earlier i said another word for forgotten, the forgotten 15 had slipped our minds, it just slipped our minds, we need to remind the senators other there, all americans do, they need to pick up the phone and say, what's your opposition to these 22 bills that will create jobs and put america back to work so we can be a thriving economy once again. mr. gart for the: and the plan we have come up with to get this economy moving forward, they're embodied in the forgotten 15. all these bills with the simple goal empowering small businesses an reducing government barriers to job creation. . nobody opposes these ideas. if you go to americans around this country and ask them, should we be encouraging entrepreneurship and growth, they will say yes and that's what these bills do. mrs. roby: the private sector is

sitting on trillions of dollars. we know that. the money is there to restart, jump start our economy, but because of all this uncertainty, no one is spending these dollars to re-invest in private businesses. mr. kinzinger: how many times is washington going to be dishonest with us and just say, well, the answer is, i know it didn't work. the president said shovel-ready jobs, chuckle, chuckle, they weren't shovel-ready at all. this plan will work. the american people doing what they can do best, that's the recovery plan. not another $500 billion. mrs. roby: and getting the government out of the way so they can thrive. ms. herrera beutler: mr. speaker, and those controlling the time, it's important to recognize, if you want more details about these jobs, the

forgotten 15, jobs.g.o.p..gov. regulatory burdens act, several more bills that the other side needs to hear from the folks at home on. i'm going to yield back to the gentleman from colorado. mr. gardner: i thank everybody for participating about our job for plans. 32 months, this country has faced unemployment over 8% and i want to share a story that happened just a couple of weeks ago when i had the opportunity to sit down with some employers around the state of colorado. we were in a restaurant and had the opportunity to discuss what regulations are doing to economy, overregulation. we believe in smart regulations, those regulation that aren't overly burdensome to job

creators and we talked about what burden we were placing on future generations, high unemployment rate, 14 million people who are out of work and what we were going to do to help america's working families and make ends meet. and we had a wait tress who was taking orders and working very hard. and after we were done, we walked out and the conversations were going and i was the last one to leave this meeting and just then, the waitress who was working in that room and grabbed me by the shoulder and she said, hey, i liked what you guys were talking about, because this is my second job. i'm trying to start a business. and i'm trying to work here while that business gets off the ground and trying to make ends meet and get the business going and trying to work here. but what you talked about, the regulations that are hurting businesses, the taxes that are

making an uncompetitive advantage for people right here and there she is working a second job and there are people out there with third jobs trying to make ends meet. and i want to thank everybody for participating tonight and encourage to visit the people who may be interested in the republican jobs plan. and yield back the balance of my time. the speaker pro tempore: the gentleman yields back the balance of his time. the chair will receive a message. the messenger: a message from the senate. the secretary: mr. speaker, i have been directed by the senate to inform the house the senate has passed america's cut act in which the conclusion of the house is requested.

the speaker pro tempore: under the speaker's announced policy of january 5, 2011, the gentleman from minnesota, mr. ellison, is recognized for 60 minutes as the designee of the minority leader. mr. ellison: thank you for recognizing me for this hour. i'm going to speak for a time and then i'm going to yield my time to mr. jackson, who has an important message. but i would like to like to start just by talking to the american people about the progressive message. you can sit on your television set and watch this broadcast and for the last hour, what you would have heard as people claiming that you can get jobs by taking away our health and safety rules, by getting rid of regulation magicically, we are going to get jobs. we have had the clean air act in

place since the early 1970's and have seen record job growth in the 1990's and seen the bush era when the republicans had the house, the senate and the white house, the lowest job era in modern memory. they have tried it their way and they got us into this mess. never forget that it was in january, 2009, when this country lost 741,000 jobs in that month alone and the democrats and president obama have been building back ever since. i want to say that the progressive message is talking about the antidote to that line of argument. the poor have too much. they are asking american corporations to look after health and safety laws as too

much of a burden that we have to sacrifice our lungs so multinational can make even more money. no. no. no. the progressive message is where we stand up for small business people and we talk about the right to organize on the job, where we get into the conversation of civil rights and human rights and talk about peace at home and abroad and where we talk about the importance of protecting our environment. i want to welcome congresswoman jackson lee who has joined me. she's here and great member from texas. thank you for joining me with the progressive message. i yield to you. ms. jackson lee: i'm delighted to join my friend, colleague from the great state of minnesota and the distinguished co-chair of the progressive caucus of which i have the privilege of serving as a vice

chair and i truly want to say to our colleagues, progressive caucus has been on the mark and in fact, stays on a pattern, frankly, that should draw good thinking, well intentioned americans from both sides of the aisle. let me recount for my kee chair, the number of job fairs and summits. but i wanted to focus on a couple of points that i believe has been the progressive message. it is a good samaritan message that, we are all in this together. it is to recognize that the nation is not so broke or it is not broke that it cannot help the most vulnerable. in a supercommittee hearing, it was delineated by the head of the o.m.b. that actually, mr. ellison, that our debt-deficit

is 8.5% of gross depesk product, 92% is rolling along. and if we took a family budget and they said we have less than 10% debt and 100%, but 10% debt, let's work to diminish that debt, but let me not stop feeding the three children. let me not stop paying the mortgage. if that was the ratio of our debt. the progressive message is there is a way of pulling us up by our boot straps. we can have the bush tax cuts expiring and generate billions of dollars. we can pass the jocks act that really focuses -- we can pass the jobs act that really focuses on creating the millions of jobs that we can generate out of that

particular legislation. we can eliminate discrimination of the chronically unemployed and a tax credit for employers for hiring the long term unemployed. are we remembering that on december 31, 2011, we will be bringing home by that time our president has said that soldiers from iraq will come home. that is an immediate infusion of dollars back into our bank account, although we must be able to protect our soldiers who are coming home and provide for them. we have on the horizon, mr. chairman, and i know all who are listening are excited about the fact an omnibus jobs bill that is about to come forward from the progressive caucus. we found a way. we found a way to pay for creating jobs and answering the collarion call of the american people. so i believe the progressive

message is the secular good samaritan and can't leave the vulnerable on the streets of despair and must be able to ensure that we are looking out for those who cannot look out for themselves. i finish on these two points. the supercommittee is doing the very best it can do. i'm grateful that we will be opening opportunity for our own hearing in the coming weeks, but there is a dilemma, and that dilemma is that there is a certain amount of the vulnerable needs of america that are protected, but there are some that are exposed and what that means is that we will be looking in the face of america in 2012, looking back in our rear zhrep view mirror and see along the highway of life that have been left out because we have raised no revenue. and if i might do a personal

moment. if we have states like the state of texas that are in, essence, with elected officials who have in head rocks, and i'm coming to my closure so you can understand how i prioritize. the n word rock. i'm ashamed of that description, proud to make it known on the floor of the house. all we have, state agencies that we fund, texas motor vehicle board, state of texas gets federal funds was about to issue a confederate license plate issued by the state of texas on november 10. i will be in austin in texas to oppose it. but if we have time to deal with these negatives, do we not have the time toll galvanize states, representatives and governors? don't we have time to call for

the voices to be raised, to be able to given couragement to the supercommittee, encouragement to those who don't want to raise revenue, take that 8.5 deficit, boost the g.d.p., build, rebuild, create jobs, create jobs for small businesses and steer ourselves away from confederate flags and get all of the states to work together and follow the progressive message, which is liberty and justice for all and opportunity for all. i thank the gentleman for allowing me to yield to him on this occasion. mr. ellison: let me thank the gentlelady and i will yield to my good friend from illinois, jesse jackson. as you talk about this, we are talking about poor folks who need home heating oil, children who need head start, right? we are talking about people who

need the snap program, students who need help to afford a college education, and my question is, will the rich and wealthy of america pay a little bit more to help this happen? bank of america didn't pay a single penny in federal income tax in 2009. boeing, despite receiving billions of dollars in federal government in every single year, boeing didn't pay federal income tax in 2008 and 2010. citigroup, its deferred income taxes amounted to a grand total of zero, at the same time citigroup is continuing to pay its staff lavishly. the head of citigroup's investment bank is expected to be the bank's highest paid executive for the second year in

a row with compensation of $9 poinch 5 million. exxon mobil, big oil, dodgers used offshore subsidies to avoid paying their fair share and they paid 15 billion in taxes in 2009, none of it went to the american treasury. this is the same year in a the company overtook wal-mart in the fortune 500. total compensation for an exxon c.e.o. was $29 million. general electric, in 2009 filed more than 7,000 tax returns and still paid nothing to america's government. ge did it with a rigid tax code that subsidizes companies that allows them to set up tax havens overseas. .

on behalf of the folks who need food stamps, who need college stegs -- college education, on behalf of the folks who need home heating oil, on behalf of those who are struggling to make it today, will the most privileged americans do anything? the progressive caucus thinks they should do something. ms. jackson lee: before you close, i want to comment on the gentleman, we're going to yield to him, i want to thank -- to thank you, mr. jackson, for what i know you're about to begin, which is an eloquent presentation on the importance of construction. it looks as if an airport you've been fighting on for many years if we would listen to you on the particular project you're speaking of but also as we look to infrom struckture around america, we would be able to create what i'm getting ready to -- we would be able to compete with some of the other nations we

wile -- he will fight that will more -- have more airports an the united states. we look forward to hearing you an thank you for the progressive mess to -- message. mr. elson: let me yield to the gentleman from illinois to talk to us about infrastructure. the speaker pro tempore: under the speaker's announced policy of january 5, 2011, the gentleman from illinois, mr. jackson, will control the remainder of the hour. mr. jackson: may i inquire how much time i have remaining? the speaker pro tempore: the gentleman has 48 minutes remaining. mr. jackson: i thank the gentlelady from houston. as many of you know, i've been talking about building a third airport for chicago's metropolitan area since my first campaign in 1995. the on gregsal drigget i represent has nearly three people for every one job in many communities, compare that to the northwest suburban parts

of the city of chicago, there are nearly three jobs for every one person. since that time in 1995, the united states has not built a single new airport. the united states has not built a new greenfield airport in 40 years. the last totally new airport was dallas-forth which opened for business in 1969. some of you may say that denver built a new airport. well, yes and no. denver has a new airport. but it was a replacement airport. once the new denver international airport was completed, the old stapleton airport was shut down so while devon has an updated facility, that airport really didn't add to the number of u.s. airports. since 1969, when dallas-fort worth open, the numb of -- the amount of u.s. air traffic has more than tripled. yet despite a tripling of activity, no new major airport

has come online to accommodate that expansion. that's absolutely incredible, mr. speaker. compare our record to china's. the chinese government recently announced plans to build 9 new airports between 2008 and 2020. so the u.s. builds zero airports in 42 years. china is embarking on a plan to build 97 new airports in just 12 years. if the united states wants or hopes to stay competitive in the global economy, we need to start thinking bigger, we need to start thinking about ports, and specifically, airports. we need to start thinking a little more like the chinese. 100 new airports by 2020. the general administration of the civil aviation of china said it plans to spen over $450 billion build nothing fewer than 97 airports by 2020.

it will see the mum of airports increase to 24. the plan wills mean that eight of every 10 chinese people will live within 100 kilometers of an airport. if the quites wants to compete, we have to be prepared to build more of these facilities. i'm happy to report that some of us in washington and illinois are doing precisely that. in the past two months, i've heard president barack obama talk about the need to build new airports not once, not twice, but several times i've heard the president say this. the first time when he unveiled his national jobs plan, the president said, and i quote, we can put people to work rebuilding america. our highways are clogged with traffic. our skies are the most congested in the world. it's anout rage. quote, building a world class transportation system is part of what made us an economic superpower.

now we're going to sit back and watch china build newer airports and faster railroads at a time when millions of unemployed construction workers could build them right here in america? the president said. he even noted that perhaps the best way and maybe the only way to build new airports, new highways, new infrastructure is through public-private partnerships, also known as perform p.p. in fact, mr. president, i -- mr. speaker, i explained this concept to state senator barack obama while he was running to become a united states senator in 1994. when he wrote an op-ed in support of this, he said, there is a strong case for a regional third airport in the south suburbs a region that's struggled economically while other suburban areas have prospered. employment and income lags the rest of the chicago air dwhreasm construction of a new airport would bring 1,000

construction jobs in the next two years and 15,000 permanent jobs by the first full year of operations. as well as billions of dollars in new economic activity to residents and communities that sorely need it. represent representative jesse jackson jr. has asemied a grubble on -- assembled a group of private investors willing to put their own money behind it. it would be limited to building roads, transit, and sewers which it routinely provides to other development projects around the state. mr. obama said, the benefits of the south suburban airport would not be limited to the chicago region. many other areas are hampered by flights. an airport in the area would provide down state communities with enhanced air traffic to

chicago. in addition, as the world's first and only airport custom designed, built, and priced to attract low-cost carriers, it will attract air service to the chicago area by startup an discount airlines currently not operating out of chicago's existing airports. as many of you know, the plan i put together for chicago's third airport is precisely that. i've advocated for building this airport through a public-private partnership for the past eight years. to quote president obama again, he said, there are private construction companies all across america just waiting to get to work. we'll set up an independent fund to attract private dollars and issue loans based on two criteria tissue how badly a construction project is needed, number one, and how much good it will do for the economy. the president knows that chicago's two airports, o'hare and medway, have been operating

at or above capacity for years, so the need is clearly there. in fact, the federal aviation administration has been asking chicago to built a new airport since 1985. for more than 25 years. as for the president's requirement that new infrastructure be good for the economy, there is no greater job generator in the world than an airport. for proof, we need only look no further than washington, d.c., and the dulles airport cor -- corridor. once out in the middle of nowhere, the dulles airport corridor today is home to 35,000 new companies. some 575,000 people go to work there every day and roughly 57% of the world's internet traffic now flows through the dulles corridor. most of that is possible due to the airport. as for the airport that i'm

proposing for chicago, it would create 1,000 construction jobs immediately over the next two years. once phase one construction is done, which can be done as early as june of next year and the airport opens for business, it would create an additional 15,000 new permanent jobs for the local economy. again, by the first day of operations. that 15,000 jobs at the airport includes some jobs at the airport like pilots and baggage handlers an air traffic controllers an service agents and t.s.a. agents. but moreover, it includes jobs located outside of the airport's footprint. i'm talking about jobs at the new hilton, the new hyatt, the new fairmont hotels locating near airports. jobs that -- at u.p.s. and federal express, two businesses that can't survive without airports. hertz, dollar, alamo, avis,

enterprise, jobs at local restaurants, mcdonald's and burger king and chillingi's, k.f.c., white castle, outback steak house, stake n shake, convention centers, malls with entertainment complexes, sprts complexes, warehouses, rail yards, all in the service industry and corporate headquarters, all of which historically like to locate near airports. hotels across america must be at 80% occupancy in order to be profitable every single day. people who say at hotels tend to get to those hotels by flying there, catching a taxi or -- catching a taxi from an airport or renting a car. airports are the center of the service based economy. expanding the service based economy is the fastest way to employ the american people and put them, mr. speaker, back to work.

