the changing circumstance. this is not the same old crisis but a brand new crisis. >> do you have anything to add? >> i could add a bit. as you rightly observed, in commending the legislation will be a huge challenge. -- implementing the legislation

will be a huge challenge. . . these are all items that are extremely complicated for even the most complicated institutions i think the work really cannot be underestimated. i think there will be quite a bit of organizational work that will need to be done internal of the federal reserve to make this done correctly.

>> senator. >> thank you very much. thank you to the panel. i want to start with a general issue and see if any of you have got to like to share. there is an ongoing debate in washington about deficit reduction verses' monetary and fiscal stimulus. in essence, it could be reduced to have used tear to make sure you do not have a greek like debt crisis? on the other side, you do not end up like a japan like recession. any thought on the relevance of the experience of the two nations are in sight of how we should manage our way to a healthier economy? i will begin.

i think we have an outlook at this time where we seem to be in recovery but the recovery is not proceeding at a pace that is sufficient to bring down unemployment very rapidly. it is clear that it is appropriate long-term. it is clear that it is appropriate for us to be asking what to do. as congress considers the option for further fiscal stimulus now, which is natural given the outlook, i would emphasize that it is very important and congress will have more flexibility to move in the short term to support the economy is simultaneously it can put in place and show credibility on

taking the measures that are necessary to attack a long-term deficit, which i think is widely understood to be an unsustainable situation that requires a painful policy action. it simultaneously congress were able to put in place meaningful measures that would phase in over time to address medium and longer-term deficit issues, i believe that would create greater scope in the shorter- term for congress to also contemplate actions to address short-term weakness in the economy. >> thank you. >> i think your reference to japan actually is noteworthy, because there are a couple of lessons there that we need to keep in mind. one is having to do it the fact that japan's recovery was

probably slower than one -- than they would have liked. it had something to do with not having a strong, robust resurgence of a cleansing. the banking sector stayed weak there for a number of years. that is something we want to keep in mind, especially of we have not yet seen an uptick in bank lending. it is something we would like to see spur growth. i think that is one possible lesson of japan. the other being the general nature of that recovery orrin hatch the -- the recovery. >> you mentioned lending i the thing many of my colleagues had the same experience that i have of going home and hearing from every business group and cent of

small business owners, how difficult it is to obtain lending. this morning i had a copy brit. they talked about the difficulty accessing credit, a longtime businesses but do -- businesses. we can assist them in lending more. it feels like we need to find a more aggressive way to make funds available for businesses to seize opportunities and create jobs. what should we be doing? >> that is a challenge. there are a number of obstacles right now to a bank lending. i think we have to work carefully to try to figure out what they are. what you are hearing, by the way, it is not dissimilar to what i hear in maryland and what regulators are here across

the country. bank lending is not where it should be. part of it has to do with the lack of robust demand. you will hear a lot about -- a lot of in a boat -- an adult about how there are not enough borrowers. we also hear stories about credit-worthy borrowers. they have credible cash flows. the bankers did not have to be dependent on the week collateral coming from real- estate. there is cash flow here. these are borrowers that can sustain new loans. why does borrowers are not able to get loans is a challenge. i think we need to do some work on that. significantly, banks lending to small businesses is a critical factor in spurring employment. the notion of getting this right

will also have good consequences for employment. >> does anybody else want to jump in on that conversation? >> the federal reserve has just concluded before-on sessions we have had around the country in which we tried to bring together lenders, small-business owners, and others to understand exactly what the problems are and all the various items that sarah mentioned in her answer. this is a complex situation. one of the things we are aware of is that as supervisors we need to be very careful not to be discouraging lending that is sound, carefully underwritten,

and will be profitable. we certainly hear frequently the complaint that banks are afraid to -- that they will be criticized for loans that they make. the regulators have jointly issued guidance to supervisors emphasizing that small-business lending that is safe and sound is not only important to our communities and growing out of this recession, but is also important for profitability and the health of the institution. we have emphasized training. we have tried to train our examiners. these are tough situations where they have to make judgment calls. we do not want to inadvertently stifel small-business lending that would be very important to an economic recovery. >> thank you very much. my time has expired. i appreciate your engagement. >> senator corker? >> thank you very much.

i wish you well at the fed. i am one of those folks who thinks that the fed has to function at a very high level for our country. i know you spent a lot of time in bank regulation and -- the fed has a number of people who already do that. here in the senate, each of us has to sort of figure out how we are going to make our mark to hopefully make a stronger institution. there are a number of people who do what you do already and i was curious as you move to the fed board, joining people who have similar backgrounds and many ways, what is it to-you plan to do at the fed to make

the mark on the governance? >> it is a very thoughtful question. i do agree that the staff at the fed is really exemplary as far as i been able to interact with them. they are a very impressive group of professionals, both economists and examiners. what i'd like to add to the mix is a perspective that comes out of the work by have been doing at a very local level. as the state banking commissioner, i have really been able to see a lot of be spillover effects having to do with the crisis and also problems related to the run-up to the crisis. i am not sure her that all of those perspectives have been sufficiently incorporated into

both the monetary policy side of the fed and the regulatory side. one thing that we needed to do in maryland was to act very quickly to reform our laws. some of those laws were not at all fit for what the situation was developing. other laws and to be put in place. i think that the ability to react nimbly is important and the ability to react -- to move those observations into the more macro picture. i think that is pretty -- critical to the fed. >> we're getting ready to pass some legislation in the next 35 minutes regardless of what your testimony is, that will happen. in any 2300-page bill, there are provisions in it. i am not going to say this is the worst that -- worst bill that has ever been created, but

i do look at it as a tremendous of missed opportunity. based on the comments that you just made, i wonder if there were things you would have liked to see in the legislation that you would have liked to have seen in this legislation that you think might have caused our country to deal with some of those things that you saw in the run-up to the crisis that we just went through. this is your last chance. >> the legislation is obviously the product of a lot of hard work. i know that there has been a lot of very good mines put to the task of trying to put in place a system of reforms that can almost assure that we do not have a situation like this crisis happen again. to be completely candid, i think that one piece that we still

need to tackle is gse reform. that is a piece that was not addressed in the legislation. it is something that i think still needs to be on the forefront of the congress. >> that is very astute. [laughter] i will come back to you in just a minute. thank you to -- to live for your testimony. mr. diamond, when we met i looked over your resume and you have read more books and i've probably read in my lifetime. you are very well educated and i would not want to enter into a debate with the what many of the topics that you have mastered. i look at your background and i

think, this guy would be awesome to run the social security administration or he would be great official at treasury. not to be critical, i wish i knew as much as you do on those topics. i am sort of wondering what the hook was -- he is going to defend. you obviously think you are going to be a great -- what is it that those of us should think is the contribution you will make on the board of governors? >> in my opening remarks, i talked about working at how the economy would be -- handles risks throughout the economy. obviously, i have written heavily on how pension systems adapt to risk. but the questions that were

