September 20, 2012 CONGRESSIONAL RECORD — HOUSE H6219 

an individual’s health records. And the 

public availability of underlying data 

is not relevant to the quality of a 

study. Publication of data sets is not 

required by peer review journals and 

such publication is not a common practice in the scientific community. 

EPA cannot require scientists to give 

up their private property when they 

publish their peer-reviewed studies, so 

in many cases this amendment would 

block EPA from using relevant, highquality studies. This policy has long 

been on the industry’s wish list, and we 

just have to make sure that we don’t 

make it possible for them to put it on 

the books as a law. This is not because 

of the data quality concerns or transparency concerns, but because all of 

these studies conclusively show that 

air pollution kills people, which is the 

very subject they do not want to be 

able to debate. 

This is a very dangerous amendment, 

and I urge my colleagues to vote ‘‘no.’’ 

I yield back the balance of my time. 

Mr. HARRIS. Mr. Chairman, what’s 

there to hide? As I said, if a regulation 

is justified, why should the government 

hide data from the public in their justification of a regulation? 

Mr. Chairman, I’ve done scientific 

studies. I’ve been the peer reviewer on 

scientific studies. If I have a question 

about data, I ask for it and I get it and 

I review it myself. This is the same access the public should have. 

Nobody wants dirty air, nobody 

wants dirty water; but if we’re going to 

pass job-killing regulations, we better 

be sure that that is sound science it’s 

based on. That’s what this amendment 

does, and I urge support. 

I yield back the balance of my time. 

The Acting CHAIR. The question is 

on the amendment offered by the gentleman from Maryland (Mr. HARRIS). 

The amendment was agreed to. 

Mr. HARRIS. Mr. Chairman, I move 

that the Committee do now rise. 

The motion was agreed to. 

Accordingly, the Committee rose; 

and the Speaker pro tempore (Mr. 

POMPEO) having assumed the chair, Mr. 

WOODALL, Acting Chair of the Committee of the Whole House on the state 

of the Union, reported that that Committee, having had under consideration 

the bill (H.R. 3409) to limit the authority of the Secretary of the Interior to 

issue regulations before December 31, 

2013, under the Surface Mining Control 

and Reclamation Act of 1977, had come 

to no resolution thereon. 

f 

FEDERAL RESERVE 

The SPEAKER pro tempore. Under 

the Speaker’s announced policy of January 5, 2011, the gentleman from Georgia (Mr. WOODALL) is recognized for 60 

minutes as the designee of the majority leader. 

Mr. WOODALL. Mr. Speaker, I appreciate you coming in tonight and allowing me to have the time. 

I’m going to get a little outside of 

my comfort zone tonight, Mr. Speaker. 

You talk about the 20 months you and 

I have been on the job here in this 

body. We’ve talked a lot about tax policy. And I feel like we’re going to have 

a conversation. I think, as we stand in 

this Chamber a year from today, we 

will have signed fundamental tax reform into law. I’m excited about seeing 

this body do that. 

I think about health care reform. As 

we stand here today, I feel like this 

time next year, we will have much 

more freedom in our health care system. I feel like we’ll have skin in the 

game in our health care system. That’s 

a conversation that America has had 

and will continue to have. 

But a conversation America has not 

been having, Mr. Speaker, is one about 

the Federal Reserve and what the Federal Reserve is doing to help with jobs 

and the economy. We talk about that 

here on the floor of the House on a regular basis: What are we doing to help 

jobs and the economy? 

As you know, Mr. Speaker, we have 

about 30 bills sitting over in the Senate 

that we’ve passed here in the House 

that would stimulate the economy, 

that would help American workers get 

back to work, but the Senate has failed 

to act. And in the absence of action by 

the Senate and in the absence of being 

able to move legislation to the President’s desk, the economy continues to 

flounder. 

b 1930 

The President has orchestrated about 

$800 billion worth of stimulus programs, but that has not gotten the 

economy back on track. Not only did 

we not get unemployment down, it continued to rise under that stimulus program. And so what we have, and so if 

you folks in America talk about it, we 

have an independent Federal Reserve 

that engages in monetary policy, and 

these days, in economic stimulation. 

I want to point, Mr. Speaker, to an 

article by—well, I’ll call him Dr. Phil 

Gramm. I mean, in fact, he’s Senator 

Phil Gramm, from the great State of 

Texas, but he was born in the great 

State of Georgia and got his Ph.D. 

from the University of Georgia, his 

Ph.D. in economics. And he had an article in The Wall Street Journal just 

this past week, and I want to tell you 

what it said. 

Phil Gramm writes this, Senator 

Gramm writes this, Dr. Gramm writes 

this: 

Since mid-September of 2008, the Federal 

Reserve balance sheet has grown to $2.8 trillion, from $924 billion, as it purchased massive amounts of U.S. Treasury’s and mortgage-backed securities. To finance these purchases, the Fed increased currency and bank 

reserves, base money. That kind of monetary 

expansion would normally be a harbinger of 

inflation. However, the bank’s holding the 

excess reserves, rather than lending them 

out, and with velocity, the rate with which 

money turns over, generating national income at a 50-year low and falling, the inflation rate has stayed close to the Fed’s 2 percent target. 

Now, Mr. Speaker, I work hard. I 

study hard. I get through paragraph 

one of Dr. Gramm’s editorial, I’m already getting confused because we 

don’t spend enough time talking about 

velocity of the money supply. We don’t 

spend enough time talking about what 

the Federal Reserve’s doing in terms of 

purchasing the bonds. And we don’t 

spend enough time talking about monetary expansion. 

But let me get into some terms that 

we do talk about more, Mr. Speaker. 

The second paragraph of the editorial. 

While the Fed considered its previous 

rounds of easing, QE1, QE2 and Operation Twist, the argument was consistently made that the cost of such actions was low because inflation was nowhere on the horizon. 