just like dulles, which was washington's third airport, chicago's new third airport would create over time hundreds of thousands of new jobs. how do we build and finance an airport in these tough economic times? i know someone out there in television land is actually asking that question. as the president said, the way to build new airports is through a public-private partnership. by getting private companies to invest their own capital without risk to taxpayers. in fact, mr. speaker, i learned a lot about public-private partnership a dozen years ago when i began researching ways to build and finance a third airport for chicago. and the president is correct. i learned here in the congress of the united states, from my late colleague congressman henry hyde who introduced me to a number of consultants who impressed upon us the need to prove to public-private partnerships in order to handle

the future infrastructure demands. our research taught me that the old method for financing and building airports is absolutely obsolete. it doesn't work anymore. in short, the paradigm has shifted since 1969 when america built its last major airport. the old model used to work like this. runways and taxi ways were built and financed by cities. a city would then recoup its investment by collecting landing fees from airlines and eventually get paid back over the next 30 years. under that same old model, terminals were built an financed by aims. that's why o'hare has a united terminal and an american terminal, etc. but guess what? the old model, mr. speaker, does not work anymore. most cities cannot afford to pay for runways an then wait 30 years to get reimbursed. and they're reluctant to hit up

taxpayers for more money. likewise, most airlines, many of whom are teetering on bankruptcy, can no longer afford to invest in and build massive terminal buildings. the new model is the public-private partnership. under the public-private partnership, cities create airport commissions, they form participating governments who enter into an intergovernmental agreement. by entering into that intergovernmental agreement they form an airport authority. with the state. the state which owns land, leases land, or yields land to the airport authority, who then in turn provides that land to the developers. the developers make an investment in the airfield. they build the airport them income from the airfield comes to the developers who then pay the public entity risk and that's how the engine of our economy for a local airport

begins to spin. and it continues to spin as the airport begins to grow and begins to manifest itself in the form of productivity for those who take advantage of the facility. if the private sector does it right, they reap profits that can then be shared with the communities that formed the airport commission. this model is exactly what has been used at new airport projects around the world for the last 40 years. the main reason this model hasn't been used in the u.s. is simple. during the last 40 years, we haven't built any new airports. in chicago, we are following the new international model of the public-private partnership. first we form the local airport commission to create and oversee the public-private partnership. . that commission is comprised of 21 counties located near the airport site. these communities who call

themselves the abraham lincoln commission work essentially as one city than and they make up the public side of the partnership. these 21 communities again, abblingting as one airport commission, then conducted a global competition to find private developers who had the expertise, the experience, the wherewithal and the willingness to finance, design and manage a new airport. they responded to the commission's request for proposals. at the conclusion of that global search, almac selected two companies with aviation expertise. these two companies have built new airports or expanded existing airports in countries from europe, africa, north america, central america to south america and done so with

great success and more importantly, they have done it with their own money, with no cost to the taxpayers. for anyone who is thinking this is just a pie in the sky concept or some airport fantasy, i must say that the governor of illinois has carefully vetted this proposal. governor quinn, his lawyers, outside counsel, the illinois department of transportation sen spent close to a year vetting all their work. in the end, the governor's office found that the public-private partnership is legal, viable and capable. and i'm proud what this local commission has done. i'm proud of our private partners who want to invest $700 million in chicago's new airport and i'm proud and happy that president obama and illinois governor quinn have a clear understanding that public-private partnership are capable, indeed, necessary in

financing and operating world-class airports that will expand the aviation capacity without using taxpayer dollars faster than anything this congress can do. many of us are feeling the pressure to create jobs and rebuild america or as the president said, it's time for us to take off our slippers, put on our marching shoes, stop complaining, stop chinaing, we have work to do. i want to take a few minutes to show you how this plan would work and how this financial model would be better than the one that exists at virtually every airport in the united states. the concept is called common use gates. it means that airlines no longer build terminals so therefore, they can no longer control the

gates. instead the gates are biment and controlled by a private company that has expertise in running airports. for airlines, it means all gates can be used by any airline and they pay for just the hour or so that they use to unload passengers, reload and then take off. the common-use gate concept, which is used at modern airports outside the united states means terminals need less space, which means they cost less money. ultimately common-use gates should save travelers time and money. in closing, i'm proud to report that the commission, along with its 21 municipal members and our private developers have developed a fully vetted, cost-effective plab to expand our nation's infrastructure which cost taxpayers nothing, but will create tens of

thousands of jobs. this airport is bigger than just an airport for my congressional district and for chicago's southland. this airport would change the way we build things in the united states. and will have national and global significance. this republican-led congress hasn't been helpful to president obama. in fact, this congress is determined not to pass a single piece of legislation that will help put the american people back to work. since the president is shoing executive orders and looking for ways to go around this republican-led congress, the beauty of the jackson plan is we don't need congress or the illinois legislature to vote on or approve anything. we just need the signature of the governor of illinois on a

land lease. so what i need you to do is call the governor of illinois, 312-814-4121 and tell him to least land to the lincoln commission so we can give president obama a victory and put the america canal people back to -- american people back to work. may i inquire as to how much time i have left? the speaker pro tempore: the gentleman has 29 minutes left. >> fantastic. i thank the gentleman. mr. jackson: i want to explain to the american people how modern airports will be constructed in the united states. this is a mock-up of the facility we seek to build in the second congressional district. it's a small airport with five simple gates, whose basic

footprint fits the communities that it will be built in. between the villages of university park and others, exists 25,000 acres of land, 25,000 acres of land that has been designated by the federal aviation administration for the building of a major air field. the light area on this map represents land that has been acquired by the state of illinois for the purposes of building a major airport. so the private companies, the private developers have done an analysis to determine what is the appropriate size of the airport that they should build

as soon as humanly possible for the purposes of releaving air traffic in the region and their analysis showed that if the airport were built in 2007, at the low deplainment hours,, the median number of passengers would be 347 or the high number of passengers, 695 passengers per hour. fascinating is the correlation between the median numbers in 2007 and the low numbers in 2008. the median numbers in 2008 and the low numbers in 2009 or let's fast forward to where we are today, the median numbers in 2010, the low numbers in 2011. the median numbers in 2011 compared to the out-numbers in

2012. what you can see is that because of the number of passengers who use the airport every hour in succeeding years, it is possible to design an airport in 25,000 acres that actually scale it back to the size of an airport that we need to build today. in other words, a cost-effective airport. annual enplainments, 220,000, 2013, 270,000. once we have determined how many passengers would use such an airport, we then have to right-size the airport and determine the number of airport operations per hour that would have to exist at such a facility in order to determine the size of the airport that we need to

build. and once again the median numbers equal the low numbers in each of the succeeding years. assuming an airport is built today, 31 total aircraft operation by 2012. 38 by 2018 and so forth. a near perfect correlation suggesting that every single year from the moment this airport is built, it will continue to expand. well, mr. speaker, unlike using the old government model because we are using a for-profit model in a public-private partnership, we should never build more airport than we need, should never build more bridge than we need, should never build more road than we need because the must be sector doesn't have money. so we have to right-size the airport. and as result of the number of

aircraft that take off from the airport, we know the number to build by 2008, 2011, 2013 and 2018. the most effective airport, greenfield airport starts with five gates, 1,300 parkicing spaces and 933,000 square feet. remember, mr. speaker, not one dollar spent by taxpayers to arrive at this jobs plan. >> enough of our constituents called the governor and tell him to sign the lease to the local commission.

the real key to the concept and success of this airport, unlike traditional airport models is the idea of a common-use terminal. it's a private sector model, because we aren't building more airport than we need. it doesn't compete with o'hare airport, doesn't compete with midway airport. how could a five-gate airport compete with o'hare airport or midway? it can't. a five dive zpweat airport represents jobs for the local communities. that's why common jackson is hanging around airports. congressman, all you do is talk about airports. yeah. because with airports come hyatt hotels and hilton hotels and avis and hertz and dollar and

all businesses. look at arlington, virginia, it's because it is close to reagan airport. look at the dulles corridor, home to 575,000 people who work every day because of the airports. look at the baltimore-washington corridor, it's tied to the airports. look at all of the jobs and growth and economic activity out by o'hare airport. look at the economic activity by l.a.x. f.a.a. said 20 years ago that we need to build 10 new airports in america, the size of o'hare airport to handle the aviation prosecute problem then. how many have we built in america? china is going to build 100 new airports. how many have we built in america? not one. what's the key, congressman

jackson, to this airport? the reason this airport is going to be successful is because united, american and qunch uatas, they don't have any liability for buildings the airport. virgin airlines does not. the airport is paid for by the private sector. america is welcome to land and the gate for the one hour to let their passengers on, let their passengers off and get back on the runway. that's all the amount of time we charge the airlines. so, when you walk in this airport, it looks like a modern facility, big flat television screen and has the logo of united airlines or some airline on it. after the planes board and then takes off, guess what, mr.

speaker? the flat-screen television set, it has the american logo on it shes the same gate as the flight pulls up do that terminal. a much more efficient method of using gates. this is the key concept of making airports successful. because we are able to project well into the future in a 25,000-ack footprint, the size of a future facility, we start out with a hand drawing and we contemplate what it would mean to build the roads and infrastructure to make the infrastructure work. . . as you can see, we're contemplating a ring road, where you enter and exit the airport and if necessary you return to baggage claim or departing panels under a much

broader facility. in the 25-year plan, we're widening the processor, that is the processor where ticket agents and the transportation security administration help process passengers to global locations, not only within the united states but arn the world. so because of accurate forecasting, mr. speaker, we build a small terminal in land owned by the state, with a small apron of about 933,000 square feet and one 12,000 foot runway which is large enough to handle contemporary series aircraft, including new aircraft presently coming online. we've already contemplated a small cargo pace. remember, i said i only wanted to build with $700 million, in the paid for by the taxpayers,

i just wanted to build five gates, one, two, three, four, five. but very quickly, for very little money, the airport expands to a 13-gate airport. but for five gates, i've already employed 15,000 americans. a 13-gate airport employs 30,000 americans. we're already focusing on phase two. we tear down the wall between phase one and phase two and now the airport, mr. speaker, looks like this. then we tear down the wall, a modest expansion of the airport for phase three. we build phase four. we're contemplating phase five. while this part of the airport is functioning, we then go back to the other side of the airport and modernize its processor. without any disruption in customer service, what started out as a one, two, three, four,

five-gate airport, it's already a 40-gate airport not paid for by the taxpayers, not paid for by the airlines, with common use gates and expanding infrastructure. very quickly, the airport, mr. speaker, has now moved to a modern looking facility. paid for by the private sector in a public-private partnership, including its roads, the roads that approach the top of the airport are for departing planes. we've got a ring road around the airport for arriving passengers. this 08-gate airport represents nearly 130,000 jobs to a local economy. there is absolutely nothing that congress can do to compete with an airport. if there's going to be public works projects, a public works bill, we heard the president of

the united states stand right there and say he refuses to accept that in america we can't build one new airport while china is building 100 new airports. i'm taking this time, mr. speaker, to carefully explain to my colleagues how airports can be built without you appropriating a single dollar. this is all i'm building, mr. speaker. one runway, and five gates. but over time, following the model i proposed, one runway and five gates quickly becomes an 08-gate airport, now needing two gates. this 0-fate airport represents more than 130,000 jobs to a hele -- to a local economy an we need to be build 10g airports just like this to

alleviate today eas aviation and capacity commands. you can already see we're looking at an expanded cargo area for u.p.s., federal express and other cargo-related international trade that would be the byproduct of building this port. as i shared with you at the outset of my presentation, mr. speaker, while we're building five gates and one runway, the airport is being built in a 25,000 acre footprint. o'hare airport is in a 7,000 acre footprint. the footprint in my congressional district is four times the size of the present footprint of o'hare international airport which is somewhere between the busiest airport in the world, the second busiest or the third busiest airport in the world.

well, when you start talking about an airport of this magnitude in a 25,000 acre footprint, you're obviously talking about a global facility. in the midwest, it means an absolutely functioning o'hare airport. it means a strong and strengthened midway airport. but five gates and one runway will eventually become this facility. four runways. 200-plus gates. and massive cargo areas both north and south within the airport footprint. such a -- it's actually kind of humbling, mr. speaker. it's humbling to know, give me two of those slides back, the last two. it's humbling to know that for 17 years i've been fighting to build without asking congress for a single dollar one runway

and five gates in land already owned by the state of illinois to build this one runway and five gates to create 15,000 jobs. it's hum g to -- humbling to know i appropriate won't live to see this facility, the 25-year plus plan. and there's almost no one in this congress who is likely to be living to ever see this facility. but because of the size and scope and planning of the private sector, we can already anticipate what the future of the airport will be provided passenger forecasts and demand continue to grow. i can scan and scale this very large facility, mr. speaker, all the way back to this little bitity facility that got started -- little bitty facility that got started because president obama said we need to use public-private partnerships to build airports because airlines can't afford them anymore and municipalities

don't build runways anymore, they can't afford it. we have a model to make it happen. what are the public sector benefits? job creation, 15,000. sales and income taxes from businesses and individuals who live and dwell around the facility. off airport real estate taxes. people who live close to these things, their property values go up. the quality of their lives go up. and with the buffer between the last runway and the nearest community being more than a mile, there's a significant noise reduction factor already built into the appropriate and proper planning of this airport. the net present value of the public-private joint venture, cash flow to participating governments estimates at $230

million annually. what do you do with $230 million? as i shared with you at the beginning, let me see that map where the state of illinois has purchased land, that one right there. the state of illinois has only purchased this land, mr. speaker. but the entire foot print -- with $230 million which goes to the private developer and comes back to the commission in the form of rent that begins to purchase the remaining elements in anticipation an the expectation that the facility will expand. so when the private developer says it's time to expand the airport, the land has already been i choired by the government entity, again not at a cost to the taxpayer. but every time this airport

expands by another 10 gates, it creates another 15,000 jobs to a local economy. no road can do that. no bridge can do that. mr. speaker, may i inquire how much time i have left? i'm really excited about that, 10 more minutes, i think i can talk until tomorrow. what's the role of the public sector? it's limited, mr. speaker. it's not that complicated. we're landlords. i've been fighting for the last seven years back home, a lot of people say, we want to be in control, jackson, we like your ideas, we like your money, we like your developers, we want to be in control. mr. speaker, that's the old model. and they think like they're still participating in the old model.

the only role that the public sector provides or plays in a public-private partnership is they're the lan lord, that's all. imagine this, the city of washington, d.c., wants to attract target. a shopping center. to its city. so it has land, somewhere in washington. the city owns the land, it might be vacant land, might be a dilapidated area, the city owns the land. so it says to target, targeting we want to enter into a public-private partnership with you. we have land, you know how to run target. if we give you the land, will you build target? they say yes. for some lease fee, some arrangement between the local government and target, it builds its own store, maybe a 5-year lease, maybe a 99-year lease. the only role the government plays is in leasing the land. that's it.

unfortunately, that's not the illinois way. that's not the chicago way. the chicago way is, we need to be telling people who are running their business how to run their business. can't do that. if we lease the land and target builds the store, target runs their own store. the business on the public land runs their own business. what do we get from it? we get taxes. we get employed americans. we get economic activity and less crime and less violence. there's a benefit to the society when we make the tradeoff in the public-private partnership where there is governance over the land, there are lease terms, but we're not in the management and day-to-day operation of that business. same is true of this new airport. most public airports, the local mayor, the local city council, the local politicians are all involved in the business, trying to get their cousins

hired and get their friends hired. not in the new model. in the new model, we have the land and we turn it over to the developers to make jums about what is the most cost effective way to run an airport. jackson if you would just turn the developers over to us and let us -- no, no, no. i've been working on this too long. the way to do this right is for the politicians to stay out of it. and turn it over to the private sector so they can do their jobs. i've got to be honest with you. i ain't never ran a business before in my life. i came right from seminary and law school to congress. what kind of advice can i give an airport developer? what kind of advice anyone who has never run an airport before give some professional in the airport business? none. you need a hands off approach to allowing a public-private

partnership to operate at a profit without political interference. land. that's your public sector ole. -- role. you're a landlord. you're responsible for getting utilities to the fence. that's what you're responsible for. you're responsible for regulatory permits and approvals. that's what the public is responsible for. you're responsible for highways and transit improvements which the public-private partnership can in fact help pay for because it's a for-profit venture making a profit. so mr. speaker, i've talked about the need to build a new airport. i've showed you tonight that we don't need the congress of the united states that does not want to help barack obama, we don't need congress for nothing. to get this model moving. we just need the governor of the state of illinois. governor pat quinn.

