have heard and have full committee hearings, the report in time to analyze it, because they throughout this number, 70%, like 70% thought it was ok. thune uc the fighters themselves. -- then you see the fighters themselves. they have real concerns. you're getting into the units actually fighting the war. i think the process of jamming this through -- in all of those discussions, we have not had the opportunity to have a front- lined up war fighters to testify or even the commanders to testify. how do i know who to call?

>> are you concerned about the vehicle strategy going forward next year and at the ongoing joint light-tactical vehicle program? >> i was in a meeting a few months ago general casey said we were starting over from scratch. other than that, i do not know exactly where we are on that program right now. we will hold its hearings. we would get all the information. what i would like to see us do in the way up procurement is improve the way we fight this. i was visiting a company not long ago that makes radios. we came up with a program in 1995 -- a request for proposal -- to build a certain type of radio. it would be a certain size and

have certain capabilities. that was 15 years ago. nobody has been able to build that radio. other people have been building radios that do not quite make those qualifications. they are in the field and they are working. sometimes the way we buy things -- we start out saying we are going to build this kind of ship, truck, whatever. in the process we keep adding on and the cost goes up. let me explain to you the process. you get an architect, huge all the plants, and then you come up with a price. then you go build at home. the contractor is probably hoping that at some point you are going to say, "that is not the exact door i wanted."

you make a change order and the cost goes out the window. we developed these new types of dishwashers. would you rather not have this? that is what happens on an airplane that starts out at a certain price. during the process, you come up with more requirements and we make new computers. it drives the cost of. we spend more money looking for the ultimate weapon. when we finally get the ultimate there areuilt, technologies before we start the test flights. we need some understanding where we do not worry about everything having to be the ultimate.

maybe 95% would be good. maybe that radio was designed in 1995 that could not be built yet. maybe we could find some ways to save and still meet all the requirements that the military would have to carry out their mission. >> this may be more of a personal question, but where do you stand on letting openly gay people serve in the military? >> i have -- i have not made that commitment. i have tried not to inject my personal feelings into it because i am so upset with the process we have gone through. we have not gotten to that point. i think it is more important what the people in the field are going to have to live with on a day-to-day basis.

it will not affect my life one way or another. the combatants that have to deal with it -- i think it is more important what they're feeling is banned mind. i am sure if i sat down -- it is more important what they are feeling. i have tried to keep my personal feelings out of this. >> thank you for doing this. do you worry that general amos may have gone a step too far today? if he was very outspoken during the senate hearings, as you know. he continues to speak out against the repeal. he is the man in that will have to lead and implement the change if a change does occur. >> i applaud it general amos. he has the concerns of every marine on his mind.

he represents -- how many marines? >> to under 40,000 -- 240,000. >> the easiest thing for him to do in this town in this climate is to say, "we are marines. we will do it." i applaud him for his courage to speak up. i wish your feel good about my commander if i were a marine on the front. he is looking out for them. i think that is his constitutional responsibility, but it is a hard thing to do. yes? >> the senate has held hearings and the commanders have weighed in on it. it has now been two weeks. how much more time, how much more information do you need it?

also, assuming you vote against the bill today, is it then a vote against process and not revealing the policy? >> it definitely would be a vote against the process. it would also be a vote against repealing the act right now because we have not had hearings. for us to have to read the senate testimony without a chance to ask questions ourselves -- i really would like to hear from the battlefield commanders. not even so much general petraeus, i would like to hear from battalion commanders. i would like to hear from the company commanders on the front lines right now in afghanistan and iraq and find out what their feelings are.

what is the problem with waiting a couple more months and letting us do that? that is my feeling. the this is such a big issue -- this is such a big issue. it has such a far reaching effect, i think to do it as a last dying grass for a congress that has been voted out is an affront to the military. it is an affront to the country that just voted on november 2 for a different way of doing things. >> secretary gates has proposed a reduction in the use of federal contractors. if you think that is a good idea? the you think is realistic to cut in% from that? >> we tend to go through cycles.

we were contacting a big deal a while back. i have some people in my district that had jobs working for the military for a long time. they just lost their contract. they felt they should have a chance to bid on who was going to get the job. i think we need to look at all areas that are potential for saving money. if that is his goal, we should look at the whole from beginning to end -- the whole stream. when you contract, you do not have the cost of retirement and health care and all those things. you just have one contract price

you paid that year and you move on. we are going to do heavy oversight with the idea of finding ways to bring savings. we want to keep those savings in the defense department. yes? >> if defense authorization does come up for a vote, which you oppose it just on the ground that there is a process? you have opted out of negotiations. would you one other republicans to be the same -- to do the same? >> i do not take what we do here lightly. while i will complain about the process, if what they bring in

the wake of the bill is something that will benefit the military, even if it does not do all the the of what we would like to have done, i do not see myself building against that -- i do not see myself of ventoting against that. i will continue to complain about the process. each of us has been elected. 435 members have all been elected. when you shut a bunch of them out that the process, i think you are short circuit think democracy. at the end of the day if there is a bill that works for the military, i think i would support it, yes. >> can you tell us what programs should be cancelled?

