vote:

vote:

the presiding officer: are there any senators in the chamber wishing to vote or change their vote? if not, the ayes have it, 56-38. and the nomination is confirmed. mr. reid: mr. president? the presiding officer: the majority leader. mr. reid: i move to proceed to the reconsider the vote by which cloture was not invoked on the watt nomination. the presiding officer: the question is on the nomination. is there a sufficient second? there appears to be. the clerk will call the roll. vote:

vote:

the presiding officer: anyone wishing to vote or change their vote? if not, the ayes are 54, the noes are 42, the motion is agreed to. mr. reid: mr. president? the presiding officer: the majority leader. the senate will be in order. mr. reid: we have four unanimous consents for committees to meet during today's session.

they have the approval of both me and senator mcconnell, and i ask consent that these requests be agreed to and be printed in the record. the presiding officer: is there objection? without objection. mr. reid: i move to reconsider the vote by which cloture was not invoked on the watt nomination. the presiding officer: the question is on the motion. is there a sufficient second? there appears to be. the clerk will call the roll. vote:

vote:

the presiding officer: are there any senators in the chamber wishing to vote or change their vote? if not, the ayes are 54, the noes are 42. the motion to reconsider -- the motion to invoke cloture on the nomination of melvin watt to be the director of f.h.a. is agreed to. mr. mcconnell: mr. president? mr. president? mr. president? mr. president?

mr. president? the presiding officer: the republican leader. mr. reid: mr. president? mr. president? the presiding officer: the majority leader. mr. reid: what is the -- what is the question now -- what is the question now before the senate? the presiding officer: the question will be on the cloture vote, upon reconsideration. mr. mcconnell: mr. president? the presiding officer: the republican leader. mr. mcconnell: i rise with a question of order. mr. reid: mr. president, we need order. the presiding officer: will the senate wil be in order? the republican leader. mr. mcconnell: i make a point of order that the nominations are fully debatable under the rules of the senate unless three-fifths of senators have voted to bring debate to a close. the presiding officer: under the precedent set by the senate on november 231, 2013, cloture on nominations other than those to the supreme court of the united states is invoked by majority vote. mr. mcconnell: i appeal the ruling of the chair and is for - and ask for the yeas and nays. the presiding officer: is there a sufficient second? there appears to be. the question is, shall the

decision of the chair stand aces the judgment of the senate? the yeas and nays were order. the clerk will call the roll. vote:

vote:

vote:

the presiding officer: are there any senators in the chamber wishing to vote or change their vote?

on this vote, yaits are 51, the nays are 45, the senate sustains the decision of the chaimple ch. under the previous order, the clerk will report the motion to invoke cloture. the clerk: cloture motion: we, the undersigned senators, in accordance with the provisions of rule 22 of the standing rules of the senate, do hereby move to bring to a close debate on the nomination of melvin l. watt of north carolina to be director of the federal housing finance agency signed by 18 senators. the presiding officer: by unanimous consent, thed mandatory quorum call has been waived. the question is, is it the sense of the senate that debate on the nomination of melvin l. north carolina to be the director of the federal howling housing fine agency for a term of five years shall be brought at that close? the yeas and nays are mandatory under the rule. the clerk will call the roll.

vote:

vote:

the presiding officer: on this vote, the ayes are 57 and the nays are 40. upon reconsideration, the motion to invoke cloture is invoked. the clerk will report the nomination. the clerk: nomination, federal housing finance agency, melvin l. watt of north carolina to be director of the federal housing finance agency for a term of five years. the presiding officer: pursuant to the provisions of s. resolution 15 of the 113th congress, there will now be up

to eight hours of postcloture consideration of the nomination equally divided in the usual form. a senator: madam president? the presiding officer: the senator from connecticut. mr. murphy: madam president, i just have a unanimou unanimous t request, that the senate recess from 12:30 p.m. to 2:15 p.m. and the time during the recess count postcloture on the watt nomination with the time equally divided in the usual form. the presiding officer: is there objection? without objection. the senator from idaho. mr. crapo: i rise to discuss the nomination of melvin watt. unfortunately, i cannot support this nomination and i urge my colleagues not to support it either. i do not come to this decision lightly and regret we are placed in a position where we cannot support a well-liked member of congress. however, by making a political appointment the president has ignored the importance that the

