Skip to main content

tv   Key Capitol Hill Hearings  CSPAN  May 27, 2014 8:00pm-10:01pm EDT

8:00 pm
>> read more of our conversation with malcolm gladwell and other featured interviews from our book notes" and "q&a" programs in former commerce and barney frank in christopher dodd discussed the 2008 financial crisis. later, the supreme court argument for moss. the l a times story -- l.a. time s story about the supreme court releasing new decisions about secret service agents at that had the authority to present -- to protect the president. one of the oral arguments in the case here on c-span at 9:25 p.m. eastern.
8:01 pm
now, former senate banking committee chairman christopher. and former house financial services chairman barney frank about the financial crisis and the work they did. it is just over one hour. >> i want to introduce the moderator for this session but before i do, i want to point out that everything we discussed this morning and after this because theoot dodd-frank act rose alt all of those issues and we don't really have to do with those anymore. i also want to thank barney frank for begetting with the spirit of the program. he knew we were going to heaven abraham lincoln look-alike contest so he grew a beard. we are delightful for that. take no offense but if you read "an act of cong
8:02 pm
larsonhe and jim siegel -- are as responsible as that statute as dodd and frank. amy is the senior deputy comptroller of the currency and chief counsel. ats is her second session the occ so you can see she is -- say she is occ through. seriously, if you get to read that book, you will have great admiration for somebody who acted in congress in the good old days when people acted as though there was a tomorrow. when they had to deal with the same people the next day and sadly, those days are gone. hopefully just temporarily. i am not going to occupy any more of your time other than to say welcome, amy.
8:03 pm
welcome, senator. welcome, barney. >> thank you. it is really my pleasure and privilege to be joined by senator chris dodd and representative barney frank. they are well known to his audience for many reasons but particularly as the architects of the sweeping financial reform bill that bears their name -- the dodd-frank consumer protection act or dodd-frank. today, we have dodd-frank on dodd-frank. it is a real treat. having worked so closely with both of them and enacting this legislation which is truly historic. senator from a connecticut and he was the chairman of the senate committee on housing and a ring affairs -- urban affairs all through the years of the crisis and through the passage of dodd-frank. barney frank is a former
8:04 pm
congressman from massachusetts and the former chairman of the house financial services committee. fromnow them well dodd-frank but also as the chairman of the banking committees in the house financial services committee. they were responsible for the tarp. for the credit card act which open-heart -- overhauled the credit card industry. passedso worked on and the housing and economic recovery act which created the federal housing financing agency. forrovided the authority government backstop but beyond that, they are rate legislators. on forsman frank worked housing, equal treatment and antidiscrimination issues. was the author of the family act and work on a
8:05 pm
number of children's issues and latin america. it is really exciting for us to have you here today. and having worked with you on committeese banking issues, felt i had a front row to history and got to see your skills in action. we are six years to the month when it collapsed. in september of 2008 was when the crisis really came on full force. we are close to four years from the passage of dodd-frank. i am wondering if you could talk about whether the confidence in the u.s. financial system that we saw that great really quickly during the crisis whether it has been restored. >> well, first of all, thank you for inviting us. it is a pleasure to be with amy and jim and the introduction is appropriate. we were blessed to have remarkable people on our staffs that did a tremendous
8:06 pm
job in putting this together. the names are on the build of the reality is a lot of people, including our colleagues, contributed significantly to the legislation. the staffs deserve a lot of attention. thank you. i think it is coming back. i still think we have a long way to go. it was shattered by the events beginning a lot of earlier than 2008 with bear stearns. as well as jack reed from rhode island held hearings in 2005 on the residential mortgage crisis. while people paid attention to what happened with bear stearns and september of 2008, the problems began a lot earlier. the difficulty was getting people to pay attention to the problems. the shattering of confidence -- i will tell you one quick anecdote.
8:07 pm
i recall having a conversation before these events with the manager of a fund -- i. i was curious why he parked much of his nations wealth into the united states. he said for two reason -- one, no other country in the world is as good as making money as u.s. financial institutions are. he said the second reason for doing it is more important in the first. he said he never lost the moment sleep worrying about whether or not the integrity of the financial structure is sound and safe. made bad betsnd along the way but i have never lost sleep over the confidence in the financial architecture of the country. that was shattered. it is coming back in my view but we are still not there. >> in my mind, i agree. i think there is more confidence in fact reflected by people's behavior than there is in their
8:08 pm
opinion. the financial structure, i don't see people sending the money elsewhere are putting it under the mattress or any kind of mediation. there is still this perception and part of it -- there are two reasons for this. the main one i think is self-fulfilling prophecy on a particular issue and that is on the question of the too big to fail banks. onm convinced chris worked bipartisan things with dic k shelby. i believe the maximum you can do legally to make clear that if a large financial institution had debt that it cannot pay, it is out of business and no taxpayer money will be used.
8:09 pm
the most interesting critique i hear these days and tim geithner repeats it in his book which i saw an early copy of and others is is that we were too tough on the anti-bailout. we didn't leave the successors enough flexibility to bail out the system in general. what we have is a self fulfilling prophecy. we have people that argue that somehow our system for putting these banks out of business will not work. they then point to the fact that they still enjoy some people argue a kind of edge in financing but to the extent that they do it is because people denied that they are there. i look at the reasons why it won't work. one is one of the stupidest arguments i have heard. it is that if a large financial institution got into trouble, despite a law that in maine to will be felony for the secretary of the treasury to use public
8:10 pm
funds, there will be overwhelming public pressure on the administration in power to bailout that institution and keep it alive with public funds. i have only one question to those people. in what country? anybody that lives through what we had in the united states, how they would argue that is an expectable. --inexplicable. people's behaviors are coming back. if you ask them they still say they are worried, etc. i think the behavior is more important than the attitude. >> just to make a point on the too big to fail. there was an amendment as we began integration of this legislation and dick shelby offered the legislation. it carried 92-5 on the floor of the senate. it was the first of 60 amendments on that debate over it. clearly, that bipartisan effort on that language that was
8:11 pm
designed -- today, but we did in the fall of september 2008 is against the law. not only is it against the law, i would defy anyone to stand up and offer on the floor of the to give of the senate billions of dollars the financial institutions. >> the secretary of treasury is now against the law for him to use public funds. he has to recover them. secondly, the statutory authority that ben bernanke no longer exists. thehe argument is that chairman of the federal reserve and the secretary of the treasury would he pressed by overwhelming political pressure to violate the law to give more money to a large failing bank. no. >> do you think that congress would support something right now? >> they would impeach and convict of impeachment any official who did that.
8:12 pm
we had a hard enough time getting -- we had a republican president, a democratic congress. that was before bipartisanship ended. what ended it was the election of barack obama and the republican response. orked hard -- we w on something that was essential. i think it is very clear. history will record that the tarp program was the most highly successful, widely unpopular thing the federal government ever did. the notion that you can do it again is bizarre. >> we have definitely had a conversation this morning about too big to fail and the remain some skepticism. one of the things that has been discussed is raking up the big banks, restoring -- there were amendments to the nature during dodd-frank.
8:13 pm
now, there are bills in congress. i am wondering if you can talk about why they are making traction then and why we should be discussing that. >> breaking up the banks is entirely a reasonable idea. i do have questions for those who ask it. aid to what side? breakare going to institution so no one institution is big enough to threaten us, then they all have to be no bigger than lehman brothers was in september of 2008 because that failure was one of the precipitating causes. secondly, how are we going to do it? who is going to buy them? i don't understand what the mechanism is. there is the vocalcker rule. this,ook at the causes of i think 100% securitization is a big part of the problem. nothing would've prevented it country wise from making all those lousy loans and
8:14 pm
securitizing the 100%. nothing would've stopped a idea from screwing up as badly as it did -- aig from screwing up as badly as it did with derivatives. if people want to break up the banks -- they may be too big to manage. as i said, there are things that shrink it. warren who is a proponent of putting back class repeal was not the cause of the crisis. saidagree with barney just as well. is not is that the issue so much the size of the institution but rather the risk that institutions take on. to that extent, whether it is capital, liquidity -- other measures determine whether the institution is in good shape.
8:15 pm
making the assumption because of the size does not hold water. i am inclined -- first of all, the banks and neighboring countries of ours that are much larger than u.s. banks. i think we need to focus on the attention of risk rather than size. if you are that interested in doing it, we have provided the authority to breaking up the institutions and the belt. the -- in the bill. the authority does exist. it ought to be very rarely engage in my view but nonetheless the power does exist in the legislation that we adopted. >> there are people here that can tell me how small is not too big? what is the biggest we can let them go? i assume it is below lehman brothers. if we wereimum size going to take deposition should we allow a financial institution to be?
