tv U.S. House of Representatives CSPAN June 29, 2010 5:00pm-8:00pm EDT
adhering to his timetable for disentangling u.s. forces from this misadventure. madam speaker, the letter that mr. mcgovern mentioned, i have camp lejeune in my district and we are wearing out our miiitary. and, madam speaker, i hope the president will keep his word and have a timetable to get our troops out of afghanistan. and with that, madam speaker, i'm close -- in closing, i'd ask god to please bless our men and women in uniform, i ask god to please bless the men and women in uniform, ask god to please in his arms -- hold a child dying for freedom in iraq and afghanistan. and, madam speaker, i ask god to bless the house and senate that we will do what is right in the eyes of god. and i ask god to give wisdom, strength and courage to president obama that he would do what is right in the eyes of god. and three times i will say, please, god, please, god, please, god, continue to bless america. i yield back.
the speaker pro tempore: the gentleman yields back. mr. weiner of new york. for what purpose does the gentleman from illinois rise? >> ask unanimous consent to address the house for five minutes. the speaker pro tempore: the gentleman from illinois will be allowed to speak out of order. mr. quigley: back in december we asked, should we send more troops in afghanistan? we should have asked, would a greater military presence make america safer? and then question we asked, how can we get supplies to troops scattered in afghanistan? we should have asked, will getting supplies to troops fuel the insurgency we're fighting? now we are asking, can a new command for the afghanistan
ensure a -- ensure we win the war there? we should have been asking, is this war winnable and will it make america safer. we have to start asking the right questions. the first question is, where are the terrorists? we are so focused on the details of afghanistan that we are missing the larger picture. the terrorists we are fight are no long for the afghanistan only, they are operating in yemen, somalia, subsaharan africa an here in the just. the christmas day bomber was from nigeria. an increasing number of terror attacks are being plotted here on american soil. major hasan who killed 13 people at fort hood, texas, was born in virginia and an increasing number of extremists from around the world are being connected and motivated by the virtual afghanistan through the
internet. we are fighting an enemy without borders and must have a strategy without borders. in a world of limited resources, the next question we need to ask is this -- how can we best spend our precious tax dollars to make americans saferest? unfortunately right now we are allocating most of our resources to jaff began stan, where at most only 50 to 100 al qaeda are operating, according to c.i.a. director leon panetta. every day we read a new report that the billions we are investing are flowing to drug lords, corrupt local official, and even the taliban. according to a recent eye-opening report by subcommittee chairman tierney, we learn the u.s. military is funding a multibillion dollar protection racket a good portion of $2.16 billion in transportation contract is being paid to corrupt public officials, war lords and the
taliban to get needed supplies to our troops. we are funding the very insurgency we are fighting and we recently learned that at least $3.18 billion in cash has been transferred out of afghanistan since 2007. mostly to line the pockets of the nation's elite. on top of that, it is -- it has also been reported those same afghan elite are being shielded from attempts to investigate these cases of corruption. we simply cannot afford to continue to spend billions -- send billions to afghanistan only to see it end up in the hands on corrupt officials and the same insurgents we are fighting. we have to start fighting smarter, not harder, and that starts with asking the right questions. a reassessment of our strategy in afghanistan is due in december and one question must be answered -- is this the best way to fight terrorism and keep americans safe? i feel that with each report of afghan corruption an each
account of terrorism taking root worldwide, the answer to that question is becoming increasingly clear -- no. thank you and i yield back. the speaker pro tempore: the gentleman yields back. mr. cao of louisiana. mr. mcdermott of washington. mr. moran of kansas. mr. davis of illinois. mr. burton of indiana. mr. forbes of virginia. mr. defazio of oregon. mr. mchenry, north carolina. ms. ros-lehtinen, florida. ms. foxx, north carolina. mr. fortenberry, nebraska. under the speaker's announced policy of january 6, 2009, the gentlewoman from ohio, ms. kaptur is recognized for 60 minutes as the designee of the
majority leader. ms. kaptur: madam speaker, i thank you very much and ask unanimous consent to insert extraneous materials into the record. the speaker pro tempore: without objection. ms. kaptur: thank you. madam speaker, tonight i want to devote extra time to talking about the proposed financial reform bill the conference committee report being worked on at that moment that is likely to come before the house later in the week. i wanted to put the discussion tonight in a broader context in hopes that my colleagues will listen and consider the bill to be brought before us. let me begin with this% statement. bankers hold a very privileged position in our society because, in fact, they hold the awesome power to create money. their use of that power can advance our society or their use of that power can harm us
greatly. we are living through a period of great harm. so we have to ask, when bankers are given power, how much power do we give them? and what do we give them power to do? as we are discussing this this evening, the financial services committee is meeting to take out a proposal that had been part of the bill that would tax the banks that have done so much harm to us as a society. it is another example of too much power to too few. especially the few institutions that have hurt our entire nation. so i rise tonight to offer comments on the so-called regulatory reform conference report and i want to outline some principles that i hope members and the american people
will consider as this bill is debated later in the week. one of the key principles that we should seek in trying to correct what's wrong is the type of power that we give to these institutions to create money. in fact, the power to create money be more broadly distributed across our society, or would the bill concentrate power in the hands of those few banks that already have too much power? would, in fact, the power to create money and credit accumulation be redistributed to main street, where all of us live, or remain closely held by about six wall street and charlotte-based mega banks.
here are their names. citigroup. goldman sachs. hsbc. wells fargo. bank of america. morgan stanley. they have a whole lot more power than the people in my community in the financial realm. why is that? chances are if you talk to your relatives and neighbors, you'll find that over half of the money that they are spending to pay for their mortgage or pay for their car loans doesn't go to a local financial institution in the town in which you live, it goes to a distant institution somewhere else that sucks money, sucks wealth, sucks power away from your community and places it somewhere else system of this is a really threshold question. what does the bill do with the power to create money? today, it's shocking, but 2/3 of the financial assets of this country, 2/3, are held by those six institutions.
before the financial crisis of 2008, they only held a third of the power. now they have 2/3 of the power. i say that's way too much. that's not a competitive financial system. that's what economists would call an oligopoly. very few having very much and taking it away from the rest of us system of this issue of banking power is critical. and members if they read this very long conference report, ought to say, to whom does this devolve power? another threshold question is whether the proposed bill will encourage prudent lending or will it allow greater moral hazard by the institute, by the bill itself pretending to be reform, but actually offering the easy money creation of
recent history led by the big banks. what do i mean by that? it used to be, when america had a strong middle class we had a financial system that allowed credit, the creation of money, to be brought -- broadly distributed across our country. probably people in the galley and people listening on their televisions you actually knew bankers in your community who started banks and you'd have several, dozens of banks locally and there was real credit competition. we've seen that change as the banks became eaten up by bigger banks and bigger banks yet and % states lost money and power gravitated to wall street and charlotte, north carolina, banks. but in the days when we had really competitive credit in this country, there was a law of the land that said to banks, when you get a dollar in deposit you can't lend more than $10.
you can't loan money out more than 10 times because that's imprudent. and you might make a mistake. and therefore you have to have very careful underwriting and very careful servicing of those loans. that's all changesed. one of the reasons we're in this financial mess is the wall street institutions took $1 and blew it up into $100, where there was no underlying value no way that loan could perform. it would not rise in value if it were a home or if it were a commercial loan, it could never produce a hundred times more than it was worth at the beginning system of this issue an important question in the bill that will be before us. thily, we have to ask about conflicts of interest in the bill. between the credit rating agencies like moody's and standard and poors and the banks that employ them to rate
them. will there be a tight fenceline that is laid between them? or will it simply be finessed. i gather that mr. perlmutter has come to the floor, congressman perlmutter, very good, we'll give you two minutes system of this issue of, is conflict of interest addressed in the bill and shuts the door tight between the rating agencies and the banks, is it sufficient? members have to weigh whether it is or not. next i'd like to turn to derivatives. this is where wall street really created money whether there's no underlying value. you can check this in your own community because now a majority of mortgage loans in this country are actually the home is not worth as much as the loan is valued at. they call that under water. they so overvalued real estate through the derivative instrument and through the way that the loan was leveraged
through the bonding of the security, we're all paying the price for this now as home values start to go down and this year, another $-- another 2.4 million americans appear to be on the verge of losing their homes. the question becomes, what kind of margin calls will there be in the bill, capital margin requirements will there be in the bill and how will those derivatives be traded? will they all be traded on exchanges? will they all be transparent and electronic? and who owns the exchanges? from what i hear, it's the same big banks. they won't put an exchange in toledo, ohio, the largest city i represent. this is a big concern because in fact, if what i've heard that the capital margins in the bill are 15 to one, that's 150% increase over what we formerly had as the prudent lending
rules that existed in banks when we had a solid middle class and a banking system that was functioning for all the people, when it was $1, you could get $1 in your bank and loan $10. now we're say thinking capital margins on derivatives are one to 15. very interesting. congressman perlmutter, i'm yielding him time for a rules committee request. the speaker pro tempore: for what purpose does the gentleman from colorado rise? mr. perlmutter: madam speaker, i send to the desk a privileged report from the committee on rules for filing under the rule. the speaker pro tempore: the clerk will report the title. the clerk: report to accompany house resolution 1487, resolution waiving the requirement of clause 6-a of rule 13 with respect to consideration of certain resolutions reported from the committee on rules and for other purposes. the speaker pro tempore: referred to the house calendar and ordered printed. mr. perlmutter: and i yield back to my friend from ohio. thank you. the speaker pro tempore: the gentlewoman from ohio may
resume. ms. kaptur: i'd like to next turn to the issue of mortgages and the foreclosure rates around this country which are rising in areas such as i represent. will this bill that's coming out of the financial services committee in granting all these powers across our financial system going to do anything to help the american people who are being foreclosured in their homes? you know what the answer is? no. this year we will lose another 2.4 million families, none of these so-called modification programs are really working, and yet we have a major bill coming to the floor that doesn't address that issue when the very institutions being granted power are the ones that did this to us in the first place. so we should be able to exact from them some type of resolution for the american people who are paying their salaries, literally, by the taxpayer bailout, and yet we're not dealing with the mortgage foreclosure issue. and why aren't we? because if you look at who is
holding the mortgage today and who is servicing the mortgage, guess what? there's a conflict of interest because over half of the mortgages have second mortgages. and the servicing companies owned by the banks are the safe institutions that have a relationship with the banks that hold the second mortgage on the home. so, for xample, jpmorgan, if they're serving your loan but jpmorgan also owns the second mortgage, they have no interest in servicing your loan. and that's going on with all the instituttons that i listed earlier. so the bill is silent on the issue of mortgage resolutions, and that is a great tragedy. does the bill do anything to even reference those agencies dedicated to fighting the fraud that has crippled our financial
system? or is the bill silent? the bill is silent. even though we know we need additional agents at the department of justice and, yes, this bill is coming out of the financial services committee, but the bill doesn't even have a finding that references the importance of adding financial fraud agents at the department of justice, at the f. -- s.e. cremplet because these wrongdoers were set up at the highest levels, but the bill remains silent on that. what about -- i mentioned capital margins a little bit earlier. this is really an important issue to get at the question of pursuant lending. and -- prudent lending and how much power we grant these institutions and the instruments they create to create money and to check it against the value of the
underlying asset. the bill is quite weak on that. finally, i'd ask the question, does the bill create truly an independent systemic risk council or does it merely politicize risk evaluation through the u.s. department of treasury which has caused such confusion in the markets? credit is seized up across this country and treasury seems to play favorites always toward the biggest banks in wall street. and so these are threshold questions that the members have to ask. now, one might wonder why i hold these concerns about the financial regulatory reform bill. and the reasons start with the fact that unless we understand how excess has been rewarded and moral hazard has been encouraged inside the financial
system it will happen again unless we really get at what's wrong and how we've gotten ourselves to this position. and one of the ways to really understand that is to add up the true cost of the financial crisis we are all living through at this point. a true accounting of the cost of the big bank financial crisis to the american people is needed because unless we understand that we are in the verge of creating what is called a financial regulatory reform which should aim to prevent similar crises from happening. but we still don't yet have a full accounting of the crisis of 2008 and its causes, and that should really stand as a background to what we do from this point forward. almost two years ago i fought against the wall street bailout that was called the tarp. i did not vote for it the first
time, and i did not vote for it the second time. it gave wall street 100 cents on the dollar when people in my district were getting thrown out on their homes and they were getting zero cents on the dollar. what's fair about that? and that's not just people in my district. 20 million americans, american families. this is noust a small number. they're -- this is not a small number. and the values of every single american is being affected by this crisis. now, what's coming out of washington is the orthodox tale being spun by wall street's p.r. firms that the megabanks are paying us back, like the $700 billion, which is some of the money they were given in the fall of 2008, and so the cost of the american taxpayer will be paid back. is that really true? the big banks had narrowed the focus of what is owed back to
