EXTENSIONS OF REMARKS

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Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor.

October 3, 2008 CONGRESSIONAL RECORD — Extensions of Remarks E2215 

FINANCIAL OVERSIGHT 

HON. VIRGINIA FOXX OF NORTH CAROLINA

IN THE HOUSE OF REPRESENTATIVES

Friday, October 3, 2008 

Ms. FOXX. Madam Speaker, I submit the 

following articles for the RECORD: 

OVERSEERS PLAN FOR UNPRECEDENTED TASK

(By Joseph J. Schatz and Phil Mattingly) 

If the House clears the financial bailout 

package, the federal government within 

weeks will be wielding new authority to buy 

hundreds of billions of dollars worth of mortgages. 

And thanks to provisions added by lawmakers during the past two weeks, Congress 

would be ready to effectively oversee the 

program. 

At least that’s the plan. 

But in order to work, both the program 

itself and the oversight entities that are supposed to hold it accountable might require a 

significant infusion of financial markets expertise—perhaps from firms that have collapsed during the recent turmoil on Wall 

Street. 

The process of managing, implementing 

and contracting out a huge program—in 

many ways akin to an investment bank located in the Treasury Department—would 

present Congress with a unique oversight 

challenge. Some suggest lawmakers would be 

hard-pressed to keep track of what’s going 

on. 

‘‘It’s almost a retail operation, and you 

can’t constantly be coming back to some 

congressional board for oversight or something like that,’’ William Gale, director of 

the Brookings Institution’s economic studies 

program, said during an Oct. 1 discussion on 

the bailout package. ‘‘Mainly what’s going 

to happen, is Treasury is going to do it, and 

they’ll report back to the public now and 

then. But I just don’t see a strong role for 

oversight in all this, despite what people 

say.’’ 

If the House follows the Senate’s lead and 

clears the package, the Treasury Department wants to begin buying financial institutions’ shaky assets ‘‘as quickly as possible.’’ White House spokesman Tony Fratto 

said Thursday. ‘‘It’s a complicated thing 

that they’ll be trying to put in place, and I’ll 

let them explain it. . . . I think it’s at least 

weeks.’’ 

At its core, the bill would set up a Troubled Assets Relief Program (TARP) at Treasury with authority to purchase mortgages or 

mortgage-related securities. As requested by 

Treasury Secretary Henry M. Palson Jr., 

Treasury could decide whether those purchases occur through an auction process or 

directly from a financial firm. 

‘‘There’s a lot to work out and plan in 

terms of managing that process,’’ said Paul 

Wachtel, an economics professor at the Stern 

School of Business at New York University.’’ 

Developing a bureaucracy that can do so well 

is not a simple problem.’’ 

‘‘I think whomever is elected [president] in 

a month or so ought to designate his secretary of the Treasury pretty quickly,’’ 

House Financial Services Chairman Barney 

Frank, D-Mass., said Thursday on CNBC. 

OUTSIDE HELP NEEDED

The Treasury Department might contract 

out a great deal of the work to stressed financial institutions—a possibility that some 

watchdogs see as raising conflicts of interest. The legislation would waive the normal 

federal contracting process. 

‘‘For all of the oversight, there may not be 

much in the form of accountability,’’ said 

Gary D. Bass, founder and executive director 

of OMB Watch. ‘‘You have to consider the 

possibility that some of the people who got 

us into this in the first place are the people 

who will be getting these jobs. Does it mean 

Goldman Sachs is now going to be arm-andarm with the federal government?’’ 

And as it assembles its oversight operation, Congress might also need to bring in 

help from Wall Street. 

The legislation passed by the Senate and 

awaiting House action would set up three 

oversight functions. 

The first would be a board composed of the 

Treasury secretary, the chairman of the Federal Reserve, the commissioner of the Securities and Exchange Commission, the Housing and Urban Development secretary and 

the Federal Housing Finance Agency director. That panel would review such things as 

appointments, how the Treasury Department 

determines which assets to buy and how the 

purchases are made. 

The bill would also create a bipartisan 

panel of two House members and two senators that would submit reports to Congress 

on the program’s transparency, effectiveness 

and market impact. 