>> if you take the f-35 away, what airplane will the marines have? they put all their eggs in that basket. i would not be supportive of cutting that. i think they have shown that they are a good fighting force and could use those airplanes to a good advantage. why do you not ask me about the second engine? [laughter] i am supportive of the second engine. it is being said that we should not have that because it costs money. front, there is a little more money. in the long range we take the that will save money. we are talking about turning

over a $100 billion program to one company and having a whole fleet of airplanes with one engine. if something goes wrong with that engine, you shut down the whole fleet. i think for reasons of competitiveness and safety -- if you have people competing, you probably end up with better engines. i think we should have second engines. i am not real worry about that. i do not think the democrats in the house have gotten the message that there was an election, but i think the president has which is reaching out on this tax proposal. i think he will see that we have come out in the last congress and this congress pretty strongly in support of the second engine. that is a pretty small part of

the overall defense bill. >> a report is going to come out, i guess tomorrow, what you feel eat like you have to see tomorrow to be convinced that obama is on track in afghanistan? >> he has gotten the report? >> he is going to announce tomorrow the results of the strategy review. it is whether the surge is working or not. a comes out tomorrow. -- it comes out tomorrow. >> again, i want to have general petraeus, and report to us on what is happening over there. i think we will find that he has

made some pretty good progress. i was hopeful that we would be given a chance to see the report. if it is just coming to the president, then we just hear what the president has to say about it. i have been supportive of the president. i think i was supportive of 30,000 additional troops he sent to afghanistan. i would have preferred to see more. the the general mcchrystal had asked for more. -- general mcchrystal had asked for more. i was supportive of the president and i continued to be supportive. i would just have to wait and see what he says about the report before i have any comment to make on it. >> congressman, there is another program you did not get to in

your review. the f-35 overall, the senate would cut seven of the aircraft that the administration requested. where do you come down on that? more generally, are there any programs you think are vulnerable to cuts that should be considered for cuts? >> i am not supportive of the senate's effort to cut the f-35. i think all programs on the front end and have some setbacks. someone was let go. changes were made. the improvements were made. i think getting it at this point is shortsighted. we need to make improvements,

but i do not think right now is when we should be making cuts of the f-35. we will go to the hearing process is. we will get started shortly. we will look at what the subcommittee chairmen find help in their hearings. i know we will be putting an emphasis on getting rid of programs or methods that we think are causing us to waste money. the taxpayer's money is sacrosanct. we should fight to make sure every dollar is well spent. we will look at each and every program with that regard. we will balance it al. >> is there anything in the presidential deficit reduction kcommission that has led you to

reconsider your previous position in favor of boosting defense spending? >> i am short they have some good recommendations, but the -- i am sure they have some good recommendations. it is a nonstarter with me, especially when we are fighting two wars. i subscribe to the secretary's plan of saving money if we can, but keeping it in the defense community. >> there were people on the other side of the aisle that he worked with for many years who were not that far away from you guys. now you are dealing with a whole new crop of people. they are probably more left- linked them before. can you give me your feelings about moving forward on the committee? whether it be the same comity

you have had in the past going forward? would you expect a rough points to be? >> i think our committee has a culture of working in a bipartisan way. if you take how many people they lost off the top row of the committee, it is over 100 years of experience. they were people i worked with for a long time and people who have the best interests of the defense of our country for fraud in their minds. a lot of good people. -- our country for frefront in their minds. a lot of good people. they will not have to take me off. most of them are already gone. my plan is that we continue a

strong, bipartisan tradition. there are things that we fight over, but we have historically done it in a very adult manner. we keep it on the issues. we do not get personal. i have every intention to make sure that continues. i have a lot of good friends on the other side. >> do you think there may be a clash point? the liberals and the democratic party are not happy about afghanistan. are there other issues where you may have more difficulty than you may have in the past? >> i believe we will debate issues fully. at the end of the day we will have votes. hopefully we will, if there is something where we are philosophically different, then we should have the votes to get our points across. again, i think each of the members of the house of representatives is elected and

represents their constituents and they should have their opinions and views heard. they should have a chance to express them. that will fully be done. if there is something we disagree on philosophically, then at the end of the date we have the votes. we vote and move on. >> tri-care premiums -- will next year be it the year we will be more open to the idea of raising those premiums? >> that is something we will have to look at as we go to the process of working on the budget. there will be lots of pressures. we will have to find savings wherever we can. what we need to remember is the people in the military have -- they have paid a pretty heavy price. we have been fighting for 10

years. we have had multiple deployments. they have sacrificed for their families. you are right. it is something we definitely have to look at. that premium has remained stable for a long time. the cuts have gone up. it is taking money from other parts of the military budget. it is something we will definitely have to look at. there was a lady back there. >> on pakistan specifically, what is your feeling about the safe havens in pakistan? what do you see as a possible path the u.s. can take to increase the cooperation?

