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House Proceeding on Jul 31st, 2009 :: 0:40:50 to 0:49:10
Total video length: 3 hours 53 minutes Stream Tools: Stream Overview | Edit Time

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Barney Frank

0:40:44 to 0:41:05( Edit History Discussion )

Barney Frank: designee shall be considered re and shall be debatable for 30 minutes, equally divided and controlled by the proponent and an opponent. the gentleman from massachusetts, mr. frank, and the gentleman from alabama, mr. bachus, each will control 30 minutes. the chair recognizes the gentleman from massachusetts. mr. frank: i ask unanimous

Barney Frank

0:40:50 to 0:49:10( Edit History Discussion )
Speech By: Barney Frank

Barney Frank

0:41:06 to 0:41:26( Edit History Discussion )

Barney Frank: consent that all members have five legislative days to revise and extend their remarks and include therein extraneous material. the speaker pro tempor without objection, so ordered. mr. frank: i recognize myself for such time as i may consume. the speaker pro tempore: the gentleman is recognized. mr. frank: i have encountered gaps between rhetoric and reality in this chamber, never

Barney Frank

0:41:27 to 0:41:47( Edit History Discussion )

Barney Frank: one as great as the wildly distorted the de-prescription of this bill that we got before. let's be clear. there are differences between the party here's on the whole. at least as reflected in the committee vote, i think it will be different on the floor there is much mess -- much less difference than there used to

Barney Frank

0:41:48 to 0:42:08( Edit History Discussion )

Barney Frank: be on the say on pay. when the republicans were in the majority prior to 2007, on this and many other issues, the democrats tried to do reform and got nowhere. we did try to bring up this. the republicans used their majority not to allow it. in 2007, when we were in the

Barney Frank

0:42:09 to 0:42:30( Edit History Discussion )

Barney Frank: majority we did bring it to the floor, it passed other the objection of most republicans. i'll introduce to the record their comments on say on pay. they've moved some. they are for reform on say on pay, though a somewhat watered down form. one thing i want to address here is the question of -- but

Barney Frank

0:42:31 to 0:42:51( Edit History Discussion )

Barney Frank: i should say, there's a stark difference between us remaing on whether or not any action shall be take bin the federal government to restrain compensation practice this is a inflict excessive risk on the economy. we should be clear this assertion that this allows the control of all wages and prices is nonsense.

Barney Frank

0:42:52 to 0:43:12( Edit History Discussion )

Barney Frank: there is nothing about prices at all in the bill. as to wages, what it says is that the s.e.c. may -- shall impose rules that prevent excessive risk taking and the reference to wages is only in that context. the amount of wages is irrelevant.

Barney Frank

0:43:13 to 0:43:35( Edit History Discussion )

Barney Frank: what this bill explicitly aims at is this practice where people are given bonuses if the gamble pays off but don't le anything if it doesn't. there's widespread consensus that this incentivizes risks.

Barney Frank

0:43:36 to 0:43:56( Edit History Discussion )

Barney Frank: if you take actions that are risky and it looks like they paid off and you get your money, six months later, it turns out you were wrong and it blows up, you don't lose anything. at the outset if you take a risk and it blows up, it doesn't cost you anything. all we are saying is there has to be balance to the risk

Barney Frank

0:43:57 to 0:44:17( Edit History Discussion )

Barney Frank: taking, the excessive risk taking. what is excessive risk? when the people who take risk pay no penalty when they are wrong. when the company loses money, the economy may suffer, duh the decision makers do not. one of the sillier remarks we

Barney Frank

0:44:18 to 0:44:38( Edit History Discussion )

Barney Frank: heard was this will cause us to have less competition. say on pay, when the republican party opposed it, was borrowed from great britain. we were told we were losing business to great britain and we should cut back on sarbanes-oxley because people

Barney Frank

0:44:39 to 0:44:59( Edit History Discussion )

Barney Frank: were going to england. today i read from an article from a couple of weeks ago, the prime minister of england says they are going to adopt plans forcing banks to hold back half of all bonuses for five years and the conservative opposition is critical because it's not

