[Congressional Record Volume 154, Number 75 (Wednesday, May 7, 2008)]
[Senate]
[Pages S3861-S3883]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]





                         Cap and Trade Revenue

  Mr. GREGG. Madam President, I rise on a separate subject that is 
coming at us that is of even greater significance in many ways because 
it is going to impact the entire structure of the economy and the lives 
of everyone in the United States, and that is how we get a handle on 
the issue of global warming and the issue specifically of the emission 
of toxic materials from plants which generate energy. The term ``cap 
and trade'' is applied to a bill that is going to be brought forward 
supposedly in early June. Cap and trade is a concept of basically 
creating areas where energy companies are required to start reducing 
their emissions but the manner in which they do so is tied to the 
trading of rights of basically emissions and what sort of chemicals can 
be emitted through a trading process between different regions and 
within different communities of emitters.
  This cap-and-trade proposal, which is known as the Warner-Lieberman 
bill, is a huge readjustment of our economy. It represents a massive 
cost to our economy as well as, hopefully, a massive improvement, if it 
would work right, in the amount of toxic emissions which we incur and 
which occur as a result of our production of electricity specifically. 
The cost of the cap-and-trade program, through the purchasing and 
selling of allocations of what can be emitted, is estimated to be about 
$1.2 trillion over the first 10 years of the proposal. This cost, 
obviously, is going to have a major impact on our economy. It is going 
to have a major impact on the people who consume the electricity, 
because the cost is going to be passed on to the people who use 
electricity in their homes, primarily, and businesses. There are a lot 
of issues raised by this bill on the substance of whether cap and trade 
can work--for example, issues of foreign competition, whether the 
technology necessary to meet the conditions for reduction will be 
available in time, issues as to whether certain segments of our 
industrial society are going to be unnecessarily handicapped and create 
a rush to move jobs offshore. These are big policy issues. I didn't 
want to address those. I don't want to address the substance of how the 
actual cap and trade will work. What I want to address instead is the 
ancillary, sidecar issue of the generation of this huge cost of $1.2 
trillion, and it will go on 40 years. So we are talking about literally 
trillions of dollars passed on to consumers through higher energy 
costs. It is estimated those energy costs will increase anywhere from 
$30 to $500 a month.
  In any event, the costs are dramatic, and that has two effects. One, 
the Federal Government is going to make a massive amount of income as a 
result of these costs. Two, the consumers, the homeowners are going to 
see their electrical rates go up which is essentially a tax as a result 
of these costs. So the way I conceive of this is that the Federal 
Government is going to get a lot of new revenue, and what do we do with 
that revenue is the first question. Secondly, what about the consumers 
who are going to have to pay this new consumption cost through the 
increase in the price of electricity which is essentially a consumption 
tax.
  The bill itself that is being discussed in committee and is 
supposedly going to be reported on the floor will take the $1.2 
trillion over that 10-year period and essentially spend it all, spend 
it all in a variety of ways. But a large amount of that spending would 
involve the expansion of Government. It would be a huge infusion of 
funds into the Federal Treasury at the expense of the consumer who pays 
those funds.
  Barack Obama, who is running for President, who appears to be close 
to successful in winning his quest for the nomination, has suggested he 
would pay for an additional $300 billion in new spending annually. He 
has proposed over $300 billion in new spending annually. He would pay 
for a large amount of that through generating $30 to $50 billion 
annually in taxes as a result of cap and trade. It is estimated by some 
that that revenue to the Federal Treasury might exceed that number and 
be actually up to $100 billion a year annually of income to the Federal 
Treasury. But Barack Obama has already suggested that we spend it on 
the expansion of the Federal Government.
  The bill itself proposes that it be spent on the expansion of 
Government as well as on various other initiatives which the bill 
suggests we should pursue.
  I suggest a different approach. I suggest that if we go down the path 
of cap and trade and if we end up raising well over $1 trillion over a 
10-year period from consumers, we should return those dollars to 
consumers in some way. I believe since we are basically creating a 
consumption tax and we are essentially shifting the burden of the 
Government significantly onto the user of electricity, especially the 
homeowner, they should receive a commensurate reduction in taxes that 
they pay in other places. It makes sense to me that if you are going to 
shift what amounts to a $1.2 trillion increase in consumption taxes, 
you ought to take those revenues and use them to reduce income taxes to 
working Americans by pretty much an equal amount. I believe if we did 
that, if we took the revenue from the consumption tax and moved it over 
and reduced the income taxes so working Americans could benefit from 
that reduction in their income taxes, you could end up dramatically 
reducing income tax rates on working Americans.
  That should be our goal with these dollars. We should not use these 
dollars to significantly expand the size of the Federal Government. If 
we are going to create this brandnew consumption tax in order to try to 
energize the effort of the marketplace to control emissions which may 
be causing global warming,

[[Page S3862]]

then we ought to use the revenues which are the result of a new tax 
burden, a consumption tax burden on people using electricity, to reduce 
the tax burden on working Americans in other places. We should not use 
it as a windfall to the Federal Government which would expand the size 
of the Federal Government and expand the size of Government. It is not 
right to do that.
  The overall tax burden on the American people is already significant. 
It is going to grow, regrettably, over the next few years. If we listen 
to some of our colleagues on the other side of the aisle, it is going 
to grow a lot. In fact, the budget that passed this Congress suggests 
it will grow by almost a trillion dollars over the next 5 years. We 
don't need to throw on top of that increased burden of taxation, which 
Americans are already paying, a brandnew consumption tax, the revenues 
from which are then taken to expand the size of the Federal Government. 
Rather, let's take those revenues and put them toward a reduction in 
income taxes. In fact, there are many people who look at tax policy and 
would argue that this is an intelligent way to structure this, to 
basically begin the shift from an income tax system to a consumption 
tax system is a much more efficient way for us to collect revenues and, 
secondly, a better way to collect revenues from the standpoint of 
energizing a strong and vibrant economy. But independent of that 
argument, which has been raging for years, whether a consumption tax 
makes more sense than an income tax, what doesn't make sense is to 
raise consumption taxes through cap and trade by $1.2 trillion over 10 
years and then spend it to increase the size of Government. Let's use 
that money to reduce the tax rate on working Americans, to reduce the 
income tax. That should be our goal as we move forward and debate the 
issue of cap and trade and how we are going to use the revenues which 
that bill will generate.
  I appreciate the courtesy of the Senator from Louisiana and yield the 
floor.
  The PRESIDING OFFICER. The Senator from Louisiana.


         Amendment No. 4706, as Modified, to Amendment No. 4707

  Ms. LANDRIEU. Madam President, I ask unanimous consent that the 
pending amendment be set aside and I call up amendment 4706, as 
modified, at the desk.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from Louisiana [Ms. Landrieu] proposes an 
     amendment numbered 4706, as modified.

  Ms. LANDRIEU. I ask unanimous consent that reading of the amendment 
be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment, as modified, is as follows:

    (Purpose: To improve the Office of the Flood Insurance Advocate)

       Strike section 131 and insert the following:

     SEC. 131. FLOOD INSURANCE ADVOCATE.

       Chapter II of the National Flood Insurance Act of 1968 is 
     amended by inserting after section 1330 (42 U.S.C. 4041) the 
     following new section:

     ``SEC. 1330A. OFFICE OF THE FLOOD INSURANCE ADVOCATE.

       ``(a) Establishment of Position.--
       ``(1) In general.--There shall be in the Federal Emergency 
     Management Agency an Office of the Flood Insurance Advocate 
     which shall be headed by the National Flood Insurance 
     Advocate. The National Flood Insurance Advocate shall--
       ``(A) to the extent amounts are provided pursuant to 
     subsection (n), be compensated at the same rate as the 
     highest rate of basic pay established for the Senior 
     Executive Service under section 5382 of title 5, United 
     States Code, or, if the Director so determines, at a rate 
     fixed under section 9503 of such title;
       ``(B) be appointed by the Director without regard to 
     political affiliation;
       ``(C) report to and be under the general supervision of the 
     Director, but shall not report to, or be subject to 
     supervision by, any other officer of the Federal Emergency 
     Management Agency; and
       ``(D) consult with the Assistant Administrator for 
     Mitigation or any successor thereto, but shall not report to, 
     or be subject to the general supervision by, the Assistant 
     Administrator for Mitigation or any successor thereto.
       ``(2) Qualifications.--An individual appointed under 
     paragraph (1)(B) shall have a background in customer service, 
     accounting, auditing, financial analysis, law, management 
     analysis, public administration, investigations, or 
     insurance.
       ``(3) Restriction on employment.--An individual may be 
     appointed as the National Flood Insurance Advocate only if 
     such individual was not an officer or employee of the Federal 
     Emergency Management Agency with duties relating to the 
     national flood insurance program during the 2-year period 
     ending with such appointment and such individual agrees not 
     to accept any employment with the Federal Emergency 
     Management Agency for at least 2 years after ceasing to be 
     the National Flood Insurance Advocate. Service as an employee 
     of the National Flood Insurance Advocate shall not be taken 
     into account in applying this paragraph.
       ``(4) Staff.--To the extent amounts are provided pursuant 
     to subsection (n), the National Flood Insurance Advocate may 
     employ such personnel as may be necessary to carry out the 
     duties of the Office.
       ``(5) Independence.--The Director shall not prevent or 
     prohibit the National Flood Insurance Advocate from 
     initiating, carrying out, or completing any audit or 
     investigation, or from issuing any subpoena or summons during 
     the course of any audit or investigation.
       ``(6) Removal.--The President and the Director shall have 
     the power to remove, discharge, or dismiss the National Flood 
     Insurance Advocate. Not later than 15 days after the removal, 
     discharge, or dismissal of the Advocate, the President or the 
     Director shall report to the Committee on Banking of the 
     Senate and the Committee on Financial Services of the House 
     of Representatives on the basis for such removal, discharge, 
     or dismissal.
       ``(b) Functions of Office.--It shall be the function of the 
     Office of the Flood Insurance Advocate to--
       ``(1) assist insureds under the national flood insurance 
     program in resolving problems with the Federal Emergency 
     Management Agency relating to such program;
       ``(2) identify areas in which such insureds have problems 
     in dealings with the Federal Emergency Management Agency 
     relating to such program;
       ``(3) propose changes in the administrative practices of 
     the Federal Emergency Management Agency to mitigate problems 
     identified under paragraph (2);
       ``(4) identify potential legislative, administrative, or 
     regulatory changes which may be appropriate to mitigate such 
     problems;
       ``(5) conduct, supervise, and coordinate--
       ``(A) systematic and random audits and investigations of 
     insurance companies and associated entities that sell or 
     offer for sale insurance policies against loss resulting from 
     physical damage to or loss of real property or personal 
     property related thereto arising from any flood occurring in 
     the United States, to determine whether such insurance 
     companies or associated entities are allocating only flood 
     losses under such insurance policies to the National Flood 
     Insurance Program;
       ``(B) audits and investigations to determine if an 
     insurance company or associated entity described under 
     subparagraph (A) is negotiating on behalf of the National 
     Flood Insurance Program with third parties in good faith;
       ``(C) examinations to ensure that insurance companies and 
     associated entities are properly compiling and preserving 
     documentation for independent biennial financial statement 
     audits as required under section 62.23(l) of title 44, Code 
     of Federal Regulations; and
       ``(D) any other audit, examination, or investigation that 
     the National Flood Insurance Advocate determines necessary to 
     ensure the effective and efficient operation of the national 
     flood insurance program;
       ``(6) conduct, supervise, and coordinate investigations 
     into the operations of the national flood insurance program 
     for the purpose of--
       ``(A) promoting economy and efficiency in the 
     administration of such program;
       ``(B) preventing and detecting fraud and abuse in the 
     program; and
       ``(C) identifying, and referring to the Attorney General 
     for prosecution, any participant in such fraud or abuse;
       ``(7) identify and investigate conflicts of interest that 
     undermine the economy and efficiency of the national flood 
     insurance program; and
       ``(8) investigate allegations of consumer fraud.
       ``(c) Authority of the National Flood Insurance Advocate.--
     The National Flood Insurance Advocate may--
       ``(1) have access to all records, reports, audits, reviews, 
     documents, papers, recommendations, or other material 
     available to the Director which relate to administration or 
     operation of the national flood insurance program with 
     respect to which the National Flood Insurance Advocate has 
     responsibilities under this section;
       ``(2) undertake such investigations and reports relating to 
     the administration or operation of the national flood 
     insurance program as are, in the judgment of the National 
     Flood Insurance Advocate, necessary or desirable;
       ``(3) request such information or assistance as may be 
     necessary for carrying out the duties and responsibilities 
     provided by this section from any Federal, State, or local 
     governmental agency or unit thereof;
       ``(4) require by subpoena the production of all 
     information, documents, reports, answers, records (including 
     phone records), accounts, papers, emails, hard drives, backup 
     tapes, software, audio or visual aides, and any other data 
     and documentary evidence

[[Page S3863]]

     necessary in the performance of the functions assigned to the 
     National Flood Insurance Advocate by this section, which 
     subpoena, in the case of contumacy or refusal to obey, shall 
     be enforceable by order of any appropriate United States 
     district court, provided, that procedures other than 
     subpoenas shall be used by the National Flood Insurance 
     Advocate to obtain documents and information from any Federal 
     agency;
       ``(5) issue a summons to compel the testimony of any person 
     in the employ of any insurance company or associated entity, 
     described under subsection (b)(5)(A), or any successor to 
     such company or entity, including any member of the board of 
     such company or entity, any trustee of such company or 
     entity, any partner in such company or entity, or any agent 
     or representative of such company or entity;
       ``(6) administer to or take from any person an oath, 
     affirmation, or affidavit, whenever necessary in the 
     performance of the functions assigned by this section, which 
     oath, affirmation, or affidavit when administered or taken by 
     or before an employee of the Office designated by the 
     National Flood Insurance Advocate shall have the same force 
     and effect as if administered or taken by or before an 
     officer having a seal;
       ``(7) have direct and prompt access to the Director when 
     necessary for any purpose pertaining to the performance of 
     functions and responsibilities under this section;
       ``(8) select, appoint, and employ such officers and 
     employees as may be necessary for carrying out the functions, 
     powers, and duties of the Office subject to the provisions of 
     title 5, United States Code, governing appointments in the 
     competitive service, and the provisions of chapter 51 and 
     subchapter III of chapter 53 of such title relating to 
     classification and General Schedule pay rates;
       ``(9) obtain services as authorized by section 3109 of 
     title 5, United States Code, at daily rates not to exceed the 
     equivalent rate prescribed for the rate of basic pay for a 
     position at level IV of the Executive Schedule; and
       ``(10) to the extent and in such amounts as may be provided 
     in advance by appropriations Acts, enter into contracts and 
     other arrangements for audits, studies, analyses, and other 
     services with public agencies and with private persons, and 
     to make such payments as may be necessary to carry out the 
     provisions of this section.
       ``(d) Additional Duties of the NFIA.--The National Flood 
     Insurance Advocate shall--
       ``(1) monitor the coverage and geographic allocation of 
     regional offices of flood insurance advocates;
       ``(2) develop guidance to be distributed to all Federal 
     Emergency Management Agency officers and employees having 
     duties with respect to the national flood insurance program, 
     outlining the criteria for referral of inquiries by insureds 
     under such program to regional offices of flood insurance 
     advocates;
       ``(3) ensure that the local telephone number for each 
     regional office of the flood insurance advocate is published 
     and available to such insureds served by the office; and
       ``(4) establish temporary State or local offices where 
     necessary to meet the needs of qualified insureds following a 
     flood event.
       ``(e) Other Responsibilities.--
       ``(1) Additional requirements relating to certain audits.--
     Prior to conducting any audit or investigation relating to 
     the allocation of flood losses under subsection (b)(5)(A), 
     the National Flood Insurance Advocate shall--
       ``(A) consult with appropriate subject-matter experts to 
     identify the data necessary to determine whether flood claims 
     paid by insurance companies or associated entities on behalf 
     the national flood insurance program reflect damages caused 
     by flooding;
       ``(B) collect or compile the data identified in 
     subparagraph (A), utilizing existing data sources to the 
     maximum extent practicable; and
       ``(C) establish policies, procedures, and guidelines for 
     application of such data in all audits and investigations 
     authorized under this section.
       ``(2) Annual reports.--
       ``(A) Activities.--Not later than December 31 of each 
     calendar year, the National Flood Insurance Advocate shall 
     report to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Financial Services 
     of the House of Representatives on the activities of the 
     Office of the Flood Insurance Advocate during the fiscal year 
     ending during such calendar year. Any such report shall 
     contain a full and substantive analysis of such activities, 
     in addition to statistical information, and shall--
       ``(i) identify the initiatives the Office of the Flood 
     Insurance Advocate has taken on improving services for 
     insureds under the national flood insurance program and 
     responsiveness of the Federal Emergency Management Agency 
     with respect to such initiatives;
       ``(ii) describe the nature of recommendations made to the 
     Director under subsection (i);
       ``(iii) contain a summary of the most serious problems 
     encountered by such insureds, including a description of the 
     nature of such problems;
       ``(iv) contain an inventory of any items described in 
     clauses (i), (ii), and (iii) for which action has been taken 
     and the result of such action;
       ``(v) contain an inventory of any items described in 
     clauses (i), (ii), and (iii) for which action remains to be 
     completed and the period during which each item has remained 
     on such inventory;
       ``(vi) contain an inventory of any items described in 
     clauses (i), (ii), and (iii) for which no action has been 
     taken, the period during which each item has remained on such 
     inventory and the reasons for the inaction;
       ``(vii) identify any Flood Insurance Assistance 
     Recommendation which was not responded to by the Director in 
     a timely manner or was not followed, as specified under 
     subsection (i);
       ``(viii) contain recommendations for such administrative 
     and legislative action as may be appropriate to resolve 
     problems encountered by such insureds;
       ``(ix) identify areas of the law or regulations relating to 
     the national flood insurance program that impose significant 
     compliance burdens on such insureds or the Federal Emergency 
     Management Agency, including specific recommendations for 
     remedying these problems;
       ``(x) identify the most litigated issues for each category 
     of such insureds, including recommendations for mitigating 
     such disputes;
       ``(xi) identify ways to promote the economy, efficiency, 
     and effectiveness in the administration of the national flood 
     insurance program;
       ``(xii) identify fraud and abuse in the national flood 
     insurance program; and
       ``(xiii) include such other information as the National 
     Flood Insurance Advocate may deem advisable.
       ``(B) Direct submission of report.--Each report required 
     under this paragraph shall be provided directly to the 
     committees identified in subparagraph (A) without any prior 
     review or comment from the Director, the Secretary of 
     Homeland Security, or any other officer or employee of the 
     Federal Emergency Management Agency or the Department of 
     Homeland Security, or the Office of Management and Budget.
       ``(3) Information and assistance from other agencies.--
       ``(A) In general.--Upon request of the National Flood 
     Insurance Advocate for information or assistance under this 
     section, the head of any Federal agency shall, insofar as is 
     practicable and not in contravention of any statutory 
     restriction or regulation of the Federal agency from which 
     the information is requested, furnish to the National Flood 
     Insurance Advocate, or to an authorized designee of the 
     National Flood Insurance Advocate, such information or 
     assistance.
       ``(B) Refusal to comply.--Whenever information or 
     assistance requested under this subsection is, in the 
     judgment of the National Flood Insurance Advocate, 
     unreasonably refused or not provided, the National Flood 
     Insurance Advocate shall report the circumstances to the 
     Director without delay.
       ``(f) Compliance With GAO Standards.--In carrying out the 
     responsibilities established under this section, the National 
     Flood Insurance Advocate shall--
       ``(1) comply with standards established by the Comptroller 
     General of the United States for audits of Federal 
     establishments, organizations, programs, activities, and 
     functions;
       ``(2) establish guidelines for determining when it shall be 
     appropriate to use non-Federal auditors;
       ``(3) take appropriate steps to assure that any work 
     performed by non-Federal auditors complies with the standards 
     established by the Comptroller General as described in 
     paragraph (1); and
       ``(4) take the necessary steps to minimize the publication 
     of proprietary and trade secrets information.
       ``(g) Personnel Actions.--
       ``(1) In general.--The National Flood Insurance Advocate 
     shall have the responsibility and authority to--
       ``(A) appoint regional flood insurance advocates in a 
     manner that will provide appropriate coverage based upon 
     regional flood insurance program participation; and
       ``(B) hire, evaluate, and take personnel actions (including 
     dismissal) with respect to any employee of any regional 
     office of a flood insurance advocate described in 
     subparagraph (A).
       ``(2) Consultation.--The National Flood Insurance Advocate 
     may consult with the appropriate supervisory personnel of the 
     Federal Emergency Management Agency in carrying out the 
     National Flood Insurance Advocate's responsibilities under 
     this subsection.
       ``(h) Operation of Regional Offices.--
       ``(1) In general.--Each regional flood insurance advocate 
     appointed pursuant to subsection (d)--
       ``(A) shall report to the National Flood Insurance Advocate 
     or delegate thereof;
       ``(B) may consult with the appropriate supervisory 
     personnel of the Federal Emergency Management Agency 
     regarding the daily operation of the regional office of the 
     flood insurance advocate;
       ``(C) shall, at the initial meeting with any insured under 
     the national flood insurance program seeking the assistance 
     of a regional office of the flood insurance advocate, notify 
     such insured that the flood insurance advocate offices 
     operate independently of any other Federal Emergency 
     Management Agency office and report directly to Congress 
     through the National Flood Insurance Advocate; and
       ``(D) may, at the flood insurance advocate's discretion, 
     not disclose to the Director contact with, or information 
     provided by, such insured.