the american people to what is called the tarp, the troubled assets relief program, and they're not really talking about the big picture, the economic cost of what they have caused to us as a society. the real cost of the crisis, the real costs thrust on the american people that goes far beyond what is called tarp. yes, the american taxpayers need to be paid back for all of the damage the wall street bankers have caused, but they're taking away the tax in the committee right now as we're standing here on the floor to get them to give some of what they are earning back to the american people. that's how much power they have. we get a true picture of the real cost to the american people as we see millions and millions more of our citizens disgorged out of their homes while wall street's coffers still up and they're making
greater profits every year. their bonuses get bigger every year when americans are getting pink slips and small businesses can't pay health insurance. there's nothing fair about this playing field. so tonight i want to shine a light in the very dark corner of where the true cost of the bailout sits. so come and look behind the curtain with me where the wizard is really hiding. secretary geithner and even elizabeth warren say the banks are paying us back. but all they are paying back is the tarp money and they are not even paying all of that back. even if they pay back all $700 billion, that could not possibly be enough. in fact, there are 12 treasury programs to bolster wall street banks that have cost taxpayers $727 billion, about half of that is what is being paid back by tarp. plus, there are 24 additional
programs at the federal reserve that assist private banks, and those costs -- are you sitting down? $1,738,000,000,000. so the total of these federally orchestrated bailouts is $2.4 trillion, not $700 billion, $2.4 trillion and rising. the number is staggering. it's huge. wall street has no intention of paying back $2.4 trillion to the american people and no one is holding them accountable, not this congress, and not the administration. now, what has wall street done for main street? nothing. all they're doing right now is consolidating their power as the bill that comes to us later in the week will do. meanwhile, wall street big banks are recording record
profits and record bonuses last year on the backs of the american people who are struggling without jobs and fighting to keep their homes. now, the $2.4 trillion immediate cost of wall street's excesses are expected to rise and here is why. treasury has promised unending support regardless of the dollar amount for the next three years to two mortgage companies that they took over. they are called fannie mae and freddie mac. they're housing organizations. and the taxpayers are being asked to fill the holes in each institution as both companies continue their death spiral losses. already our taxpayers have been billed $61 billion on freddie mac, and our taxpayers have been billed $83 billion on fannie mae. that's a total just there of an
additional $144 billion. the spiraling bills and costs to our people go far beyond fannie mae and freddie mac. at the heart of the financial crisis is the housing crisis. so one must add in the losses of the federal housing administration, the veterans housing administration, the u.s. department of agriculture's housing program. they are all being tapped to pick up the mistakes of the big banks. one also has to add the cost to our economy of the decline in the value of your homes and the homes of our neighbors and friends across this country. it affects every single one of our citizens, and add to that the total cost of all of the unemployment, the lost in earnings that people have suffered as well as losses that people have lost in their
i.r.a.'s and their pension funds. all these losses have resulted from wall street's mad money game. just ohio's public pension fund losses alone took a $480 million hit with the failure of just lieman -- lehman brothers alone. that hole of all these accumulated losses that sit at wall street's feet. is what it has cost our society. now, there's one organization, the pew financial reform project, that did a report called "the cost of the financial crisis," and it prosides some very interesting information. according to pew, our economy plunged, and i quote, with gross domestic product falling by 5.4% and 6.4% in the last quarter of 2008 and the first quarter of 2009 the worst six
months for economic growth since 1958. and pew in their report created some really great charts that i'm going to discuss this evening. one that is called the impact of the crisis on our economy, which means our economy would have grown like this but in fact our economy fell like this. that gap is -- represents a huge loss, loss in jobs, loss in wages, loss in wealth. the pew brief states additional negative shock to our economy from the crisis knocked off another 5.5 million jobs, leaving employment at the end of 2009 with 9.5 million jobs lower than the potential of our economy. the anticipated employment versus what actually happened, and we all know americans who lost their jobs. they are actually subsidizing wall street.
with their job loss, with the loss of value in their home, there's the largest shift of wealth actually in american history is going on from main street to wall street and charlotte and to those six big banks. these next two charts show the impact of the crisis on household wealth and the impact of the crisis on wages. both have been damaged and the american people know it. in the district that i represent, our people have suffered this wealth shrinkage. we live it every day. the pew report states, american families -- imagine this -- lost $360 billion in wages, in salaries as a result of the weak economy, and the pew studies show the anticipated wages versus the actual wages. in addition, the bottom chart shows that the value of families' real estate, which i rmped a little bit earlier, declined sharply over the
crisis with a loss of over $5.9 trillion, or a loss of -- that was from mid 2007 to march, 2009, and a loss of $3.4 trillion from mid 2008 to march, 2009. we've all felt this. we all know this is happening. moreover, half the mortgages in our country are now controlled by the big banks. more and more families are sending their mortgage payments directed to wall street institutions or to the two institutions located in charlotte. further moving capital from our local community where you would normally pay your mortgage to your local bank or local credit union, over half those mortgages are now flowing off somewhere else as well as your car loans. this reads local communities of real money.
the pew report goes on to say the losses correspond to more than $52,900 of loss per household or $30,300 per household for the shorter period. in addition the value of families' equity holdings fell byy$10.9 trillion from the middle of 2007 to the end of march, 2009, at a loss of $97,000 per household that is real money that is a loss of your retirement dollars. that's a loss of your real estate. for many families, it's a loss of a home itself. lost wages. now we're getting a real sense of what wall street's false money creation has cost our country. the question really for congress is do we -- how much do we want to reward the system that yielded us this?
main street still keeps losing wealth while wall street keeps collecting more chips. in fact, we are experiencing the largest transfer of wealth from our country in modern history. now the last chart i have here talks about the cumulative impact on household wealth from the foreclosure crisis precipitated by the big banks with a reduction in our gross domestic product, americans obviously have lost jobs, wages, and wealth, and as they do that, they cannot hold on to their homes. we look at some of the projections, this is when the crisis started, you see that americans were having trouble with foreclosures already but then it just -- it just went down and continues to gg down here.
we have experienced this steady decline across our country, some areas being hit harder than others but nobody in wall street or in charlotte banks really seem to care because modifications, loan modifications are not being done and they're not being done for the reasons i stated earlier, that most of the 1i78 big banks, j.p. morgan, wells fargo, bank of americaing they hold a lot of second mortgages on the loans and they're not willing to work with the servicer to do a principal writedown. that would be the way we would normally resolve a loan on the books in past decades. but that isn't the system we have today when wall street holds the power system of it's a bleak picture right now for main street and to gain a true picture of the cost of the financial crisis, much more needs to be added to the ledger, not just this little simple discussion they have
here saying it's just paying back the troubled asset relief program, the tarp money. the ledger is much longer than that. and the banks have to pay back more to the american people because tarp doesn't even make a dent in what is actually owed. one of the most disgusting practices of wall street involves their use abuse of salary and the bonuses that keep getting bigger. in 2000, the standard and poor's 500 average pay for a c.e.o. on wall street was $13 million every year. $13 million by 2007, that had gone up to $54 million. over $20 million more. and the average worker in our country at minimum wage makes about $11,000 a year, minimum
wage. the average worker makes about $26,000. that's as of 2000. and then as of 2007, the minimum wage worker in our country makes about $12,000 a year and the average worker makes about $31,000. the pay scales are just so out of whack. c.e.o.'s actually made over 1,000 times more than someone working minimum wage. so the average wage of a worker in our country is $32,000. the average wage of the c.e.o. 's is about $9.2 million. we're not even talking about the same league. i say to myself, if you make the kind of big mistakes they made are they worth that amount of money? thing prudent managers at credit unions in the communities i represent, local community bankers they manage
the money much, much better. that's where we should be placing the power, back in hair hands. this bill will not do that. i really do have a question. are these big institutions really capable of caring about the american people and about the american republic? because they certainly seem hell bent on destroying it. the big banks remain too big and the crisis enabled them, sadly to get even bigger and more interconnected. too big to fail is too big to exist. i mentioned earlier that the banks before the crisis controlled 1/3 of the assets in our country. now they control 2/3. that means power is moving away from you to someplace far away from you. the concentration of wealth on wall street has sucked think lifeblood out of the rest of our economy. mid size and small banks and credit unions are fighting for their life right now. in fact, 86 more banks have
failed this year alone. banks are doing more than just banking. the wall street ones, for sure, they are speculating. this used to not be allowed in our country under an act called the glass-steagall act which prohibited commercial banks from doing investment and prohibited investment firms from taking regular bank deposits. it kept gambling and speculating separate from sound, prudent, commercial banking. that was until the late 1990's. in 1999, a bill called the graham-leech-blyly bill repealed that act and created a new kind of holding company they called a financial holding company. i have introduced legislation, h.r. 4773, the to return prudent lending banking act which would take the glass-steagall separations and carry them beyond the federal
reserve system to all federally insured depository institutions and require they separate commercial banking and investment arms as well as repealing the financial holding companies language from the graham-leech-blyly act. the bill before us late they are week will not do that. it allows them to conduct this integrated activity under this holding company structure. but separation is what's needed. but it is not what will end up being voted on on this floomple equally, something called the volcker rule was watered down in the conference committee this proposal by american economist and former value reserve chairman paul volcker would have restricted banks from making certain kinds of speculative investments if they are not on behalf of their customers. volcker argued that such speculative activity played a key role in the financial cry soifs 2007 to 2010 and he's
absolutely right but the conference report that will come before us allows them to keep their hedge funds and private equity arm up and running and they can still do some proprietary trading. do we really want home to do that? haven't we gone through enough? right now, wall street is choking the life out of our local credit systems and the communities they serve. let me just give you one example of why it's so difficult for local banks. when the big banks, i call them the big six, made all these mistakes, inside the banking system local institutions be they banks or credit unions, pay into insurance funds. well even if they didn't do anything wrong, they're part of the banking system and their fees went up. they had to pay more into the insurance funds system of some institutions that were paying $20,000 a year for insurance found their rates going up from
$20,000 to $40,000 to $70,000 to $140,000 and this year to $700,000. both credit unions and banks in the communities i represent to shore up the national insurance fund because of the losses of the big banks. what's fair about that? in my hometown of toledo, ohio, this week, there was a report that talks about one of our community development credit unions being hurt and they're being hurt all across the country because these fees are being placed on them even when they didn't do anything wrong. they simply can't earn enough to afford to pay these higher fees, so who is going to win in that game? the very six big institutions that have been rewarded again and those at the local level trying so hard to hang on are being hurt. the little guys can't expand
they can't hire or lend more since revenue has to go to insuring their depozz silts and they have to send that here to washington. and they can't lend it out. that's why credit has seized up across the country. a local bakery said, i want to add three employees, i want to get a loan locally to add some equipment, i can't get a loan. i said, i know why, i know where the money is, but i can't get to it. i don't want wall street making loans to local businesses, i want local banks making loans to local businesses. by the way, when credit at the small banks and credit unions is seized up, what's been going on is the big banks have been coming in and buying them up. when they can't make it 234i78, they buy up their deposit bases. so in coming to work, going out to the airport this week to come back to washington, i saw a sign go down, national citibank in ohio, the sign came
down, another sign went up called p.n.c. out of pittsburgh and we are now owned by some institution far, far away from us. according to the "l.a. times," on june 26, 2010, it stated the propose red form bill won't help protect small banks, nor keep competition alive in our banking system. a return to prudent banking would address this concern. reinstating and strengthening glass-steagall would move our financial system to a more competitive mode. the bill that's proposed from everything i know about it will not do that. i wanted to reference a report from bloomberg business week, that i -- that has two sentences at the beginning of the article that are important, and i quote, legislation to overhaul financial regulation will help sur b -- curb risk
taking and boost capital requirements. what it won't do is fundamentally reshape wall street's biggest banks or prevent another crisis. if we can't do that, why would i want to vote for it? so i want to ask my colleagues this -- does the proposed bill make the necessary change to be able to prevent the financial crisis of 2008? if it can't, why vote for it? too many experts don't think it can. look at your own communities and ask, for whom is our financial system working? when you pay your mortgage, or your car loan, where do you send your money? if it isn't to your own community, if it's to some distant place somewhere, do they really care about you? if you're a small business trying to expand your business and that's the only place in our society creating jobs right now, why should they get their
loan from far away? why shouldn't it come from an institution close to them? this morning, on the marketplace morning report produced by american public media, bill radke was interviewing the editor in chief of the business insider on the regulatory bill. mr. radke stated, you are one of these observers that believes that even with these new rules we are at risk of a global crisis. what might that crisis look like? mr. blodgett responded, i think the reason people are saying that is if you took this legislation and enacted it in 2005, it would not have prevented the crisis we just had. if it can't prevent the crisis we just had, what are we doing? what are we about here? so blodgett said if we enacteded the bill we are going to vote on in 2005, it would
not have prevented the crisis we faced in 2008? this certainly then can't be real financial regulatory reform. the billldoesn't appear to encourage prudent credit accumulation. it doesn't allow for that power to be devolved to main street. the bill allows financial power to create wealth, the bankers' awesome power, to be closely held in a few wall street and charlotte mega banks. the bill does not address the business model of credit rating agencies or how interwoven these nongovernmental agencies are with the institutions they rate. the bill does not require that all derivatives be traded through transparent exchanges. the bill does not adequately support those agencies dedicated to finding and
