H282 CONGRESSIONAL RECORD — HOUSE January 14, 2009 

GENERAL LEAVE 

Mr. FRANK of Massachusetts. I ask 

unanimous consent that all Members 

have 5 legislative days within which to 

revise and extend their remarks on 

H.R. 384 and insert extraneous material 

thereon. 

The SPEAKER pro tempore (Mr. 

COHEN). Is there objection to the request of the gentleman from Massachusetts? 

There was no objection. 

f 

TARP REFORM AND 

ACCOUNTABILITY ACT OF 2009 

The SPEAKER pro tempore. Pursuant to House Resolution 53 and rule 

XVIII, the Chair declares the House in 

the Committee of the Whole House on 

the state of the Union for the consideration of the bill, H.R. 384. 

b 1649 

IN THE COMMITTEE OF THE WHOLE

Accordingly, the House resolved 

itself into the Committee of the Whole 

House on the state of the Union for the 

consideration of the bill (H.R. 384) to 

reform the Troubled Assets Relief Program of the Secretary of the Treasury 

and ensure accountability under such 

Program, with Mr. SALAZAR in the 

chair. 

The Clerk read the title of the bill. 

The CHAIR. Pursuant to the rule, the 

bill is considered read the first time. 

The gentleman from Massachusetts 

(Mr. FRANK) and the gentleman from 

Alabama (Mr. BACHUS) each will control 1 hour. 

The Chair recognizes the gentleman 

from Massachusetts. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, I yield myself such time as 

I may consume. 

Mr. Chairman, the parliamentary situation must be understood. Last year, 

when we responded to the urgent pleas 

of the Bush administration to authorize the $700 billion deployment of Federal funds to unstick the credit markets, we resisted their insistence that 

all the money be made available rapidly, and at least said that they would 

have the right to spend the first half, 

but after having spent the first half, 

would have to notify Congress of any 

intent to spend the second half, and 

that we would have 15 days in which to 

consider, under expedited procedures, 

resolutions to disapprove that. 

As the Bush administration began to 

administer this program, many of us 

became very unhappy, in particular, we 

felt that they had repudiated commitments they had given to us to use a significant part of the fund to diminish 

foreclosures. 

We also thought it was a mistake to 

provide infusions of capital to banks 

without any requirements as to what 

was done with that capital. The infusion of capital was not, in itself, a bad 

idea, but doing it in a way without conditions was in error. 

Because of the dissatisfaction with 

that and some other aspects, we made 

it clear, many of us, to the Secretary 

of the Treasury that any requests to 

free up the second 350 would be voted 

down by the Congress, possibly by a 

sufficient majority to override a veto. 

The Secretary of the Treasury, therefore, withheld using any of those funds. 

We now have a new administration 

coming in, and many of us believe that 

the new administration should have 

the opportunity to spend, lend, deploy 

the 350. The main argument against it 

is very simple; because the Bush administration messed this up, we must 

not allow the Obama administration to 

do it. 

People talk about this program, the 

TARP, it is called, the Troubled Asset 

Relief Program, and they impute to it 

a personality. It becomes, in some of 

the rhetoric, a living organism. We 

can’t trust the TARP. The TARP was 

bad. 

Well, the TARP is not an organism. 

It has no mind; it has no spirit. It is a 

set of policy tools. And at the outset, 

the argument that because the Bush 

administration used those tools in 

ways that we disagree with, we should 

deny them to the Obama administration goes much too far. 

If I were to follow the principle that 

where the Bush administration did 

things badly, I would deny the Obama 

administration the chance to do them, 

we would not have a State Department 

because I don’t like the Bush administration’s foreign policy on the whole. 

But I do not think we should therefore 

deprive the new President of the 

chance to do it. 

Instead, what we do, and here’s where 

the parliamentary situation comes in. 

We have a vote coming under the bill 

that we passed last year on resolutions 

of disapproval in the Senate and the 

House, and they cannot be stopped, 

thanks to the way we wrote this, by 

the Rules Committee, by a filibuster or 

by anything else. Prior to that vote, 

many us believe we, in the House, 

should make clear what conditions we 

would want to impose on this if it does 

go forward. 

Now, I believe the Obama administration will do this better than the Bush 

administration, but I want to go more 

than simply believing that. I think it is 

important that we pass this bill that 

makes clear what we believe should be 

in it, and hope that it passes the Senate, but even if it does not get taken up 

there for a while, and we’ve had long 

delays, have the administration commit to it. 

Now, I’m somewhat bemused by my 

colleagues on the other side of the 

aisle. Trying to follow their path on 

this whole program has made me dizzy. 

Last year they were, at various points, 

ardently for it, then against it, then 

for it again. They were for it in the end 

only with a condition that had to be 

added to it involving insurance, which 

the Secretary of the Treasury of their 

administration said he did not think 

made any sense and he did not plan to 

include it. 

The leadership, I sympathize on the 

other side. They’ve got a membership 

that they have found hard sometimes 

to work with, and that has led the leadership to go, in my judgment, in the 

last year, from obstruction to irrelevance to self-delusion. First they said, 

let’s not do anything. Then they absented themselves from negotiations 

involving the White House and the 

Treasury, the Senate Republicans and 

Democrats and ourselves. They just 

weren’t there, and they wouldn’t tell us 

what they thought. Then finally they 

felt they had to do something, so they 

said they would support the bill on 

condition that it include this insurance 

plan which the Secretary of the Treasury has made very clear to people he 

intended to ignore. That gave enough 

of them enough comfort to vote for the 

bill. 

Now, we found that leaders on the 

other side who supported this when it 

was for the Bush administration, now 

want to deny it to the Obama administration because they correctly realized 

that the Bush administration did not 

do it well. 

I know that quoting the Bible is in 

vogue in some circles. I’m not the best 

exegete, but I will say there is an analogy, you were told, I think, not to visit 

the sins of the father on the son, or 

maybe you’re told that you should. I’ll 

be honest and say I don’t quite remember. 

But I certainly do know that when 

you are dealing with important matters of public policy and tools that you 

give a President, visiting the sins of 

one administration on that administration which is not only coming after it, 

but repudiated it politically would be a 

great mistake. 

Now, the last point I would make is 

again to emphasize. This vote that we 

will take on this bill does not free up 

the money. It does not free up the 

money. It does not mean the money 

should be spent. It will mean, after we 

have dealt with the amendment process, that if the money is spent, we want 

it spent in this way. There will be a 

separate vote on whether or not it 

should be spent. 

Now as I understand, I realize that 

my Republican colleagues in the leadership, on the whole, intend now to repudiate their support for this retroactively, but it comes too late. Punishing the Obama administration, denying the incoming administration the 

opportunity to deploy these resources, 

particularly after they have agreed, as 

I believe they will, very explicitly with 

what the House thinks should be included, would be a great mistake. 

And the last point I would make is 

this. If we do not pass this bill today, 

and I believe that, in a subsequent and 

independent decision, agree to release 

the $350 billion, we will make no 

progress in what is the single biggest 

economic problem we’ve been facing, 

namely, the foreclosure crisis, which 

has been the cause of so much else. 

There has been very little done in the 

foreclosure crisis. We have tried. We 


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January 14, 2009 CONGRESSIONAL RECORD — HOUSE H283 

passed a bill. It didn’t work very well. 

The one chance we have to bring relief 

to a substantial number of people facing foreclosure and, importantly, undo 

the economic harm that does for the 

country, because foreclosures don’t 

just hurt the person who’s losing the 

property. They have been a central 

cause of our economic problem, widely 

agreed upon by a wide range of economists. 

Passing this bill, and then in a subsequent vote, unrelated, but independent, 

but as part of a package, freeing up the 

second $350 billion, subject to the conditions we put today, is the only way 

Members will have to see that foreclosure diminution becomes a reality. 

So I hope this bill is passed. More importantly, next week, I hope that if it 

is passed, we will then defeat the motion of disapproval. 

I reserve the balance of my time. 

b 1700 

Mr. BACHUS. I yield 4 minutes to the 

gentleman from Texas. 

(Mr. PAUL asked and was given permission to revise and extend his remarks.) 

