Transcript: Nancy Pelosi Before Bailout Vote

September 30, 2008 by Pelikan
Filed under: U.S. Congress, U.S. Economy, U.S. Financial Crisis 

Much has been said about U.S. House Speaker Nancy Pelosi’s speech in the House chamber before Monday’s failed bailout vote. Republican leaders have used the idiotic argument that some of those in their party who were being counted on to deliver ‘yeas’, instead voted ‘nay’, because they were turned off by the partisan nature of her speech. Cry me a river. If your vote in Congress is dependent on whether or not the leader of the opposition says something partisan on the floor of the House, you’re not fit to serve.

At any rate, here’s what she said.

(Source: Congressional Record)

The SPEAKER pro tempore. The gentlewoman from California is

recognized for 1 minute.

Ms. PELOSI. Thank you very much, Madam Speaker, for recognizing me,

and also to the distinguished chairman for his extraordinary leadership

which I will address in a moment.

Madam Speaker, when was the last time anyone ever asked you for $700

billion? It is a staggering figure. And many questions have arisen from

that request, and we have been hearing I think a very informed debate

on all sides of this issue today. I am very proud of the debate. Seven

hundred billion dollars, a staggering number, but only a part of the

cost of the failed Bush economic policies to our country, policies that

were built on budget recklessness.

When President Bush took office, he inherited President Clinton’s

surpluses; 4 years in a row budget surpluses on a trajectory of $5.6

trillion in surplus. And with his reckless economic policies, within 2

years he had turned that around. And now 8 years later, the foundation

of that fiscal irresponsibility, combined with an anything-goes

economic policy, has taken us to where we are today.

They claim to be free market advocates when it is really an anything-

goes mentality. No regulation, no supervision, no discipline. And if

you fail, you will have a golden parachute and the taxpayer will bail

you out. Those days are over. The party is over in that respect.

Democrats believe in a free market. We know that it can create jobs,

it can create wealth and many things in our economy. But in this case,

in its unbridled form, as encouraged, supported by the Republicans,

some in the Republican Party, not all, it has created not jobs, not

capital, it has created chaos. And it is about that chaos that the

Secretary of the Treasury and the chairman of the Fed came to see us

just about a week and a half ago. It seems like an eternity, doesn’t

it. So much has happened, the news was so bad.

They described a very, very dismal situation, a dismal situation

describing the state of our economy, the fragility of our financial

institutions, and the instability of our markets–our equity markets,

our credit markets, our bond markets. And here we were, listening to

people who know of what they spoke. The Secretary of the Treasury

brings long credentials and knowledge of the markets. More fearful,

though, to me, more scary, were the statements of Chairman Bernanke

because Chairman Bernanke is probably one of the foremost authorities

in America on the subject of the Great Depression. I don’t know what

was so great about the depression, but that’s the name they give it.

And we heard the Secretary and the Chairman tell us that this was a

once in a hundred-year phenomenon, this fiscal crisis was so drastic.

Certainly once in 50 years, probably once in 100 years. And how did it

sneak up on us so silently, almost on little cat’s feet, that they

would come in on that day. And they didn’t actually ask for that much

money that night. It took 2 days until we saw the legislation that they

were proposing to help calm the markets. It was on that day that we

learned of a $700 billion request.

But it wasn’t just the money that was alarming, it was the nature of

the legislation. It gave the Secretary of the Treasury czar-like

powers, unlimited powers, latitude to do all kinds of things; and

specifically prohibited judicial review or review of any other Federal

administrative agency to review their actions.

Another aspect that was alarming, it gave the Secretary the power to

use any money that came back from these infusions of cash to be used at

the discretion of the Secretary, not to reduce the deficit, not to go

into the general fund so we could afford other priorities, to be used

at the discretion of the Secretary. It was shocking.

Working together in a bipartisan way, we were able to make major

improvements on that proposal even though its fundamental basis was

almost arrogant and insulting.

The American people responded almost immediately. Overwhelmingly they

said that they know something needs to be done. Seventy-eight percent

of the American people said: Congress must act. Fifty-eight percent

said: but not to accept the Bush proposal.

And so here we are today, a week and a couple of days later, coming

to the floor with a product, not a bill that I would have written, one

that has major disappointments for me beginning with the fact that it

does not have bankruptcy in this bill, and we will continue to persist

and work to achieve that.

It is interesting to me, though, when they described the magnitude of

the challenge and the precipice that we were on and how we had to act

quickly and we had to act boldly and we had to act now, that it never

occurred to them that the consequences of this market were being felt

well in advance by the American people. That unemployment is up; and,

therefore, we need unemployment insurance. That jobs are lacking; and,

therefore, we need a stimulus package.

So how on the one hand could this be so urgent at the moment, and yet

so unnecessary for us to address the effects of this poor economy in

the households of America across our country? We will come back to that

in a moment.

Working together, we put together some standards. I am really proud

of what Barney Frank did in this regard.

That first night, Thursday night when we got the very, very dismal

news he immediately said: If we are going to do this–and Spencer

Bachus was part of this as well–if we are going to do this, we must

have equity for the American people. We are putting $700 billion; we

want the American people to get some of the upside. So fairness for the

American people.

Secondly, as they described the root of the problem as the mortgage-

backed securities, Barney insisted that we would have forbearance on

foreclosure. If we are now going to own that paper, that we would have

forbearance to help responsible homeowners stay in their homes.

