Could do to advance to us policy proposals. I also think it is an issue that members of this committee could well take up and ask the basic questions, what role do we want them to play is it strictly housing, is it liquidity. Are there other ways it can be constituted given the way that the whole world but thats not really my question. I do have a question. My question relates to the approved merger which i dont believe will be the last. I have communicated to you in correspondence deep concerns held by people in the region about the continued commitment of the merged bank to invest in housing. Also communicated to you concerns about govern nans. After all, this is a fivetime zone Federal Home Loan Bank region now. And weve repeatedly asked for the letter setting forth the terms and conditions. Weve been repeatedly told we cannot have it. I want you to know that as that relates to sensitive financial matters, i completely understand. But i do not know what the compelling public good what compelling Public Policy good is served by withholding information about how we will proceed with respect to the concerns that have been brought to you by many in the region. During the pendency of a merger, for us to be putting out information that is still in the process of being discussed and negotiated, i think as an independent regulator would be irresponsible. Im sure every one of these things will be addressed. But i mean we have a fiduciary responsibility. We have a trust responsibility as regulator here not to put out information that could jeopardize the discussions. And i hope you understand that. Well, i acknowledge and embrace your fiduciary responsibility issues relating to Housing Investment and operational issues that allow for access. I dont believe they fall within that realm. I can assure you that the merged Federal Home Loan Bank will be held to the same high standards on those issues that we have held the two independent banks to, right . So were not going to relax the standard just because the standards that we expect of them just because theyre a merged bank. Knowing as you you can be assured of that. Knowing you as i do, i would expect no less, sir and i thank you. One last quick question. Insofar as freddie mack and fannie mae are under conservatorship conservatorship, insofar as you are moving quickly toward a Common Security zags platform can you identify any compelling Public Benefit for these two entities, other than it is status quo to be separate as opposed to one . Well you know, thats a public debate that i think should be had. Theres a value to competition because it makes both enterprises better. We have aligned fannie and freddies practices on a number of issues that were important to the Public Policy objectives. But i think theres some value to allowing them to compete on things that dont have a Public Policy imperative to them. So i guess but we have aligned them on a number of issues i would think it that quality of service would be an example of that. Well if you talk to one of them as opposed to the other they will tell you that their quality of service is higher than the other one, depending on which one you talk to. But we its important for them to continue to compete on the quality of the service that they deliver. Thats one of the things that it is important for them to compete on. It seems arguable we dont want them competing on a race to the bottom to extend more and more irresponsible credit. You know, there are a whole range of things that we dont want them competing on. And there are some things that we continue to allow them to compete on. It seems arguable to me whether or not that benefit trumps the economy as a scale given that for all practical purposes we own them both. I yield back the time i do not have and thank the chair for his ill dull jens. The chair now recognizes theman from arkansas. Thank you mr. Chairman. Mr. Watt, nice to see you. Thank you for appearing to the committee for an extended period of time. I think back to one of my favorite engavings in the city of washington which is on the National Archives build which is whats past is prologued. Im having a terrible flashback from a terrible movie listening to this discussion today. In 1994 when i was on the Senate Banking committee staff, fannie and freddie had one in 4000 loans that had an ltd of 3 . Then when i came back to government in 1990 and was at the treasury, that had moved to one in ten. And then at the height of the crisis it moved to 1 and 2. 5 or 40 of the loans of their combined portfolios were at the low down payment. At the same time the same direction took place in the debt to income ratios as well. I want to be on the record with you that i share the concerns of many 0 on the committee 0 on the decision to lower down payment rates notwithstanding fico scores and mortgage insurance. I want to turn to a line of question that mr. Duffy had. On this subject of preferred stock arrangement with treasury. For you to accrue money for the Housing Trust fund, pay it out potentially in the Housing Trust fund did you seek a waiver from the preferred stock arrangement with treasury to do that . No, i did not. And so its purely on your judgment, from reading the statute, that youve taken that money out of the system and not swept it to treasury . There was no money to sweep unless theres a profit at the end of the year. And there wont be any swept if theres not a profit. Right. But youve taken the decision to sweep money if there is a profit . Well i mean, to the Housing Trust fund. You mean put it into yes. Yes. Unless doing that would put them into a deficit situation. Right. But did you seek approval from treasury to do that . No. And dont you think that sense they are the owner of that preferred stock on behalf of