area code 31 -814-2121, to lease the lapped to the government that has established this commission. from that, we'll have a national model emerge on how to put the american people back to work. it can spread quickly. to have that money in the private economy that's sitting on the sidelines and not engaging the economy. i stripped the idea of an airport out of this model of a public-private partnership. this can be any government entity. it then enters into an intergovernmental agreement with other governments with an understanding that it will have a relationship to the federal government, the state government, or local government. in the form of land. or utilities. or whatever is required in order to get the business

started. we then lease the land to a developer, who then invests in the land to create jobs and economic opportunities for the american people. the profits from the activity are paid to the developer to help them satisfy and settle the obligations associated with the initial investment and then the developer rents the land or pays rent to the government entity established by the local government and the profits can be shared by local governments. mr. speaker, it doesn't have to be airports. public-private partnerships can also build roads. they may be toll roads. because if the private sector makes an investment in a toll road, in a road, that the public is going to use, certainly they need to get their money back. how do they get their money back? after they made the investment, it has to be a toll road. public-private partnerships can

work. public-private partnerships can work for bridges. it may be a toll bridge. public-private partnerships can work and mr. speaker if we offer as a congress the kind of incentives that encourage public-private partnerships we can put the american people to work in quick order. mr. speaker, i'm particularly honor and privileged that you've allowed me the opportunity to share with my colleagues and the american people the importance of a project in my congressional district. i'm particularly honored that my constituents have been leading this charge for building a new airport in the united states. we need to build 10 of them just like this. and i'm hoping, mr. speaker, that those of white house want to see and help -- those of us who want too see and help president obama be successful, that whether he call this number and encourage the government -- governor of the state of illinois to give barack ob the victory that he needs and the victory that he deserves that can show us a way to put

the american people to work without raising taxes, without borrowing more money. without passing another government program. public-private partnerships, mr. speaker, can work. i'm asking my colleagues and those who can hear my voice to give the people of the second congressional district of illinois a chance to get one started so we can show you that it works. i thank the speaker and i yield back the balance of my time. the speaker pro tempore: the gentleman yields back. does the gentleman have a motion? mr. jackson: mr. speaker, i do now move that the house adjourn. for the evening. the speaker pro tempore: the question is on the motion to adjourn. those in favor say aye. those opposed, no. the ayes have it. the motion is adopted. accordingly the house stands

he is featured this week on the c-span feature "the contenders."

live friday at 8:00 pm eastern. >> they voted to subpoena documents to bid to alone given to so linda -- solyndra later, a hearing on legislation that would establish the new secondary mortgage market. here's some background on the subpoena. >> with us is the reporter with the national journal daily. why are they interested in these documents? republicans have been interested for almost nine

months. this set of documents are of the once going back to president obama's inauguration. they have said this is not a realistic practice. republicans had voted to subpoena the white house. >> they said it is not a realistic request. what is there a legal argument? >> they say it is a long standing privilege. it this is in terms of not allowing this. this is something they pointed out and that they are serious about. >> the president made a high profile visit to solyndra's

factory. what has happened since then? >> it has taken a complete then.ved sinc since documents have shown that downward spiral. in august, they filed for chapter 11 bankruptcy. they're facing an fbi investigation. it has taken a nosedive from w hen obama touted it. >> what has the failure of the company done to the efforts? >> it has been a huge political blow. people people and the knowledge

to it. there are tax credits and grants. >> this is for documents. >> the house republicans were a little bit vague. they have not officially sent over the subpoena. they have a sense yet. they are trying to work out what they want. they originally said they this.d

>> you can read your report at the nationaljournal.com. >> not today's hearing on the white house subpoena for documents related to the loan given to solyndra. the chairman is from florida. >> good morning. the subcommittee will come to order. the chair recognizes himself for five minutes for an opening statement. >> the purpose of today's meeting is to authorize the

issue of two subpoenas to the white house and the office of vice president for documents relating to the loan guarantee for solyndra. this is only the second time this subcommittee has considered a resolution authorizing a subpoena. earlier this year, and they repeatedly failed to copper with our investigation. we were assured that engaging in a dialogue would resolve all the problems without the need to resort to a subpoena. that was a stalling tactic. the same continue to buy the administration. on september 1, of this

committee requested documents relating to the solyndra loan guarantee. in the as the white house to produce all documents containing communications relating to solyndra. between the white house and the white investors, house began to produce electric communication. the senior advisers were discussing solyndra. we sent a second request to the council on october 5 for all internal communications that were relating to solyndra. we requested they engage in a dialogue about how best to manage the production of documents. the office waited until october 14 to respond, informing us that in the opinion of the white house, the committee did not need to see such documents. on the october 18, they informed

the office that it needed to invoke a valid privilege or produced the response of documents. when asked to contact staff to start a dialogue, at the white house counsel office refused to engage in any discussion. one week later, they sent another non-responsive letter, refusing to produce documents because the committee did not need to see such documents. only after repeated failed attempts to engage the white house did the committee notified the white house and the administration that it intended to note is a business meeting to pertained the requested information. this time i got the information of the council. the white house was an able to answer even the most basic

questions. do you have any responses documents? are you going to be asserting privilege? what quality of documents do you have? have you conducted internal investigations into what type of document you have? without the answers to these questions, it is nearly impossible to limit the scope of our request. as the president has stated,"the government should not keep information confidential because officials may be embarrassed by disclosures. errors might be revealed." my colleagues, i regret that we have reached this point. we have been investigating this for over eight months. it established the legitimacy of our investigation. two of the first three companies

have now filed for bankruptcy protection. just yesterday d.o.e. stated that the program has been mismanaged. he said it could not demonstrate how it resolved are mitigated relevant risks prior to learn guarantees. this is troubling. we have a right to know who was involved, what decisions were made and why. i am not confident that we will have a good faith response from the white house without issuing a subpoena. the committee does not take this action lightly. this is a necessary step in carrying out of the constitutional obligations. we cannot allow the executive branch to pick and choose what

they will produce or whether they will produce anything at all. public officials might be embarrassed by disclosures, is inexcusable. we have a duty to pursue this investigation of the loan guarantee program to further play a legitimate role in conducting oversight over how the executive branch has spent taxpayer money. to the committee to kneneeds understand what it was. if the white house has nothing to hide, is to simply cooperate. the president owes it to the american people what happened to their tax money. i recognize my colleagues for

five minutes. >> this is a sad day. in my 15 years, we have forged a strong bipartisan tradition of pharaoh and meaningful investigation. that could have been the case with the cylinder investigation. we have a loan guarantee paid with taxpayer funds that went bad. we need to learn the circumstances of the original bill. we need all the facts and documents. i do not believe they share this goal. in the last hearing that we had, there were e-mails by treasury employees suggesting this be set to the department of justice. in every isn't the average 20 to

talk about why they did not give an opinion from the justice. the administration has provided this on a 800,000 pages of documents. the department of energy in treasury have all produced documents on the matter. the white house has already produce a thousand pages of documents regarding communications with solyndra and investors. did the majority of action moving forward was a subpoena resolution. it is an act of irresponsible partisanship.

they will advance the legitimate oversight needs. it is a serious step. it should only be taken after alternative avenues have been exhausted. in contrast, the subpoenas to the white house has the potential to reach communications of the way up to the president's desk. that is why is a longstanding practice of this committee to engage in meaningful discussions with the white house to that of mutual accommodation -- to meet mutual accommodation. i am unaware of any subpoena to the white house ever from the committee on energy and commerce.

but democrats and republicans -- with respect to the subject to subpoena the white house, the starting point was the october 5, 2011 request of the white house for documents relating to the solyndra loan guarantee. the white house propose the committee narrow its request to the following areas. the influence of campaign contributions on the decision to whether or not grant or restructure the loan guarantee. involvement by the white house in a decision whether or not to make a conditional commitment to solyndra. and, by the white house in the decision whether or not to close the solyndra loan guarantee. involvement as a decision to support the government interest loanrt of the cylindesolyndra

guarantee. the white house never said they wanted to keep documents cry because they embarrassed people. they offered to produce all these documents. i knew this investigation did not mean getting all the evidence. when i receive the media advisory they sent out, it said despite committee leaders bipartisan outrage to avoid a subpoena, they failed to turn over requested documents. they said a quote that the white house still refuses to turn over solyndra related communications. i sat there in that meeting yesterday. our staff sat there with the majority and the white house. the white house said they have turned over documents. they are willing to turn over

more documents. last night we wrote a letter to you respectably asking me to post upon this subpoena issued in and it sent to work. i would ask unanimous consent to put a copy of that letter. i would implore you to please postpone this hearing so that we can continue working with the white house and avoid this subpoena. >> >> it will be part of the record. the chair reminds members that all opening statements will be made part of the records. i recognize the full committee chairmen. >> thank you. >> i do wish that it not come to

this. oversight is a core congressional response ability. it has a proud tradition sometimes in the course of an investigation we find yourself unable to secure necessary evidence. house rules give us the power to compel cooperation. it is a tool we will use sparingly and only as a last result. today is a last resort. we began reviewing the loan guarantee made by the federal government. several news accounts that identify problems had question whether the business model was sustainable. chosen at random.t rise

we had a responsibility to look into the loan and understand how and why it was made. we have nothing but a months of frustration. it was a natural tension between the legislative and executive branches. what we have seen is downright obstruction. they administration has touted the documents. most are highly technical. they never mention that producing those documents was by extracting a tooth without amnesty zia. -- without anesthesia. the department of energy turned over several boxes of documents probably sharing them with the press long before bringing them to our investigation parent these and not responsible. there are long overdue.

many documents were delivered only after being compelled by a subpoena. we repeatedly reached out to the administration in an attempt to necessary documents. they refused to accede to your -- refused to give the documents. the ministration has put up a roadblock in virtually every turn. we are forced to contemplate a subpoena went before. we did everything to avoid it. we had no choice but to subpoena the record. we had to issue it over the objection of every member of the minority. we cannot get to the bottom of this mess without white house

cooperation. we're hearing the same excuses about the need for more time. for no details on basic questions like what the white house house, when will they let us see it. we met with the council to try to broker an agreement. they joined us for that meeting. what they offered was the open end of pledges that were given to us before the subpoena. we still have not received all the response of documents. they are using the same tactics now. it means we have no choice but to expect the same outcome costs and move forward. a little bit before 7, after the house had recess, they contacted our investigators with a last-minute attempt to narrow the scope of our request.

they made no commitment to produce documents. the lawyers did express a willingness to conduct a search for only those items in the category they identified. it is insufficient. is to not have occurred on the eve of the subpoena. any sign of cooperation is better late than never. they work with the white house on this document. this proves we are on the right track. we established this with the initial loan guarantee. we have established that advisers have closed out to the cylinder of loan. we felt pressured to approve the

loan. we have made our case. the white house has refused to produce them. we have no choice but to a authorize this. i wish and not come to this. it has ai. hop-- it has. i hope members will join me. >> thank you. i recognize you for five minutes. >> thank you. i agree with the statements that he made. we should not be having this business meeting today. this is a serious step. it should be a serious resort. it is an impasse between the branches. none of this is true today.

i wish chairman of the subcommittee when his father and president reagan or president. i never issued a subpoena to the white house. i sit down with the white house counsel and worked out an arrangement that met the oversight committees and an need while preserving the rifle provinces. this is what we should be doing here today. this is what the committee has always done. he never issued a subpoena either. he always worked it out. the council met with the chairmen yesterday. she said the document request was so broad that it would include everything from the logistics of the president's trip to solyndra to his personal

blackberry messages. she offered white house communications voluntarily if the committee would engage the in good faith negotiations to narrow its request. the white house counsel offered to provide the committee with documents that would show whether the white house would intervene on behalf of contributors and what involvement the white house had in decisions to issue or restructure the loan. that is a lot different than what we just heard from the republican leadership. they said they would only pick and choose what to produce a whether they would produce anything at all. these are central issues the committee is investigating. apparently what the committee really wants is a confrontation with the president, not information for the investigation.

no wonder the public calls as congress in solo regard. our focus should be jobs. our attention should be rebuilding the economy, not manufacturing controversies with our president. this is an important investigation. it is hard to avoid the conclusion that the committee is abusing its powers. this looks more like a rigged process. let me go through this. in june, we invited the deputy director to testify with just four days' notice. he was not available the day the committee wanted. he could not testify any other day. the committee held a hearing with the empty chair. i asked the committee to invite solyndra's executives to

testify. when they testify, the republicans publicly humiliated him for asserting his constitutional right. in last hearing, they accuse the department of energy of violating the law but refused to allow anybody from the department to testify to defend the agency. the republican majority resisted releasing information. today we're being asked to give blank c u 10pton a heck. this is no way to run an investigation that should be bipartisan. it is an unprecedented departure from the practices of this committee. we have heard that there is no other choice. i think there is another choice that reasonable people would take.

se get the white hou documents. we can always go to a subpoena if that is insufficient. instead, we want to go to a subpoena first. then we can see what request are out of balance. i think a subpoena should be sparingly and only as a last resort. this is not the case that we see today. we are entitled to advance our legitimate oversight needs. i think it is sad that we are seeing what is going on. >> the gentleman's time has expired. we recognize the full committee chairman.

these are facts and documents. we should not argue over whether the american people hae tve the right to get those documents. he voted against the initial subpoena. it appears he will vote against this issuance. that is that. to be have a long history of four together -- we have a long history of working together to get the facts. we are here today because since early this year we have been trying to get the fax from the obama white house.

they have refused to cooperate. that is a fact. that is not a supposition. we want to know what changed in january of 2009. the bush administration department of energy made a decision not to proceed with the solyndra loan. two months later, the obama administration department of energy made a 180 degree turn and not only decided to find this particular loan guarantee, but they decided to expedite its and required whether the president and vice-president might participate in some type of a full opportunity at the announcement. what happened? what changed? what made this turnaround occur? that is why we are here today, to get those facts.

upton makingirman a personal phone call to the chief of the white house to even get a meeting yesterday that they participated in with the council of the white house. in that meeting, the white house has not claimed executive privilege or that the subcommittee is not entitled. they just have various reasons not to produce them. omb has produced documents. the department treasury has produced documents. the private sector has produced documents. until six or 7:00 last night, the white house said done nothing but issue press releases. last week they introduced independent counsel. this subcommittee has been

participating for almost a year. we now have a billion dollars of taxpayer money has gone down the tubes. we know there have been repeated contacts within the white house from outside forces that were very active. we know pressure was exerted from various officials. we do not have an e-mail. we do not have a document. that is why we are here today. we can argue over what the documents mean. we will. we should not argue over whether the american people have a right to what the facts are. this has tainted the entire alternative energy program. i happen to be a supporter of loan guarantees for alternative energy. i was chairman when this was

authorized. we now have people on my side of the aisle making serious recommendations to terminate the entire program. it is not being well run. we need to get the facts. to get them, we need the documents. the only way to get them is to subpoena them. we have the authority delegating to get those documents. i would hope that once the white house receives them that they will comply. then we can work together to determine what if anything can be done to prevent future activities from occurring. >> thank you. >> i did not roll off the

cabbage wagon yesterday. i was chairman of this committee for 16 years. we always got the information on the white house. they required that exercise a certain amount of patience and not that we come in with resolutions like this, which rival that yyoto of nero. we think this should be properly aired. i sometimes threaten the use of the subpoenaed during my time as chairman. i was always able to negotiate with the administration. we consider this only as a last

resort. it racist executive privileges, an area that has much area for them to lose power. we worked with the white house. we had very few confrontations over whether subpoenas would be issued. the democrats ordered them almost overwhelmingly that were suggested by the republicans when they ran the subcommittee. i have been told of the efforts have been made by the majority staff to do what i have described, to work with the democrats. we do not see it that way over here. it appears that the republicans are having a hard time understanding what the meaning of the word "yes" is.

what part of it do you not understand? getting information is a careful work that has to be done. why have we not? they provided tens of thousands of pages of documents without being issued a subpoena. they refuse to deliver nothing more on the request for this committee. the subcommittee heard jointly. they invited solyndra officials. then we also heard from treasury officials. to we had no background in energy. they testified they and a decision making authority.

why are we doing this was so little permanent testimony? i am concerned with the president we're setting today. this is without any real basis of misbehavior. i have said earlier i only use subpoenas as a last resort. we always brought the republicans in at the earliest moment to discuss the business of the community including what information we want, what would be done in the hearings, while is the purpose of the investigations, and whether subpoenas would be needed at the earliest. i hope the members will take a minute to think about what effect this will have on future subpoenas on either republicans or democrats.

i have not agreed ofttimes with republican presidents. they serve live is chairman. i have respect for them. i have respect for the white house. the process of this committee so far has showed a great inclination toward haphazard behavior and shows a lack of respect for the president. the base is conducting an event here that forces us to this conclusion, that this is politically motivated. information has been offered by the white house, more or less formally, to deliver what you want in the wake of papers. mike advice to you is to take that opportunity and let us get these back to the point where they are bipartisan rather than

have they become vast haggles about what we're going to do. i yield back the balance of my time. >> to recognize you for 1 minutes. >> thank you. thank you for calling this business meeting. the said committee started this nine months ago. we have been patient. today the white house has refused to give the subcommittee any documents relating to the loan guarantee to solyndra carried the american people deserve answers. did they footed the bill. we know the white house was closely involved in monitoring the loan application review. we need to learn how extensive

the white house involvement was in approving the loan and whether they place political pressure to approve it. at the end of the day, $535 million of taxpayer money has been lost on the solyndra loan guarantee. there are questions about how this was allowed to happen that need to be answered by the white house. as a longtime critic, i will vote in favor of the subpoena to make sure it complies with the investigations. i yield back the balance of my time. >> you are recognized for one minute. >> this is the way it is going to be. we need to determine what happened with solyndra so the program can be more effective in future.

the white house has a marching with the committee. -- has been working with the committee to produce all the relevant materials to the solyndra loan guarantee and the white house counsel to produce a more targeted request that addresses the issues relevant investigation. this is a majority that will not take yes for an answer. why not you asked for more documents relating to the place of his birth or some numbers? it seems this is the political trend that we're going to. it is a real shame. >> the gentleman from pennsylvania.