That same argument is now being 

made as the central bank contemplates 

QE3 during the Federal open market 

committee meetings on Wednesday and 

Thursday. Inflation is not, however, 

the only cost of these unconventional 

monetary interventions. As investors 

try to predict the timing and effect of 

Fed policy on financial markets and on 

the economy, monetary policy adds to 

the climate of economic uncertainty 

and status already caused by current 

fiscal policy. There will be even greater 

costs when the economy begins to 

grow, and the Fed, to prevent inflation, 

has to reverse course and sell bonds 

and securities to the public. 

Now, I’m not going to say that’s still 

perfectly clear, Mr. Speaker. But I am 

going to say, we’re starting to talk 

about QE1, QE2, now QE3 because that 

open market committee met and decided to proceed with QE3, and Operation Twist. Now what are these terms, 

and why don’t we talk about them 

more often? 

Let me just go briefly, Mr. Speaker, 

to the Federal Reserve Act. Just to be 

clear, section 2(a), monetary policy objectives, this is what, we, the Congress, 

Mr. Speaker, have charged the Federal 

Reserve with. And I’ll quote from the 

statute: 

The Board of Governors of the Federal Reserve System and the Federal Open Market 

Committee, shall maintain long-run growth 

of the monetary and credit aggregates commensurate with the economy’s long-run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate longterm interest rates. 

Now, when folks want to know what 

it is the Federal Reserve does, this is 

the congressional mandate: increase 

production so as to promote efficiently—effectively, pardon me—the 

goals of maximum employment, stable 

prices, and moderate long-term interest rates. 

Now, Mr. Speaker, I’m not a Ph.D. 

economist, but I’ve taken a few economics classes over the years. And 

what I would tell you is I have always 

imagined that full employment and 

stable prices and moderate long-term 

interest rates are often in conflict with 

one another. 

You know, when you want to stimulate the economy, you try to lower interest rates so folks borrow more 


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H6220 CONGRESSIONAL RECORD — HOUSE September 20, 2012 

money, so folks create more jobs. You 

want to put more money in the hands 

of our small business owners, our job 

creators, want to create jobs with 

other people’s money when interest 

rates are low so that we can bring unemployment low. 

When interest rates go higher, folks 

borrow less money. When they borrow 

less money, perhaps unemployment 

goes up. 

These are conflicting goals, but we’ve 

tasked the Federal Reserve with both 

of those. And I want you to see, Mr. 

Speaker, what that brings us to today. 

I’ve got a chart here, and you’re not 

going to be able to see it from where 

you stand, but it’s the last 5 years of 

the Federal Reserve balance sheet. And 

I’d be interested to take a poll here, 

Mr. Speaker, folks back in their office 

watching on TV: how many folks have 

taken a look at the Federal Reserve’s 

balance sheet? I don’t mean take a 

look in the last 10 days, I mean who’s 

taken a look in the last quarter? 

Maybe in calendar year 2012, Mr. 

Speaker. How many folks have taken a 

look at the balance sheet in 2012? 

Maybe not even 2012. What about this 

session of Congress? What about this 

new decade? How many folks have 

taken a look at the Federal Reserve 

balance sheet? Because what you see at 

the Federal Reserve balance sheet, Mr. 

Speaker, is a dramatic change. 

You’re not going to be able to see 

these numbers here, but they run from 

zero on the balance sheet up to $1 trillion, up to $2 trillion, up to $3 trillion. 

You know, we throw trillions around in 

this town, Mr. Speaker, like they’re 

nothing. A trillion’s a big number. It’s 

a million millions. 

And historically, if you go back, and 

you see it here on the chart, 2007, 2008, 

going back into 2006, in general, the 

Federal Reserve, in order to keep liquidity in the economic system, in 

order to make sure that our financial 

system doesn’t have fits and starts, 

kind of lubricates that system, makes 

sure everything’s moving at the proper 

pace, keeps just under about $1 trillion 

on its balance sheet, the debt that it 

buys, money that it’s lending. 

It will buy Treasurys to keep that 

market fluid. It has a window that it 

will lend to banks to keep that market 

fluid. 

And what we see here, represented by 

this beige line here, is that going back 

into 2007 and 2008, most of that balance 

sheet was comprised of this traditional 

activity, with a little bit of lending to 

financial institutions. 

Now, you remember, Mr. Speaker, 

when folks got so scared back in 2008 

and we started to talk about TARP and 

the bank bailouts, we were going into 

the fall of that year and wondering if 

fiscal calamity was on the horizon. And 

this Congress passed, before you and I 

got here, measures to expand our aid to 

financial institutions, to increase that 

lubrication to make sure that dollars 

continued to flow. 

And so you see it represented here on 

this gray line, Mr. Speaker, as the Federal Reserve’s balance sheet expanded 

with loans to banking institutions. 

Now, I don’t mean expanded a little. 

Traditionally we’re here, just about 

$800 billion. Within the period of one 

quarter, we more than doubled that to 

$2.2 trillion, almost tripled it. 

Now, hear that again. This is an institution that exists to keep markets 

fluid, to prevent hiccups in our financial process, to make sure, again, full 

employment, long-term interest rates 

are stable, price stability. Tripled its 

balance sheet almost overnight in the 

name of protecting us from an economic collapse. 

And the balance sheet has not just 

stayed there since the fall of 2008, it’s 

grown even larger. But the components 

have begun to change, and that’s why 

it’s important to begin this conversation, Mr. Speaker. Again, I’m not a 

Ph.D. economist. I don’t claim to have 

all the answers. But what I do claim to 

know is, we’re not spending enough 

time, as a Nation, talking about the 

role of the Federal Reserve. 

You know, the Federal Reserve’s an 

independent agency. It’s supposed to 

make decisions on its own. Whenever 

someone complains to me, Mr. Speaker, about what’s going on with the Federal Reserve, I say, I understand that 

you have some concerns with the Federal Reserve, but the only thing worse 

than an independent Fed Chairman 

making these decisions would be a Republican Party chairman and a Democratic Party chairman making these 

decisions. I mean, we’ve made it outside of Congress to keep partisanship 

out of it, to try to do the best economic thing instead of the best political thing. 

