The Financial Crisis

THE FINANCIAL CRISIS -- (House of Representatives - September 22, 2008)

Mr. LATTA. Mr. Speaker, I appreciate this opportunity to control this hour. A lot has happened, not only this week, but in the last several weeks here in this great country of ours.

We have been talking a lot today about what's been happening on the financial markets, but we always have to worry about what's happening on the energy markets. As you know, we have all seen those commercials on television from T. Boone Pickens talking about that $700 billion transfer of wealth out of this country in 1 year's time. When we are talking right now about what is happening in the financial markets, we are talking about maybe a bailout of $700 billion.

Not only are those two numbers both very, very high, but they are also the same. We can't watch those American dollars flowing out of the country that should be staying right here. As we stand here today, we have about a $9.6 trillion national debt, of which $2.6 trillion of that is owned by foreign governments.

One of the things that I have been saying for a good long period of time is what happens when they start dictating to the United States. I think one of the most interesting stories that did not get a lot of play, but was on the front page of the Washington Times during the Fannie Mae and Freddie Mac bailout, is that when the bailout was being worked out, the foreign banks out there, and creditors, had about $1 trillion of Fannie and Freddie. They are secured, but we have a lot of American banks out there that didn't have that preferential treatment, and they are on pennies on the dollar.

But, again, as one of the things that was stated in that article, which I again found very, very interesting, it could be one of the first times since maybe the Revolutionary War when a foreign power is actually telling the United States what it is going to be doing. I think these are very, very tough times, but they are also times for action that we have to be doing in this country.

At this time, I would like to recognize the gentlelady from North Carolina (Ms. Foxx) who has been a great advocate. I would like to yield to her at this time.

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Mr. LATTA. I thank the gentleman for his eloquence also tonight and for all of his hard work on trying to get this energy issue resolved, because it really is the number 1 issue that's really facing so many Americans out there.

And I know that when I go home a lot, and I go home every weekend and I put a lot of miles on the car, I know as well as you all do. When you're at the gas station you have a lot of people come up to you and ask you the same question, what are we going to do about this energy question.

And as we talk about it for a little bit, we talk about what we're doing down here and what we're trying to get accomplished, it's kind of interesting every so often because then some people ask you, well, how do you stand it, with all this? And I say, you know, it's not that bad. If you know what the problem is and we know what the solution is, we just have to get there. So I'm two-thirds of the way there, and I think that's the best way to go.

And as the gentleman was talking about, as where we are today and it's a real crisis, and I'd like to invite my good friend, the gentlelady from Minnesota, to the podium also to talk about not only energy but also some of the financial things going on in the country at this time.

But as has been pointed out, I know by the gentlelady from North Carolina, the big story today was that crude prices went up over $30 a barrel in a 1-day jump. And suddenly, finally a record jump of $16.37, and what that's spurred on by is by this financial problem that we have in this country. It's just not on the energy side, where we had all of these folks out there trying to find where's a safe haven to be right now. So they're looking at commodities for that currency hedge. And so you watch gold, silver, copper all posting strong gains today. But at the same time we saw oil that had been slowly but steadily going down, and trying to help the American people out there not have to spend so much at the pump.

And I know the gentlelady has been very, very concerned on this same issue. And at this time I'd just like to turn over to you for a little bit to chat a little bit about where we are on the financial side, and we can talk about the energy issue at the same time.

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Mr. LATTA. You're absolutely right, because when you're talking about that $700 billion, that translates into about 70 percent of all the oil that we use every day is imported in this country. And you're absolutely right, because when that price of oil keeps escalating up, then the question becomes what happened to the regular American person out there?

Well, the problem is this. That means a person or a family won't be able to buy a new car because they've got to worry about what oil prices are.

I have the largest washing machine plant in the world in my district. So that means of those 5 million washing machines, the problem then becomes, well, maybe people won't be able to buy washing machines.

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Mr. LATTA. You're absolutely right, because we need self-sufficiency on energy in this country; we keep the money in our own pockets. And you know, when it comes down to it, my district, I had the Corning International Manufacturers. You know, we have the ninth largest number of manufacturing jobs in the Fifth Congressional District in Ohio. That's a lot of jobs that are all dependent on one thing: energy.

