tv [untitled] CSPAN June 12, 2009 7:00am-7:30am EDT
eager to stopple bombing just as we're eager to stop the war. >> television conversations from the final months of lyndon johnson's presidency on vietnam, u.n.-appointees and troubles for his pick for supreme court chief justice. listen saturday morning at 10:00 eastern on c-span radio in the washington/baltimore area at 91. >>every weekend the latest nonfiction books and authors on c-span2's book tv. saturday, on "after words," how do you run for congress with $7,000 and your sixth grade students managing the campaign? tierney cahill gave it a shot. she's interviewed by washington, d.c. delegate eleanor holmes
>> every weekend is filled with books and authors on book tv. look for our entire schedule online at booktv.org. >> now house republicans unveil their plan for regulating the financial markets. it differs in many respects from the legislation favored by congressional democrats and the white house. speakers at this event include financial services ranking member spencer baucus and republican whip eric cantor. this is about a half hour. >> i thank you for coming.
i'm joined by republican whip cantor. we expect conference chair mike pence very soon and the republican leaders of the financial services committee who have involved in the past five months in crafting a comprehensive regulatory reform proposal which we're announcing today. let me start by recognizing our distinguished whip eric cantor for a statement. >> spencer, thanks very much. i'm honored to be here with the ranking member, spencer baucus and the senior members of the financial services committee. as we unveil as a conference a roadmap forward to address the number one issue that is on the minds of most americans which is the economy and we all know that an economic recovery is going to
be predicated upon a resumption of normal credit conditions so that we can see expansion start to happen as far as jobs are concerned in this country. and we hear a lot and there's a lot of coverage about the heavy hand of government right now in the financial markets. to me, it really is a heavy hand of the obama administration. you know, who could have ever told that we would continue to find ourselves in a world of continued bailouts, handouts. we wake up one day and we're the proud owners of two of the largest car companies. it is this type of uncertainty and continued reach by government that this plan tries to react to and say, look, we do have a better way. we don't believe the government should be picking winners and losers and we want to see market forces return under a set of certain but limited rules so that innovation can occur again and i know that i speak for the ranking member and the rest of my colleagues here in saying we
stand, ready, willing to work with our colleagues from across the aisle to try to forge a solution so that we can see our capital markets return to the prominence that they should be -- should enjoy as far as attracting investment capital so that we can see an investment-led recovery. >> thank you, eric. and at this time i'd like to introduce our conference chair, mike pence. >> thanks. thank you all for being here. and i especially want to thank the senior republican on the financial services committee. for his tireless efforts on behalf of freedom and free markets. i also want to thank the other senior republicans who have been so instrumental in bringing us to this day, congressman hensley, garret and price and
all those that are gathered here for putting out a republican vision for restoring essential freedom to our free markets. the american people are fed up. their fed up with endless bailouts out of washington, d.c. they know we can't borrow and spend and bail our way back to a growing economy. and they want it to end. they recognize bailing out every failing business really means. washington is burying future generations under a mountain range of debt. and destroying the very foundation of free market capitalism that has allowed this nation to prosper for generations. congress cannot continue to ask hard-working families who played by the rules, lived within their means, paid their bills to bail out the irresponsible decisions of others or to bail out the failed policies in washington, d.c. enough is enough. today house republicans are standing with the american people who said loud and clear
no more bailouts. this reform that the house republicans are send out today, it's time to end the mailia of bailouts that's consumed washington, d.c. since last fall. it's time to end the government's ability to pick winners and losers and it's time to have some personal responsibility in our marketplace. it is time to put freedom back into our free markets. the proposal being offered today by house republicans and to the outstanding leadership of spencer baucus and those buried today is a step in that direction and i expect it will be a vision the american people will heartily welcome. >> thank you. thank you, mike. and thank you, eric, for joining us. and republicans are united today in offering this plan. i want to introduce the republican team that worked over the past two months. judy biggert from illinois,
she's chairman of our oversight committee, and she performed a lot of -- ranking member. what did i say? ranking member. i'm getting ahead of myself bay year and a half. but, judy, i appreciate your work. shelly capito in on the housing is our ranking member on housing. scott garrett who's our capital markets ranking member. jeb henserling who's financial institutions. ron paul worked on this plan. has endorsed it. he's not here. congressman miller supports the plan. so we have come in a united way. we have two other people who have worked on it also. we have tom price who is a senior member of our committee and mike castle. mike is not here. most of you know mike. he's very involved over the past
few days in making some decisions. but they are very supportive. and then we have our vice chairman of the committee, randi nugenbauer. we've met with randy's office and he has scheduled all the meetings and we have had several meetings. we've ironed this thing out and we knew we needed to get it right. let me say this, financial services, regulatory reform and the structure of our regulatory system is of critical importance and we knew that we had to get it right. we're offering today our solutions to address the causes of the financial crisis that we've all been going through, us and the families we represent. and to create a more transparent and accountable regulatory system. you'll see that a lot of what we