8:16 pm
>> i agree with barney on this. as did 90% supported of the congress. the issue on that bill had to deal with the community reinvestment act. it was a huge debate during that bill. there was general adoption of the notion that somehow we can create firewalls in the 21st-century and we didn't need to have the kind of separation. my own view is you don't want to go back. >> dodd-frank deliberately pushes risky activities out of the banking system like the volcker rule.
8:17 pm
we have seen some assets move out of the banking system because of higher capital which is directly aligned with dodd-frank and compelled. does the act sufficiently address the buildup, the potential buildup of risk outside of the traditional banking system such as through the up stock? is it the right way to go in the long haul? >> i believe so. the idea that every time something emerges, new product line emerges or some youinstitution emerges, cannot go back and pass legislation every year or two. we are talking about a global marketplace. .e care deeply about this someone is going to lead on these issues around the world and if someone -- and if we didn't, someone else would.
8:18 pm
i want to play by someone else's rules. the united states once the lead on this matter. we are getting some compatibility. it is a harmonization of rulemaking in the european market particularly as well as here. the idea of pursuing that approach may tremendous sense to me as we went forward. so, again, my hope would be that what we have done was provide the ability to look over the horizon where he can watch -- where you can watch product lines and respond to it in a timely fashion. is amazing it took legislation to create it. it should have been occurring naturally. we had regulators meeting up periodically with each other and talking about what was occurring. ofdid become the crisis september 2008. me wasr protection -- to
8:19 pm
stunning in a way of the objections of having a way of consumer rocks -- products. in this day and age, the fact that was such hostile opposition to the creation of a place where consumers of financial products could not find some grievance was stunning to me. deal did actually specifically with to important risks -- two important risks. we are pro-market. i found myself more pro-market that some of the people we were regulating. we affirmed my view. enter warned magnusson -- center warned magnusson -- senator warned magnusson once said it is competition. i talked to to insurance company executives -- two insurance
8:20 pm
company executives. it required the companies to make derivative trading more transparent. the other was says you cannot do that. we have a deal. we have to publish our price. somebody can come in and undersell us. his older colleagues said that is not our position. banid only one thing did we and that was giving residential mortgages to people who could not pay them back. i believe the mortgage thing -- the other great risky area we rules was substantive requiring derivative trading to be moved from almost all one-on-one into and more marketplace situation. one of the people would've been implementation was gary gensler and did a very good job of it.
8:21 pm
areas wen those two did some substantive things. we don't regulate institution so much as activity. even though the activity is moved out of the bank, they are still regulated. you can't be sure of all this. particularly -- there is one thing i'm worried about. one part of the implementation that worries me. i think what one of the most important things we did was to say there has to be risk retention when you securitize. that was the transformative thing. the lender to borrow discipline was done away with. to get the bill through, one of the things i would hate to hear was when chris called me and said somebody has decided that he or she was the 60th senator. there were a lot of people who became the 60th senator.
8:22 pm
we had to weaken so much of the requirement for risk retention. section that had superstate mortgages to adopt risk retention. the regulators at one point were proposing to have the exception enough the rule. -- eat up the role. mortgages could then be made without risk retention. that troubled me. if we could get some risk retention in there, think we could build systemic retention -- protection. >> that is alive debate among the regulators. is in the middle of a pending rulemaking with some on the other side expressing concern that that may impact credit availability. >> that is one of the things i want to talk about. transitions are hard. to transition -- of the tionsition -- the transi
8:23 pm
from having hundreds of thousands of people aggregate you to private life is a good transition. [laughter] that was not hard. have a lot of mortgages made in america before the results a thing as securitization. you have to people who are convinced that they had to do any risk retention, they won't get mortgages to those people. i don't believe that. i know it is uncomfortable now but i believe if we have a 5% risk retention there would be a demand for mortgages. there will be a supply of mortgage holders and you would get over it. now that i comment have changed jobs. a lot aboutked that transition. i left one group of bad actors. [laughter] now.ansitioning during the formulation of
8:24 pm
dodd-frank, there was some discussion particularly in the senate about regulatory consolidation. senator, you at a proposal that would have taken the supervisory authority from the fed and the alongnd consolidated it with the occ into one federal supervisor. congressman, i think that was something you decided not to pursue. can you both talk about why you went there or why you didn't and what were the impediments? division.abolish the they were the regulator of aig. i had an alternative proposal. one was to abolish them. if we could not do that, change the name to the office of dispensation. we had the votes to do the first. ris next big thing -ch
8:25 pm
talked about. alan greenspan always argued if you did have some regulatory authority over the fed, you would not be able to have monetary policy. rate, that was not the major problem. and ther problem came representative of one of the objecting groups is here. this state chartered banks and the small banks came to us and they said we do not want to be regulated by the occ because you will be throwing us in the same arena as the big national banks. one of the things i should say -- the big national banks had very little political pull. the political problems with the deal with game from the credit union's from the insurance agents and the retail banks. the community banks way out way to the big banks and the
8:26 pm
community banks said we will oppose any bill that puts us into the same regulators. that was the reason. that is what stop that and we could not have overcome that. it was something i thought about before but it was just no way that you can pass a bill over the strong objection of the community banks. they refused and were ready to lobby hard against bidding -- getting put in the occ because they want to be put with the big banks. 2009, i proposed a draft, a discussion draft of a bill that did basically consolidate and provided a single attentional regulator. -- potential regulated. or. in the midst of all of this, the political considerations. you have to get enough votes to pass anything and the reaction to the single regulator was
8:27 pm
overwhelming for a number of reasons. the regulator didn't want to be out of the job so they were opposed to the idea. there was no constituency interest in the matter at all. i say respectfully of our knowagues, they didn't what they were talking about so the idea of consolidation -- we got rid of it. we actually grew the regulators. one had a magic wand consolidation we would've done no rational world would you have a security change commission and the commodity commission sharing jurisdiction. tim geithner, was reading his book and he reminded me. yes needles possible to consolidate the two -- he asked me if it was possible to consolidate the two and i said yes but not in the united states.
8:28 pm
the notion that they will be thrown in with the city slickers, it never made sense. >> other countries have done it. brazil consolidated. it was under a general. [laughter] >> it means something. the supervisory function. we tried to find where you can fedally point to minutes in conversations where the supervisory function had never been a part of consideration on monetary policy. the all due respect, supervisory function, i can never find anyplace i can exercise so why would you keep in a place that doesn't use it? the idea of moving that off to get better supervisory activity seemed to be a natural inclination. the bottom line -- i think i got
8:29 pm
three votes for the idea of all of these ideas at the time. the whole idea is at some point someone needs to look at the fed system in a way. you go back 100 years to woodrow wilson in the creation of the federal reserve system. regional banks, yet to win missouri -- you have two in missouri. the whole idea of going back and re-examining that role. there was no support for these things which is an important point in all this. is something barney and i have dealt with everyday. i've been asked a million times since the summer of 2010 why did we end up with 3%. i gathered the smartest minds in the world to sit down and talk about proprietary trading, with a long discussion, in the end i had a hot -- at a people -- i had a bunch of people that wanted zero and 10 but i could get 60 votes for three.
8:30 pm
uf to keep in mind if you don't get the 60th vote in the senate, everything dies. --se numbers are on magical these numbers are not magical. they are based on the reality is that if you don't end up with a con of support you need. we had to do things we were not overly and uzi astec about. -- not overly enthusiastic about. you have to be mindful all the time. if you're not able to keep the majority of the house and a super majority in the senate, this is nothing more than a nice discussion. bille gamble to me was the giving the federal reserve system, which it hates having, the authority to cap the amount of credit card issuers in charge retailers -- can charge retailers. it got 60 some odd votes in favor of it in the senate.
8:31 pm
you mentioned the two federal reserve's in missouri. hadpresident of one of them been a fairly vigorous the center -- the center -- the dissenter. when you were many things, how about a law that once they cannot have to federal law -- federal reserve presidencies? >> like senators. when i ran for senate, jim buckley decided to running connecticut having served in the senate for new york. the constitution is rather clear on that point that each state gets to senators not each senator gets two states. [laughter] >> i am going to take you back a bit before i do, have to say on behalf of the occ that we
8:32 pm
regulate over 1500 community banks. >> barney was terrific on this. the community banks were tremendously constructive and helpful in putting this bill together. at a not been for the banks working with us, this bill would not have been passed. >> we can have a dual banking system, you have dual regulators to reflect the state federal. >> even at the federal level. timet to take you back in to september 18, 2008. it was the day you both were to the speaker's office. ben bernanke came in to tell you about what was happening with the financial system. i was wondering if you describe what happened in that room and what your reaction was. >> it was one of those days that become seared in your memory. that evening at about 7:30
8:33 pm
when 14 of us gathered in that room. the respective chairs and ranking members of the committees and jurisdiction. there was quite a conversation. the moment i remember most clearly was ben bernanke sailing the following -- saying the following. i can tell you word for word what he said. ben bernanke is not the type to engage in hyperbole. he does not raise his voice. is a low-key individual. he turned to all of us midway through the meeting and said the following -- unless you act, speaking to the speaker and john boehner as well as harry reid and mitch mcconnell -- unless you act in a matter of days, the financial system of this country and a good part of the world will meltdown. that is the chairman of the federal reserve of the fight -- of the united states saying to the leadership of the congress about the significance of the moment and the importance the act.
