or without instructions. Mr. Speaker, it is entirely appropriate that today, with the extraordinary spectacle of Wall Street titans coming to Congress hat in hand asking taxpayers for $700 billion, that we take up consideration of a bill of rights for Americans who hold credit cards. It is impossible for any of us who care to observe not to see the connection between the need for stronger consumer protections in the credit card industry today and the careless, reckless dismantling of consumer protections in the housing and financial markets in the past 30 years now known by the infamous term of ``deregulation.'' Mr. Speaker, as we know, credit serves a vital function in our economy. You cannot have a functioning capitalist economy without a functioning credit system. But the question that we face as elected representatives of the people who sent us here is whether or not we will act to provide a critical consumer protection to the credit markets and the protection to consumers who depend on them, or will we continue to leave this laissez-faire to the rules made up as they go along by the people in charge on Wall Street. If this Congress had insisted on upholding consumer protections on Wall Street, if it had not simply stood aside to the proponents of the wild west, anything-goes markets that eviscerated the regulations, and instead kept consumers safe and the markets stable and strong, then we may well have averted the crisis that this House is now considering. Maybe we would not be facing this extraordinary threat to the strength of the middle class who is working hard, paying their bills, but hanging on by their fingernails. The challenge our economy faces now is largely a result of Wall Street abusing the credit system that we all need. And now ballooning credit card debt presents a similar threat to American consumers and possibly the markets. Today, the House of Representatives will have the opportunity to adopt legislation sponsored by Congresswoman Maloney that would prevent the reoccurrence of a crisis in credit cards that is happening in our housing industry. Let's just look at the situation of consumer credit as it exists today. In 2007, Mr. Speaker, 5.2 billion credit card solicitations were put in the mail, 36 solicitations per household. There are 1.22 billion credit cards in the United States. Outstanding consumer credit in the United States is approaching $1 trillion, $969.9 billion, to be precise, and the average credit card debt per household that carries a balance as opposed to those who simply use the credit card as a convenience to pay bills, that average balance is $17,103. Does that sound sustainable and does this sound familiar? Congresswoman Maloney's bill, H.R. 5244, institutes essential and overdue protections for the market and for the consumer by guarding against growing unmanageable debt and provides critical safeguards for consumers who have been relentlessly taken advantage of by credit card companies. Specifically, the bill, among other things, ends unfair and arbitrary interest rate increases. Credit card companies raise interest rates at will, bait and switch, ends unfair penalties for cardholders who pay on time, requires fair allocation of consumer payments so that the payments are attributed to the highest interest rate first, protects cardholders from due date gimmicks, prevents companies from using misleading terms and damaging consumer credit ratings, protects vulnerable consumers from high fee subprime credit cards, and bars issuing credit cards to vulnerable minors. The bill is the beginning of important reform in credit cards; the beginning of increased protection for consumers of credit card companies. H.R. 5244 is one side of the consumer protection coin. The other side of the coin, which we're not taking up today but will hopefully get to, is for merchants who pay fees to credit card companies for every single credit card transaction, the so-called ``interchange fees.'' Mr. Speaker, in the United States, our credit card interchange fees are the highest in the entire world, accounting for as much as 2 percent of the cost of every credit card transaction, in some cases, a good deal more. By comparison, those interchange fees in the United States are almost three times what they are in Australia, four times what consumers and businesses pay in the United Kingdom. These bloated interchange fees are passed on to the consumer. The average American family, in fact, pays an extra $300 a year on items they purchase as a result of credit cards. For example, interchange fees can add more than 8 cents to the price of a gallon of gas every time you fill up. I and others have introduced legislation that may be considered at some future time, H.R. 6248, the Credit Card Interchange Fees Act, which would require credit card companies to disclose their interchange rates, terms and conditions to consumers, businesses and the public. In addition, the bill would empower the Federal Trade Commission to review these rates and rules and prohibit any practices that violate consumer protection and anti-competitive laws. Mr. Speaker, Chairman Conyers on the Judiciary Committee also has important legislation being considered, the Credit Card Fair Fee Act. In the next Congress we'll have an opportunity to take up the Conyers bill and perhaps the Welch bill. But today we have the opportunity to take up the first step, the work of Congresswoman Maloney, where she has scores of cosponsors, where she's worked tirelessly to bring this legislation to the consideration of the floor. I urge my colleagues to support this rule and to support this underlying legislation. I reserve the balance of my time.

