H10948 CONGRESSIONAL RECORD — HOUSE December 10, 2008 

It requires restructuring by March 

31, severe restructuring in order to 

place the United States in a competitive position again in our country and 

globally. It requires enormous sacrifice. 

Now, what’s interesting to me is the 

amount of the total loan was $15 billion; yet Wall Street received $700 billion plus, $750 billion, in that bill that 

passed here. There were no such requirements. There’s no mandatory payback. There are no sacrifices that are 

as significant as they’re being asked of 

this manufacturing industry, and the 

manufacturing of automobiles is a 

really tangible, goods producing industry. It creates real value. It creates 

wealth because you sell something. 

Wall Street’s bailout is basically accounting and paper trades. They don’t 

really produce anything. 

And one of the points I want to make 

tonight is that in order to lead America forward out of this deep, deepening 

recession in which we find ourselves, 

we have to manufacture our way out. 

We have to grow our way out of it, and 

we are not in recession because of the 

automotive industry. In fact, the reverse is true. The auto industry is the 

victim of the credit crunch caused by 

the mortgage foreclosure crisis. The 

bailout of Wall Street, the improper 

bill that was passed here, is making 

the situation worse, and it’s affecting 

industries like the automotive industry. 

I visited the U.S. Treasury Department today as well to share a list of 

foreclosures just in my home county of 

Lucas County in Toledo, Ohio. That is 

4,100 homes since the beginning of this 

year. Before the end of January of 

next, an additional 600 families will 

lose their homes just in that county 

because the TARP program, the Wall 

Street bailout program, is not working 

at the local level. The list is so long I 

could roll it through the Chamber and 

out that door, and there would still be 

more paper left, and that’s with four 

columns. In fact, it could probably be 

rolled over to the Senate for the size 

that it is. 

Now, why is the Treasury program 

not working? The first reason it’s not 

working is Treasury’s not a housing 

agency. Its experience is not in resolving mortgage workouts. More paper 

shuffling isn’t going to solve the problem. 

What’s happening over at Treasury is 

they’re buying banks. They are concentrating the banking system of this 

country rather than doing mortgage 

workouts, and they’re concentrating 

them up on Wall Street, and the big 

banks like PNC, which has just bought 

National City Bank in the State of 

Ohio, National City shouldn’t have 

been purchased. A workout should have 

been done in Ohio for the loans that 

gravitated to Ohio and may have been 

troubled. Seventy-five percent of the 

loans were working before the Treasury Department took over. The problem is that the Treasury Department is 

like a truck with several wheels, and 

they’re all going in a different direction. There’s not coordination. 

The Federal Deposit Insurance Corporation should be involved to do the 

mortgage workouts on the books of 

local banks. That’s really not happening for most of the loans at risk. 

The Securities and Exchange Commission should be taking a look at 

their accounting standards and marking them to true value. 

You know, in order to fix the automotive industry, you’ve got to fix the 

mortgage industry, and the Wall Street 

bailout isn’t working. 

Mr. Speaker, Godspeed to you in your 

future years. 

f 

The SPEAKER pro tempore. Under a 

previous order of the House, the gentleman from North Carolina (Mr. 

JONES) is recognized for 5 minutes. 

(Mr. JONES addressed the House. His 

remarks will appear hereafter in the 

Extensions of Remarks.) 

f 

The SPEAKER pro tempore. Under a 

previous order of the House, the gentleman from Texas (Mr. PAUL) is recognized for 5 minutes. 

(Mr. PAUL addressed the House. His 

remarks will appear hereafter in the 

Extensions of Remarks.) 

f 

The SPEAKER pro tempore. Under a 

previous order of the House, the gentleman from California (Mr. DREIER) is 

recognized for 5 minutes. 

(Mr. DREIER addressed the House. 

His remarks will appear hereafter in 

the Extensions of Remarks.) 

f 

ECONOMIC STIMULUS: BIG, FAST, 

TOUGH, TEMPORARY, AND SELFREVERSING 

The SPEAKER pro tempore. Under a 

previous order of the House, the gentleman from California (Mr. SHERMAN) 

is recognized for 5 minutes. 

Mr. SHERMAN. Mr. Speaker, let me 

commend you on your years of service 

to this House, to your district, and to 

the Nation, and I look forward to working with you and serving the people of 

this Nation in whatever capacity your 

future takes you. 

I’d like to address the kind of economic stimulus that we should write 

next month. I hope that the economic 

stimulus is big, fast, tough, temporary, 

and self-reversing. 

We face the specter, not just of a recession, but of a depression. A deflationary cycle threatens a long period of 

economic contraction. We need an 

enormous, immediate economic stimulus. But unless that stimulus is welldesigned, it may not pass Congress, and 

we may not achieve its objectives or it 

may sow the seeds of future, disastrous 

declines in the value of the dollar. 

Now, it is important that this stimulus be fast and be very large, but it 

also needs to be tough because Federal 

dollars should not be extended to private interests except on the toughest 

terms. Taxpayers should demand the 

highest yields, the largest equity upside, and the strictest limits on executive compensation and perks. 

Being tough on those who get bailouts will give us three advantages. 

First, it will increase public support 

for the bailout, and we are going to 

need a lot of public support to enact 

the size of stimulus that is necessary. 

Second, by being tough on those obtaining bailouts, we can limit the number of companies that seek bailouts. 

Not even the Federal Government can 

afford to provide a bailout to everyone 

who will ask for it if executives see the 

Federal Government as a source of 

easy and cheap money. 

Third, by getting a good deal on each 

investment we make, we minimize the 

eventual increase in the Federal deficit 

and the eventual burden to succeeding 

generations. Many of the companies 

that we make investments in will still 

not make it. So we had better make a 

good profit on our winning investments. We need to look at not only the 

rate of return that we get on preferred 

stock but on the value of the warrants 

because the warrants are our share, as 

taxpayers, of the upside of those companies that are successful. 

It, therefore, concerns me that on a 

recent bailout of Goldman Sachs by the 

Treasury Department, we taxpayers 

got half the rate of return and onesixth the warrants that Mr. Warren 

Buffett was able to receive on a very 

similar investment in the same firm. 

So we must be tough. But we also 

must make sure that the stimulus we 

adopt is temporary and reversible. 

Keynesian economics offers a simple 

prescription for the difficult economic 

times ahead. Easy money now, and austerity when the economy improves. 

But how in good conscience can I 

vote for a massive economic stimulus 

now if I believe that Congress will not 

be able to adopt fiscal restraint later? 

I know we in Congress love handing out 

money in the form of tax cuts or infrastructure projects or subsidies or aid. 

Can we count on a future Congress to 

discontinue expansionary policies and 

adopt austerity when times demand? 

If we adopt a huge fiscal stimulus 

economy now, then both our tendencies 

toward profligacy and toward inertia 

may cause us to leave the spigot on too 

long, perhaps permanently. 

What is likely to happen I fear is 

that the advocates of fiscal responsibility will prevent us today from getting the full measure of economic stimulus that we need now, and that advocates of tax cuts and free spending tomorrow will prevent us from turning 

off the spigot when that is what we 

should be doing. We will get inadequate 

stimulus in 2009, and we will continue 

the stimulus long after it is necessary 

and even when it is harmful. 

To avoid this outcome, the stimulus 

package should be both temporary and 

self-reversing. The same statutes which