[Congressional Record Volume 154, Number 94 (Monday, June 9, 2008)]
[Senate]
[Pages S5380-S5387]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
AMERICAN ENERGY POLICY
Mr. SESSIONS. Mr. President, the American people are very frustrated
with the failure of Congress to act on the great problems facing our
country, a lot of problems, but I believe they are especially concerned
about surging gasoline and energy prices. They are angry. They do not
believe we have done enough in this Congress, and I think when they
find out the leadership of this Congress, the Democratic leadership, is
proposing legislation that will raise, not lower gas prices, they will
not be happy.
Indeed, I received a note today from my staff that an experienced
reporter at the Birmingham News, Mr. Tom Gordon, today wrote that my
home county in Alabama, Wilcox County, again leads the Nation in the
percentage of income that its citizens spend monthly on motor fuel, 16
percent, because the county has low incomes and people drive long
distances to work.
It is a big deal. It is absolutely a real matter of importance. I
think we need to do something about it. They want us to reduce our
dependence on foreign oil, to produce more clean American energy, to
show we are taking steps to contain and I think maybe even hopefully
reduce the surging prices.
These prices are threatening the family budget. They are threatening
American jobs and the American economy. Turn on any news program and
read any news magazine. We are on track to spend $500 billion abroad
this year to purchase 60 percent of the oil we consume; 60 percent-plus
is being imported. This balance-of-trade deficit weakens our dollar,
requiring even more dollars to purchase the same amount of oil. With
the dollar getting weaker, you need more dollars to buy the same amount
of oil. We are creating jobs and wealth in nations around the world
with our money when this missing wealth in our country that we send
abroad reduces our own jobs.
Families are routinely paying $50, $75, $100 more a month for the
same or even less gasoline than they were a few years ago. When this
added expense reduces the ability of hard-working middle-class
Americans to purchase what they need to get by on, or to take care of
their families, and when this reduction in spending on oil reduces
spending on things other than oil that the American people need, is it
any wonder the economy is struggling, I ask? Is it
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any wonder millions of American are struggling to get by? Is it any
wonder Americans from the suites in New York to the rural roads of
Alabama are worried?
What is it our constituents are asking us to do? I think they want us
to get busy doing what we know works. What works does not mean this
$6.7 trillion cap-and-trade plan that has been introduced here that
will burden the American economy by driving up the cost of gasoline by
another 50 cents in the next number of years, 20 years; driving up the
cost of electricity by 44 percent; driving up the price of gasoline
three times that 50 cents in the years to come in the distant future;
and drive business away from America.
It will make our manufacturing industry less competitive than the
global marketplace at a time when we are already struggling to compete
and stay up. As I have noted, it will drive up unemployment, and we
unfortunately saw a very large surge in unemployment last week, to 5.5
percent.
First, it is not a horrible rate of unemployment, but a horrible
increase in unemployment of five-tenths of 1 percent. As one economist
said, I would not have been surprised to see 6 percent unemployment
over the next 12 months. I did not expect to see half of that occur in
1 month.
People know we have a problem and they understand it. I guess the
question is, is there anything we can do about it or are we hopeless?
Is there something we can do to bring down the price of oil and make
more sense in our economy to confront the danger that high energy
prices, gasoline prices pose to America's well being?
Yes, there is. There is. Fundamentally we need to do what works, and
we know a lot of things work. It is past time to get started in taking
the long road back to a sound energy policy that can and will bring
down or at least contain the price of crude oil and gasoline.
I propose that we work together on common ground, liberals,
conservatives, Republicans, and Democrats. It is within our grasp and
the people are ready for our leadership. We have an opportunity to
address our Nation's crisis. The challenge is truly bipartisan in every
way. After all, high energy prices affect Democrats, Republicans, and
Independents all in the same way. While conservation and increasing the
production of American oil and gas in an environmentally sound way can
help contain the surge in prices, we need to do that. We must seek
common ground further to develop and deploy technological breakthroughs
necessary to solve our Nation's energy crisis.
