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U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON:

For sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512\u20131800; DC area (202) 512\u20131800
Fax: (202) 512\u20132104 Mail: Stop IDCC, Washington, DC 20402\u20130001

41\u2013730 PDF
2008
MUNICIPAL BOND TURMOIL: IMPACT
ON CITIES, TOWNS, AND STATES
HEARING
BEFORE THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
MARCH 12, 2008
Printed for the use of the Committee on Financial Services
Serial No. 110\u201399
(
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(II)
HOUSE COMMITTEE ON FINANCIAL SERVICES
BARNEY FRANK, Massachusetts,Chairman

PAUL E. KANJORSKI, Pennsylvania
MAXINE WATERS, California
CAROLYN B. MALONEY, New York
LUIS V. GUTIERREZ, Illinois
NYDIA M. VELA\u00b4 ZQUEZ, New York
MELVIN L. WATT, North Carolina
GARY L. ACKERMAN, New York
BRAD SHERMAN, California
GREGORY W. MEEKS, New York
DENNIS MOORE, Kansas
MICHAEL E. CAPUANO, Massachusetts
RUBE\u00b4 N HINOJOSA, Texas
WM. LACY CLAY, Missouri
CAROLYN MCCARTHY, New York
JOE BACA, California
STEPHEN F. LYNCH, Massachusetts
BRAD MILLER, North Carolina
DAVID SCOTT, Georgia
AL GREEN, Texas
EMANUEL CLEAVER, Missouri
MELISSA L. BEAN, Illinois
GWEN MOORE, Wisconsin,
LINCOLN DAVIS, Tennessee
PAUL W. HODES, New Hampshire
KEITH ELLISON, Minnesota
RON KLEIN, Florida
TIM MAHONEY, Florida
CHARLES WILSON, Ohio
ED PERLMUTTER, Colorado
CHRISTOPHER S. MURPHY, Connecticut
JOE DONNELLY, Indiana
ROBERT WEXLER, Florida
JIM MARSHALL, Georgia
DAN BOREN, Oklahoma

SPENCER BACHUS, Alabama
DEBORAH PRYCE, Ohio
MICHAEL N. CASTLE, Delaware
PETER T. KING, New York
EDWARD R. ROYCE, California
FRANK D. LUCAS, Oklahoma
RON PAUL, Texas
STEVEN C. LATOURETTE, Ohio
DONALD A. MANZULLO, Illinois
WALTER B. JONES, JR., North Carolina
JUDY BIGGERT, Illinois
CHRISTOPHER SHAYS, Connecticut
GARY G. MILLER, California
SHELLEY MOORE CAPITO, West Virginia
TOM FEENEY, Florida
JEB HENSARLING, Texas
SCOTT GARRETT, New Jersey
GINNY BROWN-WAITE, Florida
J. GRESHAM BARRETT, South Carolina
JIM GERLACH, Pennsylvania
STEVAN PEARCE, New Mexico
RANDY NEUGEBAUER, Texas
TOM PRICE, Georgia
GEOFF DAVIS, Kentucky
PATRICK T. MCHENRY, North Carolina
JOHN CAMPBELL, California
ADAM PUTNAM, Florida
MICHELE BACHMANN, Minnesota
PETER J. ROSKAM, Illinois
KENNY MARCHANT, Texas
THADDEUS G. McCOTTER, Michigan
KEVIN McCARTHY, California
DEAN HELLER, Nevada

JEANNE M. ROSLANOWICK, Staff Director and Chief Counsel
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(III)
CONTENTS
Page
Hearing held on:
March 12, 2008.................................................................................................
1
Appendix:
March 12, 2008.................................................................................................
91
WITNESSES
WEDNESDAY, MARCH 12, 2008
Blumenthal, Hon. Richard, Attorney General, State of Connecticut..................
17
Dillon, Terry, Chief Executive Officer, Atlas Excavating, on behalf of the
National Utility Contractors Association...........................................................
52
Dinallo, Hon. Eric R., Superintendent of Insurance, Department of Insurance,
State of New York................................................................................................
16
Jain, Ajit, Chairman, Berkshire Hathaway Assurance Corporation...................
65
Levenstein, Laura, Senior Managing Director, Global Public, Project and In-
frastructure Finance Group, Moody\u2019s Investors Service...................................
69
Lockyer, Hon. Bill, Treasurer, State of California................................................
43
McCarthy, Sean W., President and Chief Operating Officer, Financial Secu-
rity Assurance, on behalf of the Association of Financial Guaranty Insurers
67
Newton, Mark, President and Chief Executive Officer, Swedish Covenant
Hospital.................................................................................................................
50
Reeves, Hon. Tate, Treasurer, State of Mississippi..............................................
48
Sirri, Erik R., Director, Division of Trading and Markets, U.S. Securities
and Exchange Commission..................................................................................
11

Vogtsberger, Martin, Managing Director and Head of Institutional Brokerage, Fifth Third Securities, Inc., on behalf of the Regional Bond Dealers Associa- tion........................................................................................................................

71
Wiessmann, Hon. Robin L., Treasurer, State of Pennsylvania............................
45
APPENDIX
Prepared statements:
DeLauro, Hon. Rosa L. .....................................................................................
92
Blumenthal, Hon. Richard...............................................................................
94
Dillon, Terry......................................................................................................

98 Dinallo, Hon. Eric R. ........................................................................................ 103 Jain, Ajit............................................................................................................ 109 Levenstein, Laura............................................................................................. 115 Lockyer, Hon. Bill............................................................................................. 132 McCarthy, Sean W. .......................................................................................... 140 Newton, Mark................................................................................................... 195 Reeves, Hon. Tate............................................................................................. 198 Sirri, Erik R. ..................................................................................................... 202 Vogtsberger, Martin......................................................................................... 210 Wiessmann, Hon. Robin L. .............................................................................. 217

ADDITIONALMATERIALSUBMITTED FOR THERECORD
Frank, Hon. Barney:
Chart entitled, \u2018\u2018Sectoral Breakdown of Moody\u2019s-Rated Issuers and De-
faulters: 1970\u20132000....................................................................................... 224
Washington Post article, \u2018\u2018Tax-Exempt Funds Yield a Surprise,\u2019\u2019 dated
March 11, 2008.............................................................................................. 225
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