that's the gses. too have been contacted about the concern that had been raised by major financial institutions that to the extent that we want to make it clear that taxpayers are not going to be on theook for any of these costs and losses that we ought also be making it clear that they won't be on the hook for it because they didn't create fannie or freddie. maybe they contributed to it. but so -- we've been engaged in -- my colleagues have been engaged in my opinion in an effort to message something without understanding the logical consequences or potential consequences of what it is they are talking about. once again, this whole effort to message something as a poliical matter is counterproductive to the substance of what we're trying tdo. this is kind of like the same issue that we debated yesterday on shore bank. it really -- it's a tangential issue and about messaging something to the public rather than getting serious about the substan of this bill. and i think that's a serious mistake. we cou

. -- by exempting the gse's. unfortunately, some bailouts of companies deemed too big to fail by the government will continue. to repair -- many claim thht the bailout mechanism will never be paid for by taxpayers. but these are the same people who worked so many years to protect gse's and then told us that they would not receive one dime of taxpayer money. they are the same people who told us that the trust fund would be paid back. they're the same people who tell us now to not worry about the exploding national debt. they were wrong then and they are wrong now. it creates a huge powerful bureaucracy funded by $500,000 budget. studies show that this new bureaucracy could cause interest rates to rise 1.5%. new jobs could be reduced by 5% in this economy. i heard this from community bankers back home. i was told by one, "if i have more compliance costs, we will lose jobs." why would we enact any legislation that would harm the ability of small businesses to credit contraction?e midst of a- how many more jobs have

. -- the gse's. i have said publicly that we expect to recommend senate broad reforms sometimes -- sometime next month. a and i would point out that thh losses that we still face in these institutions are losses that we inherited. at our assistance, they have put in place much more conservative uuderwriiing standards. they're bringing down riss and restitution quite significantly. institutions today are being run much more conservatively, as you might expect. i think we're going to find -- i hope we will find broad support in the congress. this is the kind of reform that these institutions and the housing market needs. >> thank you. my time is up. >> i want to take you back to a fellow panelist who cited home ownership levels from 1965 to 1995 as something that we ought to be aspiring to. and your response is that is exactly where reward -- where we are trying to get to. i will give you a chance to modify your answer. from 1965 to 1995, the flight number give assistance to economies of color. but can

. -- by exempting the gse's. unfortunately, some bailts of companies deemed too big to fail by the government will continue. to repair -- many cla thht the bailout mechanism will never be pa for by taxpayers. but these are the same people o worked so many years to protect gse's and tn told us that they would not receive one dime of taxpayer money. th are the same people who tolds that the trust fund wouldpaid back. t're the same people who tell us now to not worry about the exploding national debt. they were ong then and they are wrong now. it cates a huge powerful bureaucracy funded by $500,000 budget. studies show that this new bureaucracy could cause interest rates to rise 1.5%. new jobs could be reduced by 5% inhis economy. i heard this from community bankers back hom. i was told by one, "if iave more compliance costs, we will lose jobs." why would we enact any legislation that would harm the ability of small businesses to credit contraction?e midst of a- how many more jobs have to be lost? under this bill, t

we are not fixing them in this republicans have made a proposal on how to fix the gse's. all of the bureaucrats and regulators who failed miserably to deal with the bernie madoff situation, the regulators at the fed -- you name the regulator, they made mistakes in the past. we all know that. what are the democrats doing? they are saying let's give them more power and more money and even more authority, without trying to fix the problem that got us here in the first place. i think it is a flawed approach to the problem. host: hope, new jersey, republican line. caller: we are going to try to have a debate. wondering if you will attend. guest: it is hard to figure out where i will be. sometime during the course of the campaign between now and november, we will do a debate like i have always done in the past years. we will look to set them up some place during the four counties. we will try to set them up in different host: placeplaces. host: birmingham, alabama. caller: good morning. i appreciate what you have done in your career. i hope they will continue to stand for what

