Extensions of Remarks Section
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October 3, 2008 CONGRESSIONAL RECORD — Extensions of Remarks E2215 EXTENSIONS OF REMARKS FINANCIAL OVERSIGHT nancial institutions—a possibility that some of the authority granted to it by the bill and watchdogs see as raising conflicts of inter- the effect of the department’s actions on fi- est. The legislation would waive the normal nancial and housing markets. The board HON. VIRGINIA FOXX federal contracting process. would also make recommendations to Treas- OF NORTH CAROLINA ‘‘For all of the oversight, there may not be ury regarding use of its authority and would IN THE HOUSE OF REPRESENTATIVES much in the form of accountability,’’ said report any suspected fraud, misrepresenta- Friday, October 3, 2008 Gary D. Bass, founder and executive director tion or malfeasance to the special inspector of OMB Watch. ‘‘You have to consider the general for the program. It also could ap- Ms. FOXX. Madam Speaker, I submit the possibility that some of the people who got point a credit review committee to evaluate following articles for the RECORD: us into this in the first place are the people how Treasury exercises its authority to buy OVERSEERS PLAN FOR UNPRECEDENTED TASK who will be getting these jobs. Does it mean troubled assets. (By Joseph J. Schatz and Phil Mattingly) Goldman Sachs is now going to be arm-and- The board would consist of the chairman of If the House clears the financial bailout arm with the federal government?’’ the Federal Reserve Board, the Treasury sec- package, the federal government within And as it assembles its oversight oper- retary, the director of the Federal Housing weeks will be wielding new authority to buy ation, Congress might also need to bring in Finance Agency, the chairman of the Securi- hundreds of billions of dollars worth of mort- help from Wall Street. ties and Exchange Commission and the sec- gages. The legislation passed by the Senate and retary of the Department of Housing and And thanks to provisions added by law- awaiting House action would set up three Urban Development. The board would report makers during the past two weeks, Congress oversight functions. to appropriate congressional committees. would be ready to effectively oversee the The first would be a board composed of the The bill also would create a bipartisan program. Treasury secretary, the chairman of the Fed- panel of two House members and two Senate At least that’s the plan. eral Reserve, the commissioner of the Secu- members that would submit regular reports But in order to work, both the program rities and Exchange Commission, the Hous- to Congress dealing with the program’s itself and the oversight entities that are sup- ing and Urban Development secretary and transparency, effectiveness and market im- posed to hold it accountable might require a the Federal Housing Finance Agency direc- pact. significant infusion of financial markets ex- tor. That panel would review such things as GAO OVERSIGHT AND CONGRESSIONAL REPORTS pertise—perhaps from firms that have col- appointments, how the Treasury Department The bill requires the Government Account- lapsed during the recent turmoil on Wall determines which assets to buy and how the Street. ability Office (GAO) to conduct oversight of purchases are made. The process of managing, implementing the activities and performance of the pro- The bill would also create a bipartisan and contracting out a huge program—in gram and to report every 60 days to Con- panel of two House members and two sen- many ways akin to an investment bank lo- gress. ators that would submit reports to Congress cated in the Treasury Department—would Treasury would have to report to Congress on the program’s transparency, effectiveness present Congress with a unique oversight 60 days after it begins to exercise its new au- and market impact. challenge. Some suggest lawmakers would be thority and every 30 days thereafter. Reports But most of the oversight responsibility hard-pressed to keep track of what’s going would include an overview of actions taken would fall on the Government Account- on. by the department, the actual obligation and ability Office, an arm of Congress. The bill ‘‘It’s almost a retail operation, and you expenditure of the funds provided for admin- would empower the GAO’s top official, the can’t constantly be coming back to some istrative expenses and a detailed financial comptroller general, to set up an office with- congressional board for oversight or some- statement. After Treasury buys $50 billion of in Treasury at Treasury’s expense to conduct thing like that,’’ William Gale, director of troubled assets, it would have to provide an- detailed oversight including yearly audits. the Brookings Institution’s economic studies other report describing all of the trans- The