We must commit ourselves as a nation to the production of clean and
affordable energy sources. We must commit to policies that will move us
beyond oil in a financially and prudent way. Only by championing
national interests over any special interests will we be able to secure
the common interests and lower energy prices and have a cleaner
environment, both of which I believe are possible.
But we are far behind. Business-as-usual policies crafted to benefit
favored constituents are no way to develop sound energy solutions to
our Nation's needs. That is why I am proposing legislation to direct
the Department of Energy, which I think can do more and should do more,
to evaluate the host of national incentives we have now on the books to
create alternative sources of energy, some of which have worked well,
and to recommend changes based on what is in the national interest.
The national interest is to utilize those incentives to the maximum
amount possible to create the most amount of clean American energy.
Frankly, there is too much in some areas and not enough in other areas.
We need to utilize incentives to jump-start industries that can help
build a source of clean American energy. For example, we did succeed in
creating an ethanol industry through a very sizable incentive. That has
worked. We have drawn it down some now. The Agriculture bill that
passed the Senate reduced some of those incentives. Perhaps they should
have been reduced more since it has been such a healthy enterprise.
That money could have been applied to other areas and other aspects of
alternative energy that could jump-start those sources.
Congress also suffers too often from a short-term focus on the
pressing issues of the day. Too often, we fail to adequately plan for
the future needs of the country. That is why I propose that the
Department of Energy develop a comprehensive, long-term energy strategy
to anticipate unforeseen needs and to promote continued development of
innovative energy sources. In order to achieve these goals, the
Department would have to report its recommendations to Congress
frequently.
I am not ashamed to say that I have a lot of issues on my plate. I am
on the Armed Services Committee, the Judiciary Committee, and the
Energy Committee. The Department of Energy has a huge staff, a large
number of personnel. They spend all their time every day working on
energy issues. We should have leadership from them. They should tell us
what is working and what is not. They should help Congress set good
policy. They could do more in that regard. They should not be timid
about it. They should help us, step forward, make some proposals, and
be more aggressive.
There are many things we can do now to lower the price of gasoline
and promote clean American energy. Indeed, progress will be made by a
thousand steps, large and small, but they must be smart steps. They
don't need to be steps that cost far more than they will ever return in
terms of energy per cost. They don't need to be political pork.
In 2005, Congress directed the Department of Interior to study the
oil reserves in the Outer Continental Shelf. That is the deep waters
off our coast, not right on the beaches. The study found that 8.5
billion barrels of oil are currently known to exist off our Nation's
shores. In addition, the study estimated that approximately 86 billion
barrels of oil exist in these waters. We spend maybe $5 billion a year
on oil. That includes the 60 percent we import. The U.S. Geological
Survey and private industry also estimate that approximately 25 billion
barrels of oil exist on shore in the lower 48 States and Alaska. This
totals approximately 119 billion barrels of oil alone and would be
enough to power millions of automobiles for a century--not every
automobile in the country for a century, but it would carry us a long
way until we continue to work hard to have those breakthroughs that get
us off oil maybe completely. The sooner the better for me.
These are not the only reserves known to exist from studies. These
are reserves estimated from studies made 30 years ago. Further
exploration and modern seismographic work will certainly locate far
more reserves.
The question fundamentally is, to the American people and my
colleagues, do we import more and more of our oil and gas from places
that produce it in the North Sea and the Persian Gulf and the Caspian
Sea off the coast of Africa and South America or do we produce it
safely off our own shores, where the money stays at home, where we are
not sending $500 billion of American citizens' money to people who
build palaces in the desert with nothing more than basically money they
have taxed us with? The price of oil today is set in large part because
OPEC has reduced production, creating a shortage in the whole world.
That is the fundamental problem. There are a lot of others, but that is
the fundamental problem. We need to fight back. The way we fight back
is to keep more of our money at home and send it less to these
countries. How simple is that? But the policies we are having here go
the opposite direction. They are not allowing us to produce more oil
and gas in America, safely and cleanly.