>> this is one of the reasons why i want to have general petraeus come and talk to us. we read articles in the news, on the media, and you get different kinds of reports. i would like to hear it right from general petraeus. pakistan has been working with us, from what i see. i think we have been very effective in making inroads against the taliban along the border. are they helping us as much as they can? probably not, but they have their own internal politics that they have to deal with, too. i think the military is pretty supportive. i will be going over to afghanistan, probably pakistan. we have not set a time, but it

will be in the next few months. i would try to get a view of what is really going on. i am looking forward to hearing general petraeus. yes, sir? >> in terms of preacher but going for the good, -- in terms of a procurement going for the good, the last time they tried this -- had the plan on emphasizing the point that they have to get something in the air rather than looking for the latest or greatest? >> i do not what it being another tanker. i come from southern california, the district with thhere the b2s

built. it was supposed to be 132 planes. it was cut to 20. when that was completed, when it was cut to 20, they also made northrup cut up the tools so they could not make more. if we had finished that, we would be in a much better position and they would have been much cheaper than what we are looking at now going forward. there was $40 billion on the b2. if the spread that over 132 airplanes, you get one costs. they said the plane cost this much. if the bill all one of the 32, it would be a lot less. we had a report come out saying

we need another 100 long-range bombers. that is close to what we would have had if we would have built that. sometimes by not building something in the terms of saving money, you end up sit -- you end up spending more money in the long run. i just found out when i took this job that we have the next generation a bomber in planning. that was cut from the same budget where they cut the missile defense. now we are trying to look at something else. i think the qdr when we got it was supposed to look out 15 to 20 years. it basically went out five and focused on afghanistan and iraq. i had not asked the secretary about the specifically, but he was concerned when he got the

job all the thinking was long- range and they really were not focused. even though we were fighting in iraq and afghanistan, they were not focusing on the tension there. it does kind of flipped now. we need to get back to balance. i want to see the committee get back on funding. it is time we accepted and understand and put our efforts into solving the i.e.d. problem. at the same time, we need to be looking at itlong-range at threats, iran, north korea, china -- they are pushing us back. russia -- are former adversary. we need to be aware of all of

those things. probably not enough. we are still flying b-52's. we need some balance looking at the long-range with the wars we are involved in now. >> which you possibly take some out of the budget and put them somewhere else, possibly some other budget category? do you think that is feasible and we'll talk about that on the committee? >> do i think it is feasible? i would have to listen to the reasoning behind that. has it been talked about in full committee? no. i have to get some more information on that. >> is general petraeus coming to testify? i just really quick?

>> has the administration promised you that he will? >> we are just trying to work out a schedule. >> was this okay? you want a better answers? -- you want better answers? [laughter] >> republican congressman jim jordan of ohio and anthony wiener of new york. they will look at the year marks in the spending bill with paul singer. washington journal is live at

7:00 a.m. eastern on c-span. booktv, the life of a spy executed following a failed plot to execute adolf hitler. on hisrds, nhugh shelton new book. he will be honored -- he will be interviewed by william cohen. sign up to get our schedules e- mail directly to your in box with our booktv alert. >> we continue with interviews from the oral history project. this weekend, the camp david conversations and his reaction to the so-called smoking gun debate. carl anthony talked-about the first lady, grace coolidge.

richard francis on and why the judges at the salem witch trials recanted the guilty verdicts. american history tv, telling america's story every weekend. you can have our schedules in mailed to you. >> look back at the public life of richard holbrooke on line at the c-span video library. nominated for the nobel peace prize seven times, he served under four presidents and was on a main architect of the dayton peace agreement ending the war in bosnia. the c-span video library. it is washington your way. >> a hearing was held today focusing on mortgage foreclosure. we will hear from officials and advocates for homeowners facing foreclosure. this is two hours 20 minutes.

>> they are failing to return their calls in a timely manner. their lives are disrupted and turned upside down by the foreclosure process and by the procedures. the same bankers who came to congress with hat in hand demanding a bailout, the same bakers who could not have survived without welfare paid for by the american taxpayer, those same bankers have no

problem filling the american taxpayer out of their homes without due process, without accurate documents, without regard for the human beings whose lives are being effected. -- are being affected. i submit that our constituents, your bar worse, are living human beings. -- your borrowers, are living human beings. they agonize over what will happen to their homes. they need to be treated fairly during the foreclosure process. one of the major causes of this foreclosure crisis was greed. banks and lending institutions fueled by greed, put hard- working americans into mortgages they knew they could not afford. last week's foreclosure hearing,

we had a chance to hear from a judge who has presided over 1000 mortgage cases. he testified to the many problems pcs time and time again in his court room, including situations where lawyers representing mortgages failed to know who they represented were they lacked the underlying evidence bearing and solitude proceed foreclosures or they failed to establish the legal chain of titles. they submitted to the court, in some cases, false advocate -- false affidavits. recent reports indicate that lenders have executed foreclosures recklessly and without adequate review of

relevant documents. the practice of robo-signing where foreclosure documents were signed with little or no knowledge of the documents, led to the illegitimacy of hundreds of thousands of foreclosures. there was the collection of improper fees, poor underwriting and improper servicing, not to mention the pervasive predatory lending that set the stage for the crisis in the first place. these are serious issues that do not appear to be isolated incidents, but a systemic problem within the foreclosure industry. since 2007, americans have lost nearly 6 million homes. this issue is of the utmost importance to me because my home

state of georgia ranks seventh in the nation for foreclosures. predatory lending issues have always been crucial issues to me. as a commissioner, i authored and past georgia's first or nets which state legislators later used as a guide for passing a state-wide ala. as foreclosures continued to surge, we must ask if mortgage servicers are doing all they can to provide sustainable alternatives to foreclosure. how can we ensure that servicers had the training, support, and judgment to properly service loans and enter at with customers to avoid foreclosure. this is a time of economic and financial instability and at the very least families should be able to go to sleep at night knowing they have a place to lay their head.