fighting fraud in our financial system. it really doesn't do anything to address the continuing mortgage foreclosure hemorrhage, the crisis going on across our country. so if it doesn't do that, why are we just nipping at the edges? sadly, the so-called bill seems all too often in the end to support the very same big banks and not the american people in the communities in which we live, in the main streets that all of us are sworn to represent. "the new york times" ran an editorial last week on derivatives, and i really want to reference it because it stated the following -- this is arguably the most important issue for the big banks because real reform will crimp their
huge profits from derivatives deal making. that's where they take a dollar and turn it into $35 or $100. it's gambling, actually. it's not banking. it's gambling. it's arguably the most important issue for the public because the largely unregulated multitrillion dollar market in derivatives intensified the bust and led to the bailout. unreformed it will do so again. "the new york times" article says, the final bill must ensure that derivatives are traded on transparent exchanges and processed through third party clearing hour to guarantee payment in case of default. that will end the size and risks of derivative deals liie those that caused the bailout of the american international group -- american-international group a.i.g. new rules must be broadly applied, end of quote. and they told members of congress that all derivatives
should be openly marketed with transparency on exchanges, and if an institution creates and instrument that is tto complex to go through such an open and transparent process that institution should be subject to higher, in fact, extremely high capital standards. the bill really doesn't do that. the amendment offered by senator blanche lincoln in the other body, would prohibit banks from engaging in swaps. if the amendment had not been weakened it could have resulted in banks having to spin off from their swapped businesses, but it seems like it's business as usual in washington. the amendment was weakened and too many exceptions exist. goldman sachs, morgan stanley, bank of america, wells fargo, citigroup, use derivatives that hedge the risk they are undertaking as well as still being able to trade interest rate and foreign exchange
swaps. for other types of nonstandard instruments like some credit default swaps, the banks have two years to move that business to a subsidiary which is capitalized separately, and some people say there is even language in the bill that will allow them up to 15 years to try to meet some sort of standard. well, you can't really call that reform. bloomberg businessweek reported last friday that u.s. commercial banks held derivatives -- get this -- with the notional value of $216.5 trillion in the first quarter of which 92% were interest rate or foreign exchange derivatives, according to the office of the comptroller of the currency. it's not a small amount of money, and very few institutions hold the power to trade them. the five u.s. banks with the biggest holdings of derivatives -- you probably already know
the answer -- jpmorgan chase, goldman sachs, bank of america, citigroup, wells fargo hold $209 trillion or 90% of the total. the office of comptroller of the currency said. you know, when you keep running into the same rhineos, you ought to start recognizing them out there. and these are the very same companies not doing mortgage modifications through their servicers across our country. so what's allowed in the bill accounts for 92% of the held derivatives, five biggest meg eabanks control almost that 92 -- megabanks control almost 92 %. did the bill really do anything about derivatives? would se -- was essentially
every user ended? could we avoid derivatives creating such an exposure for an institution that is too big to fail that we, the government representing the people of the united states, and you, the american taxpayer, must pay hundreds of billions of dollars to prevent its demise? so i say to my colleagues, read the bill. perhaps read my comments. and in the end ask yourself the question i began with -- which bankers do you believe should hold the awesome power to create money? which bankers have been prudent in their practices? and as this bill is debated, do we increase their power or do we decrease their power? and if all we do is advocate
more power to jpmorgan, citigroup, goldman sachs, hsbc, wells fargo, bank of america and morgan stanley, have we really served the american people? madam speaker, i yield back my remaining time. the speaker pro tempore: under the speaker's announced policy of january 6, 2009, the gentlewoman from wyoming, mrs. lummis, is recognized for 60 minutes as designee of the minority leader. mrs. lummis: thank you, madam speaker. i'd also like to thank and congratulate the previous speaker for her outstanding summary of some of the issues that will be facing this house later this week. it is, as she said, a bill that will enhance big banking at the expense of small community banking, and her hard work on
this issue is appreciated on both sides of the aisle. thank you very much to the gentlelady for that excellent summary of the bill. and there are so many issues where if we could work together on a bipartisan basis i feel we could come up with better legislation. what i intend to talk about this evening is an area where we've not had much bipartisan dialogue, and that is, of course, over the budget, our debt and the deficit. it is official now, we will not have a budget this year. this will be the first time since the budget act in 1974 was passed creating the system we have for budgeting and making expenditures now that we won't have a budget. very first time since 1974. every year the house has passed a budget. i believe almost every year the senate has passed a budget. there were years when they
don't agree, but every year the house met its obligation and passed a budget. you know, my current chairman of the house budget committee, who, of course, is a member of the majority party, has said if you can't budget you can't govern. and i couldn't agree more. if you can't budget you can't govern, and we are not going to budget this year and we, therefore, are not going to be governing this year in a manner that the american people expect and deserve. so it's a source of tremendous disappointment to me. we've also been told and learned last week that we will see none of the major appropriations bills before the november election. that is an indication to me that the majority party
recognizes that it has overspent for 18 months, that the american people are tired of the overspending, that they are zeroed in on the debt and the deficit, and they are not going to take it any more. there are ideas that the republican party has had to reduce the debt and the deficit, to bring down the size and scope of the federal government and to divorce ourselves from the current strategy of big government, big unions, big business. and among the big businesses are those that the gentlelady from the majority party, from ohio, talked about in the last half an hour. always supporting bigger government, bigger businesses, bigger unions takes away from our communities where the creativity is, where the desire to create jobs and families and
businesses and households and churches and charitable institutions really grows and thrives. it deleted those kinds of opportunities around our country. it discourages those kinds of opportunities around our country. our country truly is at a crossroads now, and we've seen very different reactions on the part of the people in, say, greece, that is experiencing enormous financial problems, huge debts and deficits, and the people there who are demonstrating and rioting and out on the streets are those who receive the benefits of government in greece, those who are living off the very, very small private sector that's trying to fund this behemoth of a government with all kinds of social services and entitlement
programs that they can't afford because they're unsustainable. sending, plummeting their country into the kinds of debts and deficits that have gotten them into such deep financial trouble that all the world is horribly concerned. take that image and compare it to the image of the united states in the last 18 months where you have so-called tea partyiers who are out on april 18 -- partiers who are out there on april 18 protesting big government, protesting later in the year this enormous health care bill that the congress passed over their objection. these are the kinds of people that are up in arms in america, that are out demonstrating and protesting. they're the taxpayers. they're the people that want less government, smaller
government, more efficient government, that want business to be more accountable, that want government to be more transparent. these are the people that are protesting in the united states , and these are the people that we should be listening to. in fact, i want to congratulate one governor who was listening and who has listened and who did a miraculous thing in the last few months and that is the new governor of the state of new jersey, governor cristie. governor cristie took over from a big spending administration. he inherited a big spending legislature in new jersey and yet he ran on an agenda that resonated with the people of new jersey. he ran on an agenda to cut the
debt in the state of new jersey and he has done so. he brought forward budgets that cut government and the majority in the legislature there said, oh, my gosh, we can't do that. he said, i am going to make these cuts unless you submit to me a budget that is balanced and last night very, very late in the wee hours of the morning, that very legislature passed governor christie's budget. the state of new jersey, the signing of that budget of governor christie, has become the most fiscally responsible governor in the united states. it is a miraculous story. it's a story of the american people, in their case, the people of new jersey, winning
out over big government, special interests, entitlement programs we can't afford, and giving new life to small business, individual initiative, freedom. it is a great example of what this congress can do come november. i'm going to put up a couple of charts that i want you to see. this first one is about the changing priorities of this country with regard to spending over time, starting in the 1970's and moving into our current decade. as you can see, during the late 1960's, early 1970's our major
portion of our budget, almost 50% of our federal budget, was spent on defense. obviously this was at the height and then followed by the waning of the war in vietnam. this is when the draft was no longer in effect and ever since then defense spending has consumed a smaller and smaller part of our federal budget. it is obviously -- it's the brown line, so it's up a little bit with the war on terror, but compared to our other spending it's still very, very steady and within the realm that it has been over the last 20 years. now let's look at medicare and medicaid, this is the red line. this is the line that started out as a very small 5% component of our budget in the 1970's and has been steadily climbing and
is climbing still to the point where medicare and medicaid are going to choke out all other spending if we project it forward. the two in the middle, social security, which has been tremendously flat and pretty steady, actually is going to be funded until the 2030's. but when we hit the 20 30's we're going to see a -- 2030's we're going to see a 25% reduction in the benefits paid to those who have paid into social security, another problem this congress needs to address. on a bipartisan basis. and then the other, of course, nondefense discretionary which over time has followed a wave in between. so the big changes are the decline in defense spending as a portion of the federal budget and the massive replacement of that spending in medicare and
medicaid. now, one could say that's a good thing and indeed it is, but we're not having -- that we're not having to spend a big a portion of our federal budget on defense but the scary part is that the growth in entitlement programs, medicare and medicaid, is going to be unabated and it's going to crowd out other investments in our country because we are going to have to, in addition to all the other things we do, debt finance these programs. and when we debt finance and are paying interest out of every year's budget for interest on the debt we are crowding out other investments. and by crowding out other investments in our economy we are marching down the road towards greece, towards italy, towards spain, towards the kind of problems the u.k. has been
having. but is changing course on and is going to address. and we wish them the best in those efforts. now, where did the money go? these are components of the 2009 deficit growth in billions. here's the federal budget deficit. the places where the federal deficit tripled in one fiscal year as tax revenues fell and congress pumped out large sums to stabilize financial institutions and stimulate the economy created a tripling in the federal deficit in one fiscal year. furthermore the policies we've enacted will double the debt in five years and triple the debt in 10 years. so the situation that we put ourselves in in the last 18 months creates dire
circumstances. so the components of the 2009 deficit growth occurred due to lower tax receipts, that's part of our recession, stimulus, half in spending and half in lower taxes, the republicans quite frankly had a stimulus package that would have created twice as many jobs with half the size of a stimulus, and doing it by infrastructure spending through private sector investment. the next item, bailouts, for financial institutions and the auto industry. bailouts for fannie mae and freddie mac. and unfortunately we're not addressing the structural problems with fannie mae and freddie mac in the government reform bill or rather the financial reform bill, the conference committee of which has concluded its efforts. then we have unemployment benefits due to the recession
which have been running steadily until recently and then the remainder is a correction of aggregation of other spending. so that explains how our federal budget has trended the way it is. this was before we passed obamacare. this budget was passed before the health care reform bill which has a huge other component to the debt and the deficit. we know that that bill, if you take the years 2010 to 2020, is going to cost over $1 trillion, half of which is going to come out of cuts in medicare and the other half out of tax increases. but we're only paying out, as you'll recall, six years or seven years of benefit for 10 years of taxes and medicare cuts. when you first combine the first
10 years where we're actually collecting taxes, cutting spending on medicare and combining that 10 years with 10 years of benefits, we're talking about a deficit of $2.4 trillion and that would be what it would be going forward. in other words, we created a program that we knew had a long-term structural deficit that was enormous and did it knowingly, leaving for future generations the tough decisions about how to pay for it. creating an entitlement that you know you can't pay for and that creates structural deficits for our children, kicks the can down the road to a generation that deserves to inherit a better country, no wonder when you poll the american people they will say, we inherited a better
america from our children but our children will not be inheriting as high a standard of living from us as we inherited from our parents. that's unconscionable. i've been joined this evening by the gentleman from pennsylvania who has made his career in health care and they wish -- may wish to comment further on that or anything else. i'm so pleased that you've chosen to join me this evening and i yield the time to you. >> i thank the gentlelady from wyoming for hosting this very important hour. mr. thompson: and very important need. the number one issue right now, as you have very appropriately pointed out, is the growing and massive federal debt. independents in this country overwhelmingly identify the debt as being the biggest threat to the future well-being of this country. as i travel around and the fact that the democratic majority has not even introduced a budget, the first time since 1976, i
raised the question, you know, america's really at a critical crossroads in history. we have a choice. we have a choice to continue the path of taxing and spending and borrowing and the lack of transparency that will result in a choice between that and accountable government, so america really has a choice between becoming greece or new jersey. greece, we've all witnessed the fiscal meltdown and chaos that resulted in that country as a result of the massive social spending and out-of-control government. and we've all seen most recently in the garden state where with the election of accountable and transparent and fiscally responsible leadership, where that state has really started to put its house in order. so this is a little hard for someone who to is a lifetime
