event of a failure would be able to price the risk would be able to evaluate investments would be able to calculate more clearly with much more transparency what their downside could be in the event of a failure that bankruptcy judges are given the authority by creditors and counter parties to prevent runs on trouble institutions and alleviating a potential panic if a large go also in the in the substitute we do have some federal reserve reform changes requiring the secretary of treasury to officially sign off on all actions taken by the federal reserve section thirteen three there will be a way to put it out of its misery and i do think that some funding may be necessary and so the question is whether bankruptcy was a big issue about whether it's bankruptcy or another method of resolution we ought to be credit all of it is bankruptcy in the sense that it is only the banks because of the constitution that gives us any ability to come in and talk about how the debt paid or not what we propose is a bank and what they say in this about the problem is that the proposed legislation does not but they are consistent with the minimum recovery in the non bank context as applied to non bank financial companies  arman move to strike the last word i'm a co sponsor of the republican alternative amendment offered by mr capital because it smart financial services reform americans are fed up their record deficits and the highest unemployment rate in twenty six years they are fed up with taxpayer funded bailouts proposals that will allow the federal government bureaucrats to take over their health care in the proposals to create a national energy tax my constituents want jobs lower taxes commonsense health care energy and financial services reform what they don't want is more bailouts as i said before we must put an end to taxpayer funded bailouts sadly the underlying bill moves in the opposite direction by endorsing and codifying bailouts and it's unfortunate that on this legislation we've only had one hearing where witnesses testified that they couldn't comment on the bill because they had not had time to read it to make matters worse  permanent taxpayer funded bailout authority is being pushed ahead as just one piece of an even broader agenda to expand government at the expense of personal choice and taxpayer interests between bailing out the financial industry taking over health care placing new agency and in charge of consumer financial choices and attempting to completely secure the nation's manufacturing sector carbon taxes i have to ask where does that all stop our republican alternative to th bailout bill in our republican alternative amendment would establish a federal bankruptcy process free of political influence to resolve failed financial services company the process is fair transparent and doesn't cost the taxpayer a dime  the notion that we thought that one of the objections that my republican colleagues always have is creating governmental institutions  three it is one hundred one pages long was referred to eight different committees when it was introduced in congress  going to make a decision on this based on the number of pages i just want to make sure that they are making it based on an accurate assessment of the number of pages the gentleman indicated that  chairman just in terms of the approach here i voted against all of the bailouts for the same reason that i'm against this underlying bill i think it increases moral hazard and i also voted to give the regulators the kind of past eighteen months there was an assumption that there was a competent regulator over with knowledge that would go beyond that of market participants and i think that's part of the problem here we saw it in all of these with a tremendous increase in their authority with a tremendous expansion of the already in the areas specifically in areas that as was pointed out on various panels that was before us were not in areas that were the fundamental cause of this problem in the first place so come before this panel and say exactly what are they doing to remedy the situation that caused or allowed the made all situation to occur to remedy the situation the other failures in the to occur to remedy the situation that brought us to this debacle that we're in right now and we're still waiting for that and that's why a number of us say no to those expansions of the authority and that's why a number of us said no to the expansion of the authority of the federal reserve as well now more to the point on the legislation as  chairman often points when we try to do image from the side of the aisle it's because it's because there's a fundamental difference between the one side of the aisle and the other side of the aisle how we wish to tackle a problem and in this case that is clearly the case those on the side of the aisle fundamentally believe that we should have no more bailouts the other side disagrees this side of the aisle republicans believe that should be no more taxpayer subsidies of these companies the majority disagrees republicans believe that we should be some taxpayers or otherwise to go into these funds to help them have an orderly liquidation during that period of time funds that will be coming from some place we would argue that potentially it comes at the risk of the taxpayer but it will be coming from some place and that the underlying bill our proposal does not do that we will never in our proposal put the taxpayer on the rest even a day for the unwinding ability of the of these firms so there is the fundamental difference that we will never put the taxpayer at risk for even a moment for even a second that their funds will go to allow for this unwinding of the funds we would  but that just means that under the majority's proposal some funds taxpayers or otherwise will be going the door if you will to creditors haircut or not they will be going out the door i think it would be aghast to hear that the majority of proposals says taxpayer