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NSP Termination Act

Floor Speech

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Date:
Location: Washington, DC

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Mr. FRANK of Massachusetts. I yield myself the 30 seconds the gentleman wouldn't allow me to mention--Chicanos Por la Causa, which he keeps invoking, in what I must say is an inflammatory way, yes, it has $137 million in eight States. It is a consortium of several groups. Comparing it to one county is quite misleading. It is $137 million to an organization that has eight States in which it works and which has produced affordable housing units. And as to his argument that it is not for the poor people, almost all of the groups in this country that advocate for housing for low-income groups have sent us a letter urging that this go forward, Habitat for Humanity and others. I take them as more credible on this than my friend.

I yield 1 minute to the gentleman from Indiana (Mr. Carson).

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Mr. FRANK of Massachusetts. I yield myself 15 seconds.

The gentleman from California says he is not singling out Chicanos Por la Causa, that there are other private organizations, but he never mentions them. And he says, well, they are not a government entity. That is right. We don't think it all has to go through the government. We think places like Habitat for Humanity and others have a role to play.

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Mr. FRANK of Massachusetts. I yield myself 2 minutes to say I am struck by the incongruity of Members who have voted for the war in Iraq, a trillion-dollar huge mistake, ongoing, who vote to continue what seems to me a futile effort now in Afghanistan.

The gentleman from Alabama, and we've talked about this before, he said that because the Obama administration told him he had to, he voted to send $150 million a year last year, next year, for the next 2 years to the cotton farmers of Brazil. The gentleman opposed a $250,000 limit on subsidies to any individual farmer. In the budget, the gentleman voted, as did most on his side, to send $1.2 billion to beef up Iraqi security forces. What about American security forces? What about giving some money to the cities so when they have to deal with abandoned property, they don't have to take that out of the hides of their police departments and fire departments?

Yes, we should reduce the deficit. But to be for the enormous waste in the Pentagon--and, by the way, Members cite Mike Mullen. I wish, in addition to citing the Chairman of the Joint Chiefs of Staff, they would make a simple commitment not to vote for the Pentagon money he doesn't want. Because Members on that side cite his warning about the defense budget, about the deficit, and then force money on him that he thinks is useless.

So let's talk about the disparity between people who vote enormous amounts of money; $400 million goes to Afghan infrastructure, we're told. Well, let's have it be done efficiently. I cannot think that in any program in America we are going to be spending the money less efficiently than the $400 million my friends over there have voted to send to Afghanistan.

So let's look at this in a reasonable way. And we also believe that this billion dollars, in fact, helps our cities. And there's one fundamental error they make: the assumption is that for every piece of property--by the way, it is not simply foreclosed property; it is abandoned property--for every piece of property that's out there, there is a responsible financial institution whom you can sue and get the money from. That simply isn't true.

The CHAIR. The time of the gentleman has expired.

Mr. FRANK of Massachusetts. I yield myself 30 more seconds.

For many of these pieces of property, the cities are left with no recourse. There is no one to do it. One of the Members said the other day in committee, Well, they can send out their bulldozer. Yeah, they can pull a firefighter off and hire a bulldozer operator.

The fact is that it is not simply for foreclosed property. It's for foreclosed and abandoned property, and the notion that there are no buildings out there in the cities where there is no responsible financial entity is nonsense. And so what we're telling the cities is, It's tough. You've had these foreclosure problems. You've had this abandonment problem. You could sell it to the private sector, and the private sector will buy some, but they won't buy it all.

I now yield 3 minutes to the gentlewoman from California (Ms. Waters).

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Mr. FRANK of Massachusetts. I yield myself 3 minutes.

First of all, the gentleman says why are you talking about other programs, why don't you just talk about this program, but he talks about hundreds of billions of dollars of deficit, and this is a billion dollar program. So he hardly, Mr. Chairman, follows his own rules. He talks about hundreds of billions of dollars about a billion dollar program. I am joining him in saying, yes, we have a large deficit, of which this program is an infinitesimal part.

Secondly, I am puzzled that my Republican friends, who generally tell us that the President is not very good at his job, hide behind him when it's politically convenient. Yes, this is an Obama deal. The President was wrong. And unlike the gentleman from Alabama, if I think the President has made a foolish decision, I'm going to vote against it, not to send the money to Brazil. It wasn't the President who told you to vote not to limit the subsidies to $250,000 per person.

And as to bringing people home from Afghanistan, we will have a chance tomorrow to bring people home from Afghanistan. I will vote for that. Sending $400 million for corrupt infrastructure expenditures isn't bringing anybody home. So let's bring them home. The gentleman will have a chance to do that tomorrow.

But then I want to go back to his thing about do you want to invest? No. He just ignored the facts. This is not just about foreclosed properties. It's about abandoned properties. He says do I want to invest? He said do I want to buy it? Does he know who owns that? Could he give me the address? And what the gentleman said, he said of course you can find out who owns it; it's not hard.

We believe that there are properties where you can't find the owner. Now, the gentleman got the picture. He must know about the property.

Would you give us the address and the name of the responsible owner so we can tell the city not to use public money?

I yield to the gentleman from Alabama.