keystone stater to say, i would choose new jersey when it came between those two. we've confirmed that the federal budget plan for fiscal year 2011 really has been canceled. the cause, washington democrats' out-of-control spending spree. this is really a betrayal of hardworking american taxpayers. the house of representatives has passed a budget err he -- every year since the congressional budget act took effect in the fiscal year 1976. and to be completely accurate, there have been times under both democrats and republicans when a finished budget was not passed by both houses. but this is the first time that the house of representatives has simply decided there's too much peril for the american public to see the numbers that they are pursuing. so they're going to stop the game before the coin is even tossed. we have more than $13 trillion in debt and a presidential budget that puts the deficit at
$1.6 trillion and spends $3.8 trillion. even the fed chairman, ben bernanke, said, this debt is, quote, unsustainable. now, faced with similar challenges in our personal budget and that's something we families do around this country each and every day, there'd be talk around the kitchen table and the children's allowances would be cut along with many other luxuries. it is that discussion that the majority party in this chamber really seems unwilling to have under the theory that if they ignore it, it will go away. or if they ignore it, maybe the american people won't notice the massive amount of debt that has been accrued over these past 18 months. unfortunately the debt will not go away. it is a legacy of debt for our children and grandchildren and the pain will be transferred to those future generations in the hopes that frankly they'll have the guts to face reality. i thank the gentlelady for
hosting this hour on a very, very important popic. mrs. lummis: i thank the gentleean for -- topic. mrs. lummis: i thank the gentleman for joining me. as some of you were aware, america's -- americaspeakingout.com is a website where all americans can go to weigh in about their views on the american debt, deficit and about ideas to reduce the size and scope of government and right size it, make it more efficient, and anything else you have in mind about shaping the activities of this congress. we very much want to hear from you. it gives you a chance to share your ideas with members of congress and we very much commenn it to your attention. you know, i have a bill that i'd like to discuss, that i'd like you to put in a plug for on americaspeakingout.com and that's a bill called the federal
work force reduction act. it is a bill that i'm sponsoring and that i've used this information to help explain. this year in congress when you add up all the spending we've done in the last 18 months, the great growth sector in terms of employment has been government. in fact, when we passed the stimulus bill and we were told that if we passed the stimulus bill it will keep unemployment under 8%, unemployment since then has been hovering at around 9.7% and as high as 10%, 10.1%. during that time nine million private sector jobs were lost, the entrepreneurial economy lost jobs and yet the only sector
that grew was government. government employment has increased by 15% during the time when nine million jobs were lost in the private sector. anddthis shows you what's happened to federal government employment. it actually was pretty high back in 1993, but over the decade of the 1990's it declined. then it experienced, right after the 9/11 bump in employment associated with homeland security, it experienced tremendous stability in 2003, 2004, 2005, 2006, 2007. then you get to 2008 and then 2009 and then 2010 where it goes off the chart and it shows that federal government employment has absolutely skyrocketed and further federal government employment has grown in terms of the salaries that are paid.
they far exceed average salaries in the private sector. even here at the u.s. department of education in washington the average employee makes twice as much as the average american teacher. imagine that. + the people here in washington are making twice as much, the bureaucrats dealing with education issues, making twice as much as the classroom teacher in america who's actually teaching the students. so, for these reasons i sponsored the work force reduction act and this bill does a couple things. one, it freezes federal government employment and, secondly, for every year we're running a deficit, we will take vacant positions, when someone retires, or someone moves to another job, their position is vacated, those positions then will go into an employment pool
and agencies will have to seek reinstatement of that position so they can hire someone into that position from the employment pool. they'll have to justify it and they'll have to compete for those positions because for every two people who leave their job and vacate a position, only one position survives in the pool. . . when people leave or retire, the number of employees would diminish. the exempt agencies are homeland security, defense and veterans affairs. every other agency is subject to it. and this will continue for as long as we run deficits. the fact that federal employment has grown by 15% when the
private sector lost nine million jobs is just completely unconscionable and it is in furtherance of the big government, big unions, big business agenda that is being advanced through this congress in the last 18 months when we should be having small efficient government. we should be encouraging small business where the job creation is. and we should be encouraging union membership in small relationships that can deal directly with employers on the job site rather than the huge national organizations that have their tentacles in every aspect of every bill that we pass. please go to americaspeakingout.com and weigh in your thoughts. we have been joined by the gentleman from florida who is
also a distinguished member of this conference. and i will yield time to the the gentleman from florida. thank you for joining us. mr. diaz-balart: thank you for bringing us together to talk about an important issue. the news recently has been full of the pictures of the g-20 meeting where leaders from around the world got together to speak about the economic situation in the world. and it was rather, i thought, ironic, that you had on one side the canadian leader plus many european union leaders talking about how we have to control spending and how the world economies are going to -- on a path of not being sustainable. and on the other side, pretty much alone, you had the president of the united states who continues to insist that we need to spend more money and
borrow more money in order to have the economy prosper. now, we know how well that has worked so far. i mean, think about it. we had the tarp, bailout of wall street. we had then the so-called stimulus and the gentlewoman from wyoming just spoke about the results of that almost $1 trillion borrowed money that the federal government took from the american people, from small businesses, from families, to spend it because they said it was going to fix the employment situation and unemployment would be capped at 8%. and three-plus million jobs would be created and the only place where jobs have been created was government jobs and private sector jobs have not been created. but wealth has been taken away from families and small businesses in order to spend and
misspend and to waste that money. and then we had the second part of tarp. the second expenditure of tarp and son of stimulus. and we are continuously told, yes, that's really helping and it's worked. you know, how do you know if what you're being told isn't quite accurate? well, just listen to what they are doing. the president stated if the so-called stimulus were to pass that unemployment would be capped at 8%, would not reach 8%. those are his numbers. that was his benchmark, not mine, not yours, not the gentleman from pennsylvania's benchmark. that benchmark was established by the president. he established what he said was going to happen and we know what has happened. unemployment way above that. job creation has been dismal. we have lost millions of jobs
after the stimulus passed. and yet, we see our president in front of the world saying, number one, it's worked. and we need to do more of it. as if we are living in some weird time warp. does he and does the leadership in the house not understand what's going on in europe, with greece, for example, where they have had to get bailed out where their debt is so high and expenditures out of control that they had to bail them out. do they not understand what's going on in spain because their debt is so high and expenditures are so high. the president of the united states called spain and said you have to cut back on expenses. and yet, here, he present tends as if we live in disney world,
that you can continue to spend -- let me restate that, borrowed money, and that there are no consequences, that it's fake. that the words of just about every economists who say this is unsustainable, not true. if that were not bad enough, where have they spent this hard-earned money? where has it gone? now, if i were to tell you all now that -- i don't know, pick your government. pick your government, a neighboring government, i don't know, guatemala, argentina, wherever you want and we said, hey, the administration there just established a web page and the web page cost $5 million, we would go, oh my gosh, what have they done? there's a word for that. and if it happened someplace
else, we don't call it waste but corruption. if we see some government, some president has created a web page for $5 million, we look at it and say, something strange is happening here. a web page that was created by this administration to track the failed stimulus didn't cost $1 million or $5 million. the web page cost $18 million. now, you know, i ask the american people, did you ever hear of an $18 million web page? does that sound like efficient use of your money? does that make any sense? so you are wondering why it hasn't created jobs? because the money has been wasted. and i'm not going to use another word, a word that we would use if it happened someplace. i'm not going to use the word corruption for an $18 million
web page, but it sure smells funny and shows you that the money is wasted. and demonstrates why it has not created jobs. and we can go on and on and on and money going to campaign consultants, stimulus money going to campaign consultants? and what is the answer? is the answer of this administration and this congress, let's take a step back and look at what we have done, it hasn't worked, our debt is unsustainable. when europe tells us that your debt is unsustainable, that becomes pretty evident when they tell you we are spending too much money. the europeans are telling the united states we are spending too much money and incurring too much debt, that should make us take a step back and figure out, it hasn't worked. the administration spent all this money and said it was going to keep unemployment at 8%.
way over there. said it was going to create 3.5 million jobs. hasn't happened. you would think they would take a step back and say the american people have suffered enough through irresponsibility. let's do something different. no. they continue to do more of the same thing. they continue to double up because it's not their money, it's the american people's money and say let's double up. we're going to do more. we're going to waste more of the taxpayers' money. it is totally unacceptable. i want to throw out some numbers. in 2010, the president's budget where he submitted -- and by the way, congress did, was $3.6 trillion. here's the problem.
the revenues for that year were $2.4 trillion. it doesn't require a nasa rocket scientist to understand what the problem is. but that wasn't enough. this year, the president submitted a budget, the president did, and he submitted a budget that's $3.8 trillion. but here's the problem. the estimated revenues for this year, remember, $3.8 trillion. after last year again and all the reasons last year was a special year and all the past sins and that's why it had to be done last year and now this year, he submits a budget of $3.8 trillion. but what are the revenue estimates for this year? $2.6 trillion. now if that was ar company or if
i did that at home, they would be bankrupt. and that's precisely where this is leading, the greatest, most prosperous, most generous, most decent nation on this planet. and that's not acceptable. that's why even the europeans are saying, what are you guys doing? and not only are they doing this, but it's got -- we have results to show how well it's worked. it has been a dismal failure. not that i say so, because the president established the benchmark.%- and under the president's own benchmark, it has been a dismal failure. and there are consequences of the spending of money. there are consequences for this debt. i want to leave you with one last number. just in the interest payments alone, not the principal, to pay the interest payments, by the year 2020, the american people
are going to have to pay almost $1 trillion, $1 trillion just in interest payments. $1 trillion just in interest payments. that's the president's budget. that's what they claim is going to be the expensing, the cost, the numbers that are going to be paid by the american people, just to pay the debt they are incurring. you know, i want to thank the gentlewoman for bringing us here today to explain, to talk about this is is not monopoly money. this is real. our children's and grandchildren's future. this is the future of the greatest country on earth. and we can step back and we can salvage the situation and create jobs and stop this path towards bankruptcy. we need to do so now. and the reason that the democratic congress isn't even going to present, it seems, not
going to attempt, it looks like, to pass a budget out of the house is because these numbers, they're not my numbers, the official numbers, and they are embarrassed to show the american people the truth. therefore, they aren't going to present a budget. i haven't been here that long. but in the time that i have been here, that's never happened. it's never happened. not even attempting to present a budgee because the numbers are so dismal under their watch. this is not inherited. under their watch, the numbers are so dismal, they don't even want the american people to see those numbers. well, you know something? the american people are wise. they're not dumb. you can try to hide the facts, but the facts are there. you can try to not show the numbers, but the numbers are there. i thank you for this opportunity to speak to the american people,
directly to the american people as to what their government is doing with their money, with their children's money, with their grandchildren's money and with the future of our nation. i'm sure that we'll be able to reverse it, but we need to start now. thank you. i yield back. mrs. lummis: i thank the gentleman from florida, mr. diaz-balart, for his summary for why we haven't seen a budget and why we are not going to see a budget this year. and the answer, of course, is that it is so out of balance. we are spending so much more than we take in that there is a level of embarrassment. instead of cutting spending, instead of even making a beginning to cutting spending, the answer of the majority party is to not present a budget at
all. i return again to the budget committee chairman's own words, if you can't budget, you can't govern. i understand that there used to be within the congress a committee that was in essence a counterbalance to the appropriations committee, since the appropriations committee spends money, that there is actually a committee that would determine where we could cut, what federal agencies could be eliminated, which could be downsized, which could be more efficient. and maybe that's an idea that needs to be resurrected. if you believe that, please go to americaspeakingout.com and let us know, weigh in on these ideas, give us your creative ideas. i want to especially encourage people who verved -- served in their staae legislature to go to
americaspeakingout.com. states try out ideas that give the federal government a chance to see whether they work or fail . new jersey is doing that right now. new jersey's taking the lead, new jersey's cutting spending, new jersey's doing it at the request of their constituents, the people of new jersey are once again in control of the government in new jersey. and if it works in new jersey it's certainly worth a try here in washington. one other point i'd like to make, that the gentleman from florida also hit on, and that is when we're borrowing money from other countries and have to pay it back with these extraordinary numbers, such as $1 trillion, every time we borrow we're putting ourselves in the position where we have to pay
higher interest. in the last month the u.s. treasury issued some treasury bonds and that issue went undersubscribed which means there were not enough buyers to buy u.s. treasuries at the interest rate at which they were being offered. now, the alternative we have when that occurs is to raise the interest rates because, for heaven's sakes, we're on track to need the money to have to bbrrow the money, the treasury can't come back to congress and say, we can't sell them at that interest rate, you all are going to have to cut, that's not he treasury's job. the treasury's job is to issue u.s. treasuries to cover our debt. but when nobody will buy them at the rate for which they're being offered, their only alternative is to raise the interest rate and issue them again.
