see $5 a gallon gas, -- i saw oil hit a peak. why is the dollar weakening. global investors don't have confidence. we could be the center of that. mr. heinrich: i believe that volatility, that unpredictable nature of what we have to pay for this import of oil or gasoline should really drive our thinking. and i firmly believe with every ounce of my being that this is the moment for america, this is our moment, a golden opportunity could turn green and we could agree an economy and respond to the environment that needs to be nurtured by us and utilize our energy resources in an efficient way by having this american power that will power america

and this is our moment and we can't walk away from it. mr. polis: do you have any closing thoughts, mr. heinrich? mr. heinrich: just to thank my friend from new york for really closing, i think, on the issue we need to think about. this is about independence. it's about seizing the moment and about providing the good jobs for tomorrow for the next generation, for my sons who are 6 and 2 1/2, i want them to grow up with the same opportunities i had and more. it's going to be up to us to be able to pass this legislation to be able to provide those kinds of opportunities for the future generations of our nation. . mr. polis: when people hear cap and trade and hear these, this is what they really mean. a lot of the things we talked about here today. we are talking about the future of the american economy. we're talking about creating green jobs. we're talking about saving american households $750 a year

within 10 years and $3,90000 a year within 20 years -- $3,900 a year within 20 years. we're talking about making america the center of this technology, exporting this technology, to some of the very same countries that we rely upon today for importing, either manufacturing products or energy-represented products and most importantly we are talking about reduced -- ending the cost of inaction. we're talking about completely reducing a lot of these hidden costs and overt costs that we are paying every day, when you fill up your tank with gats, sending our men and women overseas, importing products from overseas, sending our jobs overseas and of course climate change which is having an affect on farmers across our country as well as everybody else. so by passing this american clean energy and security act which our seat coalition, sustainable energy and environmental coalition is heavily involved with here in the congress can be the single

most important act that we take this term in congress to mep make sure that america has a strong economy throughout the rest of this century and that the dollar regains its strength, we create jobs here in our country and we also save american taxpayers and families money along the way. so, you know, when people hear about this debate and they hear about costs, they need to realize the costs of inaction are greater and they he need to realize that the benefits of taking the right action now and the right action is in this bill, will be a great testimony to the american success and ingenuity for the next generation. thank you, madam speaker. the speaker pro tempore: the gentleman yields back the balance of his time. mr. polis: we do. we yield back the balance of my time. -- our time.

the speaker pro tempore: the chair recognizes the gentleman from virginia for a motion. mr. connelly: madam speaker, i move that the house adjourn. the speaker pro tempore: the question is on the motion to adjourn. those in favor say aye. those opposed, no. the ayes have it. the motion is agreed to. the house stands adjourned until they're also expected to bring up a motion to instruct conferees to the 2009 war spending bill. live coverage of the house continues here on c-span when

members return tomorrow morning. members of president barack obama's auto task force testified on capitol hill about their work with general motors and chrysler. they told lawmakers the nation would have faced substantial job loss if the administration had not restructured those auto companies. that hearing is next on c-span. later, senators made at the white house on health care legislation. and after that, an aviation safety hearing. dodge there is still time to get your copy of c-span's 2009 congressional directory with information on house and senate members, the cabinet, supreme court justices, and the nation's governors. it is $16.95 online at

cspan.org/products. >> now, a senate hearing on the government's role in the restructuring of general motors and chrysler. the witnesses are to obama administration officials who are working with the auto companies. chris dodd of connecticut chairs the senate banking committee. >> i do not see 12 of us here yet, and i do not want to delay the hearing. it is on the executive session nominees. there is going to be a vote sometime tomorrow morning on the tobacco bill, and my

recommendation would be, during that zero or right after the vote, we need to consider these executive session nominations. i think, based on conversations, they should be relatively noncontroversial. i invite my colleagues to look at them and tell me if it requires further discussion. we will save it for another moment. yes, bob? >> i am curious about the status of the fha nomination. the nominee that is not on there. i'm curious as to where we are on that. >> let me turn to senator shelby. >> there is a hud investigation going on, as i understand it, from staff dealing with respa and in some of the companies, we do not know if he is involved.