8:34 pm
the oxygen left the room. in may of been just a few seconds. i left that room with a sense of solidarity and working together. awas fortunate to have counterpart on drafting the legislation. we were able to put together a bill. hank paulson sent me a 2.5 page bill that said give me $700 billion and no court or regulator could intervene. the country erupted when that became public information. we were operating in that environment. we were trying to come up with wrapping around ideas such as the votes. a greater sense of security about what we were about to do. we went through it. 40 days before the national election, we passed in the
8:35 pm
senate 75-24. ted kennedy was the only missing vote. never forget that night because i went around to democrats and republicans 40 days later. i said to them, i have the votes to carry this and this is the kind of opec and end your career. -- and this is the kind of vote that could end your career. oustand if you felt yiou needed to. gordon smith, republican senator from oregon, i went to him and said you were up in 40 days. need to take a pass on this -- his colleague was going to vote against the bill of the time. i was never forget his answer. he said he has the face the constituent tomorrow morning. he is not sure how to explain the vote. he said the constituent is the mirror. i have to believe this is the
8:36 pm
right thing to do for the country. he cast a vote for it and 40 days later he lost his seat and in the senate. the point is that was a tough vote. i couldn't agree with barney more. i will go to my grave believing we did the right thing for the country at that moment. had we not done so, we will be looking at a very different place today. i know historians will talk about it endlessly. resourcescouped the but stabilizing the financial institutions at that moment was absolutely essential. a democratic house and senate with a republican president were 40 days away from a national election to get beyond partisanship and do the right thing for the country. [applause] >> we were not as successful in getting beyond partisanship in the house. the republicans voted against their president.
8:37 pm
absolute power corrupts. i have always thought that needed an amendment. in some cases it is impotence that corrupts. the republicans in the minority felt free to vote against it. the first time they voted against the overwhelmingly and the second time after the crash they voted against it still, not by as much. after that night -- asked to night,ght -- as to that in 2008, about every other weekend after the markets close on a friday, i would get a call from paulson. we have this problem and that problem. iny had credibility particular because they were not telling us of this until lehman brothers went bankrupt. i think they try to save lh ehman. i do believe they were honestly
8:38 pm
surprised by the depths of the reaction. we all said, this can be as bad as the great depression. it could've been worse in this meltdown. during the great depression, you still had granularity in the world. it wasn't affected. by two dozen eight, we were on one financial grid and the whole thing -- by 2008, we were on one financial grid and the whole thing was grinding to a halt. it didn't occur to us to say no. theulati--hing about initiative and a time like that is inevitably with the exception. we had two choices. either say no or say yes with modifications. there was no option of that. >> in fact, you gave enough
8:39 pm
authority that they could change their approach because you remember in tarp they were going to purchase assets and you gave them the authority to add these equity injections and that is what they did. >> they have paid back. >> at some point, you determined that legislation beyond the tarp was needed to reform the system. do you think that providing the emergency relief to the system under the tarp created the urgency to pass reform legislation or did it undercut it? >> i don't think it was either. we were aware of the need before that. educated that we needed to do something more systemic with the bear stearns failure because what paulson and bernanke both set to us was, we were not happy with having to do this with bear stearns but we had no option. paulson began arguing all during that time until lehman.
8:40 pm
other people gave him a different opinion but the lawyers of the treasury and the fed were convinced that in the case of a large financial institution faltering, they had two options. either they can let it go bankrupt with no special rules, just flat-out bankruptcy or intervening and profit -- propping it up. also need an alternative, a way we can put it out of business but not bankruptcy. we also, as chris noted -- this is one of the great historical misunderstandings -- we had both been working on the question of trying to curtail the responsible lending -- the responsible lending -- irrespon sible lending. i know there's his argument that the liberal democrats were ning in 1994,begini
8:41 pm
liberal democrats were trying to slow down loans. the free-market guys were defending them. the data committee i chair that was going to pass, the wall street journal attacking my name and said subprime loans are really good. 80% of them have paid off on time. that seems like an odd statistic. they said i was trying to great an obsolete for subprime lending. we were aware of pieces of it but i think at that point we decided we had to get it done. i take the opportunity to reiterate. the more conservative free-market people who are trying to blame us for this crisis never had any problem with subprime loans in theory or practice until the crash.
8:42 pm
>> i became chairman of the banking committee. the senate is not a meritocracy. you have a lot live in hope your friends get defeated. i was on the banking committee for 30 years and when paul trains decided to retire in january of 2007, i became the chairman of the committee. the first hearing was in the first week of february of 2007 on the subprime lending. hank paulson testified that he wanted to testify only about china. he didn't want to talk about the subprime issue. i said fine. i knew my colleagues didn't spend a lot of time on china. we got on the subject matter of the mortgage, the growing problems of mortgages. we had 90 hearings in 2007 on the subject matter. some of the first witnesses were
8:43 pm
people actually cap lady what they thought this could result in in terms of foreclosures in the country. the first witness talked about having one million foreclosures. they were highly really fueled -- ridiculed as being engaged in hyperbolic political talk were nothing like that could ever happen. we learned millions of foreclosures happened over the coming years. despite that activity, it was a refusal to it knowledge the growing problem -- to acknowledge the growing problem. in 2008, you have bear stearns. many thought this was a on e-all problem. a ludicrous proposition when you think back. with the book talked about was a wonderful in september of 2008, everybody rallied and save the country. where were they? there was a lot of information about what was occurring. people unwilling to would knowledge this -- to acknowledge
8:44 pm
this and get ideas. had there been an intervention early on, we wouldn't have had a crisis at the magnitude that we saw. never the 26 million jobs that were lost. never the 4.5 million homes that were for closed. not to mention what happened to some of the finest financial institutions in the country. failing, consolidation that occurred, insurance companies. it was a disaster. it didn't ever have to come to that had people but willing to see the growing problem that was clearly the evidence of. being paidve instantaneously and adjustable-rate mortgages when the banks knew well those arms that never the consumer can afford it. they were selling that mortgage and eight to 10 weeks. there was no liability. all of that was occurring and
8:45 pm
unwilling to step up but it could've been stopped earlier on if people were able to see the magnitude of the problem was growing. >> let me build on that. the republican who told congress from 1995 until 2006 during which time nothing happened. no legislation passed. -- in 2006, iac hank paulson told the president he wanted to try again. the president people said it was too much trouble. he got the right to do it. fannie maeo us and and freddie mac award in reform and he was given the authority he wanted in the first two years of democratic and troll. -- control. you have is general deregulatory view. in 2006, as we were about to become shares after the 2006
8:46 pm
election, i was asked to go to a chamber of commerce conference at which they were discussing the serious problem facing the american financial community. overregulation. people go back and look at it. they were complaining that they were never be again initial public offerings in america because we were too stringent. schumer and mike bloomberg commission and report -- commissioned a report. as we took office, there was a staunch defense on the part of people who said they were the market defenders of an unrestricted subprime regime. i claim that we had to cut down further on deregulation. we started below zero. >> there clearly came a time where you agreed you had to move forward.
8:47 pm
people like hank paulson -- people have been talking about reforming the financial architecture of the country for a long time. it is a classic case. congress never ask until there is some sort of crisis. just sitting back and recognizing. they probably needed to do something. it is awful to do. you can never today -- you couldn't pass dodd-frank today. you couldn't pass in 2006 or 2007. the one time you could do it was when we did it. andy view, to come to tarp to walk away as if you had dealt with the issues would've been a travesty. you had to make an effort. others have talked about for a long time, how do you this in a way that makes sense? that stabilizes and strengthens the financial institutions, provides the kind of protections and transparency needed. to have some ability to look
8:48 pm
ahead. to provide institutional framework in which future institutions can respond to emerging product lines or institutions that people cannot even imagine today might exist. my feeling was had we not moved when we did, we were just functioning as that of the world existed as it did in the fall of 2008, we would be in a mess. -- the dynamics of politics and the voters who sometimes are part of the problem. the tarp was very successful and very unpopular. but, the success didn't factor into people's opinions. in doing the tarp, we did something unpopular that staved off. here's a this advantage to politicians or economists.