Mr. PAUL. Although I recognize the 

chairman of the committee’s points 

that this literally is not the appropriation, I rise in opposition to the bill, but 

I do want to speak out against this 

whole process of what we are trying to 

do with the bailout, not only this time 

but the time before. It is a system that 

has brought this country to its knees, 

and I think we haven’t recognized what 

the cause has been, and therefore, 

we’re not looking at this problem in 

the proper manner in order to solve the 

problem. 

There has been a lot of money involved and a lot of money spent. There 

have been appropriations that we’ve 

made here in the Congress as well as 

the trillions of dollars the Federal Reserve has used to try to bail out the financial industry, and nothing seems to 

be working. 

I think it’s mainly because we 

haven’t recognized nor have we admitted that excessive spending can cause 

financial problems. Excessive debt can 

cause some problems. Inflation—that 

is, the creation of new money and credit out of thin air—can cause a lot of 

problems, and we’ve been doing it for 

decades. It was predictable. It was not 

a surprise that we got ourselves into a 

financial mess because of a system that 

is deeply flawed. 

So what do we have? What have we 

been doing now for the last 6 months to 

a year? 

We have been spending more. We 

have been running up debt like we’ve 

never run up debt before, and we’re 

printing money like we never have before. We think that is going to solve 

the problem. That literally has been 

the cause: too much spending, too 

much borrowing and too much inflation. 

I do want to address the subject more 

specifically about moral hazard and 

why the system was so deeply flawed. 

That is, when a Federal Reserve system and a central bank create easy 

money and easy credit and they have 

interest rates lower than they should 

be, businesspeople do the wrong things. 

They make mistakes. It’s called 

malinvestments, and we’ve been doing 

it for a long time. It causes financial 

bubbles, and they have to be corrected. 

Actually, the recession is therapy for 

all of the mistakes, but the mistakes 

come, basically, from a Federal Reserve system that’s causing too many 

people to make mistakes. It causes savers to make mistakes. Interest rates 

are lower than they should be, so they 

don’t save. In capitalism, capital 

comes from savings, but for decades 

now, capital has come from the printing press, and nobody has saved. 

That contributes to what we call 

‘‘moral hazard’’ as well as the system 

of the Fannie Mae and Freddie Mac 

system. It always had a line of credit. 

It never had to use it, but the assumption was, if we ever got into any trouble, the Treasury would be there, and 

the Federal Reserve would back them 

up. That existed for a long time, causing specifically the housing bubble to 

develop. 

Then we subsidized the insurance. 

The government-subsidized insurance 

program further promoted the principle of moral hazard—people doing 

things, spending money and investing 

in the incorrect way. 

Then with the assumption that we’re 

all going to be bailed out, which we’re 

endorsing by bailing everybody out, 

people say, ‘‘Well, no sweat because, if 

there is a mistake, the government will 

come to our rescue.’’ That’s part of the 

system of the FDIC. Now, nobody can 

conceive of the notion that we could 

live without an FDIC, but the truth is 

that a private FDIC would never permit this massive malinvestment. There 

would be regulations done in the marketplace, and there would not be this 

distortion that we’ve ended up with. 

So this bill actually makes it permanent that the insurance will be $250,000 

per depositor. Now you say, on the 

short run, that’s pretty good because 

that conveys confidence to the system 

because at least we know that our deposits are secure. This is true. It helps 

in the short run, and generally, this is 

the way we work here. We always say, 

On the short run, this is going to be a 

benefit. On the short run, the bailout 

will help. On the short run, we will do 

‘‘this.’’ Actually, on the short run, 

there is a great deal of harm that’s 

done. As a matter of fact, today, the 

long run is here. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, I yield 2 minutes to the gentlewoman from Wisconsin (Ms. MOORE), 

a member of the committee. 

Ms. MOORE of Wisconsin. Mr. Chairman, I rise to enter into a colloquy 

with Chairman FRANK. 

Mr. Chairman, as you know, our 

State housing finance agencies are frequently the only source of credit for 

first-time low- and moderate-income 

home buyers. However, the frozen credit markets have cut off their ability to 

sell their mortgage revenue bonds that 

fund their activities, forcing many of 

them to severely cut back their programs and forcing others to just stop 

completely. 

Additionally, unlike many of the depository institutions that have already 

accessed the TARP funds from the first 

tranche but have not passed those 

funds on to consumers, we know that 

housing finance agencies will immediately lend any money they receive 

through the TARP directly on to potential home buyers. 

My question, Mr. Chairman, is: Recognizing the vital role that FHAs can 

play in alleviating the financial credit 

crisis, I want to first encourage the 

Treasury Department to use those 

TARP funds to purchase FHA mortgage revenue bonds, and I want to 

know if there is any authorization in 

this legislation to do so. 

Mr. FRANK of Massachusetts. If the 

gentlewoman would yield, in title IV of 

the bill, we list some high-priority 

items where we expect these funds to 

be deployed, and we say that, if they 

are not deployed, we have to get an explanation in writing as to why that 

wasn’t possible. In general, aid to municipal finance and housing, as part of 

that, is clearly included. 

Ms. MOORE of Wisconsin. Well, 

thank you, Mr. Chairman. 

Mr. BACHUS. Mr. Chairman, I yield 2 

minutes to the gentleman from Indiana 

(Mr. BURTON). 

Mr. BURTON of Indiana. Mr. Chairman, not long ago, the Secretary of the 

Treasury came into our conference, 

and he was visibly shaken. He said, if 

we didn’t pony up $700 billion in a short 

period of time, the entire economy of 

the United States was going to dissolve, and we would have a major depression. There was no plan. It was just 

‘‘give us $700 billion.’’ 

Instead of talking about long-term 

solutions, such as tax cuts, for the people across the board or instead of stopping capital gains and doing away with 

capital gains taxes for a couple of years 

to stimulate investment, they said, 

Throw $700 billion at us, and we’ll solve 

the problem. 

Well, here we are a short time later. 

$350 billion has been spent, and nobody 

knows where. I mean, we come down to 

this floor. We start talking about the 

things that have been accomplished. 

We still have people losing their 

homes. The financial system in this 

country is in really bad shape, and 

companies are going bankrupt. $350 billion has been spent, and nobody knows 

where. I know part of it went to buy a 

bank in China. I’m sure the American 

taxpayers really appreciate that. 

Now they’re saying we’ve got to give 

another $350 billion very quickly or, 

once again, the sky is going to fall. 

Well, the sky has been falling, and it 

seems to me that we ought to have a 

plan that deals with the long-term financial problems facing this country. 


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H284 CONGRESSIONAL RECORD — HOUSE January 14, 2009 

The long-term financial problems facing this country involve investment, 

jobs, and economic growth. The only 

way you’re going to get economic 

growth is to stimulate the economy by 

creating an incentive for people to invest. Tax cuts. We need to cut capital 

gains. I don’t think anybody is really 

listening, but we need to cut capital 

gains. We need to have tax cuts across 

the board. If we do that, I think you’ll 

start to see signs of recovery in the 

not-too-distant future. 

In the meantime, we may have to 

pony up a few more hundred billion 

dollars to keep things going while this 

takes place, but we need an overall 

plan, not just another $350 billion 

thrown at the Federal Reserve. 

The Acting CHAIR (Mr. MURPHY of 

Connecticut). The gentleman’s time 

has expired. 

Mr. BACHUS. I yield an additional 30 

seconds to the gentleman from Indiana. 

Mr. BURTON of Indiana. Let me just 

summarize by saying that we need a 

plan, a comprehensive plan, that involves not only spending this $350 billion but also a plan that will involve 

tax cuts across the board and incentives for business to invest, such as a 

cut in the capital gains tax rate and 

cuts in business taxes across the board. 

If we do that and come up with a comprehensive plan, maybe we could work 

our way out of this, but we certainly 

cannot do it by just throwing more 

money at the problem. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, California has been one of 

the epicenters of this foreclosure crisis, 

and the delegation has worked very 

closely together. One of those leading 

that effort is the gentlewoman from 

California (Mrs. TAUSCHER). I yield her 

21⁄2 minutes. 

Mrs. TAUSCHER. Mr. Chairman, I 

rise to engage in a colloquy with Chairman FRANK. I want to thank Chairman 

FRANK for his leadership and for 

crafting this very, very important bill. 

I’ve been very proud to work on this 

issue with my colleagues—subcommittee Chairwoman WATERS, the 

head of our congressional delegation; 

Ms. LOFGREN and Mr. CARDOZA from a 

neighboring district of mine in California. 