unfortunately many americans live under the shadow of and that foreclosure and struggle against servicers who are often incompetent and disinterested. i thank the chairman for all of his hard work. i thank him for taking the time to hold this hearing. the chairman had to depart for another very important meeting. he asked me to chair this full- committee today. i look forward to hearing from the witnesses and i yield back the balance of my time. i will now recognize the ranking member of the judiciary committee and soon-to-be chairman, my friend, congressman lamar smith from texas. >> thank you, mr. chairman.

i was interested in your opening statement. i did not realize what you had done in the georgia legislature to address this problem. that is much appreciated. i am glad to hear this has been a result of your efforts. let me thank the witnesses from the second panel for their patients and for coming back to testify this week. i regret we were unable to hear from you last time. we appreciate your effort to be here today. errors in the foreclosure process or excusable and undermine the law and due process rights of borrowers. however, there does not appear to be any evidence or frolic to mislead the courts -- any evidence or fraud to mislead the courts. while the documentation issues are troubling, the larger problem is how to end the

foreclosure crisis. we seem to be caught in an economic paradox between job creation and recovery of the housing sector. the american enterprise institute has observed that the housing industry has always been the economic sector that led the united states out of recession. at the same time, it appears that jobs are what we need for the housing sector to recover. analysts have noted that without jobs fewer households are created and existing households are unable to afford to buy a home. unemployment, coupled with a large number of borrowers who are under water on their mortgages, is creating a drag on the housing sector. by all indications, the weak housing sector is constraining the broader economy. while the mortgage documentation problems are important, the more

important question is how do we get the housing sector moving again. at this point, the obama administration programs have succeeded in spending large sums of taxpayer money, but have had little success on foreclosures. hopefully we can establish more effective policies for both job creation and recovery of the housing sector. i yield back the balance of my time. >> thank you, congressman. in the interest of proceeding to our witnesses and mindful of our busy schedules, i ask that other members submit their statements for the record. without objection, the opening statements will be included in the record. all members will have 5 legislative days to submit opening statements for inclusion in the record. the chair will also declare a recess at any point. i will now introduce our second

panel. first is mr. james kowalski. he specializes in consumer protection litigation. mr. kowalski serve as an assistant state attorney for florida from 1989 until 1996 where he prosecuted public corruption, sex crimes, and homicides. he is a graduate of the university of california at berkeley and at the university of san francisco's school of law. mr. kowalski also brings the perspective of having practiced in florida, one of the states, like my state of georgia, which has been hardest hit by the ongoing foreclosure crisis. he has also been on the forefront of the foreclosure documentation scandal. welcome, sir. >> is mr. thomas cox.

he has been a lawyer for more than 40 years and is currently a program coordinator at the main attorney savings home project. it is jointly sponsored by the pinetree legal assistance. he brings a unique perspective. while the currently represents homeowners facing foreclosure, he used to represent letters seeking to foreclose. i think is perspective will be particularly interesting on the foreclosure documentation issues that we are considering here today. mr. cox received his degree from colby college. he also received a degree from boston university. welcome, sir. our next witness, ms. sandra hines, has had a flight delayed.

she may or may not get here before we conclude this hearing. the nets, i would like to welcome vanessa fluker error. she is an attorney -- next, i would like to welcome vanessa fluker. she is an attorney. she helped those at risk of losing their homes to foreclosure. she is a leader of the moratorium to stop foreclosures, evictions, and utility shut offs. thank you for being here, ma'am. ms. fluker and chairman conyers have worked very hard to get the state of michigan issued a statewide foreclosure moratorium. we will hear from her -- she

will explain to us why that was needed. she received her degree from the w.s.u. law school. our next witness is tom deutsch. he is the executive director of the american securitization forum. before attaining that position, he practiced law in the capital market department of a law firm. the earned his degree from washington university in st. louis. welcome, sir. our final witness is mr. christopher pedersen to is an associate dean for academic affairs and a professor of law at the university of utah. the has lobbied on consumer lending policy and testify on

consumer finance before the u.s. senate banking committee and the white house. he has a degree from the university of utah. it will not come as a surprise that professor peterson has strongly convergent views on the impact of securitization on real property laws. we are looking forward to erudite discussion from both of these experts. now, mr. kowalski, would you please began. >> representative johnson, members of the committee, thank you for inviting us here today to testify on issues relating to the foreclosure crisis. i am and attorney in florida and a member of the association for consumer advocates.

i would like to make a few clear points and follow-ups to the regulator's testimony of the last hearing. first, the manufacture of significant documents for signet -- for submission to the courts is not a recent practice by the servicing industry. it is widespread and long- standing. the use of robo-signers, where an individual subnets testimony under oath in the way of an affidavit. that is relied upon by the courts where the individual has no personal knowledge whatsoever. it is not a recent practice by the servicing industry. these abuses are not the work of a few individuals or eight road, outsourced servicer. the systemic use of manufactured documents and false affidavits is a business model.