But most of the oversight responsibility 

would fall on the Government Accountability Office, an arm of Congress. The bill 

would empower the GAO’s top official, the 

comptroller general, to set up an office within Treasury at Treasury’s expense to conduct 

detailed oversight including yearly audits. 

The CAO would have access to all records, 

books and accounts. 

That oversight office would be an enormous undertaking likely to require a large 

number of new personnel with significant financial acumen. 

All three oversight bodies would issue reports to a newly established inspector general appointed by the president. That person 

would have a $50 million budget and would 

coordinate all audits and investigations. 

‘‘You would have to hire people with the 

kinds of expertise [the government agencies] 

do not have at the current time,’’ said NYU’s 

Wachtel, noting that could mean an influx of 

Wall Street finance experts. ‘‘The kind of 

people who understand the structure of these 

securities would be helpful,’’ Wachtel said. 

‘‘That understanding is not widespread. . . . 

That’s one of the reasons we got to where we 

are.’’ 

Some outside observers are impressed by 

the accountability Congress has tried to 

write into the legislation. 

‘‘They tried to build some accountability 

into this process while still allowing for 

some free-form experimentation with the 

program itself because they’re not sure exactly how it’s run,’’ Thomas Mann, a senior 

fellow at Brookings, said at the Oct. 1 roundtable. 

[From CQToday, Friday, Oct. 3, 2008] 

OVERSIGHT PROVISIONS

OVERSIGHT BOARD

A Financial Stability Oversight Board 

would review the Treasury Department’s use 

of the authority granted to it by the bill and 

the effect of the department’s actions on financial and housing markets. The board 

would also make recommendations to Treasury regarding use of its authority and would 

report any suspected fraud, misrepresentation or malfeasance to the special inspector 

general for the program. It also could appoint a credit review committee to evaluate 

how Treasury exercises its authority to buy 

troubled assets. 

The board would consist of the chairman of 

the Federal Reserve Board, the Treasury secretary, the director of the Federal Housing 

Finance Agency, the chairman of the Securities and Exchange Commission and the secretary of the Department of Housing and 

Urban Development. The board would report 

to appropriate congressional committees. 

The bill also would create a bipartisan 

panel of two House members and two Senate 

members that would submit regular reports 

to Congress dealing with the program’s 

transparency, effectiveness and market impact. 

GAO OVERSIGHT AND CONGRESSIONAL REPORTS

The bill requires the Government Accountability Office (GAO) to conduct oversight of 

the activities and performance of the program and to report every 60 days to Congress. 

Treasury would have to report to Congress 

60 days after it begins to exercise its new authority and every 30 days thereafter. Reports 

would include an overview of actions taken 

by the department, the actual obligation and 

expenditure of the funds provided for administrative expenses and a detailed financial 

statement. After Treasury buys $50 billion of 

troubled assets, it would have to provide another report describing all of the transactions made during the reporting period, 

the pricing mechanism for the transactions, 

and justifications for the price paid for and 

the other financial terms associated with 

transactions. 

Treasury would review the current state of 

the financial markets and the regulatory 

system and submit a report on its findings to 

Congress. 

INSPECTOR GENERAL

An inspector general’s office would be established to conduct, supervise and coordinate audits and investigations of the program. The inspector general—nominated by 

the president and confirmed by the Senate— 

would submit a quarterly report to Congress 

summarizing its activities and the activities 

of the department under the bill, which 

would provide $50 million for the office. 

[From Investor’s Business Daily, Oct. 3, 2008] 

[GOVERNMENT IS TOO BIG NOT TO FAIL

(By Ernest S. Christian and Gary A. Robbins) 

After years of faking it, the federal government has finally hit bottom or, depending on 

how you look at it, ascended to its level of 

maximum destructive incompetence. 

So here we sit in the autumn of ’08, almost 

79 years to the day since the market crash of 

1929, with the smell of panic again in the air. 

An alarmed president and Congress are flailing away, desperately trying to fix a financial crisis originally caused and made worse 

by government meddling. And with the election coming, the increasingly incongruous 

Barack Obama looms in the foreground. 


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E2216 CONGRESSIONAL RECORD — Extensions of Remarks October 3, 2008 

As if Washington were not already doing 

too many things, almost all badly, and in the 

process doing far more harm than good, Mr. 