In California, we have among the 

highest rates of foreclosure in the 

country. Sixty-eight percent of the 

home sales in my district of Solano 

County are foreclosed properties. Home 

values in the Bay Area have fallen 40 

percent since their peak in 2007. Further, thousands of my constituents owe 

more than their homes’ values and 

have little incentive to stay in their 

homes. 

I appreciate the efforts of the chairman and of the committee to work to 

direct a portion of the TARP funds to 

foreclosure mitigation. I thank you, 

Mr. Chairman, for including language 

in this bill that will address areas with 

high foreclosure rates. 

For too long we have not addressed 

the root causes of this crisis. As we 

move forward with this legislation, I 

would like to continue to work with 

Chairman FRANK and with the committee to help address the areas hardest hit by high foreclosure rates, declining home values, and rising unemployment. I believe it is important we 

address the crisis in these disaster 

areas. 

I ask the chairman to help me provide relief to these victims. I yield to 

the chairman. 

Mr. FRANK of Massachusetts. If the 

gentlewoman would yield, I completely 

agree with that statement. 

As she knows, because she was a 

major part of this, there is an amendment included in the manager’s amendment that was authored by herself and 

by her colleague from California, Mr. 

CARDOZA, whose eloquence on behalf of 

the people facing foreclosure cannot 

fail to move anyone who listens to him. 

That says it beyond the current foreclosure relief that will be in this bill, 

and it will be the only foreclosure relief we will get if this money isn’t 

made available. We are mandating that 

a further study be made to help people 

who might be facing foreclosure in the 

future and to deal with the broader aspects of the problem. 

So I thank the united efforts of the 

people of California, the Members from 

California, for helping improve this 

bill. I give them my commitment that, 

as chairman of the committee, I will be 

working with them to go further. 

Mrs. TAUSCHER. I want to thank 

Chairman FRANK for recognizing that 

California has been particularly hard 

hit, and I look forward to working with 

him and with my other colleagues to 

ensure that Federal foreclosure mitigation efforts effectively address these 

areas that have been most affected by 

the economic crisis. 

I urge everyone’s support for the bill. 

Mr. BACHUS. Mr. Chairman, I yield 4 

minutes to the gentleman from Texas 

(Mr. NEUGEBAUER). 

Mr. NEUGEBAUER. Mr. Chairman, I 

think I heard the distinguished chairman voicing some frustration with this 

current administration on how the 

TARP program was put together. I 

think a lot of Members who voted for 

this program, including the chairman, 

have had second thoughts because we 

hastily gave the authority to the administration with no plan and, more 

importantly, with no exit strategy. 

I would remind the chairman that 

the incoming new Secretary, should he 

be confirmed and move through some 

issues that he may have, was at that 

table when designing the TARP program. So, if we’re passing out blame, 

there may be a lot of places to pass out 

blame, but here is the most important 

thing: 

Everybody who voted for that has 

been having second thoughts because, 

quite honestly, the money didn’t get 

spent like it was represented it was 

going to get spent. There have been 

some intended consequences, but there 

have also been some unintended consequences of the money we passed out, 

because we started picking winners and 

losers. Any time the government starts 

picking winners and losers we’re going 

to get in trouble. 

The issue is what to do with this next 

$350 billion. Everybody kind of thought 

we were going to have some say-so over 

this next $350 billion, but in fact, we’re 

not. This bill may pass in this House. 

It will never become law. The Senate 

has already said they will not take this 

bill up. So what should we be doing? 

Well, on both sides of the aisle, what 

we should be doing here is coming back 

and doing an autopsy on how we spent 

the first $350 billion, what the results 

of that have been, and should we even 

look at or consider the additional $350 

billion. 

The American people are not very 

happy about this. We are passing out 

money carte blanche. We have relegated the constitutional responsibility of this House by just giving the 

administration, whether it’s this current administration or the new administration, $700 billion and saying, Do 

the best you can. I don’t think anybody 

thinks that’s a very good plan. 

In fact, the chairman has, in most 

cases, been very open and has had 

markups and has had a vetting of legislation. Quite honestly, I’m very disappointed. Quite honestly, in this case, 

this is one person’s bill. Although this 

bill will not become law, one person is 

going to determine where the next $350 

billion is going to go. 

What we ought to be doing is having 

hearings. In the past, the chairman has 

had hearings—bringing people in here 

and asking them to account for the 

money that has been given them. Also, 

talk about what is the best way to do 

that. 

Now, I did not vote for it, and I want 

to be clear about this. I voted against 

it twice. Some people voted for and 

against it. The chairman said we 

weren’t clear. I’m very clear as to how 

I voted on it. I voted against it because 

I have a real problem of, cart blanche, 

giving people $700 billion of the American taxpayers’ money with no plan. 

b 1715 

More particularly, no accountability. 

We have not seen any particular reports. We have a gentleman from Texas 

who sits on an oversight board. He’s 

openly said he’s not sure exactly 

what’s going on because the amount of 

information he’s receiving is in question. That bothers me. It should bother 

the American people. It should bother 

Members on both sides of the aisle that 

we are not doing the people’s business. 

The way we do this right, if we’re serious about doing this right, is we stop 

this process. We put it on hold, we ask 

the new administration to step forward 

with a plan, we get Members on both 

sides of the aisle to look at that plan, 

we vote, we offer amendments, we open 

that process so that when we go back 

home, we can say, ‘‘You know what? 

We think we did what was in the best 

interest of the American people.’’ 


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January 14, 2009 CONGRESSIONAL RECORD — HOUSE H285 

But when you close the process, when 

you try to change the original intent of 

TARP, which was to use American taxpayers’ resources to loan to or to guarantee and with the hopes of getting 

back—in fact, even people were talking 

about we may even make money on 

this. But many of the provisions, unfortunately, of this bill aren’t intended 

to get any return on the taxpayers’ 

money, particularly then we’re moving 

away from an asset program to an entitlement program, and it deserves better consideration. 

I urge Members not to vote for this 

bill. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, time is limited so I want to 

give myself 30 seconds to rebut the inaccuracies we’ve just heard. 

First of all, the gentleman said we’ve 

closed the process. I have no idea what 

he is talking about. I suspect he does 

not either. This is a very open process. 

We solicited amendments. A number of 

amendments were offered, a number of 

amendments from both parties will be 

made in order, a number of amendments from both parties have already 

been accepted in the manager’s amendment. 

The accusation that this is closed is 

just wildly off base. It has been a very 

open process, and I would say a majority of the amendments that have been 

offered made sense, and we’ve agreed to 

them. And to say it is a one-person bill, 

in fact we have opened it up. 

Now, Members who did not offer 

amendments—I will acknowledge. If 

you didn’t offer an amendment, Mr. 

Chairman, it wasn’t put in the bill. But 

this bill has been open, and the rule tomorrow will make that clear. 

I now yield 21⁄2 minutes to the gentleman from New Jersey (Mr. 

PASCRELL) who’s had a lot of input in 

this bill, which I guess makes it still a 

one-man bill. 

Mr. PASCRELL. Mr. Chairman, I 

want to thank the chairman for all 

that he’s done to make this an accountable piece of legislation. You 

would think this is a movie out of the 

1950s, TARP 2. You know, I can see 

what’s happening. 

No. This is realistic. We’re going to 

know what’s going to be in the bill, in 

this legislation. 

But Chairman FRANK, sales are down 

30 to 50 percent in the automobile industry. States are losing revenue 

throughout the United States of America, and we know that confidence of the 

consumer is certainly not where we 

would want it. 

So I request and engage in a brief colloquy regarding H.R. 384 with your permission. 

As you know, Mr. Chairman, the legislation we have before us is not a debate focused on the interest of big business. This legislation is, instead, unmistakably intended to serve Americans across the Nation. I want to commend you personally for your leadership and commitment to providing unambiguous directives on how the TARP 

funds must be used for ensuring that 

the funds will provide relief to Main 

Street. This is the difference between 

now and a few months ago. I want to 

commend you for this. It is a fact that 

the first TARP failed to meet the intent of the Congress. Today is our opportunity to make sure that funds flow 

directly to Americans. 

Wouldn’t you agree with me, Mr. 

Chairman? 