But this is what’s happened on our 

watch. The Fed has tripled the size of 

its balance sheet. First it was loans to 

bank, represented here by gray. Then it 

turned to liquidity in other credit markets, demonstrated by this blue, and 

then it turned to mortgage-backed securities and long-term American debt. 

Now what does that mean? 

b 1940 

That means that the Fed decided 

that no one wanted to buy mortgagebacked securities in this country and 

that, in the collapse of Fannie Mae and 

Freddie Mac, uncertainty took over in 

the marketplace, and it began to slow 

and, in fact, began to bind up as those 

mortgage-backed securities either 

began to fail or ceased to move, and so 

they began to buy them in record numbers represented here. It started out as 

just a little. Now it’s over $1 trillion in 

mortgage-backed securities going 

through 2010. Couple that then with 

long-term bond purchases—American 

debt. 

Here we have an American banking 

institution, the Federal Reserve, buying American debt. Now, don’t think 

too hard about that. Don’t think too 

hard about what it means when the 

folks who control your money supply 

begin to buy your debt so that you 

begin to pay your interest to the Federal Reserve, which then returns all of 

its profits back to the government. 

You begin to see you’re taking it out of 

your left pocket and you’re putting it 

into your right pocket—taxing the one 

hand and paying the other hand. It gets 

circular in a hurry, and it puts us, as a 

Nation, on the hook for these actions. 

Again, in 5 years—2007 to 2012—and 

really, the fall of 2008 to 2012—4 years, 

48 months—we tripled the size of the 

Federal Reserve’s balance sheet and 

changed its composition from what has 

historically been traditional security 

holdings and loans to banking institutions to making those the two smallest 

parts of the chart and making longterm debt and mortgage-backed securities the largest part of the chart. 

That’s what we’ve heard from the Federal Open Market Committee, Mr. 

Speaker, is that we’re going to continue that program to the tune of 

about $40 billion a month. 

These aren’t actions that have no 

consequences. I’m looking here at yesterday’s Wall Street Journal, and the 

headline is this: ‘‘Governments Brace 

for Currency Onslaught Ahead of QE3.’’ 

Again, ‘‘QE’’ stands for ‘‘quantitative 

easing.’’ It’s talking about pumping 

more liquidity into the marketplace— 

trying to keep the lubrication going in 

the American economy—and it’s the 

expansion of the balance sheet. We 

have some charts that show what happened after QE1 and what happened 

after QE2 and Operation Twist. This 

was in yesterday’s Wall Street Journal. 

It was not an editorial, but it was from 

their reporting pages. 

The Wall Street Journal says this: 

In the previous round of Fed quantitative 

easing, which was dubbed QE2, the dollar 

weakened significantly. In the 13 months 

from June 2010—when expectations of more 

Fed stimulus first began to rise—until the 

$600 billion bond-buying program wound up 

the following summer, the Wall Street Journal Dollar Index—a measure of the dollar’s 

value against a basket of major currencies— 

lost 18 percent of its value. 

I just want you to think about that 

for a moment. We’re here arguing 

about what’s going to happen with the 

fiscal cliff, and, of course, the House 

has acted to prevent taxes from rising 

on all American families come January. The Senate has not yet acted. 

We’re trying to push that bill through 

the Senate, and we’re trying to get the 

President on board. We’re trying to 

prevent tax increases—a major part of 

what we do in this body and a major 

focus of the American taxpayer. 

All you have to do is to go back to 

December 2010, which was when Speaker NANCY PELOSI was running this U.S. 

House, when Majority Leader HARRY

REID was running the United States 

Senate, when President Obama was sitting in the White House, and when a 

big election had just been held in November of 2010. That election brought 

99 new freshmen to this body. It turned 

over a tremendous number of Members, 

which was the largest number we’d 

seen in decades, and America said, I 


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don’t have any more money to give 

Washington. I’m voting ‘‘no’’ on new 

taxes. 

So what happened? 

In the lame duck session—November 

and December of 2010—Speaker NANCY

PELOSI, Majority Leader HARRY REID, 

and President Barack Obama came together and extended the Bush tax rates 

for an additional 2 years. They refused 

to raise taxes on the American people 

because the American people had just 

had a giant referendum in the November election, and Washington responded. Folks who hated the Bush tax 

rates—who demonized the Bush tax 

rates, from whom I’ve never heard a 

nice thing said about the Bush tax 

rates—came together to extend those 

tax rates for 2 additional years. Why? 

Because the American people demanded it. 

In reading from yesterday’s Wall 

Street Journal—call it causative, call 

it correlated, call it coincidental—in 13 

months of QE2, $600 billion of bondbuying, the value of the American dollar against world currencies fell by 18 

percent, which is, in effect, an 18 percent instant tax on every single dollar 

in every single American pocket in this 

country. 

If you’re not thinking through that, I 

mean, here is the story. You’re going 

to Walmart to buy those Chinese tennis shoes for your kids. Now, when the 

American dollar—the value of what a 

dollar buys on the world marketplace— 

falls 18 percent, that means the cost of 

those Chinese sneakers rises by that 

same amount because the dollar is 

worth less and foreign currencies are 

worth more. It helps U.S. exports, because what we’ve produced here becomes worth less and it makes it easier 

for foreign companies and corporations 

and nations to buy it, but it makes all 

of our savings, all of the dollars in our 

pockets, worth less, too. This is 18 percent, Mr. Speaker, in 13 months. 

You and I were not in Congress at 

that time, but I wonder: How many letters do you think folks got, Mr. Speaker? How many phone calls do you think 

came in to say, ‘‘I’m watching the activities of the Federal Reserve. I’ve 

been studying their balance sheet. I’m 

deeply engaged in the actions of the 

$600 billion bond-buying program and 

QE2, and I see that the value of the dollar against a market basket of world 

currencies is falling by 18 percent, and 

I want Congress to fix it’’? 