CAO would have access to all records, program, said during an Oct. 1 discussion on actions made during the reporting period, books and accounts. the bailout package. ‘‘Mainly what’s going the pricing mechanism for the transactions, That oversight office would be an enor- to happen, is Treasury is going to do it, and and justifications for the price paid for and mous undertaking likely to require a large they’ll report back to the public now and the other financial terms associated with number of new personnel with significant fi- then. But I just don’t see a strong role for transactions. nancial acumen. oversight in all this, despite what people Treasury would review the current state of All three oversight bodies would issue re- say.’’ the financial markets and the regulatory If the House follows the Senate’s lead and ports to a newly established inspector gen- system and submit a report on its findings to clears the package, the Treasury Depart- eral appointed by the president. That person Congress. ment wants to begin buying financial insti- would have a $50 million budget and would tutions’ shaky assets ‘‘as quickly as pos- coordinate all audits and investigations. INSPECTOR GENERAL sible.’’ White House spokesman Tony Fratto ‘‘You would have to hire people with the An inspector general’s office would be es- said Thursday. ‘‘It’s a complicated thing kinds of expertise [the government agencies] tablished to conduct, supervise and coordi- that they’ll be trying to put in place, and I’ll do not have at the current time,’’ said NYU’s nate audits and investigations of the pro- let them explain it. I think it’s at least Wachtel, noting that could mean an influx of gram. The inspector general—nominated by weeks.’’ Wall Street finance experts. ‘‘The kind of the president and confirmed by the Senate— At its core, the bill would set up a Trou- people who understand the structure of these would submit a quarterly report to Congress bled Assets Relief Program (TARP) at Treas- securities would be helpful,’’ Wachtel said. summarizing its activities and the activities ury with authority to purchase mortgages or ‘‘That understanding is not widespread.... of the department under the bill, which mortgage-related securities. As requested by That’s one of the reasons we got to where we would provide $50 million for the office. Treasury Secretary Henry M. Palson Jr., are.’’ Treasury could decide whether those pur- Some outside observers are impressed by [From Investor’s Business Daily, Oct. 3, 2008] chases occur through an auction process or the accountability Congress has tried to [GOVERNMENT IS TOO BIG NOT TO FAIL directly from a financial firm. write into the legislation. (By Ernest S. Christian and Gary A. Robbins) ‘‘There’s a lot to work out and plan in ‘‘They tried to build some accountability terms of managing that process,’’ said Paul into this process while still allowing for After years of faking it, the federal govern- Wachtel, an economics professor at the Stern some free-form experimentation with the ment has finally hit bottom or, depending on School of Business at New York University.’’ program itself because they’re not sure ex- how you look at it, ascended to its level of Developing a bureaucracy that can do so well actly how it’s run,’’ Thomas Mann, a senior maximum destructive incompetence. is not a simple problem.’’ fellow at Brookings, said at the Oct. 1 round- So here we sit in the autumn of ’08, almost ‘‘I think whomever is elected [president] in table. 79 years to the day since the market crash of a month or so ought to designate his sec- 1929, with the smell of panic again in the air. retary of the Treasury pretty quickly,’’ [From CQToday, Friday, Oct. 3, 2008] An alarmed president and Congress are flail- House Financial Services Chairman Barney ing away, desperately trying to fix a finan- OVERSIGHT PROVISIONS Frank, D-Mass., said Thursday on CNBC. cial crisis originally caused and made worse OUTSIDE HELP NEEDED OVERSIGHT BOARD by government meddling. And with the elec- The Treasury Department might contract A Financial Stability Oversight Board tion coming, the increasingly incongruous out a great deal of the work to stressed fi- would review the Treasury Department’s use Barack Obama looms in the foreground. ∑ This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. VerDate Aug 31 2005 05:49 Oct 04, 2008 Jkt 079060 PO 00000 Frm 00001 Fmt 0626 Sfmt 0634 E:\CR\FM\A03OC8.001 E03OCPT1 smartinez on PROD1PC64 with REMARKS E2216 CONGRESSIONAL RECORD — Extensions of Remarks October 3, 2008 As if Washington were not already doing bigger and worse than Fannie or Freddie, ‘‘follow-on system’’ have been repeatedly re- too many things, almost all badly, and in the Washington will more than ever be able to jected by my Committee in legislation and, process doing far more harm than good, Mr.