In addition to that, we had to have strong, strong oversight. We

didn’t even have to see the $700 billion or the full extent of their

bill to know that we needed equity and upside for the taxpayer,

forbearance for the homeowner, oversight by the government on what they

were doing, and something that

 

[[Page H10388]]

 

the American people understand full well, an end to the golden

parachutes and a review and reform of the compensation for CEOs.

Let’s get this straight. We have a situation where on Wall Street,

people are flying high. They are making unconscionable amounts of

money. They make a lot of money. They privatize the gain. The minute

things go tough, they nationalize the risk. They get a golden parachute

as they drive their firm into the ground, and the American people have

to pick up the tab.

 

{time} 1230

 

Something is very, very wrong with this picture.

So just on first blush that Thursday night, we made it clear–meeting

much resistance on the part of the administration–those four things,

equity, forbearance, oversight, and reform of compensation.

Overriding all of this is the protection of the taxpayer. We need to

stabilize the markets, and in doing so, we need to protect the

taxpayers. And that’s why I’m so glad that this bill contains

suggestions made by Mr. Tanner that if at the end of the day, say, in 5

years when we can take a review of the success or whatever of this

initiative, that if there is a shortfall and we don’t get our whole

$700 billion back that we have invested, that there will be an

initiative to have the financial institutions that benefited from this

program to make up that shortfall. But not one penny of this should be

carried by the American people.

People ask–and Mr. Spratt spoke with great knowledge and eloquence

on the budget and aspects of the budget–$700 billion; what is the

impact, what is the opportunity cost for our country of the investments

that we would want to make?

Okay. Now we have it at a place where the taxpayer is going to be

made whole, and that was very important for us. But why on the drop of

a hat can they ask us for $700 billion and we couldn’t get any support

from the administration on a stimulus package that would also help grow

the economy?

People tell me all over the world that the biggest emerging economic

market in the world is rebuilding the infrastructure of America: roads,

bridges, waterways, water systems in addition to waterways, the grid,

broadband, schools, housing. We’re trillions of dollars in deficit

there. We know what we need to do to do it in a fiscally sound way, in

a fiscally sound way that creates good paying jobs in America

immediately, brings money into the Treasury by doing so and, again,

does all of this in an all-American way: good paying jobs here in

America. We can’t get the time of day for $25, $35 billion for that

which we know guarantees jobs, et cetera, but $700 billion.

So make no mistake: When this Congress adjourns today to observe Rosh

Hashanah and have Members go home for a bit, we are doing so at the

call of the Chair because this subject is not over, this discussion

about how we save our economy. And we must insulate Main Street from

Wall Street.

As Congresswoman Waters said, Martin Luther King Drive, and in my

district Martin Luther King Drive and Cesar Chavez Road, and all of the

manifestations of community and small businesses in our community, we

must insulate them from that.

So we have difficult choices, and so many of the things that were

said on both sides of this issue in terms of its criticisms of the bill

we have and the bill that we had at first and the very size of this, I

share. You want to go home, so I’m not going to list all of my concerns

that I have with it.

But it just comes down to one simple thing. They have described a

precipice. We are on the brink of doing something that might pull us

back from that precipice. I think we have a responsibility. We have

worked in a bipartisan way. I want to acknowledge Mr. Blunt and Mr.

Boehner of the work that we’ve done together in trying to find as much

common ground as possible on this.

But we insisted the taxpayer be covered. We all insisted that we have

a party-is-over message to Wall Street, and we insisted that the

taxpayers at risk must recover; any risks must be recovered. I have

told you that already.

So, my colleagues, let’s recognize that this legislation is not the

end of the line. Mr. Waxman will be having vigorous oversight this

week, hearings this week, on regulatory reform and other aspects of it.

I hope you will pursue fraud and mismanagement and the rest.

Mr. Frank and his committee will continue to pursue other avenues

that we can stabilize the markets and protect the taxpayer.

For too long this government in 8 years has followed a right-wing

ideology of anything goes: no supervision, no discipline, no

regulation. Again, all of us are believers in free markets, but we have

to do it right.

Now let me again acknowledge the extraordinary leadership of Mr.

Frank. He’s been an exceptional leader in the Congress, but never has

his knowledge and his experience and his judgment been more needed than

now. And I thank you, Mr. Frank, for your exceptional leadership, Mr.

Chairman.

So many people worked on this, but I also want to acknowledge the

distinguished Chair of our caucus, Mr. Emanuel. His knowledge of the

markets, the respect he commands on those subjects, and his boundless

energy on the subject served us well in these negotiations.

But this is a bipartisan initiative that we are bringing to the

floor. We have to have a bipartisan vote on this. That is the only

message that will send a message of confidence to the markets.

I know that we will be able to live up to our side of the bargain. I

hope the Republicans will, too.

But my colleagues, as you go home and see your families and observe

the holiday and the rest, don’t get settled in too far because as long

as this challenge is there for the American people–the threat of

losing their jobs, their credit, their savings, their retirement, the

opportunity for them to send their children to college–as long as in

the households of America this crisis is being felt very immediately

and being addressed at a different level, we must come back. And we

will come back as soon and as often as necessary to make the change

that is necessary.

And before long, we will have a new Congress, a new President of the

United States, and we will be able to take our country in a new

direction.

Thank you.

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Comments

One Comment on Transcript: Nancy Pelosi Before Bailout Vote

  1. Jason on Wed, 1st Oct 2008 12:36 pm

    2. The HOPE for Homeowners Act needs to pay less than 36.5 % of the face value of the subprime mortgage back securities. If more is paid the government loses money in the long run and owners of the securities profit now. nomedals.blogspot.com

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