it has been the business model of the servicing industry for years. i have been an attorney in florida for 20 years, starting in 1989. i served as the chief for the public corruption unit as as a senior trial attorney. i was also a member of a homicide team and i put three men on death row. after leaving the attorney's office, i entered civil practice and began representing individuals in a wrongful foreclosure cases. i took my first robo-signer deposition in 2003. as a result of almost a decade of handling these matters, i have reached conclusions. the servicing industry as a

business model is irretrievably broken. the application of procedures to loan modification or to any issues with foreclosure itself has been counterproductive. the clearest evidence of this is in the dual-track process where a borrower who may not be behind at all is called to inquire about a loan modification. it will often end up with one unit of the servicer continuing to deal with what by then is a terrific customer-relations issue while another unit with the same server circ proceeds mindlessly with foreclosure. the various units of the servicer do not communicate, are not committed to communicate, and do not have access to each other's computer systems. the goal appears to be the pursuits of servicer fees.

everything i will testify about is in the exhibits i have filed. affidavits filed in mortgage foreclosures cases are, for the most part, work less. the evidence shows that affidavits are completed by persons who not only do not read the file, they do not have access to the critical portions of the file. it is evident that assignments are created after the fact in an attempt to show a chain of ownership. many critical facts, such as the day, are not based on any evidence at all. the date often used by the assignment is the date the file was transferred to the law firm, not the date the servicer took ownership. i listened to a federal district judge last month described affidavits as all surface, and

no anchor. i have never read a review deposition taken by another lawyer in more than seven years where the affidavit was fully truthful. many of the law firms are overwhelmed by the internal structures and by demands placed on them by the industry. they have complied with what ever they have been asked to do. this includes small firm employees citing affidavits on behalf of their clients with the law firm employee had no personal knowledge and was acting outside the scope of whatever authority they might have had. legal aid groups and hired counselors must be better funded. local council, unfortunately, has no connection to these issues. in conclusion, i would respectfully suggest that the major servicers should not be believed when they assert that our worst are deadbeats and speeding up the process and

robert stamping them is the course they should follow. at some point, we have to stop accepting the ever-changing excuses offered by the servicing industry. if we are to restore trust in our institutions, we have to start to reform the servicing industry. it needs to enter immediately. fannie and freddie need to be incentivize to be a part of the solution. the servicers do not need a truce bailout to go along with the financial bailout we have given them for truly abysmal business processes. >> mr., kowalski, -- mr. kowalski, i will ask you to sum up at this time. i neglected to mention to the witnesses that we -- that each of you have five at nenets as indicated -- as -- each of you

have five minutes as indicated on deeds light in -- as indicated on the light in front of you. >> lawyers will always say, "i just have a few more points." but i do have just a few more points. we would appreciate the opportunity to form a bipartisan partnership to confer as regularly as you want with the members of this committee, which are staff, with treasury, and with others toward to the short and long-term solutions to these issues. at each step, the interest of american homeowners needs to be considered first. thank you. >> thank you, sir. >> we will have mr. another

statement. -- i am retire from the private practice of law where i recommended lenders in long mitigation manners. i had a working full-time as a volunteer. i have come to know the foreclosure industry well from both sides of the street. at the hearing conducted on december 2, 2010, representatives from treasury, the finance agency, each said their agencies first learned of these issues and other foreclosure irregularities with the news broke in september of this year. these issues have existed for years and have been widely known to those of us representing homeowners. there was a massive failure in the oversight of the services. these issues should have been immediately apparent by any

diligent examination of operations. i will address my remarks over the last several months. the problems with gmac mortgages were first exposed in 2006 while ealing with a robo0-signed affidavit. we know these go back at least six years. gmac was sanctioned for that conduct in 2006. gmac reported at the employees that was the cause of the sanctions with a promotion. she is a supervisor of gmac 8's -signer.ent robo

gmac was -- stefan, who signs 8000 to 10,000 documents a month, stated that he does not. when his affidavit states steadiest custody and control, he does not. when his affidavit stated that he was attaching true and accurate copies of all documents, he has no idea if that is true because he does not even look at them. he admitted that when the affidavits contain a signature by a notary public, they did not even bother to do that. he testified that his practices are fully in accordance with gmac mortgage practice and procedures. when gmac mortgage realized the admissions made by him in his deposition, rather than immediately moving to correct the problem, gmac sought to

cover it up. they saw -- they sought sanctions against me personally for sharing the information with other lawyers around the country. they sought an order from the court that it be used in no other cases and that it be retrieved from lawyers that got it from me. the court denied the motions for sanctions and opposed further sanctions against gmac for its signing practices and ordered them to pay attorneys' fees of $27,000. very recent actions of gmac mortgage prove they are not prepared to cease their using these false affidavits. thomas morano, the parent corporation of gmac mortgage,

testified that gmac is no longer proceeding with foreclosures are based on his affidavits' without going to the courts and seeking approval to use them. this fall, we noticed gmac mortgage was doing the opposite in maine and was proceeding with judgments based on those false affidavits. we brought a class-action against gmac seeking an injunction to stop them from continuing these offensive practices. gmac has vigorously opposed those efforts. our -- gmac removed our case to the united states district court in maine where the anti-in judging act prohibits the court from enjoining any proceedings. in light of these efforts by gmac, the district court ruled this past friday that even though we clearly had a right to the hearings in state court,

that court was powerless to grant any relief. i submit to you that there has been an abuse of our judicial systems by the foreclosure industry on an unprecedented and truly massive scale. if economic interests are driving this abuse. until the obverse economic interests are addressed, until the regulator start monitoring these all servicers, and until the force of the criminal justice system is brought to bear on the dishonest, that -- of the dishonest conduct of the servicers, there is not likely to be any change in this industry. i thank you for the opportunity to be here today. i welcome your questions. >> thank you, mr. cox. next, we will hear from sandra hines. ms. hines is a lifelong detroit

resident and a social worker. she brings to this hearing her personal experience of losing her family home of 37 years to foreclosure and of being evicted from back home. ms. hines has turned those people experiences and to valuable resources that she uses to assess orders of facing -- she uses to assess others facing foreclosure.