so the borrower, the purchaser of those debts gets a higher return and they get it from people who are paying taxes. so more and more of your tax dollars is going to go to pay interest on the national debt. problem is, as the gentleman from florida pointed out, we're not taking in enough money this year to pay what we're going to spend this year. we didn't take in enough money last year to pay what we spent last year. we're not going to take in enough money next year under current projections to pay what we're spending next year and on and on and on. this is a structural deficit, in other words. there's no end in sight to spending more than we're taking in every year. the only way to fill the ap is to borrow more money. and when we can't sell those
debts at an interest rate that will attract buyers we have to raise the interest rate to attract more buyers. the circle is vicious, it is ugly and the american people are going to foot the bill, especially the young people that are coming up. and they don't want this on their tab. we're hearing from younger americans now, they don't want this on their tab. i don't want this on their tab either. i yield again to the gentleman from florida. mr. diaz-balart: i think you just brought up, frankly, something that's very scary, should be very scary to us. you mentioned what happened there, that's how it started in europe. that's how it started in greece. and eventually it basically started to collapse, which is why the european union had to %- bail out greece and then they had to talk to spain about not spending any money, about cutting their spending, etc., and so when we talk about how --
and then when economists around the country, even now around the world and leaders around the world, say it's unsustainable, it's because that's where we're headed if we don't change that. but you know what adds insult to injury to me? i represent the great state of florida. i will tell you it's one of the greatest places to live in the entire planet. we have a lot of senior citizens. many of which, many of whom depend on medicare, for example. well, we know that medicare will be going insolvent in i think just a handful of years. 2016 or 2017 is when it goes insolvent. so here we are borrowing and borrowing and spending and spending and borrowing and spending, are we using that money? is the speaker and is the president using that money to shore up medicare for our senior citizens? are they using that money to shore up social security for our seniors?
no. they've now created a new entitlement that, you know, we can call the mother of all entitlements. so not only are they not solving the problems that we have, they're creating new entitlements which is going to add to the fiscal problem that we're already in. so, not only are they borrowing and spinding more, they're doing so -- spending more, they're doing so recklessly. while not dealing with the issues that we all know, everybody knows, we have to deal with. so that just adds insult to injury and when you mentioned that, about, remember what happened in greece? it got to the point where then the markets said, well, your debt is so high that we're not going to buy it unless you pay much higher interest rates and it gets to the point where then it becomes this vicious circle, where all you're doing is paying interest. like people get into with credit cards.
this administration, this president, are doing exactly the same thing to our country. and the american people are starting to understand it. world leaders are starting to tell the united states, slow down, what are you guys doing? and yet this congress and our president, i guess, i don't know, i just don't exactly understand what they're looking at. they're looking at the same numbers that we're looking at and the things they've done has been -- there's more failures, the stimulus, let's talk about the billions of dollars that the taxpayer dished out to the car companies, automobile companies. remember, in order for them to not go bankrupt, so, what happened? they didn't go bankrupt? no. they actually did go bankrupt, but after the taxpayer, who's
struggling, by the way, and they're losing their jobs and there's no federal bailout for them and they're losing their homes and there's no federal bailout for them, no, take their money to bail out the auto companies because we can't let them go bankrupt and they went bankrupt anyway. so, i don't know, that's not a failure? only in washington do you say, i'm going to spend all this money and it's going to stop unemployment from going above 8% and then it goes way above 8% and they don't call that a failure. only in washington. only in washington do you take taxpayers' hard-earned money, say that you're going to stop these auto companies from going bankrupt and then they go bankrupt pace in and you say, oh, we -- anyways, and you say, oh, it's nuts, it's insane. but herb has realized, everyone, including world leaders, i repeat myself and then i'll stop, that when you have world leaders like france saying to
the united states of america, you're borrowing and spending too much, if that's not a wakeup call, and then what will it take for this president and this congress to wake up? and you're right, that's why they're not presenting a budget. because their numbers are frankly unsustainable, the american people would go ballistic if they saw theii proposals. but you know something? the american people know what's going on anyways. thank you for your time. mrs. lummis: you i thank the gentleman from florida, mr. diaz-balart, it's been has been a powerful spokesman for responsible federal budgeting. i now would like to once again recognize my colleague from pennsylvania, mr. thompson, who will be talking further about this issue. and i want to remind people, please do go to americaspeakingout.com. also go to the whip's website, mr. cantor, who has youcut on
it, or you can go to the republican conference website, youcut is the icon you want to click, so you, too, can vote on ways to cut the federal budget. we've identified half a trillion dollars worth of cuts and we want to know whether you think they're the right ones. so please go to youcut in addition to americaspeakingout.com. and again i yield to the gentleman from pennsylvania. mr. thompson: i thank the gentlelady for yielding. you know, there's a very important number here that the american people need to identify with and it's a number that brings it home, it's a number that's very personal in terms of personal responsibility and that is over $40,000 per person. that is the current -- that doesn't -- that's the amount of debt that each man, woman and child in this country is
responsible for. and that doesn't include entitlements. if we got into medicare, social security, that number would be much larger, but just keeping it within the scheme of excluding entitlements, over $40,000. now, you look at the young people that we have today, and the fact is we're not -- we don't come to each american and collect a check. if we did that it would all be divided up evenly and that's a heck of a lot of money. that's a tremendous amount of debt to start your life out with for a young person. but the fact is, that's not how we do things. we, you know, we kind of kick the can down the road, as i heard you use that phrase earlier. we divide things up, not everybody pays the same amount. so this legacy of debt will really fall on the next generation, children and grandchildren, future generations disproportionately. what was $40,000 today will just grow ex potentially and that legacy of debt is not a legacy.
there's not a generation that doesn't want to leave this country better than when we -- what we received from our patients. but we are failing, -- parents. but we are failing with this congress, with this president, we're failing with the legacy that we're leaving. today, in 2010, a debt of $40,000 per person. now, i really appreciate you pointing out americaspeakingout and the youcut. youcut is just a wonderful tool, it gives the american people a voice. because you know who the experts are in terms of cutting today? the experts at living within their means, of pulling their belt a little tighter? that's the american citizens and the american families. they're the ones that live within their means. they know that in difficult times you have to make difficult choices. that's called showing leadership. that is not something this congress has done. and so youcut, and youcut really is brand new. it's five weeks old and it -- 5 weeks old and it hasn't been
around that long. the gentlewoman from wyoming pointed out that you can access that through the republican whip's website, and in the first five weeks, we have identified over $100 billion in cuts to government. now, that's the way to tighten the belt on the budget. and that's something the american citizens, the american families do each and every day. they live within their means. and so that's what's so exciting about america speaking -- americaspeakingout and youcut. this is the american citizens -- this gives the american citizens a voice in this process. the federal government and the budget is not something that they're removed from. it's something that they have a voice, that they're able to weigh in and share their ideas and i can't wait to hear what ideas they submit in the future and as those ideas come in, they get vetted and they may see their ideas wind up on the youcut list where they'll have a chance to really -- they can vote, go in and pick on where the next level of cuts that we should levee in terms of making
sure that the federal government lives within its means, just like the american families do. so i thank the gentlelady for just pointing out the very important resources for the american citizens. mrs. lummis: i thank the gentleman from pennsylvania for joining me this evening, in addition to the gentleman from florida. we've been trying to pint -- point out the structural deficit and debt that this country can no longer absorb and that we have to address. so it does my heart good to see the gentleman from pennsylvania get so excited about the notion of cutting spending. and we want the american people to share our enthusiasm for cutting spending. we want the american people to weigh in. americaspeakingout.com and youcut are two ways that you can do that. .
i talk to people in wyoming when i go home and they see inefficient spending. they know where it is. and there are people all across this country that know where they are. share us your ideas and share us an excitening agenda that takes us out of inefficient government and get leaner and more able to maneuver and give more room in our economy to a growing entrepreneurial sector that can create jobs and isn't shackled by oppressive taxes, but pays the taxes that is commensurate to unleash creativity and jobs. the money to borrow, expand and grow -- and create in our states
where the great ideas, where the great spirit of entrepreneurism is really alive and well. i thank the gentleman from pennsylvania for joining me. do you have any concluding remarks? mr. thompson: as our good friend from florida pointed out, there are many nations that are working hard to put their fiscal house in order. they have recognized they have to stop the spending and have to stop the borrowing and can't be levying these tremendous taxes on the shoulders of citizens. they have taken the path of fiscal responsibility. yet in this congress with our president that's not the path we have taken. he went to the g-20 trying to encourage the world leaders to spend more, spend their way into
prosperity and when you spend too much, you spend your way out of prosperity. and this is a country where we have been the most prosperous nation in the world. we need a pain to sustain that. when i travel home, people talk about the spending and talk about the borrowing and the taxing and the word -- the thing that they talk most as a result of that is the word is called uncertainty and this has create the uncertainty in our economy. there are many small businesses in this nation and these small businesses were created and are grown by entrepreneurs who are willing to take a risk. they work hard and work long days. and many times they do that and take no revenue for themselves. they re-invest in their business to grow their business and create jobs, family-sustaining
jobs. today, because of the policies we have seen in the past 18 months. they're uncertainty and don't know what's coming next. is it more health care mandates? is it a greater premium on energy under cap and tax, cap and trade? is it more taxes levied on small businesses. many businesses have been the victim of the increased taxes that this congress, the democratic majority has passed in the past 18 months. a great burden of the environmental protection agency, which puts regulatory burdens on our job creators. these folks -- these folks are sitting on the side lines. as opposed to being an
organization that would normally take a good portion of their profits and that's not a bad word, a good word and re-invest those profits, they grow the company. they buy new capital. they build new facilities. they hire more people. they aren't doing that right now. and that's why any kind of an increase we are seeing, unemployment just under 10%, it's been public. the temporary jobs with census workers and temporary jobs sustained by the stimulus. and yet it's the private sector -- that is suffering under uncertainty. and the american people deserve better. and i thank the gentlelady for hosting this hour this evening. mrs. lummis: i thank the gentleman from pennsylvania for joining me. you have been hearing about our concern that this year for the first time since 1974, we aren't
going to pass a budget in the u.s. house. and it's because the majority party does not want the american people focused on how serious the situation is, how huge the gap is between the revenues we take in and the amount of money we're spending. imagine a congress that gets together and is more excited about reducing spending, saving money, finding efficiencies, reducing the debt, cutting the deficit and celebrating it with the american people in concert with the american people. imagine going to a tea party where everyone is celebrating the fact that for the first time ever the federal government cut spending. that's going to be something to celebrate. that will be something to be proud of. you can help with it.
