[Congressional Record Volume 144, Number 130 (Friday, September 25, 1998)]
[Senate]
[Pages S10971-S10972]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             THREE ITEMS OF CONCERN ON THE SENATE'S AGENDA

  Mr. DORGAN. Mr. President, I want to make some comments on three 
items that are left on the Senate's agenda that I am very concerned 
about. The Senate is going to continue, for apparently 2 additional 
weeks, and try to adjourn for the year and finish the 105th Congress on 
October 9th or October 10th. In the 2 short weeks that remain, I am 
told that we will consider H.R. 10, the financial modernization bill, 
fast-track trade authority for new trade treaties, and a substantial 
tax cut.
  I want to describe how easy it is, with a small amount of time left, 
to make big mistakes. I am mindful there will be much disagreement 
about these three items. And I am also mindful back in my hometown one 
of the older fellas who was the wise sage said, ``It's hard to tell the 
difference between the open minded and the empty headed. They dress 
alike.''
  Let me describe these three issues and tell you what I think is empty 
headed about the attempt to try to pass these three pieces of 
legislation in the final 2 weeks of a legislative session.


                        Financial Modernization

  First, H.R. 10, the Financial Services Act of 1998. H.R. 10 is a huge 
piece of legislation that deals with the financial institutions of this 
country and the methods by which they are involved in various kinds of 
activities.
  We have had some experience in this country with the mixing of 
different kinds of enterprises--banks whose deposits are insured to 
$100,000, by the American taxpayer I might say; banks, those who are 
speculating in real estate, those who are involved in securities 
activities, those who are selling insurance; those kinds of financial 
activities.
  We have had some experience in this country putting a number of those 
together in one institution and then seeing, through speculation, one 
part of the institution weakening and eroding the other part of the 
institution that caused massive bank failures in our country. The 
result was in the 1930s and this country said let's not forget what 
happened here. Let's not allow this to happen again, and let's create 
certain circumstances that would prevent us from merging banking 
enterprises whose very existence depends on the perception of safety 
and soundness--not unsafety and soundness, but on whether people 
perceive the institution to be safe and sound. Their very existence 
depends on that.
  Let's not threaten again the banking institutions by fusing together 
financial conglomerates that merge banks with the more speculative 
enterprises of securities and insurance, or even commerce.
  The American public has in this century paid a heavy price for the 
mistakes in those areas and put together walls in the form of 
legislation to prevent it from happening again. H.R. 10 is an attempt 
to bring the walls down. It says, ``Let's create a kind of financial 
fruit salad here. Let's decide we can merge all of these again. We can 
put all of these together and we can build firewalls, and you'll never 
feel the heat in between and it will never threaten bank institutions 
and the American taxpayer will not be put at risk.''
  I guarantee you this, that if this Congress passes in the final 
hours, H.R.10, financial modernization legislation, it will result 
almost immediately in exacerbating the orgy of mergers that now exists 
in this country with big banks, and an orgy of mergers that will not 
only include banks, but will continue to include, at a greater pace, 
banks with the other kinds of financial enterprises I just described.
  And 20 years or 30 years from now they will look back at this 
Congress and this period and say, ``How on Earth could they have 
thought that that made sense? How could they have possibly thought that 
was in the public interest? How could they have forgotten the lessons 
that they learned in the 1920s and 1930s that resulted in the 
legislation that had protected us?''
  I know that there are some big interests around this town who want 
this bill to pass. There is a great deal of lobbying on its behalf. But 
I feel so strongly that to do this in the final 2 weeks of a 
legislative session would have such enormous consequences and pose such 
substantial risks for our country that I am going to resist with all of 
my effort the motion to proceed and in every other way to see if we 
cannot slow this train down on behalf of the American citizens.
  I know it sounds attractive. I know some say, ``This is creating a 
new financial blueprint for our institutions for the future, allowing 
them to compete at home and abroad. It's now a global economy.'' What 
it is is forgetting the lessons of the past. It will be a replay, in 
some ways, of the Garn-St Germain bill of the early 1980s in which they 
unhitched the S&Ls and said, It is OK. You go broker deposits. You load 
up with risky junk bonds. You can become Roman candles. Take a small 
S&L and turn it into a giant S&L with broker deposits, and you can do a 
whole range of other things, and it is fine--and the American taxpayer 
got stuck with a nearly $500 billion bailout for that fiasco.
  If this bill passes, there will be massive, massive mergers once 
again. And they have already been going on at an unprecedented and 
unhealthy pace in the banking industry and other related financial 
industries. So that is one big mistake I hope this Congress will avoid 
in the remaining days of this session. And to the extent I have the 
energy to be able to help them avoid it, I intend to try to do that.