[[Page S3864]]

       ``(2) Maintenance of independent communications.--Each 
     regional office of the flood insurance advocate shall 
     maintain a separate phone, facsimile, and other electronic 
     communication access.
       ``(i) Flood Insurance Assistance Recommendations.--
       ``(1) Authority to issue.--Upon application filed by a 
     qualified insured with the Office of the Flood Insurance 
     Advocate (in such form, manner, and at such time as the 
     Director shall by regulation prescribe), the National Flood 
     Insurance Advocate may issue a Flood Insurance Assistance 
     Recommendation, if the Advocate finds that the qualified 
     insured is suffering a significant hardship, such as a 
     significant delay in resolving claims where the insured is 
     incurring significant costs as a result of such delay, or 
     where the insured is at risk of adverse action, including the 
     loss of property, as a result of the manner in which the 
     flood insurance laws are being administered by the Director.
       ``(2) Terms of a flood insurance assistance 
     recommendation.--The terms of a Flood Insurance Assistance 
     Recommendation may recommend to the Director that the 
     Director, within a specified time period, cease any action, 
     take any action as permitted by law, or refrain from taking 
     any action, including the payment of claims, with respect to 
     the qualified insured under any other provision of law which 
     is specifically described by the National Flood Insurance 
     Advocate in such recommendation.
       ``(3) Director response.--Not later than 15 days after the 
     receipt of any Flood Insurance Assistance Recommendation 
     under this subsection, the Director shall respond in writing 
     as to--
       ``(A) whether such recommendation was followed;
       ``(B) why such recommendation was or was not followed; and
       ``(C) what, if any, additional actions were taken by the 
     Director to prevent the hardship indicated in such 
     recommendation.
       ``(4) Responsibilities of director.--The Director shall 
     establish procedures requiring a formal response consistent 
     with the requirements of paragraph (3) to all recommendations 
     submitted to the Director by the National Flood Insurance 
     Advocate under this subsection.
       ``(j) Reporting of Potential Criminal Violations.--In 
     carrying out the duties and responsibilities established 
     under this section, the National Flood Insurance Advocate 
     shall report expeditiously to the Attorney General whenever 
     the National Flood Insurance Advocate has reasonable grounds 
     to believe there has been a violation of Federal criminal 
     law.
       ``(k) Coordination.--
       ``(1) With other federal agencies.--In carrying out the 
     duties and responsibilities established under this section, 
     the National Flood Insurance Advocate--
       ``(A) shall give particular regard to the activities of the 
     Inspector General of the Department of Homeland Security with 
     a view toward avoiding duplication and insuring effective 
     coordination and cooperation; and
       ``(B) may participate, upon request of the Inspector 
     General of the Department of Homeland Security, in any audit 
     or investigation conducted by the Inspector General.
       ``(2) With state regulators.--In carrying out any 
     investigation or audit under this section, the National Flood 
     Insurance Advocate shall coordinate its activities and 
     efforts with any State insurance authority that is 
     concurrently undertaking a similar or related investigation 
     or audit.
       ``(3) Avoidance of redundancies in the resolution of 
     problems.--In providing any assistance to a policyholder 
     pursuant to paragraphs (1) and (2) of subsection (b), the 
     National Flood Insurance Advocate shall consult with the 
     Director to eliminate, avoid, or reduce any redundancies in 
     actions that may arise as a result of the actions of the 
     National Flood Insurance Advocate and the claims appeals 
     process described under section 62.20 of title 44, Code of 
     Federal Regulations.
       ``(l) Authority of the Director To Levy Penalties.--In 
     addition to any other action that may be taken by the 
     Attorney General, upon a finding in any investigation or 
     audit conducted by the Office of the National Flood Insurance 
     Advocate under this section, that any insurance company or 
     associated entity has willfully misappropriated funds under 
     the national flood insurance program, the Director may levy a 
     civil fine against such company or entity in an amount not to 
     exceed 3 times the total amount of funds shown to be 
     misappropriated.
       ``(m) Definitions.--For purposes of this subsection:
       ``(1) Associated entity.--The term `associated entity' 
     means any person, corporation, or other legal entity that 
     contracts with the Director or an insurance company to 
     provide adjustment services, benefits calculation services, 
     claims services, processing services, or record keeping 
     services in connection with standard flood insurance policies 
     made available under the national flood insurance program.
       ``(2) Insurance company.--The term `insurance company' 
     refers to any property and casualty insurance company that is 
     authorized by the Director to participate in the Write Your 
     Own program under the national flood insurance program.
       ``(3) National flood insurance advocate.--The term 
     `National Flood Insurance Advocate' includes any designee of 
     the National Flood Insurance Advocate.
       ``(4) Qualified insured.--The term `qualified insured' 
     means an insured under coverage provided under the national 
     flood insurance program under this title.
       ``(n) Funding.--Pursuant to section 1310(a)(8), the 
     Director may use amounts from the National Flood Insurance 
     Fund to fund the activities of the Office of the Flood 
     Advocate in each of fiscal years 2009 through 2014, except 
     that the amount so used in each such fiscal year may not 
     exceed $5,000,000 and shall remain available until expended. 
     Notwithstanding any other provision of this title, amounts 
     made available pursuant to this subsection shall not be 
     subject to offsetting collections through premium rates for 
     flood insurance coverage under this title.''.

  Ms. LANDRIEU. Madam President, Senator Wicker, Senator Vitter, 
myself, and Senator Cochran to some degree have been working for months 
literally on this bill. It is a very important bill--as has Senator 
Nelson of Florida--a very important bill to Mississippi and Louisiana 
that felt the brunt of these last storms that we will be marking the 
third anniversary of this August, not too far from today, and in 
September for Hurricane Rita. As I was saying earlier this morning, 
thousands and thousands and thousands of homeowners are having a 
difficult time, the causes of which are very different. In some parts 
of the country people extended debt beyond what was wise and reasonable 
and find themselves losing their homes and in some instances it is 
partly their fault.
  In some places, some consumers had bad deals thrust at them, and 
maybe through fraud or some other abuse they find themselves losing 
their homes. The people I represent didn't do either of those two 
things. The people I represent in Louisiana and along the gulf coast 
did nothing but basically play by the rules, have insurance if they 
were required to, didn't have insurance when they were not required, 
for the most part. There were some families who should have had 
insurance who did not, but that is another subject for another day. But 
the bulk of the people did exactly what they were supposed to do, and 
they are still going to lose their homes because of two reasons: The 
Federal levees that should have held didn't and the insurance paradigm 
we have established is not sufficient. That is what this bill is about.
  To describe this in very clear graphics, I wish to put up this poster 
that shows why we are on the floor today: $17.53 billion; that is a lot 
of money. That is why this bill is on the floor today, because we have 
to ``reform the system'' because it is obviously not working. We set up 
a flood insurance program and for years it would basically break even 
because of the way it was structured. Then in 2004, it went into debt a 
little bit, $225 million. Then we went into debt a little bit more, 
$300 million, but still manageable. Then Katrina and Rita hit and the 
debt goes up to almost $20 billion. So make no mistake about it, that 
is why this bill is on the floor. This is a taxpayer bailout of $20 
billion. At the same time the taxpayers are bailing out the insurance 
industry, I wanted to show you what the insurance industry profits are. 
Everybody--some Republicans and a lot of Democrats--has been on this 
floor talking about oil companies. I guess I can understand why oil 
companies are making profits, because prices are high. That is a whole 
other subject for another day. But I wonder how insurance companies can 
make profits when you are supposed to have a record loss. I understand 
profits when prices are high; I don't understand profits when losses 
are great. There is something wrong with this system.

  So, in 2005, the insurance profits went up to $48 billion. Katrina 
and Rita hit; they don't go down. The profits go up. Because it is 
basically a system where insurance companies just cannot lose money. 
People can lose money. People can lose their houses. Businesses lose 
their businesses. Businesses lose their contents and their markets. But 
for some reason, in this insurance bill we are operating under, 
insurance companies make money in the middle of a disaster. Some of my 
constituents, including myself, would like to know how this happens.
  As to the National Flood Insurance Program, the GAO did a report that 
says: ``Greater Transparency and Oversight of Wind and Flood Damage 
Determinations Are Needed.'' They just issued this report. I would say 
so, since the taxpayers are going to pick up the $20 billion bill.
  You heard the Senator from Florida, Mr. Nelson. They were so 
desperate in

[[Page S3865]]

Florida, the State had to sort of insure itself, which, thank goodness, 
Florida is big enough and maybe wealthy enough to do. It is very risky 
for the State of Florida to do that. If they have four our five 
hurricanes in one season, like they did a couple seasons ago, it could 
bankrupt the State. I am sure this debate went on in the Florida 
Legislature. But they were so desperate, they actually had no recourse 
because the Federal Government will not come up with a plan that will 
work for everyone.
  So Florida had a choice: They could either shut down every commercial 
business, shut down every homebuilder, completely stop the housing 
market in Florida, or they could self-insure themselves. It was a 
pretty desperate situation, so Florida went ahead and did that.
  But let me explain, Louisiana is not a rich State, and we are not a 
big State. We cannot insure ourselves that way. If we had another 
Katrina, the whole State would go bankrupt and our kids could not go to 
universities, our hospitals would shut down. I know people think I am 
making this up, but it is the truth. We cannot assume that risk onto 
ourselves, and neither can Mississippi, and I would suggest neither 
could Alabama. Maybe California could do it, maybe New York could do 
it, maybe Texas could do it, and maybe Florida could do it because they 
are big States, but our little States would go bankrupt.
  So our GAO says the insurance business needs some more transparency 
and oversight. I will tell you why. As shown on this chart, this is 
what is in the report. As you know, maybe by word of explanation, under 
the current system--as unbelievable as this might sound--you have the 
real estate agents who are in the private sector writing wind insurance 
for their companies, which they can make a profit on. It is private. 
They are writing the flood insurance policies. So it is ``write your 
own'' policy. So the same people who write the Federal, taxpayer-
guaranteed flood program write the private program.
  So right now--and this bill does not fix this; this bill does not do 
anything to fix this--right now, according to our own GAO, Government 
Accountability Office, which is completely neutral, not political:

       In certain damage scenarios, the WYO [write your own] 
     insurer that covers a policyholder for wind losses can have a 
     vested economic interest in the outcome of the damage 
     determination that it performs when the property is subjected 
     to a combination of high winds and flooding.

  Which, hello, most often happens in a hurricane. You have winds and 
water. So it always happens that way.

       In such cases, a conflict of interest exists--

  Let me underline ``a conflict of interest exists''--

     with the WYO insurer as it determines which damages were 
     caused by wind, to be paid by itself. . . .

  So if a house is destroyed and the person comes in and says: This 
house was destroyed by wind 85 percent--if that is the case--then I 
have to pay it out of my pocket. If it is actually 85 percent flood, 
then the Government can pay it. The poor taxpayers can pick up this 
tab, so the insurance companies move their liability to the taxpayer.
  I know, Madam President, as a former auditor, you can most certainly 
appreciate and understand this situation.
  So it says:

       In such cases, a conflict of interest exists with the WYO 
     insurer as it determines which damages were caused by wind, 
     to be paid by itself, and which damages were caused by 
     flooding, to be paid by NFIP [the National Flood Insurance 
     Program].

  Which is basically the taxpayers.

       Moreover, the amount WYO insurers are compensated . . .

  In addition to that obvious conflict of interest, which is not 
corrected in this bill, the insurers are compensated for servicing a 
flood claim, and it increases as the amount of the flood damage 
increases. So their compensation, their percentage is increased. So if 
the flood insurance is more, they get a little bit of a premium.
  So this bill has been in committee being worked out through the House 
and Senate, it is finally on the floor, and this problem has not been 
corrected. So that is why I offer my amendment to try to correct some 
portion of it.
  Let me show you one of the actual transactions we have uncovered. 
This is an actual blowup of a claim, the paperwork that was done. It 
talks about the flood that occurred on August 29. Damage appears to be 
the result of the general condition of flooding. The first inspection 
revealed an exterior waterline of 15 to 20 feet, an interior waterline 
of 8 to 12 feet. Damage was extensive. It lists this.
  That sounds wonderful and great. That is kind of what one of these 
documents would look like. The problem is, the adjuster who turned in 
that document said--this is under oath in one of the court proceedings 
that is slowly moving through the courts--``I did not put those numbers 
in there.'' ``There was no house to measure a waterline.'' ``I did not 
prepare that letter.'' ``They didn't call me about that letter.'' 
``That is the document that is sent to the Federal Government.'' This 
is an adjuster. We have blocked his name out because he would probably 
get in trouble if they knew he was sharing this information with us.
  So, in other words, again, this is not complicated, because I know 
insurance can be complicated. I do not really like the subject very 
much, but I have had to learn more about it than I care to know because 
of what we are going through.
  But we have a system which we are getting ready to vote on right now 
that allows the same insurance companies to write their own personal 
policies or their own business policies, and they do the Government a 
``big favor'' by writing the flood insurance policies. They decide when 
their houses are destroyed, how much they have to pay out of pocket, if 
it was done by wind, or how much we have to pay if it was done by 
flood. These documents are barely ever audited, or this system is 
barely ever audited.

  When we went and checked, as shown on this chart, this was the house 
that supposedly had a water line. Of course, you can see this address. 
There was no house. There could not possibly have been any measurement 
because there are no walls to measure. So this is just an example of 
hundreds that are coming out as these court cases move forward all 
along the gulf about the very serious problems related to the way the 
U.S. flood insurance program works.
  Now, I know we need a flood insurance program. My State benefits 
tremendously from having one that is fair and equitable to the people 
who are paying the premiums, to the homeowners and businesses who rely 
on it. I also have an obligation to taxpayers generally in this country 
to support a program that is honest and fair. What I am suggesting is 
that the bill we are about to vote on--which is probably why I am going 
to vote no--does not do anything to change this.
  So I am going to put up my ``$20 billion'' sign again. This $20 
billion debt exists in large measure because of this system I have just 
described. Now, this bill is going to pass, and magically the Federal 
Government is going to just absorb the $20 billion so we kind of get 
back to even. The bill, then, generally said, to make up for that, we 
are going to raise rates. But do you know on whom they raise rates? Not 
on the insurance companies that have already made record profits. Do 
you know on whom they raise rates? People who cannot afford the rates 
today. In the underlying bill, they can raise rates 15 percent a year 
or 25 percent a year.
  When we ask the committee to please consider that the people of 
Mississippi and Louisiana and Alabama cannot afford higher insurance 
rates, couldn't we possibly consider some kind of catastrophic plan--
because we might have hurricanes, but Memphis is going to have an 
earthquake someday, and Seattle is going to have a tsunami; in 1938, a 
hurricane 5 slammed into Long Island--we are told no. We cannot even 
consider such a thing.
  So there are many things wrong, and I really cannot correct them. I 
tried to hold this bill up as long as I could, and everybody decided we 
needed to have a flood insurance bill, so I said: Fine. Let the bill 
come to the floor, but I am going to talk against it. That is what I 
plan to do.
  So the purpose of this bill is for the taxpayers to eat $20 billion, 
to let insurance companies have record profits, and the end result is 
the people of Alabama, Mississippi, and Louisiana get rates raised 
every year from now until who knows. And I am supposed to just

[[Page S3866]]

sit here and say this is a great bill the committee came up with?
  So the amendment I am offering--which is not going to fix this bill, 
but it might fix one problem with this bill--is to establish an 
ombudsman.
  Oh, and this is really ironic, what is in the underlying bill. In the 
underlying bill, there is a provision that establishes an office to 
register complaints. It is a flood insurance advocate section of this 
bill. If I had the section, I would read it. But in the underlying 
bill, there is a section that talks about that if anybody has a 
complaint, they could call a 1-800 number and complain.
  Now, I have e-mails up to my ceiling in my office from people--not 
complaining, crying--not complaining, crying because they are getting 
ready to lose their business or lose their house. But they could, in 
the underlying bill, call a 1-800 number and make a complaint. But the 
language is so weak and flimsy, there is really not anything they can 
do other than complain.
  So I have taken that section and strengthened it. That is what my 
amendment does. It does not just establish a complaint counter. It 
establishes an office that has some teeth. It establishes an 
ombudsman's office. We kind of took the language from some of our IG 
legislation which will allow the establishment of an office with some 
significant funding attached to it that can review and audit more 
carefully this National Flood Insurance Program.
  I would hope the leaders of this committee would look carefully at 
this amendment and know that I offer it in very good faith. Again, I do 
not believe the underlying bill, in this provision just establishing an 
office to complain, is enough considering the gravity of the situation 
we are dealing with.
  I offer this amendment in good faith. I offer it with Senator Nelson 
from Florida as a cosponsor. It establishes an office that would 
conduct audits to ensure that only flood losses are being allocated to 
the flood insurance program. It ensures that write-your-own insurers 
are preserving the necessary documentation to justify their payments, 
to conduct any other examinations to protect the financial integrity of 
the program, and to prevent fraud and abuse and conflicts of interest.

  Now, again, our Government Accounting Office has already established 
there is an inherent conflict of interest in the current program. So we 
are not guessing that there might be a conflict of interest; there is a 
conflict of interest. It says so according to the GAO:

       In certain damage scenarios, the insurer that covers a 
     policyholder for wind losses can have a vested economic 
     interest in the outcome of the damage determination that it 
     performs when the property is subjected to a combination of 
     high winds and flooding. A conflict of interest exists, as it 
     determines whether it says your house was damaged by wind.

  So let me go ahead and pay your claim on it, or the insurer says: No, 
I think it was damaged by flood, which then the taxpayers can pay for, 
and my insurance company gets off Scot-free. And maybe, just maybe, 
that might explain why in the worst disaster in the history of the 
United States, at least recently, taxpayers have to pick up $20 billion 
and insurance companies file record profits.
  Is there anything in this underlying bill that might suggest that we 
could watch the taxpayers' money a little more carefully? No. They put 
in an office, a 1-800 number where people might complain.
  So instead of the 1-800 number where people might complain, I would 
like to put in an office where, if something is wrong, people can be 
criminally prosecuted. If there is fraud, people can be penalized with 
civil penalties and criminal penalties.
  I know this is very tough language, but I am not suggesting this 
particular document suggests that there is any stealing or any crime. 
But there is something wrong in our system of justice where somebody 
goes into a grocery store and steals $100 and gets 3 years in jail, and 
we have companies that--``fudge'' is the word. They didn't really use 
the word ``steal,'' but they will fudge a little and take $20 billion 
out of the Treasury and they get nothing--not a slap on the wrist, not 
a fine. The only thing that happens is the poor homeowners and 
businesses get increased premiums. So that is one of the things this 
amendment does.
  I hope my colleagues, whether they vote for the bill--I probably will 
not vote for the bill unless it is amended substantially, which it may 
be between now and the time we vote on final passage--but I hope my 
colleagues will look very carefully at this amendment that I offer with 
Senator Nelson. It establishes basically an IG ombudsman within this 
program to make sure the taxpayers don't pick up another $20 billion in 
costs.
  I know people will say: Well, Senator Landrieu, if we don't have this 
bill, your people won't have flood insurance. Well, I understand that, 
but our people have--we are between a rock and a hard place. We need 
flood insurance, but we need flood insurance that we can afford. We 
would like to believe we have a flood insurance program that operates 
honestly. I am not sure that we do. So that is what this amendment 
does, amendment No. 4706.