8:49 pm
they can do analysis in which they invoke the counterfactual. they can talk about why this was a good thing because they can talk about the counterfactual -- what would've happened. politicians are not allowed to use counterfactual. any elected official and goes up there and says i understand you are upset, but i saved it from getting a lot worse. slogan rented a up which -- printed up which i was dissuaded from using in 2010 that said things would've sucked worse without me. [laughter] that was my political view. we got all the negative political vibes from the tarp and very little public. that is why it was tough to get the bill through. crisismentioned the providing the impetus for
8:50 pm
getting something done. kindst extent was it the -- the crisis, the congress, and the administration that allowed to do it? how much was it your relationships with others that allowed you to move forward? >> all those factors contributed. i mentioned something at the outset of your questions. barney and i feel very strongly about this. our names are there. irony number at about 4:00 in the morning when a congressman from pennsylvania made a motion to call this bill, to call up bill.ank-dodd they said they will think it's one person. nyou want to reverse the names. the fact is -- i think it is true in the house and barn he can speak of that -- this bill would of never been done if there was nothing done by
8:51 pm
republican colleagues. one of the things i did early on, i didn't tell my staff i was going to do this. ed the republicans and democrats to meet together in the old historic room after a boat one night. -- vote one night. andok a democratic republican of the committee and assigned them responsibility to draft the various subject matters. to deal withwarner too big to fail. i asked chuck schumer and mike vapor to deal with issues. they were asked to work together on that particular issue. it is just too large a question for the committee itself to deal with. itle their names are not on and while they don't necessarily have voted for it, they are major factors that contributed to what is and is built.
8:52 pm
-- what is in this bill. that was terribly disappointing to me because had there been more participation on some of these issues, the bill will look different today. i think we wrote a good bill. i regret we didn't have strong provisions on ratings. i would've loved to have this deal with fannie and freddie. a lot more could have been dealt with. i'm grateful for bob corker in mark warner -- and mark warner. they couldn't do so because of two issues and this is what -- there were two issues that drove people away. the creation of the consumer protection bureau and corporate governance issues. it wasn't the volcker rule. it had to do with the creation of a consumer protection bureau
8:53 pm
and what they perceived to be too tough on corporate governance issues. those with the two factors that cause this bill not to have him bipartisan -- to have bipartisanship. was a necessary to have a democratic president and house and senate -- no, but it would've been a different bill. it would've been possible if we had a republican president and a democratic house and a democratic senate. it would've been possible if we had a democratic president and a republican senate. we showed much more willingness to quite right with a republican president. we would've had to weaken a little bit. the one example of that -- that w a major piece of legislationas. . he created the first efforts to try to deal with foreclosure.
8:54 pm
it dealt with a very large chunk of thanksgiving large authority to the treasury. that happen with the bush administration. it could've been passed it wasn't a republican house-senate but it would've been a less liberal bill. house.er thing -- in the here is the other important point. we sent the bill over to the senate and the norm on things like that has been with a democratic majority on the house, you only need an absolute majority. andan be a little tougher you have to get some compromises to get to the 60. the public wasn't paying much attention with what we were dealing with. health care was dominating the media. i actually lost a couple of votes on the floor on derivatives.
8:55 pm
the bill that went out of the house was weaker in the derivative section that i wanted it. the assumption was when they got to the senate, they could weaken it. work and then what i think what was transformative was the passage of the health care bill in april because when the health care bill passed then we became the center of attention. at that point, public opinion which had been sitting out our in on our side and i think that was helpful. >> i mention this in other settings. i was incredibly fortunate to have the barney frank in the house. i am about to get him into some trouble with his former colleagues. house members have a healthy disregard for the senate and for obvious reasons. you need to have a house share that understands the role of the senate and how it functions. had we not had barney as the chair of the house committee,
8:56 pm
dealing with the senate may have been much more difficult. i could've had a better ally we plan to work out the compromises than to have barney you understood -- who understood how difficult it is dealing with the senate. i've mentioned this and other for -- i have mentioned this in other forums. you understood that dynamic which unfortunately is not understood by a lot of others. >> understanding is not necessarily liking. [laughter] was you canly meant count the difference between 59 and 60. that is where we got the 3% and we got to the exception on the risk retention and where we got the one thing where i think the bill went further --
8:57 pm
that was the lincoln amendment which said the banks cannot do any kind of derivatives even if it was for themselves. if you got connectivity that is necessary, why is a good idea to move it from the more regulated to the less regulated? those were all things that happened because we needed -- th other thing about the senatee. the senate is a very democratic place. everybody has a chance to be number 60. enabled by the fact we had a couple of democrats who voted no. but, yeah. every other day some senator decided to be number 60 and we had to do something. >> the numbers changed during that as well. >> it was constantly a moving target.
8:58 pm
let me mention something else as well to this audience since many of you are involved in the business today. we have left the congress but as ve greatver -- i ha reverence for the institutions i have served in. it is going through a terrible time. something different from those of you who come from the perspective the financial services sector. the days where you have people like howard baker and bob dole are gone. me, theyrowd, believe look at these issues in a very different way. populism in aof a way that is worrisome to me in terms of how they look at the financial services sector. one of the classic examples we when you had rand paul guam the language of the federal reserve to require an audit from the federal reserve. >> on the open market.
8:59 pm
on the voting process by which the open market sets the rates. >> had that amendment been adopted, i don't think barney and knight could've gone forward with the bill. -- and i could've gone forward with a bill. oftroying the independence the federal reserve could've easily brought the whole bill down. as a result, they came very close. the amendment was about to be offered by bernie sanders who joined with the most conservative members of the senate. they join together on that proposal. bernie sanders, i talk to him a great lengths and he decided to i and change that. as a result, the amendment was not offered. we dropped the house provision. had that exact language would've have been adopted, and you cannot get rid of it and that would've brought the whole bill down. that is an indication of what we're looking at today in terms of how congress looks at the
9:00 pm
financial services sector. when people start talking about repealing all of this and going back to the fall of 2008 as if somehow you can create out of the system a reflection of what used to be, i would caution you to be careful of what you wish for. >> there was this problem of the increasing conservatism of the republican party. the ukraine bill passed only after every other country in the world had agreed to rearrange the voting structurae. try to get ans amendment through to tell the imf if they participate in the rescue of europe they had to stay out of dealing with the european crisis.
9:01 pm
we have the attack on the fed. this woulde that work with some of their republican allies that they support. you, i thought it was a pain in the ass dude to be defending the federal reserve. i have business people telling me you had to protect the federal reserve and then they gave money to the people trying to destroy it. >> we have time for one question. no pressure on that one question. if someone wants to ask the one. really? not one brave soul? much fun to pick on former members of congress. >> we can repeat the question.
9:02 pm
[laughter] >> i think everyone here respects your efforts to try and make the financial sector much safer. you are fabulous or visitors of the country. there are a lot of people that think financial status -- sector may be at better risk today. thes not just the size of shadow banking sector and the leverage, but because the government is less able to flexibility.less you say under dodd frank we have better foresight. tose committees will meet
9:03 pm
look at these indicators. was --earns the ability to for see a panic and a run on the bank is difficult. ways, i knowome you have made things safer. have you made things riskier in some ways? have you done enough to make the thing less opaque and have less average? that as agestion result of the bill the system is riskier is nonsensical. that i haveticisms heard but rarely from the same person. [laughter] is is that the institution too much bank concentration,
9:04 pm
which more often comes from the left. then the other is we haven't enough bailout authority. the bill didrst nothing to advance concentration. one factor that led to increase concentration was something, bank of america got bigger when it took over merrill lynch. have provided a mechanism so that we no longer have to be the federal reserve and the treasury . leverage, the leverage is substantially reduced by much higher capital standards. as to the nobel authority, there isn't ability to set up a facility that can lend to
9:05 pm
institutions, not just a one off, but consecutively so they can advance funds which are solvent. beyond that, the notion that we would have a situation where the offayers would be paying the debts of these large financial institutions with no penalties, that is not possible. >> this goes beyond your question and something we haven't talked about. barney knight didn't write something that is -- barney and i did not write something that was biblical. we did the best under the circumstances. i've never seen a bill that didn't overstate something or understate something. the regulatory process is taking a long time to go forward. i mention the costs that rarely
9:06 pm
get discussed. is people go forward, you get intelligent people stepping up and offering intelligent ideas of how to make this work better. this process of the reviews and so forth that require it. it is not going to shock me to find out that some changes need to be made to cousin unintended consequences. neither one of us have a problem with that. you don't not pass legislation changesthere may be required down the road. , which is the sec doing an incredible job under the circumstances given the pressure they are under, to make sure that what we are doing, barney and i tried to frame this , they gave all the power to the regulators. they never said anything of the
9:07 pm
definitions. we try to provide some parameters, leaving flexibility for those who know more about this and have the benefit of more comment to a sure we're making the right decisions. i'm confident that can happen. a slowly, but it will happen. thing.last people who are in the business, who have experience, they play a constructive part in improving it. not as long as they are still pushing it would drop dead. the price of participation and improving something is a willingness to accept its reality and work with it. that is one of the problems we have encountered so far. >> please join me in thanking the senators. [applause] >> i would like to add my thanks. wherever you come out on dodd frank, the passion they bring to the debate is phenomenal.