We have and can move forward a lot of other sources of oil. One could
be oil from oil shale. Some estimate those reserves to be approximately
1.8 trillion barrels of oil--a lifetime of oil in oil shale. There are
a lot of things that have to happen to make that be produced. We have
to be sure it is done in an environmental way. But we have major
corporations that are willing to spend billions of dollars to see if
they can produce it in that fashion. We blocked them from doing that
last year. When I say ``we,'' I didn't agree to it, but the Congress
slipped that in in conference committee and basically blocked that in
the dead of night without any hearings to discuss the merits.
For example, Saudi Arabia, which has the largest amount of oil known
in
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the world, has only approximately 267 billion barrels of oil, whereas
we have 1,800 billion barrels of oil in oil shale. It is primarily
located in the West in governmental lands.
What about coal? We are the Saudi Arabia of coal. We have 25 percent
of the world's coal reserves, which is enough to last approximately 250
years at the current rate. Surely long before then, we will have
developed alternatives to carbon fuels. Converting this tremendous
resource into liquid transportation fuel using proven technology can
bring down the price of gasoline. It really can.
At this very moment, private companies are prepared to convert coal
to liquid fuel and sell it to the Air Force for aircraft, sequestering
the carbon so it is not emitted into the atmosphere, at approximately
$85 a barrel. That is $40 less than the world market price of oil
today, which is over $130 a barrel. They are prepared to do that.
Somebody slipped in language to block that from occurring, so the Air
Force now is in limbo as to whether they can enter into a long-term
contract necessary to guarantee domestic sources of clean fuel made
from American coal, all the money staying in the United States, helping
enhance our national security. We need to repeal that provision. We
need to let the Air Force go ahead with this. It would mean tremendous
opportunity to affirm the Air Force's initiative and to verify as a
practical matter whether this large amount of fuel can be converted
from coal. The way they do it, they heat the coal, and off comes the
gas, and then you can reconvert that back to a liquid. It comes out
cleaner, just spotless clean. It cleans the engine instead of making it
dirty. It is a fabulous fuel.
Diesel fuel--let me share this with you. These are some things we can
do and get busy now, that we should already have done. Diesel fuel is
more efficient than other fuels. According to Popular Mechanics
magazine--recently they did a comparison; I can't guarantee everything
they said because the numbers are pretty astounding, but in a sense it
is good news--the next generation already in existence of clean diesel
engines runs approximately 38 percent further on a gallon of fuel than
a similar size automobile that is a hybrid automobile. The magazine
found that a 2007 Volkswagen Polo Bluemotion diesel automobile travels
38 percent farther on a gallon of fuel than a 2007 Toyota Prius hybrid.
We know for a fact that diesel gets 30, 35, 40 percent better mileage
than a gasoline engine. In fact, Europe has 50 percent of its
automobiles diesel. Why? Because it gets better gas mileage. We have
gone the exact opposite direction. We only have 3 percent of our fleet
diesel. Why are we not creating policies that will help Americans move
to more fuel-efficient diesel engines and do something about this odd
circumstance when diesel fuel is now considerably more expensive? It is
about 15 percent more expensive, but it gets at least 30 percent better
mileage. It is still a buy, even at the prices at the pump today for
diesel. In addition to being fuel efficient, diesel-powered vehicles
release fewer CO2 emissions than similar hybrids or gasoline
engines; CO2, the global warming gas, less of that from a
diesel engine. It is so much cleaner today than people's memory of
smoky diesels in the past. It is an entirely new engine, an entirely
new procedure.
According to the Popular Mechanics field test, the Volkswagen model
tested by the magazine emitted 5 percent fewer greenhouse gases per
mile than a Toyota Prius. I was able to drive a Prius the week before
last around Alabama. It was very impressive. Why are we not thinking
about diesel as we seek to clean up our air and reduce our importing of
foreign oil? Diesel engines today run on ultra-low sulfur diesel that
is 97 percent cleaner than older diesel fuel. It is the cleanest fuel
in the world. It is cleaner than the European fuel--the Europeans are
environmentally conscious--and our own regulations require that.