         Amendment No. 4705, as Modified, to Amendment No. 4707

  I have one final amendment to offer. If I can, I would like to send 
the amendment, as modified, No. 4705, to the desk.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Louisiana [Ms. Landrieu], for herself, Mr. 
     Pryor, and Mrs. Lincoln, proposes an amendment numbered 4705 
     to amendment No. 4707.

  Ms. LANDRIEU. I ask unanimous consent to dispense with the reading of 
the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       On page 10, strike line 3 and all that follows through page 
     10, line 16, and insert the following:
       (c) Study on Mandatory Purchase Requirements.--
       (1) In general.--Not later than 6 months after the date of 
     enactment of this Act, the Comptroller General shall conduct 
     and submit to Congress a study assessing the impact, 
     effectiveness, and feasibility of amending the provisions of 
     the Flood Disaster Protection Act of 1973 regarding the 
     properties that are subject to the mandatory flood insurance 
     coverage purchase requirements under such Act to extend such 
     requirements to properties located in any area that would be 
     designated as an area having special flood hazards but for 
     the existence of a structural flood protection system.
       (2) Content of report.--In carrying out the study required 
     under paragraph (1), the Comptroller General shall 
     determine--
       (A) the regulatory, financial and economic impacts of 
     extending the mandatory purchase requirements described under 
     paragraph (1) on the costs of homeownership, the actuarial 
     soundness of the National Flood Insurance Program, the 
     Federal Emergency Management Agency, local communities, 
     insurance companies, and local land use;
       (B) the effectiveness of extending such mandatory purchase 
     requirements in protecting homeowners from financial loss and 
     in protecting the financial soundness of the National Flood 
     Insurance Program; and
       (C) any impact on lenders of complying with or enforcing 
     such extended mandatory requirements.

  Ms. LANDRIEU. Madam President, I send this amendment to the desk, 
which is actually on behalf of myself, Senator Lincoln, and Senator 
Pryor, that addresses the mandatory coverage requirements in the 
underlying bill. I hope my colleagues will not think again that this 
bill only affects the gulf coast because there are some provisions in 
this bill that are going to affect the entire country.
  One of the provisions is, it is going to be mandatory as FEMA maps 
home and businesses located beyond levees and dams and floodwalls and 
other manmade structures into residual risk areas. Once these homes and 
businesses are mapped into such areas, the legislation would require 
them to purchase flood insurance.
  Now, levees and dams don't just exist in New Orleans, although we 
have quite a few of them because we are a low-lying area. But we have 
14,000 miles of Federal levees throughout the country along many 
rivers. In fact, I see the Senator from North Dakota, and he himself 
has had very significant experience with one of his towns being 
demolished, devastated, almost completely destroyed, I think it was 
maybe 15 years ago, when their levees broke. So he is well aware.
  Whether you are in Michigan or Illinois or Missouri or in many places 
where there are levees and dams, there are 14,000 miles of Federal 
levees, 79,000 dams, and 22 percent of all counties

[[Page S3867]]

and parishes have a levee. So it is one out of every four that will be 
affected by the underlying bill; that is, once FEMA finishes mapping 
the whole United States, which they are doing and which we need to do. 
We need to have better maps using new technology to try to determine 
who is near sea level and who is above sea level and who is at risk. I 
have no problem with that. But this bill will mandate that everybody 
behind those levees pays insurance.
  So my amendment will basically establish before that requirement goes 
into place--and, again, it may be necessary--that there be adequate 
study about the issue. The amendment strikes the mandatory purchase 
requirement. In its place, it requires the GAO to study the cost, the 
regulatory, financial, and economic impacts of extending the mandatory 
purchase on the cost of home ownership, the actuarial soundness to this 
program, to the local communities, insurance companies, and local land 
use; the effectiveness of sending such a purchase requirement in 
protecting homeowners from financial loss and protecting the financial 
soundness of the program.
  Now, I know this was debated in committee. I am not sure that it has 
gotten a lot of coverage, but my phone has been ringing off the hook 
from other Senators who are just waking up and saying: Well, Senator, I 
thought this flood insurance program only affected those places along 
the coast, and now I am realizing this flood insurance ``reform'' bill 
is going to raise fees--not necessarily taxes but premiums--on 
thousands and thousands and thousands of homeowners and businesses 
throughout the country.
  We may have to do that. We may have to do that. But let's do it after 
GAO has studied and laid out what the impact and ramifications are, and 
let's do it in a system that is fair so it is not just the homeowners 
who have to pay premiums, the taxpayers who bail them out when there is 
a problem, and insurance companies that can't lose money under the 
current system. That is basically the system that we have.
  So, again, 43 million people are affected by the underlying bill with 
this new provision. Twenty-two percent of all counties in the country, 
and in our case parishes, have levees; 79,000 dams and 14,000 miles of 
Federal levees.
  So these are the two amendments that I offer. This has been done in a 
package with Senator Wicker and Senator Vitter. We have offered a 
package of amendments trying to fix and expand wind coverage to this 
bill, to lift the coverage limits.
  Again, a big problem with this bill is it has not kept pace with 
inflation and only covers homes valued up to $225,000. That might sound 
like a lot, but it is not keeping pace with inflation. Our amendment 
would lift the coverage to homes over $325,000.
  Then my ombudsman amendment and this mandatory coverage reprieve 
would be the other amendment.
  Mr. DORGAN. Madam President, I wonder if the Senator would yield for 
a question.
  Ms. LANDRIEU. Yes, I will.
  Mr. DORGAN. The last amendment that the Senator sent to the desk, my 
understanding is that it is an amendment very similar to something I 
was intending to offer, but I am not certain I understand your 
amendment, so if I could just work through it with you.
  My concern about the underlying bill with respect to the mandatory 
coverage areas is that it requires the expansion of areas of special 
flood hazards to include areas of residual risks, including areas that 
are behind levees, dams, and other manmade structures.
  Is your amendment designed to strike that provision?
  Ms. LANDRIEU. It doesn't strike the mapping requirement. It doesn't 
strike the mapping requirement, but it strikes the mandatory coverage 
provision until there is a study done about what the economic impact 
will be to people living behind those levees and dams.
  Mr. DORGAN. But, if I might inquire further, is it the intention of 
the amendment to provide that there shall not be mandatory requirements 
on all of these levees, dams, and other manmade structures, which the 
underlying bill would require?
  Ms. LANDRIEU. Yes, it does. That is the intent of the amendment.
  Madam President, there are many Senators who feel as though this is a 
very abrupt requirement. They are not sure of what the outcome of these 
premiums might be to people who are already struggling with higher 
costs. And because there is no estimate to my knowledge, we thought it 
would be better to offer an amendment that would basically require a 
study so more discussion can be had, and then perhaps later we could 
insist on mandatory coverage or phase it in as is appropriate. But is 
that the Senator's concern?
  Mr. DORGAN. Madam President, I believe I looked at the amendment, and 
it does not strike what is in the underlying bill--all of section 7--
which I was intending to do with my amendment. I didn't quite 
understand the consequences of striking just a portion of it. But if 
the Senator from Connecticut who is on the Senate floor--when the 
Senator from Louisiana concludes, I would like to make a couple of 
comments about the reason for my concern about this matter, and perhaps 
we can visit. If our amendments have exactly the same impact, there is 
no reason for me to offer mine.
  Ms. LANDRIEU. I would be happy to. I appreciate the Senator raising 
it. I will review the way this amendment is structured. But, again, I 
would be happy to work with the Senator so we could offer something 
together because there are many Senators who are concerned, and rightly 
concerned, about this particular section.
  If the Senator would allow me to finish, I will be happy to yield the 
floor for further discussion because I am about ready to finish my 
remarks. There are no votes scheduled. There are other amendments that 
are going to be offered. But, again, a package has been put together by 
several Senators, both Republicans and Democrats.
  I have to say again, in conclusion, I don't like the underlying bill. 
I did a great deal to keep this bill bottled up in committee for over 2 
years. But I have been convinced the better way to proceed is to have 
this bill come to the floor, which is what I allowed with Senator 
Vitter and Senator Wicker, as long as we can offer amendments and have 
some time to air our grievances. The chairman of the committee and the 
ranking member of the committee have been men of their word and allowed 
us to do so.
  So at some point, Madam Chair, I would request that the Senate vote 
on these amendments together as a package, but individually the one 
regarding wind, the one regarding the increased coverage, the one 
regarding the ombudsman, and the amendment regarding the mandatory 
coverage, and then the additional coverage options. So there are five 
amendments in this package that we have been working on. At some point, 
when that can be agreed to, we can move this bill forward.
  In the meantime, I will be happy to work with my colleague from North 
Dakota to see if the language he has suggested is the same as ours. If 
not, perhaps we can modify our amendment to accommodate that, or 
perhaps he will offer the amendment with our acquiescence.
  With that, I yield the floor to my friend from North Dakota.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. DORGAN. Madam President, I was surprised by what is section 7 in 
the underlying bill. I understand the substitute at the desk has it on 
a different page. I am talking about the same provision the Senator 
from Louisiana spoke about briefly; that is, an expansion of the 
requirement to have flood insurance in areas of special flood hazards, 
to include areas of residual risk, areas that are located behind 
levees, dams, and other manmade structures.
  I am not surprised we want people to buy flood insurance if they are 
at risk of being flooded. That is not my point. But let me give you a 
case study, if I might, and talk about Grand Forks, ND. Eleven years 
ago--in fact 11 years ago about this time--the city of Grand Forks, ND, 
a city of nearly 50,000 people, was nearly completely evacuated. It was 
the largest evacuation of a city since the Civil War, and it was 
because of a flood on the Red River. It was a very significant flood; 
some said it was a 500-year flood.
  All of us who went to that city and spent time there and went to the 
Air Force base--a major Air Force base--15 miles west of the city and 
visited with the citizens who had been evacuated--

[[Page S3868]]

tens of thousands of people--we will never forget that. So what 
happened in the last 10 years--by the way, let me speak about the 
memory of not only a city being flooded and evacuated, but in the 
middle of that city there was a raging fire. So there is a flood, and 
then buildings in the middle of the city that are inundated by water 
caught fire, and there was a major fire in the middle of the city. To 
watch firefighters work in a flood to try to see if they can't, in the 
middle of a significant city, put out a fire that is consuming a number 
of businesses in the downtown district is quite extraordinary.
  Fast forward 10 years, and I think we have spent close to $400 
million over a decade to provide unbelievable flood protection for that 
city. That is not going to happen again. There is a flood protection 
plan in place for that city that is very significant. That flood 
protection plan protects against a 250-year flood. The provisions in 
this bill talk about a 100-year flood. We have now flood protection for 
a 250-year flood. It is blue ribbon, first rate, brandnew flood 
protection for this city. So it is a little surprising to me to see a 
bill that says, by the way, we have just finished spending a lot of 
money to provide very significant 250-year flood protection and now we 
have one other decision; we want you to understand you should now buy 
flood insurance. It is only $1 a day, $300 or $400 a year, they say.
  That is going to be pretty surprising to a lot of people who are 
still paying debts to fix up their houses from 10 or 11 years ago from 
that flood. They are going to ask the question: Why are we asked to buy 
flood insurance when you have built a very significant flood protection 
plan, with 250-year flood protection for our city, and now you say to 
us we all should go buy flood insurance. Are you daft? What are you 
thinking of? They would not understand this. I am trying to figure out 
what the requirement is.
  I understand there are some manmade levees and dams and other 
circumstances that perhaps have risk attached to them, which are old 
structures. I understand that. There are some circumstances where those 
who take a look at this believe that more should participate in the 
flood insurance program. I understand all that. But to simply say that 
in every circumstance, including areas located behind levees, dams, and 
other manmade structures, everybody should have flood insurance, that 
doesn't make any sense to me.
  I don't know how you explain that to somebody who was told we 
completed a terrific flood protection program that gives you a 250-year 
flood protection, but you need to pony up some money to buy new flood 
insurance. I think this is not a good provision, and I hope we will be 
able to remove it.
  Ms. LANDRIEU. Will the Senator yield?
  Mr. DORGAN. Yes.
  Ms. LANDRIEU. I don't know how this will be resolved. I certainly can 
appreciate that, and I agree with the Senator, because one size doesn't 
fit all, which has been part of the problem with this bill--that it is 
pushing everyone into a one-size-fits-all requirement. It is not the 
appropriate response to our situation. I hope the Senator will consider 
either modifying the amendment I have laid down, or I would be happy to 
actually support a narrower amendment that any communities that can 
establish that they have created protection that is over and above the 
average, which is 100-year flood protection, might not be subject to 
this requirement.
  As the Senator knows--because he is chairman of the Appropriations 
Committee that funds levees in the country, so he most certainly is one 
of the leading experts--the standard in America right now is not 
sufficient, and it is 1 storm out of 100. Very few communities can 
boast of being as protected as his community can. I suggest that most 
certainly I would not object as the main author of the amendment, but 
there are several cosponsors. I am sure we could work something out.
  Mr. DORGAN. Madam President, in my subcommittee that I chair on 
appropriations, dealing with energy and matter, we spent $2.2 billion 
on Corps of Engineers construction alone, to say nothing of 
maintenance, remediation, and other expenses. Just the construction in 
fiscal year 2008 was $2.244 billion. So we are spending a lot of money 
working on levees and dikes and other areas of protection. It seems to 
me--my colleague from Connecticut indicated this and he is absolutely 
correct--levees do fail, and I understand that. He is absolutely 
correct about that. Levees do fail. Manmade structures, from time to 
time, will fail. But it is also the case that some risks are 
substantially lowered, and there are some risks that are substantially 
elevated because of the condition of the levy and so on. My colleague 
from Louisiana is correct when she says let's not do something that is 
one size fits all.
  Again, I will use the example I think is clear. If you just finished 
a new flood control program that you have worked on for 10 years with a 
250-year flood protection, which is more than double the protection 
normally required to protect against a 100-year flood, at least 
understand the difference between what you have done there with public 
funding and what might exist somewhere else, where there is higher 
risk. It is hard to tell somebody, by the way, you have a new flood 
control plan, it works, it is terrific and it is new and it costs a lot 
of money; it will protect you against a 250-year flood, but you must 
buy some flood insurance, please, because we are worried that you are 
going to be hit by a 100-year flood. That is the kind of thing I hope 
we can avoid.

  Earlier, I used a word I don't ever use. I don't know why I used it. 
I used the word ``daft.'' I wasn't applying it to anybody who wrote 
this legislation. I should quickly explain that.
  It appears to me that, if this would pass, we may have to explain to 
some people something that is not able to be explained. You now have 
terrific flood protection, but we want you to buy flood insurance, even 
though we protected you with public funding, with a first-class flood 
protection system. It is not difficult for me to go to someone in a 
circumstance where there is risk and say I understand why you have to 
have flood insurance. You have to have a large number of people paying 
in. You have risk and you are going to have to buy flood insurance. I 
understand that.
  The Senator is correct that sometimes levees do fail. We should not, 
it seems to me, with this small section in the bill, on page 9, 
subsection 2, under (b), we should not say, anyplace in America where 
you have a levee, a dam, a manmade structure, you are all in the same 
boat. That is not the right thing for us to do.
  I hope that with the concurrence of the Senator from Connecticut, 
perhaps, we can talk through this as we move along and make some 
changes to that, which are thoughtful and address the issue of risk.
  I thank my colleague from Louisiana, and I thank my colleague from 
Connecticut for his patience. As I conclude, I am going to visit with 
the Senator from Louisiana to see whether my amendment is sufficiently 
similar to hers so maybe we can deal with one amendment. If so, I will 
not add my amendment. I have filed it, but I will not call it up. If it 
is not sufficiently similar, I will call up my amendment later today.
  I yield the floor.
  Mr. DODD. Madam President, now we have had five amendments that will 
be pending at some point. At an appropriate time, after my colleague 
from Alabama arrives, in consultation with others and with the 
leadership, we will work out a time when we may have consideration of 
these amendments and have votes. Many Members are curious about votes 
this evening. We would like to give a clear indication of when the 
votes are likely to occur. Let me take a few minutes and respond.
  First of all, all of us in this Chamber, including myself, have 
expressed ourselves over the years in terms of what has happened when 
people have been devastated by natural disasters, including those in 
the gulf area. I have traveled down there reviewing the area and seeing 
what happened. We all care deeply about what happened to people in the 
Gulf State areas, in terms of the devastation that occurred. Let me 
point out quickly that is not the debate, in the sense whether we 
understand it. It is what we can do about it.
  The bulk of this legislation, as presently written--it is a given 
that most of the 5.5 million properties that are going to be covered 
are in the Gulf State areas. FEMA borrowed money

[[Page S3869]]

from the Federal Government to pay the $17 billion in claims. The flood 
insurance program generates about $2.5 billion each year as a result of 
premiums as part of the fund, and about $1 billion of that goes to 
administrative costs. There might be a legitimate amendment as to why 
there is so much administration in that program. That is how it breaks 
down. You are left with $1.5 billion to cover this. As a result of 
natural disasters and floods, here we are left with a debt of $17 
billion, which FEMA owes to the Federal Government. In the process of 
paying that debt, they are increasing the premium costs, unless we take 
action. So you can have a choice. We can drop the bill, basically--
defeat it, as some suggested, who may vote against it--in which case 
the very people we are concerned about are going to end up with a 
larger cost because somebody has to pay that debt. That is a bailout 
otherwise, if we don't do something about it. So the idea is, how do 
you do that?
  The major thrust of the bill is to forgive that debt, take it off the 
books, so the people who pay these premiums will not have a surcharge 
added to their costs to meet that obligation. That is the fundamental 
purpose of the bill, to forgive that $17 billion, which otherwise 
becomes a cost to the very people paying the premiums. So I began the 
discussion by saying the thrust of this bill was to do that.
  The second part--Senator Nelson has it exactly right, the author of 
the second part. He came to the committee a number of months ago and 
asked to include a commission to deal with catastrophic natural 
disasters. There is a significant debate as to how to handle this. A 
significant percentage of our population lives within 100 miles of the 
coast of the United States. Obviously, there are natural disasters that 
occur inland as well. But how we deal with catastrophic costs, how we 
set up the mechanism to deal with it is a significant debate, with 
hardly unanimity around it. Rather than trying to pretend that one 
committee can solve all that, Senator Nelson suggested a commission 
made up of people who would bring knowledge about all this and report 
back to us in 9 months their recommendations as to how we might deal 
with catastrophic disasters that occur in our country.
  That is the second part of this bill. There are a lot of other ideas. 
I addressed some of them earlier--wind issues and the like. I don't 
argue about the legitimacy of the issue. The question is, we have a 
responsibility to be actuarially sound. I know that is not something we 
have a great reputation on, but we try to do that occasionally, to 
insist upon having a system that will allow us to collect revenue, pay 
for a program, keep the costs down, and cover the kind of catastrophe 
people face.
  Our bill does a number of things that are more than just vague 
terminology in dealing with the insurance industry. I, for one, believe 
we ought to do more in this area to try to get greater accountability. 
That is not an issue for debating here.
  Let me mention some things we have included in the bill before we 
accept the notion that nothing is here at all. No. 1, in the program we 
require the insurance companies to participate in State-sponsored 
mediation.
  We require the insurance industry to submit all data on costs to 
operate this program and require FEMA to conduct rulemaking so the 
insurance companies are only paid for actual costs.
  We created a flood advocate to help consumers who have problems with 
the flood program so they can have direct access to it. That was one of 
the major problems a few years ago.
  We also direct FEMA to collect information from the insurance 
industry on claims where there is both wind and flood damage. I might 
add, this gets exactly at the problems raised by our colleagues from 
Louisiana and the other gulf State areas. FEMA will now be required to 
look at how insurance companies are dividing damages to ensure that 
companies are not improperly shifting costs to the Federal flood 
program.
  I know others may want to add other things. But to suggest we did 
nothing to require greater accountability is not to be terribly honest 
about what is in this bill. Obviously, there are those who would like 
to get rid of the industry altogether and maybe just have a Federal 
program where FEMA becomes an insurance company. That is an option, if 
people want to do it. I don't know there is a will here to do it, but 
that is one option.
  There is no requirement in law that an industry provide this kind of 
coverage. You have to be somewhat careful that if you become so onerous 
in your requirements or your indictment of them that getting these very 
companies to write the policies becomes harder. If they don't write the 
policies, who does? Does the Federal Government then become an 
insurance company? I don't think there is a will to do that. Maybe 
there are some who would like to.
  Before you decide to beat this horse into oblivion, be careful about 
how far you go. If you do it to such a degree there is no one there to 
write the programs to begin with, we may find ourselves in deeper 
trouble. But to say they ought to be able to do exactly as they want to 
do, and not be mindful of some of the egregious examples my colleague 
from Louisiana referred to, would also be wrong.
  In this bill we tried to identify some specific areas that were the 
subject of hearings that informed us where there were matters clearly 
the industry and those responsible for overseeing them could demand 
more and get more out of them.
  I believe we have done a good job in this bill on those issues. Could 
you add some more things? I am not going to argue that. We did try to 
do our best. Again, we had a unanimous vote in our committee after 
significant debate on this bill. But the idea of having an ombudsman 
going in and basically drawing a conclusion about things before 
actually determining it--be careful what you wish for. If in fact we 
don't end up with people coming in to provide the coverage, we could 
find ourselves in even worse shape than we are in today. I invite my 
colleagues to look at the legislation and the specific provisions I 
just mentioned that we have included in the legislation to require 
greater accountability out of the industry.
  Now let me address the second point, and that is the mandatory 
requirement that people within certain high-risk areas be required to 
pay some premiums. I ask my colleagues to think about the consequences 
of this amendment should we strike the portion of the bill that 
requires people who live in areas behind levees or downstream of dams 
to purchase flood insurance. Currently, home and business owners in 
these residual risk areas, as they are called, are at great risk of 
flooding. There are over 122 levees and dams that have already been 
categorized as weak, failing.
  With all due respect to my colleague from North Dakota--and I have 
been to his community where these problems exist--these manmade 
projects do not always work. So the fact that taxpayers in Connecticut 
and elsewhere have paid to build them is a good thing. Maybe we ought 
to be talking about how those costs of premiums ought to reflect the 
quality of the levee or the dam that has been built in those areas. But 
to suggest somehow that since we built the levee anybody living in that 
residual risk area should not assume any responsibility if it breaks 
down is maybe going to far.
  Let me tell you what we are talking about. Most cost less than $1 a 
day to cover this. What you get for that is roughly $250,000 to cover 
structures and $100,000 to cover the contents. That is $350,000 in most 
cases for less than a dollar a day, for living in a residually high-
risk area where a levee or dam exists. This idea somehow that we all 
can get our levees built and dams built and we bear no other 
responsibility for trying to cover against those risks and the costs, 
when they occur, if that levee or dam breaks and it gets flooded out 
and there is no insurance requirement in those areas--who pays for that 
damage? Again, we are right back here draining the Treasury instead of 
requiring an insurance program. A dollar a day for roughly 350,000 
dollars' worth of coverage, I do not think that is overly burdensome.
  I know people don't like any additional cost. But if you are asking 
me to craft a program that is actuarially sound, that allows us to 
build up that fund so we do not have to drain the Treasury or forgive a 
debt that is now

