Date: 2008-09-29
Speaker: GARY G. MILLER (republican)
Chamber: H
State: California

Madam Speaker. as Chairman FRANK said. I have yet to talk to a Member who wants to have to vote on this today. This is probably the toughest vote any of us have taken since we have been in Congress. And if you just solely rely on the telephone calls we are getting from home and listen to people Who really dont understand the complexity of our marketplace and what we are trying to deal with here. the easiest vote for you to make would be a "no" vote today. But you have to go beyond that. You have to say what happens to the family next week who wants to buy a house and they cant get a loan? What happens to the family next week who wants to get a car loan and they cant get a car loan? Or they want to send their kids to the university and they go to get a student loan. and there are no loans available? And right now when the marketplace is running as it is. people say. well. that is not likely to happen. But if you look at the systemic problem we have in the marketplace. there is a probability that it could happen. Now we can roll dice today. We can say. lets not vote. and lets hope everything goes okay. And for Members. its a very difficult situation. They say. if I vote for this bill and the bill passes and the marketplace does not crash and it continues and it improves. people are going to be mad at me because I voted to continue the process they think is bad. If you vote "no" on this bill and we have a crash in the marketplace and illiquidity occurs and people go to get loans. the businessman who normally relies on his loans to make payroll. he goes to the bank and the bank says. like the bank said to McDonalds. we will no longer fund expansion of McDonalds. which is the largest fastfood chain in the United States. when that occurs. then the Member has to say. what is the consequence to voting "no" for this bill? So its almost a catch22. Youre darned if you do. and youre darned if you dont. There are some things in this bill that I think should have happened earlier. We are having marktomarket that deals specifically with assets banks have to hold that are devalued. Chairman Bernanke said last week. accounting rules require banks to value many assets at something close to very low firesale prices rather than at holdtomaturity prices. which is not unreasonable in its given face of illiquidity. Banks are forced today to write down the value of the assets they have and set huge reserves aside for losses they have already taken. The bad thing about this. I put language into the housing bill in April as an amendment. It came out of. this House and went to the Senate. When the bill came back from the Senate. that language mysteriously disappeared. We could have done that then and perhaps not be quite in the situation were in today. The subprime marketplace that people are angry about today. the subprime marketplace is a good marketplace. But when you mix predatory lending in the market. its bad. When you make loans to people when a trigger kicks in in the interest rate that they cannot make. you have committed a predatory loan. We should have defined that in law 4 or 5 years ago. But we did not. If you look at the rates of interest today. they have been held down so low that the euro in recent years has increased in value dramatically. and the result of commodity prices in the U.S. is that oil. grain. coal. metal. and currency premiums are basically suffering a 20 to 30 percent hit. If you look at the marketplace today. the declining home prices weve had out there today. and the subprime loans that theyre going to be buying. they are going to be buying them at 40 percent of market value. And if you look at what is happening on the prime loans. which are good loans. they are only worth 90 percent of market value. Members today need to look at what were doing. Are we going to change the market or are we going to let the market continue to decline and roll dice and say perhaps nothing will happen? I think there is something we need to do in the coming months that really bothers me that is not in this bill. I think we need to look at publicprivate partnerships involving local communities. investors. in these assets we buy and basically maximizing the benefit and the. value of these assets. If we involve the local people in what were doing here. they will put their assets with the assets of the Federal Government. increasing the benefit to the marketplace and ensuring that the yield to these investments will produce a profit. What we dont want to have happen is like what happened during the savings and loan debacle where assets were bought by the Federal Government. dumped on the marketplace at low prices. calling the market to continually decline farther than it had currently done. and end up with a worse problem than we face. Members need to look at what were doing today. Some Members have worked very. very hard to come up with a compromise package that we believe is not pleasing either side. The Democrats are not happy. The Republicans are not happy. But it is something that is going to work. We need to look at that. We need to weigh our conscience for what is best for our community and what is best for our country. And we need t o vote what is right for this Nation.