>> they called it a fishing expedition. now they're seeking a tarnished. they accuse them of hypocrisy. none of this is true. why rush? @ think they had some small -- i think they had some smoke and mirrors. no loan can be guaranteed unless they can get paid back. if it is not broken, and the taxpayers want to know why the money is gone. this must go on and not be delayed any further. nothing we do is more important

than protecting taxpayer money. we'll back. >> i respectfully disagree with the characterization by the majority that the executive branch has not cooperated. this committee has made a formal document requests. to the treasury department, to the office of management and budget. over 80,000 pages have been produced. they have a review of documents. these of the representatives we have had. i do not know how you can see how the a ministration has not cooperating.

i think the committee has the responsibility to be straightforward. i regret that they have not done so today. that is to the detriment of figuring out the matter. >> i think he for the recognition. they say this is unprecedented activity. it is unnecessary had the white house not practiced pay the mantra of "delay, delay, delay." this would have been a one day story. the white house has fought every step of the way. this seems to be the management plan. the ranking member said it is no

way to do this. they might do well to follow the counsel. the white house has refused to assert executive privilege or that they might have documents that would be covered. the white house might have been much more cooperative. that is the real shame. i yield back the balance of my time. >> thank you. the wayppointed anon this investigation is being conducted. i agree. we must investigate. the unprecedented action will be conducive on both sides.

our former chair, this program was traded in 2005 when he was chair of the committee. we ought to have this available. we ought to see what happens with this investigation appear . we could be doing better. today's hearing is more about the generating since they stopped headlines instead of living of to our constitutional authority. my opposition has nothing to do with protecting the president our politics. let's get the investigation started and start turning

congress to do something that we really do not need. today the committee is like during chun to the sharks. i yield back my time. >> the lady from tennessee is recognized for one minute. >> and a 2008 presidential debate, they received a question about executive privilege. president obama responded " richard nixon mounted similar arguments. that is not how we operate. we are a nation of laws and not men and women. you know, that is the precedent i do not mind living with as president of the united states." since she first began back in february, we worked diligently with our friends across the

aisle. we tried to be cooperative and throw in conducting oversight. they would deem it were the of responsibility they have given us. this administration has delayed the release of pertinent information that is required in order to conduct a comprehensive review. the american people have a right to know. they expect this to get to the bottom of the solyndra issue. >> thank you. the white house has agreed to cooperate on this investigation. they have been true to their word. executive privilege has been exerted. this president has done nothing more than that. i have to ask a question. what is different in the case of president obama?

we have a responsibility to investigate. we should continue with what we have. this is not the priority. they need jobs. this is what we must turn our attention to. while we may be able to wait to get more information on solyndra, the people of this country are demonstrating they cannot wait. >> shields her time. -- she yields heard time. e >> thank you. i am saddened by what we're doing today. it is premature. i support a full investigation

of solyndra. the fact is they administration is cooperating with house investigators at this time. they provided more than 80,000 pages of documents. the ministrations turned over 15,000 pages of documents to the committee this week. at a time when the american people want to see us working together and to put country before party, it seems like this is nothing more than a political gimmick. the administration is working with this committee. should it stop, i would support this. they are fully participating and cooperating. i think the investigation should continue and include anyone with any knowledge about any of this. let's get to the bottom of it. let's not have these votes just for what may or may not be

political gain for someone. it is time for us to come together and work together and put country before party. >> thank you. this is a serious investigation of a loan program for renewable energy administered by the department of energy. this was modified by the stimulus bill in section 17 05. it allowed for non money down loans. that surely contributed to this fiasco. our colleagues on the other side of the aisle when given an opportunity several months ago when a subpoena was issued to the omb for records. they voted against it. we received very valuable records. now they have another opportunity. they have an opportunity today to vote yes or no.

they have been entirely necessary. this is an important investigation. let's be teammates. the american taxpayer deserves nothing less. i yield back. >> you're recognized for one minute. >> thank you. the $535 million, you would think that the white house would be willing to operate and give us the information that we have been requesting. from the very beginning, when our committee started looking into the solyndra scandal, at the obama administration has failed to comply. they failed to live up to the very transparency that president obama tried to make a hallmark of his campaign. the taxpayer money got lost. we may have been able to protect the taxpayer money. here we are again after a

partisan attempt to block us from getting the information we already got that is been so important. now they're trying to get more information that the white house will still not give us. we will have given you enough. they do not get to decide that. in the white house is not above the law. there's taxpayer money still risk.-- stil al at the white house has played a heavy in this. i do not know why they're not complying today. what do you need? they are still trying to do this. it is time for them to come clean and finally get to the bottom of this scandal with solyndra. >> you are recognized for one minute. >> thank you. this subcommittee has been investigating the solyndra affair for months.

the investigation has been slow and delayed. you cannot lose half a billion dollars of taxpayer money and not provide answers. i hope everyone had shared in the sky. apparently not. and there's nothing to hide, then why hide? i am confused because there seems to be so many people who are unwilling to seek of those answers. i'm curious the spirit of cooperation muslims and there is still lecher. they have the ability to do this within the resistance we have been met with. this is unacceptable. i hope the white house will begin to take this matter seriously and show some initiative to get to the bottom. i yelled back. >> the gentleman from massachusetts is recognized. >> thank you. the white house is saying they want to cooperate. they want to provide all of the

relevant documents. you are saying no. the reason you're saying no is back from the minute you took over in january, you have had a concerted effort to destroy the renewable energy program in the budget. this was reduced by 70%. in april, when you brought the government to the brink of shut down, you successfully rescinded $18 billion for renewable but let these 22 billion for nuclear loan guarantees. that is what this is about. this is just a continuing pattern where the nuclear industry once this competitive wind and solar industry to grow. we have not had any announcement

of an investigation of a loan guarantee for this other company or for two nuclear power plants. the stock above this. let's >> thank you. frankly, i of the -- i am one of many who have worried that the actions of the administration in providing massive grants to solyndra and what appears to be under political persuasion or

favors or cronyism, or something, has endangered the renewal bulls -- renewables more than any ryan budget. it has created a public perception that this is an unstable, corrupt industry. i do not think there is a fair -- that is a fair label. that is why we have to make sure that our investigation is complete and that we have the appropriate documents. >> cooperation, cooperation, but there is no cooperation. two months ago we passed the white house for cooperation, and still we wait. every step of the way, the minority has opposed to this

investigation. i want all of this information to be public. $75 million subordinated, making the taxpayers second class creditors. the american people need to know who was involved in the decisionmaking process. it appears a subpoena is the only way to find out disinformation. >> of the gentlemen at yields back. there are no further opening statements. >> resolution offered by mr. stern. be resolved by the subcommittee on oversight and investigation doubt upon the adoption of this resolution, the chairman of the committee on energy and commerce may authorize an issue subpoenas to both william daley, white house chief of staff, and

bruce grade -- reed, the office of the vice-president relating to the committee's investigation of the following matter. a loan guarantee made to solyndra by the united states department of energy in september of 2009. >> mr. chairman, i have a motion at the desk. pursuant to rule 16, i move that the subcommittee on oversight and investigation postpone consideration of the revolution -- a resolution until november 15, 2011. >> the gentle lady is recognized

for five minutes. >> mr. chairman, this morning we have been haggling around about whether or not the white house has been responsive to the committee's request for documents. we all agreed that a subpoena to the white house is unprecedented in this committee. if there is any way to get the white house to cooperate with us and to provide the documents, that would be the very best results in terms of getting the evidence we want without getting involved in a prolonged court battle over executive privilege and it would also help get the evidence that we need in this investigation. i would like to take a couple of minutes to clarify exactly what has happened. to be honest, on both sides of the aisle, there has been some confusion as to what requests were made to the white house and

the rest of the executive branch. this committee's first document request to the white house related solyndra loan guarantee was sent on september 1 of this year. it asked for all communications between the white house and solyndra, as well as in the communications between the white inuse and "the investors ca solyndra." the white house, mr. chairman, responded to the request would document production on september 13, september 30, and october 7. there have been subsequent communications between this

committee at the white house. the white house has asserted that many of the documents that had been produced by the department of energy and omb were also documents that were included in the september 1 request. there have been a number of back and forth communications about those documents. there was this meeting yesterday, which we have all talked about, where the majority was there, the minority was there, and the white house. i heard the white house council clearly say that she believed that this was a legitimate investigation. she believed that documents relating to any thing about this loan guarantee board appropriate, including documents about communications with white house political donors and others.

she volunteered to work with committee staff to further narrow the scope. later yesterday, after many conversations between our staff and the white house, as i said in my opening statement, the white house offered to produce more documents. it was delineated in the letter that i sent you last night. it seems to me that the white house is attempting to cooperate with this committee's investigation. for my part, we would urge the white house to go overboard in cooperating with this committee's investigation. that the whitete t house documents were requested 8 months ago. they were requested two months ago.

there have been good faith efforts to produce documents. secondly, i have reviewed the proposed subpoena. we got that from your staff fled last night. it is a very broad subpoena. it's as documents to be produced? -- it says all document to be produced relating to the $535 million loan guarantee to solyndra by the department of energy. including notes, analysis, memorandum, and all drafts of such documents. since you are dealing with a very broad document request, there may be thousands of pages of documents that are irrelevant. it would slow us down and trying to figure out exactly what happened. the second concern i have is that if the white house asserts executive privilege and we end up in court, this is further

delayed. what i have done is i have said, let's delayed this subpoena until the november 15. that is two days before the secretary is scheduled to come in and testify before this committee. let's try to work to get the documents that would be relevant to that we can question him on that. if the white house still refuses to produce documents, we can look at it at that point. that would be my suggestion. >> i recognize the gentleman from michigan. >> i rot -- i rise in strong opposition to this amendment. we have been trying to get information now for months. last week, i informed mr. waxman that we would ask for a business meeting this week.

at the same time, i was going to call bill daley. and urged a course of action that to could have avoided today's session. i did not speak to bill daley on thursday, i left a very detailed message. i thought it would be prudent for the white house counsel's office to reach out to committee staff to see if we did get this resolved. we were not satisfied with the response sent from the letters that we send to the white house. he chose to reach out to me on tuesday afternoon. of this week. i made this same request and we had the meeting with the white house counsel yesterday morning. with both mr. waxman and their staff. they knew that we were going to

sit down with the republican members at 4:30 yesterday afternoon to make a final decision as to weather we would -- as to be there we would move -- whether we would move ahead today. 5:00 came and went. the white house knew we were sitting down at 4:30. department of energy had dumped documents to the press. i did not see that as a sign of good faith. it was about 6:45 when we received written response from the white house. that had no sense of timing when we would see any production. i would say that when we went

to -- through the exercise last july of seeking the subpoena on, it was only got the finally began to see some cooperation to provide documents. i am a former white house official. you have bad stories from time to time. when does happen, it is best to get them resolved and get them rip, drip,versus dire drip of bad news. we do not want to see this delayed any more. , ands pledged -- playgued

it is time to get to the bottom of this whole mess. we need cooperation from the white house. we have not seen it so far and that is why we are moving ahead with the subpoena resolution. i would ask my colleagues on both sides to oppose this resolution. i yelled back. i would move to table the -- i yield back. i would move to table the motion that is before dusus. >> the motion to postpone is tabled. a request for a table of vote. >> the clerk will call roll.

>> mr. sullivan? >> mr. murphy? >> anyone else wishes to vote? and >> mr. chairman, on that vote, there were 13 ayes, 9 nays. >> i seek recognition to strike the last word. we have the unfortunate situation of solyndra's bankruptcy. it is appropriate that this committee investigate how this happened. not only to find out what happened in the past, but to make sure it does not happen in the future. who is involved in such a loan? the department of energy. they are the ones that make the decisions. to else is involved?

the office of management and budget. our committee passed -- asked doe for information and we got 65,000 pages from them. some people at omb had a different opinion about solyndra. before they had a chance to get it to the congress, this committee moved to subpoena them. i thought it was inappropriate. it is a far different thing to subpoena the omb than to subpoena the president of the united states. we did not give an opportunity to work things out. we slammed them with a subpoena. i posted as premature. not because i did not want to get the information. let us review at about where we are at the white house.

the white house counsel outlined held want to proceed to get the information that was important for our committee's investigation. they acknowledged that it was a legitimate investigation. they said they would get as information on the core concerns of the committee. that statement has been made as if a were already established. we have not even gotten all the facts. there is no evidence to support it. we have to get all the information to see if it is true. the white house says they will give us that information. the loan guarantee at closing and a long restructuring -- loan

restructuring. those are the reasons we have an investigation. they did not to give him anything in writing before is 4:00 meeting. because they gave them something in writing at 6:30, we're going to go to a subpoena. to give me a break. two hours? the white house is trying to cooperate. republican after republican said today that the white house has refused to give us anything. it is just not true. in congress, i have never seen a situation where on a bipartisan basis, when somebody asks for more time, you did not give them more time. we could have given them a little bit more time. why is the white house still sane they do not want to come -- saying they do not want to comply with all the information?

because it is so broad, it could be a violation of executive privilege. if someone is discussing weather the president should go -- whether the president should go to the solyndra factory, that is not information that is pertinent to our investigation. it is a fishing expedition. it intrudes on the prerogative of the presidency. not just this president. if he would look at this question seriously, you do not need to have a subpoena vote today. they gave them a clear -- of what information they would

provide to the committee. after that information has been provided, we can see what else we need. do we need the information that was directed -- there are some things that we do not need and some things that are inappropriate for us to ask. i would urge opposition to the subpoena and i would urge that the chairman rethink his position in light of what he just said. they did not give you the information that they wanted by your four-o'clocks 30 meeting. therefore, we will go to the unprecedented step that was never taken by any chairman of this committee or subcommittee chairman to issue a subpoena to the white house. >> the chairman strikes the last word. as chairman of the subcommittee, i feel compelled to offer this resolution.

we had exercised restraint and patience during the course of this investigation. the administration has resisted their efforts every step of the way. earlier this year, omb repeatedly failed to cooperate with our investigation. we agreed to put off a vote because we were a short that engaging in a dialogue with the administration and the minority -- >> [inaudible] >> we were sure about engaging in a dialogue with the administration and the minority would resolve all the problems without the need to resort to a subpoena. that was just a stalling tactic. we were forced to issue a subpoena several weeks later, but the administration won the delay. the administration deemed -- seems to think if they can just

drive this investigation out, we will give up and go away. but we will not. we have a constitutional duty to investigate this matter. pursuant to our oversight and legislative functions. we have an obligation to the american people to find out what went wrong. why have two of the first three companies that received these loan guarantees failed? why was the taxpayers' money subordinated? why were so many warning signs and red flags simply ignored? this is a serious investigation. half a billion dollars appears to be lost. this is not a fishing expedition. we already have documents that show that the white house was involved in decisions that related to solyndra. they want answers, and so did the american taxpayers. it is unfortunate that it has come to this, but we do not have faith in the white house

overtures that simply want to delay and obstruct. i request that members in this subcommittee join me in their full support to authorize the chairman to issue a subpoena to the white house. is there any further discussion on the resolution? >> mr. chairman, in my 35 years in congress, i presided over the issuance of only one subpoena. it, too, concerned an environmental policy matter that began during the bush administration. all like this subpoena -- unlike the subpoena, the one i issued was issued on a bipartisan basis with my ranking member

fully supporting my efforts to learn more about the bush administration's response to global warming. it was a bipartisan effort because we exhausted all culvert avenue is -- all other avenues. that has not happened here. the obama administration has been cooperating with the committee and has said it will continue to do so. the white house just yesterday offered to share internal white house e-mails on all issues better being debated about the solyndra loan guarantee. by contrast, what my subpoena requested was to documents -- two documents. the bush administration did not

just refuse to provide them, they refuse to comply with the subpoena at all until the committee scheduled a business meeting to consider a contempt motion. this committee should accept the accommodation offer. subpoenas should be a last resort used to maintain -- obtain information when the subject of an inquiry has failed to cooperate. yesterday, republicans were singing a very different tune. over in the natural resources committee, 100 yards away, republicans voted unanimously against my motion to subpoena the ceos of bp, transocean,

halliburton, who refused to appear to testify about what has happened since the bp oil spill. we just wanted the opportunity to question them about the environmental catastrophe that actually it was the result of illegal activity in the gulf of mexico. while insisting on full disclosure and complete transparency from the white house on solyndra, republicans have pushed the ceos from the companies responsible from the worst oil spill in our history into a witness protection program where they are going to be immune from any congressional or public scrutiny. when it comes to solar energy, republicans embraced the

disinfecting power of sunlight and disclosure. when it comes to oil, they seem to prefer to hide behind its murky sheen. this debate is not using -- is not about using our subpoena power, this is about a fossil fuel and nuclear fuel interest. that is what it is all about. that is the bottom line. you have to see this story in two parts. bp, oil, a crime, not a word. here, they insist on issuing subpoenas. that is all you really need to know. that is what this debate is all about.