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>> in this small room, we all pressure service to the institution and as an out going member i appreciate the contribution you continue to make. >> we thank you very much for your service. >> thank you, mr. chairman a year ago, the house took a vote. the levels in 2009 were the lowest estate tax levels, in 2009, it was at a lower level

ever than under ronald reagan we had phased in, in 200 # $2 million for an individual $4 million per a couple jo they estimate those that would receive relief under the

levels in the senate comprimise, 6600 families. you need to look at what the consequences are of dealing with the foinl is state tax liability. over ten years, the lincoln kyle approach and 2009 law is $90 billion. in the deficit reduction commission

>> i think this is about the right place to leave it. the house voted that way last year. we appreciate an amendment to establish it at that level.

>> i'm going to run down and vote. ok. ask them to hold the vote. >> i'll say a word to my friend to thank him for his incredible sefrgs the question that this boilings down to is, do where he really think at this time of high-def sits, it makes sense to

give a $23 trillion tax benefit to 6600 families a year for two years it doesn't yoe ate jobsor but it add tos to the deficit jo thank you. i have this figure myself. i look at this package that has been voted on in the senate

before us and scratch my head and wonder did anybody at all listen to the deficit? we do know that the estate tax is not only incredibly generous with the exception of the toelt al exception. the president announced he wants to freeze the wages of all sfed

emrye ys it doesn't make any sense to me. while i have a lot of problems, i think this is reasonable. most americans would think it is reasonable as well.

let me echo that statement and say he is one of the most thoughtful members of this institution. his departure will play a roll i have appreciated working with him on a number of issues over the years we have done that on a

regular basis. i believe the tax rate is where it should be exactly where it is at this moment. a position of actually playing a role and enhancing. why, because as we focus on something. democrats and republicans alike.

i believe what we'll have happen is job creation and economic growth will play a roll in diminishing a huge deficit and debt burden i believe that will play a roll. >> does the gentleman really believe being able to inherent $10 billion tax-free is a bur n burden? >> i april to believe we need to decrease the annual deficit and debt burren.

i argue coping the rate that it is will have an affect. it appears the member will be made in order i know we have a

number of other proposals we have other proposals that have been schmidted to that yous i hope we'll have a chance to consider i hope we'll have a chance to deal with these issues as well. i think it is very, very important for us to ensure we don't do anything to undermine this fragile recovery that seems to have be gun. i believe increasing taxes on any american has the great

potential to diminish something we want to take place which is job creation. the issue here is whether any

rolls should play a part. >> could i say a word? it turned out the vote hadn't started. now it mass. >> where he thought you had already gone. >> i love this committee so much. i wanted another few minutes. to talk before increasing taxes. we are essentially replacing what is now with 2009 -- >> you didn't think the policy was still alive. >> what you are saying is to take lincoln kyle instead of 2009 is something relating to smrnging families in this country. i think that misuses the term

working families. i'll quote somebody i don't think exactly would say he's part of main treem working families, mr. buffet. "it is becoming anything that the gap of the super rich and middle class widens in in way frment okay" for those who are worried about deficits. with that, you voted.

i'm going back to hear more. >> what happens to 10,000 up to $40,000? under the bill? nrt bill, if you are you would have a payroll deduction. if the bill is not enacted by after january 1, you will have a middle class tax increase go into affect as well. i'll share and associate myself

myself with the colleague and classmate. we came here the same time. thank you for your service and your kind comments of all of us. dr. fox? >> thank you, mr. chairman. i wanted to comment and ask mr. holland to further comment. i wrote down you said we are giving.

all the money we earn belongs to the government. we constantly hear that phrase, we are giving them something. >> is it your attitude that whatever they earn is ai from the gift and whatever they are allowed to keep is a gift from the government social security part of the functioning of

government just to eliminate in my view teddy was right when it came to the estate tax. you don't have a permanent american arostrica we are

proposing that it continue at the 2009 level simply ask the question. i hope we'd agree if you have to raise what is the best and fairest way to do it. the benefit of those families that's part of what it means to support the central functions of our democracy i suspect you

voted for the stimulus package i asked how you voted and made some guesses to go to continue

you'lly refer to these individuals. >> i would appreciate the opportunity to respond. the congressional budget office

to get our country out of economic free fall. the most important thing to do is get the economy p back in engineer recognizing we have to put this on the sustainable footing. you provide this kind of huge tax break especially two weeks after the moment of truth

report. >> what the government does for the economy. i think we have to really make a big case. funding makes it worse. we have the history of what has

happened. i don't think we have to argue that. we also have the highest debt this country has ever struggled with. we were worried about that thing being continued.

the wealthiest few things in the country. >> i have to make one other little correction. it was very carefully talk about having the lowest rate of 2009 when it just grow $in 2010 i find it kind of interesting when you do that. the way the bills are sdraun up, it's to get the number you you want. we know the bill will raise the

deficit after 10 years. you can lay with the numbers and the years, please, we have the chance to acknowledge that. >> to acknowledge no estate tax is bad ol si. basically the argument at at the correct level. >> i urge you to read the cbo reports. it reduces it by even moreover the second ten years.

