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9 June 2010
Mr. BACHUS. Mr. Speaker, I yield 4 minutes to another gentleman from Texas (Mr. PAUL). (Mr. PAUL asked and was given permission to revise and extend his remarks.)
2010 Ron Paul 29:1
Mr. PAUL. I thank the gentleman for yielding.
2010 Ron Paul 29:2
Mr. Speaker, I rise in support of this motion to instruct. I think it is a good idea that we donít have the taxpayers bailing out eternally institutions that are bankrupt.
2010 Ron Paul 29:3
But there is an important thing to remember, that when an economy gets out of kilter, the marketplace demands a correction of that. And thatís usually called the recession. Of course, we are not discussing here today exactly how we get into the excesses, but we do. And, unfortunately, debt gets too high and mal-investment gets too excessive, and the market wants to correct this.
2010 Ron Paul 29:4
Now, itís essential that this excessive debt be liquidated. It can be liquidated in two different ways. It can be written off by inflationary currency and paid off with bad money, or it can be liquidated actually through the bankruptcy process.
2010 Ron Paul 29:5
So I am in strong support of this, but I also want to make a point here and a suggestion to the conferees that they pay attention to the provision in the House version of our bill dealing with the Federal Reserve. And that provision is called H.R. 1207, which deals with the auditing. And there is a difference between the Senate version and the House version.
2010 Ron Paul 29:6
So, although we are not talking about that specifically, to me itís important, not only for the issue of oversight and transparency, but there is also an opportunity for the Federal Reserve to provide bailout provisions for certain organizations, as well. We are talking about taxpayersí funds, the appropriated funds, TARP funds and others. But when we come to extending loans, in a way this very much is a bailout.
2010 Ron Paul 29:7
So I would like to suggest that we look at that and stand by the House provision. We do have 319 cosponsors of this provision.
Mr. FRANK of Massachusetts. If the gentleman would yield, as you know, I was for some form of that. And I guarantee, because the Senate has acted, we will have tough auditing provisions of the Federal Reserve in the final bill. And I do want to note to my friend from Texas that, when the Republicans offered a motion to recommit to the bill, they would have wiped out a number of things, including his audit provision. So despite the fact that my friend from Texas temporarily abandoned his audit provision to the perils of a recommittal provision, I will join with him in reviving it.
And, as he knows, we have in our bill a severe limitation on this power under section 13(3) for making these loans. What they did with AIG will no longer be possible. There will be no more loans to individual institutions. But he has been the leader on the audit situation, and I intend to continue to work with him to make sure it is well done.
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Mr. PAUL. I thank the chairman.
2010 Ron Paul 29:9
And I would just like to reemphasize that it is the responsibility of the Congress to commit to oversight of the Federal Reserve, something that we have been derelict in doing. I think the mood of this House and the mood of the Senate and the mood of the country is more transparency and more oversight.
2010 Ron Paul 29:10
The provision in the Senate version is not adequate for an audit of the Fed. So I am encouraged that we are getting more attention because, ultimately, it is necessary that we understand exactly how the business cycle comes about and how the Federal Reserve participates in this.
2010 Ron Paul 29:11
Because, under the circumstances of today, on what we are doing, we are prolonging our agony. And someday I would hope to see that our recessionsó and now we are talking about depressions óare minimized and shortened. And I am concerned that the programs that we are working with today are prolonging those changes.
2010 Ron Paul 29:12
So the most important thing that we can do is make sure that we exert our responsibilities, have oversight of the Federal Reserve, commit to these audits of the Federal Reserve, and not to endorse the idea that the Federal Reserve is totally secret, can do what they want, can bail out other companies and banks and foreign governments and foreign central banks without fully knowing exactly what they are doing.
2010 Ron Paul 29:13
Once again, I thank the chairman of the committee for his support for auditing the Fed.