Obama wants to give government a vast 

array of additional assignments that it is 

not competent to handle and that taxpayers 

cannot afford. 

FEDERAL MEDDLING

In the current instance of the bailout, even 

if Washington does finally find some way of 

re-lubricating the credit markets that its 

mistakes almost stopped, the systemic problem of inept governmental interference in all 

aspects of the economy will remain—and indeed will be magnified by the rescue plan 

itself. The more crisis Washington causes 

and the more ‘‘emergency’’ powers it assumes, the bigger and more tangled are the 

webs it spins. 

After Congress spends the next year or so 

‘‘fixing’’ the problems in the financial industry—and casting blame on everyone but 

itself—Washington likely will have all capital markets and credit transactions under 

its thumb. It would then be able to specify 

throughout the economy who gets financing, 

what for, when and how much. 

Just imagine an Obama-Pelosi-Reid administration (OPRA) allocating credit and investment among companies according to how 

green they are, who their shareholders are 

and whether some federal oracle thinks they 

are just and fair. Never mind quality and efficiency or ability to repay. Similar ‘‘let’s 

pretend’’ standards for allocating credit are 

exactly what led to the home mortgage debacle in the first place. 

With other made-in-Washington crises already on track to occur—think energy, entitlements, debt and the dollar—soon every aspect of American life may be under strict 

federal supervision, with a trajectory pointed downward. 

The more government interferes in private 

matters, the more the economy and society 

as a whole take on the debilitating characteristics of government. Costs go up, efficiency and quality go down, output falls, 

corruption and waste increase. 

Washington is already increasing its participation in the health care industry. That 

is the reason costs are so high. Inevitably, it 

will take complete control and, when it does, 

quality will plummet. 

Government has been messing about in the 

housing industry for decades. Obviously, it 

has already made a hash of it, but the worst 

is probably yet to come. Washington’s energy policy has long been to restrict supply 

and raise prices. Now the government also 

has a plan to bring all energy consumers 

under its supervision and control. It is called 

cap and trade. 

Because of destructive federal regulations 

and taxes on U.S. plant and equipment as 

well as on exports, America no longer has an 

economy that primarily makes and sells 

things. By default, manufacturing is being 

displaced by a ‘‘knowledge’’ industry—and 

most Yankee ingenuity is devoted to creating innovative financing techniques such 

as derivatives and securitized subprime 

mortgages. Like government, work consists 

of shuffling paper (electronically, of course). 

OUR WAY OF LIFE

Through its power over education and communications, Washington already influences 

the creation and dissemination of knowledge. Once it takes over the financial industry, nothing will be left standing in the way 

of the federal government’s dominance. 

States and localities are mere administrative units and dispersing agents for Washington. Government has won its war against 

religion, sidelining churches. 

In partnership with affiliated labor unions 

and a few public-private corporations much 

bigger and worse than Fannie or Freddie, 

Washington will more than ever be able to 

participate in all aspects of the economy in 

a manner that far more resembles the corporatist (or fascist) regimes of Europe in the 

early 1930s than American capitalism. 

American capitalism is not just an economic theory. It is a way of life where rewards are based on achievement, not identify 

or class, and is therefore inextricably bound 

up with individual freedom and American 

exceptionalism. 

The job of the next president and Congress, 

if it can possibly rise to the occasion, is first 

stop the destructive advance of government, 

then reverse it. 

f 

APPOINTMENT OF CHIEF HUMAN 

CAPITAL OFFICER 

SPEECH OF

HON. BENNIE G. THOMPSON OF MISSISSIPPI

IN THE HOUSE OF REPRESENTATIVES

Saturday, September 27, 2008 

Mr. THOMPSON of Mississippi. Mr. Speaker, I rise in support of S. 2816, a bill that will 

alter how the Chief Human Capital Officer is 

appointed at the Department of Homeland Security. 

This bill will give the Secretary of Homeland 

Security authority similar to other Federal 

agencies where a determination is made to 

place a careerist or a political appointee in the 

Chief Human Capital Officer position. This authority is particularly important as DHS makes 

its first transition to a new administration. Undoubtedly, there will be numerous staffing 

challenges ahead and the DHS Secretary 

must have a Chief Human Capital Officer to 

depend on to meet the Department’s goals. 