propose here is about accountability and transparency and to create a system that will better protect investors, taxpayers, and consumers. consumer protection is very important. and the whole risk takers on wall street responsible for their actions, not the taxpayer. in the last two years we've seen unprecedented government intervention at our financial markets. the regulators have acted on many occasions with little oversight or accountability. the american people deserve better. they deserve a better financial service regulatory structure. the individuals behind me have worked diligently, as i've said, contributed immensely to our proposal. during our work, we were guided by three key principles. and these were principles we not
only felt but our constituents it was important to them. number one, you're going to hear that. no more bailouts. we think that's very important. second, the government must stop rewarding failure and picking winners and losers. taxpayers should never again be asked to pick up the tab for bad debts and risky decisions made by the financial industry. third, we need to restore market discipline so that financial firms no longer expect the government to rescue them. and we no longer have to endure a command and control structure from the government. these three he principles are essential to ensuring that we have an exit strategy from the cycle of taxpayer bailouts and government interventions that we've all witnessed in the last six months.
and also to build a strong foundation for our financial services industry and bring back moral accountability. we're presently in the process of drafting legislation based on this proposal and these principles. at this point, i'd like to recognize the distinguished ranking member of the housing and community opportunity subcommittee, shelly capito from west virginia. >> i want to thank mr. bachus for his leadership in this and i think we're presenting a united front because not only do we recognize the seriousness of the issues but i think it's important for us to join together in the large and very complex issue of regulatory reform. as we've heard and i'll repeat again one of our primary provisions can be summed up as no more bailouts. our constituents have bailout fatigue and we do too.
and while we recognize that financial institutions -- they recognize our constituents recognize when financial institutions make bad choices they have to live with those results. poor decisions should have consequences and we can't reward bad behavior. moreover, though, wall street needs to have certainty that government cannot and should not be charged with picking winnerss and losers in the marketplace. when firms find themselves with serious financial challenges, our proposal calls for an enhanced resolution through a new chapter of the bankruptcy code. making it more suitable for ensuring the orderly unwinding of troubled institutions by facilitating coordination by regulators and the courts we can bring the technical expertise and specialized expertise to the table when these complex financial institutions are at stake. i think we highlighted what's happened -- a lot of times we fell back on the complexity of the instruments and nobody
really knew how to address those and the systemic risk involved. there are bankruptcies of farmers, railroads. financial institutions are very complex and affording them a expedited class of bankruptcy makes sense. with this proposal market participants will know the consequences of taking on too much risk. there will be no more question in waiting for a bailout. next i would like to turn it over to randy. >> we want to establish a market stability and capital adequacy board. i think the democrats and the white house have been talking about naming one person as the systemic risk regulator. we think that centralizes too much control for one individual. we also are against the concept of firms being systemically risky we believe that gives that a unfair advantage in the marketplace. we've already seen that.
we saw the government got in the picking winners and losers by determining who was systemically risky and who was not. that's not good policy for this country. how does this work? well, what would happen is we would form this group. they would be appointed. the treasury would lead that. we would have people that are a part of the regulatory structure, the new structure and possibly some outside people and then their traffic would be to get together on a periodic basis and look at not only the entities that they're regulating but also look out into the marketplace, have discussions to determine what's going on in the marketplace, new products, new things going on, how one -- what activity is going on under another regulator's purview is going on with -- on another side. and so being able to have that dialog and to begin to have those kind of discussions, then that allows that discussion to begin to let those regulators go back and the second part of that
is adequate adequacy. if you really want to regulate the entities in this country, establishing how much capital for the activities that they are involved in is a huge way to do that and more effective way to do that. and so we think that dialog -- it provides a better forum, a more efficient forum and it doesn't put the government, one, in the business of picking winners and losers and secondly, it gets it out of the systemic risk business. we don't want the taxpayers do not want to be back in this situation again where they'd been pressed into being shareholders when their back at home making their car and mortgage payments. we believe this is an effective way to address this particular issue. it's now my honor to introduce the gentlewoman from illinois, ms. biggert. >> thank you, randy. i'm here to talk about how our plan answers the question, what about the consumer? first of all, we have new duties for the new regulator of deposit other institutions.
