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EMERGENCY ECONOMIC STABILIZATION ACT OF 2008 (House of Representatives - September 29, 2008) ________________________________________________________________
TIME: 09:30 AM Mr. FRANK of Massachusetts.Madam Speaker, rarely have the Members had so many reasons for wishing we weren't here. First, it's a couple of days into what was supposed to be the time when Members can return to their districts to engage in campaigning. Members had a number of important events scheduled with their constituents, with their families, with others that have already had to be cancelled, and we are into the third day of that. Secondly, Members would rather not be here because this is a tough vote. This is a vote where many of us feel that the national interest requires us to do something which is in many ways unpopular because what we are talking about, to many of us, is the need to act to avoid something worse from happening than is already happening. It is hard to get political credit for avoiding something that hasn't yet happened but you think is going to happen. Most of all, though, we regret being here because we all deeply regret the economic conditions which have made this decision day necessary. No one is happy that we have seen the failures that we have seen in our economic system. We differ as to whether or not those failures, as they have had a cumulative effect, require us to act. I believe it is possible to debate whether or not 2 weeks ago it was necessary to act quickly. I believe that it was. The bad news continues. There has been a lack of confidence in the financial system that is pervasive. Unfortunately, a lack of sensible regulation allowed the financial system to get itself into a position where so many people owe other people so much more money than they have or can reasonably be expected to get, that as confidence ebbs and people are called upon to make good on promises they should never have made, we face a declining cycle of activity. People have said, well, you're bailing out Wall Street. The people in the financial industry who made a lot of money still have it. Their institutions may not have it, but they do. No high executive of a failed institution will be showing up soon at the unemployment office. None of them will be hurting. They will be fine personally. The people who will be hurt, in our judgment, are those who are trying to buy or sell cars, because there won't be credit for the automobile industry. There won't be ability to refinance your house or buy a house because there won't be any money there for any purchase that requires credit of any size, people will get hurt and it will have a cumulative effect. Now you might have argued that the tremendous lack of confidence that is causing this over-leveraging to be a problem would not have had to be addressed a week ago. But let's remember what happened. Ten days ago, on Thursday, not far from here, in the office of the Speaker, the bipartisan congressional leadership and those of us who have leadership roles in the Financial Services and the Banking Committees were asked to meet with the Secretary of the Treasury and the Chairman of the Federal Reserve. In our country, under our system, the executive has a lot of the initiative. We have an ability to shape. We have an ability to respond. But in emergency situations--let's be clear--the initiative is inevitably with the executive. And the two leading appointees of President Bush concerned with economic activities, the people the financial community looks to, came to us and said, you need to give us this authority, and if you don't give it to us very quickly, there will be a disaster. We have not given it to them as quickly as they asked because we felt that we needed, even if we agreed with the premise of the need for action, that we had to make some improvements. And we have made many of them, not as many as I would like, but we have made many of them. But we were able to do that, I believe, because we have been able to show progress. At all times from the time they came on Thursday night, this body has been engaged. I have been here 27, 28 years. I have never seen a piece of legislation which was so open to Member participation in which there has been so much discussion. People have said, not enough time is being spent. Well, let me say this. The hours spent on this bill exceed the hours spent on most bills. And the staffs of the committee I chair, of other committees of Members, have done extraordinary work. What we have done is substantially change what they have done, but we have been able to say at all points that we're making progress. Today is decision day. I wish it weren't the case. But I am convinced that if we defeat this bill today, it will be a very bad day for the financial sector of the American economy. And the people who will feel the pain are not the top bankers and the top corporate executives, but average Americans. They don't see it yet. And pain averted is not a basis on which you get a lot of gratitude. But that is what is coming if we do not do something today, in my judgment, positive. If this bill dies, I think we get negative. And again part of the reason is this--and I disagree with Secretary Paulson and Chairman Bernanke on some policy issues. I regard them both as men of high integrity and total commitment to the national interest. And I believe they are absolutely and legitimately convinced about this. And by the way, they cannot, in my judgment, be accused of excessive pessimism. If anything, they can be accused of being too optimistic. Because you will recall that beginning with the Bear Stearns intervention, they have tried a series of interventions much less intrusive than this and they haven't worked. These are not men whose first impulse was to do something this broad. These are men whose experience was that something systemic was required because, again, of the depths of the problem. Let's not forget the cause as we debate the consequence. The cause was too little regulation and the financial market getting itself into serious trouble. And now we have to, through government action, work with them to clean this up. And by the way, we have committed, I think almost everybody in this Chamber, certainly a large majority, that next year we will put in place the kind of regulations that we wish we had had before so this won't recur. So nobody needs to worry that we do this once and we will have to do it again another time and another time. We know how, I believe, to prevent this from recurring. But that doesn't help us as we deal with it today. And the point is this: No matter what you thought about the crisis 10 days ago, when these two internationally respected highest officials of the Bush administration of the greatest economic power in the world come up and say, if you don't do this, we will have a crisis, then even if that hadn't been true before, they have made it more true. And I don't accuse them of doing it for that reason. That is just the reality. If we repudiate George Bush's Secretary of the Treasury and Chairman of the Federal Reserve, joined as they were by previous Secretaries of the Treasury, if we repudiate them and say, nah, calm down, we'll get over it, I believe the consequences will be severe. So I hope that this bill is passed. It is a first step. We have a task next year to do with regulation. We have oversight that must be done about how we got here. But here is the choice: George Bush's two chief economic officials have said to us, if you do not act, there will be terrible, negative consequences for the financial sector, and they will very soon exacerbate an economy that is already troubled, that already has 6 percent unemployment and is on track already to lose more than 1 million private sector jobs in the year. If we add to this weakened economy, and this is the headline, ``The House Repudiates Top Economic Advisers,'' there is nothing, I believe, that will then stand between us and--it's not the end of the world, this is a strong country, people will still get up the next morning and still send their kids to school, but fewer of them will be going to work. And fewer of them will be buying cars. And fewer of them will be able to refinance their homes. And the consequences will be a much more dismal near economic future for the United States. So I hope the bill passes. I reserve the balance of my time.
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