EMERGENCY ECONOMIC STABILIZATION ACT OF 2008 (House of Representatives - September 29, 2008)
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TIME: 09:30 AM Mr. FRANK of Massachusetts.
Madam Speaker, rarely have the Members had so many reasons for wishing we weren't here.
First,
it's a couple of days into what was supposed to be the time when
Members can return to their districts to engage in campaigning. Members
had a number of important events scheduled with their constituents,
with their families, with others that have already had to be cancelled,
and we are into the third day of that.
Secondly,
Members would rather not be here because this is a tough vote. This is
a vote where many of us feel that the national interest requires us to
do something which is in many ways unpopular because what we are
talking about, to many of us, is the need to act to avoid something
worse from happening than is already happening.
It
is hard to get political credit for avoiding something that hasn't yet
happened but you think is going to happen.
Most
of all, though, we regret being here because we all deeply regret the
economic conditions which have made this decision day necessary. No one
is happy that we have seen the failures that we have seen in our
economic system. We differ as to whether or not those failures, as they
have had a cumulative effect, require us to act. I believe it is
possible to debate whether or not 2 weeks ago it was necessary to act
quickly. I believe that it was. The bad news continues.
There
has been a lack of confidence in the financial system that is
pervasive. Unfortunately, a lack of sensible regulation allowed the
financial system to get itself into a position where so many people owe
other people so much more money than they have or can reasonably be
expected to get, that as confidence ebbs and people are called upon to
make good on promises they should never have made, we face a declining
cycle of activity.
People have said, well,
you're bailing out Wall Street. The people in the financial industry
who made a lot of money still have it. Their institutions may not have
it, but they do. No high executive of a failed institution will be
showing up soon at the unemployment office. None of them will be
hurting. They will be fine personally. The people who will be hurt, in
our judgment, are those who are trying to buy or sell cars, because
there won't be credit for the automobile industry. There won't be
ability to refinance your house or buy a house because there won't be
any money there for any purchase that requires credit of any size,
people will get hurt and it will have a cumulative effect.
Now
you might have argued that the tremendous lack of confidence that is
causing this over-leveraging to be a problem would not have had to be
addressed a week ago. But let's remember what happened. Ten days ago,
on Thursday, not far from here, in the office of the Speaker, the
bipartisan congressional leadership and those of us who have leadership
roles in the Financial Services and the Banking Committees were asked
to meet with the Secretary of the Treasury and the Chairman of the
Federal Reserve. In our country, under our system, the executive has a
lot of the initiative. We have an ability to shape. We have an ability
to respond. But in emergency situations--let's be clear--the initiative
is inevitably with the executive. And the two leading appointees of
President Bush concerned with economic activities, the people the
financial community looks to, came to us and said, you need to give us
this authority, and if you don't give it to us very quickly, there will
be a disaster.
We have not given it to them
as quickly as they asked because we felt that we needed, even if we
agreed with the premise of the need for action, that we had to make
some improvements. And we have made many of them, not as many as I
would like, but we have made many of them. But we were able to do that,
I believe, because we have been able to show progress.
At
all times from the time they came on Thursday night, this body has been
engaged. I have been here 27, 28 years. I have never seen a piece of
legislation which was so open to Member participation in which there
has been so much discussion. People have said, not enough time is being
spent. Well, let me say this. The hours spent on this bill exceed the
hours spent on most bills. And the staffs of the committee I chair, of
other committees of Members, have done extraordinary work. What we have
done is substantially change what they have done, but we have been able
to say at all points that we're making progress.
Today
is decision day. I wish it weren't the case. But I am convinced that if
we defeat this bill today, it will be a very bad day for the financial
sector of the American economy. And the people who will feel the pain
are not the top bankers and the top corporate executives, but average
Americans. They don't see it yet. And pain averted is not a basis on
which you get a lot of gratitude. But that is what is coming if we do
not do something today, in my judgment, positive. If this bill dies, I
think we get negative.
And again part of the
reason is this--and I disagree with Secretary Paulson and Chairman
Bernanke on some policy issues. I regard them both as men of high
integrity and total commitment to the national interest. And I believe
they are absolutely and legitimately convinced about this. And by the
way, they cannot, in my judgment, be accused of excessive pessimism. If
anything, they can be accused of being too optimistic. Because you will
recall that beginning with the Bear Stearns intervention, they have
tried a series of interventions much less intrusive than this and they
haven't worked. These are not men whose first impulse was to do
something this broad. These are men whose experience was that something
systemic was required because, again, of the depths of the problem.
Let's
not forget the cause as we debate the consequence. The cause was too
little regulation and the financial market getting itself into serious
trouble. And now we have to, through government action, work with them
to clean this up. And by the way, we have committed, I think almost
everybody in this Chamber, certainly a large majority, that next year
we will put in place the kind of regulations that we wish we had had
before so this won't recur. So nobody needs to worry that we do this
once and we will have to do it again another time and another time. We
know how, I believe, to prevent this from recurring. But that doesn't
help us as we deal with it today.
And the
point is this: No matter what you thought about the crisis 10 days ago,
when these two internationally respected highest officials of the Bush
administration of the greatest economic power in the world come up and
say, if you don't do this, we will have a crisis, then even if that
hadn't been true before, they have made it more true. And I don't
accuse them of doing it for that reason. That is just the reality.
If
we repudiate George Bush's Secretary of the Treasury and Chairman of
the Federal Reserve, joined as they were by previous Secretaries of the
Treasury, if we repudiate them and say, nah, calm down, we'll get over
it, I believe the consequences will be severe.
So
I hope that this bill is passed. It is a first step. We have a task
next year to do with regulation. We have oversight that must be done
about how we got here. But here is the choice: George Bush's two chief
economic officials have said to us, if you do not act, there will be
terrible, negative consequences for the financial sector, and they will
very soon exacerbate an economy that is already troubled, that already
has 6 percent unemployment and is on track already to lose more than 1
million private sector jobs in the year. If we add to this weakened
economy, and this is the headline, ``The House Repudiates Top Economic
Advisers,'' there is nothing, I believe, that will then stand between
us and--it's not the end of the world, this is a strong country, people
will still get up the next morning and still send their kids to school,
but fewer of them will be going to work. And fewer of them will be
buying cars. And fewer of them will be able to refinance their homes.
And the consequences will be a much more dismal near economic future
for the United States.
So I hope the bill passes.
I reserve the balance of my time.
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