You know, when I go into my plants, I try to go in plants every week when I'm home. If we're here Monday through Thursday, I'm usually someplace on Friday. And the one thing that they'll do every time, they'll say, you know, what's driving us in cost here is the problem with energy. And a lot of times it's the oil. Well, it's the oil base that they have to have in their product that they make. It could be the energy that they have to consume to make that product. It could be higher electric costs. It could be, you know, you go right down the line of what it is.

And the problem that we have been having in this country is we haven't been taking care of ourselves. We have to have what we've been advocating on our side of the aisle is an all-of-the-above energy policy. And that policy, of course, is what we're talking about is having more nuclear, to have more clean coal technology, to go out and have oil, have natural gas, as you pointed out, and to have that solar, that wind, that hydrogen, that ethanol, the biodiesel.

But as our good friend from Georgia just mentioned a little bit ago when talking about coal, we have 24 percent of the world's known coal supplies in this country, and we're absolutely stymied at this time in not being allowed to get to that coal, because we could take that coal. I have an individual in my district that's invented a clean coal technology, and that's what we have to do. We have to utilize what we have here in this country so we don't transfer that wealth overseas.

You're absolutely right when you talk about that 420 trillion cubic feet of gas, 86 billion barrels offshore right now. You know, what has just been passed last week under the Democrat plan, we're not going to get to that oil. You want to know the reasons why? Well, first of all, a lot of that oil is within that 50 miles offshore, not 50 miles to 100. And the second thing is there's nothing in that bill talking about lawsuits and preventing those lawsuits from slowing these leases from being developed. Because if we can do that, we can start developing.

But it's about time that Americans take care of Americans because we're in a situation here, and you're absolutely right what you're talking about on the financial side, we're in a crisis stage here. We've watched all these dollars go overseas.

I talked a little bit earlier about what happened with that $2.6 trillion of our national debt now being owned by foreign countries, $1 trillion being owned when it came to Fannie and Freddie Mac by foreign creditors, that they're actually dictating to us now. They're at the table. They're bargaining, or maybe they're not even bargaining. They might be dictating. And we're in a situation that we have got to get something done in this country, and I'm sure that you are very well aware of it.

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Mr. LATTA. Well, when you're talking about who's going to be footing this bill, the other things that scares me is this. The reports out right now is that China will become the number one manufacturing country in the world next year. The United States, after more than 100 years, is getting knocked off that hill as being number one.

So as we are in a situation where the taxpayers are being asked pretty much again to step up, foot these bills, who is going to pay it? Because the problem is the jobs.

When I'm out at these factories in my district, one of the things that I ask the folks that are running the companies is, ``Out of curiosity, how far do your people drive in?'' It's not uncommon in my district that the people are driving 50 miles one way to work.

Well, then you talk to the people out on the floor, and they're saying, ``You know what? If I have to drive 500 miles a week, with gas prices as they are, is it really worth it to me to actually have this job, or should I try to find a job some place closer to home?''

Then the manager of the companies then say, ``If I lose these trained employees, where am I going to get the people to run this plant? I'm going to have to move it either across the country or out of the country.''

It's almost like the dog is chasing its tail here. And we've got a real situation in this country where the people out there don't have the dollars in their pockets because they're paying more and more out.

We had that report not too long ago that said we used about 4 1/2 percent less fuel and energy this past summer. That was almost like a good news/bad news. Good news is we have more fuel supply, but the bad news is we had companies not making product. We had people not going places. We have a lot of places in my area, the State of Ohio, especially along Lake Erie--which is a huge tourist destination area--and a lot of people said, ``You know what? We can't take that summer vacation this year. We can't go there.'' So by them not doing that, they didn't help the local tourist trade in our area.

So it's a very tough situation. You know, when other countries are out there, they're exploring. As you pointed out as we were talking about oil shale that 2.1 trillion barrels, trillion barrels. And you're absolutely right; we are the Saudi Arabia when it comes to oil shale.

At the same time you have got the Chinese and the Indians and the French and a lot of other countries in the world right now are out there producing energy. And you have got China in the next 25 to 30 years, they're probably going to build 40 nuclear power plants. The Indians are going to be building another 25 to 30 in the next 25 years. You have the French. The French right now are at least 75 percent nuclear. They have enough power that they can export that power into Europe.

And here in this country we've got a situation where they're saying, ``What are we going to do in the future?

What have we done?'' You know, the last nuclear power plant site in this country was 1977. Last one to go on line was in 1996. That's a crisis.

