[Congressional Record Volume 154, Number 52 (Thursday, April 3, 2008)]
[Senate]
[Pages S2368-S2401]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




NEW DIRECTION FOR ENERGY INDEPENDENCE, NATIONAL SECURITY, AND CONSUMER 
PROTECTION ACT AND THE RENEWABLE ENERGY AND ENERGY CONSERVATION TAX ACT 
                                OF 2007

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate adopts the motion to proceed to H.R. 3221, which the clerk will 
report.
  The legislative clerk read as follows:

       A bill (H.R. 3221) moving the United States toward greater 
     energy independence and security, developing innovative new 
     technologies, reducing carbon emissions, creating green jobs, 
     protecting consumers, increasing clean renewable energy 
     production, and modernizing our energy infrastructure, and to 
     amend the Internal Revenue Code of 1986 to provide tax 
     incentives for the production of renewable energy and energy 
     conservation.

  The ACTING PRESIDENT pro tempore. The Senator from Connecticut.


                           Amendment No. 4387

              (Purpose: To provide a complete substitute)

  Mr. DODD. Mr. President, I have an amendment at the desk.
  I call up that amendment.
  The ACTING PRESIDENT pro tempore. The clerk will report the 
amendment.
  The legislative clerk read as follows:

       The Senator from Connecticut [Mr. Dodd], for himself and 
     Mr. Shelby, proposes an amendment numbered 4387.

  Mr. DODD. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  Mr. DODD. Mr. President, let me, first of all, begin by thanking the 
majority leader, Senator Reid, and the Republican leader, Senator 
McConnell. We would not be where we are at this moment without their 
leadership. So any discussion of where we are on this matter begins 
with them and their staffs for helping us organize the effort over the 
last number of hours, beginning earlier this week, as we returned from 
the 2-week Easter break, to try to fashion together a proposal, at 
least on matters with which there was common agreement.
  As the leader has pointed out, there are many matters here with which 
there is significant disagreement. They are not part of the pending 
substitute. Senator Shelby and I and our respective staffs, along with 
many others--certainly the Finance Committee, because there are 
portions of this that are exclusively the jurisdiction of the Finance 
Committee--have worked over the last 2 days to find those issues upon 
which there was common agreement, or at least levels of spending on 
which there was common agreement, to move forward on as the 
centerpiece, with the full understanding our colleagues will offer 
various other ideas either to increase amounts of money or to add 
additional provisions to this bill.
  What is important here is we are finally working on this issue. As I 
pointed out earlier this week, we have close to 8,000 foreclosures a 
day occurring in this country, not to mention, of course, the residual 
effects spreading across the economy of our Nation--the contagion 
effect affecting students loans, car loans, people who are current in 
their mortgage but are watching the value of their house decline 
because their neighbor's house is in foreclosure, watching home sales 
drop. This is in the midst of an economy that is stumbling along, to 
put it mildly, with a fiscal situation in dire straits. The dollar has 
been weakened. Inflation is rising. Unemployment rates are increasing. 
Consumer confidence is at a low point, the lowest it has been in years.

  So it has been critical, in my view, aside from the specifics which 
you will hear about over the coming days, that we do everything 
possible to remind the American people that in this body Democrats and 
Republicans can come together to try to take intelligent steps to move 
against the flow of the economy heading in the wrong direction.
  This proposal we bring to you as a substitute this morning on behalf 
of myself and Senator Shelby, along with the leadership, is that first 
major step. Is it the end game? Absolutely not. Are there ideas I would 
love to have had included in this bill? Absolutely. Are there matters 
here the Senator from Alabama would like to have included or excluded? 
Absolutely. But we realized we were not going to be able to do that in 
this discussion over the last 2

[[Page S2369]]

days, that we needed at least to come up with a core group of issues 
around which there was general agreement, and then from that move 
forward. That is the good news.
  A month ago, we had a cloture motion on going to a housing debate. It 
was defeated. You could not even get to a debate on this housing 
crisis. That now is behind us. There are matters that occurred over the 
last several weeks that I think probably had a lot of influence on what 
has caused us to come here this morning. The Bear Stearns, JPMorgan 
situation, which we will be hearing about later this morning in the 
Banking Committee, was certainly one. I suspect the other major event 
was the fact that we went home for a couple weeks.
  There is nothing like going home and to get a message. Members went 
back home--Democrats and Republicans--and they heard from their 
constituents. They watched what happened on Wall Street in New York 
when all of a sudden there was an arrangement, which I think was the 
right one, probably, with some minor differences, that saved a major 
collapse in our financial institutions.
  But they asked the very legitimate question: If it was good enough 
for people to get together to solve a problem on Wall Street, what 
about the problem on Main Street? What are you doing here to see to it 
that I can stay in my home, that our neighborhood is not going to 
collapse--that our taxes and properties and neighborhoods are not going 
to further deteriorate? So I suspect more than anything else going home 
made a big difference, and we are here this morning to then talk about 
what we can do.
  Two days ago, the majority leader and the Republican leader asked 
Senator Shelby and myself to put together a consensus package to move 
this process forward, and I am pleased to say we have complied with the 
wishes of the two leaders in crafting a compromise proposal that we 
believe merits the full support of this body.
  Again, I thank the majority leader and the Republican leader for 
their leadership and support in this effort.
  We worked very intensely through Tuesday night until yesterday 
evening to put together this package that is before us. This effort 
built on the considerable time that we have spent in the Banking 
Committee over the past 15 months, I might add, in hearings, meetings, 
and briefings, on the causes of and remedies to the current economic 
crisis. Senator Shelby and I said yesterday that at times of crisis 
such as this, inaction is not an option. With more than 7,000 Americans 
going into foreclosure every single day, true leaders cannot simply 
turn passively away. Our agreement takes important action to address 
symptoms of this crisis in a constructive and sensible manner.

  I would be remiss if I did not also mention Senator Baucus and 
Senator Grassley, who did very good and important work in the Finance 
Committee over this same period of time, the fruits of which are also 
reflected in the package that is now before us in the substitute. This 
package includes a number of important provisions:
  Foreclosure mitigation fund--$4 billion for towns and cities to 
acquire foreclosed and abandoned properties, renovate them, and put 
them in the hands of qualified home buyers or turn them into rental 
housing as the local markets dictate. That is important because when 
you have a foreclosed property in the neighborhood, every other 
property in that neighborhood declines in value immediately. So trying 
to do something about foreclosed properties to put them back on the 
market and get them back with people living in them, either by purchase 
or rental, which will also benefit the neighbors in that community, not 
to mention property taxes, services, and the like--it is a major 
provision, one which I am glad is included.
  Foreclosure prevention counseling--$100 million of additional funding 
in fiscal year 2008 to bring borrowers and lenders to the table to work 
out terms that will prevent foreclosures. This brings the budget for 
foreclosure prevention counseling to $280 million for this fiscal year. 
That is up from $42 million last year. Now, would we have liked to have 
done more? Absolutely, we would have liked to have done more. Senator 
Schumer and Senator Murray wanted $200 million. My colleague from 
Alabama will tell you there was not a lot of appetite for this proposal 
here, to put it mildly, so we compromised between $200 million and 
virtually zero and got it to $100 million. I am told by the nonprofits 
that there are adequate funds here now in the calendar year to assist 
in the counseling effort, which can make a huge difference.
  FHA modernization. The bill also includes the FHA modernization 
legislation which passed this body 93 to 1 last fall, with some 
improvements. For example, we increased the FHA loan limits from the 
current $362,000 to as high as $550,000. This will make FHA more 
available and usable to people who live in higher cost States. It would 
also strengthen the solvency of the FHA fund. FHA can help an awful lot 
of people seeking safe, solid, affordable, fixed-rate mortgages. We 
think it is a very important component to our comprehensive strategy.
  Better disclosure. Senator Jack Reed has included a provision in the 
legislation that improves disclosure. It updates penalties for lenders 
who fail to make disclosures. These kinds of disclosures might have 
helped prevent some abusive lending if they had been in place in years 
past. I would point out that I think another Senator also had 
disclosure provisions in this bill, and this is a compromise between 
Senator Reid and a Republican Senator who was also interested in 
disclosure language.
  Tax provisions. Senator Baucus and Senator Grassley worked out a 
package of tax provisions as well. I will mention them briefly and let 
them describe the provisions more fully themselves. They include a home 
buyer tax credit to incentivize the purchase of foreclosed properties, 
the Isakson-Stabenow-Cardin proposal. No. 2 is a property tax deduction 
to help people offset rising mortgage payments. We will provide a 
modest tax cut to middle-income families of $100 to $250 who don't 
already itemize their deductions. Senator Bayh and Senator Baucus 
offered that idea. Mortgage revenue bonds to help communities raise 
resources to invest in affordable mortgages and rental housing--it goes 
right to the heart of the problem we are talking about. Net operating 
loss carryback will help businesses ride out the current downturn.
  This package is a good start. I wish to thank as well Senator Kerry, 
Senator Akaka, and Senator Norm Coleman for talking about veterans and 
making sure those serving our country in Afghanistan, Iraq, and 
elsewhere are not going to have their properties foreclosed in the 
midst of all of this.
  There are other provisions as well that I am not going into here, but 
needless to say, again, these are items upon which we could agree, both 
Democrats and Republicans, to serve as the core of the coming debate. 
Our action today does not preclude, as I have said, further legislative 
action by the Senate. In fact, I am committed to going forward and 
doing more. In fact, I will hold a hearing next week on the home 
preservation idea that a number of Democrats and Republicans are 
attracted to. Senator Shelby, to his credit--I appreciate his 
willingness to be a part of that debate and discussion during the 
coming days. There was a reluctance, and I would have loved to have 
included that in this package. There is resistance to that idea at this 
juncture, but I am still determined to do everything I can in the 
coming days to have that included as well, to see to it that we really 
get a floor and a bottom on this issue as quickly as we can.
  My colleague from Alabama is here. We are both going to be going over 
to chair a hearing, so I want to give him some time to discuss this.
  Let me thank Senator Reid and Senator Durbin for their efforts. They 
will be offering ideas as well to improve and strengthen this 
legislation. Some of these ideas we will welcome, others we will 
oppose.
  Senator Shelby and I will consult with each other in that process to 
determine how to go forward, but we want to stick with this core idea 
if we can. Other ideas that come to the table we will certainly 
consider and may, in fact, be added to the package, but I think we want 
to try to keep this core package whole and together if we can, rather 
than having it unravel.
  So with that, I thank the majority leader, the Republican leader, and 
I

[[Page S2370]]

thank my colleague from Alabama. He and I work closely together. Last 
year, we did 35 hearings and 17 bills in the Banking Committee, half of 
which became the law of the land, and some others are still pending 
here. Our committee is a good committee with good working members who 
care about these issues, and we are determined to make a difference.
  With that, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Alabama is 
recognized.
  Mr. SHELBY. Mr. President, this morning I am pleased to join my 
friend and colleague, the chairman of the Senate Banking Committee, 
Senator Dodd, in supporting the pending amendment.
  When a crisis such as the one we are now facing arises, I believe the 
American people expect us to provide effective and timely solutions. 
Chairman Dodd and I have worked together to develop a package of 
targeted measures intended to help stabilize and strengthen the housing 
and the financial markets. We chose not to pursue partisan goals here. 
Instead, we are focusing our efforts on achieving the best possible 
results in a bipartisan fashion. I commend the chairman for his 
willingness to work with me in this manner.
  The amendment before us provides immediate help to the marketplace by 
reforming the Federal Housing Administration, allowing it to provide 
greater liquidity and thereby enhancing the options available to 
America's homeowners. It also provides additional funding for 
foreclosure prevention counseling, which will hopefully help many 
homeowners stay current on their mortgages and be able to remain in 
their homes.
  In order to prevent this situation from repeating itself, the 
amendment increases the disclosures--this is very important--
disclosures made to consumers when they obtain mortgages and close 
their loans. I believe that giving consumers; that is, buyers, more 
information and greater ability to understand the choices they are 
making will help them avoid the pitfalls and bad decisions many 
underinformed consumers made in the recent past.
  To better protect our soldiers, sailors, and airmen, the amendment 
extends additional consumer protections and provides those returning 
from combat a chance to get back on their feet before they face 
foreclosure. That is the least we can do.
  In an effort to provide communities with the ability to clean up the 
damage caused by the foreclosures that have already occurred, we have 
included funding to allow States and communities to buy and repair 
foreclosed residences. Attached to this funding is a requirement that 
any profits from the sale of properties must be used to buy and repair 
additional properties, similar to a revolving fund. I believe that 
reuse of this funding in this manner will maximize the impact of these 
dollars and minimize the possibility that funds will be wasted or 
profits inappropriately pocketed, as has been the case in the past.
  The amendment before us also contains a number of tax-related 
provisions prepared in a bipartisan fashion by the chairman and ranking 
member of the Finance Committee, Senator Baucus and Senator Grassley.
  I believe this is a focused and targeted piece of legislation that 
will address in an appropriate manner a number of the difficulties we 
are now facing in the housing market. There is no doubt that we are 
experiencing serious economic stress in communities across the Nation. 
As I said in the beginning of my remarks, the American people expect us 
here in the Senate to provide effective and timely solutions. But I 
would caution my colleagues here that while we are in agreement on the 
measures contained in this bill, there is a line that I believe we 
should not cross. That line is represented by a taxpayer-funded bailout 
of investors or homeowners who freely and willingly entered into 
mortgages that they knew or should have known they could not afford. 
Nor should we be using taxpayer dollars to bail out financial 
institutions that also contributed to this problem. Chairman Dodd and I 
will shortly be attending a Banking Committee hearing in the Senate 
where we will be examining that very question in relation to the Bear 
Stearns situation.
  While there are a large and growing number of homes entering 
foreclosure, I believe we must remember that the vast majority of 
homeowners are living within their means and are making their mortgage 
payments. While some would argue that we have a responsibility to aid 
those who find themselves underwater on their mortgages or unable to 
afford their increasing payments, I would argue, on the contrary, that 
we also have a responsibility to those who have made prudent financial 
decisions and those who may be looking to enter the housing market for 
the first time. There is a large group of Americans who see falling 
home prices not only as an opportunity to buy for the first time but 
also as an opportunity to move up. We must not forget them in our zeal 
to do something here.
  Recently, I received a letter from an individual stationed in Japan. 
I think he very effectively makes the case for the other side of the 
housing market, and I would like to share this with my Senate 
colleagues. I will read it into the Record:

       Dear Sir: While I'm not a resident of your State of 
     Alabama, I would like to share my opinion with you on a very 
     important issue. My wife and I are very concerned with the 
     direction government policy seems to be taking on the debate 
     over the ``housing crisis.'' I am an employee of 
     the Department of Defense and I am serving overseas in 
     Japan. Before we came here, we lived in Washington, DC, an 
     area with a very high cost of living. From the very first 
     paycheck I received we have been saving every month for an 
     eventual down payment on a home. We could not afford to 
     purchase a home in DC or anywhere near DC and were 
     unwilling to take on an alternative mortgage with 100 
     percent financing. As such, we rented.
       When my tour is up in Japan we will probably be going back 
     to Washington and we hope to buy a home. We have worked hard, 
     saved hard, and will be putting down a 20 percent down 
     payment on the home with a 30 year fixed mortgage. An 
     important factor in our being able to purchase a home is how 
     much the market has softened. House prices are dropping 
     because the market was incredibly inflated.
       Yes, people are losing their homes to foreclosure, but more 
     often than not they shouldn't have been in those homes in the 
     first place. I have very little sympathy for someone who took 
     out two risky mortgages to cover 100 percent of the cost of a 
     home that they could not afford.

  And the letter goes on:

       In fact, I would consider it an absolute slap in the face 
     to see my tax dollars being spent on people to allow them to 
     stay in the home they can't afford when I have been saving 
     for years to get into the home that I hope I can afford.

  The letter goes on:

       I recognize that much of the debate centers around 
     predatory lending practices, and people being duped into a 
     mortgage they didn't fully understand. I feel for those 
     people. I really do. But there must come a point when people 
     take responsibility for their actions. If you didn't read 
     your mortgage before you signed, you made a big mistake, and 
     now are going to pay for it. It is not the Federal 
     Government's job to save people from the natural consequences 
     of their actions.

  The letter reads on:

       As you look for a solution to the current situation please 
     consider the position many of us are in. We work hard, we 
     save, and we buy a home we can afford. Do you really want to 
     punish us by using our tax dollars in a bailout for those who 
     got in over their heads? Do you want to reward poor fiscal 
     discipline and encourage people once again to bite off more 
     than they can chew knowing that Uncle Sam is going to come to 
     the rescue? I believe that people like me are very much in 
     the majority in this Nation. But the media attention isn't 
     going to focus on us. It doesn't make for good TV. They are 
     going to focus on the family that is losing their home 
     because of ``corporate greed.'' No mention will be made of 
     the family that simply wanted more than they can afford and 
     now has to pay the price.
       Please be an advocate not only for fiscal discipline and 
     responsibility in the government, but in each and every 
     American as an individual.

  I think that is a good letter. I believe these are wise words, and I 
believe they are words that I hope we can keep in mind to encourage my 
colleagues as we work through this legislation.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Illinois is 
recognized.


                           Amendment No. 4388

(Purpose: To address the treatment of primary mortgages in bankruptcy, 
                        and for other purposes)

  Mr. DURBIN. Mr. President, pursuant to the unanimous consent 
agreement, I send an amendment to the desk.
  The ACTING PRESIDENT pro tempore. The clerk will report the 
amendment.

[[Page S2371]]

  The legislative clerk read as follows:

       The Senator from Illinois [Mr. Durbin], for himself and Mr. 
     Reid, proposes an amendment numbered 4388.

  Mr. DURBIN. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  Mr. DURBIN. Mr. President, I am going to make a brief opening 
statement because I know the Senator from Oklahoma, Mr. Inhofe, would 
like to take the floor and has to go to a committee meeting. I am going 
to stay here to manage this bill while Senators Dodd and Shelby are off 
to a Banking Committee hearing with the head of the Federal Reserve, 
Mr. Bernanke.
  The rules of the Senate are written so that virtually any Senator can 
stop the train. It is a strange way to do business around here, but it 
is the way we have done it historically. The so-called filibuster is 
where a Senator can take to the floor and say: Stop. I don't want this 
to go forward. Literally, that interrupts the proceedings of the Senate 
until that Senator yields the floor or is persuaded by an agreement to 
cooperate with the progress that is needed.

  This bill is critically important for America. It is relating to our 
housing crisis--and it is a crisis. We proposed, on the Democratic 
side, a housing stimulus bill that had five or six component parts and 
that I thought was a good, fair, and important piece of legislation. It 
included a provision that may have been one of the major provisions of 
that bill I had authored related to the Bankruptcy Code. It turns out 
this was the most controversial part of the Democratic housing stimulus 
package. It drew more fire than anything else. There were other 
provisions even the President objected to, but it seemed like most of 
the opposition was directed at my amendment, which I will describe.
  There came a time this week, though, where we were going to return to 
the bill with the controversy associated with it--this Democratic 
stimulus package--where an opportunity presented itself. Senator Shelby 
from Alabama, the ranking Republican on the Banking Committee, 
approached Senator Dodd, the chairman, and suggested we try to work 
this out. In fact, that effort was undertaken with the blessing and 
approval of both Harry Reid, the majority leader, and Senator 
McConnell, the Republican leader. A lot of hard work went into the 
compromise. The staff, as usual, had to burn the midnight oil to get 
this bill ready--not just the Banking Committee but also the Finance 
Committee. The end result is the substitute amendment that is pending 
before the Senate at this moment.
  I will tell you, as I walked through this substitute amendment, this 
compromise, this effort, I found there was a glaring omission--my 
amendment was gone. The bankruptcy amendment I offered on the original 
bill had been stripped from it. I wasn't surprised. There was a genuine 
effort and undertaking to find common ground between Republicans and 
Democrats. Clearly, there was opposition to my proposal. I had an 
option at that point, as a Senator--and every Senator has this option--
to stop the train, to hold things up, and say that is the end of the 
story. I have seen it done, where some Senators have made a career by 
being obstinate, saying nothing will happen until I get my way. 
Sometimes they prevail but not always. The net result is an elongated 
Senate process and a lot of wasted time.
  Those who follow the Senate proceedings on C-SPAN may be familiar 
with the so-called quorum call, which basically means nothing happens 
but for a clerk who, every 5 or 10 minutes, reads a name to remind 
people we still have a pulse in the Senate. But that is a delay, it is 
a lack of effort, and it is a waste of time. So I made the decision not 
to use my right as a Senator to stop this bill. I thought that would 
have been selfish, self-centered and, honestly, didn't serve the 
purpose we are all trying to serve. All I asked in return was to be 
able to offer this amendment. All I ask my colleagues, in return, is to 
give me a vote. I don't know if I can prevail. It has substantial 
opposition. I wish to give my point of view, state my case for the 
amendment, and I welcome those who are opposed to do the same.
  In fact, I am prepared to do something that is rarely done on the 
floor of the Senate today. I am prepared to stand here and debate my 
amendment. I welcome those who oppose it, and I would debate it on the 
merits of what I have to offer. You don't see that much anymore in this 
great deliberative body. People give their speeches and leave. I will 
stick around and I will be prepared to debate the merits of it and then 
I will accept the decision of the Senate as to whether this amendment 
should be included in the package.
  All I ask is that, in good faith, those who oppose the amendment give 
us a timely debate and a vote. Let's not drag this out forever. There 
are Members on both sides of the aisle who would like to offer their 
amendments. I wish to say, at the outset, I will not be unreasonable in 
the debate time I ask for. I hope we can reach an agreement where we 
can actually have a complete debate and vote on this amendment by 12:15 
today. I am prepared to do that. As I said, whatever the decision of 
the Senate, I accept it. Let's move forward.
  When I ran for the Senate--I left the House of Representatives--I did 
it because I respected this institution. I knew so many fine people who 
served here, and I looked forward to the possibility that on the floor 
of the Senate we could engage and debate on the issues of our time, and 
those following debate in the gallery or through C-SPAN would hear both 
sides of the debate and form their own opinions and feel like we were 
doing our job. Let's do that on this amendment.
  On the bankruptcy amendment I have offered with Senator Reid, let's 
have that kind of debate.
  I am going to yield now to the Senator from Oklahoma at this point 
and ask unanimous consent to reclaim the floor after he completes his 
remarks.
  The ACTING PRESIDENT pro tempore. Is there objection? Without 
objection, it is so ordered.
  Mr. DURBIN. Mr. President, I ask the Senator, would he state publicly 
the time he thinks he might need?
  Mr. INHOFE. Yes. It is my understanding we had up to 30 minutes. It 
is not my intention to take that much time, but there might be someone 
else on our side who will want some of the time, in which case I will 
yield to them. So it could take that long.
  Mr. DURBIN. Then, I ask unanimous consent that when 30 minutes has 
expired, or if the Senator has not used all that, I be allowed to 
reclaim the floor and describe the amendment I have laid at the desk.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The Senator from Oklahoma is recognized.


                  Victory in Iraq and the Middle East

  Mr. INHOFE. Mr. President, I thank the Senator from Illinois for his 
cooperation. As I said, if we have any other Members of our side who 
wish to come down and talk about this, there was that length of time 
set aside. So I reserve that time for anybody else who wants to speak. 
If anybody is listening and they wish to use some of this 30 minutes, 
they are welcome to do it.
  I returned 2 days ago from Iraq. It is my 18th trip in the area, in 
the theater. Sometimes it was Afghanistan and other areas, but it was 
in that zone there. I wished to take this opportunity to kind of show 
where we are today, how we got here, and where we are going to go. Some 
good things are happening over there. A lot of people don't believe it, 
and some people don't want to believe it.
  The first thing I wish to do is try to give an indication as to where 
we started and how this whole thing started. We keep hearing quotes 
from people--and misquotes--such as General Cody. He is very certain 
the Army--even though it is stressed--the soldiers themselves are in a 
position to continue as they have been. But there is a problem. I think 
the world needs to know how we got into this problem in the first 
place.
  It began in the 1990s during the Clinton administration. I have a 
chart. When I make this statement, people tend not to believe it is 
true. At that time, we downgraded the military, during those 8 years in 
the 1990s, by approximately $412 billion. If you look at

[[Page S2372]]

where we were during the beginning of the Clinton administration, that 
would be this black line on the chart. If you merely put into this 
chart the inflation rate and kept the funding of the military at a 
constant level, it would be this black line. However, the red line down 
here was the Clinton budget. The budget came in--if you added up all 8 
years--at $412 billion below what the static budget would have been 
with inflation added.
  I say that, and it sounds a little bit like something people are 
hearing for the first time. Yet it should not be the first time. I know 
there wasn't one month that went by in the 1990s that I didn't come 
down to the Senate floor and say this euphoric attitude that the Cold 
War is over and we don't need a military anymore is something that is 
going to come back to haunt us. Well, it has come back to haunt us. 
This is the problem we have. It is very much like during the Carter 
administration in the 1970s, when President Ronald Reagan inherited a 
hollow force when he took office. It was.
  When you are decreasing the funding of the military over 8 years, you 
are dropping behind in your modernization program, and it means your 
force strength will be dropped, and it was a downgrading of about 40 
percent.
  One of the things that concerned me at that time was there is this 
feeling among the American people that we have the best of everything; 
that when our kids go into combat, they are armed and equipped with the 
very best equipment that is out there. Unfortunately, that is not true. 
It should be true. I think the American people would demand--if they 
knew we were having these problems--that we would give our kids the 
very best of everything.
  I have always been very appreciative of GEN John Jumper, who, in 
1998, might been the Vice Chief of the Air Force. He stood up and said 
Russia was making a strike vehicle--he was referring to the SU-25 and 
SU-30 vehicles--and selling them all over the world to countries such 
as China, or potential adversaries, which are better than our best 
strike vehicles, the F-15 and the F-16. In some areas, they were 
better. He talked about the stealth capabilities of what the Russians 
were making as opposed to what we had. At that time, there was one sale 
of around 240 of these vehicles to the Chinese. So they had equipment 
that was better than ours.
  Another example is the NLOS cannon. This is the best thing we have. 
The Paladin is World War II technology. With the Paladin, after every 
shot of this cannon, you have to swab the breach. You saw pictures of 
this in prior wars. But this isn't acceptable because there are five 
countries making a better one than we are making, including South 
Africa.
  So what we have been attempting to do, after this period of time was 
over, was to start upgrading, modernizing, and increasing the force 
strength and capability of our American military. Nonetheless, it is 
very significant that people realize that when this administration took 
over, and 9/11 came about, this was the condition of our military. It 
should not have been that way. The terrorist movement was active 
through the 1990s and during the Clinton administration.
  In February of 1993, there was a car bomb planted in the underground 
parking garage below the World Trade Center. We knew that, and that was 
prior to 9/11. In June of 1996, Khobar Towers, we remember, were bombed 
by Hezbollah, with intelligence pointing to support by al-Qaida. The 
embassies in Kenya and Tanzania, in 1998, were blown up, and that was 
done by the terrorists. We all remember what happened in Yemen, when a 
small craft went into the USS Cole and killed a number of Americans. 
That was another terrorist attack.
  So this terrorism was going on all during the time we were downsizing 
our military. The next thing we find out is we are in a position where 
we have a down-sized military, and 9/11 comes along and 3,000 Americans 
are killed by terrorists, and we found out other terrorist attacks were 
planned at that time. That is when this all started.
  I have to say--because right now I am missing a hearing, which I will 
go to when my remarks are finished--in talking about this stressed 
situation of our Army, people need to understand how we got into this 
situation. After my 18th trip over there, and every time in talking to 
the young people over there, yes, they are stressed and their families 
are stressed and, yes, they have had more deployments, and they should 
be 12 months instead of 15 months but they understand this has to be 
done. We cannot compromise our victory. So we went in after 9/11 for 
three reasons.
  First, we went in to liberate Iraq from a tyrannical leader. I 
remember so well in 1991, after the first Iraq war, I had an occasion 
to be on the first freedom flight. It was 1991. There were nine of us, 
Democrats and Republicans. We were the first ones, in fact, to go to 
Kuwait City, but the Iraqis did not even know at that time the war was 
over. They were burning oilfields. The day would turn into night 
because of the smoke. That was the environment we were in at that time.
  We had a person of nobility in Kuwait who had a palace by the Persian 
Gulf who was with us. He had a 7-year-old daughter. They went with us. 
Alexander Haig, Tony Cuello was one of the party who went over. At that 
time, he was, I believe, the Democratic whip of the House of 
Representatives. So it was a mixture of people. This man of nobility 
and his daughter wanted to see what their house looked like, if it was 
torn up during the first gulf war. When we got there, we found out that 
Saddam Hussein had used it for a headquarters. I took the little girl 
up to her bedroom--she wanted to see her little animals--only to find 
they had used her bedroom for a torture chamber, and there were body 
parts just scattered around in different areas. When we saw this, we 
realized what an animal this man we were dealing with was.
  After 1991, we went back several different times, only to find that 
Saddam Hussein went after everybody who he suspected had been opposed 
to him during that first war, and he took care of them in different 
ways. He tortured thousands of people to death. You have to have gone 
over there, as I did, and looked into the graves and seen people who 
had been buried alive. His sons would raid weddings that were taking 
place. They would rape the bride, and then they would bury her alive. 
People who were going to be tortured to death by Saddam Hussein were 
begging to be dropped into the vats of acid head first so they would 
die quicker, or into the grinders, or the limbs that were cut off.
  We really cannot draw a distinction between al-Qaida and Saddam 
Hussein in terms of the fact they are terrorists and they have no 
regard for human life. We just recently found an al-Qaida torture 
manual. The very things Saddam Hussein was doing in torturing people, 
they are doing now. Take a look at this chart. They are using flames on 
the throat; cutting the feet open so if they live, they will never be 
able to walk again; hanging by the arms while they had electrodes going 
in; drills used on their hands; and, of course, chopping off their 
limbs. This is a manual teaching them how to do it. We watched this and 
saw this was happening. I would think any reasonable person would say 
that alone would have been enough to go in to stop that reign of 
tyranny that was taking place at that time. But there are other reasons 
too.
  The second reason is there were training camps located in Iraq in 
places such as Sargot, Ramadi, Samarra, and one of them was in Salmon 
Pac. Salmon Pac is a community in Iraq where they have a fuselage of a 
707 on the ground, and they were teaching people how to hijack 
airplanes. We will never know whether the perpetrators of 9/11 were 
trained in Salmon Pac. We don't know that. We never will know. 
Nonetheless, those are four training camps in Iraq. They are all closed 
now. They are not training anymore. That alone is certainly itself 
enough reason to have gone in there.
  The third reason is to help the Iraqi people create a free and 
democratic country. People say: Why do we care about the Iraqis? We 
have problems at home. Why are we spending all this money? Why do we 
care about what kind of democracy they have? And they thought it was 
impossible to start one, anyway. One reason is, if they do not do it, 
it is going to be a problem area for terrorists in the Middle East 
until they are fighting on our soil. The troops who are over there know 
this.