                               Fast Track

  Second is fast track. I know that also has a lot of support, fast-
track trade authority. Just the very words ``fast track'' connote lack 
of preparation. Fast track, fast food--you just go down the line on 
what ``fast'' precedes, and it describes well ``fast track.''
  Fast track means you create a trade agreement negotiated in secret, 
behind locked doors someplace, probably in most cases overseas, and 
bring it to Congress and say to Congress, ``You weren't there when we 
negotiated this trade agreement, but you have no right to offer 
amendments to it.''
  The last three trade agreements under fast track have been 
incompetent. I voted against all three. In each case we have, as a 
result of it, had higher and higher trade deficits--Canada, Mexico, 
GATT--record trade deficits. This country is choking on trade deficits. 
I think to bring fast track to the floor of the House and the Senate in 
the final 2 weeks is regrettable.
  I will, again, to the extent I have any capability of slowing this 
down, there will be nothing fast about it. If I can create a 
legislative bog through which they cannot pull this fast track, I 
guarantee you I will object to every circumstance that allows anybody 
to short-circuit any amount of time to try to get fast track through 
this Congress. It is not in this country's interest to continue that 
kind of trade policy.

[[Page S10972]]

             A Tax Cut And the Social Security Trust Funds

  The third item is an $80 billion tax cut paid for with Social 
Security trust funds. Some say, ``Well, that's not the way it's paid 
for.'' Show me the money. Where do you get the money? You get the money 
for a big tax cut by taking Social Security trust funds that are in a 
fund that is preceded by the word ``trust.'' Taking those trust funds 
and saying these now represent the resources by which we can offer a 
tax cut is not the way to do this country's business.
  When we have that debate--and I expect we will next week or the week 
after--it will be an aggressive debate because some of us are fiercely 
determined never to let that happen. I recall when we had the 
constitutional amendment to balance the budget on the floor of the 
Senate, I voted against it. In fact, it lost by one vote. Had some 
folks pretty upset with that vote. I said, ``It's not that I don't want 
to balance the budget, I do.'' I helped play a role in balancing or 
nearly balancing this country's budget, not by writing something in the 
Constitution, but by doing the kinds of things you need to do on a day-
to-day basis, to do things on taxing and spending that really does 
balance the budget. But to write into the Constitution a proviso that 
says, ``Let's balance the budget by describing all revenue coming in as 
operating revenue'' is to mistreat the Social Security trust funds once 
again. And to actually write it in the Constitution of the United 
States, that does not make any sense to me.
  It does not make any sense to me in the final 2 weeks of a 
legislative session coming up to an election for anybody to say we are 
going to package up $80 billion in tax cuts so we can say to the 
American people we are offering tax cuts, when in fact the money by 
which they offer these tax cuts is to take the money out of the Social 
Security trust funds and make them available for tax cuts.
  Those moneys are not available. Those moneys were collected from 
paychecks in this country. The paychecks are a result of the work of 
the American people, and they are told ``We're going to take some money 
from that paycheck to put into a trust fund because it is needed when 
you retire to make Social Security viable.''
  Then somebody comes along and says we are changing the words ``trust 
fund''; we will just drop ``trust.'' Maybe we should amend that to the 
extent they want to bring $80 billion in tax cuts to the floor, paid 
for by Social Security trust funds. Perhaps we ought to require them to 
take the ``trust'' out of the trust fund name. That will, in my 
judgment, certainly abridge the trust that is supposed to exist with 
those trust funds.
  Those are three big mistakes in a very short time. The potential, in 
a small amount of time, to make big mistakes is very substantial: H.R. 
10, fast track, and tax cuts.
  I have a lot of things I want to get done, others have a lot of 
things they want to do, and in most cases we work closely together and 
have good relationships, but on large public policy issues like this it 
seems to me we ought to be very careful. I feel very strongly about all 
three of these areas. All three, in my judgment, would be a mistake.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. KENNEDY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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