Now, Mr. Speaker, you and I were not 

here, but if this House of Representatives had raised taxes by 18 percent on 

every American family, there would 

have been a riot. Phones would have lit 

up. Mailboxes would have been jammed 

packed. Email accounts would have 

been pumped full as American consumers would have said this is not the 

right direction for America. But who is 

talking about it when the Federal Reserve creates exactly that same impact 

through monetary policy? Again, I’m 

not saying it’s right or wrong. We have 

to make these decisions as a Nation. 

What I’m saying is there hasn’t been 

enough debate on that topic. 

Let me go on. Again, this is from yesterday’s Wall Street Journal: 

The dollar followed a similar but slower 

path leading to the QE3 announcement last 

week. The Wall Street Journal Dollar Index 

hit a 22-month high in July. 

That means that our dollar was valued high against a market basket of 

world currencies, which meant spending a dollar bought more goods than it 

historically buys. It’s a 22-month high. 

It bought more goods in July than it 

bought in any other month over 22 

months. 

The Wall Street Journal goes on: 

It then started to slide gradually before 

dropping sharply once Fed Chairman Ben 

Bernanke signaled the Central Bank’s plan 

at his speech in Jackson Hole, Wyoming, on 

August 31. The index is now 6 percent off its 

July high. 

From July to September, every dollar in every American pocket and in 

every community across this land is 

worth 6 percent less than it was just 3 

months ago. 

How many letters have you gotten, 

Mr. Speaker? How many letters have 

you received from your constituents to 

say that every single dollar they’re 

earning in their paychecks, that every 

single penny in their children’s 

piggybanks, that every single bank account, that every single stock purchase—that every single dollar of 

wealth we have in this country—now 

buys 6 percent less? 

Again, Ben Bernanke is a bright guy. 

Alan Greenspan before him was a 

bright guy. We have this independent 

Federal Reserve so that we can have 

really smart people who are studied, 

schooled—decade upon decade—in the 

economics of our land and of our world 

make these decisions. But they impact 

us, and we’re not having that national 

discussion about what that impact is. 

This is 6 percent in just the past 3 

months. 

b 1950 

We talk a lot about Social Security 

and Medicare, and certainly there’s an 

impact on our seniors, Mr. Speaker, 

with both of those major programs 

that we’ve all paid into out of our paychecks all of our lives. But what about 

folks on a fixed income? Because, 

again, part of this Federal Reserve policy, there is the expansion of the balance sheet side, and there’s also the 

controlling of the interest rate side. Of 

course, we’ve pushed interest rates low. 

What I have here, Mr. Speaker, is a 

chart of interest rates in this country 

that is kind of a 10-year bond yield. It 

is a number that is looked at around 

the globe. This chart goes from January of 2009 up to September 2012. What 

you see in green is the beginning of 

quantitative easing, QE1 in green. You 

see the end of QE1 in red. As we begin 

to put more and more and more money 

into the marketplace, lubricate that 

marketplace more and more and more, 

the cost of borrowing money went 

higher and higher and higher until QE1 

ends and interest rates collapse. Then 

we announce QE2. Here in green you 

see where QE2 begins. You see in red 

where QE2 ends. As soon as QE2 ends, 

interest rates collapse. Operation 

Twist begins. 

Here we are with average 10-year 

yields, Mr. Speaker, going back over 

the last 3 years. This is what we’re usually paying for money. This is what 

we’re paying for money right now. 

These are the lowest interest rates 

we’ve seen—well, not just in a generation, Mr. Speaker—in decades. Let me 

go on. 

This is that dollar index that I talked 

about, that market basket of world 

currencies. How much is a dollar 

worth? Again, let’s look. QE1 begins, 

the value of a dollar spikes briefly. 

Throughout QE1, the value of a dollar 

collapses and rises towards the end of 

QE1. As soon as QE1 ends, the value of 

a dollar spikes again—QE2. Again QE2 

begins. By the time QE2 ends, we see 

the dollar valued substantially less. 

What’s the discussion around the 

family dinner table, Mr. Speaker? You 

can’t find a household in this Nation 

that hasn’t had a discussion about 

their tax bill. I daresay you wouldn’t 

find many households in this Nation 

that haven’t had a discussion about the 

regulatory burden that is being placed 

on them by the Federal Government 

today, the challenges of going out and 

creating a business or building a new 

job because of the regulatory burden. 

But how many folks are sitting 

around the dinner table talking about 

this small group of men and women, 

the Federal Open Market Committee, 

the chairman of the Federal Reserve, 

and what they’re doing that both obligates Americans and impacts our fiscal 

and economic future, and what they’re 

doing to try to create those jobs and 

keep interest rates low for America 

today? 

This is the chart that concerns me 

the most, Mr. Speaker, because we’re 

borrowing at record low interest rates. 

The Federal Reserve is doing a lot of 

buying of American debt too. Again, I 

talked about the left hand and the 

right hand, and we’re paying ourselves 

because we’re borrowing from ourselves 

and lending to ourselves. These are all 

just clicks of the mouse these days. It’s 

not dollars that are changing hands. 

We’re just clicking the mouse. 

What happens borrowing a trillion 

dollars a year, Mr. Speaker? You and I 

are working hard to curtail that. Of 

course, discretionary spending in the 20 

months you and I have been here, we 

reduced 2010. When we went into 2011, 

we came lower than 2011. When we 

went into 2012, we now sent a continuing resolution to the Senate that 

brings us even lower in 2013. We’re in 

2012. We’re absolutely saving those dollars one dollar at a time, but we’re still 

borrowing a trillion tax dollars a year. 

Whose buying that debt, Mr. Speaker? 

