John Yarmuth

Mr. YARMUTH

Mr. YARMUTH. I thank the gentleman from Florida. We just have a couple of minutes left, so we will just have some concluding remarks from the gentleman from Tennessee and the gentleman from Iowa. I think this conversation has been a good one, and I am glad that they joined us for it. I yield briefly to my colleague from Memphis.

Mr. YARMUTH. I thank my colleagues for their participation today. I look forward to our conversations next week, next Wednesday, and as we go through the year. It is a great honor for me to serve with so many thoughtful, dedicated Representatives. Mr. Speaker, I yield back the balance of my time.

Mr. YARMUTH. I would yield to the gentleman from Iowa.

Mr. YARMUTH. I can tell my friend that one of the reasons no action was taken last year was the carried-interest provision, which is to what you refer. Also, it affects a lot of people who are developing apartment complexes and other things, so they are essentially individual businessmen investors who had formed partnerships, and they would have been affected by the same change. And there was a considerable amount of question as to whether that was advisable, because we want to promote people to do apartment complexes and shopping centers and so forth. We couldn't quite figure out a way to make the distinction. But that was, I think, one of the main reasons we didn't take action. But in reference to your question, and I think our colleague from Florida discussed this perfectly in his opening remarks, and that is it's not a question of whether we need massive regulation, or little regulation, we need the right regulation. What we have failed to do over the last 20 years is to modernize our regulatory system in such a way that it took recognition of the very changing picture of business, particularly in the financial sector. I think this Congress, and I know Chairman Frank of Financial Services, I know the administration is very much concerned with reshaping our regulatory system. Again, not to overregulate the economy, but to make sure we have the right type of regulation in place, adapted to the current financial structure of the world, so that these types of situations don't reoccur. I think that my colleague from Iowa also mentioned something that we really need to look into as a Congress and that is the whole question of our antitrust laws, and not just which industries are covered or not covered, but also what we can do and whether we should do something to in some way control the size of businesses because what we have seen in many of these cases recently is we have gotten businesses that are ``too big to fail.'' I understand that there is a worldwide economy and these companies have worldwide operations and there is somewhat of a limit as to what we can do, but we have not revisited the question of our antitrust laws and the size of corporations for some time in this country. I think the American people would appreciate that conversation because they don't like being in a position in which they are virtually helpless when a giant corporation which yields no benefit to them--that they perceive, anyway--is able to affect their lives so dramatically.

Mr. YARMUTH. Well, I thank my colleague. It is a very interesting situation to me, not just a question of outrage, but also a question of mystery. Because for many Americans who are viewing this situation basically as a new situation, looking at it just from the last week or so when the news of these bonuses came out-- and of course they've known about the huge amounts that the taxpayers have been paying to AIG to keep them from collapsing--now we know that the American taxpayer owns 80 percent of AIG. But this story started a long time ago. Last Congress, I was a member of the Oversight and Government Reform Committee. And last fall, we had the opportunity to hear from the last two CEOs of AIG before the government takeover. And it was a fascinating and illuminating story because what we learned during those hearings last October was that, early last year, in 2008, the man who ran this exotic investment faculty operation in London, Mr. Cassano, had told the board of directors of AIG that his division, the Credit Swap Division of AIG, would not cost the company one dollar. Several weeks later, all of a sudden there's $5 billion in losses in his division. And as we know, subsequent events have shown that there were literally hundreds of billions of dollars of credit default swaps-- which are basically bets on whether a certain obligation will be a valid obligation--but it was basically nothing but bets, and that this division had brought down a giant company. Now, Mr. Cassano, it came out in testimony, was paid for his leadership, if you can call it that, of that division, $280 million over 8 years, $280 million over 8 years. And, strangely enough, in light of what we have learned recently, he had a contract which entitled him to bonuses of another $34 million. Now, we don't know yet who the recipients of these bonuses that were paid last week are, but it would be fascinating to know if Mr. Cassano was one of those people because he had one of those contracts. One contract with someone who has been paid $280 million over 8 years was contractually due $34 million more when he had essentially brought down one of the 10 largest corporations in the United States and in the process cost American taxpayers as much as $180 billion. So it's not just a question of outrage now since the American taxpayers are paying attention and the Congress is paying attention to the AIG situation and all of us are rightly outraged, but we have to look back and see the greed, the malfeasance, and the close to criminality that occurred in this corporate operation. Strangely enough, when we spoke to those CEOs in the Oversight Committee last year, they really didn't understand anything that had been going on. And in their defense, they came on the scene when this operation had already been going, and I assume at some point it had been making AIG a fair amount of money. But they didn't know what credit default swaps were. They didn't know what all these collateralized debt obligations were upon which these bets were made. But they did know that all of a sudden this one operation that was kind of hidden from their view and developed this mystery about it because nobody except Mr. Cassano knew what was going on there, they knew that he had cost them their company and he had cost the American people an awful lot of money. The great finishing touch on this story is that even after Mr. Cassano had been fired, he was still on AIG's payroll as a consultant for a million dollars a month, a million dollars a month. And the reason was nobody else knew what was going on in that division. They had to have the benefit of his knowledge, even though his knowledge had cost them their company. So this is a story that didn't happen yesterday. It didn't happen on Friday when those bonus checks were issued. This is a story that is symbolic of what has gone on in this country over the last decade when greed and a lack of supervision and a lack of regulation have resulted in a worldwide financial crisis. So we can rightly be mad and we will take action tomorrow to rectify this situation with bonuses, but this, again, is symptomatic of a much deeper problem that this Congress both in the Financial Services Committee in the House, the Finance Committee in the Senate, and throughout government is going to be dealing with for a long period of time. So I'm glad that we have the opportunity to talk about this crisis in accountability, this crisis in regulation, this crisis in supervision in our country because the American people deserve not just to have those bonuses returned to the taxpayers' accounts, but they also deserve to have an economy that is free of the insecurity that these types of situations bring. So with that I look forward to hearing from our other colleagues.