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Mr. LATTA. You bring up a very interesting point when you're talking about what is happening, especially with the oil situation.

When we went up to ANWR, there were 11 of us from the House side that went up. And we saw that pipeline. We saw mile marker zero, that 800-mile pipeline. That pipeline, as you remember, was carrying 2.1 million barrels of oil a day down it. It's at 700,000 barrels today. The problem we're going to have is we're watching about a 15 percent reduction every year in that pipeline. And because the Prudhoe Bay area and the other areas, they're slowly starting to tap out.

When that pipeline gets down to 300,000 barrels a day, as you remember, probably the most telling problem that we're going to have up there is that pipeline can't flow any more. And it's just that they can't say we're just going to shut the pipeline off and we'll turn it back on in a few years. Once that oil stops, that pipeline is ruined.

So if we can't get that million extra barrels a day that could be coming from ANWR--and let's just talk about that ANWR area as you mentioned a little bit earlier.

It's the size of South Carolina, 19 million acres. Congress, in 1980, had set aside that section 1002 ground which was about 1.5 million acres. The area that we're looking----

Mrs. BACHMANN. If the gentleman will yield, it was 2,000 acres out of the 19 million.

Mr. LATTA. That's absolutely correct. And you're looking at that 1.5 million acres. The area that we're looking at is comprised of about 2,000 acres, which most of us from the farm country know that there's 640 acres in a section. So we're talking about 3 1/2 sections of land, a little over 3 1/2 square miles, probably. That's a pin drop up in Alaska.

And Alaskans, 80 percent, want those jobs. They want to make sure that they get that oil down here. They want to make sure there is natural gas. Right now, as you remember, what's happening with that natural gas? They can't bring itself. There's no pipeline. So they're reinjecting it back in the ground.

When you're talking about your constituents out there wondering what they're going to do this winter about--I've got my constituents right now that are only buying half a tank of propane because the problem is it is the same price as it was for a full tank last year.

So, the problem is, what happens when they run out of that half a tank of propane halfway through winter? It is a crisis, and we have got to address it, and if we are going to stop the flow of watching our dollars leave this country, if we want to make sure that we can have a future for our kids and that the people aren't living from hand-to-mouth and they start thinking about their future, that they can put things away for their own retirement, thinking about their kids' college education. And then to buy those things, the only thing we didn't talk about. Buying that new house, putting new windows in from that company that makes them up in your district.

So we've got a problem, and that problem's got to be solved now. We can't wait. We can't say we will pass this on to another Congress and pass this on to another generation, because we're going to be held responsible by every future generation as to what we do in this House Chamber in the next week.

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Mr. LATTA. Something else at play in the hands in the last few weeks is called a hurricane, by not having diversification in this country and not having our fields dispersed around this country where we can get oil and natural gas. Everything had to be shut down in the gulf. Not only is everything shut down in the gulf, but we also then lost refineries. We haven't had new refineries built in almost three decades in this country.

So we don't take care of ourselves. The problem has been in this country, we say, you other countries take care of us, we'll pay for this oil. It's not too expensive.

But boy, I tell you, the chickens have come home to roost by now because by watching what's happening in the gulf and still knowing that we can't get the production up in the gulf, they're saying we might be out for another seven to eight days and maybe a little bit longer before we get back up. But at the same time, when I left Bowling Green this morning, I filled up the car. It was $3.79 a gallon. That was before there was a spike of $16.37. So when I get home, gas will probably be over $4 a gallon again, and people are going to say, wait a minute, what are we going to do.

One of the things I did this morning was I was at our senior center in Wood County at their Meals on Wheels, the kitchen where they make the meals. They send out about 750 per day from that place. The problem is this: These folks are out there, a lot of the volunteers are saying, wait, I can't afford to volunteer my time anymore because I can't afford the gasoline.

We've got volunteer firemen around this country, they're out there. We have all these people that do so much greatness for this country by being volunteers that are being shut off from doing it, not because they don't want to do it, because they can't afford the price of a gallon of gasoline.

One of the bills I've introduced recently is to say, let's take that 14 cents for the volunteers that drive that Meals on Wheels vehicle, or their own personal use, and get that up to the business expense.

That's the problem we have. It's not taking care of ourselves. It's only having a very small area that we're going to get our oil from in this country. It's having overreliance, like 70 percent, on other countries that bring us the oil and the resources that we need when we should be taking care of them ourselves.

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