[[Page S2373]]

  I just got back. I talked with many troops. In fact, now we have the 
Oklahoma 45th over there, and we visited with most of them. They 
understand why they are there.
  What would happen? There were a lot of surrender resolutions, a lot 
of cut-and-run resolutions that got a lot of attention in this body. I 
can remember when moveon.org had the big ad campaign portraying David 
Petraeus, one of our great American heroes, as ``General Betray Us.'' 
It was unconscionable. There were resolutions to disavow what he said. 
There were 25 Members of this Senate body who opposed those 
resolutions.
  When the terrorists see this, they are hoping and praying that we, 
the Americans, are going to leave Iraq. On August 28, 2007, Ahmadinejad 
made a statement. He was referring to these resolutions that are going 
to draw our people out of Iraq. He said:

       Soon we will see a huge power vacuum in the region. Of 
     course, we are prepared to fill that gap. . . .

  We are talking about Ahmadinejad. That is why the Iraqis are getting 
so cooperative with us. They don't want that vacuum filled.
  I was talking the other day with BG Jimmy Cash. He is retired. He is 
the former command director inside the Cheyenne Mountain complex in the 
late 1980s. He said: I watched Iran and Iraq shoot missiles every day, 
all day long for months. They killed hundreds of thousands of their own 
people. They were fighting for control of the Middle East.
  Which reminds me, when all these people are talking about weapons of 
mass destruction, we knew they had weapons of mass destruction then. We 
knew they were killing hundreds of thousands of their own people in the 
north, the Kurds, and they were using weapons of mass destruction to 
send chemical warheads up there that have the effect of burning people 
to death from the inside out, the most painful thing--women, babies, 
everybody, thousands and thousands of them.
  Anyway, if he were to fill that vacuum, we do not know how long it 
will take for America to be a target on our soil.
  If we look at what is working, one of the things I noticed on the 
many trips I have taken over there--about a year ago, a little more 
than 13 months ago, the surge began. That was General Petraeus. What 
did he say? GEN David Petraeus said we have to go in there with a surge 
capability in certain areas. He was concerned about some of the areas 
around the triangle. As we went in there and positioned ourselves, we 
found that he was right in his analysis as to where we needed to have 
more troops stationed--in Fallujah and Ramadi. Remember, just about 2 
years ago, they declared that Ramadi would become the terrorist capital 
of the world. Now Ramadi is under total security, not by the United 
States but by the Iraqi security forces. So we have watched what has 
happened since that time.
  One of the reasons the surge has worked so successfully is that we 
have had the religious leaders realizing that if we leave, Iran will 
come in and fill the vacuum, and they cannot have that happen. So the 
religious leaders, the imams, the clerics started giving positive 
messages about the United States of America.
  A year ago, we had our defense intelligence attending the weekly 
meetings of the mosques. I think they meet every Friday. At that time, 
85 percent of the messages that were given in the mosques by the 
clerics and the imams were anti-American messages. As of April of last 
year, almost a year ago, there had been virtually none. They are all 
now positive messages. What does that mean? It means that the Iraqi 
citizens have now--just like, Mr. President, anyplace in your State of 
Arkansas or elsewhere in our communities, we have Neighborhood Watch 
programs. Now they have them. They have their own citizens going in 
with bait cans, drawing circles around the undetonated IEDs so our 
troops will not be killed. We watched in Anbar all the incidents. They 
have been down from 40 a day to 10 a day. We have seen economic growth, 
the markets open and crowded. The large project in the Sunni Triangle 
is now back on track. They are going to have the capability to help 
their people now.
  The Iraqi Army is starting to perform really well. This surprises a 
lot of people because they don't think the Iraqi security forces have 
the capability of being the type of soldiers they are today. We saw 
this the other day. In fact, I was over there the other day in Bucca in 
Basra when they went in and took care of the problems so we didn't have 
to do it. This is what we are seeing.
  If you have any question that it is true, all you have to do is look 
at some of the people who never really wanted to be friends of the Bush 
administration who were opposed to the liberation of Iraq. One such 
person was Katie Couric. This shocked everybody when she was 
interviewed. That was in September 2007 by Bob Schieffer. This was live 
on TV. She had made a trip, after she had been criticizing the war, 
criticizing the Bush administration, criticizing the whole liberation 
effort. She went over and came back and said:

       Well, I was surprised, you know, after I went to Eastern 
     Baghdad. I was taken to the Allawi market--

  I have been there also--

     which was near Haifa Street which was the scene of that very 
     bloody gun battle back in January, and you know this market 
     seemed to be thriving and there were a lot of people out and 
     about. A lot of family-owned businesses and vegetables stalls 
     and so you do see signs of life that seem to be normal . . . 
     the situation is improving.

  That is not me talking, that is Katie Couric, whom we least expected 
that from.
  We see these things happening. I always make a point when I visit 
with people in the markets, if I see someone carrying a little baby, I 
will go in there intentionally without any kind of armament, with an 
interpreter. The interpreter will tell us just what they are saying. 
And people with young kids love the Americans.
  I have to say this too. We are going to see, and have seen already, a 
lot of accusations that we in the United States, in our Department of 
Defense, CIA, and the rest of agencies, are guilty of all kinds of 
torture. It is true that back in Abu Ghraib, when it first happened, 
there were some people there who did the wrong thing. I think there 
were 11 of them altogether. They were doing some things that were 
perhaps not the kinds of things we would endorse. That was taken care 
of by the U.S. Army. They took care of it. But that came out, and 
people started talking about what the Americans were doing. Yet look 
what is in their manual, the types of inhumane torture.
  I went to Bucca. Bucca is where we have the most detainees in Iraq. I 
was wanting to find out for sure by going around and interviewing 
detainees. I interviewed, I would say, about 40 or 50 of them. I picked 
them out myself. I took an interpreter. Each one said: We never were 
tortured when we were captured. We have been detained. We will be going 
back to where we came from. They have become real supporters of the 
United States. They were treated right. They were treated humanely. 
They are teaching them to read. They are teaching them to study their 
Koran. They are teaching them carpentry and other trades because one of 
the biggest problems they have--it is easy to recruit people when there 
is total unemployment. The unemployment rate is so high. They have to 
feed their families some way. Now we have trained them, and they are 
able to go back and get jobs and take care of their families without 
having to do it through the military.
  I just say to you, Mr. President, since this whole situation began--
and I happened to be in Fallujah during each of the two elections that 
took place, and I watched the Iraqi security forces go down to vote 
when they knew they were risking their lives. They voted the day before 
so they could offer security. I watched those people risking their 
lives--remember the purple finger--knowing their lives were at risk 
when they voted. This is the democracy they have been looking for. 
Democracy has been working. I came back this last time thinking the 
surge has been progressing so well; if we just keep it up, really good 
things are happening over there.
  Considering we started with a downgrading of some $412 million in our 
military, then 9/11 came and we were forced into a war as a result of 
that, we have done so well.
  Mr. President, I was a part of the draft many years ago, and I was a 
believer for quite a number of years,

[[Page S2374]]

until the first gulf war, that we should have mandatory service because 
I know what a great thing it did for my life. But when you go over 
today and you see an all-volunteer force and see what they are capable 
of doing and what they have done, you come back so proud that they 
started out down here with very little to work with, and they have been 
able to sustain it.
  Are they overworked right now? Are they deployed too often and too 
long--15 months? Yes, they are. It looks as though we are going to be 
able to drop that down to 12 months. But the troops themselves say: 
Whatever it takes, we are going to do this. They know the alternative. 
The alternative is the war will be waged on American soil. We don't 
want that to happen.
  Mr. President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The assistant majority leader.
  Mr. DURBIN. Mr. President, I yield 10 minutes to the Senator from 
Pennsylvania before we claim the floor to describe my amendment.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered. The Senator from Pennsylvania.
  Mr. CASEY. Mr. President, I ask unanimous consent to speak as in 
morning business.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. CASEY. Mr. President, I ask unanimous consent to have printed in 
the Record the two documents I have in front of me, one of which is a 
description of the life of one of our fallen soldiers, as well as a 
news article from the Citizens' Voice newspaper dated December 23, 
2005.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       First Lieutenant Michael J. Cleary, of Dallas, born April 
     4, 1981 was killed in action by hostile forces on December 
     20, near Samarra, Iraq. Lt. Cleary had just completed a 
     demolitions mission when an ambush occurred. Mike was Platoon 
     Leader of the Explosive Ordinance Disposal Team in E Company, 
     1st of the 15th Infantry Regiment, 3rd Brigade, 3rd Infantry 
     Division.
       Mike graduated from Dallas Senior High in June 1999. While 
     at Dallas, he was a four-year letterman in both soccer and 
     tennis, and captain of both teams his senior year. He was 
     named to all star teams in both sports. He was selected to 
     attend the National Youth Leadership Forum on law in his 
     junior year and was involved in many school activities 
     including National Honor Society. He received the Dr. Pepper 
     Soccer MVP Scholarship and the History Scholarship at 
     graduation and was offered academic scholarships at Ursinus 
     College, Gettysburg, Dickinson, and Lafayette. He chose 
     Hamilton College in Clinton, NY.
       While at Hamilton, Mike participated in varsity soccer and 
     lettered in varsity tennis. He joined Sigma Phi Fraternity 
     and became the chapter president. He gave up intercollegiate 
     sports and participated in all fraternity intramural sports, 
     winning the Hamilton Golf Intramural Championship. He wanted 
     to enlist in Special Forces immediately after the attacks of 
     September 11, but chose to follow the advice of his mother 
     and stayed in school until completing his studies. He 
     graduated in May 2003 with honors from the Economics Program.
       In his senior year, he applied to, was tested for, and was 
     accepted into the Marine Flight Officer Program. He was 
     notified that his class would be deferred to January and 
     enlisted in the U.S. Army. He went to Basic Training three 
     weeks after college graduation, earned his Airborne Wings and 
     Sapper Tab, and graduated from the SAS Antiterrorist Course. 
     He was a player-coach of the Ft. Leonard Wood soccer team, 
     which won the Post Commander's Cup. His last soccer 
     competition was as player-coach of 1st/15th Infantry Soccer 
     Team that played a Thanksgiving Day game with the Republic of 
     Georgia Army Team.
       Mike's military decorations include the Combat Action 
     Badge, Bronze Star Purple Heart, Army Commendation Medal, Air 
     Force Commendation Medal, Army Achievement Medal, Good 
     Conduct Medal, and three campaign medals. He was awarded the 
     Overseas Military Service and Active Duty Army Ribbons, as 
     well as Meritorious and Valorous Unit Citations.
       Mike is survived by his parents, Marianne and Jack Cleary, 
     Dallas; sisters, Erin Flanagan, her husband James and their 
     three children, Bedford, N.H.; Shannon Cleary, Maui, HI; 
     Kelly Cleary and Fred Tangeman, DeLand, FL; brother, Patrick 
     Cleary, Dallas; his loving fiancee, Erin Kavanagh, Dallas, 
     and his maternal grandfather Joseph Nemeth of Waverly, N.Y.
                                  ____


                [From citizensvoice.com, Dec. 23, 2005]

                    A Family Mourns a Fallen Soldier

                         (By Robert Kalinowski)

       Dallas.--It was at her bridal shower Sunday when Erin 
     Kavanagh had one of her last conversations with fiance, 1st 
     Lt. Michael Cleary.
       ``Mike called during the shower and said, `Have fun doing 
     whatever girls do at bridal showers. I love you,' '' Kavanagh 
     recalled, her voice soft and crackling with a cup of water 
     she was sipping in hand.
       A grand wedding was set for mid-February. Cleary was 
     ``packing up'' in Iraq, scheduled to complete his yearlong 
     tour in 10 days. The couple was to move into an apartment 
     near his Georgia Army base Jan. 4, she said.
       ``I kind of thought we were free and clear,'' Kavanagh said 
     Thursday with Cleary's dad, Jack, by her side just two days 
     after Cleary was killed in action.
       The two spoke at length about the heroic 24-year-old Army 
     officer from the office of Jack Cleary's Dallas-based 
     business, Cleary Forest Products.
       Cleary and another soldier from his unit, Spc. Richard 
     Junior D. Naputi, 24, of Guam, died Tuesday in Taji, Iraq, 
     when an improvised explosive device detonated near their 
     Humvee during combat operations, the Department of Defense 
     reported Thursday. They were assigned to the 1st Battalion 
     15th Infantry Regiment, 3rd Brigade, 3rd Infantry Division, 
     Fort Benning, Ga.
       Kavanagh sporadically cried while slowly flipping though a 
     thick stack of pictures of Cleary.
       There were photos of him fishing and hunting. Some were of 
     him with family and some with fellow soldiers in Iraq. She 
     cracked a small laugh at one of him chopping down a Christmas 
     tree last year.
       The 25-year-old then paused when she came across one of the 
     couple and their parents, immediately recalling the date it 
     was taken: May 19, 2005.
       That was the day her lifelong friend and then-boyfriend 
     asked her to be his wife.
       It was the last full day they spent together. The next day, 
     Cleary shipped off to finish his tour after a two-week leave 
     at home, she said.
       Behind Kavanagh was a laptop computer, on which she had 
     just checked her e-mail. The subject line of one of Cleary's 
     final messages to her, sent Dec. 17, read: ``So good to hear 
     your voice today, Love.''
       After Kavanagh's bridal shower--attended by 50 people at 
     Apple Tree Terrace, Newberry Estates, Dallas, where the 
     wedding reception was to be--she traveled to Virginia, where 
     she was living.
       She was packing her belongings for the move to an apartment 
     at Cleary's military base in Georgia, where they planned to 
     live until Cleary's enlistment was complete in December 2006.
       It was there on Tuesday night when she learned the 
     devastating news her soon-to-be husband had been killed.
       Her mother, brother and close friend drove the 250 miles to 
     tell her face-to-face, she said.
       Kavanagh struggled but couldn't describe her initial 
     reaction Thursday before a family member walked into the 
     office, approached her crying and offered condolences. The 
     two sustained a lengthy embrace as they whispered to each 
     other and sobbed.
       Several minutes later, Kavanagh discussed how she's coping 
     with the tragedy.
       ``I've just been with family. I'll have to take it one day 
     at a time,'' she said.
       ``And, I have a new family, right Jack?'' she innocently 
     asked Cleary's father, who said yes without delay.
       Cleary tried to, and usually did, call every other day, 
     Kavanagh and Jack Cleary said.
       He last called each of them Monday, they said.
       Toward the end, he focused on talking about a Dodge Ram 
     pickup truck he bought and was waiting for him and where he 
     and Kavanagh should go on their honeymoon, they said.
       The honeymoon location was still being finalized.
       ``Erin said she didn't care (where they were going), but he 
     said, 'Dad, I think that means she really does,' '' Jack 
     Cleary recalled.
       Cleary and Kavanagh began dating on Nov. 25, 2004, which 
     was Kavanagh's 24th birthday, while Cleary was home before 
     deploying to Iraq.
       The two knew each other since they were children and 
     graduated together from Dallas High School in 1999. After 
     high school, Cleary decided to follow in his dad's footsteps 
     to Hamilton College in New York state.
       Pursuing an economics degree, Cleary was in his junior year 
     when he first considered the military. He was troubled by the 
     Sept. 11, 2001, attacks, his dad said.
       ``He came home for Thanksgiving in November and told us he 
     all but signed the final papers to join the Army special 
     forces,'' said Jack Cleary, a decorated Army veteran of the 
     Vietnam War.
       His parents convinced him to finish college first. While 
     doing so, he applied for the Marine Corps officer flight 
     school. When told his entry would be delayed, he ``said `I'm 
     not waiting''' and decided to enlist in the regular Army.
       After completing basic training, Cleary was quickly 
     promoted several ranks and entered the Army's Officer 
     Candidate School. He was commissioned first lieutenant in 
     December 2003 and trained extensively for his eventual 
     deployment to Iraq, where he was a platoon leader and 
     champion for his soldiers, his dad said.
       ``He loved the guys he was with. They were doing their 
     job,'' Jack Cleary said.
       The military has offered Cleary's family a full honors 
     burial in Arlington National Cemetery.
       Jack Cleary said the family is honored by the request, but 
     will likely decline.
       ``Our feeling is home,'' he said with a pause. ``We want 
     Mike home.''

[[Page S2375]]

                       Honoring Our Armed Forces

                    First Lieutenant Michael Cleary

  Mr. CASEY. Mr. President, I rise this morning to speak about a young 
man from my home region of northeastern Pennsylvania who lost his life 
in the war in Iraq, 1LT Michael J. Cleary of Dallas, PA. He was born 
April 4, 1981, and we are thinking of him today for so many reasons, 
not the least of which is a birthday tomorrow. I want to provide 
somewhat of a biographical sketch, and then talk a little bit about his 
life.
  Michael Cleary was a graduate of Dallas High School in Luzerne 
County, PA, in June of 1999. He was captain of two teams there, both 
soccer and tennis. He was an active member of so many organizations, 
including a proud member of the National Honor Society. He had 
opportunities at several colleges, but he chose Hamilton College in the 
State of New York. While at Hamilton, he participated in varsity soccer 
and received letters in varsity tennis. He was the chapter president of 
the Sigma Phi fraternity. And despite all of his college and academic 
interests, he also had a feeling in his heart for his country, and he 
wanted to serve. He wanted to enlist in special forces immediately 
after the attacks of September 11 but chose to follow the advice of his 
mother--which for all of us is the right thing to do--and she urged him 
to stay in school and to complete his studies.
  He did that, and he graduated in May of 2003 with honors from the 
economics program. Ultimately, his dream was fulfilled when he joined 
the military. Unfortunately, he lost his life in December of 2005. His 
military decorations include the following: the Combat Action Badge, 
the Bronze Star, the Purple Heart, the Army Commendation Medal, the Air 
Force Commendation Medal, the Army Achievement Medal, the Good Conduct 
Medal, and three campaign medals.
  It is hard to describe in a short amount of time, even in a writeup 
in the newspaper, as local papers did at that time, but probably the 
best way to encapsulate what Michael Cleary's life has meant to this 
country is to remember the words of Abraham Lincoln when he talked 
about the sacrifice of our soldiers. When he spoke about the battle of 
Gettysburg, he spoke of those who gave the last full measure of 
devotion to their country. We now can say that about so many of our 
young men and women who fought in Iraq, and one of them was Michael 
Cleary. He indeed gave the last full measure of devotion to the country 
he loved.
  He didn't have to do it. He had a great career ahead of him because 
of his academic achievements and because of his leadership qualities. 
He could have pursued another path, but he chose to give back. He chose 
to sacrifice for his country, knowing full well that he could be asked 
by God to give the last full measure of devotion, and he did.
  We are thinking of his family today for so many reasons, not the 
least of which is that First Lieutenant Cleary was the fourth 
generation of that family to serve his country. His father, Jack 
Cleary, was a decorated Army veteran from the Vietnam war, and then two 
generations before that. So this is a family who has sacrificed in 
generation after generation, and we are thinking of them today. 
Tomorrow, they should have been able to celebrate Michael's birthday, 
which would have been his 27th birthday, but they cannot. They are 
strong people. They understand the sacrifice he made, and we are 
thinking about them this morning and tomorrow and on so many other 
days.
  I think sometimes it is very difficult for us to fully comprehend--
those of us who have not had a close family member lost in combat--what 
this means to a family, what it means to a community such as 
northeastern Pennsylvania, in Luzerne County, even years later now. It 
is difficult because in so many parts of our State, as is true of the 
whole country, when we lose one soldier, especially in a small town, in 
a smaller community, the impact is devastating. And not only the 
initial impact of that, but months and years later.
  I think it is important we don't just look back and remember and pay 
tribute to the day they died and to the sacrifice they made, as 
important as that is, but we should be remembering, as well, their 
life, their life of achievement and triumph, and their life of service 
because when these families look back on these young people, they are 
not just going to remember their service in the military. Family 
members know our fighting men and women weren't born into divisions and 
platoons. They weren't born with a uniform on; they were born into 
families--families of mothers and fathers and brothers and sisters and 
aunts and uncles and cousins and friends and so many others we all know 
are part of all of our families. So I think it is important to remember 
these young men and women, to the extent that we can, on their birthday 
or some other significant moment in their life.
  Finally, let me say this: The news article I cited from December of 
2005 talked about the plans Michael Cleary had to be married to Erin 
Kavanagh. I will not review the whole article, but suffice it to say 
that it is a powerful story of what one soldier's hopes and dreams 
were--to serve his country but to come home and then start a new life 
and to be married. So we are remembering her as well today and 
remembering they graduated together from Dallas High School in that 
year of 1999.
  We are grateful this day in so many ways, but it is difficult to 
fully explain how grateful we are for his life of service and 
sacrifice, his life of courage and commitment, and his life which was 
focused on the future, his own future but also the future of our 
country. So tomorrow, as his family celebrates his birthday, we are 
remembering Michael J. Cleary at this time, and we wish for him and for 
his family all of God's blessings.
  Mr. President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The assistant majority leader.
  Mr. DURBIN. Mr. President, pending before the Senate is an amendment 
to the housing bill, which I offered earlier and on which I have asked 
the Republican side to consider a unanimous consent request so that we 
can debate and vote on it still this morning. I hope they will consider 
that in a timely manner. I am prepared to offer an equal amount of time 
to both sides of the aisle on the substance of this amendment and then 
accept a vote at 12:15.
  We have proffered this unanimous consent request, and I hope, in the 
interest of time and fairness, that the Republican minority will accede 
to this request, or if they wish to modify it, let us know as quickly 
as possible.
  Here is what this amendment is all about. We have 2 million people 
about to lose their homes. These are people who bought a home with a 
subprime mortgage. A subprime mortgage usually meant some exotic brew 
of terms for a mortgage which didn't exist traditionally or 
historically. It might be an adjusted rate mortgage where you pay a low 
interest rate on the front end and then, after 1 year, 3 years, or 5 
years that interest rate would go up. There were even mortgages offered 
that were interest only, so that people were paying low monthly 
payments of interest but not retiring the debt on the house. The 
principal debt remained the same. The theory was that as long as the 
value of real estate was going up in America, you couldn't go wrong. No 
matter what deal you signed up for to get into a house, if the house 
was going to appreciate in value, don't worry about it.
  There were also people who took that mortgage on their home and 
consolidated a lot of other debts they had on cars and other things, 
home improvements, and put it all in that mortgage so that they had a 
mortgage debt that was actually greater than the current value of the 
home.
  These so-called subprime mortgages were being written right and left. 
In the old days, going back to when I first bought a home, there used 
to be pretty close scrutiny of your credit record. They used to require 
10 percent of the value of the home as a downpayment, or 5 percent. You 
had to pay points; in other words, thousands of dollars at the closing. 
It was pretty tough in those days.
  Well, the whole climate of home lending changed with the subprime 
mortgages. More and more people moved into homes. The values of homes 
were mushrooming, and it looked as though we were just riding the crest 
of a wave. Well, guess what happened. The wave crested and started to 
fall. And when it fell with the subprime mortgages, a lot of people 
were hurt. The

[[Page S2376]]

so-called adjustment of the mortgage took place and an affordable 
monthly payment became unaffordable. All of a sudden, the low interest 
rate blossomed into a much larger interest rate. Or perhaps a family 
stumbled--somebody lost a job, a divorce, a serious illness in the 
family--and with that stumble, they missed a few payments.
  Well, now, add this up into a nation of 300 million people, and we 
end up with 2 million folks who face the prospect of losing their 
homes. Now, a lot of people say, well, isn't it a darned shame. But why 
did they sign up for those crazy things to start with? They should have 
used better judgment. They should accept their medicine at this point 
and maybe they will be a little smarter the next time around.
  If it were that easy, we could write it off as the moral hazard of 
making a bad decision, of irresponsible borrowing. But it turns out to 
be more significant. Two million people losing their home in a nation 
of 300 million doesn't sound like much, but 2 million people losing 
their home will affect the value of homes around them.
  What is the value of my home in Springfield, IL? Well, if you ask an 
appraiser or realtor, they will say: I don't know, but I will tell you 
what I will do. I will look at other homes in the neighborhood that 
have gone for sale--comparable sales, comparable values. So they look 
up and down the block and around the block, in the neighborhood, and 
look at what homes are selling for, comparing them to my home, and they 
come up with a valuation on my home.
  Well, if down the block and around the corner a home was foreclosed 
upon--in other words, the people were forced out of the home, there was 
a forced sale of the home, and it was sold for less than fair market 
value--that value will be calculated into the appraisal of my home. The 
experts tell us that 2 million people losing their homes in America 
will drag down the value of 44 million homes. It is a ripple effect.
  As the value of homes declines, more people face the reality that the 
mortgage principal, the amount they owe on the mortgage, is greater 
than the value of their home. The shorthand term they use is, you are 
``underwater.'' Your mortgage value, your mortgage principal is greater 
than the value of your home, so you can't borrow against the value of 
your home anymore. You are already in debt over the value of your home. 
That is the third ripple.

  Then there is the fourth, the mentality of buyers across America. 
This is the one that troubles me the most. For over 70 percent of 
people in America, if you ask them are they going to buy a home, and 
they say no, when you say: Can't you get a mortgage, they say: Yes, we 
can get a mortgage. Why won't you buy a home? They say: I don't think 
it is a good investment.
  Seventy percent of people in America today say buying a home, real 
estate, is not a good investment. Why? They are afraid the $500,000 
home today will be worth $450,000 next year--not a smart deal.
  As long as this mentality is out there, the housing industry is flat. 
That doesn't hurt just your realtors and your developers, it hurts 
homebuilders, skilled craftsmen, people who supply homes--from those 
who are gardeners and do the landscaping, to furniture--you name it. 
All of these related industries are slowing down into this recession 
which Mr. Bernanke finally conceded yesterday may be on the horizon. 
That is why addressing this home crisis is important--not just for 2 
million people who had the mortgages, but if we do not deal with those 
2 million people losing their homes, it is going to have a dampening 
effect on our entire economy. It is going to hurt all of us.
  A recession is a period of time in which businesses fail, jobs are 
lost, consumer confidence is low, the economy slows down. It happens in 
a free market economy. But you do not want it to go on too long because 
it can have a long-term negative impact.
  What we are trying to do today is to pass a bill to breathe some life 
back into the housing industry and housing market in America. The bill 
is good, and it has a lot of good provisions. I am happy to support it. 
I think there are things in this bill which will be of value to us as a 
nation. I think virtually every one of them has some impact, some 
positive impact. But there is not a single one of them that will have 
the positive impact of the amendment I offer. Here is what the 
amendment says.
  Currently--now--if you find you cannot pay your bills and you still 
have a job, you can go into chapter 13 in bankruptcy. You go to the 
bankruptcy court and say: I am in a mess. I am in over my head. I have 
more debt than I can take care of. Will the bankruptcy court work with 
my creditors so I can have an arrangement to pay off my debts? I would 
have to change the terms of some of the debts, but at the end of the 
day I will get out of this mess.
  The bankruptcy court takes a look at it and decides whether it is 
going to work. You may be dreaming. You may not even have a chance. 
Your creditors may not want to cooperate. So this chapter 13 is just an 
effort to try to help people get out of this mess.
  We think about 600,000 people facing mortgage foreclosure will take 
this option and go to bankruptcy court. If they go into the bankruptcy 
court and try to work out their debts and keep their homes, they have a 
problem. Under current bankruptcy law, you cannot modify the terms of 
the mortgage on your home. In other words, at the end of the day, you 
are still stuck with that same subprime mortgage that may have toppled 
you in the first place. The reason I offer this amendment and the 
reason I want to change that one provision is because it is 
fundamentally unfair.
  If I walk into a bankruptcy court and I own a farm and I say I cannot 
make my farm payments, my mortgage on my farm, the bankruptcy court has 
the legal authority to change the mortgage terms on my farm or on my 
ranch or on my vacation condo--I don't own one--or on the big boat I 
just bought and on which I can't make the payments. The bankruptcy 
court can change every single one of those, but it cannot change or 
modify the mortgage on your home. Why? Of all of the things in the 
world they can change, why not that?
  It turns out that by tradition it has never happened. So I bring the 
amendment and propose the court be given that authority.
  The group that is opposed to this, screaming bloody murder, is none 
other than the mortgage bankers, the same people who brought us the 
subprime mortgage mess. They do not want to see the terms of their 
subprime mortgages changed in court. And they say: If you change them, 
interest rates will go up.
  What I did, working with that industry, is say: I will apply this to 
a narrow group of people, the most limited group I can find that still 
has some impact on this issue, and I will narrow the discretion of the 
bankruptcy court. So listen to where this amendment takes us.
  First, you have to qualify to go into court. We changed the law 
sometime a few years ago. To qualify to go into bankruptcy court you 
have to have a certain income; you have to go through certain processes 
and disclosures--even credit counseling. All that is required before 
you can walk into the court.
  Second, this only applies to your home. I don't want a person walking 
in saying: I bought 100 acres down in southern California and I need 
help--no way. Just your home.
  Third, it only applies to existing mortgages as of the date of the 
enactment of this bill. A mortgage you enter into after the day this 
bill is enacted would not apply.
  Fourth, the court can only reduce the principal on the mortgage--the 
amount that you owe--no lower than the fair market value of the home. 
You protect the lender. If you go through foreclosure and have an 
auction, it can sell for a lot less than fair market value. So fair 
market value is the bottom line.
  Fifth, the interest rate the bankruptcy court can impose can be no 
lower than the prime rate plus a premium for risk.
  Sixth, the term of the mortgage can be no more than 30 years.
  And then, seventh--and we did this saying to the banking industry: 
What more can you ask? If in the next 5 years you sell that home and it 
has appreciated in value, any increase in value over the fair market 
value as of the date of the bankruptcy goes to the lender, not to the 
owner. What more can we do to protect these bankers--fair market value 
on one end, any appreciation in value on the other end. And they still 
oppose it.

