Disapproval of Obligations under the Emergency Economic Stabilization Act of 2008

Floor Speech

DISAPPROVAL OF OBLIGATIONS UNDER THE EMERGENCY ECONOMIC STABILIZATION ACT OF 2008 -- (House of Representatives - January 22, 2009)

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Mr. HOYER. I thank the distinguished chairman of the committee for yielding time, and I rise in opposition to this resolution of disapproval.

I listened to the gentlelady from North Carolina's debate, and it occurs to me that there must be real parallels in 1929, 1930, 1931 and 1932 and, yes, even in 1933 and 1934 as the government responded, as the American people responded to what had not been responded to during the 4 years of the Hoover administration, to try to staunch the fall of the economy, which led ultimately to 25 to 30 percent unemployment and long food lines.

I am sure we are going to be hearing rhetoric which will blame the Obama administration which has, after all, been in office for some 36 hours, for the problems that confront our country. But, in fact, no President in recent memory has inherited conditions here and around the world more difficult than this President has inherited.

The majority of President Bush's party did not support it in trying to respond to the crisis that confronts us. In fact, less than half voted for the original TARP, and, as the gentlelady from North Carolina has pointed out, she was not one of them. She did not believe that a response was appropriate, or at least that this response is not appropriate. That, I think, is a philosophically defensible position which she defends. I disagreed then and disagree now.

We, in a bipartisan way, supported the Bush administration's request for, not 350, but the $700 billion. We are the ones, however, who put constraints on that and we said you need to come back.

We are the ones who also, notwithstanding the failure of the Bush administration to request it, put, yesterday, in a bipartisan vote, additional constraints for accountability and transparency and for focusing on those folks who are at risk of losing their homes.

The gentlelady, I know, did not vote for that either. Today I think that every Member of the House is thinking back to words we said in a similar debate 4 months ago when the TARP was originally in front of us and wondering whether we can still stand by them.

Mr. Speaker, I know I can stand by mine. Here is what I said first time the TARP came to the floor, and I would remind people this was a proposal by President Bush and by Secretary Paulson, supported by Federal Reserve Chairman Bernanke appointed by President Bush.

The Democrats listened to the President, a Republican President, but our President of our country, and we responded, and I said this: "Imagine that we do nothing today. Millions more homes will likely be foreclosed on. Banks would likely be unable to lend. Credit, the lifeblood of any economy, might dry up across America.''

That was my quote. We responded. We responded with a $700 billion bill, half of which has now been allocated and promised in ways different than the Bush administration originally said it was going to do it, because it saw the facts changing.

The vote on TARP was one of the most difficult any of us have taken, certainly one of the largest commitments that this country has taken. I noted that none of us, whichever way we voted, are completely happy with TARP's results so far.

However, a principal adviser to John McCain, Mr. Zandi, has opined both on this and on the stimulus package, this is necessary. It may not be desirable from a voting standpoint, but it is necessary from our country's standpoint, from our economy's standpoint, the worst we have seen since the Hoover administration.

I stand by my words, because I remain convinced that inaction would have been far more dangerous and far more costly. Since the House took that unpopular vote, the flow of necessary lending has begun to resume, not fast enough.

It was not in a way that has staunched the loss of jobs. But every economist that I talked to, from Marty Feldstein, conservative economist, Republican economist; to Larry Summers; Paul Volcker in the current administration, much more work will be needed before our economy has recovered. But restoring credit is an essential step toward that goal. That is why both President Bush and President Obama agreed that this action was necessary.

I don't want to be deluded by the fact, and I don't want any American deluded by the fact, that President Bush would have asked for this simply because President Obama asked for it. After all, he could have easily replied, very frankly, You're going to be in office pretty soon. You can ask for it.

No. President Bush felt that this was a critical item to move forward as quickly as possible. Why? Because Secretary Paulson, his principal financial advisor; Ben Bernanke, his appointment to the Federal Reserve chairmanship, all believed it was necessary to move. That is why we must vote down this disapproval resolution and release the remaining $350 billion.

Now, our American public, our constituents, may be confused because this action will not mean anything. Why will it not mean anything? Because the Senate has already acted. And the Senate has acted in a bipartisan vote to defeat a motion for disapproval because the majority in the Senate, in a bipartisan fashion, concluded that it was necessary. Not that it was desirable, but that it was necessary.