9:08 pm
i hope you caught the senator dodd biblical reference. that was a subliminal message for you to go see noah this weekend. [laughter] [captions copyright national cable satellite corp. 2014] [captions copyright national cable satellite corp. 2014] [captioning performed by national captioning institute] at the role of climate change and energy issues in the 2014 elections. our guest is along the shore -- alana shore.
9:09 pm
later, paul barrett of bloomberg businessweek on the recent article on why gm keeps swerving inm apology to aggression recall crisis. >> take c-span with you were ever you go without -- with app.ree there is a schedule of each of our network so you can tune in when you want. play podcast of recent shows from our signature programs. whereveran with you you go. download your free app online for your iphone, android, or blackberry. >> the house veterans affairs committee hears from the v.a. over failure to comply for the
9:10 pm
subpoena about the distraction of waiting lists at the phoenix medical center. we bring you live coverage at 7:30. the headline in the huffington rip into senator richard for questioning their priorities. senator burr said several groups were insufficiently critical of veterans affairs secretary eric shinseki. of beingd the groups more invested in access to the secretary and fixing the system. the veterans of foreign wars chris responded by calling one by calling the letter one of the most dishonorable acts they've ever witness. president obama announced his plan for troop levels in
9:11 pm
afghanistan. this is 10 minutes. >> good afternoon, everybody. as you know, this weekend i traveled to afghanistan to thank our men and women in uniform and our deployed civilians. on behalf of a grateful nation for the extraordinary sacrifices they make on behalf of our security. i was also able to meet with our commanding general and ambassador to review the progress that we made. and today i'd like to update the american people on the way forward in afghanistan and how this year we will bring america's longest war to a responsible end. the united states did not seek this fight. we went into afghanistan out of necessity after our nation was attacked by al qaeda on
9:12 pm
september 11, 2001. we went to war against al qaeda and its extremist allies with the strong support of the american people and their representatives in congress. with the international community and our nato allies and with the afghan people who welcomed the opportunity of a life free from the dark tyranny of extremists. we have now been in afghanistan longer than many americans expected, but make no mistake, thanks to the skill and sacrifice of our troops, diplomats and intelligence professionals, we have struck significant blows against al qaeda's leadership, we have eliminated osama bin laden, and we've prevented afghanistan from being used to launch attacks against our homeland. we've also supported the afghan people as they continue the hard work of building a democracy. we've extended more
9:13 pm
opportunities to their people, including women and girls, and we've helped train and equip their own security forces. now we're finishing the job we started. over the last several years, we've worked to transition security responsibilities to the afghans. one year ago afghan forces assumed the lead for combat operations. since then they've continued to grow in size and in strength while making huge sacrifices for their country. this transition has allowed us to steadily drawdown our own forces, from a peak of 100,000 u.s. troops to roughly 32,000 today. 2014, therefore, is a pivotal year. together with our allies and the afghan government, we have agreed that this is the year we will conclude our combat mission in afghanistan. this is also a year of political
9:14 pm
transition in afghanistan. earlier this spring, afghans turned out in the millions to vote in the first round of their presidential election, defying threats in order to determine their own destiny. and in just over two weeks they will vote for their next president. and afghanistan will see its first democratic transfer of power in history. in the context of this progress, having consulted with congress and my national security team, i've determined the nature of the commitment that america's prepared to make beyond 2014. our objectives are clear. disrupting threats posed by al qaeda, supporting afghan security forces and giving the afghan people the opportunity to
9:15 pm
succeed as they stand on their own. here's how we'll pursue those objectives. first, america's combat mission will be over by the end of this year. starting next year, afghans will be fully responsible for securing their country. american personnel will be in an advisory role. we will no longer patrol afghan cities or towns, mountains or valleys. that is a task for the afghan people. second, i've made it clear that we're open to cooperating with afghans on two narrow missions after 2014. training afghan forces and supporting counterterrorism operations against the remnants of al qaeda. today, i want to be clear how the united states is prepared to advance those missions. at the beginning of 2015, we will have approximately 98,000 u.s. troops -- let me start that over.
9:16 pm
just because i want to make sure we don't get this written wrong. at the beginning of 2015, we will have approximately 9,800, 9,800 u.s. service members in different parts of the country together with our nato allies and other partners. by the end of 2015, we will have reduced that presence by roughly half, and we'll have consolidated our troops in quabble and on bagram air -- kabul and on bagram air force. by the end of 2016, our troops will drawdown to a normal embassy presence in kabul with a security presence like we've done in iraq. now, even as our troops come home, the international community will continue to support afghans as they build
9:17 pm
their country for years to come. but our relationship will not be defined by war. it will be shaped by our financial and development assistance as well as our diplomatic support. our commitment to afghanistan is rooted in the strategic partnership that we agreed to in 2012, and this plan remains consistent with discussions we had with our nato allies. just as with our allies have been with us every step of the way in afghanistan, we expect that our allies will be with us going forward. third, we will only sustain this military presence after 2014 if the afghan government signs the bilateral security agreement that our two governments have already negotiated. this agreement is essential to give our troops the authorities they need to fulfill their mission while respecting afghan sovereignty. the two final afghan candidates
9:18 pm
in the runoff election for president have each indicated they would sign this agreement promptly after taking office. so i'm hopeful we can get this done. the bottom line is it's time to turn the page on more than a decade in which so much of our foreign policy was focused on the wars in afghanistan and iraq. when i took office, we had nearly 180,000 troops in harm's way. by the end of this year, we will have less than 10,000. in addition to bringing our troops home, this new chapter in american foreign policy will allow us to redirect some of the resources saved by ending these wars to respond more nimbly to the changing threat of terrorism
9:19 pm
while addressing issues around around the globe. i think americans have learned that it's harder to end wars than it is to begin them. this is how wars end in the 21st century. not through signing ceremonies, but through decisive blows, transitions to governments, security force who is are trained to take the lead and ultimately full responsibility. we remain committed to a sovereign, secure, stable and unified afghanistan. and toward that end we will continue to support afghan-led efforts to promote peace in their country through reconciliation. we have to recognize afghanistan will not be a perfect place, and it is not america's responsibility to make it one. the future of afghanistan must be decided by afghans. but what the united states can do, what we will do is secure our interests and help give the afghans a chance, an opportunity to seek a long overdue and
9:20 pm
hard-earned peace. america will always keep our commitments to friends and partners who step up and we will never waiver in our determination to deny al qaeda the safe haven they had before 9/11. that commitment is embodied by the men and women in and out of uniform who serve in afghanistan today and who have served in the past. in their eyes, i see the character that sustains american security and our leadership abroad. these are mostly young people who did not hesitate to volunteer in the time of war, and as many of them begin to transition to civilian life, we will keep the promise we make to them and all veterans and make sure they get the care and benefits that they have earned and deserve. this 9/11 generation is part of an unbroken line of heroes who give up the comfort of the
9:21 pm
familiar to serve half a world away, to protect their families and communities back home and to give people they never thought they'd meet the chance to live a better life. it is an extraordinary sacrifice for them and for their families, but we shouldn't be surprised that they're willing to make it. that's who we are as americans. that's what we do. tomorrow i'll travel to west point and speak to america's newest class of military officers to discuss how afghanistan fits into our broader strategy going forward. and i'm confident that if we carry out this approach, we can not only responsibly end our war in afghanistan and achieve the objectives that took us to war in the first place, we'll also be able to begin a new chapter in the story of american leadership around the world. thanks very much.
9:22 pm
>> republican leaders responded to the remarks on afghanistan including the health services committee leader. john boehner said i hope the announcement today he will support a troop presence in afghanistan next year. -- president obama delivers the commencement address at west
9:23 pm
point military academy. he is suspected to talk about his plan to reduce troops in afghanistan. live coverage at 10:00 eastern on c-span. join the conversation on facebook and twitter. later, the house veterans affairs committee holds a hearing over questions over an forrnative waiting list veterans care. stories that resonated with me was the moment when they are dithering about tother or not they need eject seawater into unit 1. ticking.e clock is they are down to the wire.