Barney Frank

0:45:00 to 0:45:20( Edit History Discussion )

Barney Frank: mandatory. we have been in conversations with the european union, the united kingdom, canada and others. in fact, american sala american compensations have been much higher system of no, there is no price control. no there's no wage control. no it is not a problem for international competion. by the way, as to every institution, every credit

Barney Frank

0:45:21 to 0:45:42( Edit History Discussion )

Barney Frank: union, you heard that rhetoric, the bill exempts any institution with less than $1 billion in assets. it gives the s.e.c. the authority to raise that so there's even les. the republican party has reluctantly been dragged by events, reality sometimes has an impact to support a watered down version of say on pay. say on pay says the

Barney Frank

0:45:43 to 0:46:04( Edit History Discussion )

Barney Frank: shareholders can vote and express their opinion. the gentleman from texas was upset we don't have a federal election commission mechanism fothese votes. why only these votes? shareholders vote on anything. apparently it's only when the sharolders tend to vote on pay sensibilities are trampled. we do not in this bill talk about the amounts.

Barney Frank

0:46:05 to 0:46:27( Edit History Discussion )

Barney Frank: we do say the shareholders should. we say in consultation with advocacy groups that represent shareholders and p that the people who own the company, the shareholders, should be able to express opinions on the compensation. we go beyond that to say we believe the federal government has interests not in the level of compensation, that's up to the shareholders, in the structure.

Barney Frank

0:46:28 to 0:46:48( Edit History Discussion )

Barney Frank: when you have, as we have seen, structures whereby companies lose lots of money and they lose lots of money on particular deals, but the people who made ose deals make money on them, that that has a systemic negative impact on the society because it incentivizes much too much risk. what is the republican approach to that?

Barney Frank

0:46:49 to 0:47:10( Edit History Discussion )

Barney Frank: nothing. they say -- they admit these are happening. but their regrets won't stop the damage. in the republican substitute there is a watering down of say on pay but they at least acknowledge that reluctantly. when it comes to the pracktoifs large corporations in the financial area structuring bonuses that incentivize

Barney Frank

0:47:11 to 0:47:32( Edit History Discussion )

Barney Frank: excessive risk, my republican friends admit that's the case we should nothing about it. that's the big difference. we believe the s.e.c., and by the way, as to the form, it was a republican former member of this body, christopher cox, who was chair of the s.e.c., proposed disclos

Barney Frank

0:47:33 to 0:47:53( Edit History Discussion )

Barney Frank: he broached it first. he said we have an important public interest in knowing it. we are going to take the form of disclosure of compensation prescribed by a republican member of this house, chairman of the s.e.c. work his colleagues, and let the shareholders say yes or no. we are going to go beyond that and say that the s.e.c. should look at this and say, you know,

Barney Frank

0:47:54 to 0:48:14( Edit History Discussion )

Barney Frank: you have a situation here where people making the decisions will have an incentive to take too much risk. if you tell people that if they take a risk and it pays off they are enriched and if it fails miserably they don't lose anything, they will take more risks than should be taken. you should not incentivize to

Barney Frank

0:48:15 to 0:48:35( Edit History Discussion )

Barney Frank: tell people to take risks where they can only benefit and never suffer penalty. that's all this says. we will prevent that kind of thing from happening. we won't set amounts or deal with wage controls and we exempt institutions under $1 billion. i await the republican counter. they want a watered down say on pay, but they reluctantly accept it.

Barney Frank

0:48:36 to 0:48:57( Edit History Discussion )

Barney Frank: but they have zero tufere with regard to the situation of excessive bonuses. we did get reluctant agreement we put some limits on people whare recipients of tarp funds. one of those who received tarp funds prospered with those funds, paid them o now -- paid back the funds, and are ebb geap -- engaging in the

Barney Frank

0:48:58 to 0:49:10( Edit History Discussion )

Barney Frank: risky practice before. the republican position in the committee was do nothing about it. ours is, have rule, not that set the limits or wage controls but say that you cannot structure it so that whatever level of compensation you have,

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