that was acute and conspicuous .n the case of the gse's the crisis had another cause that was much more powerful in a moment. the market had financed a huge growth in leverage in a set of institutions that were allowed to operateeoutside of the constraints of capital leverage. for example, in many of our investment banks, in a vast range of non-banks and venture companies, some of which call themselves thrifts, those institutions were able to operate without a history of government support. that is not something you can attribute to moral hazard. that was a classic act of judgment that we might face a recession with a huge losses. -- with acute losses. we have a set of reforms that will address that risk? this is important. those institutions, that essentially operate like banks, whatever you call them, and take risks like banks, are important to the functioning economy. we will constrain their risk- taking. whether you call them aig, goldman sachs, or j.p. morgan, we will constrain the leverage and risk that the take on. if they get to a pooition where they could not survive on their o

that was acute and conspicuous .n the case of the gse's the crisis had another cause that was much more powerful in a moment. the market had financed a huge growth in leverage in a set of institutions that were allowed to operateeoutside of the constraints of capital leverage. for example, in many of our investment banks, in a vast range of non-banks and venture companies, some of which call themselves thrifts, those institutions were able to%% operate without a history of% goverrment support. that is not something you can attribute to moral hazard. that was a classic act of judgmenn that we might face a recession with a huge losses. -- with acute losses. we have a set of reforms that will address that risk? this is important. those institutions, that essentially operate like banks, whatever you call them, and take risks like banks, are important to the functioning economy. we will constrain their risk- taking. whether you call them aig, goldman sachs, or j.p. morgan, we will constrain the leverage and risk that the take on. if they get to a pooition where they could not survive on thei

despite what some may claim, we're not advocating for the elimination of the gse's. it is vital to plan for the short term to ensure the mistakes of yesterday are never again reiterated. i want to quote brad sherman. this is "tarp o.a.r.p. on steroids." you cannot have the government lending to failing firms and purchasing their assets, even during teeing the obligation of a solvent financial institution. the government ends up with 60% of the capital markets in terms of the government back stock in that kind of situation. that is a dangerous these institutions are too big to fail, guaranteed by the government. these are the concerns i have going for. thank you. >> we will deal with the distored history -- distorted history. mr. sherman does not characterize the current bill as that. this history on fannie aad freddie is a partial one on the part of my friend. the fact is that republicans control both houses of congress from 1995 through 2006 and the legislation was enacted by then. by 2007, first in the house and the senate, we passed the bill that gave the bush adm

that was acute and conspicuous .n the case of the gse's the crisis had another cause that was much more powerful in a moment. the market had financed a huge growth in leverage in a set of institutions that were allowed to operateeoutside of the constraints of capital leverage. for example, in many of our investment banks, in a vast range of non-banks and venture companies, some of which call themselves thrifts, those institutions were able to operate without a history of government support. that is not something you can attribute to moral hazard. that was a classic act of judgment that we might face a recession withha huge losses. -- with acute losses. we have a set of reforms that will address that risk? this is important. those institutions, that essentially operate like banks, whatever you call them, and take risks like banks, are important to the functioning economy. we will coostrain their risk- taking. whether you call them aig, goldman sachs, or j.p. morgan, we will constrain the leverage and risk that the take on. if they get to a pooition where they couud not survive on their o

that was acute and conspicuous .n the case of the gse's the crisis had another cause that was much more powerful in a moment. the market had financed a huge growth in leverage in a set of institutions that were allowed to operateeoutside of the constraints of capital leverage. for example, in many of our investment banks, in a vast range of non-banks and venture companies, some of which call themselves thrifts, those institutions were able to operate without a history of government support. that is not something you can attribute to moral hazard. that was a classic act of judgment that we might face a recession with a huge losses. -- with acute losses. we have a set of reforms that will address that risk? this is important. those institutions, that essentially operate like banks, whatever you call them, and take risks like banks, are important to the functioning economy. we will constrain their risk- taking. whether you call them aig, goldman sachs, or j.p. morgan, we will constrain the leverage and risk that the take on. if they get to a pooition where they could not survive on their o