Mr. BACHUS. Well, let me ask you this----

Mr. FRANK of Massachusetts. No. I will yield for the purpose of asking the gentleman a question.

He said it's possible to find the address and the owner. I am asking him to live up to what he said. Can he tell us who the owner is? He's got the picture of the property. He says, no, you don't have to spend public money to tear it down. Go after the responsible owner.

I ask the gentleman, can he tell us who is the responsible owner?

I yield to the gentleman.

Mr. BACHUS. It was the person that you wrote the check to. You have to buy it, and you wrote the check out. So you know who the owner is.

Mr. FRANK of Massachusetts. The gentleman is wrong.

I reclaim my time.

Mr. BACHUS. You wrote the check to somebody.

Mr. FRANK of Massachusetts. Please instruct the gentleman as to the rules. He is blatantly wrong. It is not simply purchasing property. This gives the city money, and maybe that's why they are so wrong on this. They don't understand the program. It includes giving the city money to go in----

The CHAIR. The time of the gentleman has expired.

Mr. FRANK of Massachusetts. I yield myself another minute, because these people take a lot of work to get them to explain it.

The fact is that it isn't simply to buy it from a responsible owner. It includes money, as we have tried to explain to them, to demolish property. In fact, in the cities of Detroit and Cleveland, they specifically asked us--the gentlewoman from Los Angeles amended it--you can use city money to demolish property when there is no owner. So, no, there is no--you don't write a check to someone who has abandoned the property.

I yield to the gentleman.

Mr. BACHUS. Well, let me ask you this: The IG said they couldn't trace some of this money, and I think we've all figured that out. If we don't know whom we're paying----

Mr. FRANK of Massachusetts. I reclaim my time to point out the evasion.

The CHAIR. The time of the gentleman has again expired.

Mr. FRANK of Massachusetts. I yield myself another 30 seconds.

The gentleman made a big point of saying, buy the property from this person. He doesn't know who owns the property. No one knows who owns the property because no one owns the property. They walked away from it.

And what we're saying is part of this is not to pay off the bank. And I will say, last point, and as you know, the taxpayers shouldn't do it. In the bill that passed the conference committee which authorized this billion dollars, we said that the money should come not from the taxpayers but from large financial institutions that have more than $50 billion in assets and hedge funds with more than $10 billion. Republican opposition killed it. I'm going to refile that bill today.

So I invite my Republican colleagues to join me and we will sponsor this bill, and it's in the committee that the gentleman chairs. Let's pass a bill that says the money that will go to cities to knock down property where they can't find the owner will get it from the large banks and from the large hedge funds. And if the gentleman will agree with that, then this whole argument about the deficit will disappear.

But I will predict, Mr. Chairman, that they will find that that's not so persuasive, and they will put up with the deficit when it means saving money for the large banks.

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Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself 30 seconds.

First of all, this program has been going on for some time. If there were any of the horror stories to match those hypotheticals, we would have heard from them. But I will say this to the gentleman from California. He admits under public safety, the city might have to go in and tear it down with no recompense. Here is my proposal, and I invite my Republican colleagues again to do this. Come back with us to when we had a bill that said, This program will be paid for not by the taxpayers but by an assessment on financial institutions with more than $50 billion in assets and hedge funds with more than $10 billion in assets. I will introduce this bill tomorrow. They can give us a hearing on it, mark it up, and it won't cost the taxpayers a cent. And it will save the cities money.

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Mr. FRANK of Massachusetts. I yield myself the balance of my time.

I appreciate the gentleman's acknowledgement. With all of their efforts, they are out finding pictures of abandoned houses, they couldn't find one example of where that abuse took place. In fact, there are a set of rules and restrictions that HUD has that I will submit under general leave. But again, let's review some of their errors. The fundamental error is the argument that this is a program which buys money from banks that have foreclosed and own the property. In fact, it is foreclosed and abandoned property. There are also entities that foreclose that weren't banks, that are not in existence anymore. Yes, it does not deal with all the properties. Where there is a responsible bank that you can go after, the cities go after them. But the suggestion that in Detroit, in Cleveland, in Boston, in Chicago, in all of our cities and in our rural areas there are no abandoned properties that lack someone you can sue is unreality. This is a triumph of ideological reflex over empirical observation. What this says to cities is, where you cannot find a responsible owner to go after, and the property is festering, if it's too far gone, you can tear it down. If it's not too far gone, you can take it and resell it for an affordable unit. Yes, it's got to be a limited income situation.

So that just disputes the whole notion that there's always somebody else you can get. But I still believe it's true that we shouldn't let this come from the taxpayer.

But I want to reiterate, and I'll make this offer. In the conference committee on Financial Reform, when this bill was passed--that's true also, by the way, of the emergency homeowners' relief--we said, let's not have it come from the taxpayer. Let's have it come from financial institutions with $50 billion or more in assets, except for hedge funds, where it's $10 billion or more in assets.

If that had passed, it would have cost the taxpayers, the general revenue nothing. It would not have added to the deficit. And to the extent that some financial institutions were benefiting, they would have had to contribute. In fact, it would have had the larger financial institutions help the smaller financial institutions.