Mr. YARMUTH. It was a fascinating hearing, and something that came up in that hearing was intriguing to me as well. One of our members early in the questioning period asked the two CEOs why the Treasury Department, under Secretary Paulson, had bailed out AIG and not Lehman Brothers, and they both said, well, we don't know, you will have to ask the Treasury Department. And when it got to my turn to question, I asked them, I said, you know, I would like to ask you a similar question or related question, but maybe in a different fashion, what was the relationship between AIG and Goldman Sachs? And the reason I asked the question was because Secretary Paulson and many of the officials at Treasury had come out of the Goldman Sachs operation. And they responded, as you will recall, Goldman Sachs was the counterparty with AIG on $20 billion worth of credit default swaps. And until the last few days, AIG had been unwilling to tell anyone who their counterparties had been, and they did reveal last week, a list of many of them, and how much money they had been paid and Goldman Sachs had been paid 11 or $12 billion of this amount. So what we saw was an incredible amount of incestuous dealings among these giant corporations who were out to, essentially, create wealth without creating value. And creating wealth, not for the American people, but creating wealth for these few people, these giants of Wall Street, these masters of the universe, who got into an operation that they really didn't understand. And now we are all paying the price for that. There is a fascinating article that's in the current issue of Harper's Magazine by a lawyer out of Chicago. It talks about what he perceives to be one of the problems in our current economic situation, and that it was that over the last 20, 30 years, we have put more and more emphasis on the financial services aspect of our country as opposed to the manufacturing facilities. And it all happened because we stopped paying attention to how much money you could make in the banking business, and we essentially did away with usury laws so that banks could earn 25, 30, 35 percent on their money on credit cards, and these exotic instruments where they could leverage their assets 30 and 40 times. And because they were making these huge profit margins, they drew capital away from manufacturing to the financial sector, because there was no longer nearly the return available to capital in the manufacturing sector, and it was all in the financial services sector. What we have seen as a result of that is, as has been mentioned already today, the greatest disparity in wealth between the rich and everyone else in this country in its history, and also, basically, an unsustainable and dangerous financial services sector, one that had gotten so big and created so little value that it jeopardized all of our society and our economy. With that, I would like to yield again to my friend from Memphis, the runner-up in the last poll to my beloved Louisville Cardinals, Mr. Cohen.

Mr. YARMUTH. Mr. Speaker, it now gives me great pleasure to yield to my good friend from Iowa who served with me on the Oversight Committee last year and sat through many of those hearings and now serves us well on the Energy and Commerce Committee, Mr. Braley of Iowa.

