New Direction for Energy Independence, National Security, and Consumer Protection Act and the Renewable Energy and Energy Conservation Tax Act of 2007--Motion to Proceed

Floor Speech

NEW DIRECTION FOR ENERGY INDEPENDENCE, NATIONAL SECURITY, AND CONSUMER PROTECTION ACT AND THE RENEWABLE ENERGY AND ENERGY CONSERVATION TAX ACT OF 2007--MOTION TO PROCEED -- (Senate - April 01, 2008)

BREAK IN TRANSCRIPT

Mr. CORNYN. Mr. President, we know Senators Dodd and Shelby are working on, hopefully, a bipartisan piece of legislation that will come to the floor this week that will help Congress do what needs to be done and, hopefully, what will actually work to try to relieve some of the crisis caused by the subprime lending credit crunch and the slowdown in the housing industry.

We have all acknowledged this slowdown we have seen in our economy over the last few months, and we have resolved to work together to try to give the American people the confidence that if there is something we can do, we will try to do it in a way that actually works and relieves the problem in a bipartisan way. I think, frankly, that is met with some measure of relief by people across the country.

I think we got off to a pretty good start when Speaker Pelosi and Republican leader John Boehner and Hank Paulson, the Secretary of the Treasury, came up with a stimulus package that passed with strong bipartisan majorities.

I think as much as anything it demonstrated that we are capable of acting together in a bipartisan way rather than just engaging in gridlock and finger pointing. I hope we will continue along that trend as we consider the legislation that Senator Shelby and Senator Dodd are working on.

To me, one of the best parts about the stimulus package we passed was the small business bonus depreciation provisions which gave small businesses that invested in new equipment an opportunity to write that off on an accelerated basis. It provided a great incentive for them to purchase that new equipment and hopefully allow them to continue to create jobs.

It is no secret about 70 percent of the jobs created in America are created by small businesses. We ought to do everything in our power to try to help them continue to generate jobs for hard-working Americans.

A little earlier today, I had a colleague come up to me and say, basically: We have to do something to deal with this crisis. Of course, I added: Well, I hope we do something. But more than that, I hope we do something good or something that will actually work and certainly not something that will actually make things worse.

Like the medical profession, we ought to consider in the Senate taking
a Hippocratic oath of our own that first we do no harm because, frankly, on the earlier stimulus package, where we believed it was necessary to act to give the public confidence--that we could on a bipartisan basis--basically we ended up spending about $150 billion to do so.

I think extraordinary measures were called for, but it was with more than a little trepidation that I voted for that bill which added to the debt, particularly when we are not doing a good job of dealing with the deficit in other areas and unfunded liabilities of the Federal Government, particularly when it comes to entitlement spending. But for the same reason I voted for tax cuts in 2003--which I think helped contribute to about 50 months of consecutive job growth in this country, and about 9 million new jobs--I think sometimes extraordinary measures are called for to help stimulate the economy.

But I do think the very best stimulus package we could possibly pass would be to lighten the tax load on small businesses and American taxpayers. It works. We know when people can work hard and keep more of what they earn, then it generates not only more income from them and a greater incentive to work hard, it also, ironically, generates more revenue for the Federal Treasury because more people are working, more people are paying taxes, and, thus, it helps us deal with the deficit in a way that is constructive by putting people to work.

But at the end of the day, I think what we need to do this week is to make an immediate, palpable difference in the lives of families with distressed mortgages. The housing market ought to be our focus and helping people with distressed mortgages not have to unload those through foreclosure and perhaps lose everything they have invested. That is why I would like to see the provisions from something called the SAFE Act become law.

The SAFE Act would expedite the delivery of the full $180 million appropriated for foreclosure counseling just last December. And to help stabilize the housing market itself, the SAFE Act includes a $15,000 tax credit over 3 years. This has been proposed by our colleague from Georgia, Senator Isakson. I believe Senator Stabenow on the other side of the aisle has something similar. But basically what it would do is provide a tax credit that would give people an incentive to buy existing inventory of new housing or housing that was currently in foreclosure proceedings.