The job of the Chief Human Capital Officer 

requires unique qualifications. Not only must 

this individual develop and maintain a cadre of 

national security personnel, but he or she 

must also ensure integration throughout the 

new Department and its many components. 

The men and women of the Department are 

some of the hardest working, most selfless individuals in the Federal workforce. Their mission contains little room for error. This is why 

it is so important that the Department provide 

a positive workplace that puts employees first. 

Over the past few years this has not always 

been the case and low employee morale has 

plagued the Department and limited its effectiveness. 

The 2006 Federal Human Capital Survey 

conducted by the Office of Personnel Management found that DHS was rated ‘‘dead last’’ in 

job satisfaction among its peers and received 

very low marks on leadership and management capabilities. And in the recent DHS 2007 

Employee Survey, employees cited their dissatisfaction with the Department’s pay, performance and promotion practices. Moreover, 

there have been numerous documented incidents regarding mismanagement within some 

of the major DHS components. These factors 

contribute to a fractured workforce and low 

morale. 

These are problems that must be addressed 

by the next Chief Human Capital Officer. Addressing employee concerns must be his or 

her first priority. 

One of the major sources of low morale is 

the MAX–HR system, a so-called ‘‘pay-for-performance’’ system. MAX–HR and its proposed 

‘‘follow-on system’’ have been repeatedly rejected by my Committee in legislation and, 

many Members of Congress, for the past two 

years. The damage that DHS’s relentless pursuit of such a system has done to morale is 

immeasurable. 

The next Chief Human Capital Officer has 

the chance to make some great strides and 

improvements at the Department. He or she 

must work to address the employee concerns 

and dissatisfaction with a commitment to providing proper training, career development and 

the tools necessary for its employees to do 

their jobs. Also at the top of the Chief Human 

Capital Officer’s priority list should be recruiting the best and brightest for DHS, including 

individuals with diverse backgrounds and a 

patriotic spirit to fill its ranks. 

Given the extensive investment we have 

made in developing TSA and its workforce, I 

would be remiss if I did not acknowledge that 

the TSA workforce does not have the same 

rights and protections that are afforded to their 

colleagues at DHS. As the eyes and ears in 

our airports, TSA workers need to have whistleblower protections and collective bargaining 

rights to be able to report security concerns 

without fear of losing their jobs. Moreover, 

granting basic employment rights is critical to 

recruiting our Transportation Security workforce. We know firsthand what low morale can 

do to the health, recruitment, and retention of 

the DHS workforce. 

It is clear from the Committee’s record of 

work that more can be done to support human 

capital efforts at the Department. And I am 

pleased to say that this bill is one of those 

needed measures of support. I look forward to 

working with my colleagues and the Department to continue to build a strong workforce at 

DHS. And I also take this opportunity to commend the men and women of the Department 

for their tireless work and dedication to the 

mission. 

f 

HONORING MAUREEN GAVIN FOR 

THE 2007–08 OUTSTANDING 

TEACHING OF THE HUMANITIES 

AWARD 

HON. KENNY MARCHANT OF TEXAS

IN THE HOUSE OF REPRESENTATIVES

Friday, October 3, 2008 

Mr. MARCHANT. Madam Speaker, I rise 

today to pay tribute to Maureen Gavin of 

Southlake, Texas, who was awarded the 

2007–08 Outstanding Teaching of the Humanities Award on behalf of Humanities Texas. 

This award honors K–12 humanities teachers 

in the state of Texas who make exemplary 

contributions in teaching, curriculum development and extracurricular programming. 

Mrs. Gavin, a former sixth grade English 

teacher at Eubanks Intermediate School in 

Southlake, currently works with Morningside 

Elementary School in Fort Worth. 

In the words of Mrs. Gavin, ‘‘All good thinking begins with good questioning, and as a 

humanities teacher it is my responsibility to 

provide provocative questions that allow my 

students to dig deep within themselves as 

they learn about our world, past and present, 

and how they fit into it’’. In this spirit, Mrs. 

Gavin brings to the classroom a passion for literature, language, and the ever-growing continuum of knowledge. 


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