Ron Paul Quotes
Home Page ...Contents
Not linked on Ron Pauls Congressional website.
Congressional Record [.PDF]
2005 Ron Paul 109:1
Mr. PAUL. Mr. Chairman, I offer an amendment.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows: Amendment No. 6 offered by Mr. PAUL:
Page 64, after line 12, insert the following new section:
SECTION 117. ELIMINATION OF AUTHORITY TO BORROW FROM TREASURY OF THE UNITED STATES.
(a) FANNIE MAE. — Section 304 of the Federal National Mortgage Association Charter Act (12 U.S.C. 1719) is amended by striking subsection (c).
(b) FREDDIE MAC. — Section 306 of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1455) is amended by striking subsection (c).
(c) FEDERAL HOME LOAN BANKS. — Section 11 of the Federal Home Loan Bank Act (12 U.S.C. 1431) is amended by striking subsection (i).
The Acting CHAIRMAN. Pursuant to House Resolution 509, the gentleman from Texas (Mr. PAUL) and the gentleman from Massachusetts (Mr. FRANK) each will control 5 minutes.
The Chair recognizes the gentleman from Texas (Mr. PAUL).
2005 Ron Paul 109:2
Mr. PAUL. Mr. Chairman, I yield myself 3 minutes.
(Mr. PAUL asked and was given permission to revise and extend his remarks.)
2005 Ron Paul 109:3
Mr. PAUL. Mr. Chairman, my amendment is straightforward. It cuts off a line of credit to the Treasury. The GSEs have a line of credit of $2 billion. It is said that it is not important because they never use it. The answer really to that is if they never use it, why leave it on the books. But we do know they indirectly use it. It has been described as a subsidy, because the GSEs can go into the market and get a discount on their loan costs; therefore, they can out-compete the private sector. My amendment merely eliminates that line of credit, puts a greater burden on the marketplace to regulate the GSEs rather than depending on regulation.
2005 Ron Paul 109:4
I think Members can see there is a problem with our GSEs. The debt is horrendous. Today, the administration sent a letter around and said that the debt of the GSEs totals $2.5 trillion, and they also guarantee in addition $2.4 trillion. That adds up to more money than the Federal Government has borrowed. So it is a tremendous amount of money and credit that is in the system; and people have become frightened about this, including chairman of the Federal Reserve Board, Alan Greenspan.
2005 Ron Paul 109:5
But what we are doing here today is not addressing the real problem: Why is it out of control? Why is there a financial housing bubble that everybody is afraid is going to undergo a severe correction?
2005 Ron Paul 109:6
One of the major reasons is the fact that it has this special line of credit. So if we want to address the real cause of the problem, we have to eliminate the line of credit. So it rather amazes me that we do this much legislating without addressing the real cause of our problem.
2005 Ron Paul 109:7
Of course, there are other things that contribute to the housing bubble, something that we cannot deal with today, but the fact that there is easy credit and low interest rates, interest rates below the market level, that is then directed into the housing market. This also contributes to the size and the scope of the borrowing capacity of the GSEs.
2005 Ron Paul 109:8
Also in this bill, of course, we are adding into this a brand new housing program which is said to probably involve another billion dollars in the next 2 years. I guess it is not surprising when The Wall Street Journal editorializes against this. Unfortunately, they are not very kind. They say this bill is another Republican policy embarrassment.
2005 Ron Paul 109:9
This housing bubble, a housing program that we are starting up, how do we finance it? Well, we tax the GSEs. Instead of arguing the case for the marketplace and letting people earn money legitimately without subsidies, what we do, we keep allowing the system to continue. They do make profits, and then we tax them. We are talking about an additional tax, and this might very well be the reason the administration has come out against this bill, because of this new tax.