New diesel technology, the Mercedes BlueTec engine--I visited their
Alabama facility last week--reduces carbon monoxide, nitrogen oxide,
and particulates.
According to the EPA, if 33 percent of American drivers switched to
diesel vehicles, oil consumption would be reduced by approximately 1.5
million barrels of oil a day, which would cut our imports 10 percent.
They say if you drill in ANWR in Alaska, an area the size of the State
of South Carolina--and they would like to explore for oil and gas in an
area the size of Dulles Airport--if it comes in and it is only a little
over a million barrels a day, that is about 10 percent of our import
amount. So if we had more diesel and production in Alaska, that would
reduce our imports 20 percent.
Already Americans are conserving more. They have reduced consumption
at least 5 percent this year. So now we are down 25 percent. That is
the kind of thing we can do that will make a difference in the price of
oil and help make this a stronger country.
Now, ethanol represents a viable alternative energy source, I am
convinced. According to the Congressional Research Service, 6.5 billion
gallons of ethanol were produced in the United States last year. This
amounts to approximately $19.5 billion--let me be sure I get this
correct because my mind is probably like some of my colleagues. That is
6.5 billion gallons as opposed to barrels I was talking about earlier.
Mr. President, 6.5 billion gallons of ethanol were produced in the
United States last year. It amounts to approximately $19.5 billion that
stayed in our country to create American jobs and pay good wages here.
It did not go to buy oil from some foreign country so that the wealth
goes there.
It is estimated that we are on track to produce 9 billion gallons of
ethanol this year. So we go from 6.5 billion to 9 billion gallons this
year. We are soon reaching the maximum production, I think, for most
ethanol that comes from corn, which most of this does. But that has
been helpful to us, I submit to you. So this would result in
approximately $36 billion that will be invested in America, paying
wages to American citizens, who pay taxes to our cities and counties,
for schools, and to the Federal Government. We want them to have good
jobs with good wages.
According to Renewable Fuels Association, the price of gasoline would
rise approximately 31 percent if ethanol was eliminated. Is that right?
That is an advocacy group for renewable fuels, but this week Barron's
Magazine had an analysis and quoted figures similar to that and noted
that consumers were saving several hundred dollars a year as a result
of ethanol. Whether it is a great benefit to us in net reduction of
CO2, we do not know. Originally, the environmentalists
certainly believed so and advocated it. Some now question that.
Regardless, as an economic matter and as a matter of national security,
it has reduced our dependence on foreign oil, kept wealth at home, and
helped protect our national security and create jobs.
But there are limits on ethanol, so that is why we need to seek
technological breakthroughs that will allow us to produce cellulosic
ethanol on a commercial scale. Cellulosic fuel can be produced from
sources that do not place strains on other end users.
There is tremendous potential in our country to utilize waste wood
from sawmills, paper companies, waste wood that is left in the forest
from when the timber is cut and hurricane recovery. I talked to a FEMA
hurricane emergency response official today about the potential of
utilizing cellulose that is downed and thrown away in landfills after a
hurricane, where thousands and millions of trees are blown down, to
create energy. I think it is a realistic possibility. Every city and
county in the country is constantly hauling out large amounts of wood
and trees from their city. It cannot be utilized effectively for lumber
or other uses. Instead of going to landfills, this could create energy.
I think there is a great potential here.
Auburn University has spent a lot of time on switchgrass, another
cellulosic form. They will be bringing up, June 19, to Washington their
gasification unit that is portable. It is the size of a tractor-trailer
rig. You put wood chips in one end, the wood is heated, a gas comes
off, and that gas is converted to a liquid fuel. It is proven it can be
done. This is not impossible. What we need to do is accelerate the
science to prove whether it can be commercially feasible. I think it
can be. I am proud of Auburn. They have won a national award for that.
They are No. 1 in the country in that area of research, according to
the U.S. Department of Agriculture.