this regulator will work to empower consumers to make sound financial decisions. it will regularly update improved, simplify and test disclosures. it will enforce consumer protection regulations. these are currently responsibilities that are spread around about a dozen different federal financial services regulators. and second, we have a new task for flex. consumers who have been wrong call my office all the time and say, who do i turn to? right now how is a consumer to know if he or she should contact the occ, the otc, the ncua, the fdic or the fed for a few of the agencies? so we've tasked the existing financial literacy and education commission which already cordinates federal agency's efforts to help consumers with a new job. we're going to support a -- actually, it's a bipartisan proposal that i worked on last congress. we require this commission to
set up a one-stop-shop, a 1-800-number and a website for consumers to report -- to see if he or she has been wronged and the commission will collect the data and coordinate with the appropriate federal regulators with the issue or identify trends that need to be addressed in the new regulation or fraud. and then third is the crackdown on fraud. finally, when it comes down to cracking down on fraud, we mean business. our proposal bolsters law enforcement's resources, increases civil and monetary penalties for violations and maxs restitution to victims. so to protect consumers against fraud and help consumers make informed decisions, our proposal empowers consumers. and next i would like to introduce scott garrett, the capital markets ranking member.
>> let me say thank you to our conference chair for being here and thank you to our whip eric cantor not only being with us but being on personally involved both himself personally and his staff as well on these very important financial issues. thank you, of course, goes to our -- i'll say chairman, to our chairman, spencer baucus for leading us in this endeavor to bring us to where i am quite honestly quite excited with the final product that we have out here today. it's something that we worked on long and hard and i think we can all stand up here and be proud of and we'll work hard to see that it comes into law. i will join my colleagues also in saying the tenets here i think we could all agree as the american public does that we want no more bailouts. that we want no more of the federal government picking winners and losers and we want to make sure the taxpayer is not put on the hook going forward. that we do it in one area that
i'll speak about just for a minute and that's dealing with the federal reserve. and in there you can think of it in three ways. we want to have transparency. we want to have accountability and we want to have fiscal and monetary responsibility. on transparency, we want to have for them like we have for every other aspect of government to allow for the general accounting office, the gao, to be able to go in and do an extensive audit. to provide for the extensive and open and honest government that we're all calling for. in the area of accountability, same thing. likewise, in an area that i believe there will be bipartisan support for us. of course, we've heard there's a need to address the with all the exigent circumstances and activity that the fed has done before and troy to draw a little ring around that. we need to do that and we can do that simply by saying before they go forward in any such activities in the future we need to define them and have some oversight and accountability by the executive through treasury and congress as well and finally, in the area of fiscal and monetary responsibility, another thing that the american
public is looking for. and here all we're asking to do is re-establish for the fed to hone their interest in what they originally was set up for and that is monetary policy. to take their other activities that may distract them away and allow them to focus on this and so that we have the responsibility in that area. if we do these things with the other things we have done already, we'll be drawing a line in the sand from what has occurred over the last year and the year ahead with regard to bailout. there will be no more bailouts. there will be no more picking winners and losers. there will be market integrity and we will get just as eric cantor mentioned earlier, the economic growth that this country so badly needs. thank you. oh, and at this point -- i was ready to leave. i thought i said it all. the person who will be more ar-arta ar-arta ar-artic -- well-spoken --
>> no nation can bail out and spend its way into prosperity and that's why i'm happy the republicans say no more bail outs. our federal policies that cajoled and mandated financial institutions to loan money to people to buy homes who ultimately could not afford to keep them. of all these failed policies, none loom larger than those which created the government-sanctioned monopolies fannie mae and freddie mac. the expectation, the implicit guarantee of the federal government behind those two gses allowed them to swell to unimaginable size, make profits that otherwise could not have been gained in the marketplace and now expose taxpayers to over $5 trillion of risk. in the 21st century, our housing
system can exist, operate and prosper without fannie and freddie being allowed to monopolizes their product and socialize their losses. now, although current market conditions preclude immediate sweeping action to end fannie and freddie's market distortions, the current gse model is broken. it is irreparably broken and it must be fixed. the republican financial reform bill will over a reasonable period of time transition our secondary mortgage market away from government sanctioned monopolies towards a competitive free market. any piece of legislation that purports to reform our financial system and does not touch fannie or freddie cannot be taken seriously. we will ensure that fannie and freddie are rock solid, laser in