85,000 employees in the wind and a street 85,000 employees in the coal industry. their share of electrical generation is growing too fast. we've got to put -- we've got to slow them down. do it at theo expense of all procedural safeguards being given to all those who come before this congress. >> the gentleman from texas is recognized for five minutes. >> i have listened with interest to my friends on the democratic side. there really are my friends. they're all people that i have great respect for.

we know that on this committee, where we debate the big issues, we will have spirited debates. i am reminded of the old popeye cartoon character, wimpie. he was always trying to mooch hamburgers of people. i will gladly pay you tuesday. they are all for the investigation -- in two weeks. they do not want to support it today, but they will support on november 14. it is premature to subpoena documents from the white house. this is the same mr. waxman when he was chairman of the ranking member of the government reform committee, he offered all kinds

of documents requested to the bush white house. mr. markey is upset because over in another committee, most of the members of this committee are not big fans of the other committee. their chairman tried to take all of our jurisdiction at the start of this congress. i do not know how you can associate us with those guys. we are here today because half a billion dollars of taxpayer money is gone. the company that took a loan had been rejected by the bush administration in january. the obama administration comes in and approves it an expedited and bought about doubling down on it. although they did not, to their credit. we have been trying to get some documents.

and we have a lot of documents. the department of energy and the treasury department had provided documents. the white house has not. if you read the letters that mr. upton since se -- sent, the white house says that it is not necessary. we want to get the facts but the only way to get the facts is to issue a subpoena. some have said that our subpoena request is too broad. i was oversight chairman when the republicans first came into the majority back in 1995, and we took the language almost verbatim from oversight requests that mr. dingell had been using when he was subcommittee chairmen.

>> [inaudible] >> i will add the appropriate time. -- i will at the appropriate time. our subpoena request is a standard format that democrats have used and republicans have used on this committee for decades. with all due respect, i understand my friends on the democratic side have to walk a fine line. they have to protect the president of their own party. they also have to be objective and support an investigation. it is gratifying to know that they and the white house have magnanimously decided that this is a legitimate investigation. we appreciate that. we knew that all along. if you really want to get the facts, and the white house does not want to cooperate, they just want to sandbag and dragged their feet and gladly comply

next tuesday, we have to issue the subpoena. it has to be broad. we have to insist that it be complied with. with all due respect, i would say that we should vote on this and let's work together to get the documents and dissected them, review them, analyze them, and then we can have a debate about what the conclusions are. with that, i would yield to mr. dingell. >> first of all, i ask unanimous consent for 2 additional minutes. i do not want to be recognized for a full five minutes.

>> i would ask unanimous consent for one additional minute. >> let me make one observation. i never served a subpoena on the white house. the subpoenas were always discussed with the minority. we had a policy that we would always discuss them before we issued them. i did that with the gentleman from texas and guided it with every other ranking republican member -- and i did it with every other ranking republican member. none of those things are being complied with. . this is a fishing expedition. we're asking for everything from the president's schedule, to his travel plans, to where he was going to meet on every matter related to this investigation. this is a fishing expedition and there is no way of getting around that. >> ok, anyone else?

the gentleman from georgia. >> quite honestly, what we're dealing with here, we are the subcommittee on oversight and investigation. we have a responsibility to the american people. this loan program for renewable energy is $36 billion worth of taxpayer money. there is an article in " politico" talking about 100 criminal investigations that have already been initiated by the inspector general in the department of energy. i do not know about you folks, but that sounds like a heckuva lot in a bill that was just

passed in february of 2009. we already have 100 criminal investigations. think back to the time when the community reinvestment act was passed. you had the efforts of organizations like acorn pushing banks to get out the is no money down loans. it was ignored until finally, we got this country into a mess. for us to sit here and tried our feet on something like this and say that it is nothing but a fishing expedition and a witch hunt and it is all political. that is clearly not the case. my good friend from massachusetts talked about a

murky sheen. we need to get a clearer view of these related documents from the executive office of the white house. what they are doing is putting up a murky sheen. in conclusion, it is time for us to get out the wind? -- windex. >> you said 100 criminal investigations. i do not believe that it is an accurate statement. every time they look at a matter, it does not become a criminal investigation. the only investigation is the fbi of the solyndra matter. >> i will be happy to give that to you. i refer you to an article this morning in "politico."

if there are any inaccuracies, i would be willing to retract those. 100 investigations have been initiated by the inspector general of the department of energy over this program for renewable start-ups. that is the fact that i read this morning. >> does the gentleman from michigan seek recognition? the gentleman is recognized for five minutes. >> i have questions to direct to the chief counsel of the subcommittee. is he here, please? >> he is not in the room. >> i ask that the clock not run on me. >> he is presently in the the rationale.

-- room now. >> these are yes or no questions. have you included the minority staff in any or all meetings? >> can you repeat that? >> have you included minority staff in any and all meetings with members of doe, omb, and the white house? yes or no? it does not require a lot of thought. >> yes, sir. >> have you shared any and all details of those meetings with the minority? >> they have been involved in

all the meetings. yes. >> have the requested documents from solyndra? >> no, sir. >> have you requested documents from omb? >> yes. >> have you received all the documents? >> no, sir. >> have you requested documents from the white house? >> yes, sir. >> have you received those documents? >> no. >> what do cement the dates on which the requests -- would you submit the dates on which the request were made? >> yes. >> have all of these documents been shared with the minority staff? >> yes. >> did you share with the minority staff all documents being requested at the initial designation of the document request as set forth in the

resolution and the subpoena? >> can you repeat that? >> have you shared with the minority the list of documents which are being considered for receipts under the subpoena under the resolution we have before us? >> yes. >> have you received a document showing that the white house directed debarment of energy to approve the loan with solyndra? yes or no? >> we do not have all the documents. there is a matter of interpretation. >> has the minority counsel seen the documents that you have requested from the white house

that directed department of energy to approve the loan to solyndra? >> we do not have the full production, sir. everything we have gotten, we have directed -- >> my staff did not receive a copy of the subpoena until 10:00 last night. i've only read recently. is there a clarification on the subpoena resolution or anywhere that the majority justifies the need for the subpoena? if so, where? >> i am not sure what you mean. we sent copies of the subpoena. >> are you defining what the documents are that you are requesting?

the subpoena and the resolution are without limits. i am trying to find the where the limits and one of the documents requested in the subpoena so we know what we're voting for. >> i disagree that it is without limits, sir. >> the answer to the question is yes or no. >> the answer is no. >> does the subpoena asking for specific documents that the majority knows the white house has not turned over? yes or no? >> the subpoena does not ask for particular -- >> that is precisely the point i make. in lieu of issuing a subpoena, have you held discussions with the white house to find all the way there a compromise can be arranged with the white house?

>> we have repeatedly requested to have discussions with the white house and open up a dialogue. >> have they said yes to that? >> that did not happen until yesterday. >> i would ask if the gentlemen at would yield for a question for me. >> the resolution offered by mr. chairmenthorizes the to authorize and issue a subpoena. it does not indicate specifically what the request

will be. as i said in my opening statement, "we fully intend to take last night's proposal into consideration as we refined the scope of the subpoena and work with the white house." >> that is mighty comforting, but not sufficient. we got the subpoena last night. i do not know what is your asking in the subpoena. that is what i'm trying to find out. what is constituted in this documents? >> if the gentleman will yield,

we intend to take last night's small step of cooperation -- if the vote is there to approve this -- >> i will support the gentlemen and getting the papers and records that he wants in the proper and traditional way. for that reason, i move that the committee adjourned. >> is that what i understand a gentleman's motion is? it appears to me that the no's have it. >> chairman, i would like to strike the last word.

i want to respond to what the chairman said. that he would use the discussions that happened last night as the parameters of the subpoena. yesterday, in the meeting, i passed committee staff to give me the draft subpoena. we received it at 10:00 last night. i guess i would ask the chairman, because your staff gave us the subpoena. let me just finish my sentence. and this subpoena says all documents in the possession of the executive office of the present relating to the $535 million loan guarantee issued to solyndra notes, analysis, more memoranda. this is the subpoena that the

committee staff advised us that it intends to serve upon the white house. i would ask that it be included in the record. i would ask the chairman, is it not true that this is the subpoena that you plan to serve upon them? >> i did not hear the very end of your statement. this resolution that we are voting on authorizes the chairman of the energy and commerce to issue a subpoena. that subpoena, you have seen some draft language, but it is not done yet that a draft language was written long before we received a statement last night. it is not done. we're going to use with the white house presented to us last night. >> reclaiming my time -- the

subpoena was provided to us after the white house made a statement. >> i would like to see this subpoena. i would like to vote for the subpoena if it really does take into consideration all the information that you've received. we're just authorizing you to make up a subpoena later. that does not strike me -- that is putting the cart before the horse. >> if you would like to clarify what didn't he intends to do. now it makes me even more concerned about what this resolution is asking for. >> this resolution authorizes the chairman of the energy and commerce to authorize and issue a subpoena. that subpoena, you have seen a

draft. a draft is a draft. it is not done until it is done. we're going to take last night's proposal into consideration. as we look at a final document, should this committee authorized me to send the subpoena. we will take this discussion of what the white house provided last night. we will probably add a few things. we're also going to have a timeframe, something that the white house did not offer last night. as they began to come forward with some of the communications. >> reclaiming my time, what the chairman of st., -- saying, if we hope -- if we vote for this open and did -- open ended resolution, i think that is even

more cause for concern of this committee because this committee has a longstanding tradition of working together on documents that should be produced. i will just say one last thing. i will put these proposed subpoenas, they did not say draft or potential anything. they simply reflect the very broad language. >> i would like to put these white house letters from myself and mr. upton. >> i do not have any objection. >> in my understanding that it has always been the tradition of this committee to vote on specific language of a subpoena. that is the full force of a subpoena.

vote -- to asked to authorize the chairman to go ahead and issue a subpoena. what if the ax and very arbitrarily and says he wants the president's personal blackberry? this is and i unprecedented power to the chairman of the committee. to give this kind of subpoena power. we are not voting for a subpoena, we are voting for an authorization. >> there is no further discussion. the vote occurs on the resolution. all those in favor should signify by saying aye. >> i asked for a roll-call vote. >> mr. terry? mr. sullivan?

mr. murphy? mrs. blackburn? mr. gardner? mr. griffith? mr. barton? mr. upton? mr. markey? mr. green? mr. dingell ?

mr. waxman? vote?one wish to >> there were 14, 9. the resolution is agreed to. the business of the subcommittee is adjourned. >> steven chu will testify about the government loan to solyndra. he will go before the energy and

commerce oversight subcommittee in two weeks on november 17. we will have live coverage of the testimony. >> up next, remarks from tom brokaw. after that, a hearing on legislation that would establish a new secondary mortgage market. tomorrow night, for the ronald reagan dinner, rick perry, newt gingrich, michele bachmann, ron paul, and rick santorum will deliver remarks. saturday, herman cain and newt gingrich square off in a lincoln douglas style debate on the economy and social issues. it is hosted by the texas tea

party patriots political action committee. >> this has been completed. all its needs is a signature. this is the filing fee of $1,000. we do this every four years. >> we have a great secretary of state. we appreciate your leadership. we will make sure that new hampshire remains first in the nation.

i am happy to be part of that process. i put my name on this paper. i will be able to become the nominee of our party. >> the new hampshire primary is set for january 10. you can follow campaign 2012 online with the c-span video library. the c-span video library, it is washington, your way. >> tom brokaw on american politics, journalism, and the economy. during his speech at the national press club, he reflects on a career in journalism, the changes he has seen in the world. this is 55 minutes. [applause]

>> if you are a member and to walk around the halls of this institution, you will see priceless photos depicting history of our club in our profession. there are a few individuals depicted more than once on those walls. our guest speaker today is one of those. he has spoken at arlington's anas the winner of a lifetime achievement award. it was during the administration of president ford that i saw to network's stars, tom brokaw holding court at a presidential news conference in topeka, kansas. i became fascinated with the work of broadcast news. they were camped outside the ballroom at the ramada end. i did set my sights -- wmata -- ramada inn.

americans of had breakfast with our guests, dinner, or a nightcap. he hosted the "today show." he is here today to talk about his new book, "the time of our lives." he will give us his unique perspective of this current point in history and tell us what he thinks about the great divide in our political climate. many of you are familiar with his remarkable story. his first tv news kids were in iowa, nebraska, atlanta. he joined nbc news in 1966 as a reporter. we're told that he has covered 11 presidential elections. he was the white house correspondent during watergate.

in 1983, he became the managing editor of the nightly news, where he remained until 2005. having been named one of the most trusted people in america, he was passed by nbc to step back from the spotlight to host "meet the press." he has won every major award in broadcast journalism. the same award given to state few days ago. with his trademark midwestern style, our guest is a natural storyteller, weather on the air or between the covers of a book. in 1998, he had a breakthrough achievement. it has been ranked among the best of the last century. he has a merger of a career capturing history on the fly.

other successful books have followed. while he has been less than complimentary about baby boomers, and he has remained neutral on politics. rush limbaugh referred to him as a self hating liberals. he says rush should know that those of us to make a living listening to the sound of our own voices are incapable of self hate. [applause] we think we are grand. it is not often we have the opportunity to have such a prestigious member address our audience. we are pleased he is here. we give a warm welcome to mr. tom brokaw. [applause] >> thank you very much.

we think we are grand. i include him and the fraternity. >> welcome. it is grand to have these. your grandfather was not only a great friend but he is the godfather of a small club to which i belong to for people who were once the anger of the evening news. abouting to share a story your grandmother who's led the must favor people any of us could have the privilege of knowing. i always said he studied in the park. he had his first mate. humble anchorman dan not exist -- do not exist. we count on our wives to let the air out of us. her idol was betsy cronkite.

when they move from a town house into a high-rise in new york, after three months, she said of a " i miss the old place. they said of course, you raise your family. we had a backyard. i could bury all those dam plaques he was getting. we read at the kentucky derby one year. it is a death march when you have the kind of visibility we do. by saturday night live or at a black-tie dinner. i have two friends to of always wanted to take us in a hot air balloon. you can always do that at dawn. >> we're on the outskirts.

we're getting ready to get into the hot air balloon. they stole the champagne glasses. we lifted off. the first voice i heard was betsy cronkite. e. still want that burial at sea. my final favorite came after walter had retired for a couple of years and is in the national park. you simply buying something for you. he was standing in line. the woman behind walter kept looking at him. she cannot container sai -- conn

herself. has anyone ever told you look just like walter cronkite did before he died in? [laughter] walter turned around and began to clear his throat. now she is a mild panic. she turns to the woman behind her, not knowing it is that cn says "walter cronkite is dead is an't he?" his grandmother had a wonderful crooked smile. her eyes with critical. she said it is not the zero this -- if he is not the oldest sob, he ought to be. he had someone who helped steer him on a steady course. i will take a few minutes of your time to talk about how i d thete this book ant he

craft that unites us. i have been at this for half a century. my marriage coincide with the beginning of my career as a journalist. i have a wonderful family. we have had an extraordinary life. i have four granddaughters. i had the privilege to cover stories in omaha and atlanta all the way to some it means in the kremlin. i have never lost my sense of wonder at the change we have experiences. that change was distilled in jun of 2009 when i was interviewing

president obama in germany as he is preparing to go to normandy. i was waiting to interview the new presidents. i was born in 1940. dresden had been firebombed to the point it was leveled. i spent the next 40 years behind communist lines. now the city was rising. i just came from berlin. i was there the night the wall came down.

