H152 CONGRESSIONAL RECORD — HOUSE January 9, 2009 

nothing there. It’s flat. There’s not a 

better place on earth to drill because 

there’s nothing there. Animals can’t 

live there. If the caribou come, they 

have to pass through immediately because there’s nothing there to live on. 

Drill there. We’d have a tiny footprint, 

and we were told that immediately 

we’d have 250,000 new jobs, and by the 

time they were ready for production, 

there would be 1 million new jobs. 

There’s a third of President-elect 

Obama’s promise of 3 million new jobs, 

and we don’t have to give money away. 

We don’t have to increase taxes. The 

private sector will take care of it. All 

we have to make sure is the environmental concerns are addressed so that 

we don’t hurt the environment. 

We could increase the jobs immediately by opening up more of the 

Outer Continental Shelf. What an incredible stimulus that would be. 

A Boston Herald editorial said, a real 

stimulus bill—the expiring tax cuts are 

tax increases and history shows that 

tax increases in a recession, depression 

or recovery can be deadly. We should 

not go there. 

I often look at the seal on the dollar 

bill. It has a pyramid with a triangular 

eye actually at the top, representing 

the all-seeing eye of God, and the Latin 

phrase ‘‘annuit coeptis’’. That’s Latin 

meaning He, God, has smiled on our 

undertaking. 

When we saddle those dear, sweet 

children that are alive today and their 

children with debt because we would 

not do the right thing, I don’t see how 

God or anybody else can smile on our 

undertaking. We need to get back to 

things that bring smiles. 

f 

MIDDLE EAST AND THE ECONOMY 

The SPEAKER pro tempore. Under 

the Speaker’s announced policy of January 6, 2009, the gentleman from California (Mr. SHERMAN) is recognized for 

60 minutes as the designee of the majority leader. 

Mr. SHERMAN. Madam Speaker, I 

plan to use the first two-thirds of my 

time to focus on events in the Middle 

East and then the final third to focus 

on our economy. I would invite my colleagues who wish to address these subjects to come to the floor. I can yield 

them a few minutes, but if I don’t have 

any company, I’m capable of speaking 

for a full hour, as some of my more 

bored colleagues have already seen 

proven. 

b 1530 

Now, even in an hour-long presentation, I am not going to be able to 

present all of the facts to support my 

position, and so I invite my colleagues 

to visit Brad.Sherman@mail.house.gov. 

Now, focusing on the Middle East, we 

all want peace, we all want a sustainable cease-fire. But, instead, our televisions show us blood and carnage. Who 

is to blame? What do we do to cause it 

to stop? 

Now, as to the issue of who is to 

blame, the press has a remarkably silly 

approach. They take pictures of casualties, and they decide whatever side has 

suffered the most casualties must be in 

the right. I would point out that if this 

is the standard we use, America has 

been in the wrong in every war we have 

fought since 1812. It is absolutely preposterous to say that whichever side 

suffers the greater casualties has morality on their side. 

Part of this is a misreading of the 

just war theory that so many modern 

philosophers have put together, and 

one of its key elements is proportionality. The press, skimming rather than 

reading these philosophical texts, 

comes up with the idea that there must 

be proportionality of one side’s casualties to the other side’s casualties. A 

true reading of just war theory indicates that the proportionality doctrine 

is that there must be proportionality 

between the objective that the just side 

is seeking and the casualties which are 

unfortunately borne by both sides. 

Well, what is the objective that 

Israel is seeking? First and foremost, 

the objective is to end a situation 

where 1 million Israelis every day and 

every night face daily attempts to kill 

and maim as many of them as possible. 

By this standard, this is a just effort by 

the Israeli Government to safeguard its 

people. 

Now, Hamas has sent, since 2005, well 

over 6,000 rockets and mortars into 

southern Israel. Now, I want to clarify 

one issue as to the number, because 

often you will hear a figure roughly 

half of 6,000. That is the correct figure 

for the number of rockets or for the 

number of mortars. But if you add together the rockets and the mortars 

since the year 2005, the number stands 

well over 6,000. 

Why do we pick 2005? That is because 

that is the time when Israel withdrew 

completely, unilaterally, without concession, without compensation, from 

the Gaza Strip, leaving behind valuable 

assets, which were trampled on rather 

than used by Hamas extremists. 

So we see some 6,000 rockets and 

mortars from a territory that is hardly 

under Israeli occupation. We are told 

that, well, Hamas should be regarded 

as morally virtuous because so few of 

these rockets hit their target. It is true 

that the vast majority of these 6,000 

projectiles have failed in their attempts to kill Israeli women and children and civilians, but that doesn’t 

mean that Hamas has good morality. It 

simply indicates that Hamas has bad 

aim or, more specifically, that they are 

using ordnance, which is very difficult 

for them to aim. 

Every one of those rockets and mortars had a single objective, kill as 

many Israeli civilians as possible. Not 

a single one of them was targeted at 

the Israeli military. So we are told, 

well, let us count only the casualties. 

Let us ignore the over 6,000 attempts at 

murder from Hamas. We cannot ignore 

those missiles. From a moral standpoint, it is just as wrong to fire a missile that fails to hit its civilian target 

as one that does hit its civilian target. 

Now, earlier today, the House passed 

H. Res. 34. The vote was 95 percent in 

favor, 1 percent against, the remaining 

percent either voted present or wasn’t 

present, 95 percent to 1 percent. Let us 

review some of the provisions of that 

resolution. I will read some, and then I 

will comment. 

‘‘Whereas Hamas was founded with 

the stated goal of destroying the State 

of Israel; 

‘‘Whereas Hamas has been designated 

by the United States as a Foreign Terrorist Organization; 

‘‘Whereas Hamas has refused to comply with the Quartet’s,’’ and here we 

are referring to the United States, European Union, Russia and the United 

Nations, that Quartet’s ‘‘requirements 

that Hamas recognize Israel’s right to 

exist.’’ 

