mr. chairman , i yield myself such time as i may consume . 
my amendment is to strengthen the capital requirements of the bill . 
but first , let me acknowledge that between passage in the committee and the bringing of the bill to the floor , the capital standard provision has been strengthened , and i congratulate the committee for doing that . 
but secondly , let me stress that still at this point in time , even though the bill itself got a strong bipartisan committee vote , it lacks the support of the administration . 
the principal reason does not relate to some of the debate that has occurred earlier on a very important issue , it relates to the fact that the department of the treasury , that is the administration , does not want to have accountability for regulation if it is not given adequate authority . 
and , lacking adequate authority , it feels that this approach is not one that produces greater safety and soundness for the american financial system . 
so what this amendment does is strengthens the capital standard provision . 
minimum capital is the amount of capital needed to protect financial institutions against broad categories of business risk , so when a crisis strikes , there is a reserve to fall back upon . 
capital is especially important for gses because their short-term obligations are large , and they are single-industry-intensive . 
fannie mae and freddie mac , for instance , have debt obligations due within a year of about 45 percent of their debt liabilities . 
any problem with capital markets affecting these firms could become very large , very quickly . 
what might `` very quickly '' mean ? 
because of the scale of short-term obligations of the gses , the gses are rolling over many billions of dollars of obligations each week . 
for this reason , a market crisis could become acute in a matter of days , and this is something the country has to think through . 
today 's house vote comes nearly a year after federal regulators ordered fannie mae to restate $ 10.8 billion in previously reported earnings because of accounting problems several years ago , and this is not long after freddie mac restated about $ 5 billion in earnings . 
the stakes are significant , given that these two gses carry together about $ 1.5 trillion in debt . 
the failure of either institution could potentially make the savings and loan crisis of a generation ago look somewhat minor . 
i would stress here that fannie and freddie are very unique institutions . 
they are , on the one hand , secondary market institutions serving as intermediaries primary markets as well as a tertiary market . 
on the other hand , when they hold mortgages in their portfolios , they are , in effect , simply another s & amp ; l . 
hence , while financial risk management tools are much greater than they were a generation ago when we had the s & amp ; l crisis , in one sense , for these two institutions , their use is a little bit more problematic , because in the housing industry risk is transferred to fannie and freddie disproportionately . 
they become receivers of risk and as risk becomes concentrated within these institutions , they disproportionately become on the hook if very extraordinary things happen in the economy , something that is not beyond thinking . 
in the 1980s , without sufficient capital , s & amp ; ls grew larger and entered new lines of business as their capital basis shrunk , and , when things got bad , the taxpayer was on the hook for $ 250 billion . 
fannie and freddie today operate on a capital base much less than s & amp ; ls did just before their collapse in the 1980s . 
it has been suggested by some -- actually , a `` dear colleague '' letter has been circulated -- that opponents believe that my amendment would limit the discretion of the new regulator . 
i would only suggest that that is not my intent , and it is clearly not the intent of the language . 
let me just describe what the federal reserve says about this . 
in a letter dated october 5 , 2005 , chairman greenspan wrote , `` this amendment would improve the proposed legislation ... .. 
the regulators for the gses should have a free hand in determining ... .. 
minimum risk-based capital standards for these enterprises . 
your amendment would give the regulator greater discretion in this critical area. '' it is one thing to have institutions established to have an advantage in cost of money provided by the united states government , and another thing to also have advantage in leverage ratio provided by the united states congress . 
so because the growing presence of gses in our markets and the possible risk they pose to our financial system are significant , it is clear we need a strong regulator , and i would urge that this regulator be given this additional authority . 