Mr. YARMUTH

Mr. YARMUTH. Mr. Speaker, I rise in recognition of National Safe Place Week, the organization and the critical services it provides to young people in need. Of the more than 1 million youth who experience homelessness annually, some are born without homes, but most run away to escape abuse; and with no hope in sight, one-third attempt suicide. Thankfully, National Safe Place recognizes that in each of these young people is hope for the future, a chance to succeed, and an opportunity to become productive members of our communities. In the 26 years since National Safe Place began in my hometown of Louisville, Kentucky, it has served nearly a quarter million disconnected youth nationwide, 100,000 in Kentucky alone. In 40 States and 1,400 communities across the Nation, Safe Place has provided the services and support to help a child's potential become a reality. No wonder Safe Place is the largest recipient of funding through the Reconnecting Homeless Youth Act, which we just reauthorized with legislation I authored with my colleague, Judy Biggert. Time after time, adolescents devoid of hope have traveled a path that seems sure to dead end, only to find themselves in front of one of 1,600 stores, restaurants, and businesses bearing the Safe Place logo. Inside, they find a new path that begins with the support every child needs and ends with a chance that every child deserves. I urge my colleagues to join me in celebrating National Safe Place Week.

Mr. YARMUTH

Mr. YARMUTH. Mr. Speaker, on Sunday former Vice President Cheney made the latest in a series of outrageous attempts to rewrite history. He suggested that America was less safe now than under President Bush. Well, as a former journalist and editor, I'm compelled to do a little rewrite of his story. I think it is important to note that under President Bush and Vice President Cheney, we let Osama bin Laden escape. We took our eye off the ball in Afghanistan and moved to Iraq. We went into Iraq with no plan for victory. We heard from Vice President Cheney that we were going to be greeted as liberators, that WMD would certainly be found, and that this war was going to be very short and cost us very little money. My editing of Vice President Cheney's statement on Sunday would be that he did not exactly tell the whole story. Fortunately, the American people know the whole story. They know that we are much safer now with President Obama in the White House. So as the recently departed Paul Harvey would have said, ``And now you know the rest of the story.''

Mr. YARMUTH

Mr. YARMUTH. Mr. Speaker, I rise today to applaud President Obama's executive order lifting the ban on Federal funding of embryonic stem cell research. I join scientists across the country, especially researchers at the University of Louisville, who are excited about the opportunities that expanded research presents. But as we all know, there is another dimension to this issue, and it involves moral questions about the use of discarded embryos for scientific purposes. I fully respect the views of those who raise moral objections to embryonic stem cell research; their convictions are just as valid and unassailable as the scientific arguments made about the potential of stem cell research. On the other side, however, are equally valid and, to my mind, unassailable moral arguments that support President Obama's decision this week. They are analogous to the arguments made in support of organ donation and transplantation. Here, human material that has the potential to save life is not being squandered. Like those who raise moral objections to stem cell research, I would have problems with the production of embryos for scientific purposes, but to me, the destruction of embryos that can be used to advance science in the service of life raises similar moral problems. I congratulate President Obama on his action.

Mr. YARMUTH

Mr. YARMUTH. Mr. Speaker, yesterday, in this Chamber, Prime Minister Gordon Brown talked to us about having faith in the future, and that, in fact, is what America's always been about, having faith that the future will be better for all of us. But it's impossible for the American people to have faith in the future, faith in their future when the next illness or accident could drive them into bankruptcy or, in fact, could end their lives because they have insufficient access to quality, affordable health care. This Congress and this administration is committed to changing that. We are committed to making sure that health care is a right that every American can exercise. And we have already taken the first steps in this Congress, by expanding SCHIP, by providing assistance to the States to provide more Medicaid, and finally, by developing the infrastructure, by investing in that health care infrastructure that will help make a system that can provide quality, accessible health care to everyone. That's what restoring faith in the future means to this Congress. And this afternoon, when President Obama convenes his first health care summit, we will begin to take the steps, as a Nation, to develop the kind of health care system we all can be proud of and that will bring faith in the future to every American.

Mr. YARMUTH

Mr. YARMUTH. I thank my colleague for his contribution. I would like to conclude this hour of discussion from the Majority Makers, the class of 2006, that as this Congress proceeds and as we work with the Obama administration to set a new course for the country, to lay a foundation for growth and prosperity, a return to prosperity in this country, we look forward to further discussions. And I think the most important thing we can say in closing is that to repeat the words of Prime Minister Brown this morning, who said, who kept mentioning, ``faith in the future.'' That's what we are about, restoring faith in the future for the American people, and this will be our main mission over the next 2 years as we proceed to help every American realize his or her ambition for a better life.