Mr. WELCH of Vermont. I thank the gentleman from Arizona. Here is my understanding. The gentleman raises, I think, a good point. The Armed Services Committee is working, as I understand it, on a bipartisan Department of Defense authorization bill. My understanding is the conclusion of the people who are most responsible on both sides of the aisle for that, on our side, expect that the Senate will not participate in a conference, so it will be a single bill that would be presented to this body under suspension. So my understanding is that the folks who represent us, both sides of the aisle on the Armed Services Committee, have come to the conclusion that given the way the other body is going to handle this, that this is the most practical and effective way to proceed. Since it's coming up under suspension, it's going to take a two- thirds vote, obviously. So whatever the reasons are that Members may want to reject that, they're going to have an opportunity to do it. I will go on if you want, but I don't want to take too much of your time.

Mr. WELCH of Vermont. Mr. Speaker, I yield 3 minutes to the gentleman from Missouri (Mr. Cleaver).

Mr. WELCH of Vermont. Mr. Speaker, I yield 2 minutes to the gentleman from Minnesota, a member of the Financial Services Committee, Mr. Ellison.

Mr. WELCH of Vermont. I have at least two speakers at this point.

Mr. WELCH of Vermont. Mr. Speaker, I will yield the gentleman an additional 30 seconds.

Mr. WELCH of Vermont. Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Doggett).

Mr. WELCH of Vermont. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 1476 and ask for its immediate consideration.

Mr. WELCH of Vermont. Mr. Speaker, I yield 5 minutes to the gentlewoman from New York, the chairwoman of the Subcommittee on Financial Institutions and Consumer Credit, and the sponsor of the bill, Mrs. Maloney.

Mr. WELCH of Vermont

Mr. WELCH of Vermont. Mr. Speaker, I want to read a letter from a Vermonter about this bailout. It's from a banker. ``I am a community banker who is irate about the recent developments on Wall Street and recent bailouts that our government has undertaken. The great, great majority of banks in this country never made one subprime loan, and 98 percent are well capitalized. We are working every day to serve our communities and provide loans to consumers and small businesses. Banks have paid tens of billions of premiums to fund the FDIC insurance fund, and we know we are going to have significantly increased premiums for years to come. We accept that and we don't ask for or need a bailout. ``Bear Sterns, Fannie Mae, Freddie Mac, and AIG are not banks. Yet we hear constant talk about `bank problems' and `bank bailouts.' Now Congress is going to vote on legislation to consider a fund with billions of dollars in it to buy distressed assets and some want to add amendments that will hurt my bank, the local community bank, such as changes in the bankruptcy laws. ``My bank is trying to serve its community and make loans, but it cannot do that when policymakers are adopting policies that may make it hard to lend and increase regulatory costs. While a stable financial system is essential, these measures cannot be done at the expense of community banks like mine. I implore you to please consider the impact of these proposals and oppose any effort to include provisions that would hurt our community banks.''

Mr. WELCH of Vermont

Mr. WELCH of Vermont. Madam Chairman, I have an amendment at the desk made in order under the rule.