go to americaspeakingout.com. go to youcut. give us your ideas. let's build the momentum so this congress can celebrate with the american people the return to a more stable, vibrant, robust american economy driven by the american people. the american people are still in control of this country. it can get really discouraging sitting around here and getting defeated on vote after vote after vote. that has been happening to me for the last 18 months. but the great reward, as i know the american people are in control, and i thank you for the opportunity to discuss these issues with you this evening. madam speaker, i yield back. the speaker pro tempore: under the speaker's announced policy
of january 6, 2009, the chair recognizes the gentleman from iowa, mr. king, for 60 minutes. mr. king: thank you, mr. speaker. it's a privilege to have the opportunity to address you here on the floor of the house and lot of subjects come up here. everything has been debated here on the floor. i have listened to a lot of the dialogue in the previous hour, and i appreciate my coleastheegs ' situation and the dire straits that america is in. and it seems ironic to me that about a year ago, little more than a year ago, i sat in the office in berlin just outside
the reicshtagg and angela merkel made a statement that the united states is spending too much money. this was february or march of 2009 and she made the argument that the solution for economic crisis was not the federal government spending more money, mr. speaker, but it was about some targeted tax cuts that they had provided for their social ized economy. european socialized economy, government-managed businesses, public-private partnerships, that's been some of the problems as to why they haven'ted the economic viability we have had in the united states. and still as this financial situation unfolded, brought to
the american people's attention before the presidential election, i might add, these discussions were taking place in february and then again in may of 2009 with representatives of the european union and the leadership over in western europe whom i have often been critical of because they didn't let free enterprise flourish. they had too many regulations and too many taxes. entrepreneurs weren't allowed to have the prosperity they would have in thee united states. our economy grew. their economy stagnated. and that's what we have seen unfold over the last generation or so in the economic comparison between europe and the united states. but i found myself in the improbable position of listening to the leadership of the european union and western yupe
-- europe that we should spend more money, not less money. $400 billion in loans and targeted spending and the advice was, america needs to hold down the spending. and we need to adopt a more fiscally responsible budget, spend less money and provide less debt and not bass this onto the next generations. that was a year and several months ago when this began, mr. speaker. and within the last couple of weeks, we heard that lecture again from the same person, angela merkel of germany. i'm glad she is making the case to hit home to the president of the united states that we here in america, this congress, over my strenuous objections and many of my colleagues voted no on a
$700 billion tarp fund and an economic stimulus plan and in the middle of that, we watched the government takeover of the three large investment banks and a.i.g. and freddie mac and fannie mae, general motors and chrysler and watched the nationalization and everything in the form of obamacare and the government has now subsequently within that last i just identified swallowed up over 50% of the former private sector activity of our economy. and more to come. financial services reaching out to tap in and regulate every credit transaction in america and setting up boards, a whole new regulatory shield, another layer of regulation for our financial institutions, for our large banks, for our -- to a lesser degree, our independent banks and smaller banks, but not for freddie mac and fannie mae
where this problem came from, where the taxpayers of the united states have now assumed $7.5 trillion contingent liability that if they go over, we have dumped billions into them, $50 billion perhaps for each, that if they should become insolvent, the american taxpayers have to keep dumping money in to freddie mac and fannie mae to prop them up. they used to be private. one time they were private. then they were quasigovernment and now they are completely under the ownership, management or control of the federal government. all of this is taking place in the last year and a half or more. we watched it happen. we argued against it and some of my colleagues and a good number have come to this floor and made this case, made it over and over again. but the situation that europe
has where they have loaned money to each other, thh economy of greece has gone down and propped up by the european union and the economy has the highest unemployment. spain had the highest unemployment in the industrialized world. their economy is would beling. ireland is would beling and the european union countries have loaned money to each other. almost like being in a poker game and let's just say because of the overhead it's taken out by government. if we all sit down in a poker game and the house takes, let's say 45% of every pot, sooner or later, the people sitting around the table trying to exchange those dollars are exchanging i.o.u.'s. government has swallowed up too much of the proceeds and then they loan money to each other and the united states is borrowing money from around the world. in fact, the amount of money
that's borrowed from the chinese is now approaching $1 trillion and americans have invested into american debt. but this debt is too hard a burden for us to carry. i put a poll up on -- polling question up on my website. and the news is full every day of the environmental calamenty in the gulf and -- calamity in the gulf and it's sad and we should shut off the leak and clean up the mess. but i asked, what is the greatest threat to america, the gulf oil leak or the debt and deficit that this country is carrying. and about 80% of the respondents will say the debt and deficit is a greater threat than the gulf oil leak. that gives me encouragement and tells me that the american people are on target here and they understand the priorities
and they understand the long-term implications of the debt and deficit that we are carrying now in this economy. . that picks up on some previous speakers in the previous hours. perhaps i'll come back to the economic side of this. but i think we need to talk about the rule of law for a little while here tonight. i often come to the floor and talk about the pillars of american exceptionalism. those essential components that have made america great. and i've listed them across, freedom of speech, religion, assembly, the right of the people to peaceably assemble and petition the government for redress of grievances. the right to keep and bear arms which just this week the supreme court has reinforced. first the heller case established it's an individual right to keep and bear arms, then the case settled just this week, i think just yesterday is when the news came out, is that
the second amendment, the right to keep and bear arms, affects not just the right of a reach of the federal government to diminish the gun ownership rights of its citizens but also the second amendment is guaranteed to protect the citizens' right to keep and bear arms from the reach of any political subdivision of the -- in america whether it's states, municipalities, counties, whatever the divisions are. the second amendment has been strengthened twice within the last decade or so, in the heller case and now this case this week. the second amendment is a pillar of american exceptionalism. we know an armed pop -- populace can defend itself against tyranny. the pillars of american exceptionalism, freedom of speech and the press, the right to address the government for
redress of grievances, the right to keep and bear arm, rights to property which have been subverted by the decision that i hope is overturned by a supreme court that's more prudent than the past supreme court that made that decision. the protection against double jeopardy and the right to be tried by a jury of our peers. the list goes on. but most of those pillars of american exceptionalism are within the constitution and the bill of rights. there's a couple of other components part of american exceptionalism that are not defined in the bill of rights or the constitution. that is something that -- one of them, one of them, mr. speaker, is enshrined in the flash cards that are produced by uscis, the united states ciiizenship immigration services. these flash cards are training cards like you'd imagine, like
you'd see in a classroom that you can learn off of, the flash cord that says two plus two, you turn it over, it's four. four plus four is eight. and so on. but the flash cards for learning to become a naturalized american citizen asks simple questions, questions you need to know the answer to if you're going to be a naturalized american citizen, it starts with who is the father of our country? you flip the card over, george washington who emancipated slaves, abraham lincoln. question number 11, i believe, is, what is the economic system of the united states. flip that card over and on the other side it says free enterprise capitalism, mr. speaker. the economic system of the united states. that is a pillar of american exceptionalism. if we didn't have free enterprise capitalism, we would not be a great nation. our economy could not have competed with that of the rest
of the world. we could not have built the industrial giant that supported our people and troops and military around the world to win world war ii. we would not have emerged as victors in world war ii without free enterprise being a driving force that let industry in america fulfill and supply the demand that we had for -- for 16 million mostly men and also women in uniform in world war ii. we went all over the world with our my, with our people. we brought american products everywhere in the world. it was a chance for profit. our factories were running at a fever pitch, day and night. we were building bombers and tanks and ships and parachutes and we were providing supplies for a lot of the rest of world whose industry had been the stroyed. at the end of world war ii, we were the only industrialized country in the world that had an intact industry. and the dollar was golden. the greenback was strong. it was -- it was a silver
certificate at the time. and we saw american culture, american values, and american products spread throughout the world. we provided a large share of the world's manufacturing and industry and a lot of that was driven because we maintained exactly that -- intact that pillar of american exceptionalism, capitalism. the freedom to produce and earn and get wealthy if you can figure out how to do it. the unemployment rate at the end of world war ii was 1.2%. when people argue we've been at historically low unemployment levels, that 4.6% is that, or that that is a normal unemployment level, i point them back to the lowest level we'd seen in history 1rk.6% at the end of world war ii. that number went up when a lot of soldiers came home. free enterprise capitalism is what has driven the
industrialized might of the united states, it's driven the military, taken our culture around the world, the desire to trade and market and profit from it has taken the american culture every where the nrled -- in the world. free enterprise capitalism is an essential pillar of american exceptionalism. another one of those pillars of american exceptionalism is a legitimate legal immigration system. the constitution requires that congress establish and union -- an uniform immigration system system of congress is to do that. i would say we've done that. it's uniform. it fits. it's consistent with the constitution. we have an immigration reform act that was passed here in this congress in 1996 and signed into law. we need to be, we need an executive branch that will follow the law but the beauty of america's immigration system has been that up until the last
generation or so, maybe the last generation and a half, mr. speaker, we've had -- it's been difficult to come to the united states of america. and the legal system that we had actually screened people out, those who came into ellis island, the millions that came into ellis island, and i can think of one day that set the record, 11,757 came through the great hall at ellis island on, i think i can remember the year and the date, april 15, 1907. massive number. just like 11,757 people through there but day by day by day they came through. about 2% of those who had been screened before they got on the ship to come to the united states immigrate into the united states, even though they were screened for good health, for sanity, to speak, they were screened so that they had an ability to take care of themselves they arrived here, a
century ago it was a merit ogcy. we didn't have a welfare system that had at this point evolved into a welfare state it was a merit ockcy. we wanted people physically healthy, mentally healthy, able to come here and get a job, go to work or start a business and take care of themselves. they were screened by conditions we had then. before they got ton he the ship, generally in europe, and they were screened again when they arrived at ellis island. they were checked physically. sometimes they were rushed through but even though they were screened before they came, about 2% were sent back to their home country because they didn't meet the standards here in america. almost all of them who came to the united states, almost all of them aspired to the american dream. and many of them may have believed that the streets were paved in gold and gotten here and found out they were disappointed to find out they were paved in, well, dirt,
dust, mud, sometimes cobblestones, sometimes horse manure. it wasn't quite the beautiful place that was advertised on the brochures in europe. but they came. and some of them went back voluntarily because they didn't find the promise they thought they had. but all of them had a dream. almost all of them had a dream. and they shared the american dream. when they came here they brought with them the dreamers' try vitality, the dreamers' stick-to-itiveness, the thought that they could make a life for themselves and make this world a better place for their children than it was for them. that's always been an embodyment and component of the american dream. the legal immigration that came to america did this, mr. speaker, and this is the verbal definition of one of the pillars of american exceptionalism. legal immigration skimmed the cream of the crop off of every donor civilization that sent people to the united states as
immigrants. and when that happened, we got their vigor we got their dream we got some of their capital we got all of their work and we got their descendants that grew up here in america with that same dream. and even though it might have been first generation immigrants that lived in a shan'ty town and worked in a boimer -- boiler factory somewhere, they worked to make life better and pushed their children to get an education and taught them that america has embraced us and we have our freedom, we have our liberty here and you need to defend our country and go out and make sure that you're going to grow up in a better opportunity than the first generation had and make sure the third generation has more opportunities than the second and the fourth generation more opportunities than the third. and so on and so on. and so it has been. it's been true with family after family, generation after generation. and it's embodied in a way in my family where i have a
grandmother that came from germany she raised six sons and a daughter. and of those six sons, five of them put on the uniform to defend our country. some of them went back to germany in the second world war. one of them was wounded that the battle of the bulge my father went to the south pacific. they didn't hesitate they didn't hesitate to take on the country that their mother had come from. they knew that -- and they believed -- that they owed this country a debt of gralttude and they demonstrated it. that's part of the greatness of america foo. that pillar of american exceptionalism, that vitality of the immigrants who come here, infused with the generational tradition of that vitality and the multiple generations has been a significant part of american exceptionalism. and i look at the roots of these causes for american exceptionalism and i often take this back to the age of reason in greece and roman law and how the knowledge base that was
established by rational thought in the age of reason in greece and the roman law found its way through the dark ages and emerged in the age of enlightenment. the english speaking component of the age of enlightenment, to be specific, mr. speaker. as those qualities arrived here in the new world, in america, at the dawn of the industrial revolution in a continent that was -- at that time, conceived only unlimited natural resources, low tax arkse no regulation a concept of manifest destiny, having been the beneficiary of the age of enlightenment at the dawn of the industrial revolution and had the foundation of our judeo christian values arrived here with those immigrants, most of them, that foundation of value system that comes from the birth of christ and the redemption that comes from christ and 1,500 years later