all of the taxpayers you should have checked with them first before taking money to the Housing Trust fund as opposed to sweeping all of the profit to the treasury . No. Tell me again i know youve covered some of this ground before. Tell me again why you believe thats the case. Why i shouldnt . Why you believe you dont have to why i shouldnt get treasurys approval in. Correct. Theres nothing in the preferred stock Purchase Agreement under which we operate that addresses the Housing Trust fund. Were not violating the terms of the preferred stock Purchase Agreement in doing this. Were simply complying with the law. And thats, you know so theres no reason for me to get treasurys approval for that. Seems like when we own the shares of that company as the taxpayers that we should want to have all of the proceeds, until theres a change, a truck churl change, made all of the earnings of the company outside the core Business Operations any profit thats left should be sent to the treasury. That is still the rule. Aeng but youve taken i keep reminding wu job i wasnt there when these preferred stock Purchase Agreements were negotiated. If they had put it into the agreement, then i would be obligated by it. But theres no provision in the agreement that requires my me to get approval to fund the Housing Trust fund or to comply with any other law that is in existence existence. I didnt get their approval. But you were there and took the decision to take money away from the sweep and put anytime the Housing Trust fund. That was your decision to do that. I made the decision to reverse the temporary termination of contributions to the Housing Trust fund, yes. I was there for that. Thank you very much. I yield back. Gentleman yields back. No other member is in the room to be recognized. So again, i wish to thank the director watt for coming to testify before us. Our former colleague and former and still current friend of this committee. Without objection all members will have five legislative days in which to submit questions and writings to the chair which will be submitted to the witness for written response ps. All members will have five legislative days to commit extraneous feral for conclusion in the record. This hearing stand adjourned. Tomorrow the house is scheduled to take up the Senate Version of a bill funding construction of the keystone xl pipeline. They come in at noon eastern time for legislative business. Watch the debate on cspan. The Political Landscape has changed with the 114th congress. Not only are there 43 new republicans and 15 new democrats in the house and 12 new republicans and one new democrat in the senate theres also 108 women in congress including the first African American republican in the house and the first woman veteran in the senate. Keep track of the members of congress using congressional chronicle. The page has lots of useful information there, including Voting Results and statistics about each session of congress. New congress, best access on cspan cspan 2, cspan radio and cspan. Org. With live coverage of the u. S. House on cspan and the senate on cspan 2, here on cspan 3 we compliment that coverage by showing you the most relevant cession nal hearings and Public Affairs events. On weekend cspan 3 is the home to American History tv with programs that tell our nations story including the civil wars 150th anniversary, visiting battlefields and key events, american art facts to discover what art facts we veal, history book shelf, the presidency looking at the policies and legacies of our nations commanders in chief, lectures in history with top college professors, and our new series real america featuring educational fimmentes from the 1930s through the 70s. Cspan 3 funded by your local cable or satellite provider. Watch us in hd, like us on facebook and follow us on twitter. Illinois Governor Bruce Rauner admounsed last monday his plan to raise the states minimum wage to 10. He laid out his economic plans at his first state of the state address. The states money mum age is 8. 25 and under the governors new plan it would include 25 cents annually. Governor rauner defeated pat quinn. [ applause ] [ applause ] [ applause ] [ applause ] mr. Governor please proceed. Good afternoon. President cullerton speaker madigan, leader ra doane yo, leader dir kin, Lieutenant Governor san gwinnetty, attorney general madigan, secretary white, comptroller munger treasurer fray rixs members of the General Assembly. Thank you all for your service. To our distinguished guests and to members of the media thank you for attending today. Its an honor to stand before you. Today marks a new beginning for illinois. And a new partnership between the General Assembly and the governor. [ applause ] last november voters made it clear they want bipartisan government. They want a government where people come together to solve problems and get things done. They dont want partisan bickering, political infighting or personal conflict to get in the way of serving the needs of the families of illinois. All of us were elected to do a job, to deliver real results. To serve the people of illinois to the best of our ability. [ applause ] thank you. [ applause ] all of us have a duty to serve all of the people of illinois, those who voted for using with as well as those who did not vote for us. The good lord didnt make us republicans or democrats. He made us in his image to do his work, to help each other, to make the world a better place. We all have a moral duty to serve the longterm interest of the people of illinois, to focus on the next generation, not the next election. Im personally committed to working closely with you. Each and every one of you. Meeting together, solving problems together, listening and learning from each other. Together