9:24 pm
superintendent who would have to make the final call knows it is desperate. they need to get water in there quickly. everybody wants a say. officials are all hemming and haunting. supervisors, the government hasn't signed off on this. so, he basically calls one of i'mstaff people and says going to give in order but ignored. hear,claims everyone can belong to halt the seawater injection. me, that was a human element in that story. rules,n, ignoring the
9:25 pm
acting on your own is not rewarded, here is a guy that knew he didn't act, things would go worse than they were. >> more about the synonymy and meltdown at the fukushima nuclear power plant. part of book tv this weekend. >> the supreme court ruled that secret service agents are entitled to immunity and should be shielded from a lawsuit that say their first amendment rights are violated. the case stems from a 2004 incident when secret service agents pushed protesters away from a hotel where president george w. bush was dining. this argument is one hour.
9:26 pm
>> we'll hear argument this morning in case 13115, wood v. moss. mr. gershengorn. >> mr. chief justice, and may it please the court -- the ninth circuit held that individual secret service agents could be held personally liable for their onthespot decision to reposition a group of about to demonstrators who were within weapon's range of president bush as he made an unscheduled as he made an unscheduled stop for dinner at an outdoor restaurant patio. >> may i ask a question? so were the pro-bush demonstrators. in fact, the pro-bush demonstrators were across the street pretty much at a diagonal to the president, and they were permitted to remain there the entire time. he they had a throwing distance of a bomb or a shooting distance as well. >> so, your honor, the pro-bush demonstrators were differently situated from the anti-bush demonstrators in several fundamental respects. with respect to the weapons
9:27 pm
range, there was a two-story building between the pro-bush protestors and the where the president was dining. it's in stark contrast to the open alley that led down precisely to the six-foot wooden fence behind which the president was dining, which is where the anti-bush protestors were. >> that was after the second move, not the first. >> no, your honor. at the first move, when the president arrived for dinner, the pro-bush protesters were on the north the anti-bush protesters were on the north side of california street between third and fourth, and the alley that led right down to the restaurant patio was right there. the they were at the head of the alley. so they were very differently situated from the pro-bush protesters. >> counsel, i don't understand the government to be making the argument, and i can't understand why it isn't making the argument, that it doesn't matter whether there was any intent to suppress anti-bush demonstrations, that in this area, as in traffic stops, we don't consult subjective intent.
9:28 pm
if if a policeman stops somebody, and it's, oh, you stopped me only because i was coming back from an anti-bush demonstration, we wouldn't we wouldn't listen to that argument. we'd say, did you have a broken taillight or not? if you had a broken taillight, we do not inquire into the subjective intent of the officer. why is it any different here? >> your honor, i don't believe we are avoiding the argument that your honor suggests. >> you haven't made it. >> we don't think it's i think, your honor, with respect, that we have. our position is that it is not clearly established law, that if there were an objectively reasonable >> you don't even have to get
9:29 pm
into that. you don't have to get into clearly established law. it's a very simple case. if you say, was there objectively a reason to move these people? if there was, if you had an ulterior motive that was unconstitutional, we don't inquire into it. >> your honor, we agree with that. we just have framed it as terms of in terms of clearly established law, that if we think along the lines of what this court said in reichle with respect to retaliatory arrest, if there is an objectively reasonable basis for the move for the repositioning, such as a valid security rationale, it's not clearly established that the presence of animus would be enough to take to raise a constitutional -- >> well, do you agree with that, mr. gershengorn? because you have these hypotheticals in the last page of your brief where you say that a complaint could survive a motion to dismiss if the secret service members had, you know, announced, had admitted that they had an intention to discriminate or if they had told the local police that. so i took what you were saying there to say, if there is evidence of a very clear nature, that it was all about animus and it was nothing about security, then the complaint would survive.
9:30 pm
>> so, your honor, i think that the way we reconcile the two positions is the following -- if there is no objective legitimate security rationale, and it is animus, we agree that it would be clearly established law that the officers could not have taken the agents could not have taken responsibility could not have taken the actions. however, if on the record there is an objectively reasonable security basis, then we don't think it's clearly established that, even if the individual officer didn't take the action for that reason and took it for animus, that it's not clearly established that that is a constitutional violation >> could you get oblige us by answering justice scalia's question. forget clearly established. what do you think the law is or ought to be? if the only motive for the officer's action, for the secret service action, is one based on viewpoint discrimination, but that nonetheless there was an objective reason that could have
9:31 pm
justified the action, what should the outcome be there as a matter of law? forget clearly established. >> we don't think they've stated a constitutional violation in that context. however, what the court did in reichl -- >> i don't what does that answer mean? >> that means there is no constitutional violation. >> so you so you say that any time there is an objective basis for the secret service to act to move a protester, the fact that this wasn't the motive at all, but that it was viewpoint discrimination is irrelevant. >> so, your honor, i want to -- >> is that your position or is it not? >> that is our position, but i don't think that's what we need to win this case. >> i know that, but the reason that you the reason i think these questions are being asked, my impression is exactly what justice scalia said in respect to a fourth amendment case against a police stop. but my impression also is that
9:32 pm
where you have a first amendment case and it's not against the policeman, against secret service, this court has not said that. am i right about that? and the reason that your position, if i am right, is relevant is because i think maybe we shouldn't say that for the first time in a case where the government hasn't even argued it. >> answer to what i just said? am i right on part two? so, your honor, i now and what is the answer to your honor's am i right on part one, and -- the court has never held it. what the court the closest the court has come is in reichle where what the court said was in a case of retaliatory arrest, it was not clearly established the court didn't reach the constitutional question. the court said it was not clearly established that where there was objective probable cause for arrest, retaliatory animus was not relevant. we think a number of the same factors that motivated the court
9:33 pm
in reichle could motivate the court here as well, were they to reach that question, and i'll explain why in a second. but we do not need to win on that question because it's not clearly established. so, your honor, with respect >> well, we all know you don't need to win on that question. the question is -- should, in your opinion, the court reach that question. and my hesitation would be that it is one thing to talk about ordinary policemen. it is another thing to talk about first amendment matters where we are engaged with a kind of special protective force, and certain residences there that make residences that may make a person hesitate to extend into that area. and so what is the government's view? >> so, your honor, i've been asked the government's view on a couple of things, so i want to be very clear. the question of what is our position is the position articulated by justice scalia. the question of what we need to win, it's qualified immunity. the question of whether the court should reach the constitutional question, i think our answer would be no, that the parties haven't breached it as your honor said, that the normal course would be to do what the court said in reichle and say that it's not clearly
9:34 pm
established. >> i can't understand why you didn't brief it then in that case. i cannot understand why you didn't brief it. and talking about things that we haven't haven't held in the past, we haven't even held in the past that that there is a bivens cause of action for a first amendment violation, have we? >> no, your honor. >> do we have any cases that has held that? >> no. and we agree with that, but the argument was not preserved below, so we have not presented it here. >> is that a relevant well, what is your position on that? is it pertinent in analyzing qualified immunity that there's no private right of action for the asserted constitutional violation? >> we do believe, your honor, that it is it is the court would have jurisdiction to reach it because it's a logically antecedent question and that it would be something that the court could consider. it's not something -- >> but i don't mean what the court could consider. >> yes. >> i want to know whether or not well, the question is simple. can you only can you not violate the constitution if there's no right of action against you, or do you look and say, well, whether there's a right of action or not, it still violates
9:35 pm
the constitution? >> your honor, i think that the presence of the court's hesitant to recognize bivens and the factors that go into the that gave the court hesitance to extend bivens to first amendment claims are relevant to the analysis here. we didn't raise this argument because it wasn't preserved below, but we do think the very same factors that should that would give the court pause about recognizing a bivens actions are the ones that would cause the court to reverse the ninth circuit's decision here. >> well, on the merits of the case, if you were called to brief the secret service, what would you say in response to this question -- do we have any duties under the first amendment when we are protecting the president with respect to crowds and and people that are close to him? do we have any first amendment duty? >> your honor, we would first of all, as the policy i know your honor hasn't asked this, but i just want to make clear. there's a policy that would generally prohibit the secret service from doing that, an internal policy. >> they're asking about a law, they say we want to know what the law is.