also the protestant reformation that martin luther, that taught that protestant work ethic picked up by the catholics and the catholics did pretty good with the protestant work ethic is my point, mr. speaker. we've seen this vitality in the giant petri dish of america. every component that's been positive has been if here in this country, put here by providence. the natural resources, the understanding of the adam smithian component of economic theory, the supply and demand, invisible hand component of economic theory, the age of reason and from greece and the roman law that found their way through the dark ages and emerged as the age of enlightenment, all here, the united states of america, unlimited natural resources that go along with it. those components, driven by the
vitality of the immigrants that have come here, have been essential to this nation rising through the challenges of the ages and facing off against the world when we didn't see ourselves as a world power. we didn't see ourselves as a world power when we found ourselves in the spanish-american war. so we have the legacy of that that exists today. we can -- puerto rico is one of those components. philippines are another. that goes around the world pretty well. we didn't view ourselves as a global power. but we had a global reach after having had the maine sunk in havana harbor. america had a global reach. even though we didn't see ourselves as a tpwhrobal power we got in at the tail end of world war i and made a difference. now we were a player in the world to be contended with. it's not go out and find a war to do that they came to us because we had to defend the
liberty and freedom in the world and align ourselves with the people who believed in the same values and a generation after world war i ka, along came world war ii. that was a cataclysmic conflict where tens of millions died and america emerged as the world power and the dominant force in the world until such time as the cold war began, and even then, 45 years of the cold war. . the berlin airlift, the anniversary was a few days ago. we faced off against the cold war and soviet union. and there was a game going on, high stakes life and death game going on. and at the end of it in 1984,
jean kirkpatrick, as ambassador to the united nations, stepped down from that post and said and this will be a para phrase of her quote, she said what's going on between the united states and soviet union, speaking of the cold war, is a chess and monopoly on the same board and the only question is, will the united states of america bankrupt the soviet union economically before they checkmate us militarily. that race was going on. and the soviet union was seeking to build more and more missiles to try to gain an advantage that would cause us to concede to them at least at a minimum. but ronald reagan came in and pushed the resurgence of our national defense, built the missiles back up again and in the process of doing so, november 9, 1989, the berlin
wall came down. that's the power of an economy and power of an ideology over a managed economy, a communist economy, a central command economy. that's the power of it all. this country has been a strong superpower in the world. and the only unchallenged superpower in the world in the pftermath of the wall coming down in 1989 and implosion of the soviet union. took it another year and a half to get itself wound down. so -- but we are here standing here as the unchallenged superpower in the world a + significant and central part because we have a free enterprise economy. well, we had one. and now we are getting a managed economy and someplace over there, europe is lecturing to
us, don't spend so much money. they're guilty of that, too. but a lot more of dollars nationalized by this president than by hugo chavez. and that's not a stretch, mr. speaker, but simply a fact that as hugo chavez is blown hundreds of billions of dollars. and how do we get this economy back? i'll submit, it isn't going to happen under this president. president obama isn't going to let go of companies taken over by this federal government. i asked the question of the secretary of the treasury under oath and i presented it in a written form, because we ran out of time in the hearing. the question is, president obama was elected at least in part because of his challenge to president bush where president bush allegedly not having an exit strategy in iraq. we heard that. that rhetoric is old, but it's
back there and the record is full of it. so my question to the secretary of the treasury tim geithner was, the president has been elected in part for his criticism of president bush for not having an exit strategy in iraq. what is the exit strategy for the obama administration to die investigate themselves from the takeover of the banks, insurance companies, freddie mac and fannie mae, car companies, that i have listed here. what is the strategy for divesting themselves and giving the private sector back. the answer i have received and they are buried, they took a couple of months, we'll give the secretary of treasury credit, at least he answered my leter. often, i don't get answers from the other cabinet members. a couple of months to get the
letter back, seff -- seven-page letter, he would know when the time is right to die investigate from these entities that have been nationalized. he would know when the time is right. there is no written criteria and he could make the decision then at the right time. in other words, it's really not your business and i'm not going to write down a formula. we may or may not have an intent to divest the federal government from a.i.g., freddie mac and fannie mae. they don't intend to get rid of freddie mac and fannie mae. taxpayers will bail them out. they aren't covered in this financial regulatory reform bill , the frank-dodd bill that is designed to solve our economic woes. i looked down through some of these things that aren't well known about what's in the financial regulatory reform bill.
out of the house, we know it as h.r. 4173. there is a conference report. they found out that even though the best judgment of the conference committee produced a result, that the votes aren't there. so they're going back to change the conference report and see if they can find the votes to get it passed. i'm troubled by the procedure, mr. speaker. but here are some things in it and aren't likely to come out. and i want to speak to the issue of the focus on special provisions for women and minorities that are in the bill. now, i point out, mr. speaker, that i have dealt with this for a long time with set asides and had to compete against provisions that are written into federal contracts. i have spent my life as a contractor doing site development work, concrete work, undergroundwork, seeding, fencing, those kinds of things and concrete work.
but i bid a lot of contracts in my professional life and i can think of one in particular that i will use as an example. the federal government has set aside special components. sometime the contract is set aside for women and minorities and no one else can bid it. i had a small company and had to start from scratch. i didn't have any capital. i had a negative net worth of $5,000. i convinced the banker to loan me money to buy the beaten up old bulldozer and i started to work. excuse me. and so i had to build capital with sweat equity and anything else that could be done that was legal, moral and ethical. i tried to outsmart my competition and i got a second machine, little capital, hire another man, buy another machine, hire another man and
get capital underneath me and i could bond these projects. it's a very difficult thing to build the capital to be able to bid on some of these projects. i knew i was disadvantaged. big money had the advantage. the people that were wired in. they had a significant advantage over me. i was trying to crack into that without the capital, short on equipment and manpower, strong on ambition, willing to work and work longer and harder hours than anybody else would, but the deck was stacked against me. that's why there aren't a lot of people in the business because the system and structure is set in such a way that it is capital intensive with equipment and meeting regulations with employees. i know how hard that is. i would need a project that fit our equipment, needed to be smaller projects. when it got into the million of
projects, we didn't have the money to bond. i had those projects, $100,000 project, maybe $300,000 project. so i would look for the bid notifications to pick up the projects to fit the things that were small enough that we could bid the project. quite often i would draw a set of plans and there would be a provision that said minority set aside and i couldn't bid because it was a project set aside for a minority or women-owned business. and i got sensitive to this. i could bond a larger project and this is a lifetime of work to get to that point, by the way. and i drew a set of plans for a sewer lagoon project in a city. and i remember right where it is , but i was familiar with the engineering firm, familiar with the specifications.
so i sat down to put the project together. i spent four days getting quotes from suppliers, subcontractors, calculating the volume, putting the bid together. looking at the roject and negotiated to make sure that i drew the best bids from subcontractors, all the best bids i could from suppliers. when i put that together, a man has an honorable responsibility to honor the low bid. i'm bidding for a low bid. people who bid through me as subcontractors, i want their best bid and low bid and i will honor it and i will keep it confidential until the bids are open. that's the standard that needs to exist in the industry. i spent four days doing that. i got my numbers all together and right before it was time to submit my bid, i gave one last read-through the specifications and they said there was a percentage of set asides for minority contractors.
i could guess at the percentage, and i would say under 20, but to find a minority contractor that would do a small part of that project, even if i handed it to him was an impossible built. i went through the list of contractors, i worked the phones and called other people that i knew, suppliers and contractors, where is somebody out there that can do the seeding or take on any part of this job? is there somebody that can and will? the answer was no. there was nobody that could be found. and i had to take that four days work and toss it in the trash and forget it because it was set aside for minority contractors. the component of it was, i couldn't meet. if someone was a large construction company and they had a special -- an established minority contractor to plug in, they had the bidding advantage.
and those types of situations got set up. they got set up in part because the government created a false demand. and we couldn't find people that would do the job and so there were sometimes contractors set up that didn't have a desire or a knowledge. they were just a straw man that was used to meet government regulations. i recall a project that was about $5 million in asphalt paving. set aside for a percentage of the project that came to a number, i'm going to guess that number was around $250,000, $300,000 that needed to be set aside for minority contractors. they got bids who they knew could inflate their prices because they are competing against each other. in the end, the pavers has to take the one minority contractor and add $100,000 to its price
because they didn't have enough dollars to meet the requirpte that was set up by the federal government. think what it would be like if you came in and did bridge railing or bridge approaches for large projects and minority contractor and you could write your ticket and you priced that out. and then have them say, i'm going to take your bid for $250,000 to do the bridge railings and the approach here even though it's maybe twice as high as the going rate would be if it were bid competitively against the other folks in the business. i'm going to take your price and wouldn't tell the minority contractor. they would put the bid in and add the dollars. if they got the job they would have to go to the minority contractor and say we added another $100,000 because we needed a percentage that's required by the federal government. $100,000 above the asking price. these are projects that i have
worked with that i know having been involved in them as another bidder on these projects. so imagine getting 10 jobs a year like that and having been handed $1 million extra more than you asked for because there is a set aside. now whatever that does to destroy the work ethic and professionalism of the minority contractor, it is a cheat on the american taxpayer and it's got to end. and yet, i laid all this backdrop on here, mr. speaker, because i have the sheet on what happens with barney frank-chris dodd bill. establishes an office of minority and women inclusion. responsible for diversity in management, employment and business activities. i think we ought to have equal opportunity. i stood up and defended equal opportunity and my voting record is more consistent with equal opportunity than anyone i know, certainly than that side of the
aisle because they vote for preferences. those preferences, proposition 209 in california have sought to establish that as part of the law of the land in the state of iowa, where i believe the state shall not discriminate nor grant preferential treatment to any individual or group based on race, creed. that is a quote from proposition 209 in california. the result of that, connellly's great work in california, in 1995, when they passed proposition 209, they had quoteos. there was an asian quoteo at the university of california, they wanted 12% of the students to be asia canian. well, mr. speaker, -- asian. five years later after the constitutional amendment lifted the preferences, the student
body was 46% asian, not 12%. . i think that's a good thing, mr. speaker. i think it show house merit rewards people. maybe it started out in the beginning that there would be a 12% quota, a racial set-aside for asian minorities at the university of california-berkley or any place in california but it got turned on its head by the ambition of the people. when the cap came off and the constitution protected the merits of the individuals so that no one would be discriminated for or against, shall not discriminate against or grant preferential treatment to any individual or group on the basis of race, creed, color, ethnicity or national origin, that is a beautiful statement. it's legally sound, rationally
sound and morally sound. it's consistent with america because it rewards merit. it says, you will have an equal opportunity with everyone in this country and no one shall discriminate against you and no one shall discriminate in your favor either, equal opportunity. compete in the marketplace. this barney frank-chris dodd financial regulatory reform bill does anything but that, mr. speaker. it provides the office of minority and women inclusion, if anyone is wondering what the effect is when you pass legislation that says this legislation shall be set aside, these assets of america shall be set aside, these taxpayers' dollars that are borrowed from the labor of our grandchildren shall be set aside for women and minorities, do you know what that says, mr. speaker? in a rational world, the greeks would have understood this, they would have written it in greek but it would have said, anybody but white men.
that's what the definition of women and minorities het--- set-asides are. they're set aside for anyone but white men. nobody wants to say that out loud but this legislation is replete with this language. women and minorities. women and minorities. equal employment opportunity and think racial, ethnic, and gender diversity of the work force. the gender diversity of the work force. the racial, ethnic, and gender diversity of the work force. they know they can't do this by law. they know that the supreme court has ruled that it has to be, in the case of two cases of michigan, it can't be a formula, can't be a quota set aside formula. it has to be an individual evaluation if they're going to be able to allow for a bias in favor of a particular minority that they might define. and even though her last dissenting opinion, i agreed with strongly of justice o'connor's, that was the kelo
decision, i found minse the same page as sandra day o'connor, i found myself at odds with what she wrote in the majority opinion in the michigan case or cases but the one i'm thinking of is when she wrote that we could perhaps go back and revisit the equal protection clause of the constitution in 25 years and maybe our society would have matured to the point where we wouldn't need to have a built in, let's say a built in diversity quotient. well, you don't correct an injustice with another injustice, mr. speaker. two wrongs don't make a right to put it in simple mother to son language or father to daughter language. two wrongs don't make a right you don't correct an injustice with another injustice. but equal opportunity, martin luther king's dream, that's consistent, logically, morally,
and this bill back in conference to be reshaped to try to get the votes to get it to pass violate miss of those rational principles that i think are the purest principles of america, equal opportunity under the law this bill provides for and requires increased participation of minority-owned and women-owned programs and of contracts of the agency, increased from what, i don't know. but it has to be increased. it requires they develop standards to maximize -- standards and procedures to ensure, this is interesting language, to the maximum extent possible the utilizations of minorities, women, and women and minority-own businesses and all businesses and activities at all agency levels, it requires each agency to take affirmative steps to seek diversity. i'm pretty good with that. thing message should go out there. i think there should be ample opportunity for all people to apply for contracts and jobs that -- that part is all right.