Then it goes on to say that Hamas 

has launched thousands of rockets 

against Israel’s population centers 

since 2001 and has launched more than 

6,000 such rockets and mortars into 

Israel since Israel withdrew both its 

military and civilians from Gaza in 

2005. 

The resolution also states that in 

June, 2006, after that withdrawal, 

Hamas illegally crossed into Israel, attacked Israeli forces, and kidnapped 

Corporal Gilad Shalit, whom they continue to hold today. The resolution 

then points out that Hamas is getting 

some very substantial support from 

Iran, and I will address that later, and 

is using innocent civilians as human 

shields. 

Let me give one illustration of that, 

and that is Nizar Rayyan, perhaps one 

of Hamas’ top 5 leaders. 

He stored weapons at his home, sophisticated communications designed 

to act as a communications center for 

Hamas. So what did Israel do? They 

called him at his home. They told him 

that in order to avoid civilian casualties, they were giving him 10 or 15 minutes notice, that’s enough time for people to leave the area, but that it was 

important to Israel to destroy those 

weapons, to destroy that communications equipment. 

What did Mr. Rayyan do? Having 

boasted that he wanted to die as a martyr, he not only stayed in the house, 

but he kept with him several of his 

wives and children. That is the use of 

innocent human shields at its worst, a 

man doing everything possible to lead 

to the death or cause the death of his 

four wives, of many of his children, all 

so he could claim that Israel was responsible for the deaths of those civilians. 

Let us continue to look at key provisions of the resolution that passed the 

House. 

‘‘Whereas Israel has facilitated humanitarian aid to Gaza with hundreds 

of trucks carrying humanitarian assistance . . . ’’ 

Let me provide the specifics. Just 

today some 89 humanitarian shipments 

went from Israel to Gaza, including 

2,227 tons of food, medicine, plus 315,000 


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January 9, 2009 CONGRESSIONAL RECORD — HOUSE H153 

liters of heavy-duty diesel so that Gaza 

can operate its power generation station and 143 tons of gas for domestic 

use. That is what Israel made sure, at 

risk to its own people, would reach 

Gaza just today. 

Well, how does that compare with 

combatants in other wars? Look at 

World War I and World War II. 

In each of those wars, the British 

Navy used its total mastery of the surface of the oceans to blockade Germany. Not a single ship of medicine 

was allowed to pass across the Atlantic 

to Germany, not a single ship of food, 

and, of course, prior to both World War 

I and World War II, Germany was a 

major food importer from the western 

hemisphere. 

What did Germany do? They deployed 

their submarines with the stated purpose of starving the British in both 

World War I and World War II by sinking as many ships as possible, laden 

with food, purchased in the new world. 

So in World War I and in World War II, 

both combatants from the first day of 

the war did everything possible to stop 

a single ship of humanitarian assistance, to use modern nomenclature, to 

stop a single ship with food or medicine 

from reaching its destination. Compare 

Israel to both sides in World War II, 

risking its own soldiers and civilians in 

order to help those trucks get through. 

The resolution continues with a 

quotation from Secretary Rice where 

she said, on January, 2009, January 6, 

hundreds of thousands of Israelis lived 

under daily threat of rocket attack 

and, frankly, no country would be willing to tolerate such a circumstance. 

Moreover, the people of Gaza watched 

as insecurity and lawlessness increased 

and their living conditions grew more 

dire because of Hamas’ actions, which 

began with the illegal coup against the 

Palestinian Authority in Gaza. A 

cease-fire that returns to those circumstances is unacceptable and will 

not last, will not last. 

The U.N. Security Council, passed a 

resolution last night calling for a sustainable cease-fire. But a cease-fire 

that returns Hamas to the situation 

that existed in December is, in the 

words of our own Secretary of State, 

unacceptable, because it will not last. 

The U.N. has called not for a temporary cease-fire, but for a sustainable 

cease-fire. 

Now, the resolution goes on in its resolved clauses to make a number of 

points. For example, the resolution, in 

subparagraph 3, ‘‘encourages the Administration to work actively to support a durable and sustainable ceasefire in Gaza, as soon as possible, that 

prevents Hamas from retaining or rebuilding its terrorist infrastructure, including the capability to launch rockets and mortars against Israel.’’ 

Paragraph 5 ‘‘calls on all nations— 

‘‘(A) to condemn Hamas for deliberately embedding its fighters, leaders, 

and weapons in private homes, schools, 

mosques, hospitals, and otherwise 

using Palestinian civilians as human 

shields, while simultaneously targeting 

Israeli civilians.’’ 

In paragraph 8, the resolution ‘‘calls 

for the immediate release of the kidnapped Israeli soldier Gilad Shalit, who 

has been illegally held in Gaza since 

June 2006.’’ I would point out that I, at 

least, believe that no cease-fire can be 

regarded as adequate unless it includes 

the return of Gilad Shalit. 

So these are the provisions, and I 

haven’t had a chance to quote them all, 

but these are what I think are the most 

important provisions of the resolution 

passed by this House by a vote of 95 

percent to 1 percent. I want to commend Chairman BERMAN and Speaker 

PELOSI for introducing and writing this 

resolution, and I was proud to be one of 

its original cosponsors. 

b 1545 

So let us try to review some of the 

elements that we see on the ground in 

the Middle East. 

Hamas claims to be beleaguered, but 

it has rejected the U.N. Security Council cease-fire resolution passed last 

night. Hamas has done everything to 

increase civilian casualties, including 

the actions of Mr. Rayyan and including the use of human shields. 

