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Senate Proceeding 05-11-10 on May 11th, 2010 :: 0:20:10 to 0:29:40
Total video length: 4 hours 45 minutes Stream Tools: Stream Overview | Edit Time

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Judd Gregg

0:20:06 to 0:20:26( Edit History Discussion )

Judd Gregg: that ultimately helped break down the financial market. i commend the senator from arizona. i associate myself with the remarks of the other senator from georgia. i thank the distinguished his time. mr. gregg: mr. president? the presiding officer: the senator from new hampshire. mr. gregg: i wish to rise to also -- first i want to associate myself with the words from the senator from georgia.

Judd Gregg

0:20:10 to 0:29:40( Edit History Discussion )
Speech By: Judd Gregg

Judd Gregg

0:20:27 to 0:20:49( Edit History Discussion )

Judd Gregg: he is absolut history of how freddie and fannie got started and what their purpose was and the fact that they are a great idea that went wrong, unfortunately, or went awry would be a better term, not wrong. they remain -- the concept remains a good idea. and i want to rise to support

Judd Gregg

0:20:50 to 0:21:10( Edit History Discussion )

Judd Gregg: senator mccain's proposal, because what he is suggesting is a way out of a very deep and dark hole of debt for our nation and our american taxpayers which is being generated by the legacy and the present activities of freddie and fannie. part of this amendment which i

Judd Gregg

0:21:11 to 0:21:31( Edit History Discussion )

Judd Gregg: played a role in primarily is the issue of bringing on budget and, therefore, into the light of the day just how much the american taxpayers owe as a result of the situation that's occurred i those two businesses. it is estimated that the american taxpayer will end up

Judd Gregg

0:21:32 to 0:21:53( Edit History Discussion )

Judd Gregg: picking up somewhere around $400 billion to $500 billion in costs as a result of the activities of freddie and fannie. as far as the american taxpayer knows, this will be something that comes out of the -- of the sky. i mean, nobody is aware of it. nobody's thinking about it. nobody's talking about

Judd Gregg

0:21:54 to 0:22:16( Edit History Discussion )

Judd Gregg: but these are actual debts that are going to get put on books and which will affect our credit worthiness as a nation and which all americans will have to pay back. and why is this going to happen? it's going to happen because during the hallogen days of taking on debt or taking on

Judd Gregg

0:22:17 to 0:22:37( Edit History Discussion )

Judd Gregg: obligations in the area of mortgages which weren't properly underwritten -- and there will be a later amendment by senator corker which i'll support in the area of underwriting -- but which weren't properly underwritten and which were securitized and basically insured, for all intents and purposes, by freddie and fannie, you ended up with a situation where they own a lot of paper which doesn't have the value,

Judd Gregg

0:22:38 to 0:22:59( Edit History Discussion )

Judd Gregg: doesn't have the value it's supposed to have and which isn't being paid back at the rate which it's supposed to be paid back at. and unfortunately the was a tacit understanding that grew up in the mar american taxpayer was going to stand behind that paper. now, it was never explicit but it became tacit and people expected that and then when the

Judd Gregg

0:23:00 to 0:23:21( Edit History Discussion )

Judd Gregg: actual eve occurred, as these it became real and the american taxpayer is now having to stand behind all this debt. it's certainly going to come to a shock to most americans that they own -- that they owe approximately half a trillion dollars here. half a trillion dollars b

Judd Gregg

0:23:22 to 0:23:43( Edit History Discussion )

Judd Gregg: of very bad decisions that were made by a group of people who were underwriting and basically security tieing tse loans. -- securitizing these loans. why did that happen? well, there will be a lot of recrimination on this but the basic reason was the united states congress.

Judd Gregg

0:23:44 to 0:24:04( Edit History Discussion )

Judd Gregg: the congress decided that americans should own houses, whether they could afford the house or whether the house sustained the value of the loan, americans should be able to go out and buy houses. and so a lot of houses were sold which did not have the underlying value necessary to support the loan which was made on them and which the person who bought the house and took out the mortgage didn't have the

Judd Gregg

0:24:05 to 0:24:25( Edit History Discussion )

Judd Gregg: income over the extended period of time of that loan to pay it back. everybody knew it at the time that the house was bought. everybody knew it at the time the mortgage was made. but they figured, well, appreciation will always occur in real estate prices so that won't bother us with the value of the house. and, well, maybe this person who got the loan for the house, maybe their income will increase or when the reset day occurs on

Judd Gregg

0:24:26 to 0:24:48( Edit History Discussion )

Judd Gregg: that mortgage, they'll be able to take care of it some way and so nobody faced up to the problem. at the time, and literally millions, millions of homes were purchased under that basic scenario. and th's what caused the implosion basically of our financial markets back in late 2008 and freddie and fannie are

Judd Gregg

0:24:49 to 0:25:10( Edit History Discussion )