they want to partner with the inner city which is code word, and as i look down through this, it reads and drips with politically correct language. it says at the conclusion here, it says section 113 the regulation of certain nonbank financial companies, and again, mr. speaker, this is the barney frank-chris dodd bill. those two fellows that have put this together, they didn't find a way to put any regulation on fannie and freddie, but their bill under section 113, regulation of certain nonbank financial companies, it says, the council, the regulating counsel shall consider, and i quote, the importance of the company as a source of credit for low income, minority or underserved communities and the impact that the failure of such company would have on the availability of credit in such communities. close quote. that means when determining
whether a u.s. nonbank financial company shall be supervised by the board of governors and subject to prudential standards. in other words, this importance of the company as a source of credit for low-income minority and underserved communities, it means the government is going to look differently at these companies if they are serving a minority community, which means their capital requirements are likely to be less. their regulatory requirements are likely to be less. they will give special consideration, it will not be a balanced, even hand of government. that's essentially guaranteed with the language in this legislation this justice is not color blind this lady justice is not color blind. it's written into the law. to give preference. and so, what it means is, when i read the language, u.s. nonbank financial companies shall be -- when these conditions -- when determining whether a u.s. nonbank
financial company shall be supervised by the board of governors and subject to prudential standards we also know this legislation allows for the federal government to determine which financial institutions go into receivership, the standards by which they may to set the conditions of that receivership. they can determine the success or order. if a financial institution should be shaky or deemed shaky, then the secretary of the treasury with the assent of the fdic and the fed, can close down an institution, they can turn it and sell it, they can take it other themselves and run it and operate it as a federally operated institution simply by determining that. maybe it's not too big to fail, although they will make that determination too, but it might be an agency a company that is essential to the low income
communities, low income minority or underserved communities that gives them the latitude to treat it differently than any other financial institution. when government gets involved, huge money gets lost. and when liberals get involved and progressives get involved, huge principles of liberty and freedom are sacrificed away to try to reach some kind of formula of what they think that america should be like. martin luther king never asked for this i read almost every one of these speeches and many of his writings. i can think of nothing in his writings or speemps that i disagree with. he stuck to american principles. but this congress, under pelosi leadership this president, has not stuck to american principles. they have gone all the other way to driving america off the abyss into a managed socialist economy and trying to write formulas in here where they pick winners and losers and
giving the federal government the authority to shut down or subsidize or set the price of financial institutions. all of this is anathema to america and the american dream. we can't have this vitality of this country if we have the federal government controlling the movement of our lives in this fashion. writing prescriptions for equality of result ares and granting bureaucrats and actually charging bureaucrats with an obligation to produce equality of results as opposed to equality of opportunity. you know, it's the outreach part i don't necessarily object. to go ahead and do the outreach. let the people know in the majority-minority colleges that there's jobs and opportunities out there. take it out there where they can hear it and understand those opportunities. but don't hold it away from the other institutions either this president has driven an agenda that pits americans against americans.
and i think, mr. speaker that given the time that i have left, i transition into this. it's a case i have raised over and over again. it's one i continue to -- am committed to raising. that is, the -- apparently the white house has given an order, more than a year ago, to the justice department to can sell -- to cancel the prosecution in the most open and shut case of voter intimidation in the history of america. i have spoken about this before on the floor. i've spoken about it within the media. i've tracked this case and know a little about it from the story i'm looking at, though, is in yesterday's "washington times," monday, june 28, 2010 the "washington times." the title "inside the black panther case," subtitle, anger, ignorance and lies. this is an article written by jay christian adams. he writes about the new black panther case.
to lay the backdrop and the image for this, many of us have seen this on youtube. in the elections of 2008, in philadelphia, at a polling location, there were the new black panthers were organized there and allegedly in other places. these new black panthers are not like the old blang panthers, these are, i think, more dangerous than the old black panthers, but they were there in paramilitary uniforms, including berets, standing in front of polling place with a billy club in their hand, intimidating voters that came in calling people crackers and other intimidating components of language. we've seen that video on youtube. this is the most open and shut voter intimidation case in america. i'll say in the history of america. because we didn't have a voter intimidation law until the civil rights act was passed in 1965. so this article written by christian adams who is -- has
just resigned as an attorney. he's a lawyer based in virginia, served as a voting rights attorney at the justice department until this month. so we have jay christian adams wrote this article into "the washington times" and mr. speaker, i'm going to speak to put it into the record. on the day president obama was elected, armed men wearing the black berets and jack boots of the new back panther party were stationed at the entrance of a polling place in philadelphia. they brandished a weapon and intimidating voters and poll watchers. after the election, the justice department brought a voter intimidation case against the new black panther party and the armed thugs. i and other attorneys diligently pursued the case and obtained an entry of default when they ignored the charges. that was before a final ruling could be issued, we were ordered to dismiss the case.
they was simple and most obvious violation of federal law i saw in my case. because of the corrupt nature of the dismissal, indefensible orders for lawyers not to comply with investigations, i i resigned. i continue the article by jay christian adams, former d.o.j. attorney. the federal voter intimidation statutes we used against the new black pan chers were -- panthers were enacted because america never realized genuine racial equality in elections. racial violence characterized elections from the end of the civil war until the voting rights act of 1965. before that blacks seeking the right to vote and those aiding them were victims of violence and intimidation but unlike southern legal system -- unlike the southern legal system, southern violence did not
discriminate. black voters were slain as were the right champions of their cause. some of the bodies were tossed in bogs and in one case in philadelphia, mississippi, they were buried together in an earthen dam. temp rir lay close quote and point out the irony of the brutal tragedy in philadelphia, mississippi, and i have been there, mr. speaker, and the new black panthers intimidating voters in philadelphia, pennsylvania, the city of brotherly love. . i continue with the quote. based on my experiences, i believe the dismissal of the black panther case was lawsless hostility. others still within the department share my assessment. the department abetted wrongdoers.
the dismissal raises serious questions about the department's enforcement neutrality and upcoming midterm elections and subsequent 2012 presidential election. the u.s. commission on civil rights has opened an investigation into the dismissal of the d.o.j.'s enforcement priorities. attorneys who brought the case are under subpoena to testify, but the department ordered us to ignore the subpoena, lawlessly placing us in an unacceptable legal limbo. the assistant attorney general for civil rights tom perez has testified repeatedly that the facts and law did not support this case. that claim is false. if the actions in philadelphia do not constitute voter intimidation, it is hard to imagine what would short of the outbreak of violence at the polls. let's all hope this administration has not invited that through the corrupt demrissal.
the lawyers who ordered the dismissal, loretta king, the acting head of the civil rights division and steve rosenbaum did not read the memorandum supporting the case. eric holder admitted he did not read the arizona immigration law. mr. rosenbaum admitted he did not read the documents detailing the facts and applicable law in the new black panther case. the former voting section chief was outraged that he threw the memos at mr. rosenbaum in a meeting. the department removed mr. coate s' responsibility. and there was testimony that federal rule 11 required dismissal of the lawsuit.
lawyers know that rule 11 is an ethical obligation to bring meritorious claim and such a charge challenges the ethics and provealism of the five attorneys who commenced the case. yet the attorneys who brought the case were voting rights' experts and would never pursue a frivolous manner. their experience far surpasses the experts who ordered the dismissal. not worthy of federal attention some have called it. the black panthers in october of 2008 announced a nationwide deployment for the election. we had indications that polling place thugs were deployed elsewhere not only in november, 2008 but during the democratic primaries where they targeted white hillary clinton supporters. others have falsely claimed that no votes were affected, not only
did the evidence rebut this claim but the law does not require a successful effort to intimidate and punishes even the attempt to intimidate. most disturbing, the dismissal is part of a lawlessness in our institutions. americans should be shocked to bringing civil rights cases against non-white defendants on behalf of white victims. equal enforcement of justice is not part of this administration. some of my co-workers argued that the law should not be used against black wrongdoers because of the long history of slavery. other individuals called it payback time and that is in quotes. incredibly after the case was dismissed, instructions were given that no cases like the black panther case, would be
brought by the voting section. refusing to enforce the law equally means that some citizens are protected while others are victimized depending on their race. principles of equality before the law and freedom from racial discrimination are at risk. hopefully equal enforcement of the law is a point of bipartisan, if not universal agreement. however, after my experience with the new black panther dismissal and attitudes held by officials in the civil rights division i'm beginning to fear the era over agreement over these core principles have passed. that is the end of the article, department of justice attorney with considerable experience. and this is a case that i have been familiar with for over a year. serm like many americans, i have seen the video, mr. speaker and no excuse for cancelling the most open and shut voter intimidation case in america.
since 1965, we have not had a case that we know of that has been this bad. i don't know what could come forward that would render a case worthy of prosecution by the the attorney general's office or by the president of the united states. but we know that there is significant influence from the white house into the justice department. one of the ways and one of the reasons we know that is because attorney general holder testified before the judiciary committee in the same hearing where he admitted that he hadn't read arizona's immigration law and conceded that the president had directed him to use the justice department to seek to invalidate arizona's immigration law. now that's presidential influence and influence. and for the justice department and eric holder, in particular, to testify that day that they are not a political operation and not influenced by politics but influenced by the rule of
law, i think this case that was in the "washington times" written by j. christian adams belies that point. and i would yield back the balance of my time. the speaker pro tempore: without objection. the gentlewoman from north carolina is recognized for five% minutes. ms. foxx: madam speaker, i rise today to honor mark rogers of mount airy, north carolina. mark is an accomplished auction near and real estate broker and been in the business for nearly 30 years. over his career, mark has conducted auctions in a dozen states, selling estates, farm machinery, equipment and real estate at public auction. as a real estate broker, he served as the regional vice president of the north carolina association of realtors in the
early 1990's and the president of the local board of realtors in 1997 and named realtor of the year for the local board in 1986. it should come as no surprise that mark was elected to be president of the national auction eers association and takes office this july. mark's father, who founded the family's real estate and auction business in 1964, has also served as the president of the national auctioneers association. when mark takes over as president, he and his father will be the first father-son duo to have been elected president of the association. before elected president as the national auctioneer, he served
as president of the north carolina association in the 1990's and in 2003 was inducted in the national association hall of fame. directed director of the national association in july of 2003, treasurer in july of 2007 and vice president in july, 2008. just as impressive as his professional qualifications is the personal character that commends him as an exemplary north carolina citizen. he is known as an active participant in his community, giving back and reaching out to those who need a helping hand. among his many pursuits in the community is his work with habitat for humanity, the shepard house and with young lives. he is a member of first baptist
church of mount airy. he and his wife have been married for more than 25 years and are active in their children's activities. the people of mount airy are proud to have such a committed businessman as part of the community. he is an asset to the state of north carolina and to the people of mount airy. today, i congratulate him on becoming the president of the national auctioneers association and wish him the very best during his tenure. with that, i yield back. the speaker pro tempore: the gentlelady yields back. pursuant to clause 12-a of rule
effective role ranking member. >> may we start at 30 minutes on my clock without senator session's interjection. >> madam solicitor general, i begin with concern of separation of powers which is the foundationf the constitution, and the concerns i have for what the supreme court has done really in having a consolidation of power. a lot of it going to the court, a lot of it going to the executive branch, and it's all coming from the traditional power of congress. before i move into that area, i want to take up a couple of points. senator sessions has raised the issue about you being a progressive, a legal progressive. when he was doing that this morning ias thinking about the
supreme court's decision yesterday incorporating the second amendment into the due process clause of the 14th amendment and remember how many objections were raised to the activist liberal warren court for doing that. i was a prosecutor at the time, and the law changed. constitutional law changed with a map in ohio in '16 and gideon in '63 and rand in '66, and now we have the five conservatives being progressives or activists. i was intrigued by senator hatch's questioning you on the citizens united case, really an extraordinary case