Yet in spite of all of Hamas’ efforts 

to increase civilian casualties on both 

sides, U.N. estimates state that over 

two-thirds of the Palestinian casualties 

have been gun-toting militant terrorists, and other estimates put that number at well over three-quarters. It is a 

testament to everything Israel has 

done, risking the lives of its own soldiers in order to minimize Palestinian 

civilian casualties, that well over half, 

well over two-thirds of the Palestinian 

casualties, are indeed the militants, 

not the civilians. 

When Hamas launches rockets from a 

neighborhood, an Israeli sergeant has 

seconds to decide whether to return 

fire. Now, there is always a comfortable pundit talking head on television in an air-conditioned studio 

ready to vilify that decision. But the 

decision has to be made in seconds by 

an Israeli sergeant under fire. The 

moral culpability for civilian casualties cannot be put at the feet of any 

sergeant. Moral culpability for the horrors of war lies with politicians who 

seek extreme and unjust ends through 

violent means. 

While Israel seeks to live in peace 

alongside a Palestinian state, Hamas 

and its political leaders have as their 

clearly stated objective to kill or expel 

every Jew from the Middle East. 

Hamas proudly waives the banner of 

genocide and ethnic cleansing. So 

where do we lay the blame for the casualties that continue? I believe it is 

not at the feet of the sergeant who is 

under fire, but rather it is at the feet of 

the political leaders who insist upon 

continuing to seek such unjust and extreme ends through violent means. 

Now, I have discussed this conflict as 

if it is a conflict between just Israel 

and Hamas. It is in fact a conflict of 

wider significance, a conflict between 

the government of Iran and the people 

and allies of the United States. 

The fighting in Gaza has demonstrated Iran’s ability and desire to 

wage war on America and its allies. 

Hamas is a terrorist organization seeking the destruction of Israel in favor of 

an Islamic Palestinian state, but it is 

also a proxy for the Iranian Government. As such, what we see in the Middle East is part of a regional war being 

waged by the Iranian regime against 

the United States and its allies. 

Many of Hamas’ weapons are made in 

Iran. Many top Hamas military leaders 

and experts who launched the missiles 

into Israel were trained in Iran. Iran 

provides the lion’s share of Hamas’ 

funding. It is unlikely that Hamas 

would be able to achieve its status as 

the premier Palestinian terrorist organization without backing from Iran. 

Iran backed Hamas like Iran backed 

Hezbollah. It shoots rockets at Israel’s 

civilians from deep inside their own 

densely populated civilian areas, knowing that any Israeli attempt to defend 

itself will kill or at least endanger Palestinian civilians. Through Hamas and 

Hezbollah and through its operatives in 

Iraq, Iran and its government are able 

to stir up crises in the Middle East, 

thus injuring American prestige while 

helping to achieve Iran’s own aims. 

We know that Iran is working hard to 

possess a nuclear bomb. With all that 

Iran is doing now, with all that it has 

done as far from its own country as 

blowing up the Jewish center in the 

city of Buenos Aires, what will Iran be 

like if it has nuclear weapons? It will 

act with impunity. We will go from crisis to crisis between the U.S. and its allies and Iran, and each time we will be 

staring at a hostile nuclear power. 

Now, it is true that the last time we 

went eyeball-to-eyeball with a hostile 

nuclear power, namely the Soviet 

Union, best exemplified by the Cuban 

missile crisis, we lived to tell about it. 

But imagine going eyeball-to-eyeball 

with a regime that is considerably less 

sane than Mr. Khrushchev, and not 

having one Cuban missile crisis, but a 

crisis every time Iran decides to test 

us, every time it engages in international terrorism? This is a risk 

Americans should not take. 

Finally, what happens if, as so many 

of us pray, this regime in Tehran feels 

that it is going to be swept out of 

power? They may decide to nuke Tel 

Aviv in an effort to regain popularity 

among those on the street in Iran, or 

they may decide to smuggle a weapon 

into the United States, feeling that if 

they are going to go out, they would 

just as soon go out with a bang. So it 

is unacceptable for America to sleep 

while the centrifuges spin at Natanz. 

Now, preventing an Iranian nuclear 

weapon is still possible if the new administration reorients our foreign policy to make that its chief objective. 

The good news is that the tools we 

have available, the diplomatic tools, 

the economic tools to isolate the government in Tehran, have only been 


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H154 CONGRESSIONAL RECORD — HOUSE January 9, 2009 

used to the extent of 1 or 2 percent. We 

still have a lot of tools in the tool box. 

The bad news is for this entire administration, even after 9/11, even after it 

was revealed by an Iranian dissident 

group all the details proving that Iran 

was making considerable progress to a 

nuclear bomb, even after all that, this 

administration has left most of the 

tools in the tool box. 

I will detail some of those tools in 

the time that remains to me, and the 

rest, of course, are available for my 

colleagues to view at 

Bradsherman.house.gov. 

First, we can begin the effort at economic isolation. I think incoming 

President-elect Obama has a strong 

record. He voted for the Lautenberg 

amendment in 2005, which unfortunately didn’t pass because a majority 

of Senators voted against it. That 

amendment would simply have prevented U.S. oil companies from doing 

business with Iran through their foreign subsidiaries. Furthermore, then 

Senator Obama authored the bill in the 

last Congress which would have encouraged divestment from firms doing 

business with Iran. I hope very much 

that in its first days, the Obama administration comes to Congress and 

urges us to pass these two pieces of legislation that were so strongly supported by Senator Obama. 

We then need to ask the administration, and it is an odd constitutional 

circumstance where we have to ask 

that laws be enforced, but we should 

ask the administration to begin enforcing the Iran Sanctions Act as the current administration and even the prior 

administration refused to do. 