[[Page S3870]]

owed by FEMA to the National Government, then requiring some 
responsibility--I have it in my own State of Connecticut. The 
Connecticut River in Hartford, we have a huge levee, a dam there. I 
certainly think my constituents who live along that have to pay 
something. They made the choice to be there. Some don't make the 
choice. They live there. But asking for less than $1 a day for over 
$350,000 in coverage for structure and contents in order to bear some 
responsibility--Lord forbid it breaks down--I don't see that as being 
overly burdensome, as some would suggest.
  What percentage of problems occur in this area? We are told here--
again, I am relying on data that has been given to us--we all know that 
dams fail, levees fail. What better evidence than what happened to our 
colleagues from Louisiana, the failure of the levees and the problems 
that ensued from it. I will provide the lists and put them in the 
record of the 122 levees we know are failing today. One percent of all 
flood policies are outside the 100-year floodplain, many of these in 
residual risk areas. This 1 percent of policies accounts for 25 percent 
of flood claims. Let me repeat that. One percent of the policies 
accounts for 25 percent of the flood claims. So 1 percent of policies 
not currently in mandatory purchase areas are responsible for 25 
percent of all the claims that come in--one-quarter of them.
  You could just persist in this and say we are not going to have 
anybody pay anything at all. Yet 25 percent of the entire fund is going 
off to provide coverage in areas where, again--it is only 1 percent of 
the policies that are being written. Clearly, the risks outside the 
100-year floodplain are significant--25 percent of all claims are 
coming from them, despite the dams and the levees we have here. We 
should ensure that adequate insurance coverage for all homes and 
businesses in these risky areas are covered. That is what we are trying 
to do.
  Flood insurance should not be viewed as punitive. It is a cost to 
insure against a known risk. Flood insurance premiums for homeowners in 
these residual risk areas are not prohibitively expensive. The maximum 
amount of coverage--$250,000 for structures and $100,000 for contents--
will cost less than $1 a day. That is the maximum insurance. For a 
majority of people, the cost will be much less, less than $1 a day to 
ensure a family can rebuild from a flood.

  I ask my colleagues to look at recent experiences in New Orleans, as 
well as the recent flooding in Missouri along the Black River, in 
Nevada near Reno, and in Lake County, IN. These are just a few 
examples, but each caused devastation when levees did not provide the 
needed protection.
  I also ask my colleagues to look at the U.S. Army Corps of Engineers 
review of levees last year. That review identified 122 levees at risk 
of failure in the country. Surely, people who believe they are 
protected should know of their risks and should carry affordable 
insurance to hedge against those kinds of devastating events that occur 
even when significant efforts have been made to protect people in those 
areas.
  No one likes to vote for something where you have to have a fee 
charged. We bear the responsibility of having a program that works, 
that is actuarially sound, that makes a difference, that doesn't put us 
in a position of having to constantly bail out--in this case FEMA--as a 
result of these claims coming in. If there were a way of doing this 
where I could wave a magic wand and no one would have to pay a nickel 
and somehow this would all be done by someone else, I would love to 
achieve that. But miracles do not exist when it comes to costs. We 
tried to minimize those costs and have a good program that doesn't 
drain the Treasury and doesn't expose all taxpayers to these costs and 
asks people to contribute in some degree to get the kind of protection 
we are looking for. That is what we have designed.
  If this bill fails--and there are those recommending by their vote it 
ought to fail--then those premiums are going to go up, and the very 
people we are talking about bear a tremendous financial burden. In the 
absence of this bill, they will pay a tremendous amount to pay off that 
debt to FEMA. It is not a free charge unless we take action to excuse 
that obligation.
  Then, second, that commission to examine these other very important 
issues, and then the provisions in this bill itself to achieve greater 
accountability within the insurance industry--that is why this bill 
passed unanimously out of the committee, Democrats and Republicans, 
people from coastal States and noncoastal States working together to 
craft the legislation that Senator Shelby and I put together.
  I realize we are not going to write something that everybody agrees 
with every dotted i and crossed t. That is beyond my capabilities. What 
you have asked me to do as chairman of the committee, with Senator 
Shelby, is craft a bill that will allow people to have reasonable 
costs, get some real help and relief, protect against these kinds of 
problems that are obviously going to occur again, but this time we will 
have done something about it ahead of time instead of waiting for it to 
happen and be back here again trying to come up with some supplemental 
appropriation where billions of dollars are being asked for out of the 
Federal Treasury to pay for the damages that might have otherwise been 
paid for under an intelligent insurance program, balanced and sound.
  I apologize if I can't make everybody happy with this bill, but we 
did our very best to craft legislation that I think accommodates the 
fundamental points.
  If you want me to craft legislation that allows money to be spent and 
no one has to pay a nickel for it, you are going to have to find 
someone else. I can't do that for you. I have a proposal of less than 
$1 a day for 350,000 dollars' worth of coverage. I do not believe that 
is unreasonable for people living in residual risk areas, particularly 
where 25 percent of the claims are coming out of those areas where only 
1 percent of the policies are being provided for.
  With that, at the appropriate time we would like to have some votes 
on these amendments. I will be urging my colleague to reject these 
amendments. I appreciate the intentions behind those who offer them, 
but in good conscience we need to pass a bill that can make some sense, 
become the law of the land, and provide some protection we are seeking 
with this legislation.
  Madam President, I ask unanimous consent the list of levees of 
maintenance concern be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                  U.S. ARMY CORPS OF ENGINEERS LEVEES OF MAINTENANCE CONCERN, FEBRUARY 1, 2007
----------------------------------------------------------------------------------------------------------------
           District                  Project Name           Segment Name            State             City
----------------------------------------------------------------------------------------------------------------
Detroit.......................  Erie Township / Grodi  Grodi Road...........  Michigan........  Erie Twp.
                                 Road.
Detroit.......................  Labo Island..........  Labo Island..........  Michigan........  Brown Twp.
Detroit.......................  Milliman Island......  Millman Island.......  Michigan........  Brown Twp.
Detroit.......................  Sebewaing, MI Flood    Sebewaing Flood        Michigan........  Sebewaing.
                                 Control Project.       Control Proj..
Huntington....................  Levisa and Tug Forks   Matewan, WV LPP......  West Virginia...  Matewan.
                                 and Upper Cumberland
                                 Basin.
Huntington....................  Maysville, KY........  Maysville, KY, LPP...  Kentucky........  Maysville.
Louisville....................  Brookport Local Flood  Brockport LFPP.......  Illinois........  Brockport.
                                 Protection Project.
Louisville....................  Levee Unit No. 8.....  Levee Unit No. 8.....  Indiana.........  Plainville.
Louisville....................  Shawneetown Local      Shawneetown LFPP.....  Illinois........  Old Shawneetown.
                                 Flood Protection
                                 Project.
Nashville.....................  Loyall, KY Local       Loyall, KY Local       Kentucky........  Loyall / Rio
                                 Protection Project.    Protection Project.                      Vista.
Nashville.....................  Pineville, KY Local    Pineville, KY Local    Kentucky........  Pineville.
                                 Protection Project.    Protection Project.
Nashville.....................  Wallsend, KY Local     Wallsend, KY Local     Kentucky........  Pineville.
                                 Protection Project.    Protection Project.
Pittsburgh....................  Kittaning............  Kittaning LFPP.......  Pennsylvania....  Kittaning
                                                                                                 Borough.
Pittsburgh....................  Oil City.............  Oil City LFPP........  Pennsylvania....  Oil City.
Pittsburgh....................  Vintondale...........  South Branch           Pennsylvania....  Vintondale
                                                        Blacklick.                               Borough.
Memphis.......................  White River Levees...  Augusta to Clarendon,  Arkansas........  Agriculture.
                                                        AR.
Baltimore.....................  Anacostia River......  Left Bank Anacostia    Maryland........  Town of
                                                        River.                                   Bladensburg.
Baltimore.....................  Anacostia River......  Right Bank Anacostia   Maryland........  Town of
                                                        River.                                   Hyattsville.
Baltimore.....................  Washngton, DC........  National Park Service  District of       Washington, DC.
                                                        Section.               Columbia.

[[Page S3871]]

 
Baltimore.....................  Washington, DC.......  Potomac Park Levee...  District of       Washington, DC
                                                                               Columbia.
Baltimore.....................  Washington, DC.......  US Naval Air Station   District of       Washington, DC.
                                                        Section.               Columbia.
Baltimore.....................  Wiliamsport-South      South Williamsport...  Pennsylvania....  Borough of South
                                 Williamsport.                                                   Williamsport.
New England...................  East Hartford, CT....  East Hartford, CT....  Connecticut.....  East Hartford.
New England...................  Lincoln, NH..........  Lincoln NH...........  New Hampshire...  Lincoln.
New England...................  West Springfield, MA.  West Springfield, Ma.  Massachusetts...  West
                                                                                                 Springfield.
New England...................  Canton, MA...........  Canton, MA...........  Massachusetts...  Canton.
New England...................  Chicopee, MA.........  Chic Riv Dike/Wall...  Massachusetts...  Chicopee.
New England...................  Lowell, MA...........  Lakeview.............  Massachusetts...  Lowell.
New England...................  Springfield, MA......  Conn River segment...  Massachusetts...  Springfield
New England...................  Torrington, CT (E.     Torrington, CT (E.     Connecticut.....  Torrington.
                                 Branch).               Branch).
New England...................  Torrington, CT (W.     Torrington, CT (W.     Connecticut.....  Torrington.
                                 Branch).               Branch).
New England...................  Waterbury-Watertown,   Upper Naugatuck Dike.  Connecticut.....  Waterbury and
                                 CT.                                                             Watertown.
New England...................  Woonsocket, RI         Lower Mill River Dike  Rhode Island....  Woonsocket.
                                 (lower).
New England...................  Woonsocket, RI         Singleton St Dike....  Rhode Island....  Woonsocket.
                                 (upper).
Kansas City...................  Bartley..............  Bartley..............  Nebraska........  Bartley.
Kansas City...................  Ft Leavenworth,        Ft. Leavenworth......  Kansas..........  Ft. Leavenworth
                                 Kansas.                                                         Airport.
Omaha.........................  Marmarth.............  Marmarth FCP.........  North Dakota....  Marmarth.
Portland......................  Clatsop County         Blind Slough.........  Oregon..........  Brownsmead.
                                 Drainage District
                                 No. 1.
Portland......................  Clatsop Diking         Youngs River.........  Oregon..........  Agriculture.
                                 District No. 9.
Portland......................  Sunset Drainage        Nehalem..............  Oregon..........  Agriculture.
                                 District.
Portland......................  Svensen Island Diking  Prairie Channel/       Oregon..........  Agriculture.
                                 District.              Svensen.
Seattle.......................  Green River Upper      Upper Russell........  Washington......  Kent.
                                 Russell.
Seattle.......................  Cedar River Getchman.  Monk.................  Washington......  Kent.
Seattle.......................  Cedar River Rainbow    County Road #8.......  Washington......  Kent.
                                 Bend.
Seattle.......................  Green River Monk.....  Getchman.............  Washington......  Renton.
Seattle.......................  Cedar River Alquist..  Rainbow Bend.........  Washington......  Renton.
Seattle.......................  Cedar River Herzman..  Alquist..............  Washington......  Renton.
Seattle.......................  Cedar River WPA......  Herzman..............  Washington......  Renton.
Seattle.......................  Tolt River Frew......  WPA..................  Washington......  Carnation.
Seattle.......................  Tolt River Hwy to      Frew.................  Washington......  Carnation.
                                 Bridge.
Seattle.......................  Green River County     Hwy to Bridge........  Washington......  North Bend.
                                 Road #8.
Seattle.......................  SF Snoqualmie River    Stanly Carlin........  Washington......  North Bend.
                                 Stanly Carlin.
Seattle.......................  SF Snoqualmie River    Prairie Acres........  Washington......  North Bend.
                                 Prairie Acres.
Seattle.......................  SF Snoqualmie River    McConkey.............  Washington......  North Bend.
                                 McConkey.
Seattle.......................  SF Snoqualmie River    Reif Road............  Washington......  North Bend
                                 Reif Road.
Seattle.......................  SF Snoqualmie River    Si View..............  Washington......  North Bend.
                                 Si View.
Seattle.......................  SF Snoqualmie River    Bendigo Left (upper).  Washington......  North Bend.
                                 Bendigo Left (upper).
Seattle.......................  SF Snoqualmie River    Bendigo Left (lower).  Washington......  North Bend.
                                 Bendigo Left (lower).
Seattle.......................  SF Snoqualmie River    Bendigo Right (lower)  Washington......  North Bend
                                 Bendigo Right
                                 (lower).
Seattle.......................  SF Snoqualmie River    Bendigo Right (upper)  Washington......  North Bend.
                                 Bendigo Right
                                 (upper).
Walla Walla...................  Ballantyne...........  Ballantyne...........  Idaho...........  Mountain Home.
Walla Walla...................  Milton-Freewater.....  Milton-Freewater.....  Oregon..........  Milton-
                                                                                                 Freewater.
Walla Walla...................  Sweetwater...........  Sweetwater...........  Idaho...........  Sweetwater.
Alaska........................  Salmon River Levee...  Salmon River Levee...  Alaska..........  Hyder (unincor
                                                                                                 orated).
Alaska........................  Skagway River Levee..  Skagway River Levee..  Alaska..........  Skagway.
Honolulu......................  Hanapepe River FCP...  Hanapepe River FCP...  Hawaii..........  Hanapepe.
Honolulu......................  Moanalua Stream FCP..  Moanalua Stream......  Hawaii..........  Moanalua Valley.
Honolulu......................  Waimea River FCP.....  Waimea River FCP.....  Hawaii..........  Waimea.
Jacksonville..................  C&SF Part IV--Herbert  Reach 7..............  Florida.........  Agriculture
                                 Hoover Dike.                                                    area.
Jacksonville..................  C&SF Part IV--Herbert  Reach 2..............  Florida.........  Clewiston.
                                 Hoover Dike.
Jacksonville..................  C&SF Part IV--Herbert  Reach 3..............  Florida.........  Clewiston, S
                                 Hoover Dike.                                                    Bay, Belle
                                                                                                 Glade.
Jacksonville..................  C&SF Part IV--Herbert  Reach 1..............  Florida.........  Pahokee.
                                 Hoover Dike.
Jacksonville..................  Humacao..............  Sec. 205.............  Puerto Rico.....  Punta Santiago.
Jacksonville..................  Portugues & Bucana     Sec. 205.............  Puerto Rico.....  Ponce.
                                 Flood Control.
Jacksonville..................  Sabana Grande........  Sec. 205.............  Puerto Rico.....  Sabana Grande.
Jacksonville..................  Vega Baja............  Sec 205..............  Puerto Rico.....  Vega Baja.
Savannah......................  Macon Levee..........  Macon Levee..........  Georgia.........  Macon.
Wilmington....................  Roanoke, VA,           Roanoke Floodproofing  Virginia........  Roanoke Sewage
                                 Floodproofing of STP.  of STP.                                  Treatment.
Albuquerque...................  Granada, Arkansas      Granada, Arkansas      Colorado........  Granada.
                                 River.                 River.
Albuquerque...................  Abeytas to Bernardo,   Abeytas to Bernardo,   New Mexico......  Bernardo.
                                 Rio Grande.            Rio Grande.
Albuquerque...................  Albuquerque Unit,      Albuquerque Unit,      New Mexico......  Albuquerque.
                                 Middle Rio Grande      Middle Rio Grande
                                 Levee.                 Levee.
Albuquerque...................  Creede, Willow Creek.  Creede Willow Creek..  Colorado........  Creede.
Albuquerque...................  Glenwood, Whitewater   Glenwood Whitewater    New Mexico......  Glenwood.
                                 Creek, Levee           Creek.
                                 Rehabilitation.
Los Angeles...................  Santa Maria River....  Santa Maria River....  California......  Santa Maria
Sacramento....................  Bear Creek Project...  Bear Creek, Stockton.  California......  Stockton.
Sacramento....................  Buchanan Dam (Eastman  Chowchilla River Ash   California......  Madera.
                                 Lake).                 and Berenda Sloughs.
Sacramento....................  Duck Creek...........  Duck Creek...........  California......  Farmington,
                                                                                                 Stockton.
Sacramento....................  Fairfield Vicinity     Fairfield Vicinity     California......  Fairfield.
                                 Streams.               Streams.
Sacramento....................  Farmington Reservoir   Littlejohn Creek.....  California......  Stockton
                                 Project.
Sacramento....................  Green Valley Creek,    Green Valley Creek,    California......  Vacaville.
                                 Solano County.         Solano County.
Sacramento....................  Merced County Stream   Merced County Stream   California......  Merced.
                                 Group.                 Group.
Sacramento....................  Middle Creek.........  Middle Creek.........  California......  Upper Lake.
Sacramento....................  Mormon Slough........  Mormon Slough........  California......  Stockton.
Sacramento....................  North Fork Pit River   North Fork Pit River   California......  Alturas.
                                 at Alturas.            at Alturas.
Sacramento....................  Pine Flat Lake &       Pine Flat Lake &       California......  Riverdale,
                                 Kings River.           Kings River.                             Hanford.
Sacrament.....................  Redmond Channel......  Redmond Channel......  Utah............  Redmond.
Sacramento....................  Sacramento River       Chico & Mud Creeks, &  California......  Chico.
                                 Flood Control.         Sandy Gulch.
Sacramento....................  Sacramento River       City of Marysville...  California......  Marysville.
                                 Flood Control.
Sacramento....................  Sacramento River       Deer Creek, Tehama     California......  Vina.
                                 Flood Control.         County.
Sacramento....................  Sacramento River       Elder Creek, Tehama    California......  Gerber.
                                 Flood Control.         County.
Sacramento....................  Sacramento River       Interceptor Canal,     California......  Sutter.
                                 Flood Control.         East, West.
Sacramento....................  Sacramento River       LD2-Glenn County.....  California......  Princeton.
                                 Flood Control.
Sacramento....................  Sacramento River       L03-Glenn County.....  California......  Butte City.
                                 Flood Control.
Sacramento....................  Sacramento River       RD 0150-Merritt        California......  Agriculture.
                                 Flood Control.         Island.
Sacramento....................  Sacramento River       RD 0307-Lisbon.......  California......  Agriculture.
                                 Flood Control.
Sacramento....................  Sacramento River       RD 0349-Sutter.......  California......  Agriculture.
                                 Flood Control.
Sacramento....................  Sacramento River       RD 0369-Libby-McNeil.  California......  Walnut Grove.
                                 Flood Control.
Sacramento....................  Sacramento River       RD 0501-Ryer Island..  California......  Agriculture.
                                 Flood Control.
Sacramento....................  Sacramento River       RD 0556-Upper Andrus.  California......  Agriculture.
                                 Flood Control.
Sacramento....................  Sacramento River       RD 0563-Tyler Island.  California......  Walnut Grove.
                                 Flood Control.
Sacramento....................  Sacramento River       RD 0755-Randall......  California......  Agriculture.
                                 Flood Control.
Sacramento....................  Sacramento River       RD 0827-Elkhorn......  California......  Agriculture.
                                 Flood Control.
Sacramento....................  Sacramento River       RD 1600-Mull.........  California......  Agriculture.
                                 Flood Control.
Sacramento....................  Sacramento River       RD 2098-Cache & Haas   California......  Agriculture.
                                 Flood Control.         Slough Area.
Sacramento....................  Sacramento River       Service Area 6.......  California......  Knights Landing.
                                 Flood Control.
Sacramento....................  San Joaquin River      RD 0404-Boggs........  California......  Stockton.
                                 Flood Control.
Sacramento....................  San Joaquin River      RD 0524-Middle         California......  Agriculture.
                                 Flood Control.         Roberts Island.
Sacramento....................  San Joaquin River      RD 2063-Crows Landing  California......  Agriculture.
                                 Flood Control.
Sacramento....................  San Joaquin River      RD 2064-River          California......  Ripon.
                                 Flood Control.         Junction.
Sacramento....................  Walnut Creek, Contra   Walnut Creek, Contra   California......  Walnut Creek,
                                 Costa County.          Costa County.                            Concord.
San Francisco.................  Redwood Creek at       Redwood Creek at       California......  Orrick.
                                 Crick.                 Orrick.
Little Rock...................  Conway County Levee    Conway County Levee    Arkansas........  Atkins.
                                 District No. 8.        No. 8.
----------------------------------------------------------------------------------------------------------------