Mr. YARMUTH. I thank the gentleman from Florida. One of the great things about having these discussions is we get perspectives from all over the country, not just from different, more conservative, more aggressive districts but, rather, geographically and demographically. There are a lot of important perspectives that help shape the context of this discussion. I would now like to yield to my colleague, the distinguished gentleman from Pennsylvania (Mr. Altmire).

Mr. YARMUTH. I thank the gentleman. I just have to add one thing because I think what he has done has brilliantly answered one of the charges that's always leveled about government action and its involvement in health care, which is, ``Oh, we don't want socialized medicine.'' What Mr. Altmire has so intelligently recognized is that, whether it's in an organized way or in a disorganized way, we do socialize the cost of medicine across society. Right now, we do it in a very disorganized way, which, unfortunately, leads to both the inefficiencies, the added expense and the fact that many people fall through the cracks and are not covered. So I thank him for his comments. Now I would like to yield time to my good friend from Colorado (Mr. Perlmutter).

Mr. YARMUTH. I thank my friend, and I'd like to ask a question of the gentleman from Colorado who has done such incredibly important work on the Financial Services Committee and on these issues of which he spoke. One of the things that we face, I know in terms of the housing situation, is that we have a very different situation from place to place in the country. We know certain areas of California and Nevada and Michigan have suffered to a far greater extent than many other areas. And in some of these areas, where housing values have not declined as much, and some other ones, I know some of the citizens wonder, ``Why should I worry about helping the people in California or Nevada? What's in it for me?''

Mr. YARMUTH. I'm asking the gentleman a question.

Mr. YARMUTH. I thank the gentleman. It now gives me great pleasure to introduce my colleague from the great State of Tennessee (Mr. Cohen).

Mr. YARMUTH. I thank my friend. I want to tag along a little bit about the tax discussion because, it's interesting, there's an old saying that when all you have is a hammer, everything looks like a nail. And what we've seen out of our colleagues on the other side is the only policy that they even think about when it comes to the economy is tax policy and the need to cut taxes. The Republican-run Congress, controlled Congress, in 2001 and then 2003 cut taxes. Most of that tax cut went to the very wealthiest people in the country. That tax cut was scheduled to expire in 2011. And now that the President's budget would allow those tax cuts to expire for the very wealthiest Americans, those making over $250,000 a year, our colleagues on the other side want to say we're raising taxes, which is not true at all. In fact, the way I look at it is, if you go to a store, and the store says we've got 40 percent off today and you happen to miss that sale and you go back the next day and it's back to regular price, you can't say the store raised prices, you just missed the opportunity. Well, in this situation, the wealthiest Americans did not miss the opportunity, they took full benefit of those tax cuts for the last few years. Meanwhile, the great disparity between the wealthiest Americans and everyone else continued to grow to unprecedented levels. And now that this President--and I assume this Congress--will say, let's restore some more fairness to the tax code, let's let those tax cuts expire, the rich can pay marginally more than they have been since the Bush administration cut taxes, and now they're complaining that that's a tax hike, which is frivolous.

Mr. YARMUTH. I would yield to my friend.

Mr. YARMUTH. That is clearly the effect of the President's budget, and it was clearly the effect of the recovery plan that we passed recently. And I think it was well justified. And I think the American people appreciate it and understand that--they know a tax cut when they see it and they know a tax hike when they see it. And 95 percent of the people in this country will see their paychecks increase, and they know that that's not a tax increase. So I thank the gentleman. Now it gives me great pleasure, we've been around the country from Florida to Colorado to Tennessee and Kentucky and Pennsylvania, now it gives me great pleasure to introduce my colleague from Connecticut (Mr. Courtney).

Mr. YARMUTH. I thank my friends. And I think one of the things that is so impressive about this budget that we have had submitted to us is it is unique in so many ways and it is trend setting in so many ways. I would like to yield once again to my friend from Florida (Mr. Klein) to talk about how this budget may differ from budgets we have seen.