Mr. WELCH of Vermont. I appreciate the concerns expressed by the gentleman from California, but I think I can assure him that the definition won't dilute the program, and there are two reasons. One, the term ``municipality'' does have a legal definition. It's a city, basically, or an entity as defined in the code of the applicable State. In Vermont--and I think this is pretty much true around the country--you have subdivisions. You have the Parks and Rec Department. The point here is that it is the Parks and Rec Department that is oftentimes doing this kind of work. So what this amendment would do, I think, is it would achieve that goal of local control and delivery at the most elemental and local of levels, which I think is an objective that the gentleman from California and I share. The other thing that gives me some reassurance--and it may not quite reach the level of assurance that the gentleman from California looks to--is that the grants will be competitive, so there will be a process that applicants have to go through, whether they're a municipality or whether they're any other entity making an application. It will be reviewed by an impartial authority. Let's certainly hope that's the case. Then the merit-based decision will be that this application looks like it's going to help a lot of kids and be effective, and it will be granted on that basis, not on the name of the applicant or on that of the particular entity. So I really do appreciate the concerns that were offered. I have more comfort with the constraints of the definition of ``municipality,'' apparently, than does my friend from California, but ultimately, the backstop here is that independent review that is going to be the final arbiter of who gets these competitive opportunities. I reserve the balance of my time.

Mr. WELCH of Vermont. My amendment is quite simple. It would add municipalities to the list of entities eligible for the National Capacity Environmental Education Grant Program. Keep in mind, anyone who is going to be successful has to go through a competitive grant process. The reason for that is the municipalities are the ones that at the grassroots level oftentimes provide these services. Obviously, we all live in towns or in cities, and this environmental education initiative outlined in the legislation is being offered, in many cases, by small towns in rural America and in large towns elsewhere. In fact, in smaller towns, it's the local Parks and Recreation Department. That's a subset, obviously, of the municipality and who is the ultimate intended beneficiary of this opportunity. It's the Parks and Rec Department that takes the lead in providing environmental education to our kids. This amendment would allow those agencies to participate. According to the National Park and Recreation Association, an entity that has endorsed this amendment, municipal park systems are the best and most logical partners for schools and for other educational agencies across the country to develop effective environmental education programs. In my own State of Vermont, environmental education programs are offered by almost every town during their summer programming. The programs are great for the kids in helping them appreciate the environment and the value of protecting it. The town of Colchester, for instance, boasts four summer environmental education offerings. Killington, Vermont did a survey, and it revealed that the majority of citizens thinks their town should offer through parks and recreation such an education program. Such programs are committed to providing diverse, accessible and effective environmental education at the grassroots. This amendment will bolster these efforts by assuring properly trained staff and the best materials. Tested instruction strategies are available for and are integrated into environmental programming. I ask my colleagues to support this amendment and the underlying bill. I reserve the balance of my time.

Mr. WELCH of Vermont. I yield back the balance of my time.