We need at the diplomatic level to 

demand that the World Bank stop disbursing funds to Iran in the form of 

concessionary loans. We basically acquiesced in the decisions of the World 

Bank to make those loans. Fortunately, only half the funds have been 

disbursed, and we must make it clear 

to the World Bank that our continued 

participation in that organization requires the immediate cessation of disbursements from the World Bank to 

the government of Iran. 

We need to deny Nuclear Cooperation 

Agreements to countries that provide 

technologies to Iran, and by ‘‘technologies’’ I mean those technologies 

that help Iran develop nuclear weapons. 

And we need to organize the world to 

hit one of Iran’s Achilles heels, and 

that is the fact that it needs to import 

gasoline, because although Iran is oil 

rich, it does not have refinery capacity. 

Almost half of its gasoline needs to be 

imported. 

As to this effort, I have the opportunity to report to the House that we 

have had some success. It has been reported that a major Indian refinery, 

RIL, has agreed to stop sending refined 

petroleum products to Iran. This is a 

success for the U.S. Government, and 

particularly for the Congress of the 

United States. Why? Because this very 

refinery in India was seeking funding 

from the U.S. Export-Import Bank, one 

of our major funding institutions, to 

fund the construction of infrastructure 

around the world, and we do that chiefly because it is U.S. products being 

used in that infrastructure. So RIL was 

seeking a U.S. Export-Import Bank 

loan or loan guarantee, and several 

Members of Congress joined with me in 

sending a letter to that institution 

saying that Ex-Im Bank should not 

provide such financing unless the refinery stopped shipping gasoline to Iran. 

So I look forward to using these and 

other tools to convince the Iranian 

people and Iranian elites that their policy, the policy of their government in 

supporting terrorism and building nuclear weapons, is going to lead to their 

economic and diplomatic isolation. 

I think we also owe a special debt of 

gratitude to the mullahs who run the 

Iranian Government, because their incredible corruption and inefficiency 

has left the Iranian economy very susceptible to these pressures, very fragile. This economy in Iran was fragile 

even when oil was selling for roughly 

$150 a barrel, and they are far more 

fragile now that oil is selling between 

$40 and $50 a barrel. 

b 1600 

Let me review just a few of the other 

things that this government and this 

Congress can do in order to get the 

message across to Iranian elites and 

the Iranian people that they face economic and diplomatic isolation if they 

continue to support terrorism and develop nuclear weapons. 

The first of these is to urge Americans to divest from ownership of stock 

in companies that are investing in the 

Iranian oil sector. How can we do this? 

First, we need to make it clear, and 

this is legislation that passed the 

House, unfortunately, I believe it did 

not—I know it did not make it through 

the Senate, to simply tell pension 

plans and other trustees that they are 

free to divest without the risk of lawsuits from some crazy investor or beneficiary who somehow would claim that 

the fund could make more money if it 

did invest in companies doing business 

in Iran. We’ve got to make it plain that 

no one has a fiduciary duty to invest in 

terrorism. 

Second, we would want to change our 

tax laws so that those selling stock in 

a company, usually a foreign oil company that is investing in the Iranian 

oil sector and investing in the stock of 

a different company, that those who 

engage in such a transaction are not 

immediately taxed. Rather, they 

should get to what tax professionals 

call a carry-over basis, and then, when 

they divest, when they sell the stock of 

the new company, the company that’s 

doing good things, that would be the 

time when they would recognize their 

capital gain, because divestiture of 

companies doing business with Iran in 

a way so as to bolster its energy sector, 

divestment should not result in lawsuits. It should not result in taxation. 

It should result in accolades and 

thanks from this Congress to see that 

American pension plans, both public 

and private, and American individuals, 

are willing to step forward and put 

some economic pressure on the Iranian 

government. 

In addition, I think that we have to 

examine our relationship with Russia 

and China with a lens of looking at 

how Russia and China deal with Iran. 

Too often these two super powers or 

former super powers, or future super 

powers, whatever term you would use 

for Russia and China, these two powerful countries use their seat at the U.N. 

Security Council to defend Iran from 

any meaningful sanctions. 

Why do they do this? 

First and foremost, they do it because they can, knowing full well that 

our policy toward China or Russia on 

the issues they care about will not be 

affected by what they choose to do on 

Iran. This failure of linkage needs to 

end with the end of this administration. We need a State Department and 

a President and a foreign policy that 

makes it plain to Russia that when we 

look at Georgia, when we look at 

Trans-Dniester Moldova, when we look 

at disputes involving the pricing of 

natural gas, when we look at whether 

we’re putting missile defense in Poland 

and the Czech Republic, when we’re 

looking at any issue important to Moscow, our first question will be what has 

Russia done to hinder or help the Iranian nuclear program. 

Nothing illustrates this better than 

our plan to put missile defense in the 

Czech Republic and Poland, justified by 

the current administration on the theory that we need that because Iran 

may have nuclear ICBMs. 

Now, how crazy is this? 

We anger Russia by putting the missile defense in the Czech Republic and 

Poland. What instead we should do is 

agree not to build that missile defense 

if Russia will help us prevent Iran from 

having nuclear weapons, which was the 

theoretical reason we needed the missile defense. 

Keep in mind that missile defense is 

not going to safeguard Poland or the 

Czech Republic from Iranian nuclear 

weapons. First, it probably won’t work. 

But even if it did, Iranian missiles are 

not aimed at Krakow or Prague. Iranian missiles would probably not be 

the mechanism that Iran would use to 

deliver nuclear weapons. You see, to 

develop an ICBM you have to be a 

damn good rocket scientist or actually 

have a bunch of damn good rocket scientists. But you do not have to be a 

rocket scientist to get a nuclear weapon into an American city. 