you mentioned in respkt to the estate taxes with a rate of 55% over any amount over that. the change in-law is 68 billion over two years of presenting this comprimise. let's go back to the 2009 levels and not go to this extra 23

trillion. i remind you, the way that law was written. the rate above it is 55%. >> thank you. i know this has been difficult working through this. i'd like to say there is much here to like and much not to like. the fact is we are doling now with he is going back to where it was in the bush era was very fair. we voted for this in congress at this level.

to find out how we either want to have a lower rate with a higher level is a bit too far. i think what we are dealing with is not wealthy versus not wealthy the elements of this package that we are hoping for as the economy feel it is

unnecessary to go to this level. it is not necessary what mr. palmeroy's amendment voted on in the past. something i believe most us here can agree to. my feeling is that it is actually we are dealing with the elements. we knew this was something we need to deal with. to come to a fair solution as we move forward, i appreciate this

very much. >> let me tell the members here there is one vote. you may want to vote and come back to keep this thing twoing. i think we are the least effective when we point fingers and as opposed to pointing fingers at who is at fault or what. my sense is that with respect to tax cuts, i'm supportive of

that. because it would be critical to helping us. i listen to the arguments and i don't understand how reducing the amount of estate tax will help the economy. that's what we are looking at the 2009 levels would do things like help to fund defense. all we heard about in this election was the deficit. the last point i want to make

those people that achieve the moment do achieve the most that's what i think this debate focuses on today. thank you >> i appreciate the comments of my friend from new york, i mraud the gentleman for bringing this amendment it saves the country

$23 bill yomiobillion. i couldn't have said it any better that this is a place where we can make sure that folks who have developed estates can pass that estate on to their family. over that, there is payment of taxes for that. it represents some $99%

>> yes, sir. mr. chairman and members it is time for congress to stop demand.

it is hard to imagine a worst idea that a clear it is vital we stop the looming tax hikes the investment is critically important for family farmers and business owners i have some serious concerns. the failure to pay for the extension of unemployment benefit we are passing along to future generations according to

the joint committee on taxation. extending the tax credit will ib crease the federal deficit by nearly $5 billion. congress projects the industry from competition imposing a

steep terrif. we have regulations of edge follow and other fuels this year. at the same time diverting corn and feed stock. resent evidence that is rethis

is an industry that is getting special treatment because it happens to have good political tensions. mesh people are tired of highing specialist park. the muss pass bills is time to do away with this at all. he mentioned the reformation >> thank you for being here.

mr. brady. well yom >> thank you, i'll be brief. here on the ranking member. i'm here to tut the spending to cover the cost of this bill small businesses when they are trying to add jobs which seniors live on bringing the death tax

back where we work the whole life and have ub kel sam take everything they've earned is wro wrong has support. the national tax union and other leaders within the conservative movement. there is a real concern. bringing back the death tax. it will impose the second highest death tax rate and con

if is indicateses the hard work. that amendment is imposed by the planning. it includes your neighbor family farms and grocery stores. newspapers, auto deerls. local dolors and contractors. i urge its defeat. >> i believe this bill should be paid for. we have several leading supporters here to having their amendment n this bill. this takes the recommendations of the commission and puts them into place to eliminate wasteful

spending in the bum et. p

just political rhetoric but i am trying to put this in perspective. i don't know many people who get to a million dollars tax free. i don't know many people have those kind of a state. -- estate. i think this bill is overly generous. you are going to implement the recommendations of the bipartisan commission. do you include eliminating the tax deduction for -- on interest for people who own homes? >> no, these are spending cuts. >> you talk about freezing the

pay of federal employees. is there a cut off? is the person cleaning a floor in federal buildings making $20,000 per year, and do their salaries get frozen? as the much as someone who is making $100,000 per year? this inherent sense of unfairness in that. there are people whose salaries you want to freeze to make far less than we do. at the same time, we are expending generous tax cuts to the wealthiest individuals in this country and we have an estate tax that is the most generous in the history of our country with the exception of the fact that it expired. where is the balance? where is the fairness? why do low income people and

middle income families have to bear the burden of digging our company out of this mess that they did not correct -- create. we are rushing to give the richest people in this country a tax break. i did we have our priorities messed up and we need to focus on middle income families. we have already passed twice tax cuts for middle income families. and yet, you are proposing that you will offset the benefits for the wealthiest people by doing things that will negatively impact middle income and low income families. there has to be fairness here in terms of getting ourselves out of this deficit. i don't see that your proposal. i want people to understand that the estate tax relief in this bill right now, it is $10 million tax free for a couple. $10 million. that is an awful lot of money.