it is vibrant once again. it had been the capital of the most mendacious regime than anyone could imagine. then along came an african- american president his father came from africa and mother came from here. we began our exchange. when i mentioned i have been in berlin denied the what came down, urging the night in the wall came down, he said i know, i watched you. i was in law school. my god. he was in law school. the energy to take that we have been there. i wonder what they would be saying about their time. this is about what we left them.

you forget you have a firm idea of where you're going to go. as every page, you have new thoughts about the direction you want to go. this came down to two questions. what happened to the america i thought i knew? they would say, do you think my children will have a better life that i have had? i wary they will not. that question as at the heart of the american dream. they hope succeeding generations will have better lives. my dad dropped out of school

when he was 10 years old to go to work for a swedish town center. he became a master operator and could find work. it was thought easy. he dried up and blow away from them. she was 16 when she graduated from high school pray i thought about the change in their lives and the change in our lives. as i began to write the book, i thought maybe we ought to .ecalibrate that question ca

there is a finite capacity all of that. it is to give us collectively. they will have a national dialogue about what it is we want to leave behind th. what kind of values do you want to leave behind? what kind of economic opportunity to want to leave behind? how do we expand the tolerance

that takes such a quantum leap forward. how do we fit into a smaller planet. how do we transform this to our fingertips? how do we make this planet a better place? i began with the need to do something desperately. this is a subject that is not on the table. we have a to class -- a two- class system. the rest of the country were stuck with a one size fits all warehousing education.

at least we're talking about it. we're attempting to do something about it. along way to go. every eighth grader in china is required to take math, physics, and biology. in america, only 18% of high school students take those courses. in in 1996, irish reporting from seoul. we did in the middle of the day i was reporting from seoul. we did in the middle of the night. before the sun came up, that courtyard was filled with the likes of flashlights. i cannot figure out what was going on. i went down to the closer. there were students in the courtyard of doing their homework by flashlight waiting for the doors to open so that

they could improve themselves. this is a country that in 1950's was ravaged by war and had a stone age agricultural economy. and now it is one of the industrial powerhouses. president obama said tell me about your challenges in education. the president said my greatest challenge is that parents want more. i began to address that and the role we can all play in it. those from my generation ought to be thinking more accurately about coming in ball. there were some heartening developments. i believe the combination now of public/private partnerships

will be the work force. we're beginning to have a national debate about an effective teacher. we have a discussion on npr. they said it was tire late the form of wall street. it is not all wall street. the people have to except personal response among urging personal responsibility through different people have to accept personal responsibility. -- people have to accept personal responsibility.

it ignored a lot of the financial reality. there is an extraordinary change that went on. i liken it to the second big bang. we have created an entirely new universe out there. we are trying to determine which of these planets will survive and which will drift too close to the sun, which will support life as we know it. it to work itself out so there is an orderly universe.

what happened to the journalism at thought i use and no? i said i will surprise you. there is a richer many of information out there. you have to get up in the morning and not just reaching the daily newspaper. to be a fully informed citizen you have to develop a personal filter system for the information that is coming at you all along. what is the political motivation?

we are working our way through it. how reliable is the information? what is the integrity of what we're seeing? that will require more vigilance. we should have no less expectations. we heated up in the morning and read the financial times. there are a broad range of papers that are available. it is just to see how the high

school football team is doing and how my friends are going. what is most important about this change that we are all witness to is the fifth place in journalism should not go away. this cannot be lost in the debate. people require a forum or they can retrieve information that is useful to them to make decisions that affect their lives and their nations. which should redouble our efforts. it remained intact. but she remains in place.

we will be witness to the fault lines of american journalism. it has become an echo chamber. something like the herman cain accusations get into the system and squeeze out almost everything else. there is a women like journalistic pattern in which everyone -- lemming like journalistic pattern in which everyone chases after the same story. he had a fairly prominent role. he was on the board of the reader's digest association. there was a time when anyone who declares for president can have

a series of reports. no longer. now it is just everybody chasing candidates around the landscape or at the base and then when something happens playing a giant game of gotcha. that is a place to begin. always going to chase these scandals. the american public deserves more. they require an in-depth examination of who they are and what their policies are. this is the least that we oppose the voting audience and the

people who give us all the freedoms that we have a. we can always expect there will be a robust debate. some of the language we are seeing now is my alibi even contemporary standards. there is a new book, on the campaign of 1948. everyone remembers this campaign. i was implying he made a speech in which she compared tom dooley to hitler and musil leaning. it is which the financial services had to have them represent them. the same thing happen in italy.

they continued the campaign in that fashion. we have a rich tradition of that. here's something that may surprise a lot of people. abraham lincoln was one of the first blogger. when he was a lawyer, he wrote scathingly criticisms of his opponent under a pseudonym -- scathing criticisms that have very little basis in fact. they were very opinionated. because he was so well-known, one of his opponents called him out. he was challenged. abraham lincoln decided he would choose a broadswords.

they met just crossed the line because doles were not permissible -- duals were not permissible in illinois. wiser heads prevailed. it was provoked by abraham lincoln using someone else's name. it is worth keeping all that in historical context. i will share with you two stories. we're big outdoors people. we are backpackers. we cannot wait for the grandchildren. we decided they should go on their first championship.

we went to a rudimentary cavan on our property. we had a cookout. she would sit in the cabin. it is a tiny cabin. we will just be out in our sleeping bags. you could see they have a lot of questions. they were not raising them. we did here and urging conversation from the inside. -- we could hear a conversation from the inside. the young guests said, " we need an adult in here now." i think that may be a metaphor for the country.

finally, the antidote that follows that is i always learn sending from the wild. every year there's some kind of an enduring lesson that i storms that blow through. the most memorable came four years ago when our river was very high. this was bordered by a country road. we got to the grassy pastures. out of the counter for growth came about 12 elk cows and their newborn calves. they stood and looked at me. i decided -- they decided i was no threat. the mother cal led them into

this very high and strong raging river. they swam across. they're having a hard time thrashing their way through the bushes. the all made it except for one. he was swept downstream. i thought, what do i do? on his own, a he found a back current and got on a sand bar and walked back of further. did the rest of the herd was across the river. they're waiting patiently. he tried again. he killed a second time. he got back on the sand bar and tried a third time and failed again. now i could barely breathe watching all of this. as god as my witness, after the third time, he stood on that sandbank trembling. the edgeer what to of the river and nodded her majestic head, waded in the

river and led him upstream to a safer place for the rest of the herd waited for him. then they moved on to greener pastures. our country is a flood stage. we need to find a way that we can navigate these rivers together and find our way to higher ground. thank you very much. [applause] >> thank you very much. allow the smiling faces in our audience. using this generation, how would you currently categorize the generation? >> the young people coming of age or us? >> of both. >> i member of a silent generation.

we are small. there's not a lot of birth going on during the war. i've been fascinated by the baby boomers. i was close enough to them that we shared a lot of interests. i cover them as a reporter. i pulled out the unresolved resolution for -- generation. the current generation coming of age now are called the million meals -- millennials. and lot of them have moved back home. not because they are slacker's but because the cannot find a job or housing. marketers are calling them neo- frugalists. they are making decisions a week or a day ahead of time. they are skeptical about a lot of the institutions we have taken for granted including

corporations and job security. that is how i would characterize them. >> we dealt with similar themes. ken burns was here to talk about his three part series on prohibition. he uses that as a fulcrum to talk about the business in u.s. history. how would you do this? >> you always end of the more distance. this is a very difficult time. the old world and not seem to apply. i was with a group of very latesticated ceo's in 2009. if they said the recovery would be well under way by the fourth quarter of 2010 because of the amount of stimulus.

everybody underestimated the depth of the housing crisis and the quality of unemployment. they make money with fewer workers. a under estimated the kind of ruthlessness and the inefficiency of wall street. it does not make anything. everyone under estimated be connectivity in global economy. who ever thought that when it greece got a cold we could get the flu? erases around the world.

>> on the political climate, it seems to have now been garnered a response from the occupied wall street's people. in terms of the political environment, became of your age during watergate. how does it feel to you now? >> 1960 a was a very difficult time. it was a real cancer in american life. we lost 16,000 people in vietnam. lyndon johnson was forced to step down. dr. king and bobby kennedy were assassinated. we had an economic underpinning in which things are pretty good economically. it even the people in the street

had a home to go back to. if you get a job but they chose to. there is so much economic uncertainty. that causes exception not anxiety if you take the people who have a home that is in foreclosure or the value has gone way down, and that represents the great bulk of their net worth. they cannot see looking out how they're ever going to get out. they have workers who lost their jobs or who have been furloughed. they do not have a retirement program anymore. what is going to happen to that? i have been critical of the aarp and the new ad saying we are 50 million strong, do not cut our benefits. it would have been more useful for them to say a lot of our

members need all these benefits, but we will like to have a dialogue. we know about entitlement programs. we want to be a part of that discussion. if everyone retreat to their corners, i do not know how we get downstream. medicare needs to be reformed. social security cannot be sustained at this current levels unless we make some significant changes. it is time for some changes now. others ought to be saying "count as us in." >> are all americans guilty of failing to make a significant sacrifice like the greatest generation? >> here is what i do think.

the national debt is a critical issue. it is going to be left behind for our children and grandchildren to pay off it will make life that much more experience -- difficult. most americans cannot touch it or feel it or smell it so it is out there. things going ok for them so they will not worry about it. the debt came with a hot, dry, wind to reminded that it exists. when he stepped up the door, there was an enormous amount -- mound reminding you how much would have to pay off. we have a greater sense of urgency. >> what is your sense of optimism or pessimism as to whether these solutions can come down? >> i am a product of america.

to the glass is always half full. we have the greatest education. the genius is everyone is always coming here wanting to work harder. they invented this technology in america. they change the world. it the goethes silicon valley, you find these americans that were dismissed as computer geeks out there in silicon valley. the economy is pumping there. it is that kind of inventiveness. it they can get the job done.

we are competing against countries that have an open playing field. they are inventing there on the new institutions. they're changing back to the reality. it is a digital world. crises some very down on public education. surely cannot mean that every public school is failing is students? >> i think public education has to look at how can renew itself. i picture be to a woman in north carolina who was very concerns about the gap between hispanic and african-american students.

many of the lower classis had no parents at home when they left. she put on a campaign to get kids back in the classroom. they have a sixth day of classes. she gave out her telephone number. they turn this around. i need some help. hit to a stretch of a very sound. she said it should be a library. we did not have anything to fill it up with. i helped her raise some money. she is very resourceful on her own. the room is now filled with books and computers. she keeps it open until 7:00 at night as a community center for the single parents living go

there with their children and learn together. the allotted teachers are volunteering to stay after. it is that enterprise that will be the saving grace of public education. i encourage you to buy it this way. >> we have a question. what do you think about the impact of the citizens united on alexians? >> i had been a big critic for a long time of big money in politics. it is a whole nother level. i am not enough of a legal experts say the supreme court was wrong. i think they have a right to play their part. we have a lot of of the money that was pouring into the

system. i have been covering this part to give a part of american politics since i began in california. they're looking at the records by some as a all the names. it is impossible to read pages of documents. money is the mother's milk of politics. some people who are not directly involved in the culture have come to it except that. it is hard to get the public aroused about the impact of money. we are talking about numbers. we have a couple billion dollars.

it could be used in some any other ways. >> i came here in 2009. one was about half the country was ticked off. they did not believe anything they were hearing any more. that is the root of the tea party moment. they were worrying about holding their families together. 11 voted for the president. -- a lot of them voted for the president. i think people do not feel connected to their congressmen are center and the way they once

did. you have an entire industry wonder how much money spent around. every financial institution at a high-powered lawyer in there. we have not finished it. this will be driven so much. >> you are recognized more as an officer in recent times. talk about the craft of writing? headed a compared? >> it is a short form. i have a number of friends and your literary novelists.

we talk about the craft of writing. my problem is always rising long. i use a dish or narratives. this is a really long journey. i find it very gratifying. what i like about is the permanence. we had a conversation about it. he said i am trying to hang on to first edition copies of books in print that i like because i think 20 years and now i know where they will be. i do not know all happen to my electronic books. that is a fairly estate

observation. my grandchildren all read books with books in their hands. they love the idea of it. they go straight through them. they're not reading it electronically as much as they are a book with a binding on it. the pointalk about you had rivals at cbs. >> some have thought the stature of the network anger can never be recaptured. is that true? >> bill riley gets a lot of attention because he's the most popular commentator.

he likes to talk about that. that is fine. he has tapped the audience of scot who is ranked third in the evening news broadcast. the evening news broadcast on a nightly basis has 20 million viewers. who would like to have circulation 20 million? he has done a great job. he is number one. diane is no. 2. we worry about a decline. we do not get as many young people. they can get it from other places.

we do not want to overstate. what change from us is that we all of europe as correspondents. we're able to get on the training but to the philippines. we could be in south africa. >> do you think the nightly newscast will survive? >> my guess is that it will. it constantly has to adapt to what is going on. it will probably take on some new forms by then. it'll probably have many parts to it.

it'll all be complementary. on youre able to see it ipad in whatever form that is. you'll be able to dial it up. we all got used to the idea. there is a good possibility of that information. >> is the media missing a lot of stories because of the downsizing? >> i do not think this has anything to do it downsizing.

this is how you do reporting. this is a staff of 34. bloomberg did not exist and as a reporter in washington. this is just how we use it. they did the best job they have done all week. they go to the archival information to the things he

said along the way and putting in context some of the defenses of him. there is a debate saying our blacks are better than their black spirit that is why there's such a debate. john stewart went right after that. they said have been in 1990. this is the kind of reporting we ought to be seen. there's not anything loaded about all of it. there's a factual recitation. >> we're almost out of time. i have a couple of last-minute housekeeping items to take care of. i like to remind our audience about this.

there is the meteorologist that will be here. >> because you do so much traveling, we have a new guest, a new travel mug. >> one more question. >> you will be celebrating their 50th wedding anniversary next year. what is the secret to such a long and happy marriage? aughter first got married

and my wife said always make sure you have your own space. i realize a mother has 5,000 acres in montana. that is more space than i'll ever have been a marriage. space is important. we are devoted to each other. we complement each other. i am a cowboy in terms of my impulsiveness. my wife is a great musician. she's a wonderful horsewoman. she's an expert bridge player. i am at the other end of that spectrum. i am raising as a journalist and doing the things i like. she still laughs at my jokes. it is an important part. i count on her to have a long view of what has been important

to our marriage. i am and all of how she has been a role model for our daughters by just being there and allowing them to develop as individual women without imposing her own self on them. it has worked out very well. we met when we were 15. this is the equivalent of a main shock. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> up next, and hearing that

will establish in the secondary mortgage market and the house subcommittee voted to subpoena the white house for documents related to a lunch given to the solyndra company. that is later. >> we will talk to the republicans' approach on job creation. he heads of the republican study committee. then we are joined by robert groves to discuss changes in american households. >> i am prepared to wait for my answer until freezes over. >> he is the ambassador during the cuban missile crisis. he twice ran as a democratic nominee for president and lost.

he is live friday at 8:00 p.m. eastern. >> a hearing on legislation that would establish a new mortgage market and replace them. we would hear from the acting director of the finance director. they posted a larger loss in the third quarter. the subcommittee is chaired by scott garrett of new jersey who is the sponsor of the legislation. >> good morning. this is called to order.

we welcome everyone to this hearing today. we will begin with opening statements. i will give myself a man is to do so. they're holding a committee on the private mortgage market at. there are many discussions they had formally. it is about the steps that need to be taken to bring about private capital markets. the federal government is guaranteeing over 90% of the u.s. mortgage market. everyone claim that they have the efforts to bring additional private capital back. there are two things that must be done. we must begin to roll back some of the government involving in the housing market.