raised by this crisis, the credit questions that the existing knowledge of the regulators and the academic community had done some on but not a great deal, we are now painfully aware of issues on how risk gets generated and how risks in one place effect all sorts of other places, systemic risk. my background is to think about those things. what i have started doing is reading the parts of the academic literature. some of it goes back decades. on how interactions can happen. what i hope to be able to do is explore how the regulatory structure will pay more attention to the interactions which go from an individual bank risk to systemic risk and i

think that requires the kind of background and the nature of economic equilibrium that i bring to it because the structure of the kinds of questions and regulations and much of the economic analysis simply does not engage with this. we now know how important it is. the opportunity to work on something that important in an environment as good for a learning about the economy as the fed would just be a wonderful opportunity for me. i would hope to be very helpful at it. >> thank you. i was out of the room for a moment and i know senator shelby asked you about supervision. she seemed to indicate in your

testimony that to sell a lot of problems and felt the fed should have responded or could have responded a little more nimbly and talked a little bit about that a minute ago. you are on -- you were head of the fed in san francisco. you had a pretty large calamities out there. i know you addressed commercial real-estate earlier. there is a huge bubble out there in residential real estate. as you look back, do you wish there were actions that you had taken or the fed had taken as it relates to the residential side? i know you are still focused on commercial. i agree with you, that is still a problem here in our system. but do you wish there were actions that the fed had taken as it relates to housing in your part of the country? >> i think we were monitoring housing prices very carefully and became concerned by 2005

that there might well be a bubble in the housing market. i think personally, i gave speeches in 2005 warning of that possibility. this is something that we were attentive to and i think tried to evaluate what the risks would be coming out of that. i think we failed completely to understand the complexity of what the impact of a decline in -- a national decline in housing prices would be in the financial system. we saw a number of different things and we failed to connect the dots. while we thought about risk coming from a housing price decline, we fail to understand just how serious mortgage standards have declined, what had happened with the complexity of securitization,

and the risks that were building in the financial system around and that -- around to that. i think we missed critical elements of its that caused the crisis to be as severe as it was. looking back on it, certainly, i wish that regulators, including the fed, had taken more significant steps earlier to appreciate what the risks were in the underwriting, to understand mortgages that were being originated and packaged and sold into the market or there was a clear deterioration in its underwriting standards.

i think we should have focused, i wish we had focused more on the system aggressed that that was causing rather than being as focused as we were on safety and soundness of banks, particularly if failure to focus on systemic risk. i am pleased that this bill directs us to consider in our supervision of consolidated supervision of bank holding companies, the risk that activities can post to the broader financial system. on the underwriting side, i believe we should have taken more significant steps to curtail that center. >> mr. chairman, i know my time is out since nobody -- can i keep going since nobody is here? >> the second panel is coming up. we must get out of here by

11:00 to vote. >> can i ask to more questions? >> 1 short one. >> that is a shame. i know we have the votes at 11:00, but i think there is a lot that can be gained. >> you may submit your questions. >> ok. let me ask one simple question. i would love to hear from -- about gse's. we are pressing forward trying to understand gse's down the road. i think we missed a great opportunity to do that now. i wanted to pass a iraq -- an amendment to require every person who purchase a home to have a minimum 5% down payment. many countries that have not had

the problems that we have had had a 15% down payment on average and still have the same hauler ship -- homeownership rates. if that one requirement would have kept us from having the type of double that you had out in california might have kept us from having many of the problems that we have now. >> sarah, i have not had a chance to think through the details of that proposal. >> a 5% down payment.

>> i would say that there were certainly mortgages that created problems that did have down payments at that level. they became problematic, so i think it is an interesting proposal and i do think underwriting standards should have been tougher, but there were a range of practices of their -- there that really created problems. >> thank you. i think -- i think each of you for your testimony. i wish we had more time. i look forward to working with you. i understand the time constraints that you are working under and i appreciate the leeway. >> i want to thank our first panel again. i want to congratulate you on your nominations. i will now call up our second panel. >> dissidents a day passes the financial regulations overhaul bill 62-39. the bill's supporters say buys restricting certain lending practices and expanding consumer protection, it will prevent another economic meltdown. president obama talked about the bill when he returned to

washington from michigan. >> good afternoon. with today's votes in the senate, the united states congress has now passed a wall street reform bill that will bring greater economic security to families and businesses across the country. it was clear from the moment it began that this suggestion was not the result of your typical economic downturn. it was a result of recklessness and irresponsibility in certain corners of wall street that infected the entire economy. it cost millions of americans their jobs and millions more their hard-earned savings. it is why businesses cannot get credit and my family's had not been able to see appreciation in their home values. the values of their homes have plummeted.

even before the financial crisis that led to this recession, i spoke on wall street about the need for common sense reforms to protect consumers and our economy as a whole. the crisis came in only underscored the need for the kind of reform the senate passed today. reform that will protect consumers when they take out a mortgage or sign up for a credit card. reform that will prevent the kind of shadowy deals that led to this crisis. reform that will never again put taxpayers on the hook for wall street's mistakes. therefore -- the reform that was passed today will accomplish these goals. it is a bill that was made possible by the tireless efforts of chairman chris dodd and congressmen and chairman barney frank. as well as the leadership of harry reid and nancy pelosi. i am extraordinarily grateful

for their determination in the face of a massive lobbying effort from the financial industry and i am also grateful to all these members of congress to step on the side of reform, including three republican senators who put politics aside to vote for this bill. the financial industry is so central to our nation's ability to grow and to prosper and to compete and innovate. this reform will foster that innovation and not hamper. it is designed to make sure that everybody follows the same set of rules, so that firms compete on price and quality, not contracts. a command account -- accountability and responsibility. it provides r&d to everyone from bankers to farmers to business owners to consumers. unless your business won't -- a model depends on cutting

corners, you have nothing to fear from this reform. for all those americans who are wondering what wall street reform means for you, here is what you should expect. if you have never applied for a credit card, a student loan, a mortgage, you know the feeling of signing your name to pages of barely understandable fine print. it is a big step for most families. it's filled with unnecessary confusion and apprehension. many americans are simply do it into hidden fees and monthly can not afford by companies to know exactly what they're doing. those days will soon end. from now on, every american will be empowered with a clear and concise information you need to make decisions -- financial decisions that are best for you. this bill will crack down on the unscrupulous mortgage lenders. it will give students to take

out college loans clearer information to make sure lenders do not cheat the system. it will ensure that every american receives a free credit score if they are denied a loan. all told, this reform puts in place the strongest consumer financial protection in history. it creates a new consumer watchdog to enforce those protections. because of this reform, the american people will never again be asked to foot the bill for wall street's mistakes. there'll be no more tax payer funded bailout. if the large financial institutions should fail, this reform gives us the ability to wind it down without endangering the broader economy. there'll be new rules to end the perception that any firm is too big to fail. so that we do not have another lehman brothers or aig. the kind of complex and backroom deals will finally be brought into the light of day. from now on, shareholders and other executives can note that