dollars again will be going out the door to pay off creditors whereas the republican proposal says no no taxpayer dollars whatsoever will be going out the door to pay off the creditors to five i think the gentleman for yielding it is an interesting history lesson over the chairman on many occasions say that this particular legislation was requested by president bush indeed it was i recall the president making a number of request of the chairman i  think he politely declined which leads me to believe that he certainly agreed with the legislate gentleman yield the gentleman from florida to recommend that i want to be agreeable but i don't want to spoil if the gentleman from that the administration leveraged tarp funds ultimately it was a plan approved by a bankruptcy court but i think there are a couple lessons to be learned here number one we know that under five percent equity stake in quote unquote new chrysler that's interesting under the bondholders were asked twenty seven billion in debt for up to ten to ultimately does very little to promote financial stability but might promote another political agenda social agenda some other economic agenda i have some concerns again with the creation of the fine i understand the chairman intends to limit it to two hundred billion dollars i would hope that that's still seen as a significant sum in this town i understand it is not the purpose of being to the chairman taxpayer funds used but again as history is my guide we would have to suspend disbelief i think in order to believe that ultimately taxpayer funds may not be called upon and i think the regulators would have the t o do the bailout it's not their money it's somebody else's money so i think you'll number one you create an incentive to have their bailouts regardless of whether you have a list or not you still have the implicit fannie freddie problem and now you have the possibility that the fund could be politicized as many of us believe as it was in the chrysler to essentially have the federal government pick winners and losers in contravention of decades and decades of excepted bankruptcy practice that can again particularly this critical time in our nation's economy  economic recovery by making people less less interested in risking capital when they think that ultimately their position in any kind of reorganization could simply be done by what and greater risk going forward and so whatever remaining time is left i would just ask the chairman then is there anything in the legislation that would prevent the committee or the council i came to this against body i was a physician and i knew that as a physician that if i didn't make the right diagnosis it was difficult to get the patient well and my concern is that i fear that the majority party is has made the wrong diagnosis in the underlying problem and the underlying bill that we're discussing i would suggest ought to be more appropriately retitled the permanent bailout for the act as many of my colleagues have  have suggested it creates a permanent bailout entity not only does it not solve the problem of government bailouts or the too big to fail moral hazard it actually codified them and now there's been discussion about whether or not this bailout fund ought to be but the fact the matter is there ought to be no bailouts ever and no government slush fund waiting for a company to be bailed out by the federal government the bailout fund under this bill is simply another tarp fund which experience shown demonstrated that the uses tons of taxpayers hard earned money to for any cause that it wants not even the originally defined cause so it's bailing out fannie mae and freddie mac running two automobile companies taking shares in hundreds of banks around the nation and losing taxpayer money and a group secretary geithner has said about this bailout fund that's under discussion here that it could need as much as a trillion dollars trillion dollars to bail out a large firm we've heard about a limitation on that but regardless of what what the amount of money is it's on top of a trillion dollars that the administration this majority believes that it needs to quote solve unquote health care on top of the nearly trillion dollars that it is spent on the non stimulus bill and on top of the seven hundred billion dollars from from tarp so the underlying bill is dangerous because its underlying philosophy is dangerous too to quote the chairman as  recently as october twenty six of this year quote we're trying on every front the increase the role of government unquote but i would suggest that markets have to be allowed to function they have to be allowed to innovate and they have to be allowed to be profitable the economy cannot and will not recover if these three things don't occur and the goal of this bill is to decrease the functionality decrease innovation and yes decrease the profitability of company foreign companies clearly have already demonstrated their desire  if this moves forward actually there and demonstrate their desire because this is even being considered moving leading the u s and and other companies on the us to to to move offshore now the republican alternative i think is important because what it does is said that there will be no more bailouts of the taxpayers ought never be asked again to pick up the tab for the bad bets of those folks on wall street or some creditors or counter parties that failed firms to make them whole the government ought to stop rewarding failure and it ought to stop picking winners and losers as has been stated by my colleagues here and the common set of just been made by our friends on the other side that this will in fact allow the picking of winners and losers allow the picking of those folks that would get this money and not further gives us pause and i believe gives the american people pause because the american people understand appreciate that it's that it's not the government that ought to be pick and who survives and who