head of the organization be viewed as nonpolitical. this is not a cabinet position where the nominee is supposed to be an advocate for the president. instead this is an independent agency with a highly complex tax --, task, impacting our entire economy and it is for this reason that many senators noted the need to avoid politics and emphasize the technical expertise needed to fill this position. regrettably, this did not occur and we stand here today with the majority party apparently willing to confirm a political figure to this highly technical position. worse yet, they appear to be ready to do it in a highly political manner that ignores decades of senate rules and precedents. representative watt has led a long and distinguished career in the house of representatives and in legal practice. he is well liked by his

colleagues. regardless of whether they see eye to eye with him on the issues. and he has a tremendously compelling personal story. my opposition to this nomination has nothing to do with representative watt from a personal perspective. to the contrary, there are many positions in government to which representative watt could have been easily confirmed. in demonstration of that point it's worth noting that most of the president's nominees to come through the banking committee have been confirmed with strong bipartisan votes, often with unanimous consent. in fact, four nominees who appeared at a nomination hearing with representative watt were all approved by voice vote. however, this position is distinctly unique within our government. thus, our evaluation of any nominee requires additional scrutiny. the director of the fhfa is is the not the the conservator of fannie mae and freddie mac which

have operated by federal control since 2008 because they didn't have enough capital to support expected losed. since that conservatorship began we've seen the bill to the american taxpayers rise to nearly $200 billion. the housing and economic recovery act or hera established the f.h.a. and the rules of the conservatorship. it specifically grants the fha the power to operate fannie and fread with all the powers of the share olders and officers so long as they remain in conservatorship. faha triggered those broad hours and the director now stands alone as the regulator, the top executive and the shareholder of fannie mae and freddie mac and their combined $5 trillion of portfolio.

because of this immense power vested in the director of the faha it's a position that requires the in-depth knowledge and experience with numerous aspects of the housing markets and mortgage industries. the statute explicitly requires that at mini nominee have a demonstrated understanding of financial management or over sight and have a demonstrated understanding of capital markets including the mortgage securities, markets and housing finance. additionally to be successful it is logical that any nominee should also have knowledge of and experience with investment portfolios, the operations of both public and private insurance and guarantees, and the management skills necessary to oversee the nearly 12 knew employees employed by both entities. since this position has virtually unchecked power to control two multimillion dollars

companies, and because the companies -- multitrillion dollars companies, the fhfa director's decision will be have a tremendous impact on the housing market and collaterally on the global market. if we are to give anyone with this much power we must know he has the experience to make the right choices and, frankly, the political independence to make those choices, even if they are unpopular. one reason this is so important is the impact on the taxpayer. even a few basis points of losses could mean billions in the context of multitrillion-dollar companies and that would be on top of the nearly $200 billion that the taxpayers have already shouldered. with those unique risks in mind the fhfa has taken great strides during the conservatorship to shore up the business practices of fannie mae anded frommed

from -- freddie mac. underwriting standards have been tightened, portfolio holdings reduced, guarantee fees increased and risk gradually trance frferred the taxpayer into the private sector. with these, revenues have increased. their risks have decreased. and for now, they have regained a certain amount of profitability. this current profitability creates its own set of challenges and questions. but one thing is certain: any return to policies of the past whether with social goals in mind or merely by mistake due to lack of technical experience could expose the taxpayer to immense risk. in addition to the risks associated with their current operations the director will also have a substantial impact on the prospects of the success of these reforms. while congress and the white house will determine how to reform and strengthen our housing finance system, we need

to be able to rely on the director of the fhfa for advice and guidance as we proceed. for this to work effectively the director will need to be seen as a technical expert who is not viewed as a political advocate for the president. this director of the fhfa must have the market experience to understand how any proposed changes would or would not work. how they would impact access to mortgages, while protecting taxpayers from losses, and how it would affect our housing market and economy as a whole. one example, there's a lot of interest in developing markets in manner to ensure there's adequate private capital taking the first loss to protect the taxpayer. if there is to be some sort of government guarantee in the future. some proposals call for the development of various