shareholders will have greater say. they can reward success instead of failure. they can help change the perverse incentives that encourage reckless risk-taking. wall street reform will bring greater security to folks on main street. the families were looking to buy their first homes or send their kids to college, to taxpayers and should not have to pay for somebody else's mistakes, to small businesses, community banks and credit unions to play by the rules, to shareholders and investors who want to see their companies grow and thrive. already, the republican leader in the house has called for a repeal of this reform. i would suggest that america cannot afford to go backwards. i think that is how most americans feel as well. we cannot afford another

financial crisis just as you're digging out from the last one. when i took office, we cannot simply rebuild its economy on the same at built -- same pile of sand. we need to rebuild on a firmer, stronger foundation for economic growth. that is why we invested in renewable energy that is currently creating new jobs all across america. that is why we are reforming our education system. that is why we pass health reform so that it will lower costs for families and businesses. that is why i am about to sign wall street reform into law, to protect consumers and with the foundation for a stronger financial system. one that is innovative, creative, competitive, and are less prone to panic and collapse. this is how we will ultimately build an economy that is stronger and more prosperous than it was before and one that provides opportunity for all americans. thank you very much. >> are you encouraged that the

oil had stopped flowing in the gulf? >> we're still in the testing phase. i will have more to say about it tomorrow. >> president obama talking about the senate passing the financial regulations bill today. debate on the measure included comments from banking committee leaders. this is a half-hour. >> i rise today to raise some remarks. this is now before the senate the data the financial crisis exposed efficiencies and the structure and culture of our financial regulatory system. years of technological expanses

and the expense of global capital markets rendered the system ill suited to achieve the mission in the modern economy. decade of inflation from accountability distracted regulators from focusing on that mission but a and senate acting to preserve safe and sound market, the regulators primarily became focused on expanding the scope of their bureaucratic reached a it was clear that significant reform was necessary to. by broad agreement on the need for reform, the majority decided it would rather move forward with a partisan bill. the result is a 2300 pay

legislate the monitor that shows the theocracy. it creates a vast new bureaucracy and undermined the competitiveness of the american economy. it does little to make our financial system saker i will urge my colleagues to do the same th. this is a real -- a direct made by the obama administration but th. i have no doubt that we could have crafted a strong bill the would have garnered 80 or more votes in the senate. it american people have not noticed by now, this is not how things work under the democratic group.

of fort lee, the manner in which this bill was constructed is not its british shortcomings. one would have assumed that the scope of the crisis, a trend of dollars lost and millions of jobs eliminated would have compelled the pay committee to spend the time necessary to thoroughly examine the crisis and develop the best possible legislation in response unfortunately, such an assumption would be entirely unfounded the banking committee never produced one cinco report on or conducted an investigation into any aspect of the financial crisis. in contrast, near the great depression, the banking committee set up an entire subcommittee to extent and what regulatory reforms were needed. the commission interviewed under oath the big actors on wall street and produced a multi-

volume reform. unfortunately, this time around, from democratic committee and surpassed it. there are no investigations, in a deposition, and no subpoenas. in fact, chairman but never called on the likes of floyd lang find -- lloyd hoehling find -- blankfein. not a single individual from the products division was questioned by the committee or the staff . of the congress did it publish its financial crisis inquiry commission to do the work that the majority party i believe refused to do, the work will not be completed until the end of this year. the banking committee cannot

hold even a single hearing on the final bill before it is marked. then never to the time to receive public testimony or survey experts about the likely outcomes that the legislation would produce. we know the majority. they clearly decided what it did not want the american people to have a chance to understand and comment on their bill before us today. the question is, why? the majority knows that this bill is a job killer and a saddle americans with billions of dollars in hidden taxes and fees allowing the public to weigh in on this bill would have spelled the end of the democratic version of reform. i believe we owe more to those who lost their jobs, their homes, and thereby save things .

this truly was a missed opportunity the the difference between what we needed to do, what we could have done, and let the majority has chosen to to its considerable. i will speak on this. congress could have focused this legislation on financial stability. it could have utilized the findings of the pinch a crisis inquiry commission. instead, they chose to adopt a legislative language in search of expanded tier. they chose to legislate for the political favor of kucinich to organizers and a black activists, singing opera classes that they could level. the result is an activist bill that has little to do with the recent crisis and a lot to do expanded the government to satisfy special interest. congress could have written a bill to address the problem of

too big to fail once and for all. the show vdot and and then began to address the right here on the floor. the democrats over reached. democrats insisted that the mission was less important than the political need of certain preferred constituencies. this dangerous mixing follows the exact same model that led us to the crisis in the first place, private enterprise to achieve social goals. they prove this combination can be highly disruptive.

congress could have pretended legislation to address key issues known to a played a role in the recent crisis. the bill is silent aside from a near steady. on runs of money market, the bill is silent. nunn and presently, on transformations that allowed the effectively create money out of aaa-rated securities, thereby make the system much more vulnerable, the bill is silent. on the financial system's overall vulnerability to liquidity crisis -- crises, the bill, again, is silent. madam president, we know with certainty that all of these factors, none of which are

addressed in the bill, were integral to the recent financial crisis. and while we do not want to write legislation that only deals with the last crisis, we do want to enact a law that addresses what we know are systemic problems. this bill fails to do so. congress could have written a bill to streamline regulation and eliminate the gaps that firms exploit in the race to the regulatory body. this bill does the opposite by making our financial regulatory system even more complex. we will still have the fed, the fdic, the s.e.c., the cftc, the o.c.c. and the remainder of the regulatory alphabet soup. in fact, most of the existing regulators that so recently failed us have been given expanded power and scope. this bill also will add new letters to the already confused soup, such as cfbp and o.f.r.

in addition to increased regulatory complexity, there will be new special activist offices with each regulator for almost every imaginable special interest. madam president, congress could have set up reasonable new research capabilities in its new stability oversight council to complement financial research performed by the financial reserve and others. instead, the democrats decided to establish the office of financial research with an unconstrained director and a focus on broad information collecting and processing. i believe that this office will only -- not only fail to detect systemic threats and the asset price bubbles in the future, it will threaten civil liberties and the privacy of americans, waste billions of dollars of taxpayer resources, and lull markets into the false belief that the new government power will protect the financial system from risky trades.