None of us want to be in this position, but we owe it to the American public and to our economy and to our families to have the courage of doing that which is not desirable but that which is certainly necessary.

It should strengthen our confidence to know that President Obama has learned from the mistakes that were made during the Bush administration in administering this sum of money. That is not a criticism. Mistakes are made. But we can learn from those mistakes, and we will learn from those mistakes.

As the new President promised, "We are going to fundamentally change some of the practices in using this next phase of the program.'' We voted to do that yesterday, as well. That means finally fighting the wave of foreclosures at the source of this crisis. It means tracking how TARP funds are spent and assuring that banks are using them for the intended purposes. It means stronger oversight from Congress and detailed reports from the recipients of taxpayers' money. And it means guaranteeing that taxpayers are not subsidizing million-dollar Park Avenue apartments for CEOs.

The TARP Reform and Accountability Act set all of those conditions, and I congratulate Chairman Frank for his leadership in bringing that to the floor, and congratulate my colleagues for passing it. President Obama has made it clear that he will hold to those principles.

I understand before I got on the floor that the gentlelady observed that that bill may not be passed by the Senate. Therefore, why should we have passed it? One could respond with equal, I think, intellectual honesty. The Senate's already acted. Why should we now act? I think the response would be because we have a responsibility to state our opinion on an issue of great importance.

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Mr. HOYER. That is the diligence we would expect from any lender--and how much more so when the source of the funds is the American taxpayer, when the principal runs in 12 digits and when the stakes are so high.

That is why we acted yesterday. I am hopeful the Senate will act as well, but I am even more hopeful that President Obama will follow the principles incorporated in yesterday's legislation.

With TARP funds already beginning to take effect, and with these new safeguards in place, I ask my colleagues to release the remaining funds.

Votes like these are never easy, and I understand we can rationalize that our vote will have no effect, whether we approve or disapprove the resolution of disapproval. But we need to stand with, frankly, President Bush and President Obama, two leaders elected by our country, in different elections, who have both said to us, This program may not be something we want to do, but it is something that we must do.

And, because of that, I urge my colleagues to vote "no'' on the resolution of disapproval.

I am pleased to yield to my friend, the gentlelady from North Carolina.

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Mr. HOYER. Reclaiming my time, I know the gentlelady voted against yesterday's bill. But in response to the gentlelady's question, it's certainly my intent as the majority leader, dealing with the majority leader in the Senate, to urge him to take up the bill, to pass the bill, and it will be my recommendation to President Obama that he sign the bill, because I believe it is a bill which responds to the concerns of the American public regarding the accountability for their money, transparency in how it is spent, and a focus on some of the issues on Main Street that were, frankly, not addressed by the previous TARP money.

So, for all of those reasons, I am hopeful the Senate will pass it, I am hopeful the President will sign it, I am hopeful that it will be law. But, as I said earlier, the good news from my perspective is that in discussions, as I understand it, with Mr. Frank, and I'll yield to him in just a second, that the administration has indicated that even if the Senate doesn't pass it, they intend to focus on those, I think, very important and salutary requirements in Mr. Frank's bill.

I yield to the gentleman from Massachusetts.

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Mr. HOYER. Reclaiming my time, I do, however, tell the gentlelady in the kindest terms possible that I find it somewhat ironic that she is so interested in that bill being signed, so there will be accountability, but yesterday she voted against it. I find that somewhat ironic.

But, in any event, in answer to your question, I think we have learned that we needed greater accountability. Very frankly, we thought the Bush administration would exercise more accountability and oversight. We provided, as I am sure you know, significant oversight. Now you call it after sight, and that may be an apt term to it, but we provided significant oversight, including the GAO, which has said it was not done as well as it should have been done, which led to Mr. Frank's legislation, which was on the floor yesterday. So we think that was very positive.

In closing, I appreciate the gentlelady saying this was the appropriate thing to bring to the floor. We provided legislation that would be brought to the floor. It is here.

I would, in closing, urge all of the Members, notwithstanding the fact that it's on the floor, notwithstanding that their vote will be of no effect. I understand it will be a statement to our constituents where we stand on the issue. And this is an unpopular program. But, across the board, liberal and conservative economists, the Secretary of the Treasury, present and future, President Bush and President Obama, have both concluded that if we are to meet the economic crisis that confronts us, moving forward with the additional second phase of TARP is essential.

I urge my colleagues to vote against the motion of disapproval.

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