[[Page S2377]]

  I hope my colleagues in the Senate will take a look at this. The 
credit unions support this because they don't get into the crazy loan 
business that some of these mortgages did. A group that includes the 
AARP, groups all across America, consumer groups, they understand this 
is only reasonable. The New York Times has editorialized in favor of 
it. I think this is an approach which will help a number of people. It 
is narrow and focused. It is limited in its scope, and it is really 
directed toward giving people another chance to stay in their homes. 
They still have to pay the mortgage. They don't get off the hook, but 
they can stay in their homes.

  Stabilizing the housing market, stabilizing your neighborhood and my 
neighborhood, breathing some life back into this housing industry, that 
is the way to turn this recession around. This amendment I offer on the 
Bankruptcy Code will help more people than all of the provisions 
combined in the rest of this housing act. This reaches a lot of people. 
Hundreds of thousands could qualify. I urge my colleagues on both sides 
of the aisle to please consider this amendment.
  Mr. President, at this point I see two of my colleagues on the Senate 
floor, Senator Smith of Oregon and Senator Kerry of Massachusetts, and 
I would like to yield to them for whatever periods they would like to 
speak and then reclaim the floor on my amendment.
  Mr. President, let me make a unanimous consent request that when the 
two Senators have completed their remarks I be recognized again on my 
amendment.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered. The Senator from Massachusetts is recognized.
  Mr. KERRY. Mr. President, I thank the distinguished assistant leader 
for his comments and his leadership in this area. As he may recall, we 
were together at a meeting at the White House a month and a half, 2 
months ago now with the President, with Secretary Paulson, Vice 
President Cheney, and a small group of Senators there to talk about the 
stimulus package. As I know he may recall, I raised at that time the 
housing crisis, saying to the President that the entire cause of 
everything that was bringing us there to discuss the stimulus was in 
fact the subprime crisis and that no stimulus package should be passed 
that didn't in effect stem the tide of foreclosures and address the 
uncertainties in the marketplace and the lack of confidence. So I know 
he joins me in expressing regret that not withstanding the nodding 
heads and comments of affirmation, absolutely nothing happened. Nothing 
happened.
  Sadly, it is not until the Federal Government puts up $400 billion to 
bail out Bear Stearns and other investment banks that you really get 
some kind of response from the Federal Government. I am not complaining 
that they should not have done what they did with respect to Bear 
Stearns and other investment banks because the implications of their 
failure could have had a profound impact, spilling down into our 
economy. But when the pain is trickling up to a Bear Stearns, and 
finally the administration notices--that very same pain has been felt 
for over a year now by people being foreclosed on in the economy--it 
really is an underscoring of the degree to which an administration is 
out of touch with the real concerns and realities in the life of the 
American people.
  We need to show that commitment, here and now, in passing this 
foreclosure act to deal with the problem nationally. We need to do it 
now. It is long overdue. As many as 8,000 foreclosures are occurring 
daily. Some of these loans we know were absolutely predatory; almost, I 
believe, criminal. People knowingly went out, knowingly made loans to 
people they knew were not capable, ultimately, of meeting the adjusted 
rate mortgages, but because of the benefit to them and the immediate 
take in terms of the points they would make and the commissions and 
returns on those transactions, they went ahead and did it. Frankly, 
some of those came from the very same people who have just been bailed 
out by the Federal Government.
  I commend our majority leader for his efforts to bring this to the 
Senate floor now and his efforts, together with Senator Dodd, to try to 
work through this particular legislation. Let me share with my 
colleagues, last weekend--things have gotten so bad in Boston that 
Mayor Tom Merino recently opened a war room where city officials are 
working together on a day-by-day basis to fight the wave of 
foreclosures that we have seen in recent days.
  A few months ago I was in the city of Brockton in Massachusetts and 
met with the mayor. He said: You have to take a moment and come 
upstairs and meet with me with these folks who are here, and impromptu 
we went upstairs and there was a group of people from the community who 
came together in desperation to try to figure out how they were going 
to deal with the foreclosures in Brockton. This mayor had already 
processed some 400 foreclosures in Brockton, and he was staring at an 
additional 800 or so that were going to come at them.
  What happens to a community already struggling to get their economy 
back on track when they face that kind of wave of foreclosures is, 
street by street, house by house, as they get boarded up and people 
leave the homes, the rest of the property values start to go down--the 
local gas station, the local 7-Eleven, the pharmacy--everybody begins 
to feel the impact.
  But most important, from the mayor's point of view and from the 
Government's point of view, they begin to see a decline in revenues. 
The only place mayors can go in any kind of wholesale fashion to deal 
with a decline of revenues is to cut fire, police, and schools.
  There are plenty of communities in America where we have already seen 
those kinds of reductions, all of which run completely counter to how 
we build a community and to what we are trying to do in order to 
restore economic strength in the country.
  Just this last weekend I attended, with Mayor Menino, at a high 
school in Roxbury, in Massachusetts, in Boston, a homeowner foreclosure 
prevention workshop. I was literally stunned at the numbers of people 
who had come into this high school on a Sunday afternoon, bringing all 
their financial records because they had been unable to get hold of a 
real human being to talk to in order to try to work out a reasonable 
agreement for what they could pay and be able to stay in their homes.
  Rather than face one of those endless phone calls where you press 2 
to talk to somebody who will tell you to press 4 who will give you an 
automated response to press 7 or whatever it is--we have the lenders 
there. We brought the various lenders there and people were able to go 
through a screening process and then go back to a room, sit down with 
the lenders, tell them their predicament, and actually negotiate a 
refinancing.
  I met people that afternoon who were smiling, who said to me: Thank 
you for getting us together. Now I can stay in my home.
  That is all it takes, that kind of effort. I talked to one woman who, 
together with her husband, is paying $5,000 a month for their home, for 
their mortgage. They have two mortgages now. They are both working, 
both of them are working.
  But I asked her what her rate was. What are you paying for a rate? 
She said: Well, I am paying 7.25 percent on one, and I am paying 9.25 
percent on the other. Nobody, with the current discount rates in 
America, is paying those kinds of rates. It is absurd.
  I also had the woman next to that particular one who was waiting in 
line, who, when she heard the 7.25 and 9.25 said: That is nothing. I am 
paying 13.25 percent on mine. So if we were to renegotiate, according 
to a fair standard of what the rate is, with what the national interest 
rates are today, and fixed rates that are available to people, a lot of 
those folks could stay in their homes, and they can afford to service 
their mortgage.
  What we need do is stop the greed and unbelievable sort of arrogance 
of some of these companies, some of those people who asked literally to 
be able to renegotiate: We were told no. I will tell you in a moment 
about a woman I met in Lawrence, MA, where this predicament is also 
going on.
  The fact is that nationwide, by last year, we all knew that 2.5 
million mortgages were already in default. That was 40 percent more 
than 2 years earlier. And despite a 40-percent increase, there was no 
response from this administration. Communities across

[[Page S2378]]

the country are being hit hard. Last year the mortgage foreclosures in 
Massachusetts alone were up 128 percent, and the foreclosure rates of 
five Massachusetts metro areas were in the top 100 in this country.
  How did we get here? Well, we got here because lenders lowered their 
standards for lending but did not appropriately plan for the increased 
risk they incurred when they lowered the standards. They flooded the 
market with mortgage loans, ignoring the risks to borrowers and to 
their own bottom line.
  As usual, most of these people turn around and expect us to bail them 
out; in most cases to bail them out first. For some time, some of us 
here in Congress have been screaming about predatory lending practices. 
I happen to think it is usury to allow 30 percent rates. A whole bunch 
of Americans do not know they are actually paying 30 percent rates 
after a group of penalties on their credit cards.
  There are even more Americans, millions of them, who are paying 18 
percent. I urge any American to go back and look at what their rate is 
at the bottom in the fine print on their credit card or ATM statements 
and they will be shocked by the levels of interest they are paying.
  I think these are excessive. These are wrong. Many people I know, all 
those of us who went to law school, learned about ``buyer beware,'' 
``caveat emptor.'' That is one of the first things you learn in law 
school.
  But the fact is, we put standards in place through the years as to 
what is an unfair practice. We have unfair trade practice laws in many 
States, and they are simply not being applied. But legislators in this 
case have backed up and turned a blind eye to what are unfair practices 
in the marketplace. Now, were there abuses on the other side of the 
ledger? The answer is: Yes, there were. Some homeowners inflated their 
income. Some misrepresented themselves to get a bigger home than they 
could afford, and obviously we are not talking about bailing out people 
from those kinds of situations. But there is blame enough to go around.
  I will tell you what has not been enough to go around, and that is a 
rapid and appropriate response from the Federal Government in order to 
deal with this problem. Lenders are now getting help. But homeowners 
are still struggling. The fact is there are a lot of homeowners out 
there who have the ability to pay for a mortgage. They cannot carry the 
increased rates and they cannot necessarily carry the inflated levels 
that some of them have been put into because of these predatory 
practices.
  Let me give you an example. This week I went to Lawrence, MA and met 
with homeowners who are facing foreclosure. Approximately 700 homes 
were foreclosed in Lawrence last year alone. I am told that number is 
going to rise for this year.
  I talked with a woman by the name of Rosa Hernandez, who has four 
children, works two jobs, one as a nursing assistant at the local 
nursing home, in order to support her family and to be able to earn 
enough to own her home. She did everything she could in order to make 
her house a home. She fixed the roof, she bought a new boiler, she 
updated the electrical system of her new house, and she did it with 
this increase in value that the company came and loaned her. After she 
was hospitalized twice last year she could no longer afford to work two 
jobs. At the same time her subprime mortgage interest rates went up 
from 4.5 percent 5 years ago to 7.5 percent. She told me, through a 
translator, that when she could not make the payments, she went to her 
lender. Her lender refused to make loan modifications that would allow 
her to stay in her home. Her lender told her they were going to devalue 
her home down to about $99,000. I think she had a total of $220,000 in 
the home. They are going to devalue it to $99,000 and put it on the 
market and sell it. She said: I can afford to pay $99,000. Let me stay 
in it for that. They refused to let her stay in, even though she could 
service that payment with the job she has with a family of four, stay 
in her home. They are prepared to kick her out and then put it on the 
market and sell it to someone else for the same price. That is 
disgraceful. That is disgusting. And that is the kind of unregulated 
practice that is taking place out there because people have walked away 
from any sense of common decency and responsibility.
  The fact is that thousands of families such as hers have been through 
the same kind of predicament where they are forced to start all over 
again. Each time a house is foreclosed on, a family's economic dream 
lies in tatters. But it is not only the family that faces the 
foreclosure that suffers; the entire community suffers. I have talked 
to police officers who tell me about the increased work they have now 
to try to patrol by houses that they know are abandoned and boarded up. 
The property values of entire streets and communities start to drop, 
which affects the entire ability of that community to be able to 
function. As I described earlier, crime rates go up, neighborhoods get 
torn apart, schools are disrupted because when the family gets kicked 
out, kids are yanked out of the classroom and you end up with a 
complete disruption to the school system.

  According to the census, by late 2007 a higher percentage of houses 
in the Northeast sat vacant than at any time in the last 50 years, 
probably since the Great Depression.
  So today we are debating the Foreclosure Act of 2008. This has the 
opportunity to be able to deal with this crisis. It reflects a 
bipartisan compromise. It is a good first step toward addressing this 
crisis. It includes a provision, and I thank Senator Smith from Oregon 
for his long participation with me in this effort as a member of the 
Finance Committee. We both passed an amendment in the Finance Committee 
to the stimulus package. We had hoped this would have been included in 
the stimulus package a few months ago so this good could have begun to 
take hold so that families who have been foreclosed on in the last few 
months would not have been. Regrettably it did not happen. But we are 
here now.
  I am appreciative of him and his efforts to help include that in the 
bill to provide an additional $10 billion. We originally sought $15 
billion of tax-exempt private activity bonds that finance our housing 
agencies. What the housing agencies would do with this money is take 
the proceeds from the bonds and use them directly to refinance subprime 
loans, provide mortgages for first-time home buyers, for multifamily 
rental housing.
  In the case of Massachusetts, that would mean about $211 million of 
targeted mortgage relief to the homeowners of our State. Similarly, 
every State in the country would benefit from this provision. I thank 
Chairman Baucus and Senator Dodd for their efforts to include this 
provision in the final bill because of what it can do to help 
struggling families.
  In 2006, State and local governments financed 120,000 new homes with 
mortgage revenue bonds. With the additional $10 billion in funds, 
States and localities can equal that amount and finance approximately 
80,000 more home loans. According to the National Association of Home 
Builders, every mortgage revenue bond new home loan produces almost two 
full-time jobs, $75,000 in additional wages and salaries, $41,000 in 
new Federal, State, and local revenues. Each new home then results in 
an average of about $3,700 that gets spent by the new occupants on 
appliances, furnishings, property alterations, all of which provide a 
real shot in the arm to our economy.
  The reason this mortgage revenue bond proposal is so important is 
that to many lower income families, they are having difficulty 
refinancing their existing mortgages. This additional funding makes it 
easier for families facing foreclosure. It will make it easier for 
first-time home buyers to buy a home, which means that the glut in the 
marketplace today of all of those homes that have already been 
foreclosed will finally find a group of people because of these bonds 
who will be able to take those houses off the market and become part of 
the community.
  The goal is simple. We want to provide assistance to those who need 
it most. The extra $10 billion for this program is a proven way to help 
Rosa Hernandez or others be able to stay in their homes. I might add 
also, before I close and cede the floor to my colleague, there is in 
this bill also $4 billion for the community development block grant, 
which a number of us have advocated strongly for, that will also help 
local communities to deal with the effects of the housing crisis.

[[Page S2379]]

  As we all know, the community development block grant is the only 
real flexibility mayors get in dealing with crises in their community. 
So I am delighted that is here and that we can help local governments 
be able to deal with this crisis.
  Finally, there is a provision I fought for in this legislation that I 
am pleased is in it, which is the proposal I put forward to address the 
foreclosure concerns of our returning veterans. Those who have served 
our country in Iraq and Afghanistan should never come home to a home 
that is in danger of foreclosure. But some are. You have a lot of 
National Guard folks who are doing their second or third deployment, 
and many of these people are in small businesses, or in some cases even 
sole proprietors. They have taken a pay cut, in many cases, to serve 
their country. They do not get paid as much for serving on active duty. 
The result is that many of them have been put into difficulty.
  What we do is extend the foreclosure grace period from 90 days to 9 
months, and we extend the freeze on mortgage interest rates for the 
first year a soldier is home. This is one of the ways we can make good 
on the rhetoric which is present all over the country about how we care 
for the veterans but, in fact, whether it is the VA budget or 
counseling or post-traumatic stress syndrome, or a host of other 
things, we have rarely put enough money there to keep pace with that 
rhetoric.
  This helps to do it. I do thank Senator Dodd for his work to include 
those provisions in this bill. I do not think anybody wants to see an 
Iraq or Afghanistan or any other area veteran join their brothers and 
sisters who served in Vietnam, too many of whom were in the ranks of 
the homeless or the dispossessed during those years. We owe them more 
for their plights. This helps to do that.
  I close by drawing attention to the fact that a record 37.3 million 
households currently pay more than 30 percent of their income on 
housing costs, and more than 17 million Americans are paying more than 
half of their income to be in their homes. So as we consider additional 
remedies down the road, I hope we are going to deal with the fact that 
we can create jobs while easing the affordable lending housing crisis 
if we were to pass this and pay more attention.
  I used to be chairman of the Housing Subcommittee on Banking before I 
went over to Finance.
  I know for almost 10 years we were struggling to get one voucher or 
two for housing. It wasn't until 1999 that we got the first 50,000 
vouchers in 10 years and the year after 100,000. But we have neglected 
housing as a matter of national policy for almost 20 years now. What 
some of us wish to do is create a housing trust fund that takes money 
from the surplus that comes through the FHA lending program, insurance 
program. But the money that housing produces in surplus actually goes 
to the general revenue. Some of us believe money produced by housing, 
that creates a profit in effect or a surplus for the Federal 
Government, ought to go back into housing rather than continually have 
housing be the stepchild of American policy. We hope we will ultimately 
be able to do that.
  I urge my colleagues to vote for this legislation. I thank my 
colleague from Oregon for his patience and, most importantly, for his 
coefforts in this initiative.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Whitehouse). The Senator from Oregon.
  Mr. SMITH. Mr. President, I thank Senator Kerry, my colleague from 
Massachusetts, for his kind words. We come to the floor today as 
Republicans and Democrats trying to work out a bill that will make a 
difference on the central plank of the current economic slowdown. It is 
a time, frankly, to note we are finally working in a way that will make 
a difference and make progress for the American people.
  Tuesday evening, I went home and TiVo'd the news. I saw Senator Reid 
and Senator McConnell standing together before the cameras. Behind them 
were Senators Dodd and Shelby, as well as Senator Baucus and Senator 
Grassley from the Finance Committee, who have worked with Senator 
Kerry. When I saw these Senators together in a joint press conference, 
I thought I also heard a collective sigh of relief from the American 
people that finally the Senate was proceeding in a way they expect. I, 
for one, was breathing a sigh of relief that there was agreement and 
that we are here productively engaged in finding a solution. I also 
thank Senator Kerry. He and I have been at this amendment now for 
months. I have had the privilege of working with him on many issues 
over a long time. I am currently on the Finance Committee, and this 
amendment we actually got approved in the Finance Committee in the last 
stimulus package. I wish it had survived that process because it would 
already be making a difference. But with the help of leaders on the 
Finance Committee and the approval of the Banking Committee, it has now 
been included in the underlying bill. I thank all of them for this.
  As I noted back in January, we offered this legislation as an 
amendment. The committee approved our amendment with an overwhelming 
20-to-1 bipartisan vote. Again, we were not able to keep it in the 
package, but it is in the package today.
  Across the country, rising interest rates and slumping home values 
are creating the perfect financial storm for many American families. 
The legislation Senator Kerry and I authored is aimed at stemming this 
tide and providing homeowners an option to avoid foreclosure and stay 
in their homes. Under current law, State and local governments are 
permitted to issue tax-exempt bonds, called qualified mortgage bonds, 
to finance new mortgage loans to first-time home buyers. What our 
legislation does is temporarily expand the use of this program to 
include refinancing of existing subprime loans. It would also provide a 
$10 billion increase in tax-exempt bond authority which could be used 
to provide these refinancing loans, issue new mortgages for first-time 
home buyers, and, finally, invest in multifamily rental housing. Our 
proposal would also exempt mortgage revenue bonds from the alternative 
minimum tax to make them more attractive to investors and to cut home-
buyer mortgage costs further.
  For Oregon, the increased bond cap will translate to roughly $122 
million in new bond authority to address the State's housing needs. Our 
neighbors in Washington State will receive roughly $210 million in new 
bonding authority, enough to produce more than 1,300 loans. In Arizona, 
where the delinquency rate has jumped from 2.9 percent in the fourth 
quarter of 2005 to 5.45 percent in the fourth quarter of last year, an 
estimated 1,400 new mortgage loans will be generated by this bill.
  Michigan, which had a delinquency rate of 8.9 percent at the end of 
the fourth quarter of last year, will have its bond cap increased by 
more than $332 million, enough to generate more than 3,300 new home 
loans or refinancing.
  Another example, Arkansas, with a delinquency rate of 6.6 percent as 
of last December, will receive more than $92 million in increased 
bonding authority which would lead to more than 1,100 new loans. 
Nationwide it is estimated our proposal would lead to roughly 80,000 
new loans.
  To anyone who questions whether addressing the housing crisis is 
economic stimulus, I would say each one of these new home loans is 
projected to produce almost two full-time jobs; $75,000 in additional 
wages and salaries; $41,000 in new Federal, State, and local revenues; 
and an average of $3,700 in new spending on appliances, furnishings, 
and property alterations.
  Our proposal is not going to solve all that ails the housing economy, 
but it is an important and good start, and it will provide real relief 
to working families at risk of losing their homes. This relief is 
targeted, not a bailout to investors who were looking to cash in on the 
housing boom. The new housing bond authority will be subject to the 
program's income and purchase price requirements. In 2006, mortgage 
revenue bond borrowers had an average income of $45,000 and bought 
first-time homes with an average purchase price of $137,000.
  I wish to say, again, how pleased I am the Senate is finally moving 
to debate on this housing package. If we are serious about stimulating 
the economy, we need to take a look at the root causes of this 
slowdown. First among

[[Page S2380]]

those is housing. There are a number of important items in the bill we 
are debating. I was disappointed, however, the AMT exemption for the 
low-income housing tax credit was not included in the base bill. This 
is something Senator Cantwell and I have been advocating and will 
continue to work this week to see if we can add to the bill.
  I hope we can work quickly, though, as Americans, as Republicans and 
Democrats, to get this bill to the President, a bill he can sign, so we 
can, through common sense and common ground, achieve some common good 
for the American people.
  I yield the floor.
  The PRESIDING OFFICER. The Republican leader.
  Mr. McCONNELL. I ask unanimous consent to proceed as in morning 
business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Mr. McConnell are printed in today's Record under 
``Morning Business.'')
  The PRESIDING OFFICER. The Senator from Pennsylvania.


                           Amendment No. 4388

  Mr. SPECTER. Mr. President, I have sought recognition to comment on 
the pending Durbin amendment.
  Mr. CORNYN. Mr. President, before the Senator begins, I wonder if he 
will yield for a unanimous consent request.
  Mr. SPECTER. I will.
  Mr. CORNYN. Mr. President, I ask unanimous consent that following the 
comments of the Senator from Pennsylvania, the Senator from Montana be 
recognized and then I be recognized following the Senator from Montana.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, I commend the distinguished Senator from 
Illinois for offering this amendment and for initiating very 
considerable discussion on the plight now being faced by many 
individuals who are faced with mortgage foreclosure.
  He and I have had very extensive discussions on his proposal and my 
legislative proposal, which has been introduced as S. 2133, which 
differs from the Durbin amendment in that it provides authority for the 
bankruptcy court to change the variable interest rate mortgages which 
have caused so much confusion and so much difficulty in leading to 
foreclosures by people who could not pay the increases which were noted 
by the variable interest rate mortgages.
  There have been a number of situations where the mortgage rate has 
jumped far in excess of what the borrower had anticipated.
  A homeowner in Lithonia, GA, who borrowed on a variable interest rate 
mortgage, found the interest payments rising from $1,079 to $1,444, 
which the borrower could not afford.
  A first-time home buyer in De Soto, TX, found their variable interest 
rate mortgage moving from $1,400 to $1,900.
  It is a pattern across the country where people have faced 
foreclosures.
  The difficulty which I see with the Durbin amendment is it will 
impact on the ability of borrowers to secure mortgages in the future 
because lenders will be unwilling to loan money where there is the 
prospect that Congress will intervene and grant authority to bankruptcy 
courts similar to that suggested by Senator Durbin today.
  The core of the consideration was articulated by Justice Stevens in a 
case captioned Nobleman v. American Savings, in 1993, where Justice 
Stevens said:

       At first blush it seems somewhat strange that the 
     Bankruptcy code should provide less protection to an 
     individual's interest in retaining possession of his or her 
     home than of other assets. The anomaly is, however, explained 
     by the legislative history indicating that favorable 
     treatment of residential mortgages was intended to encourage 
     the flow of capital into the home lending market.

  So you have the anomalous situation, as articulated by Justice 
Stevens, that on the principal home the bankruptcy court does not have 
such authority. That is for a very sound public policy reason: that if 
the bankruptcy court did have that authority, then lenders would be 
unwilling to lend money for first-home mortgages. So if you have a 
second home or if you have a yacht or if you have other assets, the 
bankruptcy court does have that authority, but for good reason it does 
not have the authority on first homes.
  There have been a number of studies on the subject concluding that 
the impact of the Durbin amendment would be deleterious to the ability 
of people to get mortgages because of the reluctance of lenders to put 
up the money.
  Professor Joseph Mason of Drexel University testified before the 
Senate Judiciary Committee that ``it is straightforward to conclude'' 
that cramdowns will increase the cost of mortgage credit.
  In its analysis of economic stimulus options, the Congressional 
Budget Office noted that one of the costs of cramdown proposals ``could 
be higher mortgage interest rates.''
  Federal Chairman Bernanke testified before Congress that modification 
of mortgages ``would probably lead to concern about the value of 
existing mortgages and probably higher interest rates for mortgages in 
the future.''
  In studying the impact of cramdowns for farm real estate in Chapter 
12 bankruptcy, the U.S. Department of Agriculture estimated that 
cramdowns raise the interest rates on farm real estate loans by between 
25 and 100 basis points.
  Even the report cited by supporters of Senator Durbin's bill 
concluded interest rates will increase. In their paper, ``The Effect of 
Bankruptcy Strip-Down on Mortgage Interest Rates,'' Georgetown law 
professor Adam Levitin and Joshua Goodman acknowledge that allowing 
bankruptcy courts to cram down mortgages will increase interest rates.
  The effect of my bill, which is a great deal more modest, will not, I 
submit, have that effect. The essence of the bill which I have proposed 
will apply only to mortgages given, borrowings, prior to the date of 
the introduction of my bill and will sunset in 7 years.

  I think it is important the legislation now pending in the Senate 
deal with the so-called little guy, the guy who lives on Main Street. 
We have already seen very substantial relief for Wall Street in the 
Bear Stearns bailout. I am opposed to bailouts. If the entrepreneurs on 
Wall Street are making investments with the prospect or the expectation 
or the hope of big profits, and they find their judgment is bad and 
those profits are not realized and instead there are losses, it seems 
to me they ought not to be coming to the taxpayers for a bailout. Where 
they are looking for big-time speculative profits, and they are wrong, 
they ought to sustain those losses instead of having the losses 
sustained by the taxpayers.
  It is understandable that the Federal Reserve took an exceptional 
view of the Bear Stearns situation in order to avoid a potential ripple 
effect and devastating consequences on the economy. It was not a 
gigantic bailout, in any event, when Bear Stearns stock was selling for 
$150 or thereabouts a year ago, and the initial bailout was for $2 and 
the prospect of increasing that to $10.
  But I believe the current legislation pending before the Senate is 
unduly balanced for the big guy as opposed to the little guy or the 
person who operates on Wall Street as opposed to the person who lives 
on Main Street. That is why I support the focus of attention which 
Senator Durbin has brought with his bill--although for the reasons I 
have stated I disagree, and my bill takes a much more modest approach--
Senator Durbin and I worked long and hard to try to reach some 
accommodation and some compromise, and we could not do it because our 
approaches are so basically different.
  We finally had a vote on our bill in the Judiciary Committee today. 
Our legislation was introduced last fall and could have been acted on 
by the Senate a long time ago. We could have brought this matter to the 
floor and stimulated other amendments and other discussion. The delay 
of months has resulted in many foreclosures. In the Judiciary Committee 
today, on a 10-to-9 party-line vote, my bill was defeated, and the 
Durbin bill was passed for action on the floor. But events on the floor 
have finally overtaken the committee action. The committee did act 
today.
  Mr. DURBIN. Mr. President, will the Senator yield for a question?
  Mr. SPECTER. I do.
  Mr. DURBIN. Mr. President, if I could very briefly, because I know 
others are here to speak, I would like to distinguish, if I can, three 
or four approaches where we differ between us.