we're waiting to see what comes out of the investigation. my interest is making sure that all nominees feel like he will be ok. we want to make sure. we're waiting for a little more information before i agree. >> let me say, i do not know mr. stevens personally. he comes highly recommended it. when people are knowledgeable -- we have all talked about him. he has come recommended highly. senator shelby points out some issues that the committee cannot ignore in the midst of all this. i have talked the secretary about the nominee and what steps we are willing to take for assurances of the committee.

i did not believe in necessary -- necessarily voicing this on the committee. i like to have bipartisan support for a nominee. we're all aware of what can happen. six months from now, something could pop up. i am not sure -- that is or where we are on this. any comments you like to make? >> i think he has gone out of his way to try to alleviate those. based on what he knows about the case, and there is more diligence, apparently. we would not have anybody serving in the administration. in any event, there may be some

issues. i will defer to the chair ranking member. it is a pretty important position that is not in place. >> i would like to say again, this gentleman might be very well qualified. he might be pristine clean, and i hope he is. when there is a hud investigation involving one of these companies he was involved in, we ought to have a clean bill of health from the man before i vote on him. i do not know. i have been here a few years. >> i also want to make a couple of observations about the hearing today. because of the rulings on a

chrysler bankruptcy of the supreme court last evening, one of our witnesses was able to have his full testimony for us on time yesterday. we will give you a waiver on that. understanding the circumstances -- however, the numbers are rightly concerned that the testimony was not delivered until 11:30 today and the committee has strict rules on this. i do understand the problems of last evening. as the members of the committee understand, general motors filed for cooperation and protection under chapter 11 on june 1. i have them for that mr. bloom might not be able to answer questions that are the subject of that ongoing litigation. if that is the case, you have to respond accordingly. i raise those two issues that have been brought to my attention. i want to welcome our to witnesses as part of the table.

i will take a couple of minutes for an opening statement and onto senator shelby. let me say the bottom line for me. getting out of the automobile industry would not be soon enough for me if it were to happen yesterday. my hope is, what ever we like or dislike, i want to see as get out of this business as quickly as we can. i would start any discussion or debate from that point of view. it can't be soon enough and that matter. on the state of the american automobile industry, today's hearing is unique because for the first time, we will be hearing directly from the administration officials who are

giving assistance to america's auto industry. failure of any one of detroit's's big three poses a systemic risk to the economy. from suppliers, to car dealers, some 20,000 people in my home state of connecticut alone are directly employed by the auto industry. it is for these reasons that president bush and president obama march and the resources of our government to preserve countless american jobs and to reestablish a domestic auto industry. there buckling under a hundred $70 billion in debt for general motors, -- $170 billion in debt for general motors.

the plan has largely been adopted as one of the prepackaged gm and chrysler bankruptcy proposals. i believe that once finalized, they will result in a savings of thousands of american jobs. that is my hope. and potentially, the preservation of a critical sector. communities all across collation are not going to be scared. -- to be scared -- spared. it will continue to raise questions over unprecedented government involvement. to me, these questions can be summed up as follows. how exactly are taxpayer dollars being used to restructure the auto industry? why does the government taking such large ownership stakes in these companies? is the government doing everything it can to protect american jobs? what assistance is being provided to communities devastated by auto plant and a dealer closing periods -- and a dealer closings.