congress could, madam president, could have been transparent in identifying the bill's fiscal effects and costs. instead, the majority wrote a bill that hijacks taxpayer resources but hides that fact from public view. and just as the administration refuses to acknowledge trillions of dollars of contingent taxpayer liabilities residing with fannie and freddie, this bill provides americans with a transparent view of the cost of the new multibillion-dollar consumer protection bureaucracy. according to the report on the bill offered by the majority, the consumer bureaucracy's budget is, and i quote -- "paid for by the federal reserve system." madam president, make no mistake, paid for by the he fed means paid for ultimately by the taxpayers. taxpayers will be on the hook for billions of dollars of unchecked, unencumbered and

unappropriated spending financed by the inflationary money printing authority of the federal reserve which will be hidden from the american people in the arcane federal budget. congress could, madam president, have also used this legislative opportunity to begin the process of reforming the failed mortgage giants fannie and freddie whose ever-growing bailouts have no upper limit. when it became clear this system was not the intention of the democrats, republicans sought to address the current and worsening conditions of the g.s.e.'s. we established -- we suggested establishing taxpayer protections such as portfolio caps on the mortgage giants. we recommended making the costs of fannie and freddie bailouts transparent to the public, that is to the taxpayer. we offered initial steps toward the never -- inevitable unwinding of these institutions. yet, madam president, at every

turn the democratic majority blocked efforts for at least establishing reform here. the democrats prefer approaching this bill in reforming the mortgage giants is a stay. let me repeat that notion. in order to address a bailout that has already cost american taxpayers roughly $150 million to date with unlimited future taxpayer exposure, the democrats proposed a study. it does not take a study to determine, madam president, th that $150 billion in unlimited loss exposure needs to be addressed immediately, now. congress could have focused, madam president, on securities market practices that were known to have contributed to systemic risk in our financial system. again, democrats overreached, i believe, once again. for example, the bill gives the securities and exchange commission, which has failed to carry out its existing mandates, a new systemic risk mandate to

oversee advisors to hedge funds and private equity funds. yet, no one contends that private funds were a cause of the recent crisis or that the demise of any private fund during the crisis resulted in a systemwide shock. congress could have acted, madam president, to curtail wall street's speculative excesses and enhance main street access to credit, but instead here in this bill large financial firms on wall street seem to have benefited. judging by the behavior of their stock prices while the legislation almost surely will increase uncertainties and costs for main street and america's job creators. madam president, the actual provisions in the bill will benefit big wall street institutions because they substantially increase the amount and costs of financial regulation. only large financial institutions will have the resources to navigate all of the new laws and regulations that

this legislation will generate. as a result, this bill, i believe, disproportionately will hurt small and medium-sized banks which had nothing to do with the crisis. and madam president, while the largest financial institutions get special regulation under this bill, the unintended result will be lower funding costs for these firms. that will benefit the big banks and hurt the small banks. therefore, this bill will result in higher fees, less choice, and fewer opportunities to responsibly obtain credit for blameless consumers. moreover, this bill raises taxes, which as we all know ultimately are borne by consumers. make no mistake, when wall street writes a check to pay higher taxes, the ones that end up paying those taxes are american consumers and workers. madam president, congress could have written legislation for consumer protection that respects both american consumers and the need for safety and

soundness in our financial system. instead, the dodd-frank bill was basically constructed by architects in the treasury department who have a certain condescension, i believe, for american consumers and their choices. the ultimate goal is to substitute the judgment of a benefit he have leapt bureaucrat for that of the american consumer, thereby controlling consumer behavior without regard for the safety and soundness of our banking system. the american people, i believe, madam president, are being told not to worry, however, because it's all being done for their own good. and while a consumer protection agency might sound like a good idea, the way it's constructed in this bill will slow economic growth and kill jobs, i believe, by imposing massive new regulatory burdens on businesses large and small. it will stifle innovation in

consumer financial products and it will reduce small business activity. it will lead to reduced consumer credit and higher costs for available credit. less credit at a higher price will dampen the very small business engine of job creation that our economy desperately needs right now. that is a price i'm not willing to pay. congress could, madam president, could have implemented reforms to improve derivatives market activities. instead, the bill's derivative title seems to have been inspired by the desire to be punitive or to provide short-term political support during an election or both. instead of imposing a rational and effective regulatory framework on the o.t.c. derivatives market, the bill runs roughshod over the main street businesses that use derivatives to protect themselves every day. madam president, the dodd-frank bill will increase companies' costs and limit their access to risk-mitigating derivatives without making our financial

system safer in the process. as a result, there will be fewer opportunities for businesses to grow, fewer jobs for the unemployed and higher prices for consumers. congress could, madam president, have written a bill to put an end to overreliance on credit rating agencies and underreliance on their own due diligence. instead, the dodd-frank bill sets up new regulations and liability provisions to give the impression that ratings are accurate. it then takes a contradictory direction and instructs regulators to replace references to ratings with other standards of creditworthiness. to make matters even more confusing, the bill also provides for the establishment of a government-sponsored body that will select a credit rating agency to perform an initial rating of security issue. i anticipate that the net effect of these conflicting provisions will be a redution in competition among credit rating agencies and potential

competitors either will be deterred by all of the new regulatory requirements or be destroyed by the liability provisions set up in the bill. the lack of competition led to poor quality ratings in the runup to the crisis. this bill perpetuates and in fact worsens that problem. madam president, the congress could have eased regulatory burdens on small and bead yum-sized businesses that are not integral to the recent crisis or any crisis. instead, main street corporations will be subject to a panoply of new corporate governance and executive compensation requirements. these new requirements will be costly and potentially harmful to shareholders because they empower special interests and encourage short-term thinking by managers. these features were included solely for the purpose of apiecing unions and other special interest lobbyists, and there is no demonstrated link between these changes and the enhanced stability of our financial system, our improved investor protection. we're getting toward the end

here. congress could have held hearings or analyzed a number of changes that this bill makes to the securities laws. instead, dramatic changes in the laws were written with little discussion and no analysis. madam president, throughout this process, there has been a lot of talk about the influence of wall street on this bill. to be sure, in the early stages of negotiations, wall street and the big banks were very engaged. i think the american people know, however, that in the end, the real influence peddlers on this bill were not wall street lobbyists but rather liberal activists and washington bureaucrats. wall street and the big banks just happen to be the incidental beneficiaries of their success. when chairman dodd and i began this process, we agreed that the bureaucratic status quo was unacceptable and that radical changes were necessary, and with that in mind, we agreed to consolidate all the financial regulators and constrain the fed to its monetary policy role. this was not a result the big banks wanted. the last thing a large

regulating financial institution wants is a new regulator. after all, they spent years and millions of dollars developing a relationship with their current regulators. a major regulatory organization would have seriously upset the status quo and cost them a great deal of money. neither chairman dodd nor i were persuaded, however, that the necessary change was going to come. unfortunately, that provision of reform again denies the bureaucrats and the liberal left begin to exercise their influence over the bill. when it became apparent that i was not willing to embrace the left's expansive consumer bureaucracy, it also became apparent that actual regulatory reform was not what the majority was seeking. all other serious reform was scuttled by the democrats in defense of the new consumer bureaucracy. that was the point at which chairman dodd and i began to seek a new negotiation -- negotiating partner, ultimately to no avail. as the fed and other regulators

began to regain their foothold with the democrats and the administration left consolidated, it supported around an expansive new bureaucracy. all the democrats will succeed in doing with the help of republicans is to give the failed bureaucracies more power, more money and a pat on the back with the hope that they will do a better job next time. this is not real reform, madam president. that is just more of the same. we had an opportunity to lead the world by creating a modern, efficient and competitive regulatory structure that will serve our economy for years to come. instead, i believe we squandered that opportunity by barely expanding an obsolete, inefficient and uncompetitive system. to make it even worse, they have added to the bureaucratic morass several more unrestrained and unaccountable agencies. it became apparent early on to me that the administration, the

democrat majority are not really interested in regulatory reform. all they were really trying to do is exploit the crisis in order to expand government further and award special interests. the dodd-frank bill will not enhance systemic stability. it will not prevent future bailouts of politically favored institutions and groups by the government. the bill serves to expand the beryl bureaucracy and government-controlled private sector. it will impose large costs on the taxpayers and businesses. for these reasons, i urge my colleagues to reject this bill. i note the absence of a quorum. the presiding officer: the clerk will call the roll. mr. dodd: madam president? the presiding officer: the senator from connecticut. mr. dodd: well, madam president, let me thank my colleague from alabama once again. i say this with respect, but i almost feel like i'm listening to the same speech i heard back in november when i offered the original proposal of this bill.