there are the past 14,000 bill so far this year. etting a key part of givin private once again. we must take actions to facilitate interest in the secondary market. it provides legal certainty there a clear rule of law. there will be robust participation. this set up a new qualified dickered is asian market. they are using traditional underwriting standards. they are responsible for

creating standard that securitization agreements. they will standardize the arrangements. for securities that meet this, and contain the standard agreements, and they will be eligible for exemption from sec registration. the legislation removes one of the biggest impediments to private capital. it does so by striking provisions.

it will create a multitude of- unintended consequences. i'm not sure. this sounds like every loan that is made out there. they have risk retention. i believe a better form is an improved standardized system that includes a structure that answers the claims will be honored at the end of the day. we ensure that loans that meet this are able. and to bring private investment back to our mortgage market.

it is essential that this is clear and upheld. contracts must be honored. secondly, by clarifying the roles of around the lien holder rights. by preventing modifications that would inevitably impact investors. they will finally have the certainty they need. in regard to transparency and disclosure, investors should be empowered to do their own analysis of the assets underlying this spirit by disclosing more detail loan level data while protecting privacy of the borrowers and by allowing more times for the investors to study, investors will conduct more due diligence and lessen their reliance on rating agencies. this is a capsule of what we are doing.

it has to do the ongoing war going on. let me say i think you are doing a very good job these are very different -- very good job under very difficult circumstances. you're being called upon by extreme elements to allow for americans to pay for other american mortgages. with that, i yield back and i yield two minutes to mr. miller. >> there is a lot to like in mr. garrett's bill. it is very similar to

legislation i have introduced in this congress and in the previous congress as well. hr1783, the foreclosure fraud and homeowner abuse prevention act. the difference is, for whatever reason we have not guest worked across the aisle on this legislation, it appears the differences we have are not deep, philosophical differences. there is no partisan divide. we are trying to do the same thing in a somewhat different way. it seems to be a practical difference, not a philosophical difference. i certainly support the idea of standardizing contracts by pooling the servicing agreements, making clearer, transparent the underlying loan files and making sure servicing standards are uniform. those are all things in the bill that i introduced. i certainly welcome the idea of

amending existing laws to make the mortgage securities market function like other assets security markets. that appears to be -- we appear to be a trying to accomplish the same thing, but the bill under discussion today would really just create an entirely -- secondary mortgage market from scratch, when there appears to be a clear model for doing it, and grants great discretionary power for fha to fill in the blanks when there is a model that appears to work. in the grants in an agency that we thought would be an oversight agency over an important part of our economy. there are other provisions were the intent makes sense but not exactly the way to go about it. i introduced legislation in the last congress to prohibit servicers from being an

affiliate from owning -- or any affiliate of the service owning second liens were the servicers are servicing liens that are effectively owned by someone out, were the beneficial ownership is what someone else. this bill prohibits any servicer from holding a second mortgage, which does not really -- goes beyond that conflict of interest and it is not clear why it should, why it would not make more sense to make a prohibition that i welcome generally only where the servers are actually does not owned entity, mortgages they or servicing. it goes on. there are other issues where we are trying to get to the same place. we simply are taking different paths, though they are not incompatible at all. i hope there will be the opportunity to work on this issue across party lines. thank you very much. i yield back >> the gentleman

yields back. this is a draft version of the legislation here, not wed to some of the provisions in here. on that last point, very complicated issue. to the gentleman from arizona for two minutes. >> first of all like to ask to start this with a thank you. to mr. demarco, your staff have in many ways been stunningly accessible when we have had very technical questions, when we want to cut through some folklore. there are very few people in the bureaucracy i have found here in washington who will return a phone call that fast and be willing to be that detailed with it. so there is a great appreciation there. as i have shared many times with the chairman and the members here, my personal fixation is the proper pricing of risk,

because i believe that if there -- the failure to properly price risk is what has caused the cascades we have seen around us today. as i am being told, freddie mac lost another $6 billion last quarter. we are basically suffering through the sense of the past, the sense of not pricing risk. the other thing i want to stand here and make it clear, i am understand this is a draft bill. there is a lot of things in here i am excited about and a lot of things i am hoping as we hear testimony we will work through the details and the mechanics, but the number of folks who come to my office and talk about the risk retention in asset backed credit cards, automobiles, and many of those markets held up surprisingly well. maybe we should not be going where we are going.

are we going to ultimately do more damage to the economy with the ability to finance our future. >> mr. peters for two minutes. >> thank you for holding this hearing. i think we all agree that the american housing market is severely depressed, which in turn is holding back our entire economy. i believe there is also widespread bipartisan appreciation for the fact that the existing pse system is a failure. allowing fannie and freddie to pass on huge bonuses to their executives also sticking black player do taxpayers with losses was a huge mistake that should never be repeated. given the importance of the housing industry to the larger economy, we need to make sure we are moving forward with caution. chairman derek propose legislation is a helpful addition to the ongoing debate about the future housing finance reform. the bill attempts to replicate some of the things the existing pse does right.

it will make it easier for investors to have confidence in the market for private label securities. i am concerned that chairman garrett's bill does not do enough to ensure that 30-year fixed-rate mortgages are portable to the middle class. we should not abandon a system that has for decades made the american dream of home ownership or reality for millions of middle-class americans. just because irresponsible lending exploited a weakness. i think we should work to eliminate that weakness while strengthening the system. represented campbell and i have introduced legislation that would retain a limited role for government in the securitization market to ensure that we would continue to have liquid secondary markets. my colleagues have also introduced bipartisan legislation on this topic. i would hope that as the subcommittee continues to debate these important issues that those bills would also be given a full and thorough debate. mr. chairman, i think it is very

important that these bills come before the committee and are subject to a hearing and i look forward to scheduling such a hearing in the near future. as a society, we value home ownership. it is import our country create opportunities so we can extend the american dream beyond just the wealthiest americans and ensure that on in home remains affordable for the middle-class. i hope we are able to accomplish that with this going forward. >> thank you following today's hearing on your proposal, a discussion draft in tunnel the private mortgage market investment act. in march, treasury secretary geithner testified before our committee in said the administration and congress have a responsibility to look forward, reconsider the role government has played in the past, and work together to build

a stronger and more balanced system of housing finance. i agree. today's draft is part of this committee's delivered to dialogue about how to stabilize the housing market, reduce taxpayers' liability and facilitate a reentry private- sector capital for single-family and multiple family housing. we have learned that for private capital to resume an increased role in housing finance, investors need regulatory certainty and common sense, what they don't need is unrest and unworkable rules like the unfair competition from federal programs like they may, freddie mac, an fha. i look forward to today's discussion and yield back the balance of my time. >> the gentleman is recognized for six minutes. >> the ranking member is on her way. >> the gentleman is recognized

for five minutes, excuse me. >> the gentlewoman from california or arrives and i will yield curve part of that time. i pre -- i appreciate that you said this was a draft bill. we have been informed that a markup on the subject of securitization was scheduled for november 15, but i would think consistent with your saying this is a draft bill that this would not be for this bill. is their intention to mark up this bill on the 15th? i would think you are having said it was the draft that that was not the case, but i wanted to clear up the confusion. >> today we are focused on this bill. my comments with regard to the draft is just what we are talking about here. >>, my question is, there was a marked scheduled by the committee for the 15th in

subcommittee on securitization. my question is, is this legislation the subject of that markup? >> i don't have a date certain on any markup. if i could do that i would. >> so that 15th date is not a mark of date for this bill. >> i have not a definite mark of date for this bill from the committee. >> it then that clears it up because we have been told was a marked on the 15th. >> i have put requests in to try to move things along. >> this is a very important topic and we have some very important issues to grapple with and i appreciate the non dogmatic tone of some of the testimony.

my recommendation would be were probably would want at least another hearing on this. i notice we have one group of witnesses and you don't want to get too many witnesses and bore the out of each other -- bore the hell out of each other. i have a letter expressing some doubts about this. remains concerned that that the reform effort would remove all federal support of the nation's mortgage market. it says while they support the objectives of the draft bill, will report to contributing bought for recommendations. we remain concerned about -- i would assume some point we would want to hear from the home builders and realtors as well as other groups that have an

interest and i would ask that this could be -- that this be put into the record. >> i would also have some questions -- wehrheim labour party major concern here it -- my major concern is the repeal of securitization. the ability to make loans and not stand behind them was a problem, can the proposal was to replace risk retention as an assurance here with a very complicated set of regulations. my view is that we would be better off with risk retention because that makes one government policy and then leaves it to the lender to decide. i think we have a fairly elaborate set of rules here. i noticed in mr. wallace's testimony he had some specific questions about the restrictions put on who can do this and that. at first glance it seems the

solution in the bill as an alternative to risk retention is excessively elaborate and relies too much on the decision and judgement of regulators and not enough on risks retention. after that it is entirely up to the market and that is one thing i hope we would pursue. the final question is where we stand in terms of housing finance legislation in general. we have 14 bills that have been approved by subcommittee. the majority criticize us for delaying subcommittee deliberations by one day. we have still my got a full committee. i will except for one day's delay and the majority except blame for seven months delay. the hensarling bill was offered last year and there is criticism for not being included. that bill is of in limbo

somewhere. it has been reintroduced and has never been mentioned. i think there is interest in what the plans are for the majority to do with the hensarling bill and the 14 bills and maybe more to come and make changes to fannie and freddie. it would be helpful if at some point that could be clarified. >> the the gentleman yields. >> right now for the gsa, the taxpayers are effectively on the hook for over $5 trillion in total mortgage debt and the tse's are also responsible for all new mortgages originating in this country since the financial crisis. all taxpayers remain exposed to enormous an increase and the potential liability in our current mortgage financing system, our housing market remains severely challenged. this situation is unsustainable

for growth that taxpayers and housing market participants. instead of a morgan to market dominated by the federal government guarantees, we need new and creative solutions that create conditions for the private sectors return to a mortgage financing market without taxpayer guarantees. to create a private sector conditions we must have a legal framework that establishes and enforces uniform standards, transparency, an illegal search for the private sector lenders and investors. i think chairman garrett's discussion draft which we are considering today goes a long way toward creating a private sector conditions. so i want to thank the chairman for his work and his leadership on this important issue and a certain look forward to hearing from our witnesses today. i yield back. >> we have a minute and a half left and i will claim a minute.

from one sensed some suggest we are moving too quickly and some other perspectives argue that we are moving too slowly. i guess in comparison to the way that dodd-frank move, which moved through the committee process without even many subcommittee hearings and not your regular order, i guess we are moving at the appropriate speed because we are doing this through subcommittee process and doing it through hearings and what have you. others say we are moving too quickly. we have had so far 17 hearings on housing finance and the ranking member list a number of organizations and trade associations that would probably like to chime in on some of this legislation. by and large, each and every one of them have been able to be at the table where mr. demarco is right now and have had the opportunity during the course of the 17 hearings into the questions from either side of the aisle at any particular

facet of housing finance. the question has been raised with regard to other legislation that has been out there. again, we have had 17 hearings for those pieces of legislation and others and the general topics of those to be discussed and questions raised to the members of the panel. i would suggest that today if anyone has questions on any piece of legislation that mr. demarco would be more than happy to discuss them because he has already raised some both points in his testimony. time on both sides has been expired and i will yield to our first witness, our first panel. >> thank you, chairman garrett .er members of the subcommittee, thank you for having me here this morning. i am pleased that the

subcommittee is beginning the serious work of considering housing finance reform options which will lead to the ultimate resolution of the enterprises fannie mae and freddie mac. a recent statement provides a rare rebuke of some of fha is work since i last appeared before you. i will focus now on the need for legislation. placing the enterprises into conservatorship was designed to maintain market stability while providing lawmakers time to consider the proper course for housing finance reform and a transition from the current enterprise structured. conservatorship is not a long- term solution, yet we just passed the three-year anniversary of conservatorship. we all but -- knew was going to be difficult to develop a reform solution but we must move forward on this process. as the conservatorship sleep and, at age if they must continue to make decisions regarding -- in the face of an

uncertain future. to state the obvious, the key question in the debate on housing finance reform is the future role of government. it should be clear about this question at the onset. it seems safe to say that there will always be some portion of the mortgage market that will be assisted by government programs. the future design of our housing finance system, careful consideration should be given to targeting subsidies to specific groups that lawmakers determine warrant that benefit. for example, the explicit government guarantees that the federal housing ministration and veterans administration provide reflect policymakers judgment as to the public benefit from targeting certain eligible borrowers with those programs. acknowledging that there will be our role for government of the next question is what type of structure is necessary to replace the activity currently undertaken by the enterprises. there seems to be relatively

broad agreement that the government sponsored enterprise of the past, charged with achieving certain policy goals did not work. that model relied on investors providing funding for housing at preferential rates based on a perception of government support. this perception proved true, and the cost to the american taxpayers is now more than $107 billion. in place of the system, the chairman's discussion draft will establish a functioning mortgage-backed securities market by replacing some of the standard setting is that the enterprises provide today with the regulatory regime that sets the standards. this model would not rely on a government guarantee to attract funding to the mortgage markets but rather would love to standardization in rules for enforcing contracts to provide a degree of certainty to investors. process of undertaking housing

finance reform is difficult. the discussion draft is a thoughtful approach to a framework that does not rely on a government guarantee. in the end, lawmakers must decide what structure will provide functioning housing finance market that does not place taxpayers at risk. mr. chairman, i would like to thank you for helping to move the housing finance reform discussion forward. by offering a discussion draft and by holding this hearing. i believe the private capital markets can and should reclaim a prominent position providing housing finance. you are -- your draft proposal bronze the discussion of how that might be done. i recognize this subcommittee and the full committee has difficult and important decisions to make in the coming months and we look forward to offering technical assistance to both the administration and congress as a consideration of policy alternatives. thank you.

>> with 50 seconds to spare, thank you. i will yield myself five minutes to begin questioning. obviously there is widespread disagreement from various factions with regard to what to do in general with regard to gse reform. there is broad acceptance to the idea that we don't want to have a system with an implicit guarantee going forward. you look at our draft legislation. the basic question, is there something anything you see in what you have before you that would create any implicit guarantee in this legislation? >> no, mr. chairman. based on the review i have been able to undertake to date, i don't see how one would interpret or perceive an implied guarantee as the federal taxpayer in the general

framework that is outlined here. i believe it is prickly that this is putting investors on hooks it is i believe is pretty clear that this is putting investors on the hook. what we try to do here is create a system where a fhfa is able to go out and set upon uniform the in this securitization and the underwriting side. >> if this were to occur, how do you see that playing out? how did you see those two aspects into fruition at the end of the day, and as to the point on the investors, what would you be doing to attract the the broad sector of investors' interest in this or not a narrow sector investors' interest in this? >> i think it would certainly be striving to have a deep and liquid mortgage market. we would want to attract a broad

set of investors to that. i think that in the framework that your bill proposes that a key responsibility would be in defining both the securitization structure and the classification of mortgages, that it be done in a way that allowed for the market to reach that depth of liquidity and clarity about credit risk that would be necessary and appropriate to get efficient pricing of that credit risk by investors. i would envision we would undertake doing this classification process in a way in which we were striving to achieve relatively deep pools of homogenous market so that investors could have confidence both in the forward market that would be created and then in the execution of the secondary market that investors could understand the risk characteristics of particular

groups of mortgages. >> you mentioned the forward market. what would be the benefit of creating that liquidity in the forward market? >> it allows investors to be able to make commitments for investing in mortgages before the pools themselves are actually structure. there needs to be clarity and certainty regarding the characteristics of the mortgages that are being committed to be delivered into the marketplace. >> further than that, -- it allows the borrowers to commit and a lender to commit to a bar or a mortgage rate that can be locked then during the process of completing the transaction. >> speaking hypothetically, if this were in place today, the debt of the pools as far as what would be offered -- how would you see that growing over time?

we know what happened with regard to the cll right now and where that is. were that to change, how does it change as far as the depth of each of these schools as far as the interest of investors in it? >> part of what is to be determined in the marketplace in this framework is how these securities would be broken up and offered to investors that were looking for particular characteristics. we have almost $11 trillion single-family mortgage market. there would be a great deal of depth and liquidity if it would emerge in the marketplace given the size of the overall market. >> that is an interesting point and something we will raise questions about as we go through. the point on that is, you need that depth and that liquidity

for the trade to occur in order for the rates to be there. >> that is right. >> in the statute, according we could say there are going to be one or 22 of these categories, but at this point is not a statutory provision that you want to do pri >> i believe that is right. that is determined by getting feedback from investors and a whole set of stakeholders so we can get the most efficient route possible. >> i will let knowledge you and i have very different definitions of the regular order. if you look at the procedures of the financial reform bill, there were more hearings, markups, amendment, recorded votes, and for time than any other record of voter can remember. i don't believe it is regular order to have subcommittee consideration and then have six months go by and no committee.