Mr. FRANK of Massachusetts. If the 

gentleman would yield, absolutely. 

I believe that the difference in the 

way the TARP will be administered in 

the new administration and the last 

administration will be very glaring, 

and frankly, I think that one of the 

motivations on some of my Republican 

colleagues to kill this now is that they 

fear the contrasts that will be presented between the very responsible 

and effective administration of this by 

the new administration and the inappropriate way of the last administration. 

Mr. PASCRELL. I would agree this is 

night and day. I testified last month, 

as you remember, before the Financial 

Services Committee on the need to 

open up the credit markets for consumers. That’s what we are all about. 

Title III of TARP will help to open the 

credit markets for auto loans. Specifically, it clarifies and confirms the 

Treasury’s authorization to provide assistance to automobile manufacturers. 

We can provide lots of money to the 

Big Three. If we don’t sell cars, if we 

don’t have traffic in those dealers, they 

not only close, we have an extended recession in the economy. 

Most importantly, this bill will help 

those borrowers that have good credit 

access the necessary financing for auto 

loans. Wouldn’t you agree, Mr. Chairman, that’s a major problem: those 

who can’t get credit aren’t getting it? 

The Acting CHAIR. The time of the 

gentleman has expired. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, I yield the gentleman 30 additional seconds, and ask him to yield 

to me. 

Mr. PASCRELL. I yield to the gentleman. 

Mr. FRANK of Massachusetts. Absolutely. This is a necessary component 

of our efforts to keep the American 

automobile manufacturers from going 

under. We give this authority—we reassert this authority to Treasury, and 

we intend to be very, very insistent 

that they use it. 

Mr. PASCRELL. Mr. Chairman, 

TARP 2 also clarifies Treasury’s authority to provide support to the financing arms of automakers for financing activities to ensure that they can 

continue to provide needed credit, including through dealer and other financing of consumer and business 

autos and other vehicle loans. 

This is 20 percent of our retail economy. 

The Acting CHAIR. The time of the 

gentleman has again expired. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, I yield the gentleman 10 additional seconds. 

He is absolutely right, and once 

again, we underlined this authority 

and we intend to be very insistent that 

it be used. 

Mr. PASCRELL. Mr. Chairman, it 

must be clear to everyone in this body, 

Democrats and Republicans, that the 

best way to get out of this recession is 

to encourage consumer spending, and 

this bill does that. Retail, rational consumption. 

Mr. BACHUS. Mr. Chairman, I yield 4 

minutes to the gentleman from Texas 

(Mr. HENSARLING). 

Mr. HENSARLING. I thank the gentleman for yielding. Mr. Chairman, I 

must admit that I find it somewhat 

ironic that the biggest critics of the 

bailout legislation are the very people 

who wrote the bailout legislation. 

Many are shocked at the lack of transparency and what they would view as 

the apparent lack of effectiveness. 

Again, these are the people who wrote 

the bill. 

I think the bill that is before us is a 

tacit admission that they didn’t get it 

right in the first place. You know, Mr. 

Chairman, I don’t say that in trying to 

assess blame. There were Members on 

both sides of the aisle who supported 

that legislation in good faith. I was not 

among them. I supported an alternative piece. 

But I do say this to make the point 

that here is another piece of legislation 

being rushed to the floor. Haste makes 

waste. The first TARP bill was fraught 

with unintended consequences, and 

now we are here, perhaps with Son of 

TARP—I believe the previous speaker 

said—maybe it’s fraught with unintended consequences as well. 

Mr. Chairman, I would also ask a few 

questions and make a few observations. 

You know, if government spending 

money could solve the problem, we’re 

up to about $7 or $8 trillion of potential 

taxpayer exposure already. Now, I 

don’t believe the taxpayers will have to 

pay the entirety of the bill, but if they 

did, we’re looking at almost $100,000 

per American family. And here is another $350 billion on top of that, Mr. 

Chairman. 

And I have the question, where is the 

plan? Where is the incoming administration’s plan for the $350 billion? 

And last I looked, Mr. Chairman, 

Congress doesn’t have any extended recess scheduled until April, and certainly the majority has proven their 

ability to ram through legislation in 

24-, 48-hour’s notice. Why do we have to 

hand over an additional $350 billion of 

hard-earned taxpayer money to an administration that hasn’t taken office, 

who hasn’t even presented us a plan? 

Why is Congress yielding, yielding 

their spending prerogatives at this 

time? I simply don’t understand it. 

Now, Mr. Chairman, it appears that 

we are given three different choices 

here: number one, we can vote to disallow the second $350 billion without 

receiving a plan. That’s simply what I 

advocate. Some may, once again, want 

to give the $350 billion check to the administration. 


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And then there’s Chairman FRANK’s 

plan. We will give them the $350 billion, 

but we will attach certain strings to it. 

Now, I agree with the chairman when 

it comes to accountability. There are 

certain strings of his that I would 

agree with. I don’t understand why you 

would hand over money and not at 

least set up some provision for knowing how it’s spent or be able to measure whether or not the plan is succeeding. And I compliment the chairman for that. 

Outside of that, Mr. Chairman, I do 

not believe that I agree with his other 

extremes. 

Number one, I believe that he has a 

string that has the Federal Government picking winners and losers. Now, 

he and the previous speaker had a colloquy regarding the auto industry. Mr. 

Chairman, I don’t know what industry 

isn’t suffering in this economy. If it’s 

the auto industry today, is it the airline industry tomorrow? Is it the tourist industry on Thursday? And when 

does Starbucks get in line? We’re not 

helping the entire economy. 

This TARP legislation I believe implicitly picks winners and losers. 

Second of all, we start going down 

this road of putting government observers in the boardrooms. I mean, the 

government agent who observes today 

will suggest tomorrow, and he, I assure 

you, will mandate on Thursday. I’ve 

seen this before. I don’t want to go 

down this road, Mr. Chairman. 

And then last but not least, taking 

money away from people who are current on their mortgage and giving it to 

people who aren’t current on their 

mortgage is no way to work our way 

out of the economic peril that we find 

ourselves in. 

We need tax relief for families. We 

need tax relief for small businesses. We 

need to grow our way out of this economic crisis. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, I yield 21⁄2 minutes to one of 

our freshman Members, a man with 

great experience in municipal government, the gentleman from Virginia 

(Mr. CONNOLLY). 

Mr. CONNOLLY of Virginia. I thank 

the distinguished chairman. 

I rise for the purpose of a colloquy 

with the distinguished chairman. I 

know that he shares my concern with 

respect to the current state of the municipal bond market in the United 

States. Following the meltdown of last 

fall, investors fled from bond markets 

to U.S. Treasury notes. As a result, our 

State and local governments are experiencing limited access to the capital 

markets due to the liquidity crisis. 

The double-whammy has effectively 

denied many of the municipal taxes 

and bond issuers across the country 

any ability with which to finance capital projects. As we already know, our 

partners in State and local governments are already facing tough financial choices, but if this particular issue 

is not addressed, it could lead to a contraction of the national economy to 

the tune of hundreds of billions of dollars at precisely the time we are trying 

to stimulate it. 

I would ask the distinguished chairman of the Financial Services Committee, is his understanding about the 

current state of the municipal bond 

market similar to that I just described? 

Mr. FRANK of Massachusetts. If the 

gentleman would yield, yes, I very 

much agree. 

I think one of the most sympathetic 

victims of this financial crisis has been 

the municipalities. The capacity to finance what’s necessary for the quality 

of the life of their constituents has 

been impaired by factors well beyond 

their control. And the gentleman is absolutely right that we have an obligation to try to come to their aid which 

this bill would mandate be done. 

Mr. CONNOLLY of Virginia. I thank 

the chairman. 

And I would ask for his consideration 

of a proposal to direct the Secretary of 

Treasury to establish a program to provide direct credit enhancements or insurance from municipal bonds to help 

State and local governments to move 

forward on their civil-ready projects 

now on hold. 

Mr. FRANK of Massachusetts. Would 

the gentleman yield? 

Mr. CONNOLLY of Virginia. Yes, sir. 

Mr. FRANK of Massachusetts. I am 

in complete agreement, and while that 

would be beyond the scope of this, as 

the gentleman knows—I know he’s not 

suggesting we do it here—I guarantee 

we will be having hearings later this 

year on the proposal. 