more importantly, we got the gses to come when the program. all of our laws and litigators had one program they had to deal with instead of nuanced proprietary programs. i believe mp worked when it needed to. there is a part b to that, which is that this problem is moving foard. i believe we now need to focus on fallouts from hamp. we need to focus onre- defaults. we need to focus on a targeted for closure prevention problem. i think hamp served its purpose when it did. i want to applaud my colleagues for having tried as hard as they did, along with myself, in scaling what was an important response to homeowners at the time. >> before hamp, i think one of the significant advantages has been the establishment of standards, and in particular the debt to income ratio that was higher than the 31%. to establish that as a standard that is usable and customary, where we can work on behalf of investors, has enabled the results we have with hamp, but equally importantly the result we have in our prop. programs. that is a significant advantage. >> if it

we can blame a lot of things on bush, but this with gse's is not one of them.e was calling for that a number of yeers ago. it is not like members of congress did not see this coming. fannie and freddie were in trouble long ago. the too big to fail contracts when it comes out of a push for reform for those two entities -- it does come from these. you have something government sponsored, agreed to buy mortgages from banks and package -pthem and resell them as mortgage-backed securities. it had a lot to do with the housing collapse. host: something likely in the bill as talked about in "the washington post" today, described as a derivatives spinoff plan, gaining support. banks would be forced to spin off their derivatives. the plan seems to be gaining it is championed by centerized.- blanche lincoln. it had been opposed by the administration. some lawmakers in both parties, multiple banking regulators and wall street, but appears to be gaining support. your reaction? guest: derivatives swaps are very complicated. i never worked on wall street. i never worked on th

i believe it is simply a failure of will that nothing is being done to reform the gse's cap all losses. the open with the american people about what you are refusing to address this core issue. another major component deals with the creation of a massive new consumer bureaacracy all along with a separate title 12 which i believe is it liberal activist dream come true. and provisions will compel financial institutions to provide free services to selected community groups pontiffs paul census model that . because the democrats' new bureaucracy is an enormous reach across every segment of our economy and a massive expansion of government influence on our daily financial lives, republicans only ask that this budget be subject to congressional oversight and reviewed by the regulators charged with ensuring the safety and soundness of our banks and banking system. the democrats' response was a unanimous know. the american people have been clear. they do not want a massively intrusive and continuously growinggand overly expensive government. we all do favor consumer protection. this legislatio

more importantly, we got the gses to come when the program. all of our laws and litigators had one program they had to deal with instead of nuanced proprietary programs. i believe hamp worked when it needed to. there is a part b to that, which is that this problem is moving forward. i believe we now need to focus on fallouts from hamp. we need to focus onre- defaults. we need to focus on a targeted for closure prevention problem. i think hamp served its purpose when it did. i want to applaud my colleagues for having tried as hard as they did, along with myself, in scaling what was an important response to homeowners at the time. >> before hamp, i think one of the significant advantages has been the establishment of standards, and in particular the debt to income ratio that was higher than the 31%. to establish that as a standard that is usable and customary, where we can work on behalf of investors, has enabled the results we have with hamp, but equally importantly the result we have in our prop. programs. that is a significant advantage. >> i

more importantly, we got the gses to come when the program. all of our laws and litigators had one program they had to deal with instead of nuanced proprietary programs. i believe hamp worked when it needed to. there is a part b to that, which is that this problem is moving forward. i believe we now need to focus on fallouts from hamp. we need to focus onre- defaults. we need to focus on a targeted for closure prevention problem. i think hamp served its purpose when it did. i want to applaud my colleagues for having tried as hard as they did, along with myself, in scaling what was an important response to homeowners at the time. >> before hamp, i think one of the significant advantages has been the establishment of standards, and in particular the debt to income ratio that was higher than the 31%. to establish that as a standard that is usable and customary, where we can work on behalf of investors, has enabled the results we have with hamp, but equally importantly the result we have in our prop. programs. that is a significant advantage. >> i