  Mr. DODD. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.

[[Page S3872]]

  Mr. SHELBY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Tester). Without objection, it is so 
ordered.


                           Amendment No. 4706

  Mr. SHELBY. Mr. President, I rise in strong opposition to the 
amendment offered by Senator Landrieu, my friend from Louisiana, which 
would allow the mandatory purchase provision for areas behind levees 
and dams to be eliminated.
  Currently, the flood insurance program suffers from a $17 billion 
deficit, mostly as a result of payments made to individuals living 
behind manmade structures such as levees and dams.
  The fact that people behind manmade flood protections do not have to 
purchase flood insurance clearly sends the wrong message. As we all 
know now, flood protections sometimes fail. Telling people they need 
not protect themselves from the risks associated with those failures 
provides a false sense of security.
  Keep in mind that all of these individuals will be required to pay a 
rate that reflects the risk associated with living behind flood 
mitigation devices. Currently the rates behind many of these structures 
would suggest an individual homeowner would pay approximately $316 for 
coverage up to $350,000. That is less than $1 per day for full flood 
protection; $1 dollar a day. This bill eliminates the entire debt 
associated with this program that is owed to the Federal Government, 
but it also demands that in the future people begin to pay a fair price 
for the risk associated with living in high-risk areas.
  This amendment would require that we undertake a study as to the 
effect of requiring insurance behind manmade structures. I believe we 
have learned all we need to know about the risk associated with living 
behind manmade flood protection devices.
  The insurance premium takes into account the real risk properties 
face. Levees fail. They fail all the time. They do not eliminate all 
risk. Flood insurance protects people against unforeseen risk.
  These amendments do not recognize that fact. A prudent course is 
risk-based premiums for everyone at risk. I strongly oppose this 
amendment. I urge my colleagues to do the same.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. BUNNING. Mr. President, I wish to speak for a few minutes on the 
bill itself.
  The PRESIDING OFFICER. The Senator has that right.
  Mr. BUNNING. I wish to speak about the flood insurance bill before 
the Senate and about the program in general.
  The flood insurance program is one I care about a great deal. It is 
vitally important to States such as Kentucky that are surrounded and 
crossed by major rivers and exposed to flooding.
  In 2004, former Senator Sarbanes, Senator Shelby, and I sat down to 
make some important changes to the program and we did. My bill was a 
step in the right direction for fixing the program. Our reforms 
established a mitigation program to reduce further losses, charge 
higher premiums if property owners refused to reduce their risk.
  Unfortunately, we were not able to address all of the problems in the 
bill, but I am glad some of the things we wanted to do back then are 
being done in this bill before us today.
  As we saw from the storms of 2005, the flood insurance program is not 
financially sound. This bill builds on the reforms of the 2004 law by 
ending the subsidy for the most costly and least deserving properties. 
It requires more at-risk people to purchase flood insurance, and 
increases penalties on the lenders for not following the law.
  It also sets up a reserve fund to keep the program from going into 
debt in future years with significant flood losses. This bill does not 
fix all of the problems in the program, but it is a strong bill which I 
support. While I do not like forgiving the program's debt, it is a 
necessary step to stop policyholders in Kentucky and across this 
country from having to foot the bill for the gulf coast's problems.
  Every Senator should think about that $18 billion we are forgiving 
when they consider the additional cost of amendments being offered. We 
have 40 years of experience that says the Government is a terrible 
insurance company. Adding wind insurance will drive out private 
insurers and put the taxpayers throughout the entire country on the 
hook for the risks taken by those who choose to live in the path of 
hurricanes.
  The sponsors of the amendment claim premiums will reflect the actual 
risk, but I would point out to them the 18 billion reasons why I do not 
believe that will happen. Several other amendments are worth 
mentioning. One would create a Federal backstop for State disaster 
insurance funds. I understand why the Gulf Coast States would want a 
Federal backstop for the risk, but I do not understand why my State or 
anyone else's State should be put on the hook for the decisions of 
coastal State legislators who choose to socialize insurance.
  Other amendments would increase coverage limits or decrease the 
amount policyholders would have to pay. One would even make a certain 
earmark for an area in Illinois for lower premiums. Those amendments 
would defeat the entire purpose of this bill. Instead of making the 
program more financially sound, they would make the current problems 
worse by charging policyholders less than their actual risk.
  After some version of this bill becomes law, we will have to keep an 
eye on how FEMA acts on these reforms. It took FEMA more than 2 years 
to implement some of the 2004 reforms, and they did that only after the 
Vice President and the Secretary of Homeland Security intervened. We 
must make sure the program is run the way Congress intended, not as the 
bureaucrats think it should be run.
  I congratulate Senator Dodd and Senator Shelby and their staffs for 
writing a good bill. I also thank former Senator Sarbanes for his help 
in writing the 2004 bill and setting the foundation for this bill 
today.
  Finally, I wish to say I am glad Senator McConnell has brought up the 
important issue of energy. The American people are watching gas prices 
go through the roof, and this summer electric bills are going to do the 
same. I have heard the other side talk about energy before, but I have 
not seen them do one thing about the problem. The problem is, we do not 
have enough supply. The solution is expanding domestic production of 
energy any way we can. We can drill for oil safely in Alaska, we can 
get more natural gas from the Gulf of Mexico.
  But beyond the usual ways to increase production, we can use new 
technologies to change the game for energy prices. That is why I have 
supported and will keep pushing coal-to-liquid fuels. We are sitting on 
hundreds of years' worth of coal, and through a proven and 
environmentally sound process, we can turn that coal into gasoline for 
our cars, diesel for our trucks, and jet fuel for our planes.
  I have met with the Air Force many times. This is one of the most 
important security issues they face. We cannot rely on Middle Eastern 
oil to provide fuel for our jet fighters and our tanks. With secure 
domestic alternative fuels, we can guarantee the military the fuel they 
need.
  The American people deserve a Congress that takes action. Every 
barrel of fuel made in America is a barrel of fuel we do not have to 
buy from the Middle East. Increasing production of energy in America 
will bring down energy costs and protect jobs.
  For too long we have heard about manufacturers and companies moving 
good-paying jobs to China or the Middle East because of cheap energy. 
Today, with this package we can do something about it. We can give 
American companies the energy they need to build cars, fly planes, and 
produce goods with American workers.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, parliamentary inquiry: What are we on 
now?
  The PRESIDING OFFICER. The Senate is considering amendment No. 4705 
offered by Senator Landrieu.


                     American Energy Production Act

  Mr. DOMENICI. We have been setting aside the pending amendments?
  The PRESIDING OFFICER. That is correct.
  Mr. DOMENICI. I plan to speak for about 15 or 20 minutes here, for 
those who might be interested.
  I rise not to talk about the work that has been done by the committee 
on

[[Page S3873]]

flood insurance, although it is obvious that is important, and they 
have done a great job and we ought to be finding our way through that 
thicket before too long. But attached to that bill, for the purpose of 
making an issue and seeing to it that we give everybody in this body an 
opportunity to vote for the production of more American energy for the 
American people, for the automobiles that drive on our streets, the 
trucks that drive on our streets, the airplanes, both domestic and 
military, that fly, and all other sources of energy, we are going to 
have a chance to vote on whether we want to produce more energy which 
we now import, either crude oil or crude oil products or substitute 
products that can be produced in the United States. Do we want to do 
that?
  The Democrats today had a press conference after we have been talking 
about this bill that we call the American Energy Production Act, and 
they are talking about what they might want to do. I regret I cannot 
talk in detail about what they propose, but I will say I will be very 
surprised if the sum total of their suggestions produces one new barrel 
of oil or one cubic foot of natural gas, one cubic foot of American-
produced natural gas, because it seems to me they are too busy trying 
to find out what they can do to the oil companies of the United States 
and windfall profits and those kinds of things.
  But we are going to give everyone this opportunity, an opportunity to 
take a look at some very simple propositions that could yield large 
quantities of crude oil, natural gas, derivatives of coal that can be 
used in trucks, diesel fuel in airplanes, for military and the domestic 
airplanes.
  I want to suggest the following: Last week I introduced a bill which 
would fundamentally change America's reliance upon foreign oil in a 
shorter time period than I have seen of any proposal thus far.
  The American Energy Production Act is cosponsored by 19 of my 
colleagues and would produce a minimum of 24 billion barrels of 
American oil. Americans, in my opinion, are sick and tired of such high 
prices for gasoline, and unless we take action, the situation is going 
to only get worse. One can talk all one wants about why it is, but the 
biggest reason the price is going up and continues up--and we do not 
even know where it will stop--is because the demand for crude oil in 
the world is getting bigger than the production of crude oil in the 
world. So supply and demand is principally the reason for the 
increasing cost of crude oil.
  There may be other things we have to do, but essentially the only way 
to alter that rising price and cause it to come down and, thus, give 
the American people some relief is to produce more crude oil and 
derivatives of coal and otherwise that we can use to take the place of 
crude oil products. So if the American people are sick and tired of 
paying high prices and want to know what can be done, we are telling 
them we think it is time we face up to the fact that we can produce 
much more in America. But for some reason, we have decided to vote no 
on some very imposing and powerful supply sources. It is time we take 
another look at those, especially with crude oil at $120 a barrel and 
rising.
  What we have done is looked around at what we have refused to do in 
the past, new things we could do that would accomplish what I have 
suggested. Congress has made a great deal of progress already in 
promoting conservation and developing renewable energy technology such 
as wind and solar. I am for doing more of those, if we can and when we 
are ready. I stand ready to work on those. I have been leading the 
charge on those fronts as either chairman of the Energy Committee or 
ranking member. I believe we should develop all our energy sources as 
soon as we can.
  The bottom line is that America is not going to stop using oil in the 
near term, so we need to take action to make sure the oil we do use is 
produced domestically, all of it we can, rather than coming from 
unstable regions. Congress has not done such a good job in this area. 
In fact, almost every time we have tried to boost domestic production, 
Democrats--mostly Democrats--have blocked our efforts. But with oil now 
at $122 a barrel and rising, I implore my colleagues on the other side 
of the aisle to rethink their position. Times have changed. Now 
America's response needs to change as well.
  The American Energy Production Act, which is an amendment on this 
bill, which I indicated we will vote on one way or another before this 
bill is finished, is an excellent place to start. The bill allows for 
States on the Atlantic and Pacific coasts to petition the Federal 
Government to opt out of a broad moratorium that for two decades has 
locked up America's assets and forced us to turn to unstable foreign 
nations to power our lives.
  Together, the Atlantic and Pacific Oceans contain oil reserves of up 
to 14 billion barrels, and that is a minimum. We know it is a minimum, 
and we have not been allowed to spend the money to do an in-depth 
evaluation which I believe would show much more. The reserves of 
natural gas are thought to be 55 trillion cubic feet. These regions 
contain substantially more oil and gas than the areas we opened in 2006 
in the Gulf of Mexico Energy Security Act. The area that is left, that 
we had this moratorium on for more than 20 years, is much bigger than 
the area we opened as part of the Gulf of Mexico Energy Security Act, 
much bigger, much larger space, and much more in reserves.
  This legislation also opens 2,000 of the 19 million acres of the 
Arctic Plain of ANWR for oil and gas leasing.
  Over the past week, I have heard Members from the other side of the 
aisle say that ANWR won't help because it will take 8 to 10 years to 
bring it on line. That is the same thing they have been saying for two 
decades. Had we acted when we had a chance, we would have 1 million 
barrels of oil a day available to us, oil that we are now forced to buy 
overseas.
  I heard a Member of the Senate from the other side of the aisle, the 
Senator from New York--the Senator from New York who is not running for 
President--say that if we could get the OPEC cartel to just add 500,000 
barrels of production, it would have a big impact on bringing down the 
price of oil. If that is the case, if we had a million barrels of oil a 
day coming from ANWR, that surely would do as much or more. It would 
bring down the price just as well, if not more than the Senator was 
speaking of from oil the cartel would produce. That is because it is a 
supply-demand situation he is talking about. ANWR would yield more than 
the 500,000 barrels to which he alluded.
  Additionally, even after revenue sharing, ANWR oil could bring over 
$2 billion to our Federal Treasury annually. It is past time that we 
started producing our own oil and generating revenues for our own 
Government instead of buying foreign oil and sending billions of 
dollars to unstable, unfriendly regimes.
  The Republican bill I have talked about also makes it easier to build 
refineries. We haven't built a new refinery for 30 years, and our 
Nation cannot afford to go 30 more years without doing so. We provide 
some incentives and some very natural ways to cause that to happen.
  While I have resisted calls to suspend filling the Strategic 
Petroleum Reserve in the past, I have indicated to the chairman of the 
subcommittee on which I serve, the Energy and Water Committee, I have 
told the Senator who is promoting discontinuing filling of the SPR for 
6 months to a year, providing 70,000 additional barrels of light sweet 
crude a day to the marketplace, that I would support him on that at 
this time because the price of oil is so high that it is worth doing. 
That is in this bill. By its very nature, this 70,000 barrels from SPR 
is just a fraction of the oil that would be gained through the OCS 
production and ANWR production, but in today's environment every small 
amount helps.
  In the area of alternative resources, this bill requires studies on 
ethanol to help ensure that smart decisions are made as we move toward 
cellulosic and other advanced biofuels. This bill also provides 
incentives for the advancement of breakthrough energy technologies such 
as battery-powered vehicles. That is necessary and something we could 
do. It is ready and right.
  It is also important to mention that this bill will promote the use 
of coal-to-liquids technologies, as long as it results in no more 
greenhouse gases than the fuels we are already using. Bringing 6 
billion gallons of this fuel to market, if we started immediately 
working

[[Page S3874]]

on it, could be done quickly. They are already doing it in South 
Africa. It would reduce our projected imports by 4 percent by the year 
2022. The coal-to-liquids mandate is just one-sixth the size of the 
ethanol mandate placed into law last year. To push the coal-to-liquids 
technology, we must send a signal to the marketplace that America is 
serious about using some of its abundant, reliable American energy 
resource--coal.
  In addition, this bill repeals the moratorium on oil shale 
regulations that was put into an omnibus appropriations bill in the 
dark of night, when those of us who had been involved were not around 
and could not object. The shale beneath our Western States amounts to 
three times the conventional oil reserves in Saudi Arabia. We need to 
accelerate this project's resources and repeal the $4,000 fee for 
drilling permits which hit America's smallest family-owned oil and gas 
companies the hardest. This, too, was done in an appropriations rider. 
It is time to take it off, while we talk about producing more rather 
than less. We don't need more taxes and fees on American producers if 
we want to produce more.
  It is my sincere hope that we can act soon on this measure. I have 
not talked about every provision, but they all are directed at 
producing more energy rather than directed at more attacks against 
energy companies and those things included in today's proposal by the 
Democratic leadership.
  The United States needs to send a message to the marketplace, to 
OPEC, and to consumers that we will no longer continue to let billions 
of barrels of oil sit underground within our own domain while the price 
at the pump goes up and up. We must end the cycle of dependence and the 
flow of money overseas for foreign oil. We must do it as quickly as 
possible. If we can do it now, we should do it now.
  I thank the Republican leader for bringing up this important issue. I 
urge my colleagues to think about it and ultimately to support it. What 
a message it would send.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, I am about to make a unanimous consent 
request dealing with a series of amendments we are going to vote on. 
Then following my unanimous consent request, I know the Senator from 
Alabama would like to be recognized. I ask unanimous consent that he be 
recognized at the conclusion of my request.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DODD. Mr. President, I ask unanimous consent that at 6 p.m., the 
Senate proceed to a vote in relation to the following amendments: 
Wicker amendment No. 4719; Vitter amendment No. 4722; Vitter amendment 
No. 4723; Landrieu amendment No. 4705, as modified further; further, I 
ask that there be 2 minutes of debate equally divided prior to each 
vote and that there be no second-degree amendments in order prior to 
the votes. Finally, I ask consent that the first vote be a 15-minute 
rollcall vote and the remaining votes be 10-minute votes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DODD. I thank the Chair and my colleague.
  The PRESIDING OFFICER (Mr. Webb). Under the previous order, the 
junior Senator from Alabama is recognized.
  Mr. SESSIONS. Mr. President, I see Senator Thune, who wanted to have 
4 minutes to file an amendment. I ask unanimous consent that he be 
recognized when I finish my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SESSIONS. Mr. President, I so much appreciate the remarks of 
Senator Domenici. He has given his career in the Senate to dealing with 
energy issues. There is no one here who is more deeply steeped in those 
issues and the history of how we got here and how we could be in better 
shape today than Senator Domenici. We don't want to be in a blame game. 
We don't want to be saying, ``I told you so.'' In fact, I will admit 
that I have made decisions, when the price of a barrel of oil was $30 
and $40. It is different when it is now $120, as the Senator from New 
Mexico pointed out. We are facing a crisis, and we need to do some 
things. We don't need to do a piece of legislation that is pending on 
this floor, that came out of the EPW Committee, that not only won't 
help us deal with our crisis in energy but will actually surge the cost 
of energy, which is the only big piece of legislation I know relevant 
to the question that is now pending, other than legislation Senator 
Domenici offered.
  Gas today is over $3.60 a gallon. That is well over what it was 2 
years ago. People are spending $60 to fill up with a tank of gas. The 
average family who has two cars is spending no doubt $50 to $100 more a 
month for the same amount of gasoline they were purchasing the previous 
few years. It is an enormous cost to that family. It is an impediment 
to economic vitality. It is a very significant, if not the most 
significant, factor in the economic slowdown we are dealing with. 
Electricity also will be going up. One expert has said that we could 
basically be seeing a $100-a-month increase in the average family's 
electricity bill. If we pass this cap-and-trade bill, it will be a lot 
more than that. Diesel priced fuel is up--too high, in my view. I can't 
understand why it is consistently 60 cents more per gallon than regular 
gasoline. An airline official told me not long ago that jet fuel is 
double.
  So we have a problem. We really do. I know everybody has goals and 
visions about how we can solve this problem. Senator Domenici and I 
share a deep belief that nuclear power can be a primary source in the 
years to come to deal with this crisis. In fact, he has written a book 
about it. We have advocated this for some time. I think that reality is 
beginning to dawn more clearly on us today. But it is going to be maybe 
7, 8, 10 years to get a new nuclear plant up and running. But we can 
generate large numbers of them if we follow smart procedures and have 
that come on line. But the point I think we are trying to make is: That 
is 10 years down the road. It may take 10 years to do ANWR. We can 
bring on coal-to-liquid technology. That can happen, but it takes some 
time. But we need to get started.
  We are so hopeful we can do more with conservation. I supported the 
bill last year to raise our fuel standards, CAFE standards, automobile 
mileage standards up to 37, 35 miles per gallon, the entire fleet, 
including trucks. That is going to be difficult to achieve, but it will 
conserve a tremendous amount of fuel and be good for us. But that is 
not going to solve our problem either.
  So what must we do? I think we must have a long-term policy. I 
believe that policy should focus on investing in the ideas and concepts 
that have potential to be breakthrough technologies to confront this 
problem. There are a number of them out there.
  Hydrogen. President Bush pushed hydrogen for our automobiles, but 
from what I can understand, that is coming along slower than we would 
like. There are a number of very difficult technical problems with 
hydrogen. It takes some time. We would love to see the hybrid 
automobiles be able to be converted to plug-in hybrid automobiles, and 
progress is being made in that regard that is pretty exciting. We may 
be getting closer there than we think. That would convert from liquid 
fuel that runs our automobiles to electricity. We can utilize 
electricity generated in nuclear plants that emits no CO2, 
no pollution into the atmosphere, and do that at night when they are 
not fully engaged and be able to drive, for most people, all they need 
to drive that day on a battery charge at night, utilizing no fuel in 
their automobile. What a great thing that would be.
  We also have, as Senator Domenici has pointed out, though, great 
reserves of oil and gas and energy in our country. The sad fact is, we 
are not going to be able to get away from fossil fuels in the next few 
decades. We are just not going to be able to get away from that. People 
seem to have no problem that we buy it from foreign countries, some of 
which are not friendly to us. We can just buy from them. But if you 
talk about producing that oil and gas here in the United States, in our 
country, they get, for some reason, to objecting. We have seen it time 
and time again.
  I was so pleased that last year, under Senator Domenici's 
leadership--the year before last, I guess--we passed legislation to 
open 8.5 million acres in the Gulf of Mexico. But we left closed to 
drilling huge areas in the Gulf of Mexico, some of which have 
tremendous reserves of oil and gas. We have opened