In the early 1970s, it would have been 

us. That’s been the history of this 


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H6222 CONGRESSIONAL RECORD — HOUSE September 20, 2012 

country. We, the American people, buy 

our debt. Thrift was valued, and we 

take our hard-earned dollars, we take 

those dollars we’ve accumulated as 

families through our thrift, and we buy 

American bonds with them. We reinvest in America. And when America 

pays interest on those bonds, that interest comes back to us as American 

families. 

But over the past four decades, that’s 

begun to change dramatically. The mix 

of who’s buying those bonds has moved 

from American families and American 

institutional investors and is drifting 

aggressively towards foreign purchasers. 

That’s just the way it is. We don’t 

have any thrift in this country anymore. No one is saving money in this 

country anymore. American has debt it 

has to sell. It can’t sell it to American 

families because American families 

don’t have jobs and don’t have money, 

so they’ve got to sell it to foreigners: 

China, Germany, Japan. That’s the way 

the economy is today, Mr. Speaker. 

I’ve represented those lines here. 

This is a percent of GDP. That’s what 

this chart is. This is a baseline here, 

zero percent of GDP. It goes back to 

the year 2000. We’re just looking at the 

last decade. It comes out to 2012. The 

question is: Year over year, who’s buying Treasury securities? Is it the private sector, individuals, and institutional investors? That’s the green line. 

Is it foreign investors? That’s the blue 

line. Or is it the Federal Reserve? 

Again, I don’t know who is following 

those things day to day, Mr. Speaker. 

It’s not coming up at town hall meetings. It’s not coming up around family 

dinner tables. But the Federal Reserve, 

if you follow this black line here, the 

net change in what they were buying in 

terms of Federal Treasurys, it’s pretty 

close to zero here. This black line representing the Federal Reserve is zero in 

2001, 2002, and 2003. The foreign nations 

begin to buy more here, American consumers begin to buy a little more here, 

they sold more here, the foreigners 

bought more there. But here’s that 

black line, the baseline, the Federal 

Reserve going right on out. 

Look at what happens in 2009, 2010, 

and 2011. That black line spikes. As we 

go into 2011, I want you to see, Mr. 

Speaker, that black line crosses the 

green and the red line. Why are these 

lines getting so tall? Because America 

is selling so much debt. You’ve got to 

remember that. When President Bush 

was in the White House when debts 

were considered then massive at that 

time, we were under $400 billion a year. 

We were trying to sell $400 billion a 

year in government-backed securities 

on the world market. 

Beginning late in 2008 and going into 

2009 and into 2010 and into 2011, we 

began to sell over a trillion dollars a 

year. The number of debt instruments 

that we had to sell in the world marketplace tripled, if not quadrupled. So 

you see that spike, and everyone has to 

buy more of our debt. Individuals are 

buying more in the green line, foreign 

nations and foreign investors are buying more with the blue line, and the 

Federal Reserve begins to buy more, as 

you see, in the black line. 

Starting in late 2010 and going into 

2011, you see the black line come out 

on top, that the net change in the ownership of Treasurys has shifted away 

from all private and governmental investors combined around the globe, and 

now the biggest shift in each month is 

our Federal Reserve buying our own 

debt, us taking the money out of one 

pocket, putting it in the other, taking 

the debt instrument out of your pocket, putting it back in the other. 

What’s the impact of that, Mr. 

Speaker, on the long-term American 

economy when we can’t find enough 

dollars on the planet, we can’t find 

enough buyers on the planet to invest 

in American debt? So we the American 

Federal Reserve have to buy that 

American debt—again, just a click of 

the mouse—because no one else is. 

What if the Federal Reserve closed 

the doors tomorrow, Mr. Speaker? 

Could we even sell it? I understand the 

Federal Reserve competing in that 

marketplace. It helps to keep interest 

rates low, right? When demand is high 

for debt, interest rates are lower. The 

Federal Reserve would have stopped 

that demand. What’s the real cost of 

borrowing in this country? We don’t 

know. 

We have four times higher debt today 

than we did in the late 1990s, by 1997. 

Four times more debt today than we 

did in 1997, and yet we pay less in interest on the national debt as a percent of 

GDP today than we did then. Why? Because of record low interest rates. Why 

do we have record low interest rates? 

Because we are exerting every fiber of 

energy that the Federal Reserve can 

muster to keep those interest rates 

low. I’ll show you a chart of those interest rates later. But they are the 

largest purchaser of our debt. 

There is some good news in that, and 

I want to shift just a moment from the 

Federal Reserve to the Treasury Department. Again, the Federal Reserve, 

Mr. Speaker, is an independent doing 

its own thing. The Treasury Department is completely funded by this Congress, completely involved in oversight 

under this Congress and direction by 

the administration. 

We are experiencing record low interest rates today. 

b 2000 

There is so much uncertainty in our 

future and, again, I’m trying to highlight how some of that has been created by the Federal Reserve just so 

that America begins to have that conversation. The good news is the folks 

over at Treasury, the public folks over 

at Treasury, the Bureau of Public Debt 

and Treasury have begun to extend the 

maturity, average maturity rate, of 

our debt. 

Now, what does that mean? Well, you 

remember reading about all the folks 

in the mortgage market who got 

caught by those teaser rate loans. The 

rates were low on year one, but they 

went up in year two and folks couldn’t 

afford the payments on year two and 

the interest rate jumped—teaser rates. 

Well, right now we’re financing 

America’s debt at teaser rates. We’re 

borrowing at the lowest rates in history. When we go out and we start selling debt instruments, we’re not selling 

everything as a 30-year bond, where nobody is going to come looking for the 

principal for another 30 years. We sell 

that in 28-day instruments, 1 month, 3 

months, 6 months. Short-term instruments finance the plurality of our debt. 

Now, what does that mean? That 

means we have tremendous interest 

rate risk. Whatever the debts are in 

our families at home, Mr. Speaker, if 

we have those amortized over a long 

period of time, then we know exactly 

what our payments are going to be. If 

we’re involved in short-term teaser 

rates, then we could have the rug 

pulled out from under us tomorrow. 