i'm wondering whether or not we have been in the same chamber, in the same city over the last several years. i'm not going to go in the time between now and 11:00 a.m. when we'll vote on the cloture motion. i won't go through the long list here, page after page after page of amendments that were adopted as part of this bill offered by my good friends on the minority side. 80 hearings held over two years. countless efforts to reach out and bring people in. you can make a lot of accusations i suppose about the bill, but this was a very inclusive process. half the amendments that were adopted on the floor of this chamber during the consideration of the four weeks were ones offered by the minority were accepted and bipartisan amendments. there was never an alternative offered. there was never a substitute offered. it was really a question of whether people wanted to amend this legislation we had before us. it is not a perfect bill. i will be the first to admit that. we don't know ultimately how well the ideas we have incorporated here will achieve the results we all desire. it will take the next economic

crisis, as certainly it will come, to determine whether or not the provisions of this bill will actually provide this generation or the next generation of regulators with the tools necessary to minimize the effects of that crisis when it happens, but we believe we have done the best we could under the circumstances to see to it we never have another bailout of a major financial institution at taxpayer expense. in fact, it was the shelby-dodd amendment adopted in this chamber as the second amendment to be considered that actually completed the process of seeing to it that there would be either bankruptcy or resolution of financial institutions that got themselves into so much trouble they put the entire system at risk. we have set up an oversight council to make sure we could observe what was occurring, not only here at home but around the globe, matters such as greece or spain that could put our economy at risk. so it isn't just one set of eyes, but having those responsible for seeing to it that our economy remains safe and sound, have the opportunity to provide the early warning that never occurred.

you didn't need a commission to find out what was going on. you had mortgages that were being sold in this country to people that couldn't afford them, marketing in a way that would guarantee failure, securitizing them so you could be paid and then skipping town in a sense. i don't need to have hours of hearings to find out what was the cause of it. it's how to put a system in place to minimize the kind of future risks our nation would face t. wasn't just to deal with those who created the problem but rather to look ahead, not in a punitive way but to try and set up an architecture and structure that would allow to us get to that point where we could be confident that we were addressing these issues. thirdly, of course, we tried to deal with the exotic instruments that had caused so much of the difficulty. the derivatives market was a $90 billion market and it mushroomed in less than a decade to $600 trillion, putting our nation at risk because of a lack of transparency and accountability to determine what was occurring in those markets.

we considered it a radical idea that we might want to have transparency and accountability i find rather remarkable considering what our country has been through. and also we provided a consumer protection bureau. what a radical idea that s. the idea that people who -- what a radical idea that is. the idea that people who buy mortgages, have a student loan, a credit card, a car loan, they might have some place in this city that watches out for them, for their jobs, their homes, their retirement accounts were lost. and so while this bureau is in place in this bill, the idea was at least to see to it that people when they have the problems they've been through or are going through, someone is watching out for them. we have a consumer product safety commission, when you buy a faulty product, what happens when someone abuses or takes advantage, as happened so many cases in financial areas that people have a chance to have a redress of their grievance or to

at least in the outset have an opportunity to address that before it becomes a broader problem. mr. president, again, we've debated this -- madam president, again, we've debated this and we spent four weeks on the floor of this chamber. amendments were offered. never once -- i get on one occasion did we have a super majority vote. there was only one tabling motion that i know of. i did everything i could to make it as inclusive a process as possible. and the fact that i understand people don't like the bill. it saddens me in a way that once again it's become sort of a mindless partisan argument rather than talking about what we need to be doing. this is not the end of all of it, obviously. oversight will be required, consultation in the coming weeks and months and years to make this work well. but, madam president, i can't imagine another process that has

been as inclusive. my colleagues will recall going on ten months, almost a year ago that i invited both democrats and republicans on the banking committee to assume responsibility for major sections of this bill which they did do, by the way, and made a significant contribution to the product. and so while i expect those who want to vote against the bill, that's their right to do so. find some arguments based on the merits rather than arguing about whether or not this was a process that was inclusive or allowed people the opportunity to be heard. now, again, we have the right to be heard. you don't have a right to necessarily have your ideas become the law of the land. that's what a body like this is for. and so this is a major undertaking, one that is historic in its proportions, that is an attempt to set in place the structure that would allow us to minimize the problems in the future. i can't legislate integrity, i can't legislate wisdom. i can't legislate passion or

competency. what we can do is create the tools and the architecture that allow good people to do a good job on behalf of the american public. and theatsd what a bill like this -- and that's what a bill like this is designed to do. i regret i cannot give you your job back, put retirement moments back in your account. what i can do is see to it that we never, ever again have to go through what this nation has been through. and that's what this effort has been about over the last several years, to try and create that structure, that architecture it will be incumbent now on the present administration and those that follow to nominate good people to head up these operations, to attract good public servants who will fill the jobs in these various regulatory bodies to see to it that they do the job we all want them to do. again, i can't legislate that. i can merely create the opportunity for that kind of protection to occur, to modernize our financial system, to lead the world, if we can, in

harmonizing rules so we don't have the kind of sovereign shopping that has gone on with regulatory bodies, where major financial institutions shop around the world as to the nation of least resistance or the regulator of least resistance to see to it we have the unanimity and at least the harmonization of rules that will allow us to have a more orderly system in our globe, because as we've all painfully learned, matters that can occur thousands of miles away can affect the economy in our own country. so for all of those reasons, madam president, i thank my colleagues for their efforts over the last two years. i thank the leadership for providing the opportunity and time for to us do this in this chamber. i thank my colleague in the house, barney frank, and his colleagues for the work they engaged in in order to produce a bill there. the two weeks we spent, some 70 hours of debating the conference report, again, where more amendments were adopted, again, offered by my colleagues, republicans and democrats, to

make this as good a bill as we could in all of this. so with that, madam president, again, i'll reserve some comments for later but as we approach this vote in the next few minutes, i urge my colleagues to invoke cloture, to allow us to then have an up-or-down vote on this bill, to do what we can to restore some trust and confidence and optimism in the american people that in the midst of the worst economic crisis of the lifetime of most americans, this institution, the united states s senate, rose to the occasion and crafted a bill and a proposal to address the financial service structure of our nation to give us once again that hope that we can see wealth created, jobs produced and an economy that will offer opportunities for the next generation of americans. i urge my colleagues to support that cloture motion, and i urge them to support the bill when quorum.