[[Page S3875]]

none off the Pacific coast, where there are huge resources, and none 
off the Atlantic coast. We have shown in the Gulf of Mexico that even 
with this powerful hurricane, these billion-dollar rigs can sustain the 
storm and not provide economic destruction or damage to the gulf. We 
can do that around the world. So the question is, Are we going to take 
that step? This legislation helps us go in that direction.
  We have seen and shown you can convert coal. We have huge reserves of 
coal-to-liquid that can burn in our automobiles. That is technology 
which is ready to go today basically. We just need to prove it out in a 
large commercial area, and the Government should help establish that 
technology. But the point I would like to make is that would produce 
huge amounts of energy we can utilize in our vehicles and keep the 
money at home.
  So there are many other things we can do and are doing.
  I believe the concerns over ethanol raising food prices are 
exaggerated. Even President Bush, who has been somewhat skeptical of 
this--his own administration said they thought about 2 percent to 3 
percent of the price of food was as a result of ethanol being produced 
from corn and soybeans for biodiesel. It is not the main factor in the 
rise of farm prices. But it certainly helped us not to have to import 
lots and lots of foreign oil into the United States.
  I will recall for my colleagues that according to the Congressional 
Research Service, this year we will import into America $400 billion-
plus worth of oil. Probably, the next year from this day--the next 12 
months--it would be over $500 billion worth of oil. This is the 
greatest wealth transfer in the history of the world. It is money we 
have, as American citizens, that is ending up in the pockets of 
countries--small countries, some of them, building more skyscrapers 
than they have apartment complexes--unbelievable displays of wealth. We 
can do better about that. We need to produce more energy here at home, 
energy that we have. If we do so, we can reduce our dependence on 
foreign oil. And if we can reduce that amount through conservation, 
through local American production, the result could be that we could 
knock down the high demand that is out there, and we might even see the 
price of oil drop more than people think. Historically, it has been 
boom and bust in the oil industry. Some say we will not have a bust 
again because of the world demand, and they may be right. But I think 
there are some realistic possibilities we can.
  So there are biofuels and solar and wind and biomass and new 
batteries. All of this is good, and I would support research and 
development on them. But I do not believe we ought to press down on the 
brow of the American working man some theoretical beliefs about clean 
energy that will not work or are exceedingly expensive and create only 
a burden on working families in America. We have to be careful about 
that.
  So I am excited about the proposal that has been put forth. I believe 
we have great potential to produce more American oil and gas off our 
Continental Shelf. I have seen it right off from the coast where I live 
in Alabama. I have seen that production come in for decades now.
  We know ANWR has great potential. It could reduce our imports by as 
much as 10 percent if it is brought on line.
  We know coal-to-liquid can be done today for far less than the world 
price of oil. We know oil can be produced from these huge oil shale 
deposits in the West for less than the world price of oil today.
  We know nuclear power has the potential to help us transform our 
vehicular traffic from fossil fuels to electricity. But we have to get 
busy doing it. We have not built a nuclear plant in 30 years. Since I 
have been in the Senate, for 12 years I have talked about nuclear 
power, how critical it is to our future. We have done nothing really to 
make that happen--until Senator Domenici, 2 years ago, as chairman of 
the Energy Committee, finally pushed through some legislation that took 
us from having zero applications for nuclear plants to over 30 today.

  I think we have the potential to see a renewal of nuclear power. The 
British just announced they are going to build five new nuclear plants. 
France has 80 percent of their power or more from nuclear power. Japan 
does.
  We also need to figure out how to deal with the question of 
recycling, which is not at all impossible to do. The British, the 
French, the Japanese, the Russians recycle. We want to work on 
legislation to create recycling of nuclear waste. That will both help 
us create more fuel and reduce the danger of the waste that is left.
  These are things we can do. But it is time to get busy and do it, not 
have a policy of creating a massive bureaucracy, some cap-in-trade 
bureaucracy that has not worked in Europe. It just has not worked. A 
massive tax increase is what it amounts to in sheep's clothing.
  So, Mr. President, I thank the Chair.
  Mr. DOMENICI. Mr. President, before the Senator leaves the floor, 
will he answer a question?
  Mr. SESSIONS. Yes.
  Mr. DOMENICI. I ask the Senator, do you know what the price of a 
barrel of oil was when we sent the ANWR bill to the President of the 
United States, which was vetoed? Do you know how much it was per 
barrel?
  Mr. SESSIONS. Mr. President, I know it was less, but I do not know.
  Mr. DOMENICI. Nineteen dollars a barrel.
  Mr. SESSIONS. Nineteen.
  Mr. DOMENICI. So for those who do not think it is worth another try--
that is, to have a vote and seriously consider ANWR--just think of the 
difference in economic impact on the United States of tying up that 
resource when we did it compared to now.
  Also, we were estimating only 1 million barrels of oil as the 
production per day. We have not upped that, brought that current for 
$120-a-barrel oil. It might very well be that it is more than a million 
barrels a day just based upon price because it would justify far more 
investment in that little 2,000-acre footprint. Clearly, with such an 
increase in price, you probably will get more.
  But I think some of the American people may have favored holding that 
2,000 acres hostage and saying you cannot use it--they might have said, 
well, that is all right when it is $19 a barrel--but when we are 
suffering with $120-a-barrel oil, it may be a very close call even for 
those who have exaggerated in their dilemma and fear about ANWR. To say 
we can afford $19-a-barrel oil--lock it up--but should we lock it up 
for $120 a barrel is a very good question.
  Mr. SESSIONS. That is six times as expensive.
  Mr. DOMENICI. Right.
  Mr. SESSIONS. It has increased six times in price since you first 
began to discuss it.
  Mr. DOMENICI. So a million barrels a day becomes a different thing. A 
million barrels a day was $19 million. But now a million barrels is 120 
times that. That is what you are losing to foreign countries.
  You have alluded to the fact that maybe the American economy is 
suffering irreparable harm. You said it a different way than I. But I 
happen to believe--and have spoken to it two or three times on the 
floor--I think we are experiencing irreparable damage to the American 
economy because of the enormous price of crude oil and our inability to 
find a way to get along without it. We are just depleting our vitality, 
and we do not know quite how to figure it out. We do not know why the 
economy is having trouble. There are just all kinds of things we do not 
know. But I have an answer for most of them: It is too many dollars 
going overseas to get crude oil. That is an enormous drain on this 
economy, as strong as it is. That, plus the big debt we have accrued is 
hanging out there to be bought by the Chinese and others. You add them 
up, and it is frightening. If we can do something about it, we should. 
Isn't that why we are here?
  Mr. SESSIONS. I could not agree more, I say to Senator Domenici.
  Mr. DOMENICI. I yield floor and thank the Senator.
  Mr. SESSIONS. It is very troubling to me. I say to the Senator, I 
know you also are knowledgeable--I do not know if you have a minute; I 
think you mentioned it in your remarks. But you have pointed out, as I 
understand it, in the West, in the shale oil areas of the West, we can 
actually produce shale oil for far less than $120 a barrel; is that 
correct?

[[Page S3876]]

  Mr. DOMENICI. That is correct.
  Mr. SESSIONS. Under current technology. I assume it will get better 
in the years to come, but even right now with the technology we have?
  Mr. DOMENICI. There is no question. One of the major oil companies 
has invested a huge amount of money. I think the initial investment 
allowed was $4 billion to experiment with a project that would in situ, 
on sight--rather than picking mines, they would boil the oil in the 
ground and siphon it out. That price was put around $50, $50 to $60 
before they would consider it feasible to invest money. We are long 
past that, for that kind of an experiment. If it works, then the next 
steps have to be taken. It will be expensive, but $50 a barrel versus 
$120, there is a lot of room for play.
  Mr. SESSIONS. That keeps the money at home, hiring American workers 
who pay taxes to the United States of America.
  Mr. DOMENICI. Yes. And this bill we are talking about here tonight 
has a provision in it about it. Because in the dead of night, in an 
appropriations bill in the Department of the Interior, somebody in the 
House--we think we know who--decided to put a moratorium on the final 
regulations for shale development, even though in the Energy bill you 
helped us write, the comprehensive bill, we provided for oil shale 
leases of the right size to permit activity, permit this research, this 
experimentation. Well, they put a moratorium on it and that thwarts the 
company that is putting the investment in it. This bill says no, that 
has to come off. So I don't know whether we will have a chance to vote 
on it another way, but maybe since it is one year at a time, we may 
take it off of appropriations. I don't know.
  Mr. SESSIONS. Senator Domenici has some interest. We have had talks 
about coal to liquids. It is my understanding--is it yours--that we 
have technology today that can take our massive coal reserves and 
convert that to a good liquid fuel for our automobiles at less than 
$120 a barrel, the world market price of oil today?
  Mr. DOMENICI. Well, I choose to take one step back on that and say, 
there is no question but that South African technology is available to 
convert clean coal into liquid diesel. Its principal use at that point 
would be American airplanes, both commercial and military, American 
military equipment, and that would be a huge amount. This bill limits 
it to 9 million, the equivalent of 9 million barrels a day is what we 
would produce. That would be so we could be sure we weren't having a 
negative impact on the environment. How do we do that? Well, the energy 
produced by the conversion would not contribute any more than the crude 
oil we would buy would contribute and we would use it anyway, so we 
don't think we are harming the environment. But we are not going to go 
all out and produce the whole amount that coal can produce but, rather, 
learn how to do it, do it well, and send a signal that the great 
American ingenuity is ready to do something, and do something big. That 
is what that one would be, a big one that would frighten those who have 
us captive, because they would say they are finally going to do 
something and something that is important.
  The same thing would happen if we had a breakthrough on oil shale. 
There is no question, that would be an enormous signal. Now I am not 
saying that is as ready as coal to liquid. One is ready rather quickly, 
the other one would take a little while. But we only put things in that 
are doable and that are important, and if they are not doable 
immediately, they are doable in the sense of sending a signal that the 
country is doing something.
  I thank the Senator for yielding.
  Mr. SESSIONS. I thank the Senator.
  The PRESIDING OFFICER. The Senator from South Dakota is recognized.
  Mr. THUNE. Mr. President, what is the pending business?
  The PRESIDING OFFICER. The Landrieu amendment No. 4705 is pending.
  Mr. THUNE. Mr. President, I ask unanimous consent to be able to call 
up amendment No. 4731 which I filed earlier today with my colleague 
from South Dakota, Senator Tim Johnson.
  The PRESIDING OFFICER. Is there objection?
  Ms. LANDRIEU. I object.
  The PRESIDING OFFICER. Objection is heard.
  Mr. THUNE. Mr. President, I wish to congratulate the Senator from New 
Mexico for his comprehensive energy bill which he introduced. It is a 
solution we need to take a hard look at, perhaps moving to it sometime 
in the not too distant future here in the Senate. I think his bill 
starts the debate.
  Unfortunately, he has tried over and over and over again to start the 
debate here in the Senate. The legislation he introduced--and I am a 
cosponsor of that bill last week--is comprehensive in that it addresses 
the supply issue. We can't address America's high energy costs absent 
addressing the issue of supply. We are sending, as was already noted, 
$1.6 billion every single day outside the United States and, in some 
cases, to countries that would do us harm, in order to meet our demand 
for energy here at home. The Senator from New Mexico has put forward a 
solution which is broad based and which addresses the supply issue by 
making available some of the reserves we have in this country on the 
North Slope of Alaska, on the Outer Continental Shelf, and he addresses 
the need for additional refinery capacity. We haven't built a refinery 
in 30 years, since 1976. He also addresses some of the new technologies 
such as coal to liquid, which was talked about earlier.
  I should say he changes a definition that was modified very late in 
the Energy bill debate last year that precludes forest waste residues 
from being a source of cellulosic ethanol because in many respects, the 
future of renewable energy in this country is transitioning from corn-
based ethanol to cellulosic ethanol. We have enormous biomass available 
in this country in forests in the form of switchgrass that can be grown 
in abundance on the prairies in this country and other forms of biomass 
that can be available and can be converted into cellulosic ethanol. So 
his solution is to create additional supply--the supply of fuels but 
also the capacity of refineries--in order to be able to process more of 
those natural resources into refined gasoline. If we don't do that, we 
are going to continue to send billions and billions and billions of 
dollars every single year to countries outside the United States which, 
in many cases, use those very dollars to turn around and fund terrorist 
organizations that attack Americans, that to the tune of about almost 
$500 billion. Half a trillion dollars last year left the United States 
in order to meet the demand we have for energy here at home.
  I congratulate the Senator from New Mexico and hope we can get a 
debate going here in the Senate that addresses the supply issue.
  I am all for conservation measures. There are some conservation 
measures as well, and there are lots of steps we can be taking. Last 
year as part of the Energy bill, we created the first change in a long 
time--something like 20 years--in fuel efficiency standards. That is 
something we need to be pursuing as well. But at the end of the day, 
our appetite for energy in this country and the world's appetite for 
energy is not going away. In fact, the Department of Energy estimates 
that even with intensive conservation efforts in place, maintaining our 
economic growth through the year 2025 will require a 36-percent 
increase in energy supply, including a 39-percent increase in oil 
consumption. Sixty percent of our oil is currently imported. So as 
demand rises and domestic supply is not increased, we are subject to 
prices that are set by foreign countries, including, as I mentioned, 
some hostile regimes.

  Senator Domenici has put forward several ideas in his plan that are 
not new. Some of them have been debated previously, some of them 
blocked by bipartisan politics. But I hope that $3.50, $4-a-gallon 
gasoline will change some of that. In my State of South Dakota, the 
average price of gasoline today is $3.60. Oil, of course, traded at an 
all-time high of $122 per barrel. Diesel is $4.18 a gallon. As the 
farmers in my State continue another planting season, they are faced 
with those diesel fuel costs that are substantially higher than 
previous years. They are faced with higher fertilizer costs because 
natural gas prices have gone up.
  This is a crisis that reaches into the pocketbooks of every American. 
I was talking in my State of South Dakota

[[Page S3877]]

this week with someone in the tourism business who was saying the 
numbers this year are already down 11 percent from the previous year. I 
think that is a sign of more to come in terms of the economic hardship 
that is going to be imposed on the economy all across this country. My 
State of South Dakota, because it is so energy dependent as a result of 
tourism and agriculture and some of the industries that are very energy 
intensive, is particularly hard hit. Since I was first elected to 
Congress over 10 years ago, we voted on opening a small section of ANWR 
at least five times. Most recently, in the 2006 Defense appropriations 
bill, we had that vote.
  It is important to note at that time the Senate Democrats blocked oil 
and gas exploration in ANWR oil was trading for just over $50 a barrel. 
Well, now it is at $122 a barrel, and at that time it was argued it 
would take at least 10 years to develop the resources in ANWR. But I 
think it is high time we began the process of authorizing that 
exploration and production. We have up to 16 billion barrels of oil, we 
are told, up there, or a million barrels of oil each day that could be 
coming into our pipeline in this country and taking pressure off of gas 
prices. So I hope the fact that today the high price of gasoline is 
impacting more and more consumers across this country, more and more 
small business owners, more and more families, we will see a change in 
the mindset that will enable us to move forward with legislation such 
as that introduced by my colleague from New Mexico that will get at the 
heart of this problem. The problem is we don't have enough supply to 
keep up with the demand either at home or around the world, but at a 
minimum, we ought to be coming up with those solutions that are 
domestic, that are home grown, and by that I mean the oil reserves we 
have here in the United States or off our shores, the infinite amounts 
of coal we have that can be converted into fuels, the enormous 
potential we have out there for renewable energy such as ethanol made 
not only from corn but from other sources of biomass, and that we take 
steps to add refinery capacity.
  It is absolutely critical, in my mind and in my view, that we start 
moving in this direction. I heard a report earlier today that some 
projections are that oil prices could get up to somewhere around $200 a 
barrel. I can't imagine that happening or what the impact would be on 
our economy, but it is never too late to do the right thing, and we 
need to move quickly now and decisively on an energy policy that will 
increase our supply, our domestic supply, take pressure off of oil 
prices and prices at the pump that American consumers are dealing with 
every single day.
  I congratulate again the Senator from New Mexico for his bill. I am 
happy to be a cosponsor of it. I hope we are able to get a vote on it, 
and I hope we can do something once and for all about high gas prices 
and bring some relief to the American consumer.
  Mr. President, I yield the floor.
  Ms. CANTWELL. Mr. President, I rise to join in this discussion. I 
know my colleagues on the other side of the aisle have been out here 
talking about energy issues and the high price of gasoline.
  I certainly know when the Senate works together on energy policy, we 
get things done. The 2000 Senate Energy bill is an example of that, of 
how we worked in a bipartisan fashion. That bill, when it is fully 
implemented over the next 20 years, will save families over $1,000 a 
year at gas stations. That is because we put a good policy into place.
  The question is where we are going to go from here. I have listened 
to some of the things my colleagues on the other side of the aisle have 
said, and I hope when we are done with our statements, we can sit down 
and work together on trying to implement more legislation that will 
help the American consumer. But I think the notion that where we are 
today is a rational market and that supply and demand is driving what 
we are seeing, a 100-percent increase over last year in oil prices, is 
not correct.
  We just had a hearing in the Commerce Committee where airline 
executives were testifying, and they said they don't think this is 
supply and demand, and it has obviously caused a great impact on their 
industry. They would like us to be more aggressive in policing the 
markets, and they offered some suggestions. But many of my colleagues 
have been out here talking about opening drilling in the Arctic 
Wildlife Refuge. Well, we have had this debate. We have had it numerous 
times. I always like the administration's own Energy Information Agency 
that says drilling in the Arctic Wildlife Refuge would result, when it 
is fully implemented 10 or 20 years from now, in 1-penny-per-gallon 
savings. So that means when you take the average driving of a consumer 
at 400 or 500 gallons of gasoline in a year, you would have saved $5 on 
your annual gas bill from drilling in the Arctic Wildlife Refuge.
  God only gave the United States 3 percent of the world's oil 
reserves. We are not going to drill our way out of this situation. But 
I ask my colleagues to look at what is causing this problem because we 
have oil company executives who are saying oil should be at $50 to $55 
a barrel. This is the oil companies testifying in April. So they are 
saying the market isn't functioning correctly when it is at $120 a 
barrel.
  The PRESIDING OFFICER. The Senator's time has expired.
  Ms. CANTWELL. I thank the Chair.