A nuclear weapon is about the size of 

a person, and of course those sizes 

vary, as do nuclear weapons. But it is 

not that hard to smuggle something 

the size of a person into the United 

States. In fact, our efforts along the 

U.S./Mexican border have raised the 

price that smugglers charge for that 


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very activity from $1,000 dollars up to 

$1,500. That may deter some who would 

cross the border illegally for economic 

reasons. That may deter poor people 

from Latin America, but it obviously 

isn’t going to deter any country with 

nuclear weapons. 

Likewise, I could point out that we 

do not have a single border officer on 

the entire Alaska/Canadian border, not 

one. So if you think that oh, well, 

we’re going to defend Los Angeles and 

Chicago because we have this incredible border effort, we have zero on that 

border. And so Iran could easily, could 

smuggle a weapon into Anchorage, 

even more easily than to smuggle one 

into Los Angeles or Washington or New 

York. 

So why are we building missile defense in the Czech Republic and Poland 

and by doing so, angering Moscow and 

making it more difficult for us to pass 

appropriate resolutions sanctioning 

Iran through the United Nations Security Council? 

First, myopia has marked so much of 

the foreign policy of the current administration. 

And second, a peculiar belief that by 

building missile defense in the Czech 

Republic and Poland, we are somehow 

tying those two countries to us and 

continuing the Cold War against Russia. 

We should be building missile defense 

only if we think it will work. It will 

not work against Iran. 

And there’s a second reason. Iran will 

choose to smuggle nuclear weapons, 

rather than use Intercontinental Ballistic Missiles because they will have 

more confidence in their ability to 

smuggle. Even if they have an ICBM, 

they’re not sure it works. They’re certainly not sure that it hits the target 

within 5 miles or within half a mile of 

what they’re trying to achieve. They 

know they can smuggle a nuclear 

weapon to precisely the location they 

want right outside the security perimeter of this Capitol, right outside the 

front gate of the White House. 

And, in addition, Iran would prefer to 

have plausible deniability. Why should 

they make it so clear that the bomb 

came from the Iranian government? If, 

instead, it is delivered by a terrorist 

they can always say, oh, you dare not 

retaliate; it wasn’t our fault. So Iran 

would prefer plausible deniability, just 

as bin Ladin denied then admitted then 

denied responsibility for 9/11. 

So we are building missile defense in 

the Czech Republic and Poland for no 

reason that enhances American security and at great cost to our effort to 

prevent Iran from developing nuclear 

weapons. 

Likewise, we have made it all too 

clear to Beijing that our attitudes toward their currency manipulation will 

not be affected in the slightest by what 

they do with regard to Iran, particularly at the United Nations. Why would 

we take the Number 1 threat to our national security and tell the Chinese, we 

won’t link it to anything you care 

about? 

Again, this has been an ineffective 

foreign policy of the outgoing administration. So I look forward to a diplomatic policy that gives the highest priority to putting U.N. sanctions on Iran 

as long as it develops nuclear weapons 

and supports terror. I look forward to 

using all of the economic sanctions 

available to us. And I look forward to 

being able to use our broadcasting resources to inform the Iranian government and people that they face true 

isolation, economically and diplomatically, if they continue down the same 

path. 

At this point, I want to move from 

foreign policy to our economic situation. Next week, this Congress will 

consider a bill amending the TARP 

program. TARP is the program that is 

known as the $700 billion bailout bill. 

$350 billion has been spent by this administration. The other $350 billion remains available to the next administration. 

Now, that second $350 billion will not 

be available to the new administration 

until the administration makes a request and until we have a chance in a 

privileged resolution to vote on a resolution of disapproval. But I should 

point out that it would be virtually impossible for this Congress to prevent 

any administration making such a formal request from getting the second 

$350 billion. That is because any resolution of disapproval would have to pass 

both Houses of Congress, then sustain a 

presidential veto, and both Houses 

would have to override that veto. So 

the second $350 billion is likely to become available to the Executive 

Branch. 

Before that we should strengthen the 

requirements for expenditure of the 

second $350 billion. Now, there are a variety of ways to strengthen the requirements. There are three that I 

have focused on most directly. Chairman FRANK has focused on quite a 

number of other ways to strengthen 

the TARP program, and I agree with 

most of what he will be trying to do. 

I should point out that I’m speaking 

on the basis of the outline posted on 

the Speaker’s web page and I believe on 

the web page of the Financial Services 

Committee as well. 

We do not yet have the bill’s text. 

But from that outline, we see one 

major improvement focusing on one of 

the three issues that I have focused on, 

and that is a requirement that when we 

invest in a financial institution, we receive at least a minimum number of 

warrants. Now, frankly, we should be 

getting a lot more warrants than the 

minimum that would be established by 

Chairman FRANK’s legislation. But the 

current TARP bill has no minimum at 

all. So if we can raise that to a 15 percent minimum and make it plain to the 

Department of the Treasury that the 

minimum is a floor, not a ceiling, and 

that the taxpayers of this country deserve warrants commensurate with the 

risk that we are taking, then we will be 

in a much stronger position, because, 

let’s face it, we’re investing in the preferred stock of quite a number of these 

banks of different sizes, and some of 

those investments will fail. So if we 

don’t make a profit on the good ones, 

our kids are going to be paying for an 

enormous increase in the Federal deficit as a result of the bad investments 

we have made. 

The way to do this is to set 15 percent as the floor, but to expect that 

where substantial risks are taken, that 

we get warrants worth 20, 30, 40, 50, or 

80 percent of the amount that the Federal Government is investing. 