To the Treasury’s credit, go back to 

1980 here, average maturity of debt, 

when interest rates have gotten lower, 

Treasury has begun to lock American 

debt in for longer and longer maturities. Back in October of 2008, when we 

were just dumping debt on the marketplace as fast as we could because we 

were spending at the highest deficit 

levels in American history—again, four 

times the previous levels, as George 

Bush was leaving office—we had to sell 

it to anybody who was willing to buy 

it. 

The maturity rate, just the average 

maturity rate just collapsed, collapsed. 

We’ve been battling back from that 

time, 48 months in October of 2008. 

Again, that’s average, 2008. What were 

we talking about then, Mr. Speaker? 

About $13.5 trillion in public debt that, 

on average, was due in 4 years or less. 

There is a thing about that, because 

there’s no surplus here. We’re still borrowing more, but every 4 years the entire amount of debt comes due, that’s 

the average. The entire debt turns over 

every 4 years. We’re not only borrowing a trillion more each year; we’ve 

got to pay back the $13 trillion we already borrowed that we’re then refinancing by selling additional debt. 

To the Treasury’s credit, we’re extending that timeline one month at a 

time, one day at a time. Here in May of 

2012, we’ve already pushed out the average maturity date 32 percent. It’s up 

to 64 months there over the summer to 

try to lock in these low interest rates 

to give America some interest rate protection, to reduce our interest rate exposure. 

You can’t throw money around the 

way this Nation is throwing money 

around and think inflation isn’t going 

to get you. It’s not a question for 

economists, Is inflation coming? The 

question is when is it coming and how 

bad is it going to be. It’s coming. 

The laws of economics are sound. It’s 

coming. When is it coming? How bad’s 


tjames on DSK6SPTVN1PROD with HOUSE
September 20, 2012 CONGRESSIONAL RECORD — HOUSE H6223 

it going to be? Our Federal Reserve 

tries to manage that for us with our 

Treasury Department locking in those 

longer-term rates now. 

Let me just say that we’ve begun 

that discussion in Congress. I think we 

need to begin that discussion, Mr. 

Speaker, in living rooms around the 

country. It’s not just a congressional 

discussion, of course. It’s a discussion 

that the American people need to have. 

Who are we as a Nation? What are we 

mortgaging away in our tomorrow to 

try to help our today? Is what we’re 

doing making today easier? Perhaps it 

is. But giving the risk of what it does 

to tomorrow, is it worth that risk? 

We’re not having that conversation. 

We’re leaving those decisions to the 

independent Federal Reserve. We’re 

leaving those decisions to the Federal 

Market Committee. 

That was a different choice that we 

made when the balance sheet of the 

Federal Reserve was $800 billion, still a 

big number, but $800 billion. Now it’s 

four times larger. We’re working on 

that here in Congress, Mr. Speaker. It 

began with the Federal Reserve Transparency Act; and that’s a bill, a bipartisan bill, 274 cosponsors in the House. 

When we finally brought it to the 

House floor, it passed 327–98. 

That’s big. You talk about all the 

things we don’t agree on here in Congress, you talk about party-line votes 

that divide us right down the middle— 

3–1 Congress voted to pass the Federal 

Reserve Transparency Act. 

Now, does that say the Federal Reserve is doing a bad job? No, that’s not 

what this bill says. What this bill says 

is the Federal Reserve is doing a lot. 

It’s doing a lot that we never anticipated when we created the Federal Reserve. 

There comes a time the American 

people need to be involved in that process and we, as their Representatives, 

need to be involved in that process. 

This is Dr. RON PAUL from Texas who 

has been pushing this idea for years 

and years and years. In this Congress, 

as he prepares to retire at the end of 

this year, the House finally had a vote 

and passed it by a large margin. 

There is another bill in the House 

that has 48 cosponsors right now. It has 

not moved out of committee, and it’s 

called the Sound Dollar Act. It’s H.R. 

4180. Again, it’s looking at some of 

these questions going back to be that 

Wall Street Journal article I showed in 

the beginning, 6 percent devaluation of 

our currency in the last 3 months. As 

the Federal Reserve began to act on 

QE2, an 18 percent devaluation in our 

currency. 

Golly, you work hard all your life, 

you think, God the stock market is too 

risky for me. I have seen it collapse, 

more than once: tech bubble collapse; 

builders, real estate collapse; September 11, 2001 collapse. Too risky, I 

just can’t do it. I’m going to take my 

dollar, and I’m going to put it in a federally insured banking institution so 

that I know when I go to take that dollar out, it’s going to be there. 

Well, that’s true. But is it still going 

to be worth a dollar when you take it 

out? The answer turns out to be no. 

If this government wants your 

money, we can come and we can tax 

you, Mr. Speaker. We can take 20 percent of everything you own, brand-new 

tax, 20 percent of all the wealth anyone 

has in America. Yes, $10, we’re going to 

take $2 of it. 

That’s not going to pass this body, 

and it shouldn’t. It’s crazy. Through 

monetary policy, we can achieve that 

very same effect and nary a voter said 

a word. 

I’m not telling you it’s bad for America. I’m not telling you the folks of the 

Federal Reserve are out to get America. I’m not saying that at all. These 

are conscientious men and women who 

love this country and who are trying to 

make sure, in line with their Federal 

mandates, that they are keeping an eye 

on inflation, that they are keeping an 

eye on interest rates, that they are 

keeping an eye on full employment. 

These are contradictory goals, and 

they have got to keep them all in the 

same basket and try to succeed on all 

fronts. 

But the beneficiary, if they succeed, 

is the American taxpayer. The one who 

bears the burden if they fail is the 

American taxpayer. The one that’s not 

involved in the discussion right now 

about whether it’s the right thing to do 

or the wrong thing to do is the American taxpayer. 