private-sector risk sharing mechanisms including senior subordinated deal structures, credit-linked structures and regulated bond guarantors. many are looking at what the fhfa has already begun working toward as a test for the viability of capital markets risk-sharing transactions. these risk transfer deelz known within fread as the -- freddie as the stacker deal and in fean emmys if m.m.i. and c. deals are sport examples of how private capital can partake in this market at a higher level. they are examples of why the director must have a deep and sound understanding of the demands of capital market investors. in constructing and monitoring these deals we need to know that decisions in how to balance the necessity of encouraging private markets with the protection of the taxpayers are being made, based upon effective market

analysis absent the political preferences of one individual. another important aspect of the transition will be development of the common securitization platform. fhfa has noted the g.s. e.'s infrastructure are in, issuing securities that apractice private capital, aggregating data or lower lowering barriers to market entry. as such there must be maintenance of the enterprise's securitization infrastructure. this is a complex undertaking that will take years to develop but it is an essential component of mote reform proposals. because of this it is important the director on day one has the dingell expertise and the commitment to establish this potential utility similar to ones used in securities markets.

all of us are currently witnessing the consequences of political people leading technical platform development as we watch the continued failures of the rollout for obamacare. we cannot afford the same mistakes in the context of our $5 trillion mortgage market. the management of fani's and -- fannie's and fread is the most important part of the director's task. when congress passed hera authorizing the director to appoint the agency conservator of the g.s.e.'s, it authorized fhfa to put the g.s.e.'s in a -- quote -- "scownd and solvent condition" -- end quote and to -- quote -- "preserve the assets of the properties" -- end quote of the g.s.e.'s. congress very specifically intended that the assets of fean

and -- fannie and freddie maximize payments in in exchange for bailing out the g.s.e.'s and maximize their value in whatever system is designed for the future. acting director dimarco has done a commendable job. however, some believe that other provisions trump this and advocate using the g.s.e.'s in manners that would achieve other policy goals. representative watt noted this at his confirmation that if confirmed he would decide whether there is sufficient capital to fund various social programs. in order to ensure that taxpayers are made whole and to best position the secondary market for reform, we cannot afford the fhfa director to make decisions that do not first prioritize the preservation and conservation of taxpayer assets. so long as fannie mae and freddie mac are in

conservatorship, profits aconsume laterred by the g.s.e.'s should not be used to fund social programs. additionally we cannot return to any of the policies that contributed to the housing crisis. such as further pressing the g.s.e.'s affordable housing goals. decisions affecting policies should be made through congressional action on housing financing reform. one final yet incredibly important element important is regulatory interaction. in a new housing finance system the already complex web of regulatory interaction between various regulators and federal and state regulators becomes further muddled. state insurance regulators and state banking supervisors must communicate effectively with with federal counterparts. as this system is being built the fhfa must coordinate effectively with the prudential

banking regulators and the cfpb to make sure we are not bobbing down our economy with due plik plik tiff regulation. to accomplish this the director needs highly technical expertise and this person must be seen by other regulators as acting without political intent. for all of these reasons and many more, the conservator must be an apolitical financial regulator with technical spears 30 -- sperpt tees who will resist political pressure from all sides of the political spectrum. joseph smith, the last nominee, failed to win confirmation because of concerns over whether he was independent enough. at the time of representative watt's nomination the white house was fully aware these concerns have only been heightened since then. in the wake of repeated attempts by outside political groups and individuals to influence the

decisions of the conservator, and in view of the countless complex decisions of which i've only mentioned a few, numerous senators repeatedly called for a technocarat rather than a political figure. however, the white house chose to ignore calls to emphasize technical expertise and political independence in their search. as a result their nominee failed to be confirmed by this body just a few weeks ago. the white house failed to accept the advice of the senate. today because of a historical rewrite of senate rules, we are now facing another vote. instead, this time the white house and the democrats in the senate chose to break the rules of this body so that they could push through representative watt and other nominees in a partisan vote. i'm disappointed with the white