9:36 pm
we're law enforcement officers. will you please tell us what the law is. >> i would say, your honor, that the law is not clearly established. this court has never held that the secret service -- >> they said that's why we've invited you to lunch, so that you will tell us what the law is. [laughter] >> and we may yet get clarity. but as -- >> you actually are arguing that it's not >> could i -- >> that it's not -- >> have an answer to this question, please? >> answer justice kennedy's question. >> we would tell i think i would have to say in candor, your honor, that in part because of some of the discussion we're having, that we think the better view of the law would be if you have an objective security rationale for the action, that the retaliatory animus would not render that unconstitutional. >> well, can i ask you a question? but i would have to say that that's not clearly established and there's a rule -- >> do you think it's not clearly established that you can't discriminate solely i've used the word "solely." no security reason, no nothing. you can't discriminate solely on
9:37 pm
the basis of viewpoint? >> that's correct, your honor. we agree with that. >> that's constitutionally established? >> and i take that as different from the hypothetical that justice scalia proposed. >> no, no, no. let me go. >> okay. yes. >> step by step. you agree that's clearly established. >> yes, your honor. >> all right. what you don't think is clearly established is a mixed motive case. >> that's correct. >> that's a different issue. so the question here is -- is this a mixed motive case or not? >> your honor. >> that the other side, i think, is saying it's not, that there was no valid security reason, no objective security reason for this move. >> and i think our response to that, your honor, is we would agree that's clearly established. if there were if no reasonable officer could believe there was a security rationale and it was only on the basis of animus, then it would be clearly established. we believe -- >> that's not a mixed motive. why why do you accept the description of that as a mixed motive case? >> i don't think that i don't think justice sotomayor -- >> if you agreed with my hypothetical, the point is it doesn't matter what the officer's motive was. it does not matter. if there's an objective basis for a traffic stop, even if his sole motive was discriminatory,
9:38 pm
the stop is nonetheless valid. this is not a mixed motive issue. >> your honor, i took justice sotomayor to be asking me a different question -- if there is no objective security rationale, which takes it out of your honor's hypo, then we agree it is clearly established and we believe this complaint fails because they have failed to satisfy iqbal. >> then don't just don't call it mixed motive. it confuses everything. it confuses everything. >> no, that i don't think is mixed motive. but what justice sotomayor was asking was, i thought, something different, which is that whether there is a sort of mount healthy butfor causation. and i would say i just want to be very clear what our position is here. i know i'm being asked on the merits, but just to get our the position on qualified immunity. it is not clearly established that taking viewpoint discrimination into account in a security situation violates the constitution. it is not clearly established that if there is objective security rationale, even if you act then in animus, that that would violate the constitution. >> justice -- >> but we agree -- >> justice alito has been trying to get a question in.
9:39 pm
>> i'm sorry, your honor. >> no, no. it's certainly not your fault. [laughter] >> this question about the the issue that you've been addressing in response to justice scalia's question. in in the fourth amendment context where it is purely the inquiry is purely objective, we have case law on what is reasonable suspicion, what is probable cause. now, if you apply that to a first amendment case where there where it's asserted that there is a security there may or may not be a security concern, would it not be necessary for us to identify a a degree of suspicion or probable cause that the secret service would have to have before making before moving people for security reasons? i imagine whenever the president is out in public, there is some degree of risk. you want no risk? you know, keep him in a bunker. so at some point do you see what i'm saying? the secret service has to make a decision about how much information they need before
9:40 pm
they can they should move people or change a route or something like that. so the courts would then have to set that standard. >> your honor, i think it -- would have to be a very deferential standard and it would and i think that that is proper under this court's case law. if i could attack that in sort of two ways. the way the court addressed this issue in reichle we think is quite parallel to how it would address it in this first amendment context. what the court said in reichle was -- first, the existence of probable cause in that case is likely to be an issue in every in virtually every case. and we think in this situation, the existence of a legitimate objective security rationale, in part because that's what the agents do and in part because of statute that that requires the agency to protect the president, a legitimate security rationale is likely to be in every case first. second, what the court said in reichle was that it's very
9:41 pm
difficult to distinguish animus from the proper use of reliance on protected speech because because the court has recognized that it is valid at times to take into account the nature of one's speech in in making arrests and other security decisions. and the same would be true here. and we think there's a third factor here which is important, which this court has recognized, that the physical security of the president occupies a special place in our constitutional structure, as justice breyer put it in his rubin dissent, and that the secret service has a special role to play. >> would you say that under your view of the case, that there is a first amendment interest that protesters have, but that it is virtually unenforceable in the context of crowd control? >> no, your honor, we would not say that. we think there are -- >> because it seems to me that if this complaint doesn't survive, nothing will. >> so, your honor, i'd like to address that in a couple of different ways. first of all, there's a very big
9:42 pm
difference between whether there's a bivens action stated and whether there are other ways to enforce constitutional rights. so it is possible and there have been suits that have sought injunctive and declaratory relief before things like inaugurations, political conventions, even just regular presidential visits. those would be unaffected. second, there are there are situations in which plaintiffs, and there are pending challenges now, have challenged secret service policies, for example a secret service policy that no that bars certain supports for signs from a parade route. that's being challenged now in the court. and then if there are bivens claims, we think there are allegations that would survive. but we do recognize that this would that that a ruling on qualified immunity here would cut back on damages claims against individual agents, but we think that's appropriate in light of the difficulties they face. >> you know, i really i really don't understand what the government is doing here. it seems to me you want to win this case, but not too big.
9:43 pm
[laughter] in in light of the arguments waived below and the arguments not made here, you want us to find for you, but on the narrowest possible ground. i would think it is in the interest of the united states and the secret service to say there are no bivens first amendment actions, but you don't make that argument. didn't make it below -- don't make it here. likewise, it would be in their interest to say, oh, this is just like a traffic stop. it doesn't matter whether we had a a bad motive so long as there was an objective reason, that's the end, but you don't make that argument here either. i i really can't understand what the government is trying to do here. >> your honor, we are we are doing our best to make with the arguments that we have before the court. we think that the that the qualified immunity standards that we have articulated and the position on clearly established law we have taken is sufficient for this court to decide the claim. although. as i've tried to say, we agree
9:44 pm
with both of the propositions that your honor has said and in a properly preserved case we would be likely to address them. >> mr. gershengorn, suppose that we changed the facts here and that both the pro-bush demonstrators and the anti-bush demonstrators were in the same place and they were at the foot of the alleyway, so that there was an objective security rationale, but that the secret service members and they were in all respects the same except that they had different signs. some signs say the president is great and some signs say the president is terrible. and the secret service members had only removed the ones with the signs that said the president is terrible. so what would your analysis of that be, both under the clearly established, but also, i want you to get to what you think the law is there. >> all right. so under clearly established, your honor, i think we do think that that would make a plausible case that there that the agents acted without a valid security rationale because they because
9:45 pm
they moved the anti-bush protesters, but not the pro-bush. >> i think you're changing my hypothetical, or let me just explain my hypothetical. >> okay. >> i put them both at the foot of the alleyway because that meant that both have a straight shot, you know, that they can throw a grenade into the patio, which is, i take it, what the nature of your objective security consideration is. so that's true of both of them. but you only move the ones that say the president is terrible. >> so we would say, your honor, first on clearly established, that it is not clearly established that the agency couldn't do that, but we recognize that the court is concerned about that situation where an agent an agent has a legitimate an objective security rationale, but acts solely on the basis of animus and i think it would support that kind of inference. but i would urge the court to think, as it thinks about it about the flip case, which is an agent who has an objective security rationale -- >> but just tell me what your answer to that case is.
9:46 pm
what do you think -- >> the answer is it would not be clearly established, that they >> and do you think it would be unlawful? forget clearly established. >> the government's position is if although we haven't briefed it in this case the government's position would be the one articulated by justice scalia. but we recognize that is not something that the court has yet held and so i think -- >> i don't think that's -- responsive to justice kagan's hypothetical. justice scalia's hypothetical, there is an objective reason for stopping the car. it's violating traffic regulations, which is the broken taillight. i understood my colleague's question to be there is no objective security rationale. >> i'm sorry. i had understood it differently. did you believe i thought you were saying there was an objective >> i said both can throw a grenade into the patio area, but in fact you only remove the people who have the anti-president sign >> so i took the fact -- >> notwithstanding that the security consideration applies to both equally.
9:47 pm
>> so i took that to be that there is an objective security rationale, and i think in that situation, we would say that the a, it's not clearly established but that we believe that the better answer is the one from justice scalia because there's an objective security rationale. >> well, no. i thought the question was there's no differential security rationale. in other words, maybe it's not the question my colleague asked, i'll ask it. >> okay. >> let's say you have to move the president in an emergency situation. you've got two options, go through the anti-bush crowd or go through the pro-bush crowd, and you've got to do it right away. is it a justified security rationale to say that we think it's more likely that it will be problematic if you evacuate the president through the anti-bush crowd than through the pro-bush crowd? >> we do not think that would be unconstitutional, your honor. but -- >> so in other words, the viewpoint itself constitutes a security consideration? >> that's what this court said in reichle, that there are times, not that it inevitably -- >> and so, your answer to justice kagan is that it would
9:48 pm
be proper if you have only minutes, a limited amount of time, to move the people with the with the adverse with the signs that criticize the president? >> that's correct, your honor. >> so your answer to justice kagan is that there is no violation if they move just the bush protesters. that's your answer. >> that's correct, your honor. but i and if i could just say a word or two about the >> i don't know i thought what the chief was going to say, there's no differential reason to move one or the other. let's assume you have an equal amount of time, you can get everybody moved, and you just are choosing to move the bush anti-bush demonstrators. >> your honor, i understand that this is an unattractive hypothetical for the government's position. and if i could explain why nonetheless i think it's the right answer because the flip side is if you have an agent who has a legitimate security rationale and is going to move against somebody who's hostile who's showing a message that's
9:49 pm
hostile to the president, you don't want that agent to hesitate. that's what this court said in hunter. the court said in hunter there are times when we don't want a reasonable official to hesitate before he acts and nowhere is that more important than when the specter of presidential assassination is in order. but i want to be crystal clear that we don't need that i think i've said that before, but i just want to make sure that we don't that to win. it just has to be clearly established. >> i mean, suppose i add to my hypothetical and i say and the secret service goes to the local police and says and, you know, doesn't talk about grenades at all and really just says we have got to get these anti-president people out of here because they're annoying the president -- let's do it right now, and that's what they do. >> i think, your honor, that at some point you would cross over into a position where you would say there is a real question about whether there's an objective security rationale and we would be in a situation >> well, there is one.