I believe this November, Mr. Speaker, we are going to have the largest 

voter turnout in American history, and 

I’m thrilled about it because I still believe in America. I still believe in 

Americans. 

When more Americans turn out to 

have their voice heard, we’re going to 

end up with the right answer. I don’t 

have any idea what the American people are going to decide because at the 

polls they’re still trying to make up 

their mind in some cases. 

But when more of us are involved, 

we’re going to end up with a better decision for America at the end of the 

day. We need to get those voices involved in Federal Reserve policy. 

This chart, Mr. Speaker, is one of my 

favorites. It goes back to 1962. We go 

deep, deep, deep into history. I say 

deep, deep, deep because I’m in my forties; this is before I was born. So I call 

that deep, deep, deep into history. If 

you were born before 1962, it might not 

seem like that far to you, but it’s 50 

years, Mr. Speaker, of American interest rate policy. 

We see here the end of the Carter 

years and the beginning of the Reagan 

years before the Reagan tax cuts had a 

chance to take effect and get the economy back on track. We’re talking 

about sky-high interest rates, but over 

50 years of American history, 50 years 

of American history through Vietnam, 

through the oil embargoes, through 

Carter, Reagan, Bush, and Clinton. You 

look way out to the end of this chart, 

Mr. Speaker, 2012. You see a collapse in 

the average 10-year interest rate to the 

lowest levels that most of us have ever 

seen in our lifetimes. 

b 2010 

These are the interest rates that 

America ordinarily pays. But we’re manipulating the system to pay the lowest interest rates in history. At the 

same time, we’re borrowing the most 

money in history. The laws of economics tell you that’s not what goes on 

with supply and demand. If there’s 

more demand for debt and less supply 

and folks to buy, interest rates are supposed to go up. We have more demand 

than ever before. We have less supply 

of buyers than ever before in the world 

marketplace. And yet interest rates 

are at their lowest level in history. 

There’s going to come a time, Mr. 

Speaker, that we’re going to have to 

pay the piper. This is normalcy. This is 

historical normalcy. What we’re experiencing today is temporary, and, by 

definition, has to be. The same thing is 

true on 30-year interest rates. In fact, 

it’s even more dramatic. This goes 

back to 1977, Mr. Speaker, out to 30- 

year interest rates today. The 30-year 

U.S. Government interest rate down 

around 3 percent, Mr. Speaker. Who is 

it, Mr. Speaker, who wants to trade 

away $1 today with the agreement that 

they’ll get $1.03 back next year. And 

that same deal over the next 30 years. 

Who thinks that dollar is only going to 

devalue 3 cents a year going out over 

time? 

As I close, I want to make it clear 

there’s a lot of shin-kicking that goes 

on in this town. I’m not trying to kick 

the shins of the Federal Reserve. I’ve 

got a lot of constituents who think I 

should. I’ve got a couple of constituents who think I shouldn’t. But what I 

don’t have enough of are voices across 

the Nation demanding that we take a 

look at it. 

I recommend this article to you. September 11, 2012, again, written by Senator Phil Gramm. That’s Phil Gramm 

of the Gramm-Rudman-Hollings Act. 

Do you remember that? That was our 

last serious effort at deficit reduction. 

This is a gentleman who has been concerned about free markets and American job creation and American debt 

for a generation. He served here in the 

House, served in the United States Senate. He crafted, again, some of the biggest budget bills, most progressive, 

most opportune when it came to seizing the moments to try to change the 

fiscal direction of the country for the 

better. He’s writing on September 11 

about our fiscal future and what’s happening at the Federal Reserve. 

I’ll close with the same way that he 

closed. He said: 

Some day, hopefully next year, the American economy will come back to life. Banks 

will begin to lend, the money supply will expand, and the velocity of money will rise. 

Unless the Fed responds by reducing its balance sheet, inflationary pressure will build 

rapidly. At that point, the cost of our current monetary policy will be all too clear. 

Like Mr. Obama’s stimulus policy, Mr. 

Bernanke’s monetary policy expansion will 


tjames on DSK6SPTVN1PROD with HOUSE
H6224 CONGRESSIONAL RECORD — HOUSE September 20, 2012 

ultimately have to be paid for. The Fed softened the recession by its decisive actions 

during the panic of 2008. But the marginal 

benefits of its subsequent policy have almost 

certainly been small. We may find the policies that had little positive impact on the recovery today will have high costs, indeed, 

when they must be reversed in a full-blown 

expansion. 

There’s not a man or woman in this 

country, Mr. Speaker, who’s registered 

to vote who’s not thinking about their 

tax bill, who’s not thinking about the 

economy, who’s not thinking about job 

creation, and who’s not going to go to 

the polls and vote accordingly. Mr. 

Speaker, I encourage you to encourage 

your constituents, as I’m going to encourage mine, don’t just think about 

tax policy. Think about monetary policy. What we’re doing here in Washington to cut budgets, that’s what we’ll 

call fiscal policy. What the Federal Reserve is doing with its balance sheet 

and with interest rate, that’s going to 

be monetary policy. And it makes a 

difference. The decisions we make 

today have to be paid for tomorrow. 

Perhaps it’s the right thing to do 

today, but if it happens in secret, if it 

happens unbeknownst to the American 

taxpayer, the American job creator, 

the American jobholder, who will ultimately have to foot that bill, then it’s 

not the right course of action for 

America. 

Let’s have this debate. Let’s talk 

about it in the light of day. And let’s 

make that decision, Mr. Speaker. Balance those costs and those benefits and 

do what we know will be best for the 

American family for another generation to come. 

With that, Mr. Speaker, I yield back 

the balance of my time. 

f 

NANNY-STATE GOVERNMENT 

The SPEAKER pro tempore. Under 

the Speaker’s announced policy of January 5, 2011, the Chair recognizes the 

gentleman from Iowa (Mr. KING) for 30 

minutes. 