[[Page S2381]]

  The first element that is important--and I wish to make sure it is 
clear for the record--my amendment gives to the bankruptcy court the 
authority to modify the mortgage. But under your amendment, or your 
approach, the ultimate decision on whether a mortgage is going to be 
modified still has to be approved by the lending institution; is that 
not correct?
  Mr. SPECTER. Mr. President, I answer the distinguished Senator from 
Illinois through the Chair by saying that is correct. My bill does 
allow for the modification of the principal sum but only where the 
lender is in agreement. I do not do that to give the lender control of 
the situation. I do that to avoid having a principle established where 
lenders in the future will be unwilling to loan money for mortgages if 
they think the bankruptcy court has the authority to reduce the 
principal over their objection. But if the lender agrees to it--and I 
think it is important because the bankruptcy court would not have the 
authority to reduce the principal unless there is the provision I have 
by obtaining the lender's agreement.
  But the principle that the Senator from Illinois seeks to reduce the 
principal sum, I think, is sound, so long as you do not destroy the 
ability of the lender to control it so as to not discourage future 
lenders. So my answer is yes.
  Mr. DURBIN. Mr. President, if the Senator will yield for only two or 
three more questions.
  I might acknowledge the fact that currently those lenders can 
renegotiate the terms of a mortgage without a bankruptcy court and that 
giving them the last word is going to diminish, I believe, the 
likelihood that they would agree to anything by the bankruptcy court.
  I might also say that under chapter 12 bankruptcies and on farm loans 
a few years ago, we gave this authority to the Bankruptcy Court and the 
lenders said: Oh, interest rates will go up, and they didn't.
  But I wish to ask this specific question. My amendment limits these 
modifications to mortgages that are subprime mortgages, and the Specter 
bill, S. 2133, says these modifications would apply to any type of 
loan, even prime fixed rate mortgages. Is that not correct?
  Mr. SPECTER. It would apply only as long as they are variable 
interest rate mortgages.
  Mr. DURBIN. Mr. President, I wish to also ask the Senator from 
Pennsylvania, through the Chair: Is it true that the Senator limits the 
application of his modification of mortgages by the Bankruptcy Court to 
families earning less than 150 percent of State median income, which 
would be somewhere in the range of $60,000 to $70,000 a year in most 
States--annual income of most States--and would not cover those, for 
example, in the State of California and other States where they have 
higher incomes and higher mortgages?
  Mr. SPECTER. Mr. President, the Senator from Illinois is correct. It 
may be that my proposal is too modest in that respect. I am not in 
concrete on that specific provision because I think that could be 
modified to accommodate different markets without dealing with the 
underlying principles I am concerned with.
  Mr. DURBIN. I thank the Senator for yielding.
  I might say to the Chair, I have spoken to the Senator in the hopes 
that we can bring this to a vote. I have spoken to the minority leader, 
Senator McConnell, and he has said there are other Members who wish to 
come to the floor to speak on this amendment, and I hope they will. 
There is no point in dragging this out indefinitely. There are many 
other amendments that are going to be offered and I wish to bring this 
to a vote.
  I thank the Senator from Pennsylvania for yielding for a question.
  Mr. SPECTER. Mr. President, I thank the Senator from Illinois for the 
questions. I think the questions clarify the positions. It is almost 
like debating an issue in the world's greatest deliberative body. Too 
often speeches are made with no one present except the Presiding 
Officer and perhaps someone who is listening on C-SPAN 2, besides my 
sisters. But we need more of this kind of a discussion in the Senate to 
illuminate and provide a little life and a little spontaneity besides 
Senators who rise and read from a text, and frequently reading badly 
from a text.
  I agree with the Senator from Illinois that we ought to move ahead on 
this bill and vote as soon as possible, and I join him in urging people 
who have amendments to come to the floor. It is my intention to offer 
another--my amendment, S. 2133, and to have a vote on that after we 
conclude with the amendment by the Senator from Illinois.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, I agree with the Senator from 
Pennsylvania. The last 10, 15 minutes has been one of the more 
edifying, constructive, and helpful explanations on various approaches. 
He made the statement that perhaps there should be more of that on the 
Senate floor, a point with which I strongly agree. I thank both 
Senators for that dialog.
  Mr. BAUCUS. Mr. President, Charles Dickens wrote:

     Home is a name, a word,
     it is a strong one;
     stronger than a magician ever spoke,
     or a spirit ever answered to,
     in the strongest conjuration.

  Simply put, we are here today to help families keep their homes. We 
are here today to move a package of tax provisions that will help those 
families to keep their homes. Our package does so with tax relief for 
homeowners, for home buyers, and for home builders. We are offering 
this Finance Committee tax package as part of the pending consensus 
amendment assembled by the two leaders and by Senators Dodd and Shelby.
  Today, many American families find their home is threatened. A weak 
housing market has spread weakness throughout the larger economy. More 
than 5 million households now owe more than their house is worth. That 
is about 1 out of every 10 home mortgages. As prices fall, that number 
is expected to grow.
  Our tax package seeks to stabilize the housing market by providing 
temporary, targeted, and timely tax relief to the housing market. We 
have developed a consensus package that is limited to four provisions 
and these provisions focus solely on our ailing housing sector. The 
Finance Committee passed the first two provisions early this year as 
part of the economic stimulus package.
  First, our package increases the number of mortgage revenue bonds. 
Mortgage revenue bonds are tax-exempt bonds issued by State and local 
housing finance agencies. With the proceeds, these agencies can extend 
mortgages to home buyers at interest rates below the market rate. This 
will help. It will help homeowners avoid foreclosure and will increase 
first-time home purchases.
  The subprime and affordable mortgage markets have virtually 
collapsed. As a result, demand for mortgages financed by housing 
finance agencies is increasing. State housing agencies can respond 
immediately to the growing risks of foreclosure. These agencies can 
issue more mortgage revenue bonds. That can provide States the option 
to refinance subprime mortgages, and additional mortgage revenue bonds 
can help clear out the glut of existing homes on the market through 
first-time home purchases.

  Our proposal includes a second provision that the Finance Committee 
passed earlier this year. That is extending the carryback period for 
net operating losses, otherwise known as NOLs, from 2 years to 4 years.
  Generally, cyclical businesses have profitable years followed by loss 
years. During a loss period, a company will carry back the net 
operating losses from the loss years to their prior profitable years. 
They will file a quick refund claim and that quick refund claim will 
act as a cash infusion that will allow the company to survive a loss 
period.
  The housing industry in particular will greatly benefit from an 
increased NOL carryback period. The expanded period will allow builders 
to avoid selling land and houses at distressed prices, and it will 
provide less costly financing.
  An increased NOL carryback period will improve business conditions 
for the eventual return of the housing market, and the expanded period 
would give the housing industry cash to meet payroll, which would 
certainly limit additional job losses.

[[Page S2382]]

  Third, our proposal provides broad-based tax relief for low-income 
individuals and those who have already paid off their mortgages. Under 
our proposal, homeowners would be allowed to deduct local real estate 
property taxes from their Federal tax return, even if they don't 
itemize. According to the Joint Committee on Taxation, more than 28 
million taxpayers pay property taxes but don't itemize. Our proposal 
would provide these 28 million taxpayers a deduction for the amount of 
their property taxes up to $500 for individuals and $1,000 for married 
filers. Most often, nonitemizers are low or middle-income people. Our 
proposal will also benefit those who are not likely to itemize because 
they have already paid off their mortgages. Senior citizens clearly 
would benefit. The Congressional Research Service estimates that nearly 
130,000 property taxpayers could benefit in my home State of Montana 
alone.
  Fourth, our package provides a home ownership tax credit for the 
purchase of homes subject to foreclosure. Behind each foreclosed 
property is a family kicked to the curb, and the suffering does not end 
there. Foreclosed and vacant homes are a blight on the neighborhood. 
They drag down home prices. They are targets for vandalism and 
burglaries. Congress should encourage people to purchase those 
properties. That will help to stabilize home prices and get the housing 
industry back on track.
  Our proposal provides a one-time credit for taxpayers of $7,000. The 
credit will be claimed over 2 years and the home purchase would have to 
be made in the following 12 months. The short-term nature of this 
credit is critical to providing immediate stimulus. It also ensures 
that we do not oversubsidize the housing industry or exacerbate the 
current oversupply of residential homes.
  This focused package of four proposals will go far. It will go far to 
address the housing downturn and economic weakness in our country. I am 
proud we have all pulled together on this with Senator Grassley and 
others, and I hope the Senate can pass it into law expeditiously.
  A lot of irresponsible actions led to the housing crisis, but now a 
lot of responsible homeowners, home buyers and home builders are caught 
up in it. Tax relief and mortgage help to folks who played by the rules 
in the housing market is the right thing for Congress to do. The tax 
provisions in this package will keep property values up, keep folks in 
their homes, and keep businesses afloat, and those are all keys to 
handling the housing crisis.
  In sum, this is an effort to provide tax relief to homeowners, home 
buyers, and home builders. It is an attempt to help families keep their 
homes. It is an effort to preserve an important word stronger than any 
magician ever spoke or any spirit ever answered to--the word called 
``home.''
  I urge my colleagues to support the package.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mr. CORNYN. Mr. President, the Senator from Georgia has asked me to 
yield 1 minute of my time, and I will do so without yielding the floor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ISAKSON. Mr. President, I thank the Senator from Texas.
  While the chairman of the Finance Committee is on the floor, I 
express my appreciation to him, Chairman Baucus, on the hard work that 
has been done on this particular legislation, in particular, the tax 
credit on foreclosed homes, and to praise his staff for the late night 
concentrated hours Tuesday night and early Wednesday morning when this 
was put together. It was a remarkable effort and I wanted the chairman 
to know how much I appreciate it.
  Mr. BAUCUS. Mr. President, if I might respond to the Senator from 
Georgia, I certainly appreciate those remarks. He is to be complimented 
for bringing the idea forward to me personally and to others. It is a 
major contribution to the solution we are providing here. We did have 
to tailor it down a little bit within the confines of the package. I 
thank the Senator from Georgia for being agreeable and for working with 
us to find a way to make this work.
  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mr. CORNYN. Mr. President, I want to address the Durbin amendment 
because I am concerned that the Durbin amendment would hurt low and 
middle-income families by making home mortgage interest payments 
higher, make them more expensive, by discouraging credit counseling and 
mortgage renegotiations and inadvertently steering more American 
homeowners into bankruptcy.
  Let me try to quantify what I mean in terms of the expense. It is 
estimated that the so-called cramdown provision would raise interest 
rates on average by about 1\1/2\ percent. In Texas the average home 
loan is $122,000 a year. The monthly payment for a 30-year fixed home 
mortgage at 6 percent is $734. If you add a percentage point and a half 
to that, it goes up by $122 a month. So if these estimates are 
correct--and I think they are the best information we have available to 
us now--the average increase to Texas homeowners would be almost $1,500 
a year. It would be $1,465 a year. For that reason, among others, I 
oppose the Durbin amendment.
  The bill actually risks increasing the cost of owning a home for 
every American, and not just for people in my State, in Texas. There 
has been a little history to this provision as well.
  The Democratic Congress and President Jimmy Carter back in 1978 had a 
reason for excluding from cramdown the ability for a bankruptcy judge 
to actually go in and rewrite the interest rate so people could afford 
their home. As a matter of fact, the cramdown exception, which this 
amendment would eliminate, actually helps people buy homes. It is 
pretty clear--Senator Specter from Pennsylvania quoted a U.S. Supreme 
Court opinion relative to this, but it is pretty clear that the 
congressional intent to exclude home mortgages from cramdown was 
intended. Some have disputed that Congress was pursuing a policy of 
making home mortgages more available when we created the cramdown 
exception.
  Senator Durbin, I believe, has said that the cramdown exception for 
home mortgages makes no sense whatsoever. The record from the 1978 act 
clearly shows that Congress viewed exceptions to cramdown as a means of 
making mortgages more available. The Senate Judiciary Committee report 
explained that the purpose of the real estate exception was to: 
``afford greater protection'' to real estate financing ``by creating a 
safe harbor that would facilitate, rather than discourage, this type of 
financing.''
  As I alluded, the courts have recognized this policy in interpreting 
the act, most notable in Justice Stevens' concurrence in Nobleman v. 
American Savings Bank. So I would say that the Democratic Congress of 
1978, President Carter, and Justice Stevens all have acknowledged that 
this policy of excepting home mortgages from cramdown makes sense and 
helps keep mortgage rates low, which I think ought to be our policy.
  Inadvertently, I think this amendment would also encourage more 
people to seek bankruptcy as a way to deal with their financial 
difficulties. It has been argued that this provision would actually 
encourage borrowers to negotiate with their lender. The one problem 
with that is, as we all know, most mortgages these days are actually 
sold by the lender; they are packaged and then purchased as securities 
and sold on the open market. It is, in fact, what has happened in the 
subprime mortgage market, which has created this crisis. The people who 
actually bought those securities now find that they are worth 
dramatically less than they thought because of the problems these 
mortgage holders are having. So it is certainly not a given that they 
will be in a position to negotiate with the lender, who no longer even 
holds that mortgage.
  I am concerned, though, that the amendment goes too far in those rare 
cases where negotiations are still possible to remove the homeowner's 
incentive to negotiate and, instead, steer them into bankruptcy. The 
Durbin amendment would, in fact, create a siren's song that would lure 
struggling families onto the rocks of bankruptcy. For most Americans, 
our homes are our largest and most-cherished investment. The chance to 
have their mortgage decreased by a bankruptcy court, basically to 
renegotiate what a negotiated interest rate is, would encourage

[[Page S2383]]

struggling families to seek bankruptcy protection instead of trying to 
negotiate and get their finances back in order in a way that will 
preserve their credit and will not lure them into bankruptcy.
  I think it is worth noting that bankruptcy itself has lasting and 
serious consequences to the credit rating of the people who seek it. 
Bankruptcy is not in the long-term interest of every family who falls 
behind on their mortgage. We should encourage negotiation where 
possible. In fact, we know that is what happens anyway. Very few 
mortgage holders refuse to negotiate with the borrower when they get 
behind in their payments because, frankly, they don't want the property 
back. They want to continue the loan in effect, if possible.
  So I think the Durbin amendment actually discourages negotiation and 
creates an effective magnet, attracting people into bankruptcy. I have 
already talked about why I think that is a bad idea.
  Of course, this amendment also waives the bankruptcy law's counseling 
requirement when a home is in foreclosure, which is inconsistent with 
the underlying Shelby-Dodd compromise that provides $100 million to 
encourage credit counseling.
  The goal of the bill should be to help struggling families get back 
on their feet, not encourage bankruptcy filings that would raise 
mortgage rates for everybody, ruin the credit of the borrower, and 
ultimately not solve the problem it is intended to solve. For that 
reason, I oppose the Durbin amendment and encourage my colleagues to do 
likewise.
  Mr. DURBIN. Will the Senator yield for a question?
  Mr. CORNYN. Yes.
  Mr. DURBIN. Mr. President, I acknowledge that the Senator is correct 
that this modification of a mortgage on a primary residence would be a 
change in bankruptcy law. I ask the Senator from Texas, is he aware 
that in the 1980s we created chapter 12 bankruptcy for farms and 
created the opportunity for the bankruptcy court to modify mortgages on 
family homes and farms, and at the time the banking industry said the 
same thing about that change as they have about my amendment--that it 
would raise interest rates? Is the Senator aware of the fact that there 
was no significant increase in interest rates on farms as a result of 
the creation of chapter 12 bankruptcies?
  Mr. CORNYN. I accept what the Senator says. I have no reason to 
dispute it. I, frankly, have no knowledge of it. I know that currently 
we have roughly 2 percent of the mortgages in America that are in 
foreclosure proceedings. While there is undoubtedly a serious problem, 
I don't think this is the right solution to it. I said that some 
estimates are that it would increase interest rates by 1.5 percent on 
mortgages. On a $122,000 mortgage in Texas, it would increase annual 
costs about $1,500. So I must oppose it.
  Mr. DURBIN. Will the Senator yield for a further question?
  Mr. CORNYN. I will.
  Mr. DURBIN. Is the Senator aware that my amendment limits the 
modification of mortgages in bankruptcy to those on primary residences, 
existing as of the date of the enactment of this law, and that it would 
not apply to any future mortgages and would not have an impact on 
future mortgages, those that are going to be issued. So the credit 
industry is saying: We are afraid this is going to apply to everybody. 
There is a limited application of a narrow class of people who would be 
eligible.
  Mr. CORNYN. Mr. President, I appreciate the clarification. I also 
note that the tendency in Washington and in Congress, and the Federal 
Government generally, is for things to get bigger rather than to 
contract. So while I appreciate the clarification, I am not consoled by 
the current limitation.
  The PRESIDING OFFICER (Mrs. McCaskill). The Senator from California 
is recognized.
  Mrs. FEINSTEIN. Madam President, I am a cosponsor of the Durbin 
amendment and am very happy to support it. Later, Senator Martinez and 
I will be submitting an amendment. The Senator is in the Banking 
Committee now and will come to the floor shortly.
  I wish to take this opportunity to speak about this amendment. It is 
also supported by Senators Boxer, Obama, Salazar, Dole, Durbin, and 
Clinton. Essentially, this amendment deals with the fact that today 
there is a very thin patchwork of State licensing for brokers. It is 
insufficient. There are no national standards for the licensing of a 
mortgage broker in this subprime marketplace. In many States, there are 
really no requirements. What that has done is enabled bad actors to 
flourish. I wish to give you two examples of what a bad actor as a 
subprime mortgage broker means.
  I met this family in the picture in Los Angeles this past week. This 
is the Simmons family. Mr. Simmons worked for Northrop Grumman for 20 
years, and Mrs. Simmons has been a checker at Alpha Beta for 26 years. 
They are retired. They have owned this home in Los Angeles for 39 
years. Mr. Simmons had a stroke. When he had this stroke, they 
obviously had additional medical expenses. Last year, they were in the 
market for a better rate than the 8 percent they were paying on the 
loan on their house which remained and was $550,000. They got a cold-
call from an unlicensed broker, who offered them a $629,000 loan with 
these terms: $25,000 cash back, a 4.5-percent interest rate, and 
monthly payments of $2,000 after four months at $5,300 to lower the 
interest rate. They studied it and said, ``We can afford this.'' And so 
they did it. Here is what really happened. The interest rate was 11.2 
percent, not 4.5 percent. There was no cash back. The monthly payments 
were $5,300 every month. They called about it, and they were told it 
just wasn't true. The paper they signed was for $5,300 every month for 
the length of the mortgage. Then they learned that not only was there 
no cash back, but this broker walked off with $20,000 in his pocket. 
These are retired people. They were confronted with hundreds of pages 
of loan documents, filled with small print. They trusted their broker.
  Not too long ago, my husband and I bought a home. We trusted our 
broker. He went through the papers with us. Candidly, I do not believe 
most people read every line of what amounts to a stack about 6 inches 
high of papers when you buy a home.
  For the Simmons family, they dipped into their life savings. They are 
afraid they may lose their home. This is exactly the type of situation 
our bill would prevent.
  Let me give you another story of Steve and Valvina McFatten. They 
live in Fresno, and they are in this photo with their children and dog 
in front of their house. They have two teenage daughters. Steve is an 
assembly-line worker. Valvina is an office assistant. They both work.
  In 2005, a bank told them they could handle a mortgage of up to 
$135,000. When they saw their dream home the next year--listed at 
$250,000--they thought it was out of reach. But a broker steered them 
into two mortgages for $250,000 for only $1,000 down, with an 
adjustable interest rate. Their combined monthly payments were $1,600. 
Now, the McFattens have weak credit, modest income, and two children to 
raise. They told their broker they could not afford this loan. The 
broker told them not to worry, that their monthly payments included 
their property taxes, their mortgage insurance, and a warranty for home 
repairs. Well, did that turn out? No. Here is what the real deal was: 
no money toward property taxes, no money toward insurance, and no 
warranty. It was canceled without their knowledge.
  These are two examples of what is happening in California. Many 
Americans trying to get a piece of the American dream have actually 
been sold a bill of goods by unscrupulous brokers and lenders. When I 
was in Los Angeles, the San Bernardino district attorney, the Los 
Angeles district attorney, and the State attorney general had just 
arrested nine bad actors in the mortgage broker business. So it is 
going on all of the time. People are told: Don't worry, you don't need 
a big downpayment. You can get into a zero-interest loan. Don't worry 
about what you are getting into. Home values always rise. Don't worry 
about the adjustable interest rate; you can always refinance. Don't 
worry, you cannot lose.
  Well, the fact is that you can lose, and you can lose big. I can say 
that everybody should read the fine print and take the time to 
understand exactly

[[Page S2384]]

what their mortgage documents say. The fact is that people have 
difficulty understanding these very legal documents. They tend to 
depend on their mortgage broker. So the damage is staggering.
  There were more than 2 million filings last year, and another 2 
million are expected this year. Senator Boxer's and my State is ground 
zero, with 4 of the 10 metropolitan areas with the highest foreclosure 
rates in the Nation. No. 2 is Stockton. No. 4 is San Bernardino. No. 5 
is Sacramento. No. 7 is Bakersfield. It just so happens that these are 
areas with a lot of middle-class, hard-working families who tend to 
trust their broker. Both people in the family work. They may not all be 
college graduates. They may have a tough time understanding the fine 
print, and they depend on the person who comes to them as a 
professional and makes personal representations to them.
  My State accounts for more than 20 percent of the Nation's 
foreclosure filings. It is very serious. We have now learned how easy 
it is for anyone to get into the mortgage business in some States and, 
quite frankly, it is astonishing. A simple Internet search will show 
how easy it is.
  These are statements taken right off the Internet for a broker. Here 
is the source: http://www.cflicense.com. We accessed this site on the 
27th of February of this year. Here is what they advertised:

       No experience, education or exam is necessary.

  To sell subprime mortgages in the State of California.
  And here is also what we learned:

       You can hire unlicensed sales agents to originate loans 
     under your company license.

  In fact, a lot of the real estate industry is opposed to mortgage 
licensing. They want to be able to do that. But our job is to decide, 
is this in the best interest of the consumer? I don't believe it is. As 
a matter of fact, I find it rather outrageous. I say to the real estate 
industry: This does you no good to have unlicensed subprime mortgage 
brokers who give bogus information to your clients.
  So here is what this bipartisan amendment would do. First, it would 
establish some minimum, basic Federal license requirements. They would 
ensure mortgage brokers and lenders are trained in ethics, consumer 
protection, lending laws, and the subprime marketplace. To be licensed, 
you would have to have no felony convictions, have no similar license 
revoked, demonstrate a record of financial responsibility, successfully 
complete educational requirements, at least 20 hours of approved 
courses--it seems to me that is pretty basic--pass a comprehensive 
written exam, and meet an annual license review and renewal 
requirement. It would also require that all mortgage brokers and 
lenders provide fingerprints, a summary of work experience, and consent 
to a background check to authorities.
  The bill would also establish a national database so individuals 
buying a home who wanted to use a subprime mortgage broker could go on 
the Internet and find out if that broker is, in fact, licensed.
  The State would have the responsibility to carry out these minimum 
standards and could add any standards they wished. But State regulators 
would be required to develop a satisfactory licensing system within 1 
year following the enactment of this legislation. If this does not 
occur, the Housing and Urban Development Secretary is empowered to 
quickly develop a national database and license-generating revenue for 
its implementation through fees to license applicants.
  There is broad bipartisan support for this amendment. Our amendment 
is similar to a provision authored by Representative Spencer Bachus, a 
Republican from Alabama, the ranking member of the House Committee on 
Financial Services.
  The national licensing concept for mortgage lenders and brokers was 
included in the comprehensive mortgage reform bill which passed the 
House in November. And last month, the President's working group on 
financial markets recommended a similar proposal in their report on the 
housing crisis.
  I will conclude. The emergence in recent years of subprime and other 
exotic mortgage products have put many American home buyers at great 
financial risk, and many of these products require little or no 
downpayment. They allow people with bad credit to get in over their 
head. They do not verify their wages. Many have exaggerated wages on 
the loan documents. And most lenders and brokers offered these 
mortgages, though, in a responsible fashion. But many others used 
predatory tactics, such as failing to disclose the full risk in order 
to place unsuspecting borrowers into mortgages they could not afford.
  Madam President, my heart broke when I met the Simmons family. When I 
think of somebody working for 20 years for a defense firm in 
California, his wife working for 26 years as a checker in a supermarket 
so they could buy and sustain a home which, as we can see, they have 
kept in pristine condition, having a health problem--namely, a stroke 
by Mr. Simmons; it is difficult for him to get around, it is difficult 
for him to speak--costing them extra, using the home as a basis to try 
to refinance to take some money out of this house to pay for medical 
bills.
  What is happening now? A bad actor got hold of them. They did not 
realize what they were getting into. He promised certain things which 
did not come through. And now this couple faces losing their home.
  Fortunately, we were able to hook them up last week with a community 
pro bono law firm that will now represent them and deal with their 
mortgage company and try to see if they can recondition some of this 
loan back to what they were promised.
  This is going on, and it is going on all over California. The areas I 
just pointed out, the 4 out of the 10 highest areas are not the most 
affluent places in my State. They are places where families just like 
the Simmons have heard the rhetoric: We can put you into the American 
dream; we can enable you to buy a home; and here, I, the mortgage 
broker am willing to sit down and make you all these commitments. Then 
they find out the commitments are ashes.
  This has to stop. There is no place for the predator in this 
industry. I know Citibank told me they oppose the legislation. I say to 
Citibank: Are you proud of this? Is this the way you want to do 
business?
  And I say to realtors who do not want these brokers to be licensed: 
Is that the way you want to do business? If it is, I am against what 
you want.
  I hope this amendment is adopted. It has been talked about, it has 
been dealt with in general terms in a past bill that passed the House. 
The President's working group said we should consider it. We now have 
the chance to do it.
  We face 2 million additional foreclosures, and we have to do 
something about predatory lenders and brokers, and this amendment is a 
beginning.
  Mr. DURBIN. Madam President, will the Senator yield for a question?
  Mrs. FEINSTEIN. I certainly will.
  Mr. DURBIN. Through the Chair, I am happy to be a cosponsor of the 
Senator's amendment. The last point she made is the one I found almost 
nothing short of amazing: that the largest banks that are involved in 
the mortgage business, and the realtors who are involved, obviously, in 
these transactions are resisting Senator Feinstein's amendment that 
would provide some basic standards for the licensure of mortgage 
brokers. That is the point I would like to make, through the Chair, to 
the Senator from California. I continue to wonder why these noble 
professions are protecting the bottom feeders of our economy, those who 
are preying on people such as the Simmons.

  I have stories in Illinois I can tell that will match each one of the 
Senator from California, where there is basic exploitation of people by 
those who mislead people in terrible financial circumstances, people of 
limited experience and education who are trying to understand the 
complexity of mortgages and closings and interest rates and all of the 
matters that have to be understood well.
  I ask the Senator from California, Madam President, does she have the 
support of any financial institutions or any of these professions that 
should be in support of State licensing of these mortgage brokers?
  Mrs. FEINSTEIN. Let me answer that. Not to the best of my knowledge. 
Let me also say--and perhaps I do, but I will find out--let me also say 
Citibank and even the California real

[[Page S2385]]

estate establishment want exemptions. Well, I am not willing to give 
exemptions. I say for shame if this is the way you want to practice 
your business. It is not acceptable.
  Mr. DURBIN. I thank the Senator from California.
  Mrs. FEINSTEIN. I yield the floor.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. BOND. Madam President, too many families in Missouri and across 
the Nation are feeling the pain of the housing crisis. They need our 
help now. This Senate is coming together on a bipartisan basis to 
provide some relief to deal with some of the real problems we find in 
communities throughout our Nation.
  Over the Easter break, I traveled around the State. I talked with a 
lot of folks who have a real and deep interest in this housing crisis. 
I met with families struggling under the threat of foreclosure, 
neighborhood groups counseling families on how to keep their homes, 
government officials at the local level--mayors and council members--
who were trying to find ways they could assist, community leaders 
asking for our help. They told me about the neighborhoods devastated by 
foreclosures. More critically, they told me of the personal problems 
faced by families running into foreclosure where their adjustable rates 
had risen so high they could no longer afford them. And they talked to 
me about the devastation of family after family being threatened with 
losing their home.
  I did not hear from speculators who overbuilt and are now caught with 
too much inventory. I did not hear from investors who bought a second 
or third vacation home, expecting that the price would go up more than 
they paid for it and now regret their bad decisions. And I did not hear 
from the greedy lenders who went out and offered terms that were too 
good to be true. Some of the worst ones were the no-downpayment loans. 
Many others offered unbelievable teaser rates and then put out paper 
that was absolutely unaffordable by the borrowers. They spread this 
toxic paper throughout the system. It is putting at risk not only our 
national financial system, but that toxic stuff has spread to 
international markets, and markets across the world are feeling the 
pain of our subprime crisis.
  In Missouri, I heard from mothers and fathers who want to keep their 
home. I heard from fixed-income seniors who thought they had a deal 
they could live with until the rates started adjusting and the 
mortgages got out of their ability to pay. These folks do not want a 
government handout. They do not want a bailout. They do not want the 
Federal Government buying their mortgage or buying the homes around 
them. They are hard-working Americans who want to be able to meet their 
original commitments and keep the promises they made. They need 
targeted temporary help to get them refinanced and on with the rest of 
their lives.
  That is the kind of relief I offered on behalf of several of my 
Republican colleagues in the Security Against Foreclosure and Education 
Act, or SAFE Act, of 2008. It provided help for families to refinance 
distressed subprime mortgages, help for neighborhoods for the purchase 
of foreclosed homes, help for returning war vets coming home to the 
threat of foreclosure, and reform of the Federal Housing Administration 
that we all agreed upon last year and still have not been able to pass.
  These proposals, I am very happy to say, form the core of the 
Foreclosure Prevention Act substitute amendment that is before us 
today. I thank Senators Dodd and Shelby who came together and assembled 
this bipartisan package of relief for families and neighborhoods. They 
took proposals from our SAFE Act, housing proposals from our Democratic 
colleagues, and provisions from our friends on the Finance Committee to 
make this relief package.
  Most importantly, this measure will help struggling families 
refinance their subprime mortgages by authorizing State housing finance 
agencies to issue $10 billion in tax-exempt bonds and use the proceeds 
for refinancing.
  I happen to know very well how effectively our Missouri Housing 
Development Corporation functions, and if they have this authority and 
if they can sell their bonds, then they will be able to refinance where 
people have seen their mortgage payments escalate beyond their ability 
to pay. This is the kind of assistance we expect from our housing 
finance agencies, and we need to empower them.