There is a second area that I have focused on in all of the TARP discussions, and that is my concern that we 

will be bailing out foreign entities, not 

just American entities; that this would 

take the form of buying bad bonds that 

were invested in and owned, not by 

U.S. entities, but by big banks in 

Shanghai and Riyadh and London. 

Now, up until now, contrary to the 

plan that Secretary Paulson presented 

to this House, he has not spent a single 

penny buying bad bonds from anybody. 

b 1615 

Of course, he told us that was the 

only thing he was going to use the 

money for. He changed his mind by the 

moment he passed the bill, but the new 

administration may, indeed, decide to 

buy troubled assets/bad bonds from 

those who invested in them. If this is 

the case, they should only buy such 

bonds if they were held by an American 

entity on September 20, 2008, which is 

the day that all of this bubbled up to 

the surface, the day of Secretary 

Paulson’s original proposal. 

When I say an ‘‘American investor,’’ 

I include as American investors those 

entities incorporated in the United 

States, or doing business in the United 

States, even if they are owned by foreign entities. So, if Fireman’s Fund 

happens to be owned by an entity outside the United States, they are still 

very much a part of the business activity here in the United States, and if 

the bond was actually owned by the 

U.S. entity, it should be eligible for 

purchase under TARP. But it is a very 

different thing to allow what I call the 

China two-step. 

The China two-step works like this: 

The Bank of Shanghai made some bad 

investments. You know, everybody 

around the world bought our bad bonds 

or mortgage-backed securities, whatever you want to call them. They 

bought some really bad bonds. Shanghai transfers those to some U.S. entity 

on Monday, and then the Treasury 

buys them on Tuesday. The China twostep. 

We need to put into the statute that, 

before any bond is purchased, before 

any troubled asset is purchased, we 

know that it was owned by a U.S. investor, including those entities that 

may have foreign parents, but was 

owned by a U.S. investor on September 

20. 

The third issue that I’m concerned 

about and that now, I think, all of my 


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H156 CONGRESSIONAL RECORD — HOUSE January 9, 2009 

colleagues or our colleagues are concerned about is the issue of executive 

compensation and perks. Now, the outline—and I’m only working from the 

outline that’s posted on the Web page— 

does say that those who receive bailout 

moneys cannot own or lease private 

jets, but it leaves it clear that they can 

charter the private jets. Better we 

should take the private jet provision 

out of the law entirely than we commit 

a fraud on the American people and say 

that the executives at companies which 

needed a bailout are not going to have 

private jets, and lo and behold, instead 

of owning jets, they charter them. 

We should make it clear that chartered luxury aircraft cannot be used by 

those who receive bailouts, and we 

should provide an exception. We should 

provide an exception where the destination is a place very far from scheduled air service. We should focus not 

only on perks, but on the total compensation package. 

Now, the automobile bailout bill that 

passed this House, but did not pass the 

Senate, did provide limits on bonuses 

paid to the executives of the bailed-out 

firm. What we need to make clear is 

that any grant of a stock option is covered whether or not called a ‘‘bonus,’’ 

because the creativity of the corporate 

world is enormous. 

AIG said, when they paid millions of 

dollars to executives just last month, 

those weren’t bonuses; those were retention payments. So, given the ability 

of some in the corporate world to say 

it’s not a bonus just because it quacks 

like a bonus or walks like a bonus, you 

can be sure that there are those in the 

corporate world who think that granting a stock option is not a bonus. 

Why are stock options so important? 

Because the stock prices of the bailedout entities are currently trading very 

low. That’s why they need a bailout. 

So, if you give an executive the right 

to buy thousands and thousands of 

shares of his company and to buy each 

share for today’s $1 or $2 price, you are, 

perhaps, providing that executive with 

tens of millions or with hundreds of 

millions of dollars worth of options. It 

is, therefore, important that we not 

allow stock options to be granted or 

allow stock to be granted—either one— 

to executives at firms that receive a 

bailout. 

Some will ask: What about those 

companies that took money from 

Paulson and didn’t know that there 

would be tough restrictions? The answer is simple: Give us back the 

money. No firm should be required to 

live under these tough provisions if it 

no longer wants to hold taxpayers’ 

money, but if they’ve got taxpayer 

money, they ought to either live under 

the restrictions or return it to us. 

In addition to bonuses and stock options, in addition to chartered aircraft, 

I should point out that Goldman Sachs, 

one of the companies that is holding 

our bailout money, paid a quarter of a 

million dollars last year for a luxury 

limo for just one executive. So there 

are some other perks for us to limit. 

But in addition to perks and bonuses, 

we ought to look at salaries because 

some of these executives are getting $1 

million-a-month salaries. 

I think, if a company is receiving 

TARP funds, they should limit the 

total compensation package of every 

executive to a mere $1 million, and 

when I say total compensation package, that has got to count everything. 

That counts the salary, the bonus, the 

pension plan contributions, and the 

stock options. 

Now, I’m not certain that everything 

I’m suggesting here will be in the bill 

we consider next week. My fear is that 

the bill will prohibit bonuses but will 

be a little unclear about stock options, 

that it will prohibit leasing the corporate jets, but will allow the companies to charter the corporate jets, and 

that it will put limits on bonuses but 

no limits on salaries. 

The question then is a difficult one 

for those of us who were skeptical 

about the initial bill. Do we vote to put 

in some additional restrictions knowing that they are insufficient or do we 

vote against it? I will be analyzing that 

issue carefully, but I will say this: 

If we pass a bill next week that imposes additional restrictions, I hope we 

do so to a bill that is considered under 

regular order. Let us mark up the bill 

in the Financial Services Committee, 

and if the amendments that I’ve alluded to here fail to pass the committee or the House, I’ll be happy to 

vote for the bill knowing that these 

issues have at least been discussed, but 

if we are confronted with a bill that is 

a step forward but is not considered in 

regular order, as to which there is no 

markup in committee, and we are not 

allowed to consider amendments, substantive amendments on this floor, 

then it will be more difficult to support 

a bill even if that bill is a step forward. 