regular order assumes a progression. we have 14 bills, some of which were marked up in april and subcommittee, and there has been no sign that any of them are going to go to the full committee. this bill is premised on the situation when there is no more fannie and freddie, but this committee has the power to deal with that and has not moved on anything in that regard. a subcommittee alone is not regular order. that assumes a progression, and we are getting late in the year. i have a couple of questions. i know you said the conservatorship was appropriate and that came from this committee in 2007, working with mr. paulson. one of the questions was, and the goal was to stop the bleeding into a great extent and try to preserve some function in the housing market with out the losses that preceded it. i know we don't want to keep the

conservatorship and you don't want to be sentenced to a lifetime as a conservator. i appreciate that. has that essentially worked out? would you say it is pro rycroft or >> i believe it has. i believe we brought the stability to the marketplace so that mortgage finance has continue to operate fairly effectively during the duration. >> what we often try to do, and i give credit to mr. paulson and this committee that did it. we always try to be able to get good things to happen and minimize the bad things. is it correct to say -- as we look at the losses, what is your estimate, what is the situation with the loans that have been made into the conservatorship? would you expect a loss rate to be as opposed to the previous ones? >> i believe for both

enterprises, the post conservatorship books of businesses will be profitable. >> this committee did that in 2007 and 2008. you don't want to be the conservative forever, but somebody is going to be doing something forever if this bill passes. the director will prescribe classifications for mortgages having -- no credit risk to classification of mortgages with the goals, etc. that is a pretty big job. this bill contemplates an fhfa in perpetuity. that is a pretty big job for the director pick what kind of staff do you think this would require? what kind of permanent operation would we need to undertake the responsibilities given to the director of fhfa and to this bill? >> i certainly won't say that i

have worked through that. the bill is pretty new year. fhfa today has approximately 520 employees. i would expect we have quite an examination of work force and our current structure because the current structure is focused on an immense undertaking of safety and soundness examination of fannie and freddie. this bill would replace that and there would not be that function going forward. with regard to the size, i am not sure how much it would change. i think we'll see a change in the direction and principal elements of work from taking soundness examination to assessing the mortgage market and establishing standards. >> people should not think we would sense -- eventually see it go away. my own concern is it is a very

specific set of ongoing government intervention in the market. in addition to that, you have to establish a variety of things. you would do the standards for servicing -- this is a very significant government intervention in the mortgage market. i think risk retention has a greater simplicity, and i am concerned about the capacity of any federal agency to take on the degree of supervision of the mortgage market on an indefinite basis that this bill goes for. i yelled back. >> the gentleman from arizona. >> part of this is also a chance to ask a couple of questions. could you what we threw some of

the assets that the gse's hole right now in performing paper, and the number properties that the whole title to? i have always been very curious if there is a number of assets there that would help you prime the pump if they were sold without a guarantee, and just getting that pricing model, what with the market pays and what with the market of sorts? >> in broad strokes, the two companies together have $5 trillion worth of mortgages, single-family and multifamily that they either own and finance directly on their balance sheet or that they provide guarantees to market investors. the finance portfolio of companies are declining over time and there is a minimum required shrinkage of those portfolios. i don't have the exact numbers

of the top of my head. fannie mae is on the order of a little over $700 billion right now and freddie mac is on 600 billion. it is moving less from whole loans and their own mortgage- backed securities to being mortgages that have been purchased out of mortgage-backed securities either for loan modification purposes or because they are delinquent. >> let's take that $700 billion. those are ones where you hold the total paper progressed we on the total paper. not only do we have the credit risk but we also have the market risk. u.s. asked aboutreo properties that we have title to because the property has gone through foreclosure. the count for that is a bit less than 200,000 properties.

it is about 190,000 or so properties. >> as there ever been -- requesting pricing, saying here is our portfolio of performing paper, here is our impaired paper. what would you pay us for parts of this with the guarantee and without a guarantee? >> yes, sir pitt in september and gave a speech in which i was sort of looking forward to next things on the horizon for us as conservator, things that i think are appropriate both to a conservative mandate and preparing to attract more private capital back into the mortgage market to reduce the taxpayer's overall exposure. i talked about two things, my expectation that we would continue to see gradually

increasing guaranty fees. the second is that we would work on engaging more loss sharing with private capital for the mortgage activity, the new mortgage activities fannie and freddie doing. there are two ways i outlined that that could be done. one is to increase the debt the participation of private mortgage insurance companies providing insurance guarantees on mortgages. the other is that there are ways in this securitization process to break up pools of mortgages in a fashion which you may sell a portion of the pool to mortgage investors and do so without any fannie and freddie guarantee and hence without taxpayer guarantee and start to get more troops market price for the credit risk. these are options we are exploring. >> is any of that data coming in to you, have you had any one

call and say we would love to buy a few billion dollars and here is what we are willing to pay on the hill? >> we have got a lot of public interest and i believe as we prepare to move in a more formal sense on the risk sharing, we will get those kind of offers. i have informally had market participants suggest an openness to purchasing that sort of paper. >> i am very pleased with what you have been doing all on thereo side. -- what you have been doing on the reo side. when you have a couple hundred thousand properties out there, we need to get those backed to productive use. thank you mr. chairman, my time is over.

>> mr. demarco, in my opening i spoke of the conflicts of holding seconds and servicing first held by others, officially owned by others. i have asked the leading servicers, all of whom are subsidiaries of the biggest banks, what business reason there was for that apparent conflict or that alignment of interest that are not identical which creates a conflict for kant -- which creates the potential conflict. do you see any reason to have that alignment of interests? >> i do, mr. miller. as a general proposition, one of the lessons to be taken from the last couple of years is the

difficulties that second liens have posed for developing problems with first liens. the potential conflicts of interest need to be identified and house seconds that come after first, altering the risk characteristics of the first. all these things need to be studied and should be part of housing finance reform. >> you did not see a reason to have servicers of beneficial -- mortgages beneficially owned by others holding seconds on those. >> i believe that is a conflict of interest and there is another way of resolving that conflict by providing clarity in the law. i agree with you, sir. >> could you not just by contract require that? i have been frustrated at the

enormous market power of fannie and freddie of holding half the mortgages of legacy mortgages and have an almost complete monopoly power with respect to new mortgages, an unwillingness to use that market power. why had he not require that by contract? -- why have you not required that by contract? >> with restrictions on who may make those second liens, rather than put legal counsel on the spot, i believe that is not legally within mike -- we will go back and study that question. if i am incorrect in my answer, i will report back to you. >> i handed you a peer review of economic studies from the federal reserve board of new york that shows modifications the reduced principal leads to performing loans to reduce

losses to mortgage holders. fannie and freddie have been very unwilling to reduce principal. there is now a pending settlement that may or may not go through of bank of america, bank of new york mellon, and an essential part of that is the investors in those mortgages are insisting that bank of america give up servicing where mortgages go into default to smaller servicers and that they modify principal, reduce the principal to produce a mortgage that will not go through the hideous losses of foreclosure, but is something the homeowner can pay. have you talked with the folks at pimlico and black rock who

seem to have come to a different conclusion of what is in their best interest? >> if i may pause for just a second, mr. miller. i want to check of my recollection was correct. my understanding of the proposed settlement agreement you are referring to does not contain a mandate for principal forgiveness and it does actually contain some requirements that bank of america and any sub servers of that would result from this would service these loans according to the standards that we have developed atfhfa in the form of our servicing alignment initiative to promote modifications and those sorts of activities. i don't believe there is a mandate for principal forgiveness in that. >> the former mac program does have not as underwriting standards, but also sets out

procedures for when a mortgage bows into defaults. have you looked at how that program has worked and whether that works? >> i have not looked at that particular program, no sir. >> part of what we would establish in terms of standards would be lost mitigation protocol. that would be part of the servicing standards developed so that market investors would have protocol of how servicer was expected to minimize investors lost in the event of a delinquency in a mortgage. >> thank you, mr. chairman. nice to see you here, mr. demarco. does fannie mae and freddie mac and fha's dominance of the

mortgage market allow for innovation in the private sector? we already heard about some of the businesses being shut down and jobs lost because they cannot compete with the taxpayer back in government programs like fha. should we continue to allow the government sponsored housing programs to compete and to edge out the private sector? >> to the first part, i don't believe a model of having fannie mae and freddie mac in conservatorship is conducive to innovating new products and we are not introducing new products. i think the market framework that would allow for innovation and the introduction of new instruments and so forth would better have an outside the realm we are in today. >> in the white paper treasury's

auction one, there is a privatized system of housing and finance role limited to the fha, usda, and department of veterans affairs. it looks a lot like the plan that the republicans have been promoting for a couple of years. what is your view of option one? >> i believe option 1, at is certainly a credible option. i believe chairman garrett's discussion draft is one of the next developments or refinements of the treasury's auction one in that it provides a basic framework for treasury's auction one to be implemented legislatively. -- option 1 to be implemented legislatively. >> the you believefhfa creates

mortgage buckets and defines the standards to fit into those buckets? the private sector will perceive that the mortgages in the buckets are implicitly guaranteed by the u.s. government? >> no, that is not how i understand it would work in this bill. i don't see anything in the bill that would give that sort of insurance to investors. >> that is something we are always working to make sure we don't fall into may be a trap like that again. those are my questions. i would yield back. >> thank you very much, mr. chairman. mr. demarco, as you review the language of the private mortgage market investment act, how do you believe that this will

impact to your organization's ability to effectively regulate and the conservator of fannie mae and freddie mac? >> i perceive this legislation as actually being in tandem with other legislation that has already been pending before the subcommittee and to the full committee. i don't believe this is intended to be undertaken with an ongoing indefinite conservatorship of fannie and freddie. i believe this is framed to be replaced it. how that transition works remains to be worked out. >> how does fhfa have the capacity, how to have the expertise to implement such a program that will go into effect no later than six months from the enactment? >> there are a number of things we would be required to do in this legislation that in fact we are already doing. the servicing alignment initiative we have undertaken as

conservator of fannie and freddie to establish more robust and consistent and effective mortgage servicing standards is something we are well along with and the implementation of it has begun. that would be a key component of what would go into the standard setting that the chairman's discussion draft would have. the second thing is i have already made clear that as conservator of fannie and freddie, i am working towards changing their securitization process so that mortgage market investors would have detailed low-level data on the loans underlying the pool. this is also a provision as part of the chairman's bill. this is something we are working towards already. i believe there are certain things we are already under way and we have the expertise in house to be able to develop that. i think some of the work we are doing in our current rolle fits well with what is proposed in the new role. >> what does the secondary

mortgage market looked like with no government guarantee on a long-term, fixed-rate debt? >> for long-term, fixed-rate mortgages, it looks like one that is pricing the risk according to what it actually is. we will get a true market price of the risk, not just the credit risk but the interest-rate risk associated with a long-term, fixed-rate assets. the concept behind a grouping of mortgages is to give greater homogeneity in the securitization process so that investors would understand this is a class m taiko pool, this is a class p type of pool, so investors know what to keep credit characteristic differences are between those different pools and we would see that priced accordingly in the marketplace. >> in listening to the dialogue

that you had with my colleague congressman miller regarding the principal modification, and your response was, principal forgiveness. there is a heck of a lot of difference. what we have been discussing here in our committee is that if we are going to be able to make it possible, scituate -- situations where person buys a house for $300,000 and then it drops in market value to $200,000, they still have an indebtedness for some part of $300,000. we are asking consideration of those modifications, and i need for you to give me some clarification, because i am not clear on your response. >> i will apologize to congressman miller if i misunderstood the question and did not give an appropriate answer. to your question about principle forgiveness, here is how i have

looked at this as the conservator of fannie mae and freddie mac. i believe we have an obligation to minimize taxpayer losses from the book of business that they have. i also believe we have an obligation to be maximizing our efforts to avoid foreclosures, recognizing the net present value to that taxpayer. that is a statutory mandate that we have. what we are doing in a loss mitigation space with fannie and freddie is that there is a whole protocol that is in place at each company that the mortgage servicers are supposed to execute on their behalf. what this protocol is about is when a borrower goes the link on the mortgage, there is supposed to be immediate outrage to that borrower to find out what the reason for the missed payment is. -- immediate out reach to that bar or. if they are incapable of making the full mortgage payment they are obligated to, the first alternative would turn to is a

loan modification appropriate for this maror. the borrower is committed to continue to make a payment they can afford and committed to staying in the house. that is the outcome we all want to see, and that is our first priority. the per se step is following the precepts of the treasury department's home affordable modification program. the hamp program is designed to fund what is an affordable payment, which is defined as a payment equal to 31% of the borrower's monthly income. there will be a series of modifications made to the mortgage to get the borrowed into a payment of that size. we are in fact doing that and fannie mae and freddie mac together have completed just under 1 million completed loan modifications. if the borrower doesn't qualify, there is a proprietary model that will address the

particular situations of the bar or. loan principal forgiveness in that context, we have found we can get the borrower to that payment without doing principle forgiveness and we better protect the taxpayer by preserving an upside potential if the borrower is successful in their modification. >> the gentleman from california is recognized for five minutes. >> as we discussed earlier, there is general agreement that the conservatorship was the right thing to do in 2008 and that the conservatorship in the current system is not the permanent solution and we need to replace it with something. the question before us today is whether or not this bill is the sole and sufficient replacement for fannie and freddie as opposed to some of the other alternatives that are offered by other members of this committee, including myself. the first question for you would

be if fannie and freddie were to disappear tomorrow and this bill were the sole replacement for that comic-con -- the sow replacement for that tomorrow, could this serve the entire marketplace? >> it could not do it tomorrow. this would take some time for standards to be developed and articulate it and in order to attract private capital and build up the infrastructure to do this secured session proposed in this bill, we need to know what the standards are, what the requirements a going to be, and then make the necessary inappropriate investments in infrastructure and risk management to be able to execute it. over time can that develop and be implemented? if the market has certainty that these are the rules of the road and that these rules of the road are not going to be changing every three months, i believe

the private market can step in and do a great portion of what is currently being done by fannie and freddie. about what would happen to fha and federal home loan banks to the volume through them if fannie and freddie were gone and this was the sole solution? >> fha really has an unprecedented volume today relative to any time in recent history. i believe for lawmakers to consider the housing finance system more broadly, i would expect consideration of fha pose a role here, whether it expands, contracts, gets redefined, that you all would figure out. a huge portion of the market would probably go through fha if fannie and freddie disappeared. >> i would not necessarily draw that conclusion.

>> they used to be the lender of last resort. now they have become the lender of first resort, particularly for anyone with less than 20% down. >> there are a lot of borrowers that would find market execution at an attractive price without having to go through fha. >> this bill actually has a lot of government restriction and control over the marketplace. one of the things that we required fhfha to do is promulgate underwriting standards. could this not be seen as a stamp of approval or leaving open to litigation or legal liability from investors, were those portfolios to go bad in the future? >> i believe the discussion and careful review of the discussion draft on that point can and should continue.

i would say at first blush it looks to me as though the bill is taking great pains to make clear that in fact that is not permissible and that is not intended. >> it is not permissible to -- under this bill as i see it, you are in essentially filling the role of the bond rating agencies. >> i believe what we are doing is setting definition than rules in terms of mortgages with this group of characteristics will be classified as this class. mortgage investors will know when an offering is made for this class, there is, to negative about the risk characteristics and then for this river class, there is, an anti about the risk factors for that class. >> you are not just the director of fhfa, but your or a noted

economist. there is no guarantee because the private market doesn't want to except the duration and interest-rate risk in addition to credit risk. what effect would that have on housing prices? we are talking about trying to keep -- if the housing market falls further, the economy will fall and a lot of jobs will disappear, and that is what we do not want to have happened creek >> that is a predicate to the question i would not really agree with it. the implication that this bill would cause that to happen. the question is, if you suddenly out what 30-year fixed- rate mortgages, would there be an effect on house prices? there could be, but there could also be an effect on mortgage interest rates, which are also affecting house prices. in some