>> may i answer? thank you for those points. and thank you all for your role in serving on the rules committee. this was a bipartisan deficit commission. the provisions were endorsed by the white house and by democrats as well as republicans. we need to get serious about trimming the government back, reducing what is now the third highest deficit on the globe. these provisions are good starts. >> why do ignore the deficit commission recommendation that we basically enact an estate tax policy? why do you pick and choose? >> the reason we are opposing the amendment is come january 1, taxes on family-owned farms and businesses will go to 55%.

that is more than half of everything they have earned. the government has a greater claim of everything they spent a lifetime earnings than the person themselves. that is what the law will do with his bill does not pass. my belief is that it is immoral for the government. >> that is what we are -- that is not what we're talking about. >> that a yes, we are. i had a family-0 and nursery co. and the kids work in the business. the worked their whole life building the company and they went for the numbers where their family has no debt, has built a successful business from scratch. under the debts tax they will face, -- under the death tax, if

the kids take out enough insurance on their families and go back in debt, they may be able to keep their family-owned business. you can have this conversation with my family-owned business all you want but the point being, if i may finish, as i did for you, why should any family have to take out large amounts of life insurance on their parents and go back into debt simply to keep their own family on business? what has the government done to deserve their business, their form, ther? >> you can believe it should be zero.

55%. not talking about a we are talking about the 6600 people in this country that would be impacted. >> i was called away. this family you are speaking of, as a small -- is it a small nursery? >> it has grown larger over the years. >> are they worth $1 million? >> i don't know. >> then they won't be taxed. >> all the family farmers and small groceries and everybody will go under but they are not in the bracket to pay this tax anyway. >> do you support the death tax going back to 55%? >> that is lower than it was 20 years ago. i support keeping the

government running. we also pay our fair share. >> the government taking more than half -- >> people say they are doing well, they owe something to the government. >> we always see things different in the community and hard work of families. obviously, you believe it is the government to redistribute this but i don't. >> if they make $1 million per year, i think they should pay taxes than if they work hard and become successful whether there is $1 million or $10 million -- >> the issue before us is whether or not the government owns the money. and and the issue right now is in the current bill, there is $10 million tax-free.

mr. pomeroy is talking about $7 million tax free. what you are talking about is not real. we are simply saying that as the bipartisan deficit commission said, the proposal that mr. pomeroy has is the better way to go if you are serious about deficit reduction. that is what this of debate is about. it is not about imposing a 55% tax cut on all the states. that is a bogus argument. we are talking about whether or not we will keep the current language that is in the bill that the senate passed or whether or not a better way to proceed at a more responsible way to proceed is as mr. pomeroy pointed out which would reduce deficit which rig which would increase debt as a production. >> can i make a point? >> i would like to ask you a

question. in your comments a little bit ago, you said if it is worth $10 million, they should pay taxes. are you under the assumption that they have not already paid taxes? we have a nursery business. we pay taxes on everything that we earn. >> we are talking about the estate tax. is your business worth more than $10 million? well, then you're not involved in the estate tax. >> do you assume they have not paid taxes? >> of course not. there are various kinds of taxes. we are talking about the estate tax. we were talking about the estate tax which only 6600 people in the united states will be required to pay under this plan. >> matt and chairman, the implication from new was that they should pay taxes.

they have already paid taxes. my guess is they have paid taxes on their earnings. they pay taxes on capital gains. >> i hope so. >> this would probably be the third tax they would pay on the same well. i think that is extra and to ask the government to take from people money three times on the same earnings. i think it is real important that we exploit the people have already paid taxes. >> i am talking about the estate tax and i see you are not. do you yield back? >> yes, i am talking about the estate tax, too, but i want to make it clear that these people have already paid taxes. >> they have paid some taxes, absolutely, property tax, school tax, and who knows what. >> madam chair, there has been a growing number of persons who

that rich people, very, very wealthy people, the landed gentry and the 6600 individuals, many of whom are entrepreneurial and did arnelle substantial amount of money -- and did aren't substantial money. there are persons who inherited their money and many of them did not work a single day in their life anywhere. that does not mean that they are and -- are not entitled to their money. we have a system where there is fairness and unfairness on anyone that has to pay taxes. they always perceived as unfair. i don't. like most of you, many people don't believe that congress people pay taxes. you would be astounded at the number of people that think we live up here rent-free.

and that all of us have limousine service. that is a common notion and around. no criticism of people for being misinformed. now then, one of the pegs that really galls me is that very wealthy people are great charitable givers. the statistics don't show that to be the case. any of you who have been moving about america -- >> is there a basketball game going on behind me? >> can we have some quiet please? >> many of the persons who are very wealthy are sometimes fairly wealthy because they are stingy and cheap. all of you, as i, have in your constituency charities ranging

from the united way all but way to one i work with very favorably in my community called the pantry. you see the people lining up that need the services and see the lack of charitable giving. i don't know about where you are all from, but in florida where we have many wealthy people and a few in my constituency although i read -- represented more poor people than most people do, i have a few very wealthy people and at the same time, charitable giving is now 15%. we are in a royal mess in this country. it is just that simple. in order to get out of the royal mess, everybody has to sacrifice. that is what did not happen in the iraq war and the afghanistan war. all of us went about our

businesses, going to basketball games, going on vacation, doing what ever is that we do as if nothing was happening other than the fact that we would come here and politically it make arguments when we lose a constituent or the soldiers would come home loaded and what have you. generally speaking in america, the same ice cream cone and everything else. i am old enough to know when the country did sacrifice when we were at war. we didn't and it has come to haunt us and we need to tell the people that. all of us, poor and rich, need to sacrifice in order that we might be able to bring this country out of the mass is in. thank you, madam. >> if i may, is there any chance the government could sacrifice? >> absolutely. >> the government went on a spending spree.