If we pass a bill that strengthens the 

TARP program but insufficiently, I 

will then introduce legislation to deal 

with the issues that I’ve brought up in 

this speech, and we will hopefully, one 

way or another, pass even stronger restrictions than those that are currently outlined on the Web page of the 

Financial Services Committee, hopefully as part of the one bill we will consider next week, possibly as part of 

other legislation that will be considered before the day when we authorize 

or when we vote on whether to disapprove the disbursement of the second 

$350 billion. So I look forward to improving the TARP bill. 

I think, of course, the greatest improvement is that I am far less skeptical of the incoming administration 

than I am of the outgoing administration, and that high skepticism of the 

current administration is justified by 

the fact that not one penny has been 

spent yet by Paulson to do anything 

that he told us that he would spend all 

of the money on. So a certain degree of 

skepticism of the current Treasury 

Secretary has been borne out by his remarkable departure from that which he 

was very clear was his promise to this 

House, right up until the minute when 

we passed the bill that he wanted. 

Finally, let’s take a look at the stimulus bill. I just want to comment on a 

few of the tax provisions. One of those 

that is being put forward by the administration that, I think, a number of 

those, including Senator KERRY, have 

some concerns with is the idea of providing employers with a $3,000-per-hire 

tax credit for each new person they 

hire. Let me illustrate the concern I 

have with this proposal. 

Imagine two restaurants. One has 

been there for years and is desperately 

trying to hold on, is desperately trying 

to keep its 25 staff members employed. 

Then somebody else opens a new restaurant right across the street. It’s 

going to hire 25 new people. Well, under 

the provision as I understand it—and 

there is no legislative language yet 

available; although the bill will probably be voted on within a few weeks— 

the new restaurant gets a huge credit. 

It receives $3,000 for every one of its 25 

employees, thereby putting it in a position to put out of business the existing 

restaurant across the street. 

Now, there are some tax provisions 

being suggested by the Transition 

Team that, I think, make a lot of 

sense. These involve giving businesses 

tax deductions in 2009 that they were 

otherwise going to reap in 2011 or in 

2012 or in 2013 anyway. 

The chief reason I support these provisions is they give us a lot of bang for 

the buck. They put a lot of money in 

the hands of businesses today, but 

when you look at the Federal deficit 

over the next 10 years, they increase 

that Federal deficit only a little bit. 

Why is that? Because the money we’re 

giving these businesses today is money 

they’re going to owe us in future years. 

So we’re not giving them new tax deductions. We’re simply letting them 

take the tax deductions sooner. Two 

provisions particularly meet this 

standard. 

One is allowing operating loss carrybacks for 5 years rather than for 2 

years by allowing those with operating 

loss deductions to be used now. We give 

money to the companies now, but we 

deprive the companies of those deductions in future years. 

Second, what is called ‘‘accelerated,’’ 

sometimes called ‘‘bonus depreciation’’ 

where we allow small companies to 

write off up to $250,000 of new investment immediately rather than taking 

depreciation deductions over a number 

of years. 

Another element that ought to be 

part of the stimulus package is aid to 

States and localities. There is nothing 

worse to do in the middle of a deep recession than to fire a bunch of police 

officers and a bunch of teachers. 

First, that means their work is not 

being done; our kids aren’t being educated, and at the worst possible time, 

our neighborhoods are less safe. Second, it has an immediate negative effect on employment and on the cash 


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January 9, 2009 CONGRESSIONAL RECORD — HOUSE H157 

available to consumers. So we ought to 

be providing enough aid to all of the 

States to make sure that they can, if 

anything, increase employment on 

those areas of public employment that 

are truly useful to their citizens. 

What we may need to do also is provide some formula by which we can 

provide the money to local governments rather than just to the State 

governments. I would suggest payments to each school district based on 

the number of full-time students and 

payments to whichever entity of local 

government provides police protection 

based on the number of residents they 

are protecting. 

I want to thank this House for giving 

me an hour of time to express these 

views. Even with all of this time, as 

I’ve said, I have not presented all of the 

evidence in support of these positions. 

That’s why I hope my colleagues will 

visit Bradsherman.house.gov to look at 

the additional arguments in favor of 

these positions. 

I yield back to the Chair. 

f 

ISRAEL 

The SPEAKER pro tempore (Ms. 

HIRONO). Under the Speaker’s announced policy of January 6, 2009, the 

gentleman from Arizona (Mr. FRANKS) 

is recognized for 60 minutes. 

Mr. FRANKS of Arizona. Madam 

Speaker, the most fundamental purpose for any government is its national 

defense and the protection of its citizens. I stand here today in heartfelt 

support for Israel and for its right to 

defend its innocent citizens from the 

attacks of a relentless enemy that 

seeks its destruction. The conflict unfolding in Israel’s heartland today is 

not unfamiliar to the Israeli people. 

b 1630 

Since its establishment in 1948, the 

tiny State of Israel—22 of which would 

fit into our State of California—has 

faced enemies on every side that openly oppose its right to exist and work 

actively to bring about its destruction. 

Indeed, Israel has never known a reality where its very existence was not 

threatened by this insidious ideology 

called jihad; an ideology so sinister as 

to make men and women leap for joy at 

killing their own children in order to 

be able to kill the children of others, 

whether that means flying commercial 

airplanes into the World Trade Center 

or sending a Qassam rocket into the 

side of a bus carrying small school children in Israel. 