Mr. WELCH of Vermont

Mr. WELCH of Vermont. I thank the gentlelady from Ohio. Madam Speaker, this bill, I think, brings in sharp relief a major question that this Congress is now having to contend with. Our economy has been hijacked by speculation. Institutions that have served average American families, average American farmers, average American businesses very well have become casino chips on Wall Street. A couple of examples: One, mortgages. Folks were able to get a mortgage when they had enough savings and could get one that they could afford and they would buy a home. Mortgages were turned into subprimes that became investment vehicles by Wall Street, and now we're seeing the collapse. A second institution, and this is why the Agriculture Committee is so involved, is the futures market. The purpose of the futures market was to give some price stability to our farmers, to our fuel dealers, to our airlines, folks who absolutely had a need for some price stability, some price discovery with the commodity they were producing. And how did we get to this situation where it's been taken over by Wall Street? We can thank Enron for that. And it is important to understand historically how we got here. Enron came into this Congress in 2001 and asked, literally, for a loophole, and they got it; and that was to allow speculative trading in the futures market. What that has resulted in is a vast increase in speculative activity in the energy market and the futures market for commodities by financial players as opposed to by farmers, by fuel dealers, by airlines. We saw what happened with the subprime mess, and now we're seeing what has happened in the commodity futures trading market and why it's so essential that we get control on this and restore the futures market and restore it to what its original intention was, that is, something that's going to help the American consumer, the American farmer, the American small business. This committee bill is bipartisan. The Agriculture Committee probably has the two most bipartisan leaders in the House with Chairman Peterson and Representative Goodlatte. And what they've done is made a decision in this committee to bring a bill that restores the commodity futures trading market to its original purpose, and that is having as its focus helping our farmers, our consumers, and small businesses and saying ``no'' to Wall Street; this is not one of your toys for speculation and enrichment. So this is absolutely essential not just for the farmers and the small businesses, the fuel dealers, the airlines, but for capitalism itself. If we don't have mechanisms that reward work as opposed to just speculation, we're not going to have an economy that works. So this bipartisan legislation recognizes the fundamental requirement that we have institutions that work to reward and help our farmers and our small businesses. Today, the House will take up H.R. 6604, the Commodity Market Transparency and Accountability Act. This bill will take crucial steps to curb excessive speculation in the energy futures markets. Each weekend I hear the same thing from Vermonters: increasing expenses for fuel, child care, health care, and education are making it harder and harder for working families to make ends meet. Energy costs are an enormous driver of this crisis. The average U.S. heating oil bill is expected to be a record $3,500 for the upcoming winter, up 76 percent from two winters ago. This is not sustainable. Based on the current state of the market, speculation is a large contributing factor to the astronomical spikes we have had in just the past 12 to 18 months. In 2000, Enron and several large energy companies successfully lobbied the (Republican-led Congress to exempt energy markets from government regulation. This lack of oversight has resulted in multi- billion dollar price manipulation and excessive speculation by traders. This special interest loophole is allowing energy traders to rip off Americans who are already struggling every winter to heat their homes. The previous Congress sold us out to Enron, creating a Wild West in the energy markets at the public's expense. It's time to end this rip off. Last November I introduced H.R. 4066, the ``Close the Enron Loophole'' bill. My bill and the bill we will vote on later today calls into question the excessive speculation occurring in the marketplace. Are we going to allow the oil futures market to continue to profit from ripping-off our hardworking constituents, or are we to pass and enforce responsible regulations on energy futures trading? Families who already struggle to pay fuel bills, should not be forced to choose between putting food on the table and keeping their house warm as energy traders continue to line their pockets. This bill will not solve our energy problems. Forcing speculation out of the market is not a substitute for real commitment to a long term energy policy. As a nation that possesses less than 2 percent of the world's oil reserves, but uses 25 percent of the world's oil, we must adopt new policies--higher mileage standards for our vehicles, higher energy efficiency standards, tax incentives for clean energy alternatives, better construction designs, restoration of mass transit and rail--we can create jobs, improve our environment, develop affordable energy, and strengthen our national security.

Mr. WELCH of Vermont

Mr. WELCH of Vermont. Mr. Speaker, a couple of things about this. Number one, the fact that this is a bipartisan bill is really a breakthrough. The fact is that having the support of the Agriculture Committee, ranking member and the chairman, indicates that there is a coming together on something that is incredibly important. We have had a lot of debate about how this is going to affect the price of gas, but the way, as I understand it, the Agriculture Committee approached this, was how are we going to protect consumers? How are we going to protect farmers? How are we going to protect fuel dealers and airlines that have the burden of buying in the futures market because they need price stability, and they need a futures trading market in order to have price discovery, so that coming together was about recognizing that the institutional mechanism of a commodity futures trading commission has to be in service of those farmers in the Midwest. It has to be in service of airlines that are trying to get us from here to there, of our fuel dealers that are delivering home heating fuel to our people at home. We can have a debate about how much prices are going to come down. In fact, since this committee took this under active consideration, the prices have come from 150 to 100. We can argue about what's the cause and effect, but it certainly was contemporaneous and had a big impact. But what is happening in our economy is that basic institutions that have served us well, mortgages for homeowners, or the futures trading for farmers and others, have been hijacked for other reasons, not just to help a person buy a home or help a farmer have a price, but to become a commodity itself used by Wall Street to speculate for financial manipulation and market reasons. That is not what these institutions are about, and the Congress has a fundamental decision before it. Are we going to stand up for American farmers and American consumers and provide protection for the institutions that they absolutely need, we need, or are we going to allow them to continue to be hijacked by Wall Street for other reasons?