Obviously, our housing market has a big impact on employment, and it has a ripple effect on the economy generally. I think this $15,000 tax credit over 3 years would provide a powerful incentive for people who are in the market to purchase a single family home in foreclosure or a new home from existing inventory which now in many cases just sits vacant.

This would make it more affordable for families looking to start buying a home and will provide an incentive for people to reenter the market in the coming year.

Finally, to make sure these same problems are avoided in the future, we need to focus on increasing transparency and information for prospective borrowers.

I agree with Senator McCain who said we should not be about bailing out unscrupulous lenders who made bad loans or people who made the mistake of borrowing money they could not pay back, perhaps betting on the continuous bubble in housing prices in the housing market. But what we do owe the American taxpayer, the American consumer, is transparency and information which will allow them to consider--for example, when they buy an adjustable rate mortgage--and understand what they are getting into.

That means letting borrowers know the full details of any new introductory rate and payment and what their new adjustable rate will be and how much they can expect their payments to be.

We must ensure consumers fully understand their mortgages and that they have a completely free and well-informed choice when it comes to their loans. That is the only way I believe we can hope to avoid future problems in the housing and banking industries in the future, beyond making sure that underwriters don't intentionally loan money to people they know can't pay it back. But those have to be resolved on a transaction-by-transaction basis, perhaps by the courts.

The Senate should make sure that any proposal does not produce insurmountable challenges to prospective and current homeowners. Too often, the work we do in the Senate has the effect of unforeseen and unintended consequences. Here again, we should do no harm, and I think we should be careful not to cause problems while we are trying to fix problems.

For that reason, I would be hesitant to support any proposal that increases the size of the Government's budget at the expense of the family budget. I could not support proposals that actually make home ownership more expensive, encourage costly litigation, or expand Washington programs.

The Senate should not be making home ownership more expensive for working families. That is what I believe, for example, the bankruptcy provision would do, which would allow bankruptcy judges to actually cram down reduced interest rates, thus devaluing that particular financial instrument, which would actually in the long run have the unintended consequence of raising interest rates and the cost of mortgages. I think every Member of this body can agree the last thing the Senate should be doing is making things harder on families and making it more difficult for small businesses to grow and create jobs here at home.

When this Senate passed the economic stimulus package, it affirmed the basic principle that economic growth is best served through taxpayers and people who are earning the money being able to keep more of it. It would be incomprehensible to me to now turn around and pursue a mortgage plan that would take that money away through bigger Government programs or higher costs for homes or mortgages.

Let me say that in my home State of Texas, we continue to enjoy strong job creation. Although there has been a downturn in the housing markets, by and large, we are running in a countercyclical fashion to much of the rest of the Nation. Our unemployment rate is at a 30-year low, and over the past year, Texas has led the Nation in job creation. We have accomplished this by some things that are pretty obvious, but I think they are worth noting; things such as low taxes, commonsense regulation, and an economy based to a large extent on free trade. All of these factors give businesses the tools to grow and families the stability to live. Not coincident, naturally, it allows or encourages job creators and businesses to move to our State, thus creating in the last--well, since 2000 about 3 million people have moved to Texas. I think people tend to vote with their feet where they find opportunity, and I think this formula of lower taxes, less regulation, the right to work without having to join a labor union--you can if you want, but you shouldn't be forced to do so just to get a job--those, in addition to commonsense tort reform and some medical liability reform, which has reduced the cost of medical liability insurance some 17 percent, have encouraged a lot of physicians to move to our State and has created a lot more access to good quality health care. So from my standpoint, we kind of know what works, what helps encourage the economy, what helps stimulate the economy, and what provides the incentives for American workers to work hard and businesses to be attracted to a particular State or location.

I urge all of my colleagues to join me in supporting well-reasoned and proven measures such as these, while rejecting other proposals that would increase onerous regulation, drive up housing and loan costs, and build a barrier between more families and home ownership. We have worked well in the past when we have worked together, and I hope this week will be yet another example of good work we can accomplish when we put partisan politics aside to work out solutions in a way that addresses the real problems that face the American people.

Mr. President, I yield the floor.

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