9:50 pm
i mean, there is one in a sense of as we look back, we can see that there's an alleyway and that somebody could have a grenade, but there is evidence that that's not at all what was in the heads of the secret service members. >> your honor, i recognize that that is as i said, i think that is a that is the hardest case for us and i recognize that's why your honor posed it. but i urge your honor to think about from the flip side, which is if you adopted the rule that your honor's question would not attributing to you, but might lead one to adopt, that the result is an agent who has a legitimate security rationale but is operating against people who are expressing a viewpoint must hesitate. and i think it's important in this context to remember that what we have are secret service agents who are making on the spot judgments while protecting high level officials. >> we understand that and i think that that's the problem, and i think you're being sort of
9:51 pm
picked at for this reason in my mind, and i don't know if you have an answer to this. i know everyone understands the importance of guarding the president in this country. everyone understands the danger. you can't run a risk. at the same time, no one wants a praetorian guard that is above the law, and we have examples of history of what happens when you do that. so everyone is looking for some kind of line that permits the protection but denies the praetorian guard. and if you have anything to say that we're immersed in details about how to get to that general objective, i would love to hear it from either side. >> your honor, very briefly, then i'd like to reserve. i think the simplest way to reserve it is actually to resolve this, is to hold that it's not clearly established, that it's a mixed motive case-- it is not clearly established that the situation justice scalia posed would be unconstitutional-- and that under iqbal, that the plaintiffs have not alleged what they would need to allege under clearly established law, that it was the
9:52 pm
sole motive for their actions and there was no objectively reasonable security rationale. i'd like to reserve the balance, your honor. >> thank you, counsel. mr. wilker. >> mr. chief justice, and may it please the court -- the plaintiffs have pled a plausible claim for intentional viewpoint discrimination in violation of core first amendment principles. we have done so for three interrelated reasons and we've pled it as a sole cause. this was solely the cause, not security rationale, but the sole cause of the move here was the viewpoint being expressed. >> would you have taken the same position if all that had been was the first move, that is, the move to fourth street? then there would have been about an equal distance from the pro-president demonstrators. >> i think that would be a more difficult case for us to prevail because we wouldn't have one of the prongs on which we rely, which is the disparate treatment
9:53 pm
as one of the factors we rely on to establish the inference of intent. >> well, then would you say that you would have no tenable case if they moved them just the one street over so they wouldn't be in a position to throw a hand grenade to the patio? >> i think as a practical matter, we would probably we would likely not have as tenable a case as we do. if in fact the only reason for the move was the officer's intent to move the anti-bush demonstrators further from where they were so that they could be heard less well, that would in our view state a claim for relief. it would be a more difficult claim because we are trying to establish intent and we're trying to establish intent from the inferences from the various
9:54 pm
facts that occurred that evening. >> counsel, do you acknowledge that that the issue here is whether the law was clearly established? do you agree with that? >> i think, the i think we believe the law was clearly established by this court's precedents. >> i'm not saying whether you believe it is. is that the if you find it wasn't clearly established, do you lose, is what i'm saying? >> well, i think this court's qualified immunity precedents make that clear. >> okay. now, how can it be clearly established if we have never held that there is a bivens cause of action for a first amendment violation? we've never held that, have we? how can you possibly say that the violation here is clearly established. >> i think you can, justice scalia, hold find from this court's decisions in its viewpoint discrimination holdings, like rosenberger, like r.a.v. st.paul, like pinette, where the court has clearly made it clear that viewpoint discrimination is a pernicious form >> oh, it is pernicious.
9:55 pm
but is there a bivens action for it? the constitution does not create a cause of action for this. doesn't cover this. we invented it out of really out of nothing, and we have not extended that to first amendment violations up to now. >> up to now. and that argument was not made below, nor preserved to >> well, regardless of whether it was made below, it certainly goes to the argument that was made below and here, that the violation here was not clearly established. >> well, i think it's different to say whether or not there is a remedy for the violation as to whether the violation was clearly established. >> well, okay. >> the violation was clearly established. whether or not there is a remedy for that violation under bivens -- >> that's a good point. >> is a different question. >> that's a good point. >> mr. wilker, let's say something happens back in the patio area where you you're the head of the secret service detail. you've got to evacuate the
9:56 pm
president right away. do you go through the anti-bush crowd or through the pro-bush crowd? you've got to decide right now quickly. i'm serious. you have to make a split-second decision. which way do you go? >> i think whichever way provides the clearest egress. >> no, no. they are both the same. that was one of your propositions, that there is no way to distinguish there. it's too late. you've taken too long to decide. it's a serious point. >> it is a serious point. >> you've got to decide like that. >> but that's not the position that that's not the position the agents were in on october , . >> no. i know. but if we're trying to decide whether viewpoint can ever be a security justification, we have to consider all of the possible situations. so again, if you had to decide right now do you go through the anti-bush crowd or the pro-bush crowd? guns are going off, explosions. which way do you go? >> i truly don't know the answer to your question because i'm not >> really? >> a security expert. i don't know where the guns are
9:57 pm
coming from. i don't know what the -- >> you're the farthest thing from a security expert if you don't know the answer to that one. [laughter] >> that's actually not much of an answer for lots of reasons, but the most, if you don't know, how are we supposed to know? >> well, because that's not the issue that's presented to this court for decision today. we're this is not a case in which the secret service made a split-second judgment as to which evacuation route to take with the president. >> well, but with respect, my point is that we do have to adopt a general principle, and if we say viewpoint can never be a consideration, then you have to say when there is an emergency going on, it's just as likely there will be a problem if we go through the pro-bush demonstrators or the anti ones, which seems to me to be, on its face, implausible. >> well, in the context of an emergency, there may be a different rule than there would be in the context of a considered decision to take viewpoint into account in making a decision, which is what we have alleged here. >> so then you think there well, there may be situations in which viewpoint alone may be a security consideration. >> there may be. and i think if there were
9:58 pm
individuals directly in proximity to the president, not, you know, feet or feet away, but directly, could the secret service take into account, i think that's what this court said in reichle, is that the court can into account where it said in the proximity of the president, or in that case the vice president. >> mr. wilker, do you concede that, looking back on this just in a hindsight kind of way, that there is an objective security rationale here, that they are standing at the foot of the alleyway, that you could throw a grenade into the patio area? do you concede that just looking at the situation and not thinking, not taking into account any evidence of what was in their heads, that there in fact is an objective security rationale for moving people from this area? >> i think if you if the concern was the mouth of the alley and that the riot geared police guarding the mouth of the alley were not sufficient to protect the alley and protect against that kind of incursion, the more simple solution in this case
9:59 pm
would simply be to move people slightly to the east or west where they had buildings between them and the president. >> the question is, what is there are so many different theories floating in this case that i've had a hard time trying to figure out what you want me to decide on what theory you want me to decide. is your allegation that the secret service agents were motivated in part by security reasons and in part by bad what you would say, bad viewpoint reasons? or is your theory the secret service was motivated only by viewpoint and zero by security? >> it's the latter. >> it's the latter. okay. so then if it is the latter, i think you're hearing the government saying, yes, that is clearly established, that they could not in fact be motivated only by bad viewpoint reasons and zero by security, and therefore, you have stated a
10:00 pm
claim, if your complaint does say what we both just agreed you wanted to say. >> i don't think the government has conceded that. >> all right. maybe they didn't and i have to decide that. >> i don't think the government >> does that save the claim? leaving all that out, the next question would be, which i haven't heard argued yet, what more do you have to do then state a claim? five years ago i would have thought, nothing. if you have an absurd claim -- i am not saying it is absurd, but if it were absurd, a district court could deal with it.

32 Views

info Stream Only

Uploaded by TV Archive on