fails in the marketplace that's not how we became the greatest nation in the history of the world market this but when needs to be restored in the way to do that i believe is through the alternative that we put forward so that financial firms will no longer expect that the government will come in and rescue them from the consequences of imprudent business decisions federal regulators need to be able to discuss with each other to be able to talk with each other they need to become more flexible and nimble we don't need more regulation we need appropriate smart flexible regular the diagnosis that our friends on the other side of the olive made is that free market capitalism is bad and that deregulation has failed when in fact the free market capitalism has been stifled by the intervention of the federal government and further intervention is the last thing that needs to happen and that deregulation has failed which is what the other side of appears to believe that more and more and more and more regulation is what's needed in fact we need smarter regulation more flexible and nimble regulation so that the market can abuse the system in a way that harms people with nobody watching the matters that nobody was watching what was going on those that were charged with about whether or not this might trigger the takings cause the takings clause in the constitution if you had a healthy company regardless of whether it was acting as an agent who could essentially quire companies the discussion we've just had because it clarifies it ensures that taxpayers are never again forced to pay for the reckless mistakes of my amendment allows for financial companies to be put in a resolution to die in order about these matters in these limitations you don't need to limit the class of institutions that can be bailed out if you don't set up a bailout in the first place to the extent that the amendment  do you set up a bailout fund do you not set up a bailout fund are their firms too big to fail or their firms should be allowed to fail should some firms be allowed to fail so that others can survive and that's really what you i'll that's between us mr chairman right now again if you don't set up the bailout fund in the first place you don't have to worry about this and by the way again if all you're trying to do  a death penalty on the failing firms well those costs are marginal and should come out of the assets of the failing for another reason you don't need the bell out fine but if the ballot fund is going to be used to reward one set of creditors over another creditors and then all of a sudden receivership doesn't take place over a day or a week or a model all of a sudden it stretches on for years and years  conservatorship alternately again if you build the bailout fund it will be used and so there's a huge difference between the approaches of the republican bill and the democratic bill but i would congratulate the gentleman from new hampshire believe what should be paramount is taxpayer protection and again we have a different a difference of principle and a difference of philosophy of those on the other side as believe in the concept that they are still  doesn't hire out but if we hear the rhetoric on this side of the aisle saying we want to have taxpayer protection why don't we have similar language that says taxpayer funds cannot be used under this act if the could apply to foreign companies well can require delphi financial holding companies to sell or transfer assets pose limitations on credit exposure to on affiliate companies fed apparently definitions for a quote unquote well capitalized quote undercapitalised quote unquote significantly under capitalized the fed can place a firm into involuntary purposes away negative real interest rates you could not have had a housing bubble but for that on our side of the aisle the republican bill says you know the federal reserve ought to be sticking to its knitting it ought to be paying attention be because we have talked at the financial stability that particular moment has passed we are clearly still in a serious recession otherwise we would have ten point two percent fortune one hundred five hundred company in america fill in the blank is that really what the american people want is that the best of do not have again as we look at the first trillion dollar deficit in our nation's history a spending plan that was passed a budget that will triple triple the national debt in the next two years and all this amendment does from the gentleman from minnesota is that the secretary one individual cannot on his own decide to give tarp an additional ten months of life was written into the original statute if congress believes it is such a wise policy to continue to give the administration seven hundred billion dollars of walking around money that belongs with the taxpayer congress go out and debate it let creditors who were rewarded over secured creditors ended up owning chrysler tarp funds are being given to the foreign automakers who didn't have one dime invested in chrysler but it's been given to  so far the track record is not particularly good since the one point two trillion dollars stimulus plan of the administration and congress passed one point two trillion when you add in the interest we've seen over three million body but at the taxpayers want their money back they want their money back they're tired of borrowing forty cents on the dollar and it seems to me that everything we've heard debated here is that we are learn exercising its resolving authority from purchasing equity in the failing institution the goal here is to eliminate future bailouts of these firms that have put our economy in our livelihoods at risk we passed hard to prevent a depression but we don't ever want to be faced with this kind of threat to our economy again this amendment will ensure that it is required to step in and that this will not be a bailout and the company will not survive this bill is hold it open for them