The Republicans killed that before, but I believe in repentance, Mr. Chairman. I believe in second chances for miscreants. I'm going to give, Mr. Chairman, my Republican colleagues a second chance. So for all their rhetoric about the deficit, here's the response. Here are the choices:

You can tell Detroit and Cleveland and other cities, you tear down that property when there's nobody else to go to and you pay for it and lay off some teachers and cops and firefighters, or you leave the property up there to fester. Or you do it our way. You join in assessing the large financial institutions. And I don't mean to demonize Citicorp or Bank of America, Goldman Sachs, Blackstone. These are decent people. They are trying to make a profit. I don't always agree with them. Why don't we let them pay the billion dollars?

So if there is a genuine concern about the deficit--I'm skeptical when people want to send the money to Afghanistan and Iraq and to Brazilian cotton farmers. Obama made them do that. Whenever they have a tough political decision, Mr. Chairman, Obama did it. Why can't they solve the problems of Fannie and Freddie? Well, Obama won't tell them how to do it. So they always hide behind the President when it's convenient.

But here's the deal. It is undeniable. Let's go back to the gentleman from Alabama. He found a building that was so decrepit he had a picture, and he said to us, You can go to the owner of that building and get the money. Well, he could find the building to take a picture, but he couldn't find the owner. Because I asked him, If that's the case, if we can go to the owner, tell me who the owner is and let's try and go after him. And he left the floor because he doesn't know who the owner is because in some cases nobody knows who the owner is because the property has been abandoned or it was foreclosed upon by an entity that's no longer in existence.

So join with us, make the large financial institutions and the hedge funds pay for this, and save the cities money that they do not have.

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Mr. FRANK of Massachusetts. In the first place, there is a consistent misunderstanding on the Republican side manifested by their talking about this as a program that there was foreclosed property. That, of course, allows them conveniently to pretend that, for every piece of property that a city is stuck with, there is an entity that stood behind it that foreclosed and can be sued. But that's not true.

This is not only about foreclosed property. It is about foreclosed and abandoned property, and there is property that has been abandoned. It has been abandoned by the owner who's walked away. It has been abandoned by some financial institutions that did not have the substance of banks. There is demonstrably property in the cities which cannot be traced.

The chairman of the committee displayed a picture before of a beat-up piece of property and said, Look at this piece of property. It's so far gone, who would want to buy it?

We said, No one would. It should be demolished. Tell us who owns it.

He said, You can always find out who owns it--except for that piece of property.

So it's not just about foreclosed property. Somebody has to demolish property where there is no owner. Somebody has to demolish property where there is no responsible party standing behind it. I just left the Chamber to meet with three firefighters from the city of Fall River in my district. They were appalled at the notion that they would be left in the city of Fall River to deal with abandoned property, which is a set of fire traps, and not have any help. So for that reason, I believe that we ought to be clear that this is not about only foreclosed property. And some property, by the way, has been foreclosed upon by entities that are bankrupt, by entities that have no funds.

The other point I would make, though, is this. I do agree with my colleagues that we should do something about the deficit. Now, I wish that they listened to that when we subsidized agriculture or when we sent money to Afghanistan and Iraq for their social purposes. But I have an alternative. I will repeat again, and they'll ignore it all day, I know. In the bill that originally authorized this billion dollars, we required that it be funded not by the general revenues but by a special assessment on financial institutions that have $50 billion or more in assets and hedge funds at $10 billion.

Now let's be clear, Mr. Chairman. Members on the other side know this bill is unlikely to become law. Indeed, some have even said they understand the money will be spent before it can move. So the billion dollars is almost certainly going to be spent. My colleagues now have a choice. They can allow it to be spent by the taxpayers, or they can reconsider their opposition to our proposal of last summer and assess this on the large financial institutions and hedge funds. By the way, some of it, it is true, was caused by banks and some of it will go to banks.

But here's the answer. Instead of complaining that some of this will go to banks, join us and have it all come from banks and from hedge funds. But please, Mr. Chairman, let's not perpetuate the myth that, for every piece of property with which our poorer cities and rural areas are burdened, there is somebody they can go and sue and get it down. In fact, the gentleman from California himself has said, well, they can get a bulldozer and tear it down. Those bulldozers cost money. The people driving the bulldozers cost money.

So we believe that the approach should be to take money from the large financial institutions and from the hedge funds and take the billion dollars from them and provide it to municipalities and groups like Habitat for Humanity and others who will use it either to tear down the property, in some cases, or rehabilitate the property and make it affordable housing.

That, Mr. Chairman, is the choice between us. Again, I want to stress, this notion that it is only foreclosed property is a misstatement with a purpose, because it means that you ignore the fact that much of the property existing in the cities is abandoned and will only be dealt with by the city spending its own money or, by our preferred mode, having the large financial institutions and the hedge funds join us.

So I hope at some point today, one member of the majority will tell us whether or not they agree, Mr. Chairman, that if this program survives, we should get it not from the taxpayer and not from the property taxpayers of our cities or rural areas but from the large financial institutions. That's what I hope will happen.

The CHAIR. The time of the gentleman has expired.

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