My own view is that some form of insurance would be there. 

The most unjustified risk premium 

being paid in America is by those municipalities that issue particularly full 

faith and credit general obligation 

bonds. 

I welcome the gentleman as someone 

with the municipal government experience that he’s most recently had, and I 

look forward to drawing on that experience as we help correct this situation. 

Mr. CONNOLLY of Virginia. I look 

forward to cooperating with the distinguished chairman, and I thank him for 

his consideration and time. 

Mr. BACHUS. Mr. Chairman, I yield 3 

minutes to the gentleman from South 

Carolina (Mr. BARRETT). 

Mr. BARRETT of South Carolina. I 

thank the gentleman for yielding. 

Mr. Chairman, before coming to Congress, I owned a small furniture store, 

the best and only store in Westminster, 

South Carolina. We sold only furniture. 

We did one thing, and we did it pretty 

good. 

And before that, I was a captain in 

the United States Army. I had a pretty 

clear job title. 

In both organizations, I was taught 

to keep operations focused and not expand our mission beyond its initials 

goals. 

So what does this have to do with the 

legislation that we’re talking about 

today? Well, unfortunately, this bill is 

a perfect example of Congress’ bad habits of expanding its initial missions, a 

habit that brought us Fannie Mae and 

Freddie Mac, the Community Reinvestment Act, and guess what, the alternative minimum tax. 

b 1730 

I voted for the Emergency Economic 

Stabilization Act to restore liquidity 

and stability into America’s financial 

system, allowing American businesses 

to access credit so they could obtain 

inventory, buy supplies, and make payroll. I supported this act to prevent 

what many experts called an ‘‘economic tsunami,’’ and I’m glad that we 

haven’t seen the widespread financial 

mayhem that I think was certain. 

We had to take extraordinary measures during those extraordinary times, 

but don’t you think it’s common sense 

to examine how we spent the first $350 

billion before we even discuss how 

we’re going to spend the second $350 

billion? I agree with my colleagues 

that the first $350 billion was spent too 

hastily and haphazardly, and I believe 

there was not enough oversight or 

planning by the Treasury Department 

for how this money was to be used. 

However, I fully support the efforts of 

this bill to improve transparency, oversight and disclose exactly how the taxpayer money is being used, but I’m extremely concerned that this legislation 

expands the goals of the Troubled Assets Relief Program and brings us even 

further from its original mission, 

which did not include providing a fund 

to prop up failing corporations or putting politically-motivated mandates on 

private businesses in exchange for government funds. 

This legislation will expand government interference in the private markets even more, Mr. Chairman, and I 

urge my colleagues to oppose H.R. 384. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, I yield 2 minutes to one of 

the most energetic and informed members of the committee, the gentleman 

from Georgia (Mr. SCOTT). 

Mr. SCOTT of Georgia. First let me 

address a couple of points that the 

other side has mentioned. The first erroneous statement is that this is a oneperson bill, the chairman’s. Nothing 

could be further from the truth. This 

has been an open process. Many of the 

amendments and concerns of the other 

side have been added to this bill. 

Tomorrow we are going to have 

amendments that the chairman has 

made allowable for the other side to be 

debated on this bill. Many of the concerns that I had raised in the early 

part of the first expenditure of the first 

$350 billion are incorporated in this. 

Many of the ideas that Congresswoman 

MAXINE WATERS and I, in our concern 

about the housing and the home foreclosures, are a part of this bill, any 

number. We’ve had hearings. So I think 

it is very important for that statement 

to be shot down as erroneous and unfair to our distinguished chairman, for 


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he has certainly had a very open process. 

Now, I’ve listened to the other side, 

and you talk about putting a plan together. You talk about not making the 

mistakes that we’ve made before. The 

mistakes we made before were in the 

hands of this administration, with this 

Treasury Department that came in and 

said he wanted the $350 billion for one 

thing, which was to take the spoiled 

assets off the books, he didn’t use it for 

that. Before we could get on an airplane and get out of Dodge he had 

changed the whole plan, gave the banks 

$290 million just like that, before we 

could even put the Inspector General in 

place, before we could put the oversight in place. 

What this bill does is correct that 

mistake, puts a plan in place that will 

bring the reporting, bring the monitoring, the accountability and the 

transparency to this and will have upfront agreements on how these funds 

will be used. 

And let me just state for the record 

that in this morning’s Politico there is 

an interesting poll that drives home 

the basic need and the substance for 

this bill. In that poll it says that 5 percent of the American people—only 5 

percent of the American people—believe and have a great deal of trust 

that the Federal Government will handle its financial responsibilities responsibly. This measure goes right to the 

heart of that and makes sure that we 

put in place a way in which we guarantee that we will make sure that this 

$350 billion is handled responsibly. 

Mr. BACHUS. Mr. Chairman, can I 

inquire into the time left on both sides. 

The CHAIR. The gentleman from 

Alabama has 431⁄2 minutes remaining; 

the gentleman from Massachusetts has 

40 minutes remaining. 

Mr. BACHUS. Mr. Chairman, I yield 4 

minutes to the gentleman from Georgia (Mr. PRICE). 

Mr. PRICE of Georgia. I want to 

thank the gentleman from Alabama for 

his stellar leadership on this issue. 

Well, Mr. Chairman, here we are, another $350 billion, $350 billion. Now, I 

don’t want to overstate the obvious, 

but Mr. Chairman, that’s money that 

we don’t have. 

In addition to that, the process 

points that have been made I think are 

incredibly important. We haven’t had 

any appropriate committee work. 

We’ve had a discussion, but there 

hasn’t been the hearings devoted specifically to this bill. There hasn’t been 

a markup. We haven’t had the opportunity in committee to amend this bill, 

to have Member input. Members 

haven’t had the opportunity to provide 

input into the development of the legislation. The mere fact that there are 

70 amendments filed with the Rules 

Committee, 50 of them from Democrats, clearly demonstrates that Members on both sides of the aisle have concerns about this legislation and ideas 

that they would like to share. 

We’ve seen bailout after bailout after 

bailout, yet our constituents have felt 

no relief. We cannot, in good conscience, allow the government to dig 

deeper into their pockets and spend 

their money without giving their elected Representatives the opportunity to 

be heard. 

Fundamentally, Mr. Chairman, we’re 

talking about examining a vital role. 

What’s the vital issue that says a lot 

about what we believe our government 

role ought to be? We’re being asked to 

entrust Treasury with the authority to 

spend an additional $350 billion, a huge 

sum of money, and allowing them to 

take on additional risk to the taxpayers by pursuing modifications that 

have not yet proven to be a wise investment. 

Now, we can all agree that the oversight of the initial TARP program has 

been wanting, there’s no doubt about 

that; that’s evidenced by the fact that 

Treasury completely shifted the original purpose of the program without 

consultation or consequence. Treasury 

has failed to answer basic questions, 

they have struggled to track the billions of taxpayer dollars, and they 

seem to have no way to measure the 

success of this program. 

When Secretary Paulson initially approached Congress with an urgent request for funding and broad authority 

to stabilize the economy, a representative from the Treasury admitted that 

they were arbitrarily picking a number. In fact, when we asked a senior 

member at the Treasury Department 

how did they arrive at $700 billion, do 

you know what they said, Mr. Chairman? They said, ‘‘We needed a really 

big number.’’ Well, that’s not terribly 

encouraging as to how to arrive at the 

amount of taxpayer money that they 

are putting at risk. 

There have been no indications that 

the last tranche of funding is needed, 

indeed, to further stabilize the economy. There have been no emergency 

meetings to explain why this money is 

necessary and how it would be used effectively to justify this release. In fact, 

just a few days ago Mr. Kashkari described our financial system as ‘‘fundamentally more stable’’ than when we 

began. 

Ultimately we have seen, through the 

failures of the TARP program and the 

Hope for Homeowners Program, that 

the government isn’t the solution to 

all of our problems. Again, we’ve seen 

bailout after bailout, but there doesn’t 

yet seem to be any relief for constituents and taxpayers. It’s because of the 

hasty passage of the TARP program in 

the first place that we’re now in the 

position to consider sweeping changes 

to the program. 