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The next is the plug-in hybrid technology, which holds exceedingly
great potential. By utilizing and improving current battery technology,
plug-in hybrids will be able to travel father using less gasoline--
perhaps dramatically less gasoline--than conventional hybrids or any
other kind of automobile. In addition to greatly displacing imported
oil, plug-in hybrids can reduce the amount of pollutants and greenhouse
gases in the air by relying on clean nuclear energy to recharge their
batteries.
Let's just talk about this briefly. We will talk a little more about
nuclear energy. But if you have a commute each day of 10 or 15 miles
and you can create a battery that will run 30 miles without any hybrid
engine having to be turned on to charge and recharge the battery, a
person could commute back and forth to work every day if that car would
only run 30 miles. When they come home at night, they can plug it in
and recharge the battery from the power socket. And particularly
charging it from 11 p.m. to 5 a.m., it will use base load power, often
not even being fully utilized. If the power source is nuclear power, it
emits no pollutants into the atmosphere whatsoever, and that will
completely eliminate the need to utilize any oil or gasoline in the
car. Now, that is close to being reality.
Certainly, we will produce more wind and solar power. We support
those energy sources. The Congress has provided incentives for that.
Few would dispute that large increases in clean American base load
electricity in large amounts is essential, and we cannot get there by
conservation only because a number of things happen. No. 1 is that our
population is going up. By 2050, we will have a substantial increase in
the American population. So even if every American used less, the
Nation is projected, by every expert I am aware of, to utilize more
energy. Another thing that happens: You may well develop new
lightbulbs, which I hope every American will utilize and turn off
lightbulbs when they are not using them, but we have other things that
come up. For example, how many of our people want to give up plasma
TVs? They use a lot more electricity than the old kind. And computers.
When we projected the increase in the cost of the utilization of
electricity in the 1970s and early 1980s, we did not expect the size of
the computer revolution and the amount of energy that would add. So
there is always something out there. That is all I am suggesting. It is
just not smart for us to project in a way that is contrary to the
experts that we are going to utilize less electricity.
So after much study--and I have spent a good bit of study on this--it
is clear to me that nuclear-generated electricity is the serious
solution for a clean energy future and an alternative to a future
filled with ever-increasing regulations and more regulators and more
lobbyists and more political fights such as this cap-and-trade bill--
all of which produce no energy but drain our American economy. Nuclear
power is American based. It is a proven technology. It helps enhance
our national security. It is competitive cost-wise. It is not
outrageously expensive like some of the ideas that are being floated.
It emits no pollutants into the air, neither NOX nor SOx nor
mercury nor particulates. And it 100 percent meets our global warming
goals, which is to reduce CO2, carbon dioxide--zero, zilch.
Twenty percent of our electricity today is nuclear, and we have not
built a plant in 30 years. France produces 80 percent of its power from
nuclear power, and Japan is over 50 percent. They are heavily committed
to nuclear power, and it is paying off for them. Britain just announced
five new nuclear plants. So we are running behind.
But the good news is that after the Energy bill Senator Domenici
worked so hard on and the legislation he offered, 30 new applications
for nuclear powerplants have been submitted. That is 30--up from zero
just a couple years ago. But we must strive to ensure this nuclear
renaissance continues and completes.
There is this tremendous possibility that base load nuclear power,
particularly in the night, offpeak time, could be utilized to charge
automobile batteries so we could run our automobiles without any fossil
fuel being burned. Nuclear power is the one energy source that could
create large amounts of hydrogen, the hydrogen necessary if we are to
develop effectively fuel cell hydrogen automobiles that also favor a
clean concept. Both of these are postoil, postcarbon energy sources
that can power our automobiles, which is where our crisis is today.
Renewable energy sources also have an important role to play.
According to the Department of Energy, renewable energy provided
approximately 9 percent of the total U.S. electricity generation in
2005. While this is not large, there is significant room for growth.
Wind energy has led this growth, increasing from approximately 3,500
megawatts in 2001 to almost 17,000 megawatts today. Solar power has
also increased, although cost and storage remain serious issues.