Mr. YARMUTH. I thank my colleague, and I think that is truly one of the special things about this budget, is that it is forward-looking, it is visionary, and it doesn't rely on the tired actions of the past. And, furthermore, it's such an honest budget. For the first time it is totally comprehensive, so that we don't keep things off the books like we have kept the expenditures for the war in Iraq and Afghanistan over the last 8 years. It puts expenses for those activities in the budget, projects them. It also includes items for anticipating disasters like Katrina or other natural disasters we know are going to occur but we never put those expenses in the budget. So this is fully transparent, it is comprehensive, it is honest and, again, it is forward-looking, and that certainly is something that I think the American people, as time goes on and we discuss this budget, will appreciate that it is large. There is no question about it. We are spending unprecedented amounts of money and we, unfortunately, are facing some pretty substantial deficits. But if we stick to this test, the odds of our not just recovering from our current situation, but from setting the foundation for an incredible era of growth and progress in this country, are greatly improved because of this new agenda advanced by the Obama administration. So, as we get toward the end of our hour, I would like to recognize my friend from Tennessee (Mr. Cohen) who has also played an important role in one aspect of meeting the challenge of this current situation, and that is an element of the housing problem that he has been particularly instrumental in dealing with.

Mr. YARMUTH. I thank my colleague and thank him for his work on this very important piece of legislation that we will be dealing with tomorrow, which will be another important component to get the ship of state back on course and to get our economy moving again. It gives me great pleasure to welcome and recognize our distinguished colleague from Vermont (Mr. Welch).

Mr. YARMUTH. Madam Speaker, it's a great honor for me to be here tonight to join with many of my colleagues from The Majority Makers, the Class of 2006, which brought change to the Congress, and now hopes to join with President Obama to bring change to the country. We're here tonight to talk about the challenges facing this country that are manifold, the incredible, unprecedented nature of our situation, the opportunities that we face, because every challenge comes with opportunities, and also to talk about the budget that President Obama has proposed to this Congress, because it is a budget that takes us in a very different direction in this country, echoing and reinforcing his theme of his campaign, which was to bring change to the country. And it's also the motivation for all of us who came to Congress in the Class of 2006. You know, I have the great privilege of serving on the Ways and Means Committee and also on the Budget Committee. Over the last 2 days, we've heard Secretary of the Treasury Timothy Geithner and OMB Director Peter Orszag talking about what the situation is in the country--the economic challenges we in the world face--and also what the Obama administration plans to do about them in asking for our assistance. Two things have been very clear in listening to both of these two gentlemen, who are new to their jobs, in listening to the new administration and also in listening to our colleagues on the other side of the aisle as they're responding to the initiatives of the administration. The two things are: One, that they like to take potshots at the budget, which is fair game, because this is, after all, sometimes a partisan exercise. Also, the ideas that they bring to the debate are really no new ideas at all. As a matter of fact, listening to Republicans talk about the economic situation and their suggestions for how we move forward is kind of like listening to the coach of the Detroit Lions saying, ``hey, use my playbook,'' after they just went 0 and 16. I don't want to pick on the Detroit Lions, but that's really what it sounds like because they bring no new ideas to the table. That's what is so impressive about this team that President Obama has assembled and about the budget that he has brought to the Congress and to the American people. It is a budget that is full of new ideas and of new approaches to very old and very difficult problems. So, as we're here tonight to talk about where we've been and where we're going and where we need to go in this country, I just want to mention the fact that Prime Minister Gordon Brown was here today. The theme of his address to the joint session of Congress was--and he has mentioned the expression many times--``faith in the future.'' That's really what we're trying to bring to this country, faith in the future, because that faith has been destroyed over the last decade in the United States, and that's what we are so committed to doing, and I think that's what the Obama administration is committed to doing as well, to restoring faith in the future, because that is also what has driven our country, our people, our businesses, and our institutions, which is that we believe there is a better time facing us, a better time ahead, and we have taken those steps. We have worked as hard as we can and have used our ingenuity to realize the future that we all aspire to. So I look forward to the discussion tonight as it's always a pleasure to be with my colleagues. I would like to yield, first of all, to someone who has been a consistent participant in these discussions we've had, the gentleman from Florida (Mr. Klein).

Mr. YARMUTH

Mr. YARMUTH. Mr. Speaker, I like to think that government is the way that we organize our responsibilities to each other. Last night, President Obama gave a clear path to explain how this government can help us meet our responsibilities to each other. He mentioned government and laid a groundwork for government, not as a substitute for private initiative and private enterprise, but as a catalyst for private initiative and private enterprise. As a facilitator and enabler he showed the way that this government can help people realize their ambitions and rebuild America in a much stronger position. As we move forward in considering the agenda that President Obama has laid out, I hope that we will remember that not only do we call on individual Americans to meet their responsibilities to each other, but that we as Members of Congress meet our individual responsibilities to them and to make this government one that truly stands united in favor of the American people. This was truly an inspirational charge that we were given last night, and I hope we all listen carefully.