Mr. WELCH of Vermont

Mr. WELCH of Vermont. Mr. Speaker, yesterday, the House of Representatives passed a comprehensive energy bill, regrettably with almost undivided Republican opposition. That was disappointing because we had a chance to work together. In fact, this bill incorporated two things--one, a recognition that we need to continue getting the supply of oil to make it from here to there, but second, we needed a sustainable revenue source to invest in R&D and to invest in implementing alternative energy projects. The energy plan of the Republicans, cooked up by Vice President Cheney in secret, has been very good for the American oil companies, not for the American consumers. So far this year, oil companies in a down economy have raked in $44 billion in profits. That's seven times the amount of profits Big Oil brought in when President Bush was first sworn into office. What has the energy plan done that the President pursues or that our colleagues on the other side pursue? $4 gasoline. It's costing $2,500 more to heat your homes. Mr. President, it's time for us to work together and to get our colleagues in the Senate to pass that bill.

Mr. WELCH of Vermont

Mr. WELCH of Vermont. Mr. Speaker, it's becoming quite apparent that our economy is in peril. The biggest casualty in this economy are middle-class families trying to hang on by their fingernails. We have got a different point of view by our leadership. President Bush says that the 500-point collapse is just, quote, a correction. Mr. McCain, Senator McCain says the economy is fundamentally sound. The reality is that the economy has become weak, with policies that have deregulated financial institutions leading to the collapse of some of our longest-standing, historically most solid institutions like Lehman Brothers. For 8 years, the Bush-McCain economic policy has had a radical proposition that we can deregulate everything and leave everything to Wall Street, and it will all take care of itself. Now American families, businesses on Main Street, are beginning to pay the price for this economic failure under the Bush administration. The only way we can change our economy is by returning to the basic principle that our economic policies should all be about building the middle class.

Mr. WELCH of Vermont

Mr. WELCH of Vermont. Mr. Speaker, we have an opportunity here to decide to make policy instead of continuing to play politics. I happen to be among those who believe that we cannot drill our way out of this energy crisis, yet I support this bill that contains significant offshore and domestic drilling, and I'll tell you why. This will offer a transition fund so that we can go from an energy-dependent economy on oil to an independent energy economy. What this bill will do is marry the argument that has been made on the other side that we have to have supply to get from here to there-- that's true, it's indisputable--and that developing our own domestic resources is a way to help us get there. And it marries that to establishing that the revenues that will be generated will be used for the benefit of the American people to achieve the goal of energy independence, which requires two things: It requires investment in research and development of alternative energies, and it requires investment in the implementation of alternative energy projects. So what you have here is a recognition that we do need supply; that's true. That's been the argument of the Republican side. Valid point. But it also recognizes that we need a sustainable financial fund in order to implement research and development in the implementation of clean energy projects. This bill also cracks down on speculation, makes oil available, which will have an impact on the price of oil. It does a whole array of things that most of us are in agreement need to be done on wind, solar, biomass. So, Mr. President, we can't drill our way out, but we can't get to where we need to be, a post oil-dependent economy, unless we have a sustainable energy fund that will allow us to do that. We managed to do this in Vermont when we had a fierce debate over nuclear power, and in the storage of nuclear waste, assessed a fee that went into a clean energy fund. It is now allowing schools to literally cut in half their cost of heating their schools. This is a very wise decision and allows us to work together to get something done.