The regular democratic process in 

order would ensure that all Members of 

Congress can make their voice heard 

on this very important issue. To say 

that there isn’t time to have a markup 

is not only disingenuous, Mr. Chairman, it simply is not true. We should 

take the time necessary to ensure that 

we are truly acting in the best interests of the American people. Perhaps if 

we had taken the time to allow for 

markup and evaluation initially, we 

would not be in the situation that we 

find ourselves now. 

Rather than entrenching our government with $350 billion of additional 

debt, I think it’s time that we start 

considering positive solutions that embrace American values, American principles, and American solutions, none of 

which appear in the underlying bill. 

Mr. FRANK of Massachusetts. Well, 

Mr. Chairman, I am tempted to defend 

George Bush against the charge that he 

is un-American at this point because 

this was his program, but I’ll defer that 

until later. 

I yield 2 minutes to the gentleman 

from Missouri (Mr. CLAY). 

Mr. CLAY. I thank the chairman for 

yielding, and I wanted to engage in a 

colloquy with the chairman. 

There is a provision in your amendment that helps the automobile rental 

industry finance debt secured by their 

fleets. This does not help the one company which is located in my district 

that uses unsecured commercial paper 

to fund the acquisition of their automobile fleet. Therefore, this omission 

puts them at a competitive disadvantage. And I understand that this was an 

unintended consequence, and I am asking for a minor correction. 

Mr. FRANK of Massachusetts. If the 

gentleman would yield, obviously we 

aren’t doing anything for any one company—the gentleman wasn’t suggesting 

that we were—there are other companies. And yes, unsecured paper should 

be covered. Obviously we don’t expect 

any investment by Treasury to be 

made irresponsibly; they have to check 

to make sure that it’s a good investment. But ruling out the unsecured, 

no, that was not our intention. In fact, 

under the underlying bill, which we do 

not change, the Secretary has the authority fully to respond to that sort of 

situation. 

Mr. CLAY. I thank the chairman for 

the explanation and appreciate your 

cooperation. 

Mr. BACHUS. Mr. Chairman, I yield 4 

minutes to the gentleman from California (Mr. ROYCE). 

Mr. ROYCE. I guess part of my concern here is philosophical, but I think 

that ideas have consequences, and bad 

ideas have bad consequences in policy. 

And specifically what I worry about 

here are two challenges that the U.S. 

faces; one is a budget deficit right now 

which, when we look forward, it’s going 

to be about 7 percent of GDP. And with 

the Fed’s balance sheet continuing to 

expand, I think it’s now at about $2 

trillion. 

With the promise of another stimulus 

package coming, which will be somewhere between $800 billion and $1 trillion, we are becoming increasingly dependent upon our rescuers. Now, in this 

case our rescuers are the American 

taxpayers and U.S. debt purchasers, 

most of them overseas. Why worry 

about this? Well, I think one of the reasons we have to be concerned is that 


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eventually bond investors might begin 

to reconsider purchasing that U.S. 

debt, they might begin to second guess 

that. And that consequence would really be catastrophic. Avoiding such a scenario would require us, then, to take a 

step back from where we are and require us to begin to eliminate unnecessary spending and not go forward with 

compounding the problem with the 

deficits. 

But beyond the impact of the budget, 

there is a second concern that I have, 

and that’s the ill effect of this bailout 

trend in terms of the rapidly increasing 

role that government is playing inside 

financial firms, that it’s playing in the 

board rooms. And I will just cite this 

December 17 article in the Wall Street 

Journal entitled, ‘‘U.S. Ratchets Up 

City Oversight.’’ And in that story 

they describe the active role that regulators are playing in the day-to-day operations of the financial institution. 

Earlier this week, headlines focused 

on an effort by U.S. banking regulators 

to encourage Citigroup to shake up its 

board and to replace its chairman, Win 

Bischoff. And they said this would be 

an effort to restore confidence in the 

beleaguered financial giant. But then 

as the argument is put forward, one of 

the leading candidates is Richard Parsons, who is Time Warner’s chairman, 

and he is a member of Citigroup’s 

board, but he also happens to be a 

member of President-elect Barack 

Obama’s transition economic advisory 

board. 

Additionally, it should come as no 

surprise, I think, that earlier this week 

Citigroup announced it would support 

legislative efforts to allow bankruptcy 

judges now to rewrite mortgage contracts. Now, that’s a provision that 

would restrict the flow of capital into 

the mortgage market, it would increase the cost certainly going forward 

of obtaining a mortgage for anybody. 

And traditionally the financial press 

has called this a ‘‘cram down’’ provision that’s been adamantly opposed by 

the financial institution. Now we have 

$45 billion of taxpayers’ cash, we have 

a $249 billion taxpayer guarantee for 

bad assets on the balance sheets of the 

institution. And the institution, which 

now has seen this bureaucratic control 

within the firm reverse itself on a position, and I begin to wonder if political 

pull is going to replace market forces, 

if government bullying is going to determine the actions that firms are 

going to take. And this is my second 

concern. Because, to me, a major reason we’re in dire financial straits is the 

market distortions caused by bureaucratic and regulatory manipulation of 

the quasi public entities. We’ve had 16 

hearings where we’ve heard the Federal 

Reserve Board, we’ve heard the Treasury warn over the last few years about 

Fannie Mae and Freddie Mac. And 

these institutions took on that excessive risk. It was Congress that encouraged it and prevented the regulation 

that the Treasury wanted in order to 

prevent it. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, I yield 2 minutes to another 

freshman member of the committee, 

the gentleman from Connecticut (Mr. 

HIMES). 

Mr. HIMES. Mr. Chairman, I rise 

today in support of H.R. 384, a bill to 

reform the TARP program. 

Let us be absolutely clear, had our 

markets functioned, had our regulators 

done their job, had our leaders been 

sufficiently vigilant, neither the TARP 

program nor its reform would be necessary. But extraordinary times demand extraordinary measures. 

Four months ago, the TARP was 

deemed necessary. Yesterday, in committee, we heard from a long line of experts who urged us to grant the new 

President authority to use the remainder of the TARP funds. On this question, perhaps people of good faith may 

disagree, but there can be no disagreement that if those funds are to be authorized, this House has an obligation 

to oversee their use. 

b 1745 

We owe it to the American taxpayer 

to closely watch how their money is 

used and to assure that it is neither 

wasted nor used for private benefit. 

This bill, at great long last, offers that 

assurance. 

As importantly, there can be no disagreement that after providing relief 

to industry after industry, it is time to 

get to the heart of the matter: American moms, dads, and children, and the 

homes that they live in. This bill, none 

too soon, mandates and funds a national comprehensive foreclosure relief 

plan that will finally address the root 

cause of this crisis, the housing problem. As the saying goes, better late 

than never. 

When the sun goes down today, another 7,000 American families will have 

lost their home. The same will be true 

tomorrow. We cannot delay. We must 

act to save the very core of the American Dream. 

I commend Chairman FRANK for his 

leadership on this bill, and I urge my 

colleagues to stand for smart oversight 

and for the beleaguered American 

homeowner. 

Mr. BACHUS. Mr. Chairman, I yield 2 

minutes to the gentleman from California (Mr. CAMPBELL). 

Mr. CAMPBELL. Mr. Chairman, I 

would like to have a colloquy with the 

chairman of the committee. 

Mr. Chairman, the Emergency Economic Stabilization Act was intended 

to apply to financial institutions, I believe, without regard to their form of 

ownership: public, private, mutual associations. Is that your understanding? 

Is that correct? 

Mr. FRANK of Massachusetts. If the 

gentleman will yield, Mr. Chairman, 

he’s absolutely correct. The form of 

ownership should have no relevance to 

the decision here. 

Mr. CAMPBELL. But yet many mutual, bank, and insurance holding companies have been unable to even apply 

for TARP funds because of the Treasury’s not coming out with a term sheet 

that would enable them to apply, even 

those that can issue nonpublic preferred stock. Would you agree that the 

Treasury should be encouraged to come 

out with those term sheets? 

Mr. FRANK of Massachusetts. If the 

gentleman would yield, he understates 

my view when he says they should be 

encouraged. I believe I will be glad to 

join with him in insisting that they do 

that. And, frankly, we don’t want any 

form to be disfavored and certainly not 

the mutual form, which has a great 

deal in terms of our history to commend it. So the gentleman is absolutely right, and I think on this one we 

can be pretty certain that, particularly 

if the House gives the kind of endorsement to it that I suspect that it will, 

we’ll be able to accomplish that. 