the presidin

the presiding officer: the clerk will call the

get students involved. find a place to hold the event and get the word out. encourage open communication between both parties. always remember that just because the person you are talking -- talking to may disagree with you and your political ideas -- thank you. [applause] >> i think we have a little time before our congress man arrives. we will take questions for any of our speakers. i hope they inspire you to do

something active on your campus. i think they made a great presentation. yes? [inaudible] >> i was wondering with the professor evaluation forms, how effective are those regarding tenure? >> at our university, our faculty takes the vibrations very seriously. even a professor who is tenured would receive the same repercussions from the faculty as a braniff that -- as a brand new professor. they determine how many courses that professor will teach the next year and whether they will

teach summer courses. that is it the great thing about oklahoma state university. >> did you get a piece of paper to put your name on it? you'll be in the drawing. the microphone is coming. keep that microphone on while we are doing the questions. >> i have an organization in the law school in the south. i think something unique about it is the race issue is harder to deal with because in the south, it is still very alive. when a lot of people here conservatives, they hear racism. i was wondering as conservative

leaders on campus if you ever dealt with those types of preconceived notions and how you did -- dealt with them? >> it is too bad when people think state rights is a code word for racism, because most people do not mean that at all. some think there is an interference with state rights and personal rights to have a mandate that we all as individuals by a particular product. would any of our students like to comment on the question? >> being from california, it says it is one of the most diverse student bodies.

in california, it is a diverse society. to be honest, my school is completely opposite. nobody talks about it. i do not know why. it could be simply because there is not a lot of different people there were people are scared to say anything. >> people interpret the referred -- the word states' rights in different ways. one libertarian group spoke in favor this massachusetts decision in favor of same-sex marriage as a matter of states' rights. i think it is bad history. they do not understand it. people have different views. that is one of the things you need to overcome and not succumb

to the epithet racism every time anybody makes an argument. questions? somebody let me know when the congressman arrives, please. >> i was interested in the video you showed thatcher can set -- conservative voices club. what was the content and have is your range the meetings around the videos? >> most of them were political videos. i was not involved in the video planning part. i was meeting with the person in charge -- we have a person in

charge of buildings in coordinating different events. we set up a time where it was available to be used. try to to get there ever made in and talk to them if they coordinate that. >> questions? >> when i go to college campuses, there are usually big audiences. many come out to ask provocative questions. it makes it a fun evening. i enjoy it. i hope they enjoy it as well.

>> i go to a small christian school that remains non- political. it is hard to get people enter active in government, because they do not want to have different parties represent the. can you get people involved without getting political? >> you could involve them to volunteer in some candidates race. thousands of people will be on the ballots, not only from congress but the state legislature. to volunteer for some candidate you like would be a great way to deal with politics. that is my suggestion. any others? >> get involved in pro-life activism.

that usually goes past partisan politics. most people believe killing innocent human beings is wrong. i like activism. it is a great thing to do. it is not in a political issue. i encourage you in your school to get involved in it. >> the congressman is here. >> where is he? hiding behind the door. i cannot see him. he really is here. i have to take your word for it. >> guess. >> what is the best way to publicize for it? >> who wants to answer that?

>> i can answer. you will face a couple of challenges when people do not believe in the event you are holding. word of mouth, we used fliers in the cafe of the school. you can send out emails. the student body -- the student governing body may not give you the database if they are not supporting your event. >> what about putting up signs? >> it can work. we were not allowed to put choc on the sidewalks at my school. california is very green so we could not pass out a bunch of

stuff. >> and people can take it down. >> that is true. most schools have a community or association board. if you put it under your name and somebody rips it down, you report it and there is a process the school will go to to try to find del -- find out who is ripping off your stuff. >> let's give a round of applause to our panelists. [applause] we will have our first congressional speaker of the morning, the representative from wisconsin. you have probably seen him on television. he seems to be making the best statements on television of what went wrong with obama care. he is a fifth generation wisconsin native. he is in his sixth term as a member of congress.

he has a degree in economics and political science from miami university in ohio, not florida. he is quite a policy which is on a subject that was the biggest this year and a major goal of the obama administration. please welcome representative paul ryan. [applause] >> good morning. anybody from wisconsin? welcome to dc. you're probably doing summer internships. what i'd like to do is give you a glimpse of the fight of the battle's going on. i came here as a young,

idealistic person as a college intern. in the policy world -- what do i mean when i say fight? right now, this battle of ideas which got started in the 20th- century is coming to a crescendo. it is a battle of an ideal. what we have happening is the reoccurring seen throughout the policies moving through congress is a collision between two political philosophies or ideologies. on the left, liberalism. that name -- we call people moderate -- modern liberals.

there is a doctrine that has been established for quite a while. progressivism is being practiced by our government. on the other hand, is what i call the american ideal. that is the doctrine or the ideas or principles that built this country that our founders used to establish this country. there is something really special and very unique about this country. i would say something exceptional about america. it is not exceptional because we love our country a lot, but because of the american idea. it is basically this. our rights come before the government. it comes from god in nature, not government. that is the heart and soul of the american idea.

it is the job of the government to protect our people. we built this country on principles of liberty, freedom, free enterprise, and others. the role of the government is to protect us so we have equal opportunities so we can go out and make the most of our lives. it is the most free doctrine ever accomplished. it is the freest country we have ever had. it has brought the most economic prosperity to the most people ever. the question that is coming before us and before your generation right now is is this idea behind the times? that is where we come to the discussion about progresses of -- progressivism. those are timeless principles.

we need to move on to new things and devolve with history. we need to have a living and breathing constitution set on ideas that can change. what that says is our rights come from government. it is the job of the government to give us our rights and manufacture our rights. we need to redistribute and regulate in handout rights were taken away at the time comes. you have to get a large government and have a lot of smart bureaucrats to help organize and run the affairs of society. but we have learned is big government do not produce big opportunity. at the end of the day, what we are looking at is whether we are talking about health care legislation or energy legislation or financial regulatory overhaul -- the tax

code we are talking about, all of these issues come from the same place. we wanted to make the most out of your lives. equalizing the outcome of our lives. equalizing the results of our lives. that is the key. equal opportunity or equality of outcome. what we end up doing is we take the safety net in our society, which most people think we should have a safety net. we reversed that into a hammock which lows people into lives of dependency on the government for their livelihood. that drains them of the will to make the most of their lives. that is a step backwards. if you want to see the practical

implications of these ideas and policies, turn on the tv and look at athens. it does not work. as noble as an idea it may be, they do not work. you run out of other people's money to spend eventually. you cannot take away all of the fruits of a person's labor and give it to another person forever. that is where we are. you have seen -- those of us that corruption the '80s and '90s, we watched reagan take that idea on. we saw our country get itself back. your generation will finish this fight. your generation is the ipod generation. that is what i call it. we lived in an instant

technology generation where we are so used to having all these choices in our lives and technology in choices to customize to our own desires. we have access to all of these opportunities. how is it that our generation -- is in this society, we customize our liberties and freedoms -- how can we have a government that the process of these choices and freedomand things that are so into meant to our lives such as health care, how we retire, how much of the fruits of our labors we get to keep. what i see happening is a collision course of these ideas.