Geothermal energy has not expanded as rapidly as wind has, but it has
potential. According to MIT, the United States has approximately
100,000 megawatts of enhanced geothermal capacity which can be
developed by 2050.
A few weeks ago, this Senate voted on a plan that would have taken
the first steps to produce many of these untapped energy resources by
allowing more energy exploration off our coasts and in Alaska. But we
do need to move beyond petroleum-based transportation fuels. We need to
do some other steps, such as enhancing the batteries for electric cars,
as this bill would have done, which could have allowed us to move to
plug-in hybrids. I think that is within our grasp right now, and it
would help clean up our environment.
Mr. President, I see the majority leader on the floor. I will just
conclude by noting that with prices at record highs, I think the
American people can be excused for wondering what their Congress is
doing. They expect us to get busy--to get busy now--to produce more
clean American energy. That will be the only thing that is going to
help reduce our dependence on foreign oil and our ability to be
hijacked by prices driven up by OPEC nations that are restricting
supply.
I thank the Chair and yield the floor.
The ACTING PRESIDENT pro tempore. The majority leader is recognized.
Mr. REID. Mr. President, I extend my appreciation to my friend from
Alabama for giving up the floor.
Unanimous-Consent Agreement--Executive Calendar
Mr. President, this is a consent request to have a vote on three
district court judges tomorrow.
I ask unanimous consent that on Tuesday, June 10, after the cloture
vote or votes with respect to S. 3044 and H.R. 6049, regardless of the
outcome, and notwithstanding rule XXII, the Senate then proceed to
executive session to consider concurrently Calendar Nos. 539, 540, and
541; that there be a total of 10 minutes equally divided and controlled
between Senator Leahy and Senator Specter; that upon the use or
yielding back of time, the Senate proceed to vote on confirmation of
each nomination in the order listed above; that there be 2 minutes
between each vote, and after the first vote, the vote time be limited
to 10 minutes each; that upon confirmation, the motions to reconsider
be laid upon the table en bloc, no further motions be in order, the
President be immediately notified of the Senate's action, and the
Senate resume legislative session, without further intervening action
or debate, and the Senate then stand in recess until 2:15 p.m. for the
respective party conference meetings.
The ACTING PRESIDENT pro tempore. Is there objection?
Without objection, it is so ordered.
Unanimous-Consent Request--S. 3036
Mr. REID. Mr. President, I now ask unanimous consent that S. 3036 be
returned to the calendar.
The ACTING PRESIDENT pro tempore. Is there objection?
Mr. SESSIONS. There is objection. I object.
The ACTING PRESIDENT pro tempore. Objection is heard.
The Senator from Connecticut.
Mr. DODD. Mr. President, may I inquire, has my colleague from Alabama
completed his remarks? You have?
Mr. SESSIONS. Yes.
The ACTING PRESIDENT pro tempore. The Senator from Connecticut.
Mr. DODD. Mr. President, I ask unanimous consent that I be allowed to
speak as in morning business.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
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Housing Crisis
Mr. DODD. Mr. President, I rise this afternoon to take a few minutes
to share with our colleagues the current condition of the housing
situation and the steps being taken by the Senate Banking, Housing, and
Urban Affairs Committee--the steps we have taken in recent days and
what I hope we can continue to do in the coming days over the next week
or so, depending upon the agenda the leadership will set for us: our
hope is to bring forth one more proposal that will complete the circle
of the steps we can take as public policy setters in the area of
dealing with the heart of the economic crisis, which is the housing
crisis. The heart of the housing crisis is, of course, the foreclosure
crisis. So this report I share with my colleagues is both a positive
one--which includes the steps we are taking together to address the
problem--as well as, unfortunately, a rather negative one in terms of
the actual statistics and numbers that people are living with every
day.
When we talk about these numbers and statistics, they actually
reflect what is going on in the lives of very real people in our
country who are struggling economically to make ends meet. Home
ownership and the value of homes is at the heart of not only the
American family dream but also at the heart of their economic success
in many ways. So as I have done regularly over the past several months,
I wish to share with my colleagues some of the problems we are facing
in our economy and some of the steps we are taking to address them.