Mr. CAMPBELL. Thank you, Mr. 

Chairman. 

On one other point, there are people 

who say that a financial collapse didn’t 

happen, and, in fact, it didn’t. You 

don’t get credit for bad things that 

don’t happen. I would argue that the financial collapse was imminent were it 

not for this bill and also for the extraordinary monetary actions of the 

Fed. But as we go forward with the additional $350 billion, I would think that 

we should be leveraging. My concern is 

not that it’s too much, that it’s too little, and leveraging private funds by—— 

Mr. FRANK of Massachusetts. If the 

gentleman would yield, that’s right. 

And I would say some of my colleagues 

understandably wanted to put very severe restrictions on the recipient institutions, and we put restrictions on 

them. But we don’t want to be so restrictive that we drive out private capital. This will only work if the public 

capital leverages and unlocks and reassures private capital. 

Mr. CAMPBELL. Thank you, Mr. 

Chairman. We’ll get a lot more benefit 

for this if it’s more like matching 

funds and we encourage private capital 

to go in and the public capital comes 

with it. 

With that, Mr. Chairman, I stand in 

support of this bill and its provisions. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, not being a person who 

holds grudges, I yield 2 minutes to 

someone who left our committee, the 

gentleman from New York (Mr. CROWLEY). 

Mr. CROWLEY. I think I thank the 

chairman for yielding. 

Mr. Chairman, I wish to enter into a 

colloquy with the chairman. 

Mr. Chairman, I seek to clarify language in the underlying TARP legislation. As you know, New York has been 

battered by the financial crisis, and unemployment, like in most States, has 

been drastically increasing. 

It is my understanding that TARP 

recipients can use TARP funds to provide funds to local small businesses to 

free up capital, preserve jobs, and support wages of their employees during 

these difficult times. Is that correct? 


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Mr. FRANK of Massachusetts. If the 

gentleman would yield, he is absolutely 

correct. We think that it is a very important use of it. It’s one of those 

things that was not done sufficiently 

previously, and we are convinced it will 

be done with this House’s taking the 

lead in the future. 

Mr. CROWLEY. I thank the chairman. 

Just one additional statement, and 

you can correct me if I’m wrong. 

Am I correct in saying there is nothing in the TARP that prevents banks, 

such as Amalgamated Bank in New 

York, from applying for TARP and 

using these funds to support wages of 

workers as well as create jobs through 

the lending of funds to people and 

small businesses in the communities as 

well as providing some safety net during these difficult times? 

Mr. FRANK of Massachusetts. If the 

gentleman will yield, yes, he’s correct. 

What we, in fact, say here is that nothing should be advanced to a bank without an agreement in advance as to how 

it should be used. Now, we would expect a great bulk of the funds, the 

agreement would say, be re-lent, but 

that’s not the exclusive purpose. There 

are other valid purposes. What this bill 

says, however, is that that would have 

to be clear up front as one of the permitted purposes, and we do believe that 

this Treasury Department, given that, 

yes, they would accept that as a very 

valid use. 

Mr. CROWLEY. I thank the chairman 

for the colloquy. 

Mr. BACHUS. Mr. Chairman, may I 

inquire as to how much time is remaining? 

The Acting CHAIR. The gentleman 

from Alabama has 331⁄2 minutes remaining. The gentleman from Massachusetts has 35 minutes remaining. 

Mr. BACHUS. Mr. Chairman, I reserve the balance of my time. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, I will now yield 3 minutes to 

one of the leaders in this House on the 

important issue of foreclosure, the gentlewoman from California (Ms. WATERS). 

Ms. WATERS. Mr. Chairman, I rise in 

support of H.R. 384, the TARP Reform 

and Accountability Act of 2009, and I 

would like to thank our chairman, 

Chairman FRANK, for his hard work and 

his leadership on drafting this most 

important piece of legislation. 

As a Congress, we have experienced 

numerous disappointments with the 

TARP program’s implementation, most 

notably the Treasury’s refusal to use 

TARP funds for loan modifications and 

homeowner relief. The need to address 

the foreclosure crisis head on is why I 

lend my support to H.R. 384 and its requirements for foreclosure mitigation. 

When we passed the first TARP bill 

last year, we intended for the Treasury 

to use its unprecedented authority to 

remove toxic assets and nonperforming 

loans from the marketplace, modify 

mortgages, and increase the availability of credit. To date, no TARP 

funds have been used or directed to systematic loan modification or increased 

lending. 

Foreclosures are affecting homeowners, renters, and communities. 

Homelessness levels are rising as a result of renters who have dutifully paid 

rent on time being evicted from their 

homes because the owner is in foreclosure. Stopping foreclosures is key to 

reducing homelessness, helping the 

economy to recover, and rebuilding 

communities. 

H.R. 384 has the components homeowners, mortgage servicers, and lenders need to effectively confront the 

foreclosure crisis. The bill provides 

from $40 to $100 billion for funding foreclosure mitigation. We may need a 

larger funding level for foreclosure 

mitigation, perhaps up to $70 billion; 

however, I appreciate the chairman’s 

efforts to direct resources to this crisis. 

The bill also provides several alternatives for foreclosure mitigation, such 

as a systematic mortgage modification 

program, whole loan purchasing, buydown of second mortgages, reduction of 

costs in the Hope for Homeowners Program, and incentives and assistance to 

servicers to modify loans. 

But most importantly, in the manager’s amendment, the bill will now require implementation of the systematic foreclosure prevention and mortgage modification program that I’ve 

been calling for since last year. On the 

first day of the 111th Congress, I introduced H.R. 37, the Systematic Foreclosure Prevention and Mortgage Modification Act of 2009, to give the power 

of law to the successful systematic 

mortgage modification program developed by the Federal Deposit Insurance 

Corporation and currently in use at the 

IndyMac Federal Bank, where it has resulted in over 5,000 IndyMac borrowers 

avoiding foreclosures. I applaud Chairman FRANK for including this legislation in H.R. 384. 

The housing crisis must be corrected 

through our efforts with TARP. I believe that H.R. 384 will finally put us 

on track to addressing the foreclosure 

crisis. I support H.R. 384, the TARP Reform and Accountability Act of 2009, 

and I urge my colleagues to vote ‘‘yes.’’ 

Mr. BACHUS. Mr. Chairman, I yield 5 

minutes to the gentlewoman from Minnesota (Mrs. BACHMANN). 

Mrs. BACHMANN. Mr. Chairman, I 

would like to thank the gentleman 

from Alabama for yielding a few minutes to me. 

It’s a tremendous honor to be able to 

sit on the Financial Services Committee. It’s been the center of the universe the last 2 years dealing with this 

crisis that’s very real that is impacting 

not only individuals but businesses, 

people who are looking at the loss of 

their life savings, loss of their greatest 

capital asset: their home. We know 

that this is a strong reality. But we 

also realize the magnitude of the tremendous amount of taxpayer resources 

that have been devoted to this effort. 

Initially we were told by the Treasury Secretary that in effect a financial 

Armageddon would ensue if this body 

did not, in fact, pass a bailout of gargantuan proportions. We were told $700 

billion is what the Treasury Secretary 

would need to have in order to offer an 

effective front to stave off, in essence, 

the four horsemen of the apocalypse for 

our financial markets. 

We’ve seen a tremendous roller coaster occur in 2008 regarding our financial 

markets. For the first $350 billion, the 

first tranche going forward, what have 

we seen? This week in the Financial 

Services Committee, we had testimony 

before our committee from the administration. Questions were asked: Where 

has the first $350 billion gone? Who are 

the recipients of the first $350 billion? 

What did the money get spent on? 

What were the answers that we received? What is the effectiveness of 

that money? Did the American taxpayer receive value for $350 billion 

that’s already been expended? 

Mr. Chairman, not only did we not 

receive answers to those questions, we 

didn’t receive answers to the very basic 

question of what will the next administration do with this next request for 

$350 billion? We don’t have a full accounting of that either. And what is 

the reason? Again, Mr. Chairman, we’re 

told to do just exactly what we were 

told with the last $350 billion: Trust 

me. Trust me. That didn’t work so well 

for us last time. We were rushed into 

this. There wasn’t oversight. There 

weren’t strings attached. Once again 

with the next $350 billion, this Congress is being told that we will have to 

go out and borrow $350 billion because 

the American people need to know we 

don’t have $350 billion in the bank 

right now, or like my father-in-law 

says to my mother-in-law, ‘‘Elma, I 

have to go to the backyard and shake 

the money tree to get the money out.’’ 