Mr. KING of Iowa. Mr. Speaker, it is 

my honor and privilege to address you 

here on the floor of the United States 

House of Representatives and take up 

some of the issues that I think are so 

important to the dialogue before us 

here and the American people to consider as they listen to our discussion. 

A number of things weigh on me as I 

come to the floor tonight. And one of 

them is something that I think is 

emerging in the consciousness of the 

American people, Mr. Speaker, in a 

way that really wasn’t there before 

this administration took office, and 

that is the massive growth of the 

nanny state here in the United States 

of America. 

We’ve watched as regulation after 

regulation have crept in on our regular 

lives, and some of the things that I’ve 

spoken about with you in the past fall 

down along those lines. For example, 

the curlicue light bulb. The idea that 

the Federal Government could ban our 

100-watt light bulbs and prohibit us 

from buying our patriotic Edison light 

bulbs and require us instead to substitute for those curlicue mercuryladen light bulbs. 

Now I’ll point out, Mr. Speaker, that 

I have a good number of those—I’ll call 

them modern—light bulbs in my house. 

I put them where they make sense. And 

where they don’t make sense, I put in 

the patriotic Edison bulbs. If I need 

quick light to walk into a room for just 

a minute, I want to have an Edison 

bulb there, not a curlicue, so it lights 

up right away. I can shut it off right 

away. It’s not on much. It doesn’t cost 

much electricity. If I’m going to have a 

bulb that’s going to be on for quite a 

long time, then I want to have the energy-efficient bulb. That’s a simple decision that a consumer can make—and 

especially a well-informed consumer. 

But when you end up with a one-sizefits-all that comes from the Federal 

Government, you end up with a lot of 

bad decisions so that it all fits into one 

formula. That’s the light bulb. 

Another one is shower heads. Several 

months ago, the Federal Government 

fined three companies for selling shower heads that let too much water out. 

Think of that. Too much water. One 

size fits all. The water supply in let’s 

say Buffalo, up by Niagara, is different 

than the water in someplace like Tucson; different than someplace like New 

Orleans or Florida or Iowa. And so we 

have one-size-fits-all on shower heads. 

And here’s the brilliant presumption 

on the part of the nanny state Federal 

Government: the conclusion that in all 

cases water is going to be more valuable than time. So people can stand 

under that shower head and wait for 

their feet to get wet because over the 

broad calculation of 300 million people 

you will save some gallons of water 

that are more valuable to the mind of 

the nanny state—certainly, more valuable in the mind of the nanny state— 

than the time that it takes for someone to stand there and wait to get wet. 

Here’s another one. The 55 mile-anhour speed limit that was imposed a 

long time ago in this country under the 

belief that if we all drove 55 miles an 

hour we would save gas and that would 

help our energy independence and keep 

us less dependent upon foreign oil. So 

the Federal Government dialed the 

speed limit down to the ‘‘double 

nickle,’’ as we called it, and everybody 

in the country drove 55 for a long time, 

even on the interstates, with the misguided idea that gas was always worth 

more than time. 

So one day, Mr. Speaker, I was driving down the road in Iowa at 55 miles 

an hour and I came through this intersection on a county road and I could 

look in my mirror and see a mile in my 

mirror, not a car in sight. A lot of 

cornfields. Looked right, looked left. I 

could see a mile in either direction. I 

could see a mile ahead of me. I could 

cover 4 miles of road by looking out 

three windows and into a mirror. 

And there I am driving down the road 

looking at cornfields, which I love to 

look at, at 55 miles an hour. I thought, 

Why am I doing this? Well, it must be 

the nanny state that has imposed this 

on me. And I picked up my phone and 

called—now there’s a law against that 

in the nanny state—but I called my 

secretary in one of our offices and said, 

I want to know how many passenger 

miles are traveled on the rural roads in 

Iowa each year. Can you get me that 

number? She came back to me a little 

later and said, I can’t give you the passenger miles but I can give you the vehicle miles on rural roads. 

So I did one of those little calculations on my calculator that works out 

like this: if we all drove 65 miles an 

hour instead of 55 miles an hour, that’s 

10 miles an hour faster. You calculate 

how much sooner you arrive at your 

destination by driving 10 miles an hour 

faster. 

b 2020 

Then you calculate that each one of 

us on the day we were born was granted 

the actuarial number—at that time I 

figured it at 76 years—when you figure 

those hours that you have in your lifetime at 76 years and then you figure 

out how many hours you spend unnecessarily looking out the windshield at 

55 miles an hour, and you calculate the 

lifespan, and you divide it into the 

time saved and the miles that are traveled on rural roads in Iowa each year. 

And it came down to this: that if we 

drive 65 instead of 55, we will have 

saved 79.64 lifetimes of living, in other 

words, getting to our destination, 

doing something productive. That has 

value too. 

That calculation wasn’t made by the 

nanny state. The nanny state only calculated gas is always worth more than 

time. 

Not so in Germany where people get 

out on the Autobahn and drive as fast 

in some locations as they have the 

nerve to drive under the idea that you 

get them out on the highway, you get 

them off the highway, you get them 

out of the way where they’re not going 

to be congesting traffic, and you get 

people engaged in doing their regular 

living in life. 

That’s the speed limit, the shower 

nozzles, the curlicue light bulbs, all examples of the nanny state. 

But, Mr. Speaker, the examples of 

the nanny state have surpassed the 

imagination of almost every one of us 

that has common sense. 

When I look at what has come out of 

the U.S. Department of Agriculture, 

for example, the rule that cooperated 

with the Department of Labor, worked 

in conjunction with the Department of 

Labor, and I asked this question under 

oath of one of the Under Secretaries of 

the Department of Labor before the 

Small Business Committee, did the 

U.S. Department of Agriculture work 

in cooperation with the Department of 

Labor to produce these rules that 

would regulate farm youth labor? The 

answer was, yes, they worked in cooperation with the Department of Agriculture. 


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