and when can we expect a return in the investments we have made? i like to address what i would regard to be a false something -- that declined the restructuring plan as a windfall to autoworkers. creditors are being asked to forgive that to a smaller stake in the company -- to forgive debt for a smaller stake in the company. in the case of the gm proposal, bondholders will be asked to forgive $27 billion in debt in exchange for equity in the company. they offered 10% equity, plus the option to acquire an additional 15% later on. it would forgive half of its remaining $20 billion in debt for -- in exchange for acquiring 17.5% of gm's common stock. with $2.5 billion in notes. as i am sure the witnesses can

explain, the debt forgiveness and equity stakes do not reflect the extent of the auto workers concessions. indeed, the companies have announced tens of thousands of layoffs as a result of the restructuring. retirees are told that they're losing 30% of their health benefits. in gm's case alone, 20,000 additional people are losing jobs as a result of the bankruptcy. the courts have been reviewing these restructuring proposals to ensure an equitable outcome for autoworkers as well as other stakeholders. hundreds of thousands of americans and countless businesses will be affected by the court's decisions. it is for this reason the president was right in my view to test this it ministration not only with assistant gm and chrysler, but with less than the effects of the auto industry's downturn on various committees. the plans are not without

controversy. one aspect of the proposal is unprecedented. the government is taking a huge equity stake. 8% and chrysler, and a whopping 60% and general motors. they believe the structure of voice the imposition of further data on these companies. it also begs the question, how will the government extricate itself from such a commitment in the future. we should be concerned that she had become a kind of economic vietnam or the federal government throws good money after bad, year after year, in a vain quest for victory. they have worked tirelessly to establish the domestic auto industry's viability. that also been told to rekindle our competitive edge in a truly iconic sector of the united states economy. not too long ago, it seemed that

an american could not walk the city block without sensing the strength of the american automakers bland -- brand. they dominated the u.s. automobile market and the global market in many ways. owning a buick was the stuff of american dreams. today, those images have faded. they have slipped below 50%, going from 66% in 2001 to 40% today. the u.s. industry have long abandoned its diversified product mix and instead has had to play catch up to foreign companies. only now have a recognize that in a shift their focus to make more fuel-efficient automobiles. one thing has remained constant. the skill and ingenuity of the american auto worker. there certainly proving it these days.

given the proper tools, i think we can keep fighting until we're back on top once again. i believe that can happen. i'm for it -- i'm interested in hearing about how you can set the stage for a comeback in our country. mr. bloom has been intimately involved in negotiations with various stakeholders. i look forward to exploring the rationale behind these decisions, and the administration's plans for the future. dr. montgomery is tasked with a far more different responsibility. this to steer federal assistance to communities devastated by plant closings and dealer consolidations. a look forward to hearing about your travels around our nation learning of the resources you believe are required for these recovery efforts. with that, let me turn to my colleague from alabama for any opening comments. colleague from alabama for any

opening comments and then hearing from the witnesses. >> thank you, mr. chairman. when detroit three came before this committee to ask u.s. takes pairs for bailout money, they cited the financial crisis as the reason for their troubles. the financial crisis was certainly a reason but it was by no means the only reason these companies were failing. although structural and managerial problems in the companies were decades in the making, they managed to convince congress in the last administration that bankruptcy, the normal course for companies in their condition at that time was not an option. even if it came with government financing. this was a few months ago. instead, they said they just needed some cash to make it through until the economy returned to normal and consumers starting buying cars again. combined the two firms received then $24 billion. these initial billions, howeve,

were not enough to prevent the inevitable from happening. both chrysler and gm have now entered chapter 11 bankruptcy process and each company once again needs additional taxpayer support. the obama administration has set forth a plan for the two companies post bankruptcy, choosing to bypass the normal bankruptcy process, the administration presided over the restructuring through an alternatived a hock process. today's hearing i hope will give us an opportunity to understand how the administration came to the conclusion that this support was warranted and expectations about how the new taxpayer investments will be managed and ultimately unwound. i look forward today to understand what considerations drove the jut comes of both the gm and the chrysler negotiations. why didn't the administration address the significant excess capacity in the u.s.? possibly by merging chrysler and gm. why did the administration

instead favor a merger between chrysler and fiat and on what did the administration base its conclusion that the new chrysler will be viable in the long run? did the administration take into consideration the effect that the aid to gm and chrysler would have on other auto manufacturers in the u.s.? what underlays the determination that the u.s. treasury should hold approximately 10% of the new chrysler and 60% of the new gm? by taking such significant equity stakes in the two companies, the administration has embarked on a disturb disturbing and i believe difficult road. we've been assured the administration would stay out of day to day management and it will not allow politics to influence the decision-making process within the companies. on the one hand, that's very reassuring. on the other, it illustrates the inherent difficulty posed by large government interventions in private markets.