                           Amendment No. 4719

  Mr. KENNEDY. Mr. President, The issue of wind coverage is important 
and is a concern of many families across the country and in my home 
State of Massachusetts and the Cape. Legislation must be developed that 
helps those families facing the threat of wind damage without harming 
those who already have flood insurance. I have the assurance from the 
chairman of the Banking Committee, my friend the senior Senator from 
Connecticut, that this is his intention as well and that he intends for 
a commission to study the issue and present to Congress a set of 
responsible recommendations for addressing this need.
  For this reason, I oppose the Wicker amendment at this time in order 
to allow further study of the matter and that a consensus approach may 
be put forward in the Senate in the near future.


                           Amendment No. 4719

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes of debate equally divided prior to the vote in relation to 
amendment No. 4719 offered by the Senator from Mississippi, Mr. Wicker.
  Who yields time?
  The Senator from Mississippi is recognized.
  Mr. WICKER. Mr. President, I understand we now have 1 minute each to 
close on the amendment; is that the order of the day?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. WICKER. Mr. President, I tell my colleagues that this is a 
multiple perils amendment to the National Flood Insurance Program. It 
is backed by the National Association of Realtors.
  The CBO will tell you it is budget neutral because the premiums have 
to be based on risk and actuarially sound. There are changes that could 
be made to make a good amendment perfect. We might not have those 
tonight. But I can assure my colleagues of this: The passage of the 
Wicker amendment tonight will ensure that a solution will come quicker 
to the problem of millions and millions of Americans not being able to 
ensure against wind and water damage at the same time. I urge passage 
of the Wicker amendment for that reason, if for no other.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Brown). The senior Senator from 
Connecticut is recognized.
  Mr. DODD. Mr. President, I have great respect for our colleague from 
Mississippi. The point we wish to make on this amendment is not that we 
disagree. The simple question, as pointed out by Senator Nelson from 
Florida, is that this amendment, as presently crafted, could end up 
costing billions more than we anticipated. There were $17 billion in 
claims in excess of the $1.5 billion in funds. Some predict this could 
be as much as $60 billion to $100 billion.
  We have a commission we are working on as part of the bill. We have 
to grapple with wind. We have to have an actuarially sound program. The 
last thing we want to do is destroy a flood program, which we could do 
by overwhelming it as a result of claims under

[[Page S3878]]

wind, without standards under which we judge those conditions and 
concerns. Based on what happened in 2005, the claims under wind might 
have been five times $17 billion.
  I am determined as a member of the committee to spend more time on 
this. In fact, we would have spent more time but for the foreclosure 
crisis to try to come up with answers. At this juncture, to adopt this 
amendment would cause the program to be put in great jeopardy.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
4719.
  Mr. SHELBY. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second? There is a 
sufficient second.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from New York (Mrs. Clinton), 
the Senator from Maryland (Ms. Mikulski), and the Senator from Illinois 
(Mr. Obama) are necessarily absent.
  I also announce that the Senator from Delaware (Mr. Biden) is absent 
because of illness.
  Mr. KYL. The following Senators are necessarily absent: the Senator 
from Nebraska (Mr. Hagel), the Senator from Arizona (Mr. McCain), and 
the Senator from Virginia (Mr. Warner).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 19, nays 74, as follows:

                      [Rollcall Vote No. 117 Leg.]

                                YEAS--19

     Chambliss
     Cochran
     Craig
     Graham
     Isakson
     Landrieu
     Lautenberg
     Lincoln
     Martinez
     McConnell
     Menendez
     Murkowski
     Nelson (FL)
     Pryor
     Schumer
     Snowe
     Stevens
     Vitter
     Wicker

                                NAYS--74

     Akaka
     Alexander
     Allard
     Barrasso
     Baucus
     Bayh
     Bennett
     Bingaman
     Bond
     Boxer
     Brown
     Brownback
     Bunning
     Burr
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Coburn
     Coleman
     Collins
     Conrad
     Corker
     Cornyn
     Crapo
     DeMint
     Dodd
     Dole
     Domenici
     Dorgan
     Durbin
     Ensign
     Enzi
     Feingold
     Feinstein
     Grassley
     Gregg
     Harkin
     Hatch
     Hutchison
     Inhofe
     Inouye
     Johnson
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Kyl
     Leahy
     Levin
     Lieberman
     Lugar
     McCaskill
     Murray
     Nelson (NE)
     Reed
     Reid
     Roberts
     Rockefeller
     Salazar
     Sanders
     Sessions
     Shelby
     Smith
     Specter
     Stabenow
     Sununu
     Tester
     Thune
     Voinovich
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--7

     Biden
     Clinton
     Hagel
     McCain
     Mikulski
     Obama
     Warner
  The amendment (No. 4719) was rejected.
  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. REID. Mr. President, I have had a number of conversations with 
Senator McConnell today. I have had a number of conversations with the 
two managers of the bill. I think we have a plan for finishing this 
legislation tomorrow. We have had good cooperation on both sides.
  What we are going to try to do is finish this bill. There are a 
number of Senators who want to offer amendments tonight. We can have 
the votes tonight or in the morning. The way things are looking, we can 
have them after morning business in the morning because there are not a 
lot of amendments.
  It is our goal to finish this bill tomorrow. If that is the case, 
then we wouldn't have to be in Friday. We have a lot of things to do 
legislatively, hearings, and other such business. What we will do is 
come in Monday and vote on the amendment that has been filed by the 
Republican leader dealing with energy. It is the Domenici energy 
package. We will have a side-by-side. I already explained to the 
Republican leader and others what that will be. It should be fairly 
direct and to the point. We will have a 60-vote margin on both of 
those.
  Following that, we will move to legislation that is bipartisan in 
nature. We will need to invoke cloture on it. It is the Judd Gregg 
firefighters legislation. That will get us through Monday.
  We have 2 weeks left. Hang on to your hats; we have a lot to do. We 
do not know if we are going to get the supplemental next week. We 
thought we would early next week, but we have learned today there may 
be some problems developing in the House. We are doing our very best to 
do that.
  I congratulate Senators Harkin and Chambliss and Senators Baucus and 
Grassley. We think--we don't think, we know the farm bill has been put 
to rest. We are going to be able to bring a bipartisan conference 
report to the Senate floor, hopefully, next week. There is no reason we 
should not be able to do that next week. Those are just a few of the 
moving parts we have.
  The supplemental is not going to be easy, as it never is. Once we get 
it from the House, we can do our job over here fairly rapidly.
  Mr. DOMENICI. Mr. President, can the leader explain how he is going 
to handle the two Energy bills? It seemed he was saying we would be 
finished with this bill before that. That is not the case, is it? These 
two amendments will be voted on as part of this bill.
  Mr. REID. What we would like to do--we certainly will work with the 
distinguished Republican leader at a later time. I don't think Senators 
Shelby and Dodd want energy to be part of this bill. If we can get 60 
votes on it, we will be happy to stick it in this bill.
  What Senator McConnell and I talked about--I think it is fair, and we 
do a lot of business with 60 votes around here. We are not trying to 
stop anybody from doing anything.
  Mr. DOMENICI. It is going to be freestanding.
  Mr. REID. Absolutely.
  Mr. DOMENICI. As long as there is ample time to discuss it.
  Mr. REID. Absolutely.
  Mr. DOMENICI. I thank the Senator.
  Mr. REID. Mr. President, I say to Senator Domenici, even though he 
and I have disagreed on a few issues over the years--few in number--I 
personally know how strongly the Senator from New Mexico feels about 
this energy issue. I hope the Senator doesn't get 60 votes, but we will 
do everything we can to ensure he gets a vote.
  Mr. President, able staff, both on the majority and minority side, 
say I may not have phrased everything right regarding the energy 
legislation. But I think Senator McConnell and I understand we are 
going to have two votes on energy Monday night. The exact terminology 
procedurally, I may not have outlined it properly, but I think we know 
where we are going.


                           Amendment No. 4722

  The PRESIDING OFFICER. Under previous the order, there is now 2 
minutes for debate equally divided prior to a vote on amendment No. 
4722 offered by the junior Senator from Louisiana. Who yields time?
  The junior Senator from Louisiana is recognized for 1 minute.
  Mr. VITTER. Mr. President, this amendment is very simple and modest. 
It simply updates the coverage limits available for a flood policy 
which have not been updated at all since 1994. It does not even take 
into account all inflation since then, just most inflation. It is what 
the House did. And under the CBO study of the House bill, the CBO said 
it does not increase the cost of the bill because people will obviously 
pay significantly higher premiums for the higher limits.
  This is a very modest updating of the limits. I ask for the support 
of my colleagues.
  I reserve the remainder of my time.
  The PRESIDING OFFICER (Mr. Casey). The Senator from Alabama.
  Mr. SHELBY. Mr. President, I oppose the Vitter amendment. The purpose 
of the Dodd-Shelby bill is to increase the actuarial soundness of the 
flood insurance program. This amendment by Senator Vitter would 
undermine greatly that effort. The amendment would extend flood 
insurance subsidies, crowd out private markets, and lead to larger 
program losses down the road.
  I urge my colleagues to join Senator Dodd and me in opposing the 
Vitter amendment.
  Mr. VITTER. Mr. President, reclaiming the remainder of my time, again 
I think it is very important to note the CBO analysis, with regard to 
this issue in the House bill, said it does not cost any more. It does 
not get in the way of actuarial soundness at all. This is only updating 
the limits for less than inflation since 1994.
  The PRESIDING OFFICER. The time of the Senator has expired.

[[Page S3879]]

  Mr. SHELBY. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second? There is 
sufficient second.
  The question is on agreeing to the amendment. The clerk will call the 
roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from New York (Mrs. Clinton), 
the Senator from Maryland (Ms. Mikulski), and the Senator from Illinois 
(Mr. Obama) are necessarily absent.
  I also announce that the Senator from Delaware (Mr. Biden) is absent 
due to illness.
  Mr. KYL. The following Senators are necessarily absent: the Senator 
from Nebraska (Mr. Hagel), the Senator from Arizona (Mr. McCain), and 
the Senator from Virginia (Mr. Warner).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 27, nays 66, as follows:

                      [Rollcall Vote No. 118 Leg.]

                                YEAS--27

     Bingaman
     Boxer
     Burr
     Cantwell
     Coburn
     Cochran
     Feinstein
     Graham
     Harkin
     Hatch
     Hutchison
     Klobuchar
     Landrieu
     Lautenberg
     Lincoln
     Martinez
     Menendez
     Murkowski
     Murray
     Nelson (FL)
     Pryor
     Salazar
     Schumer
     Stabenow
     Stevens
     Vitter
     Wicker

                                NAYS--66

     Akaka
     Alexander
     Allard
     Barrasso
     Baucus
     Bayh
     Bennett
     Bond
     Brown
     Brownback
     Bunning
     Byrd
     Cardin
     Carper
     Casey
     Chambliss
     Coleman
     Collins
     Conrad
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dodd
     Dole
     Domenici
     Dorgan
     Durbin
     Ensign
     Enzi
     Feingold
     Grassley
     Gregg
     Inhofe
     Inouye
     Isakson
     Johnson
     Kennedy
     Kerry
     Kohl
     Kyl
     Leahy
     Levin
     Lieberman
     Lugar
     McCaskill
     McConnell
     Nelson (NE)
     Reed
     Reid
     Roberts
     Rockefeller
     Sanders
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Sununu
     Tester
     Thune
     Voinovich
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--7

     Biden
     Clinton
     Hagel
     McCain
     Mikulski
     Obama
     Warner
  The amendment (No. 4722) was rejected.
  Mr. DODD. Mr. President, I move to reconsider the vote and move to 
reconsider the previous vote as well.
  Mr. LEAHY. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes of debate equally divided prior to a vote in relation to 
amendment No. 4723 offered by the Senator from Louisiana, Mr. Vitter.


                           Amendment No. 4723

  Mr. VITTER. Mr. President, periodically new flood maps are issued by 
FEMA. When a new flood map comes out, some properties that used to not 
be in a flood zone may now be in a flood zone, or move from a lesser to 
a more severe part of a flood zone.
  This amendment would simply say we are going to charge higher 
premiums, absolutely, but we will transition that over 5 years instead 
of the 2 years in the bill. The 5 years is the same provision as in the 
House bill. I think it is a reasonable transition, still getting to 
that new higher premium.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SHELBY. Mr. President, I oppose the Vitter amendment No. 4273. 
Most homes mapped into the mandatory coverage areas will only see 
limited increases in their premium rates.
  Homes or properties mapped into the higher risk areas should pay 
higher rates to match the reality of higher risk. Out-of-date maps that 
have vastly underclassified risk need to be updated, and delay in 
requiring property owners to pay their full freight is an extension of 
the inadvertent subsidies provided by inaccurate maps.
  I urge my colleagues to join Senator Dodd and me in opposing the 
Vitter amendment.
  I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the amendment.
  The clerk will call the roll.
  The bill clerk called the roll.
  Mr. DURBIN. I announce that the Senator from New York (Mrs. Clinton), 
the Senator from Maryland (Ms. Mikulski), the Senator from Illinois 
(Mr. Obama), and the Senator from Nevada (Mr. Reid) are necessarily 
absent.
  I also announce that the Senator from Delaware (Mr. Biden) is absent 
because of illness.
  Mr. KYL. The following Senators are necessarily absent: the Senator 
from Nebraska (Mr. Hagel), the Senator from Arizona (Mr. McCain), and 
the Senator from Virginia (Mr. Warner).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 23, nays 69, as follows:

                      [Rollcall Vote No. 119 Leg.]

                                YEAS--23

     Boxer
     Cantwell
     Cochran
     Cornyn
     Craig
     Crapo
     Durbin
     Feinstein
     Harkin
     Hutchison
     Landrieu
     Lautenberg
     Lincoln
     Martinez
     McCaskill
     Menendez
     Murray
     Nelson (FL)
     Pryor
     Schumer
     Stabenow
     Vitter
     Wicker

                                NAYS--69

     Akaka
     Alexander
     Allard
     Barrasso
     Baucus
     Bayh
     Bennett
     Bingaman
     Bond
     Brown
     Brownback
     Bunning
     Burr
     Byrd
     Cardin
     Carper
     Casey
     Chambliss
     Coburn
     Coleman
     Collins
     Conrad
     Corker
     DeMint
     Dodd
     Dole
     Domenici
     Dorgan
     Ensign
     Enzi
     Feingold
     Graham
     Grassley
     Gregg
     Hatch
     Inhofe
     Inouye
     Isakson
     Johnson
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Kyl
     Leahy
     Levin
     Lieberman
     Lugar
     McConnell
     Murkowski
     Nelson (NE)
     Reed
     Roberts
     Rockefeller
     Salazar
     Sanders
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stevens
     Sununu
     Tester
     Thune
     Voinovich
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--8

     Biden
     Clinton
     Hagel
     McCain
     Mikulski
     Obama
     Reid
     Warner
  The amendment (No. 4723) was rejected.
  Mr. DODD. I move to reconsider the vote.
  Mrs. LINCOLN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                    Amendment No. 4705, as Modified

  The PRESIDING OFFICER. Under the previous order, there will now be 2 
minutes of debate equally divided in relation to amendment No. 4705, as 
modified, offered by the Senator from Louisiana, Ms. Landrieu.


                Amendment No. 4705, as Further Modified

  Ms. LANDRIEU. Mr. President, I ask unanimous consent that amendment 
No. 4705 be modified further with the changes at the desk and that 
Senators Dorgan, Lincoln, and Pryor be added as cosponsors.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment, as further modified, is as follows:

       On page 9, strike line 12 and all that follows through page 
     10, line 16, and insert the following:
       (c) Study on Mandatory Purchase Requirements.--
       (1) In general.--Not later than 6 months after the date of 
     enactment of this Act, the Comptroller General shall conduct 
     and submit to Congress a study assessing the impact, 
     effectiveness, and feasibility of amending the provisions of 
     the Flood Disaster Protection Act of 1973 regarding the 
     properties that are subject to the mandatory flood insurance 
     coverage purchase requirements under such Act to extend such 
     requirements to properties located in any area that would be 
     designated as an area having special flood hazards but for 
     the existence of a structural flood protection system.
       (2) Content of report.--In carrying out the study required 
     under paragraph (1), the Comptroller General shall 
     determine--
       (A) the regulatory, financial and economic impacts of 
     extending the mandatory purchase requirements described under 
     paragraph (1) on the costs of homeownership, the actuarial 
     soundness of the National Flood Insurance Program, the 
     Federal Emergency Management Agency, local communities, 
     insurance companies, and local land use;
       (B) the effectiveness of extending such mandatory purchase 
     requirements in protecting homeowners from financial loss and 
     in protecting the financial soundness of the National Flood 
     Insurance Program; and
       (C) any impact on lenders of complying with or enforcing 
     such extended mandatory requirements.

  Ms. LANDRIEU. Mr. President, if this amendment does not pass, 
significant portions of many States will be

[[Page S3880]]

required to have flood insurance which has never been required before. 
The underlying bill says everywhere there is a dike, a dam, or a levy, 
regardless of the situation behind the dike, dam, or levy, regardless 
of how strong the dike, dam, or levy is, you will be required to have 
flood insurance. That is a very different jump from where we are today. 
Our amendment strikes that language and instead says there shall be a 
study and evaluation to make better determinations.
  This is a tough issue because we were behind levees that broke. It 
would have been a good idea, but this is a tax and fees on people 
without the appropriate study. That is what our amendment does.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, let me take 30 seconds to say to Members, if 
they have any amendments on this bill, I will stay around this evening. 
Anyone who has an amendment, we will consider them this evening. There 
will be no votes until tomorrow, but I will stay around tonight to 
engage in debate on amendments.
  Let me express my opposition to the Landrieu amendment. This is less 
than $1 a day; at the most it is $350 a year for 350,000 dollars' worth 
of insurance. Twenty-five percent of all the claims against the flood 
insurance program come out of residual risk areas. One percent of the 
policies are coming out of that area. If we are going to have an 
actuarially sound program, you have to ask people to contribute.
  Here is a list of dikes and dams that are failing right now. There is 
no guarantee these are going to last forever. We learned that painfully 
in Louisiana. When they don't, just like homeowner policies, you want 
to have something in place that will allow people to get back on their 
feet again other than coming to raid the Treasury to do so. Again, 
$350,000 for the maximum of less than $1 a day is very little to ask 
for a program that is actuarially sound. That is what we are trying to 
do with this bill so we don't end up raiding the Treasury in the long 
run.
  I urge defeat of the amendment and ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the amendment. The clerk will call the 
roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from New York (Mrs. Clinton), 
the Senator from Maryland (Mrs. Mikulski), the Senator from Illinois 
(Mr. Obama), and the Senator from Nevada (Mr. Reid) are necessarily 
absent.
  I also announce that the Senator from Delaware (Mr. Biden) is absent 
because of illness.
  Mr. KYL. The following Senators are necessarily absent: the Senator 
from Nebraska (Mr. Hagel), the Senator from Arizona (Mr. McCain), and 
the Senator from Virginia (Mr. Warner).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 30, nays 62, as follows:

                      [Rollcall Vote No. 120 Leg.]