Madam Speaker, in Imperial China, 

there was a terrible form of execution 

known as death by a thousand cuts. It 

was an unspeakably cruel demonstration meant to terrify observers into 

submissions. Israel is fighting to stop 

the ‘‘death by a thousand cuts’’ strategy used by Hamas to inflict constant, 

incessant destruction and terror on the 

Israeli citizens; and the nation of Israel 

has acted nobly for the sake of innocent Israelis, as well as innocent Palestinian civilians to justly refuse to 

allow the bloodletting to continue. 

Hamas was designated as a foreign 

terrorist organization by the United 

States in 1995. And it is a known proxy 

of the Iranian regime which openly 

seeks to see Israel wiped from the face 

of the Earth. The governing charter of 

Hamas openly calls for the destruction 

of the State of Israel, with the goal of 

raising the banner of jihad over every 

square inch of the State of Israel. 

And still, Madam Speaker, time after 

time, Israel has acted in good faith and 

has extended gestures of goodwill towards its Palestinian neighbors and 

Hamas, including its complete disengagement from the Gaza Strip in 2005 

and its commitment to target only 

military installations of its enemies 

despite the routine attacks against its 

own women and children on almost a 

daily basis. 

Madam Speaker, in all of its conflicts, Israel seeks to minimize civilian 

casualties; Hamas has sought to maximize them. Hamas has broken every 

cease-fire agreement and every honorable rule of war by deliberately embedding their terrorist militants and 

weapons caches in the homes of private 

citizens, and in schools, and in hospitals, and mosques; and Hamas has repeatedly used innocent Palestinian civilians as human shields while they deliberately target Israeli civilians. 

There is no moral equivalence here, 

Madam Speaker. Hamas and Israel are 

guided by two completely opposite philosophies: One is committed to equality and human dignity under God, and 

one is committed to a totalitarian ideology of hatred and intolerance; one is 

devoted to protecting innocent human 

life, and one commands its destruction. 

When a cease-fire agreement was 

reached between Israel and Hamas last 

June, Hamas used that opportunity to 

build up its stockpiles of rockets and 

weapons that now threaten approximately one million Israelis. And now, 

Madam Speaker, in a struggle for peace 

and survival, Israel is once again forced 

to carry out defensive action against 

Hamas in order to stop the terrorizing 

of its innocent civilians. 

And once again, once again, Madam 

Speaker, certain members of the international community are calling on 

Israel to ‘‘exercise restraint.’’ 

Madam Speaker, if 6,000 rockets had 

fallen on an American city over a space 

of four years, what would we say to 

anyone who called upon us to restrain 

ourselves in the effort to protect our 

own citizens? If those same members of 

the international community who so 

harshly criticize Israel for the defensive actions had to suffer for 1 week— 

just 1 week—under these indiscriminate incessant attacks against their 

families and their loved ones as Israel 

has done for decades, Madam Speaker, 

I would submit that the layers of 

Hamas would have been made ashes 

once and for all long ago. 

Madam Speaker, Charles 

Krauthammer recently wrote in the 

Washington Post something I wish 

every world leader could understand. 

He said, ‘‘Some geopolitical conflicts 

are morally complicated. The IsraeliGaza war is not. It possesses a moral 

clarity not only rare, but excruciating.’’ 

Madam Speaker, I could not agree 

with those words more. 

If the beleaguered Jewish people have 

learned anything in their struggles for 

survival over the millennia against enemies who have sought their complete 

annihilation, it is, as one Holocaust 

survivor said, ‘‘When someone says 

they intend to kill you, believe them.’’ 

Madam Speaker, consider some of 

the things that terrorist enemies of 

Israel have said they intend to do to 

Israel. 

Sheikh Hassan Nasrallah stated, ‘‘We 

have discovered how to hit the Jews 

where they are most vulnerable. The 

Jews love life, so that is what we shall 

take from them. We will win because 

the Jews love life, and we love death.’’ 

Wael al-Zarad, a Hamas Cleric, said, 

‘‘As Muslims, our blood vengeance 

against them will only subside with 

their annihilation . . .’’ 

And Egyptian Cleric Safwat Higazi 

gave this mandate to jihadists on 

Hamas television. He said, ‘‘We say to 

you: Dispatch those sons of apes and 

pigs to the Hellfire on the wings of the 

Qassam rockets. Jihad is our path . . . 

This is our strategic option, and not 

peace. . . . They [the Jews] deserve to 

be killed. They deserve to die. You 

should not care if you hit a man, 

woman, or a child. . . . Destroy . . . everything . . .’’ 

Madam Speaker, those are horrifying 

words even when we hear them here in 

the safe enclaves of our own homes and 

work places of America. But for the 

people of Israel, such words mean terror and death. 

Madam Speaker, America’s enemies 

and Israel’s enemies in this war are the 

same. Both of us face the reality of 

radical Islamic jihadists who would see 

our nations wiped from the face of the 

Earth if they could. Both of our nations have been struck deeply, and 

Israel, in its case, has been repeatedly, 

by any stretch of imagination, has 

been struck by this same ideology time 

and time again; the same ideology that 

murdered Olympic athletes in 1972, 

that took American hostages in Iran, 

that murdered Marines in their barracks in 1993, that bombed the World 

Trade Center in 1993, that bombed Riyadh in 1995, the Khobar Towers in 

1996, the embassy in 1998, the USS Cole 

in 2000. And then, Madam Speaker, this 

murderous, hellish ideology massacred 

nearly 3,000 Americans on September 

11. 

And this enemy makes little distinction between those who support Israel 

and Israel itself, and for that reason, 

Madam Speaker, we must realize that 

an attack on Israel is an attack on 

America and freedom itself. 

Listen to the words of Sheikh Ahmad 

Bahr, acting speaker of the Palestinian 


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