There isn’t money there in the bank. 

We have to go and borrow money that 

we don’t have. And who pays that 

back? It’s the American taxpayer. I 

think, Mr. Chairman, we need to have 

some very basic answers to our questions before we go forward with this extraordinary request. 

We are being forced to vote without 

details on how this $350 billion will be 

spent, but the trouble is we haven’t 

held even a single hearing on the merits or the necessity of releasing the 

second tranche because the House is 

proceeding as though the decision has 

already been made to release the second $350 billion without holding any 

substantial debate on whether or not 

such a release is the appropriate step 

for stabilizing the financial markets 

and getting these markets moving 

again. 

Congress handed the Treasury Secretary a $700 billion blank check. Let’s 

just be clear about that. The original 

bailout was passed, and we were told 

that the $700 billion was essentially a 

big number. It was picked out of thin 

air, but it was needed to calm the markets. Now, I think most Americans 


smartinez on PROD1PC64 with HOUSE
H290 CONGRESSIONAL RECORD — HOUSE January 14, 2009 

would be appalled to learn that that 

was the truth. But we also need to recognize the United States Treasury 

doesn’t even have to spend every penny 

of that money. Many experts, even Secretary Paulson himself, stated that 

was the case. 

But here we are again and the House 

is moving forward with a preemptive 

decision that jumps ahead of this very 

fundamental question, and it’s this: Is 

it even necessary to release the second 

tranche for the state of our financial 

markets? 

b 1800 

We remain unconvinced, many of us, 

that the case hasn’t even been made 

that it is. This bill is attempting to 

make sweeping changes to the way 

that TARP must operate. I would agree 

with my colleagues on both sides of the 

aisle that TARP has very serious flaws, 

many of which were predicted by many 

of us on both sides of the aisle, and we 

should look at ways to address the 

flaws. 

But Congress should not be forced to 

rush to vote on this bill the way that 

we are being forced to rush on it today. 

Congress was rushed into this gargantuan decision, and we need to take 

the time to be deliberative. 

Mr. FRANK of Massachusetts. 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. 

CAPUANO) having assumed the chair, 

Mr. MURPHY of Connecticut, 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. 

384) to reform the Troubled Assets Relief Program of the Secretary of the 

Treasury and ensure accountability 

under such Program, had come to no 

resolution thereon. 

f 

REPORT ON RESOLUTION PROVIDING FOR FURTHER CONSIDERATION OF H.R. 384, TARP REFORM AND ACCOUNTABILITY 

ACT OF 2009 

Mr. PERLMUTTER, from the Committee on Rules, submitted a privileged report (Rept. No. 111–3) on the 

resolution (H. Res. 62) providing for 

further consideration of the bill (H.R. 

384) to reform the Troubled Assets Relief Program of the Secretary of the 

Treasury and ensure accountability 

under such Program, which was referred to the House Calendar and ordered to be printed. 

f 

PROVIDING FOR ATTENDANCE AT 

INAUGURAL CEREMONIES ON 

JANUARY 20, 2009 

Mr. PERLMUTTER. Mr. Speaker, I 

offer a privileged resolution and ask 

for its immediate consideration. 

The Clerk read the resolution, as follows: 

H. RES. 61 

Resolved, that House Resolution 23 is 

amended by striking ‘‘10 a.m.’’ and inserting 

‘‘noon’’. 

The resolution was agreed to. 

A motion to reconsider was laid on 

the table. 

f 

TARP REFORM AND 

ACCOUNTABILITY ACT OF 2009 

The SPEAKER pro tempore. Pursuant to House Resolution 53 and rule 

XVIII, the Chair declares the House in 

the Committee of the Whole House on 

the State of the Union for the further 

consideration of the bill, H.R. 384. 

b 1803 

IN THE COMMITTEE OF THE WHOLE

Accordingly, the House resolved 

itself into the Committee of the Whole 

House on the State of the Union for the 

further consideration of the bill (H.R. 

384) to reform the Troubled Assets Relief Program of the Secretary of the 

Treasury and ensure accountability 

under such Program, with Mr. SIRES

(Acting Chair) in the chair. 

The Clerk read the title of the bill. 

The Acting CHAIR. When the Committee of the Whole rose earlier today, 

601⁄2 minutes remained in general debate. The gentleman from Massachusetts (Mr. FRANK) has 32 minutes, and 

the gentleman from Alabama (Mr. 

BACHUS) has 281⁄2 minutes. 

The Chair recognizes the gentleman 

from Massachusetts. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, just as in baseball, sometimes a player who made a great defensive play is first up. After his stellar 

role in the chair, I yield 3 minutes to 

the gentleman from Massachusetts 

(Mr. CAPUANO). 

Mr. CAPUANO. My colleague is easily impressed, but thank you very 

much. 

Mr. Chairman, we have to back up a 

little bit and remind ourselves what we 

are debating here. We are debating a 

bill that amends the TARP provisions. 

It doesn’t grant $350 billion to anyone. 

There is no money attached to this 

bill, and I actually agree with many of 

the comments that have been made 

about the past 350 and the potential 

soon to be $350 billion. I have the same 

concerns they do. I may fall on the different side of the issue because, for me, 

I voted for it, not because I loved it, 

but because to me it was the only way 

to save the economy. 

I think some of it’s working. I agree 

that I have the same concerns about 

the lack of reporting that has been 

done to us, that this administration 

has not told us how effective it has 

been. I agree with those concerns, but 

that’s not what we are debating. The 

bill before us is an improvement on the 

bill that we passed, and those other 

concerns should be directed when we 

get that other bill, hopefully within 

the next few days, and I may actually 

join you when the time comes, don’t 

know yet. 

It depends on whether this bill gets 

passed. It depends on what the new incoming administration says about this 

bill that’s currently before us. 

But let’s not forget how we had the 

last one. Many of us tried to add some 

of these provisions the last time. We 

were told by the current President that 

if those things were added he would not 

sign the bill. He would veto it and let 

the economy go down the tubes. We 

were told by some of our colleagues in 

the other body that they would not go 

along with it. 

So we were stuck with the situation. 

You either save the economy or do 

nothing. 

I actually respect those of us who did 

nothing. I wasn’t sure that my vote 

was right. I am still not sure, as I stand 

here today. And anyone who is so certain that they know exactly how to fix 

this economy, well, good luck to you 

and God bless you, because you are 

much more certain than most Americans. 

Most of us are doing the best we can 

with the knowledge that we have. I 

wish I could sit here today and say to 

you that the hearing we had a few 

weeks ago in Financial Services provided me all the information I needed 

to make a thoughtful judgment on 

whether the next 350 should go forward. 

Instead, I was told we are not going 

to look at the individual institutions. 

We don’t care what they do. That is an 

insane statement. No one can agree 

with that, yet that’s what we were 

told. 

I have some belief and some faith 

that the new administration will feel 

differently. I believe this bill sets forth 

clear or at least clearer definitions of 

what must be in the report, clearer 

definitions of how the money should be 

used. 

I haven’t heard one reason to vote 

against the bill that’s before us. I have 

heard reasons to vote against potentially the next 350. 

But let’s focus on the bill that’s in 

front of us. I would like to hear one 

reason why we shouldn’t specify better 

reporting, that we shouldn’t strengthen 

oversight, that we shouldn’t clearly 

state that this Congress wants something to be done directly about mortgage foreclosures. I haven’t heard that. 

Mr. BACHUS. Mr. Chairman, I yield 

an additional 4 minutes to the gentleman from New Jersey (Mr. GARRETT). 

Mr. GARRETT of New Jersey. I 

thank the ranking member. 

You know, Mr. Chairman, this debate 

and maybe this vote is an exercise in 

futility. Our distinguished chairman 

has already noted in various media 

outlets that he doesn’t believe that 

this bill is ever going to become law. 

The Senate Banking Committee chairman has declared that he is not even 

going to bother drafting similar legislation, much less voting on it. 

So, you might ask yourselves, why is 

it that we are here today? As an aside, 

the chairman said interestingly enough 


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