  Secondly, to help families know their options to avoid foreclosure 
and keep them in their homes, it provides an additional $100 million 
for loan counseling. I was proud to be able to join with my colleague 
from Connecticut, Senator Dodd, in the Housing and Urban Development 
appropriations bill last year to put $180 million in counseling. 
Congress passed it in December. The first of these funds has gone out, 
and they tell me already they are having a great effect. Many say that 
knowledge means power. Housing counselors I met with over the recess 
told me how these counseling funds are helping families know how to 
renegotiate with their banks to get good refinancing and keep their 
homes.
  The message all of us ought to carry back to our home States when we 
talk to people who are threatened by these problems is that if you see 
your mortgage rates going up beyond your ability to pay, if you have 
concerns about whether you can meet the terms of the financing, don't 
wait until foreclosure proceedings are initiated. Don't wait until you 
get hauled up on the courthouse steps to see your property sold. There 
are counseling agencies that we have funded and will be funded 
additionally across the country in every large community that will come 
in and work with the homeowner and with the lending agencies to try to 
work out terms.
  Many of these will be able to get refinanced. It has to be voluntary 
on both sides, but as has been said earlier on this floor, lenders have 
a real disincentive for foreclosing. They got into the business not to 
own homes, they got in the business to receive payments. Very often 
this means there is common ground which can be agreeable to the 
homeowners and the lenders to stay the costs and the risks of 
foreclosure.
  Foreclosure not only is devastating to the family, it is very 
devastating to the neighborhood. The neighbors see their home values go 
down, and the whole community suffers. That is why I had mayors and 
council members and city aldermen coming out and saying, what can we 
do? I said: Get good education.
  As the Senator from California said, we need better education for 
people before they seek to buy a home, and certainly we need education 
and counseling for those who see mortgage payments rising above their 
reach.
  Back to the provisions in this bill. We supported on our side--and 
this measure includes--help for struggling neighborhoods by providing 
tax credits for that purpose over the next year of a home in or facing 
foreclosure. It is $7,000 available for families moving in and living 
in the home over 2 years to keep the neighborhoods from being flooded 
with properties in foreclosure, which drags down property values for 
everyone. These tax credits should help all homeowners in the 
neighborhood by stabilizing property values as families get back into 
vacant homes and add value.
  Not surprisingly--not surprisingly--when I laid out this proposal to 
the roundtables and the discussion groups I had around the State, one 
of the things the mayors and the city councilmen liked the most was 
this ability to get those homes in foreclosure sold and occupied by 
borrowers who would be contributing members of the community and 
helping to stabilize those communities. They recognize the importance 
this has for their communities as well as the families who would be 
living there.
  One other part of this proposal that is very important to me is that 
the measure proposes new loan disclosure requirements with a prominent, 
plain English explanation of key loan conditions. I want the borrowers 
to see in big type any teaser rates or introductory rates, anything 
that will change the terms of their payments or limit their ability and 
lead to foreclosure.
  I have had the distinction of living in several houses in the last 
few years. As we have moved from house to house and purchased homes, I 
have seen that stack of documents. As the occupant of the chair, I used 
to be a lawyer. I am recovering from it now. I have looked at those 
documents and tried to make

[[Page S2386]]

sense of them, and I tell you there is not enough time if you are 
purchasing a house. It took me about 45 minutes to sign all the pieces 
of paper that came before me. Now, that doesn't help anybody. The Truth 
in Lending Act has gone to ridiculous extremes. Unfortunately, we let 
lawyers draft that, and there ought to be a law against lawyers 
drafting any kind of disclosure documents. We need to have those 
simple, in plain English, so you know what your rate is, what it could 
rise to, whether there is a prepayment penalty, and whether you can 
refinance it. That is on the first or second page.
  Tell me something I need to know. Don't make me sign 30 pages saying 
I have read all the fine type or all the fine print.
  Everybody knows that is a joke. Let us put disclosure in plain terms. 
That should be a help in the future.
  We also have a provision from Senator Coleman of Minnesota in this 
bill to give returning war veterans more time to avoid home 
foreclosure. Currently, they have a 3-month window from their return to 
work out any mortgage difficulties they have. This may not be enough 
time for them. So this proposed measure would extend the protection 
against foreclosure to 6 months after arrival home. That is the least 
we can do for our returning heroes.
  We have included provisions of the Federal Housing Act reform bill, 
which passed the Senate 93 to 1 last year. That bipartisan, near 
unanimous reform bill deserves to become law. FHA is one of our key 
financing insuring agencies for lower income people. We need to make 
sure it works. We have heard about the possible application of FHA 
Secure to assist borrowers whose mortgage payments have gone beyond 
their reach, but it is too limited. They can't use it. We need to 
loosen up the terms so that the terms are not so strict that FHA is in 
the position of what some people used to characterize as a bank being a 
place that lends you an umbrella and takes it back when it starts to 
rain. The FHA holds out great promise for being able to insure loans 
and get people in houses, but when they say, if you do anything, if 
there is anything, if you miss any step, you can't get the protection, 
it seems to me maybe we have tightened it down too hard.
  I believe, however, for the future, it ought to be the policy of the 
FHA--and I would hope it would be the policy of any responsible 
mortgage broker or lender--not to make any no-downpayment loans. No-
downpayment loans are one of the most significant contributors to 
housing foreclosures and failure to be able to meet those terms. If you 
don't have the money to buy a house, there is nothing wrong with living 
in a rented house. I have lived in rented houses. You can save up the 
money to buy a house. But to buy a house responsibly, you need to have 
some downpayment. I hope that the FHA would get rid of the idea that it 
is the American dream to put somebody into a house with no equity in 
it. That is asking for trouble, and that is one of the sources of the 
trouble we face.

  I would say one other thing. A lot of people are now realizing that 
this housing crisis is the basis of financial challenges and financial 
difficulties in the United States and possibly even internationally. I 
said earlier, this toxic paper has been spread throughout the world, 
and there are banks in other countries, there are investment houses in 
other countries that are suffering because of it. There had to be steps 
taken at the Federal level, and some of the steps were a little bit 
breathtaking. I was not wild about seeing the Fed have to move in and 
wipe out Bear Stearns and provide the guarantees, but I am willing to 
accept what the Chairman said, and what others have said, that this was 
necessary to stop the domino effect of collapsing Federal institutions 
and federally insured institutions, and it is necessary to stop a 
worldwide panic from subprime loans.
  There are other steps that have been taken as well--lowering the Fed 
rate to 3\1/4\, 2\1/4\. These steps are necessary on a macro level. But 
let me tell you one thing. This macro problem has a micro problem 
basis. The problem we face is not just what happens in Washington or 
happens in New York or happens at the Federal Reserve. This problem 
depends upon how we solve the problems of the families facing 
foreclosure, of the communities seeing a wave of foreclosures driving 
down property values.
  This problem requires also that we work for a solution that begins at 
the ground up; that takes care of the families in need; that takes care 
of the communities facing these problems and not do only what has been 
done nationally, what we read about in the headlines, but what we can 
only see in community newspapers back home, as to how we help families 
and communities struggling with foreclosure.
  This housing bill before us represents the needs and values of our 
families and neighborhoods. It doesn't provide for any government 
buyouts of mortgages, as some propose. It does not provide for 
refinancing of vacation or investment homes, as some fear. Together, 
our housing proposal will help families and neighborhoods across this 
country get through the crisis and help our financial systems to 
maintain stability. But most of all, for our families, for our 
neighborhoods, for our communities, I urge my colleagues to support 
this measure.
  Madam President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Madam President, I thank the Senator from Missouri for 
his statement. He made reference to something which I thought was so 
obvious. Senator Jack Reed of Rhode Island had an amendment to the 
original bill, and since Senator Bond is an attorney, and the Presiding 
Officer is an attorney, and I have been one in the past, we know what 
happens at a real estate closing. You give people a stack of papers and 
you turn the corners and say: Keep signing until you are finished. If 
someone has the nerve to ask: What am I signing? Nine times out of ten, 
it is going to be dismissed by the realtor or the lawyer in the room: 
Oh, it is another Federal form required by law. Just sign it. 
Everything is fine.
  At the end of the day, let's be honest. No one has read all of those 
forms. No one understands all those forms, particularly those who are 
borrowing money. But the fine print in those forms is going to dictate 
their lives, and they do not even know it. How many of us take the time 
to carefully read the back of our monthly credit card statement? Not 
me. And the print is so fine, even with these glasses which I have all 
over my house, I can't keep up with it and understand it.
  So what Senator Jack Reed proposed was that there be a cover sheet to 
the disclosing documents which says: You are borrowing X number of 
dollars, the interest rate is X, the monthly payment will be X, the 
interest rate can increase to X number, your monthly payment can 
increase to a certain amount, and there is or is not a penalty for 
repaying your mortgage. Pretty simple, right? Well, you ought to see 
what the financial institutions did to Jack Reed's very simple 
proposal--one that made sense.
  The reason it caught my attention is it amends the Truth in Lending 
law in America. I have kind of a special attachment to this, because 
the first person I ever worked for on Capitol Hill was Senator Paul 
Douglas, who tried to pass the Truth in Lending Act for 18 years. He 
was fought by the banks and never succeeded. He left Congress in 1966, 
and Senator William Proxmire of Wisconsin passed it.
  It was, I am sure, a good-faith effort for better disclosure at 
closing, but the law is so complicated, so arcane, that at the end of 
the day it did not serve the ultimate purpose Senator Douglas sought. 
So I was anxious to read what the banking institutions would agree to 
as part of the compromise bill before us. I hope my colleagues will 
take a few minutes and go to section 501 of this bill and try to make 
sense out of this. What I described to you, in Senator Jack Reed's 
proposals, I could explain at any town meeting in Illinois--any Senator 
could--and people would say: Sure, why shouldn't we know this? We might 
have avoided some of the problems we have today if the borrowers 
actually knew what they were getting into.
  Try to make sense out of what the financial institutions agreed to in 
this bill. I have read through it. I don't get it. I mean, it does try 
my patience that at this moment in history, with so many people facing 
mortgage foreclosures, we do not have an appetite in the Senate to 
change the basic laws and rules to have more oversight and avoid this 
happening again.

[[Page S2387]]

  If it is uncomfortable for us to be plowing through all this 
legislation, think about how uncomfortable it is for 2 million 
homeowners facing the loss of their homes.
  Senator Feinstein was here a few moments ago, talking about these 
homeowners in her State. I have met them in my State. They are in 
Missouri, they are in Iowa. These are unsuspecting people, many of them 
retired, many of them with limited experience and education, drawn into 
complicated loans that have traps every time you turn. If you reach a 
situation where you have lost a job, where you have a serious medical 
bill, where something has occurred here, you could lose your home. A 
lifetime of savings could be gone.
  That isn't right. I understand people have to accept responsibility 
for their actions, but you know a lot of these people are being preyed 
upon, they are being deceived. I have seen it happen. I have talked to 
the families back in Illinois. We had a chance, with this bill, to put 
a very important and simple provision in, on which the Senator from 
Missouri spoke. We didn't do it. I might say, I see the Senator from 
Iowa, and I don't want to take any additional time, but I wish to say 
through the Presiding Officer: We convened this morning at 9:30. My 
amendment, which is pending, has been on the floor for virtually 3 
hours now--almost 3 hours. I have stayed that entire period of time to 
entertain any questions or to engage in any debate related to this 
amendment.
  There have been a lot of speeches about other issues. I don't wish to 
be critical of my colleagues. I have done the same thing. They have 
issues that are important to them relating to this bill and other 
subjects. That is their right.
  I tried to get an agreement that at 12:15 we would vote on my 
amendment, up or down, win or lose; let's debate it and vote on it. I 
asked the Republican minority leader and he said: Too soon. Other 
Members want to come and speak to this amendment. I don't want to 
foreclose anyone's opportunity to speak on the floor for or against 
this amendment, but why are we wasting this time? That is my question. 
This is an important bill. There are a lot of very important 
amendments. Let's get on with it. Three hours should be enough for this 
amendment. It is way too much. We could have debated this thoroughly in 
a matter of an hour. Unfortunately, a lot of Members have not come to 
the floor.
  There should reach a point where the minority leader says to his 
colleagues: You had your chance. Now let's vote. That is kind of the 
normal consequence in life--you snooze, you lose, whether you are in 
the Senate or not. So I encourage those who support or oppose my 
amendment, come to the floor. I am here. Let's have something 
unprecedented, a debate, an actual debate in the Senate, where I say 
something and someone challenges it or they say something and I 
challenge it. Wouldn't that be exciting? C-SPAN might advertise that is 
going to happen on the floor of the Senate, it is so rare.
  I am ready. I hope, if the Senator from Iowa is here on my amendment, 
that we can be engaged in a debate shortly.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. GRASSLEY. Madam President, I rise for two purposes. One, to state 
some views on the Durbin amendment and, No. 2, to give very short 
remarks on tax provisions that are part of the underlying housing bill. 
I would like to speak on the Durbin amendment for the reason that I am 
the author of the bankruptcy reform provisions that passed here, maybe 
3 or 4 years ago, and are now law. I would like to speak on the tax 
provisions as ranking Republican on the Senate Finance Committee.
  Senator Durbin and I have had opportunities to work together on many 
issues, and in fact we are working together on other things this very 
day, unrelated to this bill. I appreciate the opportunities to 
cooperate in a bipartisan way with Senator Durbin. Senator Durbin, many 
months ago, was very polite, coming to me and asking me to take a look 
at his bankruptcy language. It is probably similar to the one that is 
before us right now. I know the language has been changed some since 
then, but it is basically the same concept. He asked me to consider it.
  I and my staff did consider it, and I am standing here now to speak 
against it. But Senator Durbin was very courteous in giving me a heads 
up, not just a few weeks ago but a long time ago. I want my colleagues 
to know Senator Durbin is an easy Senator to work with, even if you 
disagree with him.
  So I am here to voice opposition to Senator Durbin's bankruptcy 
amendment. While I appreciate Senator Durbin's sincerity in trying to 
alleviate the home mortgage crisis, I believe his amendment is 
misguided and will have serious unintended consequences. So I am going 
to point out some of my concerns.
  First, the proposal would make filing bankruptcy a deceptively 
attractive option for people trying to keep their homes. But we do not 
want to encourage people to go into bankruptcy for the sole reason of 
keeping their homes. Rather, we should be working on solutions outside 
of bankruptcy to address this issue, and that is what a great part of 
the other provisions of this housing legislation before us is all 
about. That is what a lot of the things the Federal Reserve and the 
Secretary of the Treasury are trying to do, both through public policy 
as well as through encouraging private sector policy.

  Other solutions need to be sought before bankruptcy. In order to get 
the relief Senator Durbin wants, homeowners will have to go into 
bankruptcy to get it. That is no news. He has made that very clear. I 
believe otherwise; that voluntary efforts and programs outside of 
bankruptcy will be quicker and more efficient, in terms of helping 
people keep their homes and shoring up the housing market. We need to 
let these efforts work.
  Also, people will not risk ruining their credit history by filing for 
bankruptcy just because they think that this is the only way maybe they 
are going to be able to keep their home. The mortgage banking industry 
needs to be doing all it can to make sure that all homeowners in 
distress, not just the ones in bankruptcy, are getting help in making 
their payments.
  I think more importantly, we have been told the cramdown provision in 
Senator Durbin's amendment will increase the cost of mortgages for all 
borrowers in the form of higher interest rates or higher downpayments, 
or both. Independent experts, as well as the Congressional Budget 
Office--and I like quoting the Congressional Budget Office because they 
are not partisan--have concluded that there will be an interest rate 
increase for all home mortgages, between 1 and 2 percent. Higher 
interest rates will deny many Americans the ability to buy a home and 
will make it more expensive for other Americans to get a home loan. So, 
in effect, this will put up barriers--maybe unintended barriers, but 
real barriers, the experts tell us--to the American dream of owning a 
home.
  The fact is, in 1978, a Democratic-controlled Congress and a 
Democratic President specifically--and I wish to emphasize 
``specifically''--exempted primary residences from cramdown to keep 
interest rates low for primary homes and to ensure credit was available 
for low-income borrowers. In fact, U.S. Supreme Court Justice Stevens 
explained, in the Nobleman case, that the legislative history of the 
1978 bankruptcy law indicated very clearly that:

       . . . favorable treatment of residential mortgages was 
     intended to encourage the flow of capital into the home 
     lending market.

  Debate surrounding the Senate version of the 1978 act indicates that 
exceptions for real estate liens were allowed with the explicit goal of 
making home mortgages more available and more affordable than other 
kinds of credit. So I think, from the history of the 1978 act, there is 
a sound policy basis for this decision to not allow cramdown for 
primary homes in bankruptcy.
  Mr. DURBIN. Will the Senator yield for a question?
  Mr. GRASSLEY. Yes.
  Mr. DURBIN. I would like to ask the Senator--I don't question what he 
has said, but after that, in the 1980s, we created a new chapter in 
bankruptcy, Chapter 12.
  Mr. GRASSLEY. Now you are getting personal.
  Mr. DURBIN. That is why I wish to make this point. Because we said 
that

[[Page S2388]]

when it came to the so-called cramdown or modification of mortgages, we 
would make an exception and the exception would apply to the homes of 
farmers and their farm property. We said if they go into bankruptcy, 
they can have the mortgage on their farm home crammed down or modified.
  At the time, the banking industry said this is a terrible decision 
because we are going to have to raise interest rates on farms. You are 
going to regret this. We did it anyway, and there was no significant 
increase in interest rates.
  I would like to ask, through the Chair, whether the Senator from the 
great agricultural State of Iowa objects to cramming down mortgages on 
farm homes under Chapter 12.
  Mr. GRASSLEY. Madam President, I am glad to answer that. First, let 
me explain why I said he is getting personal. I am the author of that 
Chapter 12 bankruptcy provision. I am going to address it very soon. So 
if you would listen, I think I will answer your questions. I appreciate 
what you are saying and, in fact, I anticipated that, and I hope I am 
ready for it. I am sure it is going to be difficult to satisfy the 
Senator from Illinois, though.
  The amendment of Senator Durbin will not only increase interest rates 
on mortgages and make home ownership more expensive for everyone, many 
experts tell us this proposal will also have an adverse impact on 
financial markets because of difficulties and uncertainty in valuing 
the mortgages that back up securities. In addition, innocent investors 
would be hurt. So the Durbin amendment would cause other adverse 
impacts beyond higher costs of home loans.
  Proponents of this amendment, particularly the cramdown provisions, 
argue that primary residences should be crammed down in bankruptcy just 
as second homes, family farms, and boats are. But there are good 
reasons why primary homes are treated differently from these other 
things.
  First, interest rates and downpayments for vacation homes are 
significantly higher than for primary homes. If we are to start 
treating primary homes the same as vacation homes, I am told that then 
interest rates are certain to rise to the same level of second homes 
where cramdown is permitted.
  Second, Chapter 12, referred to by the Senator from Illinois, only 
applies to very small commercial farming and ranching operations, not 
all farms and not all ranches. There are very specific requirements 
that need to be met in order to be able to file under Chapter 12. So we 
are not talking about the same number of loans that could be eligible 
under the Durbin amendment. I would be glad to give some statistics on 
that, but I am going to wait and see if the Senator from Illinois is 
satisfied.
  Actually, I will give these numbers now because I think they are 
significant at this point. According to the USCOURTS.GOV Web site, the 
Federal courts Government Web site, for fiscal year 2006 there were 
only 348 Chapter 12 filings; in fiscal year 2007, there were only 361 
Chapter 12 filings. This would compare to what, at least I believe, you 
are saying are possibly at least 600,000 filings under your amendment.
  Moreover, it took Congress over two decades to make Chapter 12 a 
permanent part of the Bankruptcy Code because people were concerned 
about the possible negative consequences to allowing cramdown for 
family farms. Chapter 12 was initially only enacted as a temporary 
provision.
  In addition, I would like to say that the definition of family farm 
which can file under Chapter 12 is very limited. In fact, Chapter 12 
only applies to a limited number of farms--those that have less than 
$3.2 million in debt; debt has to arise out of the farming operation; 
50 percent of income within the last 3 years has to come from farming 
income; and 80 percent of the assets in the estate have to be related 
to farming operations. Those are some of the requirements.
  So probably Chapter 12 ended up, quite frankly, being a lot more 
narrow than maybe I originally intended. But I think it is working.
  Finally, I want to go to the cramdown that is allowed for boats, 
because boats are like cars: their values diminish rather than 
increase, which is very different from real estate, where values are 
expected to rise over the long term.
  Proponents of Senator Durbin's amendment argue that the way the 
amendment is now drafted, only a very limited number of loans will 
qualify for cramdown in bankruptcy. Now, while the amendment does 
attempt to limit the scope of the legislation from how it was 
originally drafted when Senator Durbin introduced his bankruptcy 
proposal as a stand-alone bill--that was probably soon after he had 
talked to me about it several months ago--the reality is that the 
language still is extremely broad. Cramdown and other loan 
modifications are available for many loans, both nontraditional and 
subprime as defined by Senator Durbin's amendment, made before the 
amendment's effective date. That is, of course, a lot of loans. Since 
there is no sunset date in the amendment, borrowers could file for 
bankruptcy and still get this cramdown relief years and years from now.
  Mr. DURBIN. Would the Senator yield for a question?
  Mr. GRASSLEY. Yes.
  Mr. DURBIN. I ask the Senator, through the Chair, if he is aware of 
the fact that this only applies to mortgages, subprime mortgages on a 
primary residence that had been entered into as of the date of the 
enactment of legislation, not to any future mortgages of any kind?
  Mr. GRASSLEY. So then you are saying my statement was wrong?
  Mr. DURBIN. I am saying your statement should be modified.
  Mr. GRASSLEY. I am looking at my staff because I am not a lawyer. My 
staff would disagree with you that my statement is inaccurate. But I 
will not go into that now.
  Furthermore, according to the Durbin amendment, subprime loans are 
defined to be any loan with an interest rate of 3 to 5 percent over the 
Treasury yield rates for comparable loans. It is my understanding that 
this definition could include prime loans and home equity lines of 
credit, which would encompass a large number of loans.
  The cramdown provision is just one of several problematic provisions 
in Senator Durbin's amendment. The amendment will increase bankruptcy 
filings, something I really do not think we should encourage. We should 
be doing everything we can to keep people out of bankruptcy. It ought 
to be very much a last resort, particularly because filing bankruptcy 
in and of itself hurts a consumer's credit rating. I think we can all 
agree that bankruptcy should be a last resort and one should not file 
for bankruptcy unless it is absolutely necessary. The amendment will 
increase mortgage interest rates and downpayments for other homeowners 
and potential home buyers. The Durbin bankruptcy amendment will inject 
greater risk into and negatively impact our financial markets.
  I would like to be clear: I want to help homeowners weather the storm 
just as much as the next Senator. I want to support constructive 
solutions to help homeowners meet their obligations so they do not lose 
their homes. In fact, I have worked very hard with other Senators to 
craft tax provisions that I am soon going to address that are currently 
contained in the underlying housing proposal before us. But I am 
concerned that the Durbin bankruptcy amendment we are considering right 
now--if we adopt that, we are going to pass legislation that would do a 
great deal of harm. I am concerned about the possibility of the 
amendment helping some, but hurting many others. I am not alone in my 
concerns. Many experts agree that the Durbin bankruptcy cramdown 
proposal is problematic and could have serious adverse consequences. So 
I am asking my colleagues to vote against the Durbin bankruptcy 
amendment.
  I said that I am the ranking Republican on the Senate Finance 
Committee. I now wish to give a short statement about some of the tax 
provisions. I may have to be more specific when we get into debate on 
this, so this is kind of a preliminary notice of where the committee is 
coming from. First of all, as usual, I find it very necessary to thank 
Chairman Baucus for his courtesy and hard work in the legislative 
effort. Our goal was to develop a bipartisan tax package that responds 
to the needs of Americans and, in particular, the housing market.

[[Page S2389]]

  Americans are struggling to keep their homes and their jobs. As 
economic conditions continue to worsen, it is appropriate that Congress 
act to enact tax laws that address the housing problem. After all, the 
housing problem is at the root of the current economic turmoil and 
anxiety that people have.
  Last year, we responded to the call for help. Congress enacted the 
Mortgage Debt Relief Act of 2007 which was signed into law by the 
President. This law excludes from income discharges of indebtedness 
incurred by taxpayers to acquire homes. It also extends the tax 
deduction for mortgage insurance premiums.
  Earlier this year, Congress acted at lightning speed to enact a 
stimulus package that delivers additional relief to American taxpayers. 
As a result of that legislation, Treasury will be sending out rebate 
checks in a few weeks that will give the economy a much needed boost.
  We have carefully balanced this tax relief package being considered 
today on the floor. It addresses the housing downturn but is limited so 
as to ensure that it helps the problem and does not simply create new 
problems. We are mindful that any relief that benefits one sector of 
the public does not do so at the expense of another sector. The other 
sector is the taxpaying population that carefully managed their family 
budget, especially as it is related to housing costs. Taxpayers bear 
the burden of a bailout of these risky mortgages that went south. So it 
is important that we have a compassionate view that recognizes 
taxpayers possibly picking up some of the tab.
  Once again, the Senate is stepping in to help Americans in distress. 
The tax relief package helps encourage home ownership and encourages 
the basic businesses that are tied to the housing industry to recover 
some losses. Keep in mind that those businesses create jobs. More jobs 
means a stronger economy.
  In 2002, Congress passed a stimulus bill that provided some of the 
very same relief that is contained in this bill. In 2002, Congress 
passed, with overwhelming support, a provision to extend the net 
operating loss carryback. This provision passed without controversy. 
Hopefully, there will be no controversy this time. Then, again, earlier 
this year the Senate Finance Committee passed a similar provision to 
extend the net operating loss carryback once again, with overwhelming 
support by the committee.
  Relying on our successes in the past, we have included similar 
provisions in this bill. However, the net operating loss provision in 
this bill is even more conservative than the relief offered in the 
past. Instead of a 5-year carryback, this proposal offers a 4-year 
carryback. This provision, of course, is a no-brainer. It helps the 
very industries suffering from this housing downturn and will help 
Americans continue to be employed.

  This bill also offers a tax credit to help people buy homes that are 
in foreclosure. These homes are depressing home values in the 
marketplace. It is important that this inventory is moved so as to help 
retain home values.
  This bill also increases the cap on mortgage revenue bonds to give 
people in distressed loans additional options for refinancing. This is 
not a bailout for homeowners; this is a provision that helps enable 
people to keep their homes and to pay mortgages.
  As we proceed on this bill, I am asking everybody to keep in mind 
what I said at the beginning: We need to address the housing downturn, 
but we need to show restraint. We need to limit the relief so that it 
eases the problem, but does not create new ones. We need to be 
considerate of the many Americans who worked hard to save and buy homes 
and who will ultimately pay the price for this relief, if the relief is 
used, and we expect it will be. They should benefit, too, in that any 
targeted relief will, in fact, give the economy a boost and not be a 
drag on the economy, drag it down even further. We want to keep people 
employed, and particularly the taxpayers who were conservative in their 
financial plans should not be harmed as a result of this.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois is recognized.
  Mr. DURBIN. Madam President, I thank my colleague from Iowa. He and I 
are friends. We have worked together and continue to work together on 
many issues. We have profound disagreements on some issues, but we have 
managed to maintain our friendship regardless.
  We had the responsibility for a number of years of dealing with the 
Bankruptcy Code. I will say to my friend from Iowa, for a man who is 
not an attorney, I was always impressed by his knowledge of the issues 
and his ability to articulate his position effectively whether his 
opponents were attorneys or not. So I thank you very much for your 
comments today. I respect very much your point of view, although I 
disagree with the conclusions.
  The purpose here is not to send people to bankruptcy court, it is the 
opposite. Going to bankruptcy court these days is not a trip to Disney 
World. It is a problem. You have to go through credit counseling, you 
have to gather all of your documentation, walk into a courtroom, 
usually with a lawyer, and be prepared for a pretty tough ordeal. And 
then, if you successfully complete the bankruptcy, you carry that 
stigma with you for years. Whenever you want to apply for a loan, one 
of the questions asked is: Have you ever filed for bankruptcy? So I do 
not believe people are gleefully jumping at the chance to go to 
bankruptcy court. For most of them, it is an embarrassing experience, 
it is a humbling experience, and it is one they want to avoid.
  The purpose of this bankruptcy provision is to avoid that experience. 
Here is the problem: If banks today, if mortgage lenders today were 
jumping forward to renegotiate these mortgages, we would not be 
standing here in this debate. They are not. People are in a position 
where they are about to lose their homes, and these mortgage 
institutions are not responding.
  I will give you an example. A woman named Carol Thomas in Peoria, IL, 
retired as a drugstore clerk, spent her lifetime in that very basic 
job, retired with her husband, who worked at a factory. They bought a 
little home in Peoria. After they retired, her husband got sick. He 
could not climb the stairs anymore. She wanted to keep him home as long 
as possible and knew he could not get upstairs to the bedroom, so she 
went looking for another house, a smaller house but one floor. She 
found one near where she lived, and she ended up buying the house.
  Unfortunately, the medical bills got the best of them. She ended up 
needing some money to pay off medical bills. Now, this is the No. 1 
reason people do file bankruptcy in America: medical bills. But to 
avoid bankruptcy, she thought: Maybe I can borrow more money on my 
home. She got ahold of one of those mortgage lenders. And this is why I 
support Senator Feinstein's effort to license these mortgage brokers. 
She could not have received worse advice. This poor woman who was no 
business expert, no college graduate, just a hard-working woman who 
deserves a decent retirement, was advised to consolidate her debts in 
her new mortgage. They brought together all of the debts she had and 
lumped them into a new debt on her home. They were so unscrupulous and 
so deceptive that they brought into this package of consolidated loans 
a zero-percent loan she had from the city of Peoria for home 
improvements. Can you imagine? This woman was paying off that home-
improvement loan with zero percent, and this unscrupulous mortgage 
broker and lender ended up putting that debt into her home where she 
was paying interest on it now. Thanks so much for the help for Mrs. 
Thomas.
  It did not take but a year for the bottom to fall out. The reset came 
in. Her husband has since passed away. She was trying to get by on 
meager savings and Social Security. Her mortgage payment doubled, and 
there she stood, about to lose her home and her retirement, thinking 
about going back to work to save the home.
  That is when she showed up at that little gathering I had to talk 
about this issue. It is a heartbreaking situation. She said to me ahead 
of time, before the press conference got started: I hope I do not cry. 
I said: Just be as strong as you can. And she did not cry.
  She contained her emotions but almost lost it when she talked about 
her husband and what he went through. She then said: I don't know which 
way to turn. I call this mortgage company.
  I will not give their names here because there is a good ending to 
this.