scope and focused on a achievable good. their conservatorship will sunset under our bill and their portfolios will shrink and their government subsidies will wind down. above all, the republican bill will protect taxpayers from ever again having to back-stop the mother of all bailouts, that being fannie and freddie. and now it's my honor to introduce the chairman of the republican study gentleman from georgia dr. tom price >> i can't tell you how pleased, truly pleased i am here to stand united with my republican colleagues to champion the reforms that will restore the function and the integrity of our regulatory system. we find ourselves in the current challenge today not due to deregulation but due to an ineffective, unresponsive regulatory infrastructure. the democrats solution is to guarantee -- guarantee more bailouts through a systemic risk
regulator. their plan would establish a permanent bailout agency. the american people are sick and tired of bailouts and so are we. there should be no more federal bailouts. it's time to end having washington pick winnerses and losers in the marketplace. it's time to end this political economy. that's not what made us the greatest nation in the history of the world. our plan embraces principles and the rule of law. it reforms the current law to facilitate the unwinding of insolvent nonbank institutions. we ensure that those charged with the responsibility for oversight have the authority to accomplish the necessary regulatory actions. our plan ensures that the federal reserve receives the transparency and accountability demanded by every single american and our plan will restore the integrity of our system and instill the confidence necessary for free market capitalism and our nation to survive. and to thrive. by remembering the principle that if we remove all risk, we
remove all reward. and we become a very different and a very bland society. this is a thoughtful and a commonsense plan and piece of legislation that will be produced from it that embraces the principles that americans know and love. we urge all our colleagues to adopt and embrace this positive reform. it's my honor to yield back to the ranking member, mr. bachus. >> thank you, and i appreciate all my ranking member comments. i appreciate the leadership of being here. yesterday, i met with leader boehner and several representatives from different groups to outline some of those programs, and we -- i think
there was a pretty unanimous agreement that this was a comprehensive and sound approach. at this time i want to take questions. now, we're going to pass out -- this plan is not a plan of talking points. it is actually a substantive plan several pages long, single-spaced type written. a lot of it -- the questions you'll probably ask now, you would probably have answered just by reading he0by this plan. but at this time, we will -- we'll take questions. >> when are you planning to introduce the legislation and what kind of response are you getting from the chairman on the proposal? >> i'll take those in reverse order. [laughter] >> chairman frank has called twice today asking for a copy of the plan. and we -- we have just sent him a copy simultaneous with this press conference so i have not heard from him. we have all along in this
process, we wanted to put out a plan what we consider our solutions, what we considered our blueprint for preventing what happened last year. and for protecting as i said consumers, investors and taxpayers. and we want very much to work in a bipartisan way across the aisle and we hope by putting out this comprehensive plan that we'll be able to compare our plan with the other plan and work across the aisle in a bipartisan way. as you know, things work better in that regard. any other members have -- >> and how soon would you introduce the bill? >> one question per person. [laughter] >> ranking member, you know, the american people seem to want regulation, you know, i'm wondering if that will change by
the fall and does this bill adequately address that concern? and can you articulate that to the american people? >> yeah, what i would say what the american people want number one is they want to avoid what has happened in the last six months or year with our financial services industry and, thus, our economy. and we believe that we can have smarter regulations, not more regulation. >> i wonder if i could or your colleagues could be more specific about point 2. which of the pickings of winners and losers would you have not let happen or let go. lehman brothers, bear stearns shouldn't have happened in your view. >> there may be a difference of opinion but we don't want -- we don't want to pick any winners or losers. >> if you go back to september
or even into march when a lot of this was occurring, when it began to occur, a lot of the decisions, if you recall were done over a weekend. there's no transparency or accountability or uniform plan. i mean, i would wake up in the morning, monday morning, to find out who won and who lost. who was going to go bankrupt and who was going to get saved? and i don't think that's a method that the american people who want to know what's going on and know that their investments are safe, their future's safe in terms of their economics, and i think our plan brings forward, i think, some very good ideas to avoid those kind of scenarios. >> and on that point, one of the things that i have found in talking to stakeholders, talking to investors, talking to people back in my district, i represent new jersey, so a lot of investors there they continue to literally sit on the sideline today with regard to their investments. why? because they do not know what the rules of the road are going to be today and tomorro