FISCAL ISSUES AFFECTING THE COUNTRY -- (House of Representatives - April 29, 2009)
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Mr. PERLMUTTER. Thank you, Mr. Capuano. And I appreciate the comments that you have made.
I have a chart that shows exactly how much was done under the Republican Congress and the Republican administration in terms of reforming and revamping the GSEs, or, in other words, the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, and what was done to deal with subprime lending during the Bush administration, and at the same time when Congress was in the hands of the Republican Party.
My friends earlier today from the other side of the aisle were blaming everything on Democrats when they were in charge. Now, it is nice to try to lay blame when there is a realistic argument for laying that blame, but they can't do that. It simply is a fact that nothing was done to try to deal with what was becoming a tremendous housing bubble; that there were excesses in the way that lending was taking place, that restraints didn't exist, that regulation was being eliminated or ignored. And as a consequence, we had a tremendous burst of a bubble.
And it is under the Democratic Congress, under the chairmanship of BARNEY FRANK, that there has been a real effort to try to rein this in. So instead of having zero, this Congress, one of the very first things it did under the Democrats and under Chairman Frank's leadership was to begin reforming Fannie Mae and Freddie Mac. It was one of the very first bills that the Congress in 2007, when I was elected, when Congressman Ellison was elected, it was one of the very first things that we did, knowing full well that there were excesses with Fannie Mae, Freddie Mac, and the subprime lending. We still didn't have much success with the Bush administration. Certainly, the Obama administration is going to deal with this directly.
We are in the process of working on subprime loans and predatory lending. We did finally get some Fannie Mae and Freddie Mac legislation passed at the end of last year. And now we can start regulating these kinds of vehicles, this kind of lending in a serious fashion, not one that is going to bring the market to a halt, but one that respects the fact that you can get out of control, and that is precisely what happened.
I know my friend from Massachusetts read the quote from Mr. Oxley, who was the Republican chairman who tried to do something but was stalled by the Bush administration. But I think it again bears reading. He says, this was last summer, when we actually passed the Fannie Mae and Freddie Mac legislation and all of a sudden there were a lot of Republicans saying the Democrats should have done something about Fannie Mae and Freddie Mac earlier before there were any kinds of financial problems. And he said something, he fumes about the criticism of his House colleagues--this is Republican former Chairman Mike Oxley, ``All the handwringing and bedwetting is going on without remembering how the House stepped up on this. What did we get from the White House? We got a one-finger salute.''
So when there was an attempt, even under the Republican Congress, to try to reform things, the White House refused to do that. So that kind of gives you this big zero, what actually happened.
The subprime chart that Congressman Capuano showed a second ago was another sign of the excesses that were taking place under the Republican Congress and the Bush administration. And then you see what we get from all of that.
My friends on the other side of the aisle were complaining about the deficit and the debt that is being incurred
right now, but it is that debt that was created under the Bush administration. The Obama administration has inherited a $1.3 trillion deficit; that's where they start. That is where this administration starts. And it starts with a banking crisis, a $1.3 trillion deficit, loss of jobs, and a housing crisis.
What we are doing is to provide some funding so that people can buy homes at an interest rate that is reasonable. We are trying to stop the foreclosures that are occurring. So we are trying to stabilize the housing market and we are trying to stabilize the financial market.
Now, much of what we did to try and stop the crisis or the fall of the financial markets was done last fall, really under a bipartisan effort of the Democratic Congress and the Bush administration, but it was in free fall. So the Obama administration is trying to get the financial markets on the right path again. It appears that that is going on.
And then we really, this Congress and that administration, also under the leadership of BARNEY FRANK, we came up with a stimulus bill, which is going to spur more jobs, creation of jobs, as well as a new energy economy, revamping education, and dealing with health care costs.
Now I would like to give my friend from Minnesota an opportunity to speak about this, and we will then have a conversation.
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Mr. PERLMUTTER. It has. The underlying principle of the American Recovery and Reinvestment Act, the stimulus bill, is jobs, jobs and stabilizing the housing market, financial market. But what it does with the Neighborhood Stabilization Act is it starts to absorb foreclosed properties, takes those foreclosed properties, upgrades them, rehabilitates the properties, and makes them energy-efficient homes. So not only does it stabilize the housing market, it creates jobs by upgrading these homes to energy-efficient standards, and then helps us move to a new energy economy, which is one of the key points in the stimulus bill. So it really has so many facets to it, the stimulus bill does, to get us back on track after falling off a cliff, as you can see what happened under the Bush administration.
I would yield back to my friend from Minnesota for any further comments; or I know my friend from Massachusetts is to be guiding all of us tonight, so wherever you would like to go.
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Mr. PERLMUTTER. I just have to go back to the quotes from Mr. Oxley, the Republican chairman at the time, trying to deal with excesses within the mortgage market. This is from the Financial Times, dated September 9, 2008.
He says, ``We missed a golden opportunity that would have avoided a lot of the problems we're facing now if we hadn't had such a firm ideological position at the White House and the Treasury and the Fed.''
With that, I'd yield back to my friend from Massachusetts.
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Mr. PERLMUTTER. And I think that's the important point here. We want to explain to anybody who might be listening within this House. This is in an effort to be bipartisan. There was in 2005. There was when we took the control of the Congress in 2007 and 2008 and now 2009. BARNEY FRANK seeks that in every single vote and every single bill as we go through this, and then so does the President of the United States, Barack Obama. But we're not going to sit on our hands and allow the country to just stall out.
I mean, some of my friends on the other side, their mantra is ``Just say no. We like the status quo.'' We can't afford the status quo any longer. So we're going to stabilize the housing market and the financial markets, we're going to stimulate this economy, and we're going to place back into the system reasonable regulations so that America can really get back on track. And we see signs of that today.
It's going to be a rocky time and a steep hill for us to climb, but we are turning the corner. I am just proud to be part of this Financial Services Committee with my friends here under the chairmanship of BARNEY FRANK and under a presidency of Barack Obama.
With that, I return the message to my friend from Massachusetts.
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