                                YEAS--30

     Baucus
     Bingaman
     Cantwell
     Cochran
     Coleman
     Conrad
     Cornyn
     Dorgan
     Durbin
     Harkin
     Hutchison
     Inhofe
     Klobuchar
     Kyl
     Landrieu
     Lautenberg
     Levin
     Lieberman
     Lincoln
     Martinez
     McCaskill
     Menendez
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Stabenow
     Tester
     Vitter
     Wicker

                                NAYS--62

     Akaka
     Alexander
     Allard
     Barrasso
     Bayh
     Bennett
     Bond
     Boxer
     Brown
     Brownback
     Bunning
     Burr
     Byrd
     Cardin
     Carper
     Casey
     Chambliss
     Coburn
     Collins
     Corker
     Craig
     Crapo
     DeMint
     Dodd
     Dole
     Domenici
     Ensign
     Enzi
     Feingold
     Feinstein
     Graham
     Grassley
     Gregg
     Hatch
     Inouye
     Isakson
     Johnson
     Kennedy
     Kerry
     Kohl
     Leahy
     Lugar
     McConnell
     Murkowski
     Reed
     Roberts
     Rockefeller
     Salazar
     Sanders
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stevens
     Sununu
     Thune
     Voinovich
     Webb
     Whitehouse
     Wyden

                             NOT VOTING--8

     Biden
     Clinton
     Hagel
     McCain
     Mikulski
     Obama
     Reid
     Warner
  The amendment (No. 4705), as further modified, was rejected.
  Mr. DODD. I move to reconsider the vote, and I move to lay that 
motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The Senator from Florida.


                Amendment No. 4709 to Amendment No. 4707

 (Purpose: To establish a National Catastrophe Risks Consortium and a 
  National Homeowners' Insurance Stabilization Program, and for other 
                               purposes)

  Mr. NELSON of Florida. Mr. President, I send amendment No. 4709 to 
the desk. It has been filed, and I call it up.
  The PRESIDING OFFICER. Without objection, the pending amendments are 
set aside.
  The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Florida [Mr. Nelson], for himself, Mrs. 
     Clinton, Mr. Martinez, and Ms. Landrieu, proposes an 
     amendment numbered 4709 to amendment No. 4707.

  (The amendment is printed in the Record of Tuesday, May 6, 2008, 
under ``Text of Amendments.'')
  Mr. NELSON of Florida. Mr. President, this is an amendment to 
recognize what we have been discussing on this floor earlier: that the 
big one is coming. The big one is either a category 5 hurricane that is 
hitting an urbanized area of the coast, of which there is some loss of 
$50 billion of insurance losses in wind losses, or it is an 8.5 
earthquake on the Richter scale that hits downtown San Francisco or 
downtown Memphis--either one of which no one State could withstand that 
kind of economic loss. There is no one insurance company that can 
withstand that economic loss.
  It is clear that the package of bills Senator Martinez and I--and he, 
by the way, is a cosponsor of this amendment--the package of bills we 
have filed to address the plethora of subjects having to do with 
catastrophic risk--a national catastrophe fund is one of those bills. 
That is not going to pass. The White House opposes it. But what could 
pass is what has already passed the House of Representatives and is 
down here and is the essence of this amendment; that is, it sets up two 
things. It sets up, on the one hand, a consortium whereby if a State's 
catastrophe fund goes dry and they need additional bonding, that State 
then has set up a consortium where it is easy to go into the private 
bond market for catastrophe bonds and get that bonding back to the 
State catastrophe fund. That is one part of this bill. The other part 
of this bill is also where the State has a State catastrophe fund.
  What is a catastrophe fund? It is a reinsurance fund. It reinsures 
insurance companies against the catastrophic risk. In the case of 
Florida, it is hurricanes. In the case of California, it is 
earthquakes. In the case of Memphis, TN, it is earthquakes. In the case 
of the gulf coast, the Atlantic seaboard, it is hurricanes. That is 
what a State catastrophe fund is.
  Florida has that fund. There are a lot of other States that do not. 
So this amendment would only apply to those that set up and address the 
catastrophic risk at the State level first. Therefore, if a State has a 
State catastrophe fund, it would have another opportunity to have the 
Federal Government help it. If the well ran dry in its State 
catastrophe fund and was out of money, it then could borrow cash from 
the Federal Government at market rates to replenish the cash until it 
could get its own cash reserves replenished by its mechanism which, in 
the case of Florida, is that they assess all of the policyholders--the 
property and casualty policyholders--in the State. Now, that is the way 
Florida does it.
  This is not a new Federal program. This is a Federal incentive to the 
States solving this problem but recognizing that the big one is 
coming--either a hurricane or an earthquake--that when the big one 
does, if the State catastrophe fund, the reinsurance fund cannot handle 
it, the Federal Government is going to step in but only to the extent 
of helping the State catastrophe fund facilitate getting bonds in the 
private marketplace--catastrophe bonds--or, No. 2, help the State 
catastrophe fund have ready quick access to cash from the Federal 
Government but lent at fair market rates.
  Now, this is utilizing the private marketplace. This is not a new 
Federal

[[Page S3881]]

program. It is a commonsense solution. It has already passed the House 
overwhelmingly. This is the vehicle that we have to offer it all. Even 
though this is a flood insurance bill, it is an insurance bill. We are 
not trying to monkey around with the flood insurance program; we are 
merely trying to have a vehicle by which we can bring this up.

  Now, they are going to say it is not germane because it is not flood 
insurance. So that means we are going to have to get the 60-vote 
threshold to waive a point of order that it is not germane, and that is 
a high threshold. But nevertheless, we have to try.
  I notice my colleague from Florida is here, and he is a cosponsor. I 
wish to thank him for that cosponsorship.
  I ask unanimous consent that a detailed explanation of my amendment 
be printed in the Record at this point.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                   Summary of the Homeowners Defense

       The Homeowners Defense amendment establishes a Consortium, 
     a non-Federal entity that States may choose to join. The 
     Consortium is designed to encourage and facilitate the 
     transfer of catastrophe risk from State catastrophe 
     reinsurance facilities/funds into the private markets, 
     notably, the catastrophe bond markets.
       In addition the bill also creates a Federal loan program to 
     provide financing for qualified reinsurance programs and 
     state residual insurance market entities that choose to 
     participate to help cover the cost of paying out in the event 
     of a disaster.
       The bill includes general eligibility and underwriting 
     requirement provisions that would:
       Ensure that the savings realized form Titles I and II are 
     passed through to primary policy holders
       Encourage compliance with loss mitigation requirements
       Ensure that actuarial rates are charged
       Ensure that State reinsurance programs only underwrite 
     truly catastrophic events (i.e. Katrina)


           Title I--The National Catastrophe Risk Consortium

       Title I establishes the National Catastrophe Risk 
     Consortium, an organization that States can choose to join 
     for the purposes of transferring catastrophe risk to the 
     private market. To be clear, the Consortium would not assume 
     the States' disaster risk. The risk transfer would be 
     achieved through the issuance of risk-linked securities 
     catastrophe bonds) or through negotiate reinsurance 
     contracts. The consortium is designed to function as a 
     conduit, so that at no time would risk transfer either to or 
     from the Federal government.
       The Consortium would be governed by a board comprised of 
     Federal and participating State representatives with all 
     members having a single vote. All States are eligible to 
     join. Much of the Consortium's needs for risk modeling, 
     financial consulting, and relations with the capital markets 
     would be arranged for on a contract basis rather than 
     provided by a permanent staff.
       The Consortium offers States and private market 
     participants a unique opportunity to benefit from combining 
     catastrophic risks diversified by the type of peril and 
     geographic regions. The Consortium staff would work in 
     coordination with participating States to catalogue 
     inventories of catastrophic risk.
       Catastrophe bond underwriters and other market participants 
     would be able to access this database to structure bonds or 
     reinsurance contracts and treaties.
       The Consortium would serve as a conduit issuer of 
     catastrophe bonds on behalf of the participating States, but 
     not actually take possession of any bond proceeds, coupon 
     payments, or underlying risk. Through the aggregation and 
     maintenance of market statistics, the Consortium would 
     develop industry standards for the catastrophe bond and risk 
     transference markets. Such standards include, but are not 
     limited to, the terms of bond offerings, the nature of 
     triggers used and the definitions of risks.
       $20,000,000 per year is authorized to cover the costs of 
     the establishing and administering the consortium.


     Title II--National Homeowners Insurance Stabilization Program

       This title creates a National Homeowners Insurance 
     Stabilization Program within the Department of Treasury 
     designed to ensure a stable private insurance market by 
     extending Federal loans to qualified reinsurance programs in 
     States wishing to participate in the program. Specifically, 
     the program would make two types of loans of last resort 
     available: liquidity loans and catastrophic loans.
       Liquidity loans would be extended to qualified reinsurance 
     programs that have a capital liquidity shortage due to and 
     following an insured catastrophic event.
       The amount of the loan cannot exceed the ceiling coverage 
     level for the reinsurance program. The liquidity loan would 
     have an interest rate set at 3 percentage points higher than 
     marketable obligations of the Treasury having the same term 
     to maturity of between 5 and 10 years.
       Catastrophic loans would be extended to a qualified 
     reinsurance program when it has sustained losses above its 
     maximum underwriting capacity. The catastrophic loan will 
     have an annual interest rate set at 0.20 percentage points 
     higher than marketable obligations of the Treasury having the 
     same term to maturity and maturity of no less than 10 years.
       As a transitional measure, during the first five years of 
     the program, States that do not have a qualified reinsurance 
     plan would be eligible to participate in the Title II program 
     through their residual insurance market entities. Currently 
     36 states have a residual market entity that would meet the 
     requirements of this bill.

  Mr. NELSON of Florida. Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Florida is recognized.
  Mr. MARTINEZ. Mr. President, I thank Senator Nelson, my dear 
colleague from the State of Florida, for bringing this bill forward, of 
which I am a cosponsor. I wish to associate myself with his comments 
regarding this very important proposal for the State of Florida. What 
already passed in the House ought to be given an opportunity to be 
considered by the Senate. I believe it could make a big difference to a 
lot of Florida homeowners who today are hurting because of high 
insurance costs because of unavailability of insurance and this is a 
way of safeguarding and actually it is a way of planning ahead for the 
inevitable storm.
  Senator Nelson likes to say the big one is coming. The fact is it is 
inevitable that we will have other storms and some of them are going to 
be substantially large storms. As that occurs, the Federal Government 
will have a response. Inevitably, FEMA will be there, and there will be 
other responses to help people. Wouldn't it make much more sense to 
have a Federal backstop to an insurance program that could then 
provide, in an orderly way, the relief that surely will come to Florida 
or whatever other State is afflicted by the big natural disaster as we 
know Katrina was and other terrible storms can be.
  I met today with the Director of the National Hurricane Center. I 
presume Senator Nelson may have met him as well. He was coming around 
to tell us about their programs, the terrific job they do of 
forecasting, but it is also a reminder that the hurricane season is 
upon us. About a month from now will be the official beginning of the 
hurricane season. As that happens, surely I will join with Senator 
Nelson in saying the big one is sure to come, and when it does it will 
be nice to have the kinds of funds the Klein-Mahoney legislation 
envisions and which I fully support.
  I thank the Chair and I yield the floor.
  Mr. DODD. Mr. President, pending some language to be drafted on a UC 
request, let me respond to the comments of Senators Nelson and Martinez 
of Florida.
  First, I commend Bill Nelson and the two House Members who crafted 
this legislative proposal to deal with the national catastrophe events. 
I commend them because they thought about this in a constructive way as 
to how they can possibly get resources to come into the States to deal 
with national catastrophes. Every one of us is confronted with this 
problem, whether you are in Florida with hurricane season, or in the 
Midwest with cyclones and tornadoes and floods, or whatever else may 
occur. We have all been confronted with how to deal with devastating 
natural disasters. It has been a long-time interest of mine.
  Some years ago, going back almost 20 years, Senators Stevens, Inouye, 
others, and I tried to craft exactly something like this. We didn't get 
very far back in those days. The idea was to try to come up with a 
national plan that would allow us to be able to deal with these issues.
  I begin my comments about the Nelson amendment as a complimentary 
one. We tried to accommodate it to some degree, because there are a lot 
of different ideas on how to do this. The authors of the original idea 
in the other body have a very creative idea. I welcome that. And there 
are others; it is not the only one. Rather than trying to adopt this in 
the middle of a flood insurance bill, as you heard Senator Nelson talk 
about earlier, we adopted a commission study for 9 months to examine 
these various ideas, and to come back to us with recommendations within 
that 9-month period. So we will

[[Page S3882]]

look clearly at this idea, but there are others as well. That is the 
intention.
  We also included in the legislation several other ideas to try and 
deal with some of these problems. Two initiatives particularly, I 
admit, don't address the overall problem. They assist homeowners in 
communities faced with these problems. One is to provide a tax credit 
to homeowners who live in coastal areas--and it is not in the bill; it 
is a separate piece of legislation--who have seen property insurance 
rates substantially increase. That is certainly the case in Florida, 
where they have seen significant increases in those rates.
  The bill I have introduced would give homeowners an immediate relief 
to offset part of the rise in premiums as we grapple with the long-term 
solutions. Again, it is not an answer, but it is some financial relief 
before we sort out this issue. I hope it will be on an appropriate 
vehicle, and I hope we will have an opportunity to offer that idea in 
the next several weeks.
  I have also introduced a bill to provide grants and loans to home and 
business owners to undertake mitigation efforts. The best we can do for 
people in harm's way is to help them lessen the risk in the first 
place, with things such as storm shutters, hurricane clips, elevating 
essential utilities, and even elevating an entire house, in some cases. 
That will not only reduce insurance costs but save lives.
  Mitigation costs are not inexpensive. We thought it might be a great 
help to assist in this so when problems arise, there is an effort to 
reduce the amount of damage that would occur. First, I admit these are 
not solutions to the issue raised by our colleague from Florida. I urge 
my colleagues at this juncture to add a specific idea such as this. But 
this is going a little beyond where we are prepared to go. That is my 
note of caution.
  There is a vote on this tomorrow. I will be voting against the 
amendment offered by Senator Nelson, but not because I am opposed to 
the idea. In fact, I would make a case that I believe there may be 
legal authority that exists today to do some things already that he is 
talking about in his amendment. Some may be redundant based on what 
existing law would allow States to do to assist with funds in these 
areas. Some would clearly require new authority.
  I urge colleagues, when considering this, not to give up. We will get 
to it. We have to. I think the best way to approach it is in a more 
comprehensive fashion. I thank them for their ideas, and I commend the 
two House Members of the Florida delegation, the principal authors of 
this idea. I commend Senator Martinez, as well, for addressing these 
issues. I met with both of the House Members in my office several weeks 
ago and, ironically, at the time they came to my office, the chief 
executive officer of the Travelers Insurance Company, Jay Fishman, a 
very good friend of mine, a good fellow, was in the office, and he has 
authored his own idea that has attracted broad-based interest. Despite 
the fact that somebody would say it has come from the CEO of an 
insurance company, he is an original thinker; he thinks outside of the 
box. In fact, both of the members of the Florida delegation were quite 
taken with his idea and thought it was very creative as a national 
model. That is one other idea that is out there that we happened to 
discuss that day in the lengthy conversation we had on this issue.
  There are many ideas, a lot of which have very sound merit, but they 
need to be thought out. I am a little uneasy about taking an idea and 
adopting it as an amendment as part of a flood insurance bill without 
understanding the full implications of what is involved in it. For 
those reasons, I will be objecting, or at least asking my colleagues to 
turn down this particular approach--not because it is a bad idea or it 
may not work but because we are not quite ready to accept that at this 
juncture.
  The PRESIDING OFFICER. The Senator from South Carolina is recognized.


                Amendment No. 4711 to Amendment No. 4707

  Mr. DeMINT. Mr. President, I wish to call up two amendments and then 
make some brief comments about them. The first amendment is amendment 
No. 4711, which I believe is at the desk.
  The PRESIDING OFFICER. Without objection, the pending amendments are 
set aside.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from South Carolina [Mr. DeMint] proposes an 
     amendment numbered 4711 to amendment No. 4707.

  Mr. DeMINT. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

  (Purpose: To require the Director to conduct a study on the impact, 
effectiveness, and feasibility of amending section 1361 of the National 
   Flood Insurance Act of 1968 to include widely used and nationally 
recognized building codes as part of the floodplain management criteria 
                     developed under such section)

       At the end, add the following:

     SEC. ____. REPORT ON INCLUSION OF BUILDING CODES IN 
                   FLOODPLAIN MANAGEMENT CRITERIA.

       Not later than 6 months after the date of the enactment of 
     this Act, the Director of the Federal Emergency Management 
     Agency shall conduct a study and submit a report to the 
     Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate regarding the impact, 
     effectiveness, and feasibility of amending section 1361 of 
     the National Flood Insurance Act of 1968 (42 U.S.C. 4102) to 
     include widely used and nationally recognized building codes 
     as part of the floodplain management criteria developed under 
     such section, and shall determine--
       (1) the regulatory, financial, and economic impacts of such 
     a building code requirement on homeowners, States and local 
     communities, local land use policies, and the Federal 
     Emergency Management Agency;
       (2) the resources required of State and local communities 
     to administer and enforce such a building code requirement;
       (3) the effectiveness of such a building code requirement 
     in reducing flood-related damage to buildings and contents;
       (4) the impact of such a building code requirement on the 
     actuarial soundness of the National Flood Insurance Program;
       (5) the effectiveness of nationally recognized codes in 
     allowing innovative materials and systems for flood-resistant 
     construction; and
       (6) the feasibility and effectiveness of providing an 
     incentive in lower premium rates for flood insurance coverage 
     under such Act for structures meeting whichever of such 
     widely used and nationally recognized building code or any 
     applicable local building code provides greater protection 
     from flood damage.


         Amendment No. 4710, as Modified, to Amendment No. 4707

  Mr. DeMINT. Mr. President, my next amendment is actually a 
modification which I need to send to the desk. It is amendment No. 
4710.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from South Carolina [Mr. DeMint] proposes an 
     amendment numbered 4710, as modified.

  Mr. DeMINT. Mr. President, I ask that the reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       On page 8, line 13, strike ``and''.
       On page 8, line 16, strike ``policy.''.'' and insert the 
     following: ``policy; and
       ``(3) any property purchased on or after the date of 
     enactment of the Flood Insurance Reform and Modernization Act 
     of 2007.''.

  Mr. DeMINT. Mr. President, if I could take a couple of minutes to 
explain these, my hope is that I can even get the chairman's support of 
this.
  Amendment No. 4711 is actually a study that I hope we can all agree 
on. It is a study that would try to determine the feasibility of using 
incentives of lower flood insurance rates when consumers or businesses 
have their homes or business locations comply with nationally 
recognized building codes. A number of codes are out there. If we could 
encourage better construction of buildings, to make them more resistant 
to storms, it is likely we could save the flood insurance program a lot 
of money. So this amendment would simply study the feasibility of those 
incentives and what it might do to insurance rates, as well as to 
saving Government money.
  My second amendment, No. 4710, ends the practice of permanently 
subsidizing premiums for older homes in flood zones, which can be as 
large as 65-percent. The bill does a good job phasing out these 
subsidies for just about every other property: businesses, vacation 
rentals, and primary residences that have been renovated since the 
flood zone mapping was determined. But there are a number of homes that

[[Page S3883]]

are grandfathered into subsidies up to 65 percent. These are homes that 
were built before 1975 or when their area's flood mapping was actually 
done. These primary residences enjoy this subsidy, and will continue to 
under the current bill.
  What my amendment does not do is change the insurance rates or the 
subsidy for those who are grandfathered into the current rate that we 
call pre-firm, or before flood insurance rate maps were completed; in 
other words, these are folks who could legitimately have said they did 
not know they were in a flood plain when they bought their home. I 
think their rates and subsidies should stay the same.
  What my amendment does is make the premiums for pre-firm properties 
sold after this bill's enactment the same actuarial rates of homes that 
were built after the new mapping was complete, or post-firm. So it is a 
relatively simple amendment, and I think it gives more equity to the 
total bill by making sure all properties are eventually treated 
equally.
  So I will provide more detail tomorrow, but I hope the chairman will 
consider both of those amendments because I would love to have his 
support.
  With that, I yield the floor.
  Mr. DODD. Mr. President, I note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DODD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________