a government is trying to move us fought -- so far to the left and bring in a society that will not work. what is behind that our numbers. the problem with this approach and doctrine is that they created some open-ended entitlements is that behind this is a massive fiscal explosion on the horizon and a massive debt. i am 40 years old. i have three kids. when they are my age, this government will be twice the size of it is today. for the last 40 years, we have taken 18.3 since out of every dollar made in america to pay for the united states.

defense, social security, medicare, health care, education. 40 cents must come out of every dollar just to pay for the government at that time in 40 years. the debt of our economy is growing up fast. the budget doubles the debt in five years and troubles at in 10. what i am trying to say is we have a doctrine this as have the government do more and take more from the people then had its micromanage affairs in our lives. what we have as are going bankrupt. every single objective and

authority in washington is telling you that what you will not have it as good as we had it. we have never had that in this country. i've lost my dad when i was little. he always told me a couple of things. you are a the part of the problem or the solution. i decided to be part of the solution. every generation takes on its own challenges said the next generation is better off. we will sever that legacy if we do not turn this around. you'll have a lower standard of living when you get out of college. we need to turn this around so we can get this american engine of prosperity back on and

realize our true potential and freedoms. we need to protect your equal and natural rights, equality, and make sure you have the resources to reach your potential. we want you to make the most of your life. we do not want you to mr. potential. that is where we are. that is the difference between the ideology and the progressivism. what is happening is in this generation right now, that decision will be made over the next few years. it is not because of one politician or election, but because of all of these numbers crashing upon us. it is important that we play our role in this country to get it back and make sure we secure

these freedoms and opportunities again so you can have the opportunity that your parents want you to have and they believe in this country that you should have. that is what it is all about. most americans want this type of society. most want their children to be more prosperous. many believe in leaving your kids better off. thanks for coming out. i hope you are learning something. i am happy to answer your questions. thank you. [applause] smart't you think these people in governments are able -- are better able to spend our money than we are? >> a and hissing is good cliches.

it does well work. bridgett it does not work. >> i am doing some research. what kind of welfare system would you advocate? and have this building and maintaining healthy marriages play into it? >> i have a road map for america's future. it is a restructuring of all of our entitlement programs. we reward work and family and put the incentive structure in the right way. you need to do that kind of reform to make them sustainable and to make it where individuals can have more control over their lives. that helps produce prosperity. if you estimate what the biggest

problem to america is, i would tell you relativism. the culture matters to you, where you go to church, and your family races here. they married, had kids, teach them right from wrong. i cannot preach to you what bill should be passed. we need to do no harm to our culture. if we move further down to a place where americans are dependent upon the state than themselves, the tax foundation says 20% of americans get their income from the government. we are moving to a place for

more people are becoming dependent on the federal gornment. that the roads the culture. look at europe where relativism is rampant far more than here in america. that accelerates the pace in the culture and diminishing the value of human beings. that is where people in government have a role to play. 70% of americans want a free market democracy that has made as great. the rest want a welfare state. that would make it harder for families to stay together.

free-market democracy is the best thing we can do to support culture and embrace the idea that there are fundamental unchanging truth in life in government that we should be embracing. that is how i would take it. >> what have you heard about numbers in terms of obama care. i do not think most people know what that is going to cost. do you have any idea and can you break it down? >> what is obama care. the cost? we have the statistics -- going to cost? we have statistics.

many have said it will produce a deficit. your health care expenses will exceed 9.3% of your income and obama care will subsidize the rest. the biggest entitlement ever created. it is new insurance directed by the government in an exchange. both silver and bronze, different insurances. it will be far more expensive than what most people have today because of the rules and regulations and mandates that people left. when you look at states that have employed these things such as new jersey, kentucky, genetically higher health

insurance. many say they will see interest rates increase next year going up 20% to 40% next year. it depends on who you are. it is tough to answer the question without knowing who to talk about. everybody will have higher health-care costs. those with pre-existing conditions will get the most subsidies. i think there is a better way to deal with that than having the government take over the health- care system. >> where did they get to the idea that if the government doesn't, it will cost less?

>> this government. they make these convoluted argument. [unintelligible] >> i am all for that petition. i need to sign it. petitions in the minority do not really work. we do not set to match a 80 people against this health care bill because we have a progressive liberal democratic

congress. we are for repealing this. this was the biggest mistake congress has made in decades. this law will have liabilities that rival the size of medicare. it is going bankrupt in seven years. it is the primary cause of the bankruptcy of this country. we need to reform it. these benefits will not be there for you when you retire. this will go bankrupt before you get close to retirement. we have to make these changes now. that way you do not have to change things for people when they get into retirement. we will sign it, but we will not get the most of it. we will move legislation to

repeal this bill. you have to ask someone to sign that the legislation to repeal it. that is tough when the president has spent the last couple of years trying to get it into law. there is a lot we can do to make the case between now and 2013. the problem with this funding is we have to pass an appropriations bill and the president has to sign it. you cannot do it unilaterally in the house or senate. we have our work cut out for us. that is what they doubled down on their ideology to push it through. that is why i would argue this government and the administration is dedicated to

being progressive. they're very ideological. i wish we had that when we were in the majority. the problem is their convictions are the antithesis of the american ideal. if we do not fix this pretty fast, it may be too late. >> less say thanks for him coming. [applause] he is an expert on obama care. we appreciate that. it is very costly and will be costly to you in the future and the present. i am very happy to present to you my own congressman from missouri. he is a good example that if you

select the right guy, you do not have to cough up and tell them how to vote, because he is always voting rights. -- right. he has his degree in management engineering. he was an engineer for ibm. he served on a small business committee. he is one of 16 members in the house who voted against the bill -- bailout. please welcome congressman taught a can of missouri. -- todd achan of missouri. he is not here? someone is giving me the wrong signs.

do you have any other questions at this time? yes. give him the microphone. >> the congressman is talking about dependency on government. i wondered if he regretted his vote for tarp. >> i think most of them that photophore it do regret it. it has become a campaign issue. it was the beginning of the bailout. no question about that. it was time to stand and fight.