[[Page S2390]]

  She said: I call the mortgage company and they say to me, you clearly 
can't make these payments, so just stop making payments.
  So she said: I didn't send in the monthly payment which would have 
exhausted my savings. Then they sent me a notice and said: You are in 
default. You are facing foreclosure. I can't win. I follow their 
instructions; they tell me they are going to foreclose.
  She had some counselors helping her, and the counselors said to me: 
Would you call the mortgage institution and see if you can talk to 
them?
  So I did. I called and left a message for the vice president of this 
major company. If I gave their name, it would be recognized instantly.
  I said: Please give this woman straight advice and figure out if 
there is any way she can stay in her home. Within 24 hours this vice 
president said: We will take care of it. Ms. Thomas can stay in her 
home, new interest rate, much lower percent interest rate, and she is 
OK. Don't worry about it.
  Why did she have to go through that? Why did I have to make that 
call? Do Senators have to get on the phone, all 100 of us, and call on 
behalf of 2 million home owners to get this straightened out? I had to 
make that call because that mortgage company wouldn't step up and do 
that until somebody pushed them. I didn't have any threat I could hang 
over their head other than the embarrassment to their company of not 
helping this poor woman out. But they finally did it. Why did I have to 
make that phone call? Why did she have to go through month after month 
of being beaten up by people on the phone giving her conflicting 
advice?
  That is why this is needed, not so that Carol Thomas and people such 
as her end up in bankruptcy court but so that the mortgage lenders know 
if they will not sit down and work with people, those folks may end up 
in bankruptcy court and the bankruptcy judge may modify the terms of 
the mortgage. If they know that is coming, they might sit down and talk 
to Carol Thomas or somebody before it reaches that point.
  Some of my colleagues may have been listening or on the Senate floor 
earlier when my colleague from Massachusetts, Senator Kerry, told his 
story. Isn't this a great story? Irene Hernandez of Lawrence, MA, a 
mother trying to raise her children, ends up over her head with a 
mortgage. They come in and tell her that since she has defaulted, they 
are going to have to foreclose on her mortgage and toss her out of the 
house.
  They say: Your $210,000 house is now only worth $99,000. So we are 
going to toss you out and we are going to sell your house for $99,000.
  Irene Hernandez says: I will buy it. I can pay a mortgage on $99,000. 
You know that. I have been paying this mortgage. So why don't you let 
me buy it?
  They said: No. You are disqualified. You are disqualified because you 
defaulted on a mortgage with our company.
  You think of these cases, and you wonder what is going through the 
minds of these financial institutions. Here many of them have created 
this subprime mortgage mess which was a catalyst for this recession, 
which we are sadly heading into according to Mr. Bernanke, and these 
same mortgage bankers still rule the debate in the Senate. Doesn't this 
tell you a great story about this institution; that the mortgage 
bankers responsible for this mortgage foreclosure crisis are telling 
people: Don't vote for that Durbin amendment. We are opposed to that. 
And Senators say: That is what mortgage bankers say, and that is where 
I am going to be.
  We have a responsibility beyond the special interest groups that line 
the hallways in nice silk suits. We have a responsibility to a lot of 
people like Carol Thomas and Irene Hernandez. These are hard-working 
people who deserve a break. Many of them were exploited, deceived. They 
deserve a chance. That is all I am asking. The vast majority of them 
will never end up in bankruptcy court, will never have the benefit of 
this proposal. But some of them will. Some of them are going to be able 
to keep their homes because of this.
  I cannot imagine what it would have meant to my family when I was 
raising them if I thought I was going to lose my home--not only the 
embarrassment of it, the uncertainty of where they would go, but moving 
out of the neighborhood, changing schools, leaving their friends. That 
is something we should not just look on as a routine occurrence in 
life. It is something they will never, ever forget. That is why this 
bill is important.
  I have been on the Senate floor now for 3 hours and 10 minutes with 
my amendment. I have invited every Senator who wants to come to this 
floor to oppose or support this amendment to come on down. The Senate 
floor is empty but for the Presiding Officer, whom I thank very much 
for being here. There have been three Senators on the other side of the 
aisle who have come to speak against my amendment. When I asked the 
Republican minority leader if we could schedule this for a vote up or 
down, let's have the decision of the Senate, he said: Senators want to 
speak. Well, good. That is appropriate. There should be speeches, and I 
hope even debate. But I have to urge my colleagues, if they believe 
there is a sense of urgency about the housing crisis, please come to 
the floor. Please join us in a conversation for or against the 
provision.
  I respect Senator Grassley of Iowa who opposes my provision. I 
respect the fact that he came to the floor and expressed his point of 
view and submitted to a question or two. For some who don't follow the 
Senate, this is a rare occurrence. A Senator actually allowed another 
Senator to ask a question. We have reached the point where we just come 
down to the floor and read speeches and finish the speeches and leave 
the floor. That is unfortunate. It would be better for the debate, for 
the Senate, and for people following it to hear both sides of the 
story, to hear me defend my amendment and those who are critical of it 
express their point of view. It doesn't happen much. It should happen 
more. I hope it will happen soon.
  I am going to renew my request of the Republican leader after the 
lunch period which many Senators now are involved in to try to bring 
this to a vote. I think we have given Senators over 3 hours to come to 
the floor, and exactly three Republicans have come to speak to this 
amendment. If it is one an hour, then we have 46 more hours to go 
because there are 49 Republican Senators. That is unfortunate. It is 
unnecessary. I hope those who do come to the floor will read this 
amendment carefully.

  The argument that this change in the bankruptcy law is going to raise 
interest rates is one that cannot be sustained. When I asked Senator 
Grassley about the provision relating to farmers' homes being allowed 
to be treated this way, he said it was a limited number of farmers who 
have filed for bankruptcy. He is right. But if the principle is sound 
for a farmer's home, why is it not sound for a person living in town? 
If a farmer can go into court and ask the bankruptcy court to change 
the terms of the mortgage so that they can stay on the farm, why is 
this inappropriate when it comes to those living in town? The principle 
is the same, and the principle is sound.
  It is true that chapter 12 bankruptcies for those facing agricultural 
shortcomings are restricted, but so is this provision, restricted to 
those who qualify for bankruptcy; to those who have a primary 
residence, a home at stake; for existing mortgages, as of the date of 
enactment of this law, not after; to provide, as well, that the 
mortgage terms can only be reduced for the principal to fair market 
value, no lower; that the interest rate on the new mortgage 
modification cannot be lower than the prime rate plus a premium for 
risk; that the term of the new mortgage modification cannot be more 
than 30 years; that we protect the lending institution; if the property 
appreciates in value over the next 5 years after the bankruptcy, any 
appreciation in value goes to the lender, not to the owner of the 
property. We have put all of these provisions in there. We keep 
narrowing it down to what I think is a very discrete group of people. 
It is not prospective. It does not apply to things in the future.
  Once every 60 years or so we have a housing crisis in America. I am 
glad it doesn't occur more often. To respond in a temporary, focused, 
and narrowly gauged way is appropriate. I think it gives people a 
fighting chance.
  I have taken the floor most of the morning. I know my colleague from

[[Page S2391]]

Louisiana is here and has a very important statement to make regarding 
this bill and her region of the country. I thank Senator Landrieu for 
being such a strong advocate for the State of Louisiana and for their 
recovery from Hurricane Katrina.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Ms. LANDRIEU. I thank my colleague from Illinois for those comments. 
I do appreciate his help because from the beginning of the catastrophe 
we faced from Hurricanes Katrina and Rita, the anniversaries of which 
we will not celebrate, by any chance, but mark by the end of August of 
this year and, of course, 3 weeks later in September, we still are 
struggling. I thank the Senator from Illinois for his constant help and 
support as we work through how to recover, how to rebuild with a 
Federal agency, FEMA, that was caught flat footed and poorly staffed 
and poorly resourced and disorganized. Initially, it made some 
improvements, but we still have great challenges when it comes to the 
rebuilding of the gulf coast.
  That is why I am here to take this opportunity, while we are on a 
housing bill for the Nation, and there is some real urgency to get real 
help to real people who need the Federal Government to act to help 
stabilize markets appropriately. And as we are talking about this, I 
wanted to offer an amendment that I would like to speak on, one 
amendment that I intend to offer to make sure this bill, in its attempt 
to help homeowners struggling to get back in their homes, as this bill 
tries to help neighborhoods stabilize from Detroit to California to the 
east coast, as this bill attempts to do other things, that we do 
continue to give appropriate aid and support to the hundreds of 
thousands of homeowners who are still struggling despite the good work 
this Congress has done to give them help.
  A chart illustrates this, if I could put it up. We have heard a lot 
about the city of Detroit and a region which has, outside of Stockton, 
CA, and Las Vegas, NV, the highest percentage of foreclosures, almost 5 
percent in this region, which is a significant percentage. Stockton, 
CA, almost 5 percent; Las Vegas, 4.2; other communities from Sacramento 
to Miami, FL, to the Denver-Aurora area, Fort Lauderdale, a fairly 
significant percentage of homes that are foreclosed. In some areas, it 
is quite a few people.
  Let's look at San Bernardino, CA. This is 51,000 homes. That is a lot 
of homes, a big place, lots of people, lots of children. You can 
imagine in your mind, if you are from a community of 50,000, how big 
that could be. They are not all in this situation, clustered, 51,000 
foreclosures all in the same block. Some of them are spread throughout 
a great area. But that is still a large number.
  This is why we have come to the floor to try to bring help to these 
families. Some of them, in my opinion, deserve help. Maybe some of them 
don't. I hope this bill will sort the wheat from the chaff because 
maybe some of these people entered into the kind of loans they 
shouldn't have. Maybe they should have read the fine print, and they 
didn't. I am not here saying every single one deserves a handout, but I 
am saying they deserve this Senate to talk about what help they might 
need to receive and the ramifications.
  If the whole financial establishment could get together and have a 
debate about Bear Sterns and Wall Street and what it might mean, what 
it would mean to the country if Bear Sterns collapsed, and they debated 
and came up with a solution, we most certainly need to be on this 
Senate floor talking about what solutions might be appropriate for 
homeowners. I understand the Bear Sterns issue was that they were all 
intertwined and, if they failed, maybe all the other banks would fail.
  Let me say for the record that in places such as Detroit, if all of 
these homes fail, it will put such a burden on that city or that area 
that others who had nothing to do with any of this may also fail. That 
is the principle. It is the same principle for which the Fed sort of 
bailed out Bear Sterns. And we most certainly need to be on the floor 
of the Senate talking about not trying to save people who did the wrong 
thing but trying to help people who did nothing wrong and may get 
pulled down by maybe whatever people want to characterize as our 
inaction or inappropriate regulation, whatever. But this is not normal. 
We are on the floor talking about these numbers because they are high.

  Let me show you what the gulf coast numbers, though, look like 
because it is striking.
  Let's take St. Bernard Parish. Let's look at this chart with the 
other one so we can get a comparison. Remember, Detroit has 41,000 
homes, or 4.9 percent, that were destroyed. That is basically this 
Detroit, Livonia, Dearborn area.
  Let me tell you about what the people from St. Bernard are still 
reeling from. It is not a 5-percent, it is not a 10-percent, it is a 
54-percent destruction rate--54 percent. There is no county or parish 
in the country that is experiencing right now the devastation of homes, 
including those that are closed, empty or vacated.
  Now, we are recovering from a disaster, which is not necessarily the 
same thing as a foreclosure. But I hold these charts up to show the 
nature and the scope of the problem.
  In Cameron Parish, it is not 4 percent, it is not 10 percent. It is 
46 percent.
  In Plaquemines Parish, it is 44 percent. In Orleans, it is 78,000 
households, 41 percent.
  In Hancock County, MS, it is 27 percent.
  In Harrison County, MS, it is 10 percent.
  In Jackson County, MS, it is 4 percent.
  In Jefferson Parish, LA, it is 2.6 percent.
  In St. Tammany Parish, LA, it is 2.4 percent.
  In Vermilion Parish, LA, it is 1.0 percent.
  So my amendment is drafted to address something that will help these 
families.
  After the storm, when these homes were destroyed, we passed a special 
community development block grant, extra grants to Mississippi and 
Louisiana and Alabama and Texas, sort of like we did right after the 
Twin Towers fell in New York, there was some extra community 
development block grants sent. The Congress did the same. Not 
everything we did was perfect in that regard. There were still some 
discrepancies in how it was allocated. But suffice it to say for this 
discussion that money was sent, and out of that money, Mississippi 
created the Homeowners Assistance Program and Louisiana created the 
Road Home Program.
  These were grants that were given to homeowners to try to help them 
between what their insurance would pay--and many of these homes were 
fully paid. These are problems where the mortgages were completely paid 
off. Some of these properties had insurance. Some of these properties 
did not have insurance because they were not in a flood plain, and they 
were not required to have insurance. So these are homeowners who did 
not do anything wrong. The homeowners I am talk talking about did just 
about everything right. Some of them maybe should have had insurance 
and did not, but, believe me, they are suffering the consequences of 
that. We are not bailing everybody out.
  But what we did do was allow them to take this Road Home grant. Then 
in the tax law they can also take a casualty deduction. This is the 
problem: If my amendment, which I am going to offer when I can, and ask 
for a vote on it--and I will offer this amendment not just for myself 
but for Senator Cochran, Senator Vitter, and Senator Wicker. All of us 
are together in a bipartisan way asking the Congress to give us some 
relief. If this amendment I am going to offer is not adopted, these 
families--I am going to give you an example of the Jones family and the 
Smith family--will end up paying much more in taxes than they can 
afford, and it will be counterproductive to our recovery effort.
  Let's take the Jones family. They earn $75,000 a year. Their home was 
substantially damaged. They did not take a casualty deduction as the 
current law allows. They paid the full amount of the taxes. Then out of 
the community development block grant--let's say they are in 
Mississippi--they received a grant from the State of Mississippi of 
$75,000, from the Mississippi Homeowners Assistance Program. Their Road 
Home grant will not be taxed. This family is fine.

[[Page S2392]]

  But for this family, the Smith family--which makes the same amount of 
money, and their house was completely damaged--they did take the 
deduction. They got about a $7,000 benefit. Because of what we did, 
they got their $75,000 grant, but if they have to pay taxes on this, 
their tax could be as high as $24,000.
  Now, the people whom I represent in Louisiana--and I am sure this is 
the same for Mississippi--can barely pay their utility bills right now, 
their insurance bills. They most certainly cannot pay a $24,000 tax 
bill.
  If my amendment is not adopted--and I think it has good support from 
Finance on both sides--this family that I told you about that makes 
only $75,000 a year, that had their home destroyed--through no fault of 
their own--because of a confluence of things we have done, will end up 
having to pay $24,000.
  So you may ask me: Senator, how expensive is your amendment? It is 
not cheap. The score for this amendment is $1 billion. It is not cheap. 
But we have to provide this support for these gulf coast families or 
you will have thousands and thousands of families suffer who arguably 
need the most help in the country.
  These are families who at one time owned homes such as this, as shown 
in this picture. This happens to be a double. I will show you another 
picture of another home. These are people who did not do anything 
wrong. They did not take out any subprime loan. They did not try to 
take out a low adjustable mortgage. They took out their regular 30-year 
mortgage. They paid off their regular 30-year mortgage. They paid 
insurance their whole life. They will have to end up paying $24,000 in 
taxes, and it will be the straw that breaks the camel's back.
  So you have heard me speak before about this issue. I know it can be 
a little complicated. We are not trying to ask for double dipping or 
anything. But I am going to be offering this amendment. It is important 
to remember, if we do not do this, we will have thousands of people, 
homeowners, who are trying to stay in their homes, rebuild these 
neighborhoods that are virtually destroyed, not on a beach--even though 
that is the case in some places in Mississippi--in the middle of the 
city, not close to any water or any beach, 5 minutes from the Super 
Dome, where the Hornets will be playing in one of their division 
championship games in a couple days, 5 minutes from the Super Dome.
  They did not even know the levees were going to break. The Federal 
levees broke and put their homes underwater. As shown in this picture, 
this is where the water line is. These families will have to pay 
$24,000 in taxes if we cannot get this fixed.

  So the bottom line is this: I am happy to try to vote for this bill 
for Michigan and California and places that have families that are 
experiencing some difficulty with their mortgages. But I have to ask 
this Congress to please continue to know that we still have homeowners 
who are struggling after 2\1/2\ years to get back into their homes, 
with some very complicated help that we and the States and the parishes 
are trying to give them.
  So my amendment will correct that. I will offer it when we move to 
that part of the legislation. I will also have several other amendments 
that will help the recovery process move forward. They are all about 
housing. They are all about helping people get back in their houses. 
They are not necessarily on a different subject or anything because I 
realize we will have other discussions later.
  But while we are on housing and while we are trying to fix it for 
everybody in the country, let's please stay focused and give a few 
tweaks here and there to keep this recovery going in the right 
direction on the gulf coast because we have a long way to go.
  I see my colleague from Kansas, and I yield the floor.
  Mr. ALLARD. Madam President, homeownership has long been the American 
dream, and over the last decade record numbers of families have been 
able to achieve the dream of homeownership. Unfortunately, too many 
homeowners now find themselves in mortgages they can't afford. Many of 
them knowingly or unknowingly took out exotic mortgages that made 
wildly unrealistic assumptions about the housing market; namely, that 
housing values would continue to dramatically increase.
  As we all now know, home price growth was unsustainable. 
Unfortunately, too many families are now facing the possibility of 
foreclosure. Just as ownership brings many benefits to families and 
neighborhoods, foreclosures have dramatic negative consequences for 
both individual homeowners and the economy as a whole.
  We have seen a rapid increase in the number of foreclosures, and many 
experts predict that the number will continue to climb in the near 
future. Obviously, this creates great hardships for the families facing 
this possibility. Accordingly, Congress is currently considering 
various proposals to help prevent foreclosures.
  As part of any proposal, though, I think we must be careful not to 
reward irresponsible behavior. Borrowers have a responsibility to 
understand the terms of their loan, and lenders have a responsibility 
to provide them with clear, accurate information in order to help them 
understand the terms. Borrowers have a responsibility to only borrow 
what they can repay, but lenders have a responsibility to only lend to 
those who can repay.
  Should Congress choose to provide relief, it should not do so in a 
manner that is simply a ``bail out'' for either lenders or borrowers 
who acted irresponsibly. We should also not set a broad precedent that 
the Government will simply bail people out whenever they lose money or 
face tough times in the housing market. Financial investments involve 
both risk and reward, and contracts are legal documents; we need to 
reinforce accountability amongst all parties for these elements.
  I also believe that any efforts to address foreclosures should be 
done in a thoughtful, comprehensive manner. Any effort to provide 
foreclosure relief must carefully address any risk to taxpayers.
  As part of the housing package before the Senate, we are considering 
an amendment which would give bankruptcy judges the ability to modify 
mortgage contracts after the fact.
  The bankruptcy modification provision would undermine the recovery of 
the housing market and the economy by creating a credit crunch: It 
would have a negative impact in the financial markets, making it 
difficult to value mortgages that underlay securities. The provision 
will discourage securitization, and securitization encourages 
homeownership. Securitization frees up capital to go back into making 
more mortgages. Approximately 84 percent of primary home mortgages are 
securitized; however, looking at second homes, where the mortgage can 
be modified in bankruptcy, we see that only 9 percent are securitized. 
Justice Stevens of the Supreme Court reiterated in the Nobleman case 
that ``the favorable treatment of residential mortgagees was intended 
to encourage the flow of capital into the home lending market.''

  The cramdown amendment would significantly increase the cost of 
homeownership: This provision will inject risk into the lending 
process. Whether the other side likes it or not, the markets will price 
to this risk by increasing the cost of mortgages for primary residences 
in the form of higher interest rates, down payments, points and fees. 
It is a basic tenant of the free markets that more risk requires a risk 
premium. Even the Congressional Budget Office noted in a recent report 
that one of the costs of the bill ``would be higher mortgage interest 
rates.'' Estimates are that the provision will increase mortgage 
interest rates by 1.5 percent to 2 percent. Assuming an increase of 1.5 
percent, for a Colorado family with an average sized loan--$184,362--
their monthly mortgage payment would increase by $184. For those 
families who can still afford a home, it will cost them anywhere from 
$23,000, in rural areas, to well over $500,000, in many metropolitan 
suburbs, in extra interest over the life of a 30-year mortgage. That 
money should be used for bills, their children's education, or other 
expenses.
  The other side likes to claim that the talk of increased interest 
rates is little more than a scare tactic. They couldn't be more wrong. 
These effects are not merely a hypothetical. We have seen the effects 
in a real life case example:

[[Page S2393]]

secondary homes. A bankruptcy judge can currently change the balance on 
a mortgage for a second home. As a result of this, the cost of buying a 
second home is higher--interest rates, down-payment, shorter repayment 
period--than a primary home. Title IV will increase the cost of buying 
a primary home similar to the cost of buying a second home.
  The bankruptcy provision would have a price far too high: Every 
quarter point increase in mortgage interest rates will prevent 1.1 
million Americans from being able to afford a home. This provision 
could price homes out of reach for 9 million Americans. Those 
advocating for this ill-advised provision have estimated that it could 
help as many as 600,000 families, although more realistic estimates put 
this number closer to only 15,000. We can surely find a better way to 
help a small number of families than to deny homeownership to 9 million 
families and increase costs for millions more. Quite simply, the cost 
for this provision, in terms of what it will mean for families, is far 
too high. Congress shouldn't be forcing families into bankruptcy for 
mortgage relief.
  The bankruptcy amendment is bad policy: The provision would reopen 
the bankruptcy code and would undo the 2005 requirement for 
prebankruptcy counseling. Senator Durbin's proposal would grant new 
powers to bankruptcy judges to change the terms of primary mortgages. 
Judges have little, if any, expertise in the complexity in mortgage 
terms. The bankruptcy code is not the right area to address the 
subprime issues and mortgage markets. The Senate Banking Committee, the 
House Financial Services Committee, Federal banking regulators, and 
industry are all working. These are the appropriate areas.
  The bankruptcy provision will discourage other alternatives: It will 
undermine efforts to put the two parties to the mortgage contract 
together. Borrowers must file for bankruptcy in order for the proposed 
changes to work. The HOPE NOW Alliance has helped more than a million 
homeowners through workouts and repayment plans. In Colorado, the 
Foreclosure Hotline received thousands of calls and has been able to 
help 80 percent who called. The hotlines are not perfect, and they 
cannot help all borrowers, but they are helping many. The 1 million 
plus families helped didn't have to pay a bankruptcy attorney; they 
didn't have to deal with the long-term problems caused by filing for 
bankruptcy; the Federal Government didn't have to spend taxpayer 
dollars. That is a far better approach. Drying up the credit markets 
and making loan terms less favorable will make it far more difficult 
for homeowners to refinance their loans, thus creating new problems 
where none existed previously.
  I know that many families are hurting from foreclosures, but this 
amendment isn't the right approach, and I urge my colleagues to oppose 
it.
  The PRESIDING OFFICER (Mr. Salazar). The Senator from Kansas.
  Mr. BROWNBACK. Thank you very much, Mr. President.
  I thank my colleague from Louisiana. I appreciate the information she 
has put forward. I will certainly be looking at it and considering it.
  I am delighted we are on the housing bill. Chairman Bernanke of the 
Federal Reserve, who was in front of the Joint Economic Committee 
yesterday, I thought did a nice job testifying. There are lot of 
interesting things going on as to what he was talking about taking 
place. But he was saying the primary thing to watch in the economy 
right now is housing, the price of housing, it is holding or 
declining--it is declining in a number of key areas--but to watch that 
marketplace because that is the linchpin issue. He urged Congress to 
act on housing.
  So I am delighted we have this bill up. I am delighted we have a 
bipartisan bill that I can look at and say a number of the provisions 
look pretty good. We do not try to get too one-sided one way or the 
other so it gets held up. Because this is something we need to act on. 
I think it would be a good confidence builder for the housing market 
across the country if we can get something through here, through the 
House, and signed by the President.
  Having confidence is a key part of the marketplace. Confidence is a 
key part of what they did on the Bear Stearns bailout. He said a year 
ago they probably would not have done it. A year from now, they 
probably would not do it. But right now things are too shaky and it 
could cause things to crumble. The key piece to watch is housing.
  So it is good we are working on this legislation. It is good we are 
working in a bipartisan fashion. I will be filing an amendment that I 
think can be very helpful in the pay-fors on this because we need to 
pay for this. We are in a difficult budgetary situation, so we have a 
commission bill to look at all spending within HUD and within Treasury 
and to make recommendations for programs to be eliminated and then 
requiring a vote of Congress, up or down, whether to eliminate these 
programs and then use those funds to pay for some of the efforts that 
are taking place here.
  I think this is the sort of thing we ought to look at and the sort of 
thing we ought to do in paying for this because nobody wants the 
deficit to go up further. I think that is everybody's objective. So we 
are going to be putting forward that amendment and at the appropriate 
time bring that up.
  One of the key things we need to look at and to do on this is 
something every physician in the United States does when they become a 
physician. They take an oath. We take an oath of office. We swear to 
uphold and abide by the Constitution. A physician takes an oath. It is 
a very simple, very old oath. I think it is a very good one for 
legislating as well. The oath is very simple. It is, ``First, do no 
harm.'' That is the first premise that you operate on: ``First, do no 
harm.''
  I appreciate the amendment my colleague from Illinois has up on the 
restructuring of loans within bankruptcy, cramdown provisions on 
residential homes people own. I understand the provision. As to my 
background in the law practice I had, such as it was--I am not bragging 
about a fabulous law practice; it was a pretty simple pedestrian law 
practice in Manhattan, KS--we did bankruptcies and we had provisions 
similar to these in other areas. They were not existing on the loans. 
So I think I have some familiarity with the impact of this. I believe 
this one violates the oath of: ``First, do no harm.''
  I know my colleague from Illinois has all the right intentions, and I 
have worked closely with him on a number of issues. He is a very 
successful, able legislator. I believe this one violates that oath of: 
``First, do no harm.'' I say that advisedly. A number of people looking 
at this believe this provision, if added to this bill and becoming the 
law of the United States, will drive up mortgage interest rates on 
residential homes 1 to 2 percent because it introduces a degree of 
uncertainty. Markets do not like uncertainty, so they factor in for 
uncertainty. It is believed this would increase mortgage interest rates 
1 to 2 percent. I think there could be some fluff in that number. It 
could be low, initially. Typically, as well, markets will look at 
things, and at first they will factor more risk in until they have had 
some practice with this and seen how it hits in the numbers. So maybe 
over a period of time it would not have as much of an impact. But 
earlier on it could have more of an impact. Right at the point in time 
when we are trying to stimulate the housing market, you up your 
mortgage interest rates on your primary residence 1 to 2 percent, 
possibly more, because early on the market has not factored in: What 
will this actually do?
  The other thing it could well do on top of increasing interest rates 
is reduce the number of people who could borrow to buy a home. In fact, 
in 1978 Congress specifically barred cramdown on primary residences to 
keep interest rates low for primary homes and to ensure that lenders 
provide credit to low-income borrowers. As many people are in a low-
income situation, a more fragile economic situation, if things go south 
for them on a set of items, they have no choice but to pursue 
bankruptcy. So now then you introduce another set of risk factors on 
low-income individuals where it is going to make it harder for them to 
get a mortgage to buy a home.
  We want people to be able to buy homes. We want particularly low-
income individuals to be able to buy homes. If we introduce another 
factor of uncertainty that is going to drive interest rates up, it 
could well end up