we will do great things for the people of illinois. We will once again make illinois the greatest state in the greatest nation on earth. [ applause ] the task ahead of us is daunting. We have no time to waste. At the beginning of todays session each of you should have received a copy of our policy agenda. It is bold aggressive and comprehensive. It is both very necessary and very doable. In our agenda each of you will probably see some things you dont like. But each of you will certainly see many things that you like a lot. We should consider it as a whole, not as a list of individual initiatives. We must choose to see the big picture. An overall package that will lift up all of the people weve been chosen to represent. With that as our common goal there is no doubt that we can, together, as partners get big things done. Let us commit to doing the peoples work. Over the past dozen years 275,000 more people decided to leave illinois than chose to come here. Thats like the cities of springfield, decatur and champagne all completely disappearing. And over that same time period the states around us have been kicking our tails. The worst performer of our neighbors states have had 6. 5 times the job growth per 1,000 people has illinois has had. Iowa has had more than 15 times the job growth that weve had. Last summer i met the grip family michael, andrea and their children are some of the luckier ones. Michael lives in illinois and he wants to stay here. But after getting laid off he couldnt find a job near home. Now he must commute one hour and 20 minutes to his office in Williams Burg iowa. The grips family roots kept them in illinois but they wonder how much longer they can last and whether their children can find good careers here. And there are families like the grips in every community in illinois. Its time to give them hope. Its time to give them the opportunity to stay. Our top priority must be making illinois competitive again to grow more jobs here. To become more competitive we must look to the structure impediments to our Economic Growth. Our Workers Compensation unemployability insurance all rank against the worst in america. Those costs add up to far more than just number on an accountants balance sheet. They impact real people with real jobs and real families. Mrs. Gut tear rez is here in the galleria. Shes worked at the seely mattress factory. Recently he got a letter saying the plant is being moved to indiana and the plant in illinois is expected to close this spring. Its heartbreaking that whats happening to him is happening to countless others throughout our state. Two and a half years ago modern Forge Company a 100yearold family owned Manufacturing Business began moving its operations to indiana from blue island illinois. Modern forge employs 230 people. In illinois, it paid between 700,000 and 1. 5 million a year in workers comp premiums. In indiana, the same premium is 250,000. Modern forge is competing with manufacturers across the country that dont have illinoiss costs. Modern forge needed to move to stay competitive. Since then theyve hired 100 new indiana workers. And today almost half of its workforce lives in indiana. Leader in both political parties, including attorney general madigan have advocated for much needed reforms that address the shortcomings of the Workers Compensation law that was passed in 2011. Working together we can create a common sense system that protects and fairly compensates those who are injured on the job while also assuring that both public and private employers are not overburdened by an irrational system. [ applause ] too many people in our communities must overcome not only hurdles that State Government has put in place, but also decades of hidden barriers that have caused their communities to suffer. Approximately 80 of individuals in illinois apprenticeship programs are white even though caucasians make up fewer than 63 of our population. Whatever the reason for this disparity, it has gone on for too long. [ applause ] and we must take specific positive action to end this unfair situation. We should require unions that contract with the state to have their apprenticeship programs reflect the demographics of illinois communities. [ applause ] and to have their membership on public Construction Projects reflect the diversity in the surrounding area. [ applause ] and we should create a minority enterprise Small Business program to assess minority entrepreneurs in startups throughout illinois. [ applause ] we must also help those workers who are barely getting by by raising the minimum wage. [ applause ] our Economic Growth and jobs package increases the minimum wage to 10 an hour over the next seven years. Raising the minimum wage in conjunction with improving the overall jobs climate will make illinois more competitive and create a booming economy while increasing incomes for hardworking illinoisans. [ applause ] as we look to make illinois more competitive competitive, Property Tax Relief is one of our most pressing challenges. [ applause ] our property tax burden is one of the biggest impediments to growth. And it hurts both businesses and middle class families. The average homeowner in illinois pays more than three times the amount of property taxes as a homeowner in indiana. More than an additional 3000 paid out of the familys budget every single year. Take for instance christine dalgapol. Christine is in the gallery here with us today. She bought her home in 1978 at the time her taxes for 1,100. By 2013 her taxes were 4,797. Even after accounting for inflation, christines taxes have almost doubled. Even after getting a senior exemption and also yearly appeals, and shes not alone. Over the past decade the average property tax bill has increased nearly 33 . Meanwhile, rea