>> a representative was talking about the number crunching. i was considering what could be the effect of the numbers on ever foreign relations and military and how will it affect us internationally when the crunch and starts happening? >> i am not exactly sure what you mean by that. do you mean reducing expenditures across the board? >> windows debt become full- fledged and we are putting that

40 cents of every dollar into liabilities, how will it effect our ability to make war in deal with other countries? >> it would have a terrible effect on everything we are doing. the chinese are owning a lot of our debt now. we do not know. what if they decide the dollar is too risky and want to invest in a lot of our industries and real estate in this country and they start owning a big part of the united states? that is one of the things that can happen. cannot spend yourself into prosperity. if you are having a hard time paying your bills, you do not get out of it by spending more money. >> this is a comment about obama

care. a lot of discussion about the economic impact of it. that is important. they also need to consider the quality of care that will change. for those that have no health care, they will get better care. for those with good health care, that care would be regulated. there will be a downgrade in service. you will mall -- a more likely be seen by a nurse then a doctor. it will be spelled of very specifically as to what can be given. those that have good care, -- they have to look at this part of the debate. >> i think you are right. if they are going to cut the cost, they will decide that granma is not worth spending.

hurry up and die. if there is a disease that some might consider terminal, they can go right ahead and send it in the people that will remove the body part and give it to a younger person that can make better use of it. there are all kinds of wild ideas in the obama ministration like this. i think sarah palin was on track when she talked about the death panel. these are things to be concerned about. i see our next speaker has arrived. i gave you a beautiful introduction already when i thought you were here. wonderfulld you're a

conservative congressman. please welcome him. [applause] >> good to see you. how long do i have? >> 20 minutes. >> ok. that is fine. what i thought i might do is -- will try to get up 50,000 feet and ask you questions that are related. this is one i asked to people that have just been through the college experience. is it possible for the government to feel? the answer is yes. everyone agrees it is yes? can the government steelal?

how would they do this? when would you say it is stealing and when it is not? are you against any form of taxation? when it does it become stealing, when they get 90% of your money? [inaudible] >> when they go against their boundaries? >> what boundaries? when is it stealing? when they take money and give it to someone else? not for you.

[inaudible] you are saying the use of the money determines whether it is stealing or not. it is not a percentage? you have bright people here. yes. [inaudible] [unintelligible] >> 60% of the public says it is ok to take your money to do abortions, that is okay? it is not a cave. is that what the majority wants or is there is another principle?

[unintelligible] what is it that we that our elected -- what do we argue about? what is the main question we argue about. we always argue about in the government to do this or not? i was in a meeting with a group of people. there were economic conservatives. many were for abortion. they do not like it when the government takes their money. they are trying to find people

said that they do not get ripped off by the government as much. they talked about socialism being a bad thing. they said it does not work. it is bad because it does not work. what has happened to countries that have tried it? they talk about one country we observe and the philosophy that the government will provide you with a place to live, food to eat, a good education, a job, health care. we said that west theuss was thr and it failed. that is now what the u.s. government is doing. why do we think it will be different than when the ussr did it?

socialism is bad because you are taking all of my money away from me. it does not work. that is your main argument. they said you are missing the other half of a very good argument you should be making. it is also wrong. it is stealing. it is morally reprehensible. there are a couple kinds of abuse of government it is liberals and conservatives. let us get the terminology as to what they are. i wanted of about socialism. people do not really understand this as precisely as we need to. those that come from a christian perspective, you need to know how to argue this and make it clear. let us go forward.

what do conservatives and liberals believe? a conservative believes in limited government. is that right? the liberals believe in what? good government limited in what way probably none from what we can see. the conservatives believe in the principle of what in terms of defining what the government should do? it is based on another principle. what is the level version of what the government does in terms of the economic perspective? what is the parallel of

socialism and in what way is the government limited from a conservative stand point. most republicans say less socialistic than the other guys. that is not really the right answer. socialism is still bad. what is the difference? i wanted to take you to do -- sometimes there is a power in defining a few words. this is something that governor bradford understood. the churches do not teach basic stuff that comes out of the bible that is practical. many churches are irrelevant in what they are teaching. i ask people if they have had a good summit as to why socialism is morally wrong. how many have heard a sermon on

that subject? the rest my case. where did you hear a sermon on that? texas. that is a good sign, the state that created 7% of the jobs last year. it was presbyterian. who was preaching? [unintelligible] >> this is a pressing issue. here is the deal. here is one of your assignment. phyllis is one of the greatest grass roots political conservative of fighters the country has seen. kobach to your church and ask your pastor why he has not preached, the big topics of the

day, the moral question of socialism? give him a place to start by slipping him some notes. i will give you a syringe in a quick words. i want to define three biblical words for you. there are words you need to understand. the first is what the job of government should be. it is justice. what does it mean to you? but what do you understand it to be? the difference between white and wrong -- right and wrong. that is good. [unintelligible]

what does justice look like? have you seen it before? and image in front of your mind. they knew we were dominant in needed some help. what is the ballots? -- balance? we are talking about the finding things, the law picul someone's actions. i want to call your attention to what you notice about the justice. lies. eyes. she has a blindfold on. equal before the law. is that not a conservative principle? we are a government of law and

not men. lady justice has a blindfold on. she just has the scales up there. what does the law say? that is government by law. in the bible, when you look at justice, the founders of found justice is no special deals. do not give the rich man a special deal for the poor man is a special deal. when you decide you will take from the rich and give to the poor, it is not justice anymore, because you are not equal before the law. but paul through the bible, there are many references to justice. the government should be just.

the biblical war rout is true. -- word is true. charity, what is the nature of charity in the bible? [unintelligible] >> given what you have to someone else. the government is taking away your opportunity for this. >> when i take some of my money in taxes and it goes to somebody to feed them, if i do not pay my taxes, what happens to them? they stay in a free hotel? charity is not like that. what is the key element of charity? who said volunteer?

charity is always voluntary. the lord loves a cheerful giver. when a friend is having a hard time, hugh help amount -- you help them out voluntarily. we call the charity. threat at the bible you are commanded to be charitable -- throughout the bible you are commanded to be charitable, especially to your own family. now take those two, charity and justice and make a hybrid. the government will take from one person and give to another. people were not surprised about what the president was going to do.

why be surprised? he said but he was going to do. what is the nature of this hybrid socialism? they call it social justice. is it justice? how do we know? are people being treated equally before the law? social justice is not just. it is not a will by law, but somebody making a special deal. is it charity? you say it is not. why is that? what is the main element of charity? think in terms of these definitions. our state taxes voluntary? it is not.

it is not charity because it is of a voluntary. it is not justice, because you are not equal before the law. we do not call that justice for charity, but socialism or social justice. what does the bible say about that? are there any examples in the bible about socialism that are given positive things as what you should do? there is an example. kreisky of all you have to the poor -- >> give all you have to the poor. >> there is a story about a man and woman. they brought money from the field to the apostle.

they kept a little bit for themself and brought the rest to the apostle. they did not give it all. they lied and they get buried. the apostle recognizes, did you own the field? he said yes. did you sell it? yes. and you brought the money to caesar. there is a recognition that it is private property. you have a right to sell what you own. he brought the money to the church not caesar. that is not socialism because it is voluntary and recognize as private property and private ownership. the church in jerusalem became

in economic trouble. it is not an example of socialism. people were voluntarily giving to the church. give it another try. giving one example of socialism in the bible where it says you should do it. [unintelligible] doesn't say the government should redistribute wealth? -- does it say the government should redistribute wealth of? alth?ll [unintelligible] >> it is ok for the government to tax when it is used for

justice, defending the nation against foreigners. that is justice. it is also the police system when people break lost and get put in the free hotel. that is different than redistributing wealth. it is ok for the government to collect taxes, give to caesar what is caesar's. there is a purpose for taxes. it is called limited government. what you have to understand is, and look through your bible. there are not in the examples in scripture that talk about redistributing wealth by the federal government. i would not risk $100 if i did not do this for a long time. the ongoing example -- it is stealing. stealing.