[[Page S2394]]

working out that a low-income individual will have their interest rates 
driven up even more than the 1 to 2 percent, as the factors for risk 
are built into it.
  Again, I add, these are things that are unknown. I have groups that 
are saying this is indeed the case. I don't think we particularly know 
on this provision. But you are introducing that period of uncertainty 
with it.
  If I could say to my colleague: I know you have talked a long time 
and you know this issue very well; I wish to finish my statement and 
then I am happy to take questions or comments, because I know there 
will be extensive rebuttal taking place on it.
  I am talking about my experience. I am talking about what I believe 
will happen in this marketplace. I know it is intended to have a 
positive effect, but I think it violates this first ``do no harm'' 
provision.
  I wish to add some other comments. What we are trying to do here is 
to stimulate a housing market, not introduce factors of risk into the 
housing market. We have a good bipartisan proposal that is being put on 
the floor by Senators Dodd and Shelby, two senior Members of this body 
who have seen a lot and who have worked on a lot. I think our wisest 
course at this point in time would be to work together on those 
provisions where we can get bipartisan support rather than introducing 
factors that are highly likely to slow down a bill. We need to 
encourage the market by showing an ability to work together.
  This amendment, I believe, will be highly controversial and will 
continue to have the effect of slowing this bill down. The amendment 
would actually create an ability for unsecured creditors as well of an 
individual, to reduce their exposure, at the expense of a 
mortgageholder in consumer bankruptcy proceedings. I think this is an 
unintended consequence, but it is a consequence of it. This would be 
bad policy. This was considered in 1978. We want these mortgages to 
have as low a rate as we possibly can.
  Potentially 4.5 million Americans could be priced out of the housing 
market for every 1 percent increase in mortgages. That is according to 
home builders. They are saying that. So if you have a 2-percent 
increase, you are looking at the possibility of keeping 9 million 
Americans priced out of the housing market at a time when we want them 
in the housing market. That is not going in the right direction.
  Having said all of that, I think there are people who could look at 
this another way. Indeed, I asked Chairman Bernanke about this 
particular provision, because he said we ought to do work on the 
housing market. I asked him about this particular provision and he did 
not take a stance on it. He just said he didn't take a stance on prior 
bankruptcy reform. He said there are arguments on both sides. So I 
recognize arguments on the other side. I have used cramdown provisions 
in other bankruptcy settings, in business settings. It does introduce a 
factor of risk. It does allow restructuring to take place.
  I think where we are right now, with his statements and with our 
ability to move a piece of legislation, the key thing we should do is 
to get the base legislation moving forward, add things where we can get 
broad bipartisan support, not introduce more risk into the marketplace 
and possibly limit mortgageholders. I am presuming my colleague from 
Illinois has facts he is putting forward which say this is not going to 
take place. I think it is too much of a possibility that it will take 
place, and that it will first do harm. For those reasons, with all due 
respect to its supporters, I don't think this is a wise provision. Of 
course, I don't think this is the time for us to do it. I think we 
ought to spend a lot more time studying and thinking about this. I 
believe this is not the bill for this amendment, and I object to the 
Durbin amendment.
  Mr. DURBIN. Mr. President, would the Senator yield for a question?
  Mr. BROWNBACK. I am happy to yield.
  Mr. DURBIN. I have two questions. I know the Senator from 
Massachusetts, Senator Kennedy, wishes to speak on an unrelated issue. 
First, I wish to ask the Senator from Kansas, through the Chair, on the 
issue of uncertainty: Is the Senator from Kansas aware that on this 
amendment I am offering, I have narrowed the class of people eligible 
for this benefit, which would be modification of mortgage in Bankruptcy 
Court, to those who first qualify to go into Bankruptcy Court which, in 
many instances, requires credit counseling; secondly, that they must be 
talking about property that is their primary residence, not a piece of 
real estate they happen to own; third, that it be subject to a mortgage 
which is a subprime mortgage, not a prime rate mortgage; and fourth, 
that it has to be a mortgage that exists as of the date of the 
enactment of this legislation and none in the future? Also, that if 
there is to be a modification of the mortgage, it can be to a principal 
level no lower than the current fair market value; that the interest 
rate imposed by the court be no lower than the prime rate plus a 
premium for risk; that the term of the modification of the mortgage can 
be no more than 30 years, and that if within 5 years of bankruptcy the 
property is sold at a price higher than the fair market value at the 
time of bankruptcy, all of the proceeds will go to the lender--not to 
the owner, but to the lender?
  I say to the Senator from Kansas that every time the banking and 
financial institutions came to me and said: It is too uncertain, too 
many people could benefit from this, every time they did that I would 
narrow this more and more and more. I would further say to the Senator 
from Kansas that if we are talking about a limited group of people who 
fit the description I have given here, how can you project this to have 
an impact on real estate mortgages of 1 and 2 percent into the future?

  The last time we dealt with this issue in Congress was 30 years ago. 
The last time we had a housing crisis was 60 years ago. It isn't as if 
we are meeting every 6 months to change the law on mortgages and 
bankruptcy. I ask the Senator: How much more can I do to deal with his 
concern and the stated concerns of the banking industry about 
uncertainty?
  Mr. BROWNBACK. Mr. President, responding to my colleague through the 
Chair, a couple of things. I appreciate that the Senator has narrowed 
this down from when he started, because he started with a much broader 
amendment; no question about it. I think what the Senator has done is 
advisable and good.
  The base of the concern remains then the same, that now you have 
narrowed this in on a smaller class that you are going to raise the 
interest rates on because of the uncertainty that is going to be 
conducted there, or the likelihood of this having impacts on the 
mortgage marketplace and reducing their ability to get these houses on 
the market, which could further depress the prices on those houses. I 
think this is first do no harm. I appreciate that the Senator has 
narrowed this and he has narrowed it substantially.
  I would also point out--and it was 1978 when we did the overall--we 
took up bankruptcy reform. We did that within the last 5 or 6 years 
where we had broad bankruptcy reform, and this sort of provision could 
have come forward in that bankruptcy reform at that point in time. I 
voted against that bankruptcy reform. I didn't think that overall was 
the way to go and that again was based on the experience I had in 
dealing with bankruptcy.
  I appreciate the Senator's efforts. I think the basic issue he is 
introducing here continues to be the same even if it is within a narrow 
marketplace.
  Mr. DURBIN. Will the Senator yield for one more question?
  Mr. BROWNBACK. Yes.
  Mr. DURBIN. I wish to ask the Senator from the great farming State of 
Kansas if, in his private practice experience with bankruptcy, he ever 
dealt with a chapter 12 bankruptcy involving farm real estate and 
whether he believes that the change in the bankruptcy law in the 1980s, 
which allowed cramdown or modification of the mortgages on farm homes, 
was unreasonable; whether he believes that the banking institutions 
which fought that chapter 12 bankruptcy saying it would raise interest 
rates 1 or 2 percent on farmers--and it didn't turn out to be the 
case--whether we ought to believe those financial institutions again 
today when we talk about using the same provision--or a similar 
provision,

[[Page S2395]]

I should say--as chapter 12 to deal with the current housing crisis? 
Did the Senator from Kansas feel it was unfair to allow cramdowns or 
modifications of mortgages in farm bankruptcies in his own State under 
chapter 12?
  Mr. BROWNBACK. Mr. President, if I could respond to my colleague 
through the Chair, again in my limited background--I have actually 
taught agricultural law and written a book on it. It is not very good. 
I doubt my colleague has read it. I would recommend this chapter of it 
for him if he wishes to read it.
  In the provisions that were done at that time before either of us 
were in the Senate, what you were doing was taking business bankruptcy 
reorganizations and allowing for farm application because it was a 
different business type of setting that was taking place. It did 
introduce risks that are even still factored in today, because this is 
a provision that is allowed within it.
  Now, as I mentioned earlier, over a period of time as markets get 
adjusted to these, they say: Well, OK, this factor is only going to 
happen in this series of cases. Or they looked at lower end income 
clients and they said this is a more likely situation where we are 
going to see this taking place. Therefore, we are not going to loan to 
this guy, or it only goes to a bank that is willing to get into a more 
aggressive loan position and is desirous to do it. So it does have 
those impacts.
  But what you were doing with that chapter reorganization during the 
farm crisis was taking a business reorganization and allowing for the 
differences in agriculture which are substantial. Now you are getting 
into the basic housing market with this. This isn't a business 
reorganization; this is a housing market issue, and you are introducing 
the very factors I talk about--in a limited fashion; I appreciate that 
greatly. I think it is less harmful potentially than the original 
design of the Durbin amendment. I appreciate your heart on it. It is 
going to have an introduction of factors of uncertainty and will drive 
interest rates up, and it will drive lenders out in this situation. 
That is what will happen. I don't think we should go that route.
  The PRESIDING OFFICER. The Senator from Illinois is recognized.
  Mr. DURBIN. Mr. President, before I yield the floor, as I see Senator 
Kennedy is here and wishes to speak, I wish to make a point for the 
Record.
  We introduced this amendment 4 hours ago. I have come to the floor, 
and but for a brief period off the floor, to entertain any debate on 
this amendment. In 4 hours there have been four Republican Senators who 
have come to the floor, one each hour, to oppose this amendment. At 
this rate, with 49 Republican Senators, in 45 hours we should be able 
to close this amendment and vote on it. I say that facetiously.
  I hope those who have an interest in the amendment will come forward 
and that we can schedule it for a vote. I have asked repeatedly for 
that. I don't know what more I can do other than be here and be 
available for any debate they want to take place.
  This is a critically important bill. There are several important 
amendments, and I think mine might be one of them. But if Members won't 
come to the floor and debate it, apparently they either don't have an 
interest in the amendment or the bill. I hope they will seriously 
consider coming to the floor in the very near future.
  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. REID. Mr. President, we have an interesting situation. We have a 
substitute amendment that has been laid down. We have worked hard to 
get it here. We started on the bill at 9:30 this morning. It is now 2 
o'clock. We have one amendment that has been laid down. I even tried to 
arrange a vote on a resolution honoring the 4,000 Americans who have 
been killed in Iraq. We can't even get that up for a vote. I don't know 
what is going on. We are going to work through this. I asked for a 
consent agreement that any amendments that would be offered would be 
related to the housing bill. No, we can't do that yet. I realize the 
majority we have is very slim, but we do have the majority and that 
gives us certain rights. I am going to exercise those rights.
  I would like to have a housing bill. I think it is important to the 
country. I hope the American people see what we have put up with now 
during the last 15 months. Every step of the way is a struggle. We are 
not able to legislate. We are constantly trying to figure a way 
procedurally to get past the minority, which is still upset about the 
November 2006 elections. That is what this is all about. We are in the 
majority, as slim as it might be, and they have to get over this. Let 
us work together. We want to work. We want to pass things. My friend 
has offered an amendment.
  Let's vote on it.
  The PRESIDING OFFICER. The Senator from Massachusetts is recognized.
  Mr. KENNEDY. Mr. President, I see our leader leaving the floor. He 
was expressing his frustration about the lack of action. I join him in 
underlining what he has stated here. Yesterday, a number of us, 
including the chairman of the Joint Economic Committee, listened to Mr. 
Bernanke. Mr. Bernanke was before the Joint Economic Committee talking 
about how they had let go more than $200 billion over the period of 
these last weeks--$200 billion in secret transactions, without any 
guarantees to the American taxpayers. And here we have a proposal that 
the Senator from Illinois, Mr. Durbin, and Senator Dodd and others are 
involved with in the Banking Committee, trying to do something about 
the fact that homes are being foreclosed while we are here on the floor 
of the Senate.
  What is it about the other side that they are quite prepared to see 
hundreds of billions of dollars flow out of the Treasury, and when you 
stand up and say: Can we not this afternoon help stop some of these 
foreclosures of homes of working-class people, they say: No go, no way, 
we are not going to let you take action, but we are fine with the 
hundreds of billions of dollars that have flowed out of the Treasury in 
the last several days. What possible justification is there for that?
  Finally, when I asked the Federal Reserve--I said: Well, we have the 
immediate crisis, but we are also going to have the crisis in the 
States. States have two options: they can either raise their taxes or 
cut services. What are they going to cut? Medicaid is first. They are 
the poorest of the poor. When we ask the leader of the Federal Reserve, 
the architect--because he is the man in charge--whether he believes we 
ought to reach out and help those families, he said he did not have a 
position on that and that is a position that will have to be taken up 
by the Congress of the United States. Why doesn't he tell that to the 
Republican leaders? Why? Here you are trying to take some kind of a 
position, and this is the old Chicago movie that I remember so well 
where they talk about ``Give us the old razzle-dazzle. I will razzle-
dazzle me, too.'' We are finding out that the American homeowners, who 
are hard pressed, are being given the old razzle-dazzle.
  I applaud the determination and resolution the leader has shown on 
this issue. Real people are hurting. We are here this afternoon waiting 
to take some action, ready to move ahead on a proposal that has broad 
support, and we find out the emptiness and vacuousness of the 
Republican response.
  Mr. REID. Will the Senator yield for a question?
  Mr. KENNEDY. I will yield.
  Mr. REID. Does the Senator from Massachusetts realize that today, 
this day in April, April 3, 2008, almost 8,000 people will be pushed 
out of their homes because their foreclosure has been completed? They 
are gone--8,000 today and 8,000 tomorrow. Now, foreclosures usually 
don't happen on weekends; it is during the week. So this week, 5 times 
8,000 is 40,000 people, approximately, who will be out of their homes 
while we have been here this week. If we don't get something done 
today, we will start tomorrow, and there will be another 8,000. Is the 
Senator aware of that?
  Mr. KENNEDY. Well, I have been aware of it because we have listened 
to our good leaders, including yourself, Senator Durbin, Senator 
Schumer, and Senator Dodd, talking about between 8,000 and 12,000.
  I had a chance to be out in Youngstown, OH, recently. Five-thousand 
homes are empty there, and it is increasing every single day just in 
that one community. That is being replicated in my State. People are 
saying:

[[Page S2396]]

Where is the action? Where is the leadership? When are you going to do 
something on this issue? We are interested in getting something done.
  Mr. Bernanke was asked, after he became Chairman of the Federal 
Reserve: How are things going in terms of our economy? ``Fine,'' he 
said. He never exercised the bully pulpit to stop the explosiveness 
that is taking place in the housing market and put so many homeowners 
at risk.
  This is as bad as Katrina and as bad as the Iraq war. We have a 
similar response from the administration, and that is a failure of 
leadership and a failure of action. The American people ought to 
understand that.

  Mr. REID. Will the Senator yield for another question?
  Mr. KENNEDY. Yes.
  Mr. REID. Did the Senator hear me when I said we have asked for an 
agreement that the only amendments that will be offered on this bill 
are relating to housing? Is he aware that they said no deal? And is the 
Senator aware that Senator Durbin had offered an amendment at 
approximately 10 o'clock this morning, and there have only been four 
speakers, with not long speeches, and that we are not voting because of 
the speeches, because they are gone? Is the Senator aware that I said: 
Okay, how about voting on a resolution offered by the Senator from 
Massachusetts that honors the lives of 4,000 Americans who have been 
killed in Iraq? Is he aware that we could not get a vote on that?
  Mr. KENNEDY. Well, it is difficult to believe, Mr. President. We had 
our moment just last week in which those of us who were there in the 
Rotunda listened to our leader, who spoke so well, so movingly, as well 
as the other leaders, both Republicans and Democrats, to honor the 
anniversary of the war. Now, in the last few days, we have another 
moment of special significance, and that is the 4,000 soldiers--just 
with regard to Iraq--who have been lost and 500 more in terms of 
Afghanistan. I was very grateful to the Senator and to our other 
colleagues--and I am sure on the other side as well--who thought it 
would be useful to memorialize in the Congressional Record the names of 
these extraordinary men and women, listing their names, hometowns, 
their ranks, and their service, and that we could include that in the 
Record at this time. We are trying to do it at an appropriate time 
because we have been reminded about the loss of the 4,000--not as an 
add-on to some other kind of action here but to give respect and 
dignity and honor to these individuals and do so by having a rollcall 
vote to send a special message to their families and friends in their 
communities that we honor their service. Why is it that we cannot get 
an agreement on that?
  The good Senator--I will not insult his intelligence. I read the 
resolution, and it may be 8 lines long. It is honoring these 
extraordinary men and women and in tribute to their valor. Why is it 
that we cannot have a time when we could bring the membership together 
to honor those names? What is the possible problem? Where is the 
Republican leader? Can he explain to the American people why we cannot 
have that? Usually, if they are going to object, at least they indicate 
why. Why don't they take the floor? Why can't they give an explanation 
to the American people? Look at these pages. On each one of these pages 
is 50 names. Look at these pages. There are 50 names on each and every 
one of them with their home addresses. We ought to be able to take a 
few moments for those who want to speak to be able to express 
themselves and pass this resolution and include it in the Record at 
this time, where we have paused as a Nation out of respect for the loss 
of some 4,000 Americans.
  I thank the majority leader for all he has done. Since I have the 
floor, I will just take a few moments here, obviously, before the 
Senator from Illinois, whose amendment is pending. I will withhold at 
any time he thinks he can get action.
  Mr. President, this is the resolution we will be offering. It honors 
the sacrifice of the members of the Armed Forces who were killed in 
Iraq and Afghanistan:

       Whereas 4,009 members of the United States Armed Forces 
     have lost their lives in support of Operation Iraqi Freedom 
     and 487 members of the United States Armed Forces have lost 
     their lives in support of Operation Enduring Freedom;
       Whereas we honor the ultimate sacrifice that these men and 
     women made for our country;
       Whereas the sacrifices of the fallen are in keeping with 
     the highest traditions of the United States Army, Navy, 
     Marine Corps, Air Force, and Coast Guard;
       Whereas, as their families and loved ones have sacrificed 
     as well, we honor them in commemorating the memory of those 
     that lost their lives;
       Whereas the following 4,009 members--

  It starts off listing the fallen members of the Armed Forces.
  Mr. REID. Mr. President, will my friend yield?
  Mr. KENNEDY. Yes.
  Mr. REID. Mr. President, progress in this body is sometimes very hard 
to come by, but progress has been made. I appreciate Senator Kennedy 
coming to the floor. As those of us who have such affection and love 
for him know, once in a while he raises his voice. As a result of 
raising his voice, I ask unanimous consent that at 2:45 p.m. today, the 
Senate proceed to vote on the adoption of S. Res. 501, honoring the 
sacrifice of the members of the U.S. Armed Forces who have been killed 
in Iraq and Afghanistan; that upon adoption of the resolution, the 
preamble be agreed to, with no intervening action of our debate; and 
that no amendments be in order to the resolution or the preamble.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. REID. Mr. President, I appreciate the Senator yielding.
  Mr. KENNEDY. Mr. President, I thank the majority leader for his 
leadership in making this all possible.
  Mr. President, the war in Iraq has deeply divided our country. But 
whatever our views are about the war, we know our soldiers are serving 
nobly under extraordinarily difficult circumstances and that far too 
many are making the ultimate sacrifice for our country. The war 
continues to impose an enormous human toll on our soldiers, their 
families, and their loved ones. Our men and women in uniform have 
served with great courage and honor for 5 years, and last week, during 
the recess of Congress, we reached a sad milestone--the loss of 4,000 
service men and women in support of Operation Iraqi Freedom. An 
additional 30,000 service men and women have been wounded. We have also 
lost nearly 500 service men and women in support of Operation Enduring 
Freedom in Afghanistan.
  This loss of life is deeply distressing, and the impact of the wars 
in Iraq and Afghanistan continues to be devastating to families and 
communities around our Nation. We honor their service, and we pray that 
God's grace and mercy may ease the anguish of those they have left 
behind.
  It is fitting, therefore, that today we honor and remember the 
courageous men and women who gave the last full measure of their 
devotion to our country in these wars. From Lexington and Concord and 
Gettysburg, to Normandy and Iwo Jima, to Korea and Vietnam, to Iraq and 
Afghanistan today, these heroes are part of a long line of courageous 
patriots who stood their ground with uncommon valor and sacrificed for 
all of us.
  Since the terrorist attack by al-Qaida on September 11, millions of 
Americans have proudly and voluntarily defended our country and our 
Constitution by serving in our Armed Forces, our Reserves, and our 
National Guard. Their devotion to duty is beyond question, and their 
valor is proven. They volunteered to serve and help us meet the immense 
challenge we face. They knew the vast danger to life and limb and were 
well aware that at any moment they might make the ultimate sacrifice. 
And as of today, 4,496 have made that sacrifice in Iraq and 
Afghanistan. They were all patriots. They put themselves in harm's way 
to protect us all. And because of their dedication and sacrifice, we 
continue to enjoy the freedoms we cherish in our democracy.
  Each of these men and women has a poignant story to tell. Just as 
poignant are the fond memories of their loved ones here at home. I know 
something of that feeling. I was 12 years old when my mother became a 
Gold Star mother. It still seems like only yesterday when that knock on 
our door came in 1944, and we learned that my oldest brother, Joe, had 
been lost in World War II.
  I know there is no easy way to mend these broken hearts, no way to 
lift the

[[Page S2397]]

almost unbearable burden from the families and friends of those we 
lost. We mourn the loss of these heroes. We honor their sacrifice and 
extend our deepest condolences to their families. Words cannot ease the 
grief of losing a loved one, but I hope the families may find some 
comfort in the words of Abraham Lincoln in that famous letter he sent 
to a bereaved mother during the Civil War. He wrote:

       Dear Madam, I feel how weak and fruitless must be any words 
     of mine which should attempt to beguile you from the grief of 
     a loss so overwhelming. But I cannot refrain from tendering 
     to you the consolation that may be found in the thanks of the 
     Republic they died to save. I pray that our Heavenly Father 
     may assuage the anguish of your bereavement, and leave you 
     only the cherished memory of the loved and the lost, and the 
     solemn pride that must be yours to have laid so costly a 
     sacrifice upon the altar of freedom.

  The consequences of the decisions we make in Congress profoundly 
affect our military, their families, and the communities they have 
left. We have an obligation to our soldiers to make sensible decisions 
that will not place them needlessly in harm's way.
  It is fitting that we now pause to recognize, remember, and honor 
those who have lost their lives far from home for our grateful Nation 
in Iraq and Afghanistan.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Mr. President, I thank my colleague from Massachusetts. I 
have been a Senator for a number of years and have visited Iraq and 
Afghanistan on three separate occasions. I try my best to meet with as 
many of our soldiers as possible--but, of course, focus on those from 
Illinois--to sit and eat lunch with them and talk about the Cubs, the 
White Sox, the Bears, the Bulls, the news back home. The thing that 
haunts me--and I thank the Senator from Massachusetts for reminding 
me--the thing that haunts me are the frequent conversations where they 
say: Does anybody know we are still here? Does anybody back home know 
what we are going through? It really is heartbreaking to think that 
these men and women are risking their lives every day while we go about 
our safe, secure, normal, daily routine and how little focus we put on 
this war and the men and women who are fighting it for us and 
particularly those who have given their lives.
  We have lost almost 150 soldiers in Illinois. I took an inspiration 
from the Senator from Massachusetts and said I was going to send a note 
to every family in Illinois who loses a soldier. I thought after a year 
or two that task would have been completed. After 5 years, it is not. 
Sadly, in our State and every other State we are still losing lives. 
The fact that the Senator from Massachusetts would take the time to 
come to the floor today as a solemn reminder of what this means to us, 
should mean to us, and what it means to these families is something I 
deeply appreciate.
  Last week or so, the New York Times had a front-page story talking 
about the lives that had been lost just last year, with color 
photographs of all the soldiers, sailors, airmen, and marines who were 
among the casualties. There were six or eight personal stories of their 
lives. I took the time to read it carefully to try to absorb what was 
happening to these men and women and their families.

  I think I can speak for the Senator from Massachusetts. We have cast 
between us thousands of votes on the floor of the Senate, myself in the 
House of Representatives as well. I cannot think of another vote more 
profound and more important than the vote to authorize the invasion of 
Iraq in October 2002. Senator Kennedy and I joined 21 of our colleagues 
in voting against that authorization to go to war. At the time, it was 
not the most popular vote, but it turned out to be the right vote. Not 
to take anything away from these brave men and women who have given so 
much for our country, but this war may be the most fatal foreign policy 
mistake of the modern era, and we continue to pay for it every day in 
American lives and blood and treasure and in our reputation and safety 
in the world.
  The fact that the Senator from Massachusetts would take some time--
even a brief period of time--to remind us is something that should be 
done and I am glad is being done. I know this will receive an 
overwhelmingly unanimous vote of support, as it should. We all want to 
be on record. But I hope that also, the next time this matter comes up 
for a debate about the policy of this war in Iraq, some of our 
colleagues who want to just continue this indefinitely for years and 
years will reflect on how many more American lives will be sacrificed 
if that happens. That is the sad reality of where we are.
  The Senator could not, because his stack of papers would be 
dramatically larger, include the names of all those who have been 
seriously wounded or injured in this war. They deserve our thanks and 
our recognition as well. Many of them will carry scars for a lifetime. 
Some are very visible scars and some not visible. They are struggling 
with lives, facing blindness, burns and amputations, traumatic brain 
injuries, and post-traumatic stress disorder. I visit these veterans 
hospitals and see those veterans of past wars who are still paying the 
price today, alive--maybe barely alive--but paying the price for their 
service.
  I hope beyond the resolutions we will have the resolve to make sure 
we keep our word to these veterans, that when they come home they will 
receive the best medical care, they will receive our help to continue 
their lives, to go to school or to own a home. When I read about the 
percentages--half the homeless people in America are veterans--when I 
read that the unemployment rate among returning veterans is so high, it 
is a grim reminder that those who have given the most often receive the 
least when they come home.
  I thank the Senator from Massachusetts. I hope I can add my name, 
along with many others, as a cosponsor of this resolution and thank him 
for his leadership on this important issue.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DURBIN. Mr. President, earlier, when I was speaking to Senator 
Kennedy's resolution, I made reference to a New York Times article. It 
is an article from Tuesday, March 25. It tells in a very graphic way 
the correspondence of fallen soldiers and the circumstances they faced 
in Iraq before they died. As I mentioned before, I read this article in 
its entirety and was moved by it.
  I ask unanimous consent to have printed in the Record this New York 
Times article so my colleagues and others have an opportunity to read 
it as well.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the New York Times, Mar. 25, 2008]

               Six of the Fallen, in Words They Sent Home


  From Latest 1,000, Words by E-Mail, and in Journals to Those at Home

               [By Lizette Alvarez and Andrew W. Lehren]

       By the time Specialist Jerry Ryen King decided to write 
     about his experiences in Iraq, the teenage paratrooper had 
     more to share than most other soldiers.
       In two operations to clear the outskirts of the village of 
     Turki in the deadly Diyala Province, Specialist King and the 
     rest of the Fifth Squadron faced days of firefights, grenade 
     attacks and land mines. Well-trained insurgents had burrowed 
     deep into muddy canals, a throwback to the trenches of World 
     War I. As the fighting wore on, B-1 bombers and F-16s were 
     called in to drop a series of powerful bombs.
       Once the area was clear of insurgents, the squadron, part 
     of the 82nd Airborne Division, uncovered hidden caches of 
     weapons.
       Two months later, Specialist King, a handsome former honors 
     student and double-sport athlete from Georgia, sat down at 
     this computer. In informal but powerful prose, he began a 
     journal.

       After 232 long, desolate, morose, but somewhat days of 
     tranquility into deployment, I've decided that I should start 
     writing some of the things I experienced here in Iraq. I have 
     to say that the events that I have encountered here have 
     changed my outlook on life . . .
       The most recent mission started out as a 24-36 hour air-
     assault sniper mission in a known al-Qaida stronghold just 
     north of Baghdad. We landed a few hours before daybreak and 
     as soon as I got off the helicopter my night vision broke, I 
     was surrounded by the sound of artillery rounds, people 
     screaming in Arabic, automatic weapons, and the terrain 
     didn't look anything like what we

[[Page S2398]]

     were briefed. I knew it was going to be a bad day and a half.
                                   Jerry Ryen King, Journal Entry,
     March 7, 2007
                                  ____

       A month later, Special King was sitting inside his combat 
     outpost, an abandoned school in Sadah, when suicide bombers 
     exploded two dump trucks just outside the building. The 
     school partly collapsed, killing Specialist King on April 23, 
     2007, along with eight other soldiers, and making the blast 
     one of the most lethal for Americans fighting in Iraq.
       In that instant, Specialist King became one of 4,000 
     service members and Defense Department civilians to die in 
     the Iraq war--a milestone that was reached late Sunday, five 
     years since the war began in March 2003. The last four 
     members of that group, like the majority of the most recent 
     1,000 to die, were killed by an improvised explosive device, 
     known as a I.E.D. They died at 10 p.m. Sunday on a patrol in 
     Bagdad, military officials said; their names have not yet 
     been released.