Judd Gregg: a large part of that implosion. but a lot of the initiative for that came from the basically asserting that peoe should be able to get those types of loans and pushing freddie and fannie from using what had been very traditional spurned writing standards in the 1990's into much more aggressive standards as they moved into the

Judd Gregg

0:25:11 to 0:25:31( Edit History Discussion )

Judd Gregg: period of 2000, 2001, and the early 2000 period, and as a result had you this proliferation of loans that didn't have the underlying value and did not have the capacity to be repaid and they were all securitized by fannie and freddie. so now the american taxpayer ends up with this huge bill. and i think we have an obligation as a congress to at least be honest with the american taxpayer and tell them

Judd Gregg

0:25:32 to 0:25:52( Edit History Discussion )

Judd Gregg: this is how big the bill is, and it's huge. it's huge. so this bill is now hidden in a drawer under the federal accounting system, where we don't even acknowledge that it exists under the federal budget. even though we know we owe it, even though we know that it's going to be put on the books of the federal though we know taxpayer is going to have to end up picking this up in the long

Judd Gregg

0:25:53 to 0:26:14( Edit History Discussion )

Judd Gregg: run, we don't even acknowledge it. it's stuck in some drawer somewhere here in washington. well, that shouldn't happen any longer. we just had an amendment on here about transparency with the federal reserve. everybody voted for it. everybodvoted for the transparency bil on federal reserve. this is the transparency bill on freddie and fannie. this bill will tell the american taxpayer just how much they

Judd Gregg

0:26:15 to 0:26:36( Edit History Discussion )

Judd Gregg: really do owe. it will bring on budget the issue of the corporations, which are now the obligations of the federal government and, therefore, the american taxpayer. absolutely has to be done. and i thank the senator from arizona for including in his amendment this language which brings this on budget the way it should be and opens the?ight of

Judd Gregg

0:26:37 to 0:26:58( Edit History Discussion )

Judd Gregg: day so that the american taxpayer can understand just how much risk has been piled on their backs, how much debt has been piled on their backs as a result of the irresponsible activity which in large part was initiated by this congress over the years, forcing out loans which -- and pushing a public policy that these loans should be made. and secondly, i congratulate the senator from arizona for

Judd Gregg

0:26:59 to 0:27:19( Edit History Discussion )

Judd Gregg: bringing forward an idea, proposal for how we unwind this situation and how we get out of this situation, by putting us on a path, a path towards basically decoupling freddie and fannie from the american taxpayer, making it -- having those two

Judd Gregg

0:27:20 to 0:27:41( Edit History Discussion )

Judd Gregg: organizations no longer be dependent on the american taxpayer and have the american taxpayer no longer have to pick up the debts of mistakes made by those two corporations, wheen those mistakes -- even when those mistakes were caused to some significant degree by the congress taking actions which were inappropriate or which were bad policy. not necessarily inappropriate but definitely bad policy.

Judd Gregg

0:27:42 to 0:28:03( Edit History Discussion )

Judd Gregg: so i congratulate senator from i think this is a good amendment. and as has been said, how can you take up financial reform if you don't take up the single biggest entity, biggest two entities, when combined, the single biggest entity that affects the financial markets r real estate lend not guilty this country?

Judd Gregg

0:28:04 to 0:28:24( Edit History Discussion )

Judd Gregg: which i -- real estate lending in this country? what is caused the downturn and cris at the end of 2008. you can't do it. you can't claim you've done financial reform if you don't take on and address this issue. i understand that the administration says, well, we'll do it next year. well, we don't have time. i mean, it needs to be done now. i mean, we need to address this now. it's a critical issue.

Judd Gregg

0:28:25 to 0:28:46( Edit History Discussion )

Judd Gregg: and it's at the essence how -- whether we can get our house right and our -- and our ducks in the correct order relative to financial reform. because if you don't straighten out freddie and fannie relationship to the federal government and specifically its relationship to the american taxpayer, you really haven't done anything to solve the long-term problems of how we get

Judd Gregg

0:28:47 to 0:29:07( Edit History Discussion )

Judd Gregg: our fiscal house in order because that issue of how you make real estate loans iothis country is at the essence of how you correct the financial structure of this country. and so this amendment coupled with the amendment that's coming from senator corker on the issue of underwriting are the two key amendments to this bill which address the two elements of this

Judd Gregg

0:29:08 to 0:29:29( Edit History Discussion )

Judd Gregg: bill which are -- are not addressed but which have to be addressed if we're going to have effective, comprehensive and lasting and meaningful reform. mr. president, i yield the floor. like to say to the distinguished manager that i have the following speakers: senator coburn for 10 minutes,

Judd Gregg

0:29:30 to 0:29:40( Edit History Discussion )

Judd Gregg: senator demint for 10 minutes, senator thune for 10 minutes, senator shelby -- i have not been able to nail down how much time he's going to take; and i

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