if the government intends to be a silent partner of sorts, how do they intend to protect the interests of the american taxpayer as a shareholder? i'm not sure you can have it both ways. restraint may be difficult when jobs are at stake. plants need to be closed and environmentally-friendly vehicles prove not to be commercially viable. given the governments's bigger investment in gm than chrysler, will it make decisions that favor the former at the expense of the latter? will the administration be tempted to use politicaleans to boost annual car sales in an effort to shore up the perceived viability of the two companies? the most difficult question, of course, is how treasury intends to get out of this. our assurances that the government's involvement in the auto industry will be temporarily realistic? did the administration, as any

private investor would, work through possible exit strategies before making its investment? another question -- does the administration anticipate that the taxpayer will make money on its investment, and if so, how? and do the writeoffs that it has already taken in connection with this investment in these companies foreshadow more losses to come? does the administration here envision a long-term government participation in the auto financing business? of course, the government action is not the only factor at play in determining the ultimate outcome to gm, chrysler and the tax payer. private sector responses are critical. will the private sector lend to, or do business with these companies? will there ever be private sector interest in owning these companies? particularly if the government retains an ownership interest? i look forward to hearing the administration's thoughts on

these and other issues this afternoon, and i commend you, mr. chairman, for calling this hearing. >> thank you very much. we now have a quorum. i ask the committee to consider the nominee. all those in favor signify by saying aye. those opposed say no. the ayes have it. mercedes marquez to be the assistant secretary for community planning and development at the housing and human afars. the ayes have it. the nominees are hereby reported. the executive session is adjourned. with that we turn to our two witnesses. ron bloom is a very experienced individual, advising labor and business leaders. he assists the secretary and the

members of the auto task force. he's a founding partner of the investment firm, banking firm of keilan and bloom. mba from harvard. ed montgomery, dr. montgomery, joins us as president obama's director of recovery of auto communities and workers. formally left his post as dean of the college of social sciences at university of maryland. earned a ph.d. of economics from harvard and we're delighted to have both of you with us. we'll be begin in the order i introduced you. try to keep your remarks relatively brief. testimony, evidence, supporting documents will all be included as part of the record. >> yes, sir. good afternoon. chairman dodd, ranking member shelby, members of the senate banking committee, thank you for the opportunity to testify

before you today. first let me apologize for the snafu with getting the material to you late and appreciate your indulgence on it and to commit to you it will not happen again. over the past several months, the obama administration has been working to manage an historic crisis in the auto industry. president obama inherited an auto industry that lost 50% of its sales and over 400,000 jobs in the year before he took office. two companies, general motor and chrysler had received substantial loans from the prior administration and were requesting substantial additi additional assistance that only the government could provide. without this assistance, both of these companies faced uncontrolled bankruptcies and almost certain liquidation which would have cost significant job loss with a ripple effect throughout our entire economy. even so, president obama was unwilling to put additional taxpayer dollars on the line unless these companies and their stakeholders were willing to

fundamentally restructure, address prior bad business decisions, and chart a path towards long-term financial viability without ongoing government assistance. therefore, the president decided to give both gm and chrysler a chance to work with their stakeholders to make them stronger, leaner and more competitive in a way that would tough an investment of additional taxpayer dollars. in only a few months, both gm and chrysler, working with their stakeholders have achieved a elevel of restructuring that many thought impossible. positioning both companies for future viability. as a result as a result, the president has decided to stand behind these restructurings with additional financial assistance. consistent with prior administration's actions, this assistance is being provided from the u.s. treasury out of the t.a.r.p. program. it is now and emerged from bankruptcy. its future is in the h