       The next day we cleared an area that made me feel as if I 
     were in Vietnam. Honestly, it was one of the scariest times 
     of my life. At one point I was in water up to my waist and 
     heard an AK fire in my direction. But all in all the day was 
     going pretty good, no one was hurt, I got to shoot a few 
     rounds, toss a grenade, and we were walking to where the 
     helicopter was supposed to pick us up.
                                   Jerry Ryen King, Journal Entry,
     March 7, 2007
                                  ____

       The year 2007 would prove to be especially hard on American 
     service members; more of them died last year than in any 
     other since the war began. Many of those deaths came in the 
     midst of the 30,000-troop buildup known as ``the surge,'' the 
     linchpin of President Bush's strategy to tamp down widespread 
     violence between Islamic Sunnis and Shiites, much of it in 
     Baghdad. In April, May and June alone, 331 American service 
     members died, making it the war's deadliest three-month 
     period.
       But by fall, the strategy, bolstered by new alliances with 
     Sunni tribal chiefs and a decision by the Shiite cleric 
     Moktada al-Sadr to order his militia to stop fighting, 
     appeared to be paying off as the country entered a period of 
     relative calm. Military casualties and Iraqi civilian deaths 
     fell, and the October-December period produced the fewest 
     casualties of any three months of the war. The past month, 
     though, has seen an uptick in killings and explosions, 
     particularly suicide bombings. The violence has traveled 
     north to Mosul, where the group calling itself Al Qaeda in 
     Mesopotamia remains strong.

       Everything changed in a matter of 15 minutes . . . About 
     the time I was opening my MRE (meal ready to eat) I heard an 
     explosion. Everyone started running towards the sound of the 
     explosion. Apparently a suicide bomber had blown himself up 
     killing four soldiers from my squadron and injuring another. 
     Our 36 hour mission turned into another air-assault into a 
     totally different city, the clearing of it, and 5 more days. 
     We did find over 100 RPG's, IED making materials, insurgents 
     implacing IED's, artillery rounds, a sniper rifle, and sort 
     of like a terrorist training book and cd's.
                                   Jerry Ryen King, Journal Entry,
     March 7, 2007.
                                  ____

       Unlike the soldiers of some previous wars, who were only 
     occasionally able to send letters back home to loved ones, 
     many of those who died left behind an extraordinary 
     electronic testimony describing in detail the labor, the 
     fears and the banality of serving in Iraq.
       In excerpts published here from journals, blogs and e-mail, 
     six soldiers who died in the most recent group of 1,000 
     mostly skim the alarming particulars of combat, a kindness 
     shown their relatives and close friends. Instead, they plunge 
     readily into the mundane, but no less important rhythms of 
     home. They fire off comments about holiday celebrations, 
     impending weddings, credit card bills, school antics and the 
     creeping anxiety of family members who are coping with one 
     deployment too many.
       At other moments, the service members describe the humor of 
     daily life down range, as they call it. Hurriedly, with 
     little time to worry about spelling or grammar, they riff on 
     the chaos around them and reveal moments of fear. As 
     casualties climb and the violence intensifies, so does their 
     urge to share their grief and foreboding.


                             A Last Goodbye

       Hey beautiful well we were on blackout again, we lost yet 
     some more soldiers. I cant wait to get out of this place and 
     return to you where i belong. I dont know how much more of 
     this place i can take. i try to be hard and brave for my guys 
     but i dont know how long i can keep that up you know. its 
     like everytime we go out, any little bump or sounds freaks me 
     out. maybe im jus stressin is all. hopefully ill get over it 
     . . .
       you know, you never think that anything is or can happen to 
     you, at first you feel invincible, but then little by little 
     things start to wear on you. . .
       well im sure well be able to save a couple of bucks if you 
     stay with your mom . . . and at the same time you can help 
     her with some of the bills for the time being. it doesnt 
     bother me. as long as you guys are content is all that 
     matters. I love and miss you guys like crazy. I know i miss 
     both of you too. at times id like to even just spend 1 minute 
     out of this nightmare just to hold and kiss you guys to make 
     it seem a little bit easier. im sure he will like whatever 
     you get him for xmas, and i know that as he gets older he'll 
     understand how things work. well things here always seem to 
     be . . . uhm whats the word . . . interesting i guess you can 
     say. you never know whats gonna happen and thats the worst 
     part. do me a favor though, when you go to my sisters or moms 
     or wherever you see my family let them know that i love them 
     very much..ok? well i better get going, i have a lot of stuff 
     to do. but hopefully ill get to hear from you pretty soon. 
     *muah* and hugs. tell mijo im proud of him too!
       love always,
       your other half
     Juan Campos, E-mail Message to His Wife, Dec. 12, 2006
                                  ____


       When Staff Sgt. Juan Campos, 27, flew from Baghdad to Texas 
     for two weeks last year, there was more on his mind than rest 
     and relaxation. He visited his father's grave, which he had 
     never seen. He spent time with his grandparents and touched 
     base with the rest of his rambling, extended family.
       The day he was scheduled to return to war, Sergeant Campos 
     and his wife went out dancing and drinking all evening with 
     friends. Calm and reserved by nature, Sergeant Campos could 
     out-salsa and out-hip-hop most anyone on the dance floor. At 
     the airport, his wife, Jamie Campos, who had grown used to 
     the upheaval of deployment, surprised herself.
       ``I cried and I have never ever cried before,'' said Mrs. 
     Campos, 26, who has a 9-year-old son, Andre. ``It was just 
     really really weird. He knew, and I kind of knew. It felt 
     different.''
       We both felt that it was the last goodbye,'' she said.

     Tuesday, Oct. 3, 2006
       Mood: gloomy
       The life of an infantryman is never safe . . . how do I 
     know, well I live it every day.
       I lost a good friend of mine just two days ago to an enemy 
     sniper. The worst feeling in the world is having lost one of 
     your own and not being able to fight back. The more I go on 
     patrol, the more alert I tend to be, but regardless of the 
     situation here in Iraq is that we are never safe. No matter 
     the countermeasures we take to prevent any attacks. They seem 
     to seep through the cracks. Every day a soldier is lost or 
     wounded by enemy attacks. I for one would like to make it 
     home to my family one day. Pray for us and keep us in your 
     thoughts . . . for an infantryman's life is never safe.
     Juan Campos, Myspace Blog
                                  ____

       Sergeant Campos, a member of the First Battalion, 26th 
     Infantry, Charlie Company out of Germany, was one of 
     thousands of infantrymen assigned to stabilize Baghdad and 
     the surrounding areas last year during the troop buildup. 
     Troops were sent deep into insurgent neighborhoods, where 
     they lived in small outposts, patrolled on foot, cleared 
     houses, mingled with Iraqis and rebuilt the infrastructure.
       The extra 30,000 service members--160,000 in all--were 
     deployed to Iraq to help quell the runaway violence that 
     threatened large-scale civil war. Most soldiers spent 15 
     months in Iraq, a length of time that military commanders 
     have said is unsustainable. Many had fought in the war at 
     least once. A few had been in Iraq multiple times.

       My only goals are to make it out of this place alive and 
     return you guys and make you as happy as I can.
            Juan Campos, E-Mail Message to his Wife, Dec. 15, 2006

     
                                  ____
       But to Sergeant Campos and the rest of Charlie Company in 
     Adhamiya, a north Baghdad stronghold for Sunni insurgents, 
     the buildup seemed oddly invisible. The men patrolled almost 
     every day, sometimes 16 to 18 hours a day for months, often 
     in 120-degree weather. Exhaustion was too kind a word for 
     their fatigue.
       More than 150 soldiers lived in a two-story house with 
     portable toilets, no air-conditioning and temperamental 
     showers. Sleep came only a few hours at a time. The fighting 
     was vicious. Adhamiya was such a magnet for sectarian 
     bloodletting that the military built a wall around it to 
     contain the violence.
       ``They walled us in and left us there,'' Staff Sgt. Robin 
     Johnson, 28, said of the 110 men in Charlie Company. ``We 
     were a family. I would die for these guys before I die for my 
     own blood brother.''
       On patrol, sniper fire rang out so routinely that soldiers 
     in Sergeant Campos's platoon seldom stood still for more than 
     four seconds. They scoured rooftops for Iraqi children who 
     lobbed grenades at American soldiers for a handful of cash. 
     Roadside bombs burst from inside drainage pipes, impossible 
     to detect from the street. The bombs grew larger by the 
     month.
       Last year, these powerful improvised explosive devices were 
     responsible for a majority of American fatalities, a new 
     milestone. The bombs also killed multiple soldiers more often 
     than in the past, a testament to their potency.
       ``It was the most horrible thing you could possibly 
     imagine,'' Sergeant Johnson said. ``As soon as you left the 
     gate, you could die at any second. If you went out for a day 
     and you weren't attacked, it was confusing.''
       Charlie Company soldiers found a steady stream of Iraqis 
     killed by insurgents for

[[Page S2399]]

     money or revenge. Some had their faces wiped clean by acid. 
     Others were missing their heads or limbs.


                       ``It Could Have Been Me''

     To tell the story of iraq is a hard one.
                                           Ryan Wood, Myspace Blog

     
                                  ____
       Sgt. Ryan M. Wood, 22, a gifted artist, prolific writer and 
     a sly romantic from Oklahoma, was also one of the bluntest 
     soldiers inside Charlie Company.

       it is fighting extreme boredom with the lingering thought 
     in the forefront of your mind that any minute on this patrol 
     could be my last endeavour, only highlighted by times of such 
     extreme terror and an adrenaline rush that no drug can touch. 
     what [expletive] circumstances thinking ``that should've been 
     me'' or ``it could've been me''. wondering if that pile of 
     trash will suddenly explode killing you or worse one of your 
     beloved comrads . . . only backed by the past thoughts and 
     experiences of really losing friends of yours and not feeling 
     completely hopeless that it was all for nothing because all 
     in all, you know the final outcome of this war. it is walking 
     on that thin line between sanity and insanity. that feeling 
     of total abandonment by a government and a country you used 
     to love because politics are fighting this war . . . and its 
     a losing battle . . . and we're the ones ultimently paying 
     the price.
     Ryan Wood, Myspace Blog, Adhamiya
                                  ____

       For the soldiers in Iraq, reconciling Adhamiya with America 
     was not always easy. One place was buried in garbage and gore 
     and hopelessness. The other seemed unmoored from the war, 
     fixated on the minutia of daily life and the hiccups of the 
     famous. The media was content to indulge.

     What the Hell America??
       ``What the hell happened?'' any intelligent American might 
     ask themselves throughout their day. While the ignorant, 
     dragging themselves to thier closed off cubicle, contemplate 
     the simple things in life such as ``fast food tonight?'' or 
     ``I wonder what motivated Brittany Spears to shave her 
     unsightly, mishaped domepiece?''
       To the simpleton, this news might appear ``devastating.'' I 
     assume not everyone thinks this way, but from my little 
     corner of the earth, Iraq, a spot in the world a majority of 
     Americans could'nt point out on the map, it certainly appears 
     so. . . . To all Americans I have but one phrase that helps 
     me throughout my day of constant dangers and ever present 
     death around the corner, ``WHO THE [expletive] CARES!'' Wow 
     America, we have truly become a nation of self-absorbed 
     retards. . . . This world has serious problems and it's time 
     for America to start addressing them.
                                          Ryan Wood, Myspace Blog,
     May 26, 2007
                                  ____

       The somberness of the job was hard to shake off. But, day 
     to day, there was no more reliable antidote than Pfc. Daniel 
     J. Agami, a South Floridian with biceps the size of 
     cantaloupes, and Pfc. Ryan J. Hill, a self-described hellion 
     who loved his ``momma'' and hailed from what he called the 
     ``felony flats'' of Oregon. Funny men in the best sense of 
     the word, the two provided a valuable and essential commodity 
     in a war zone.
       Their mother jokes--the kind that begin, ``your mother is 
     so . . .''--were legendary, culminating in a Myspace joke-
     off. It ended abruptly after an enough-is-enough phone call 
     from Private Hill's mother, who ranked No. 1 on his list of 
     heroes in Myspace. Private Agami proclaimed victory.

       About a month later . . . I went to my room and my mattress 
     was missing and all my clothes were being worn by other 
     people. I couldn't figure it out so I knew right off the bat 
     to go to Hill. I saw him walking down the hall wearing five 
     of my winter jackets. He sold half my wardrobe right off his 
     back to people in our company and my mattress was in someone 
     else's room. So then I had go to around and buy all my stuff 
     back. (Now I think he won).
         Daniel J. Agami, Charlie Company. Eulogy Sent via e-mail 
                                            Message to his Mother,
                                                     Jan. 29, 2007

     
                                  ____
       To keep their spirits up, combat soldiers learned to 
     appreciate the incongruities of war in Iraq. Jokes scrawled 
     inside a Port-o-Potty quickly made the rounds. Situational 
     humor, from goofy to macabre, proved plentiful.

       A really girly guy who was a cheerleader in high school, 
     got knocked down and nearly hurt by the wind of the 
     helicopter. Listening to Dickson recite what was in every 
     single MRE was pretty funny. A cow charged and nearly 
     trampled one of my friends when we were raiding a compound. 
     And lastly, I thought that it was pretty comical that I shot 
     at a guy a long ways out but missed and later after taking 
     his house and using it as a patrol base he offered me Chai 
     and rice.
     Jerry Ryen King, Diyala Province
                                  ____

       Even a trip to the dentist, with its fringe benefits, is 
     cause for amusement in a war zone.

       Last Sat. I had two of my wisdom teeth pulled. After taking 
     double the prescribe percocot and morphine pills that the 
     doctor gave me for the pain I decided to catch a flight back 
     to my FOB (forward operation base). It was the coolest 
     Blackhawk ride I've had, I was absolutely ripped and I talked 
     the pilots into leaving the doors open. We had four more guys 
     die a couple days ago. They hit an IED, it killed everyone in 
     the humvee. It's starting to get a little scary. We made it 
     our first six months with just two deaths and that was 
     plenty. But now just in the past two and a half weeks we've 
     had nine more guys get killed, and over 50 wounded. I'm just 
     hoping that I can make it the 75 more days or so that we have 
     left of combat operations before we start packing.
     Jerry Ryen King, Journal Entry, April 11, 2007
                                  ____

       Among the guys in Charlie Company, Private Agami, 25, was 
     one of the boldest and most resilient. He was the kind of guy 
     who joined an endurance ski contest on a whim. He came in 
     fourth. He had never skied in his life.
       Private Agami had time for everyone, and everyone had time 
     for him. Affectionately called G.I. Jew, he held his religion 
     up to the light. He used it to build tolerance among the 
     troops and shatter stereotypes; few in his unit had ever met 
     a Jew. He flew the Israeli flag over his cot in Adhamiya. He 
     painted the words Hebrew Hammer onto his rifle. He even 
     managed to keep kosher, a feat that required a steady diet of 
     protein shakes and cereal.

       Commander Mom, I can't wait to come home and when I do, 
     don't worry I'll have a lot to say to the congregation. Don't 
     worry about my mental state either, we all receive counseling 
     and help from doctors when something like this happens. I am 
     a strong individual physically and mentally and if there is 
     one thing the army teaches you, it is how to deal with death. 
     Every day that passes it gets easier and easier. I miss you 
     guys very much and I love you!
                       Daniel Agami, e-mail Message to his Mother,
                                                     Oct. 28, 2006

       It did not get easier.

       I try not to cry. I have never cried this much my entire 
     life. Two great men got taken from us way too soon. I wonder 
     why it was them and not me. I sit here right now wondering 
     why did they go to the gates of heaven and not me. I try 
     every night to count my blessing that I made it another day 
     but why are we in this hell over here? Why? I can't stop 
     asking why?
                                          Ryan Hill, Myspace Blog,
                                                      Nov. 1, 2006

       Private Hill was riding in a Humvee on Jan. 20, 2007, when 
     an I.E.D. buried in the middle of the road detonated under 
     his seat, killing him instantly.
       Sergeant Campos was riding in a Humvee on May 14, 2007, two 
     weeks after returning from Texas, when it hit an I.E.D. The 
     bomb lifted the Humvee five feet off the ground and engulfed 
     it in flames. ``That's when we just left hope at the door,'' 
     Sergeant Johnson said. Severely burned over 80 percent of his 
     body, Sergeant Campos lived two weeks. He died June 1. 
     Another soldier, Pfc. Nicholas S. Hartge, 20, of Indiana, 
     died in the same attack.
       Private Agami was driving a Bradley fighting vehicle on 
     June 21, 2007, when it hit an I.E.D. The explosion flipped 
     the 30-ton vehicle, which also carried Sergeant Wood. Both 
     men were killed, along with three other soldiers and an Iraqi 
     interpreter.
       ``Obviously, it came to a point, you didn't care anymore if 
     it got better,'' said Staff Sgt. Jeremy S. Rausch, 31, one of 
     Sergeant Campos's best friends in Charlie Company. ``You 
     didn't care about the people because they didn't care about 
     themselves. We had already lost enough people that we just 
     thought, you know, `why?' ''
       During their time in Adhamiya, the soldiers of Charlie 
     Company caught more than two dozen high-value targets, found 
     nearly 50 weapons caches, detained innumerable insurgents and 
     won countless combat awards. They lost 14 men. Their mission 
     was hailed a success.


                              Just in Case

       Texan to the core, enamored of the military, Specialist 
     Daniel E. Gomez, 21, an Army combat medic in the division's 
     Alpha Company, relied on his books, his iPod and an Xbox to 
     distract him from the swirl.

       Strange but this place where we are at is unreal almost. I 
     hope I come back mentally in shape. LOL.
                                       Daniel Gomez, Myspace Blog,
                                                     Sept. 9, 2006

       He took pride in being the guy who tended to wounded 
     soldiers under fire, patching them up to help them survive.
       As the violence intensified, Specialist Gomez set aside 
     thoughts of a free Iraq or a safer America and, like 
     generations of soldiers before him, simply started fighting 
     for the soldier next to him.

       A few days ago I realized why I am here in Baghdad dealing 
     with all the gunfire, the rocket attacks, the IEDs, the car 
     bombs, the death. I have only been here going on a month and 
     a half. Already I have seen what war really is. . . but 
     officially it's called ``full spectrum operations.'' No, I 
     don't down Bush, he is my CinC, and I think he is doing a 
     good job with what Clinton left him. I don't debate why we 
     are involved in Iraq. I just know why I am here. It is not 
     for the smiling Iraqi kids, or even the feeling of wearing 
     the uniform ( it feels damn good though:). I am here for the 
     soldier on patrol with me.
       But why are you there in the States? Why are you having 
     that nice dinner, watching TV, going out on dates. . . .
                       Daniel Gomez, E-mail to Friends and Family,
                                                    Sept. 27, 2006


[[Page S2400]]


       And then Specialist Gomez fell in love. An e-mail 
     flirtation with Katy Broom, his sister's close friend, 
     gradually led to a cyber exchange of guarded promises about 
     the future. Headed home for a rest break in May, the 
     tentativeness lifted and they began to rely on each other to 
     get through the day. The two joked about ``the best sex we 
     never had.''

       . . . this R&R there is someone new in my life. Exactly 
     what she is to me, and what I am to her is uncertain, but 
     it's not really important at the moment. Just the thought 
     that I could spent a second of my life with her, before I 
     have to come back here makes everything worth it.
                                       Daniel Gomez, Myspace Blog,
                                                       May 9, 2007

     
                                  ____
       Rest and relaxation in Georgia went better than expected. 
     He fell in love with the love of his life all over again, 
     this time in person. The couple shared one kiss during his 
     leave.
       ``He was everything I expected and more,'' said Ms. Broom, 
     20, who spent one week and two days with him. ``It was kind 
     of surreal when we met. It's almost like a perfect love and 
     war story.''
       Not many soldiers leave behind a just-in-case letter. 
     Specialist Gomez did. He handed Ms. Broom an envelope at the 
     airport with the 'words, ``Don't read unless something 
     happens to me.''
       On July 18, 2007, two months after his leave, Specialist 
     Gomez died in Adhamiya when the Bradley fighting vehicle he 
     was in struck a roadside bomb. The explosion and flames also 
     killed three other soldiers.
       Ms. Broom waited three days after she got word to open the 
     letter. She sat alone in the couple's favorite spot, her 
     apartment balcony.
       ``I was very thankful that he wrote it,'' she said of the 
     letter. ``I have opened and closed it so many times, I'm 
     surprised it hasn't fallen apart.''

                                R+R 2007

       Hey baby. If you're reading this, then something has happen 
     to me and I am sorry. I promised you I would come back to 
     you, but I guess it was a promise I could not keep. You know 
     I never believe in writing ``death letters.'' I knew if I 
     left one for my folks it would scare them. Then I met you. We 
     were supposed to meet, darling. I needed someone to make me 
     smile, someone that was an old romantic like I was. I was 
     going through a very rough time in Iraq and I was starting to 
     doubt my mental state. Then one day after a patrol, I go to 
     my facebook and there you were. . . .
       I can't stop crying while I am writing this letter, but I 
     have to talk to you one last time, because maybe the last 
     time I heard your voice I did not know it would be the last 
     time I heard your voice. . . .
       I Love You. Go be happy, go raise a family. Teach your kids 
     right from wrong, and have faith, darling. l think I knew I 
     loved you before I met. I love you, Katy. * Kiss * Goodbye

  Mr. DURBIN. Mr. President, I yield the floor and suggest the absence 
of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  The PRESIDING OFFICER (Mr. Nelson of Nebraska). The Senator from 
Vermont.
  Mr. SANDERS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SANDERS. Mr. President, I ask unanimous consent to speak as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SANDERS. Mr. President, I congratulate Majority Leader Reid and 
Minority Leader McConnell, as well as Committee Chairman Dodd, and 
ranking committee member Shelby for their hard work in beginning the 
process of trying to bring relief to families who are struggling to 
hold on to their homes. I think they are taking a good step forward. I 
think we have to do a lot more to address this very serious crisis.
  It is no secret to anyone that the middle class in this country is in 
great danger. It is shrinking. Some think it is on the verge of 
collapse. Workers today who are going to fill up their car's gas tank 
are paying $3.20 for a gallon of gas in the State of Vermont, and there 
is a fear that may go higher. People are paying higher and higher 
prices for food. Since President Bush has been President, some 8 
million Americans have lost their health insurance, health care costs 
are soaring, and a college education is unaffordable. In the meantime, 
wages, the real median family income for the average American family is 
going down, and the gap between the very rich and everybody else is 
getting wider. So we have some very serious problems. Among other 
aspects of that crisis is that the personal savings rate today is below 
zero, which, up until 2005, hasn't happened since the Great Depression. 
So what is happening is that people are working longer and longer 
hours, their wages are going down, we are losing good-paying jobs, and 
they do not have enough money to survive on so they are borrowing more 
and more money. That is the reality.
  There is a lot, to my mind, that we have to consider as a country to 
begin addressing the fact that poverty is going up, the middle class is 
declining, and the gap between the rich and everybody else is growing 
wider. There is a lot we have to do. But as we now focus on the 
mortgage crisis, we have to take a hard look at interest rates in this 
country. I intend to offer an amendment to the housing bill that I want 
to say a few words on now and I will speak to at greater length later.
  My amendment will clearly not solve all of the problems facing the 
middle class, but it will do one very important thing: It will take one 
action that is long overdue, and that is it would stop big banks, 
credit card companies, payday lenders, mortgage bankers, and other 
lenders from ripping off American consumers by charging outrageous 
interest rates.
  I do a national radio show every Friday afternoon where people call 
in. And you know what they say? They say: We are sick and tired of 
paying 20, 25, 30 percent interest rates when, in fact, we pay our debt 
on time every single month. That is what they are saying. People who 
are borrowing money to send their kids to college are 
paying outrageously high rates, and certainly we know, given the crisis 
we are debating today, that mortgage interest rates are off the charts.

  With this amendment I will be offering, it would cap all interest 
rates at 8 percent above what the IRS charges income tax deadbeats. 
That is the formula we are using. Currently, the IRS charges a 6-
percent interest rate to Americans who are late on paying their income 
tax returns. That is what we are doing today. The IRS adjusts these 
rates every quarter based on the Federal funds rate. If the Federal 
funds rate rises, the interest rate the IRS charges late filers goes 
up. If the Federal funds rate goes down, so does the interest rate the 
IRS charges late filers.
  If the amendment I am offering were signed into law today, all 
interest rates in this country would be capped at 14 percent, including 
subprime mortgages, credit cards, auto loans, payday loans, and income 
tax refund anticipation loans. Why 14 percent? Why do we pick that 
number? It is an interesting point. I am glad you asked that question, 
Mr. President, and here is the answer. Because 14 percent happens to be 
the same level that former Senator Al D'Amato chose when he offered an 
amendment in 1991 to cap credit card interest rates. Al D'Amato, 
Senator from New York, offered that amendment.
  Do you know what the vote was on that bipartisan amendment, offered 
by the Republican Senator from New York? That amendment passed the 
Senate by a vote of 74 to 19--74 to 19--a huge bipartisan vote. And 
among those Members who are today in the Senate, and who cosponsored 
that amendment, were Senators Specter, Lieberman, and Domenici, among 
others. Unfortunately, that amendment ended up not being signed into 
law.
  Like my amendment, the D'Amato amendment was also pegged slightly 
above the interest rates for late income tax filers. I have the feeling 
that in my career in the Senate I will not often be quoting former 
Senator D'Amato, probably won't be doing that, but let me quote what 
Senator D'Amato said on the Senate floor in 1991. This is what he said.

       Fourteen percent is certainly a reasonable rate of interest 
     for banks to charge customers for credit card debt. It allows 
     a comfortable profit margin, but keeps banks in line so that 
     interest rates rise and fall with the health of the economy.

  He was then the chairman of the Banking Committee.
  I say to my colleagues that if the Senate in 1991 thought that 
interest rates should be capped, trust me, we should at least do as 
much today, because the problem is in fact much more severe.
  A recent report, published by Tamara Draut, the Director of the 
Economic Opportunity Program at Demos, found

[[Page S2401]]

that one-third of all credit card holders in this country are paying 
interest rates above 20 percent and as high as 41 percent--more than 
double what they paid in interest rates in 1990. In other words, if we 
had a problem then, the problem today is much more severe.
  Between 1989 and 2006, Americans' overall credit card debt grew by 
315 percent from $211 billion to $876 billion. One-third of low- and 
middle-income families reported going into credit card debt to pay for 
rent, utilities, and food in 2006.
  Now, I don't know about Nebraska, but I will tell you that in the 
State of Vermont there are a lot of people who are buying their food 
with credit cards. They do not have the cash. They have to go in debt 
to buy food and pay for other basic necessities. All of this--high 
interest rates--has resulted in credit card companies earning $90.1 
billion in interest in 2006 alone--credit card companies ripping off 
the American people and earning huge profits.
  But credit card companies aren't the only ones charging outrageous 
interest rates, and that is why my amendment expands on the D'Amato 
amendment to cover all forms of loans. For example, the Center for 
Responsible Lending has found that some American consumers are paying 
interest rates for payday loans as high as 800 percent. And if you want 
to know why these outrageous levels of interest on credit cards and 
payday loans are relevant to the debate on foreclosure, let me quote 
from two articles on the subject. The first is a recent Reuters article 
entitled ``Pay Day Loans Exacerbate Housing Crisis.'' According to this 
article:

       As hundreds of thousands of American homeowners fall behind 
     on their mortgage payments, more people are turning to short-
     term loans with sky-high interest rates just to get by. While 
     figures are hard to come by, evidence from nonprofit credit 
     and mortgage counselors suggests that the number of people 
     using these so-called ``pay day loans'' is growing as the 
     U.S. housing crisis deepens, a negative sign for economic 
     recovery.

  The second article is from a recent front-page story from USA Today. 
The title of the article says it all. ``Facing losses on bad loans, 
banks boost credit card rates.'' According to the article:

       Even as the Federal Reserve has aggressively slashed short-
     term interest rates, banks are raising rates on credit cards.

  Federal Reserve lowering; banks increasing. This should not happen. 
When the Federal Reserve has slashed the Federal funds rate five times, 
from a high of 5.25 percent down to 2.25 percent, credit card interest 
rates should be going down, not up. Interest rates for payday loans 
should be going down, not up. Mortgage interest rates should be going 
down, not up.

  The PRESIDING OFFICER. If the Senator can suspend for just a second?
  Mr. SANDERS. I ask unanimous consent for an additional 2 minutes, 
please.
  The PRESIDING OFFICER. Without objection, it is so ordered. Please 
proceed.
  Mr. SANDERS. Unfortunately, in many cases interest rates for 
consumers are going up at the worst possible time. One of the reasons 
for this is the virtual lack of regulation when it comes to interest 
rates. For example, credit card companies are able to raise interest 
rates at any time for any reason, and recently that is exactly what, 
for example, the Bank of America has done. According to a recent 
Business Week article:

       Bank of America sent letters notifying some responsible 
     card holders that it would more than double their rates to as 
     high as 28 percent, without giving an explanation for the 
     increase. Fine print at the end of the letter advised calling 
     a 800 number for the reason, but consumers who called said 
     they were unable to get a clear answer. What is striking is 
     how arbitrary the Bank of America rate increases appear, 
     credit industry experts say.

  This is unacceptable. Lenders should not be able to raise interest 
rates at any time for any reason.
  There are Biblical references to what can be described as usury; that 
when people are down and in need of money, there is a strong moral 
objection to charging them sky-high interest rates.
  In the ``Divine Comedy'' by Dante, there is reserved a special place 
for people who charge usurious interest rates, the inner ring of the 
Seventh Circle of Hell.
  I don't wish this on the credit card companies or the mortgage 
lenders, but this is what I do say. In this country today, especially 
as interest rates go down from the Fed, it is an outrage that millions 
of our fellow Americans are paying 25 percent or 30 percent interest 
rates, and our amendment would begin to address this issue. The time is 
long overdue for us to move in that direction. I ask at the appropriate 
time for the support of my colleagues.

                          ____________________