Providing For Further Consideration Of H.R. 4173, Wall Street Reform And Consumer Protection Act Of 2009
Floor Speech
Providing For Further Consideration Of H.R. 4173, Wall Street Reform And Consumer Protection Act Of 2009
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Mr. SHERMAN. I have had to sit here and listen as one Republican after another comes down and says that this bill facilitates bailouts. Most of those Republicans have quoted me. I did say that the Treasury draft of this bill submitted last summer was ``TARP on steroids,'' but apparently they didn't notice that the bill changed in committee. In fact, the gentleman from New Jersey came down and said he wants to end TARP--which I voted against twice--and that on a straight party-line vote, the Rules Committee turned down his amendment. I voted for such an amendment in the Financial Services Committee, and last I checked, I was a Democrat. But I want to focus on the issue of bailouts, comparing the bill to the Republican substitute.
Now, keep in mind that most of the bailouts we've done have not been through the TARP program, but rather were pursuant to sections of law that existed long ago, including, and especially, 13-3 of the Federal Reserve Act, which was adopted in 1932. It is that one code section alone that has allowed $3 trillion to be spent on what could be called bailouts.
So, since the biggest bailouts have come from the Fed, we ought to end secrecy at the Fed. The Democratic bill includes the Ron Paul-Alan Grayson amendment to audit the Fed; for reasons I do not understand, the Republican substitute does not. Their substitute allows the Fed to continue to be exempt from many GAO audits.
Now, as I said, the biggest bailouts are under section 13-3 of the Federal Reserve Act. That has been used for $3 trillion, but the Fed could legally use it for $30 trillion. The Republican bill does very little to limit the Fed's power under section 13-3. The Democratic bill includes my amendments to put a dollar limit on the amount that the Fed can obligate and my amendment to require that only the most secure loans are made. For some reason, the Republican bill limits the Fed barely at all.
12 U.S.C. 1823(c)(4)(G)(i) under the Federal Deposit Insurance Act has been used by the FDIC to make loan guarantees of more than $300 billion, and in fact there is no dollar limit on this section. What they've done with $300 billion they could have done with $800 billion. The Democratic bill suspends this broad authority. The Republican bill contains no limits on this authority.
So if you want to live in Bailout Nation, then you've got to make sure that the Fed doesn't lose its exemptions from audits.
The SPEAKER pro tempore. The gentleman's time has expired.
Mr. PERLMUTTER. I yield the gentleman another 30 seconds.
Mr. SHERMAN. You have to make sure that the Fed's powers under 13-3, which have already been used to the tune of $3 trillion, remain unlimited and could go to $30 trillion. And you have to keep the FDIC with unlimited powers under 12 U.S.C. 1823(c)(4)(G)(i). If you want to live in Bailout Nation, you have to vote for the Republican substitute.
If you want to rein in the bailout powers of the executive branch, and if you want to make sure that the Fed is subject to audit, you have to vote for the Democratic bill.
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