Three weeks ago, with overwhelming bipartisan support, we were able
to pass out of the Banking Committee the Hope for Homeowners Act and
legislation to reform the Government-sponsored enterprises--the so-
called GSEs. These measures will help reduce foreclosures,
strengthening the housing market and ultimately helping to restore our
economy to healthy growth. We also added as part of that legislation an
affordable housing program which will exist in perpetuity; not a short-
term, 4- or 5-year program but one that will be around for years to
come to assist those who are in desperate need of adequate and decent
shelter, including rental housing.
The committee work in these major areas follows the work that the
Senate accomplished earlier this spring when we passed the Foreclosure
Prevention Act. That legislation contains several very important
provisions to help homeowners, neighborhoods, and communities
throughout our Nation. The legislation included $4 billion for
communities to use through the Community Development Block Grant
Program to purchase and rehabilitate foreclosed properties in their
communities. The act also included $150 million in additional
foreclosure prevention counseling, on top of the dollars we had already
appropriated earlier, to assist in that area. Counseling, I would add,
is a proven and very effective program that has helped struggling
homeowners avoid the devastating effects of losing their homes.
Finally, the act includes legislation that would modernize the Federal
Housing Administration so the FHA can play an enhanced role in allowing
hard-working American families to pursue and achieve the dream of home
ownership through a suitable and sustainable mortgage.
I am continuing to work with our colleagues and the ranking member,
Senator Shelby of Alabama, along with other members of the committee--
both Democrats and Republicans--and the Senate to enact comprehensive
legislation that includes these and other provisions. These Members
include Senators Baucus and Grassley, the chairman and ranking member
respectively of the Senate Finance Committee, who have contributed very
important tax provisions to the Foreclosure Prevention Act.
There is no question in my mind that the almost daily information we
are receiving on the performance of our economy should continue to spur
action on the part of this Congress. Our economy has been limping along
for the last 6 months, with growth well under 1 percent. If you take
away the growth in Government and the buildup of inventories that
occurs when the economy enters a recession, our economy grew by three-
tenths of 1 percent in the first quarter of this year. In other words,
our economy is at best stagnant, and in the view of many economists and
others, we are actually in a recession.
Last week we learned that the unemployment rate in April rose by one-
half of a percentage point in 1 month. That is the largest monthly
increase at that rate in 22 years. We have lost thousands of jobs each
and every month this year so far, according to the Bureau of Labor
Statistics. This year, our economy has lost just under 400,000 private
sector jobs, and most economists expect they will continue to lose jobs
as the economy struggles. That is why I think it is critically
important that we ought to provide for extended unemployment insurance
benefits for those who have lost their jobs through no fault of their
own as part of our response to the economic challenges we are facing.
Certainly if we weren't able to do this, it would be the first time in
my experience in this body for a quarter of a century that we didn't
extend unemployment insurance benefits to people who have lost their
jobs during periods of economic hardship. That has never happened
before in my tenure here, and it is my serious hope that we will
provide those extended benefits to those who deserve them.
The data we are looking at, as sad as it is, also confirms that the
housing market continues to be mired in a deep recession as well.
Residential construction fell by over 30 percent in the first quarter
of this year. Sales of existing homes fell by 13 percent over last
year. Now, let me quickly add some new data today for April that
indicates sales may have finally picked up slightly, and we welcome
that news. Most analysts, however, believe this uptick, if you will, in
homes sales occurred only because home prices have continued to fall
over the last several months. Regardless of that uptick, the number of
new homes that remains unsold continues to rise, reaching the highest
number in over a quarter of a century. Joining this growing number of
new homes sitting vacant on the market unsold are homes where the
previous owner has been foreclosed.
Foreclosures have hit a new all-time record. According to the
Mortgage Bankers Association--the MBA--this data shows that almost 1 in
every 11 homes with a mortgage in our country is in default or in
foreclosure as of March of this year. That is the highest level since
the MBA began tracking foreclosures in 1979. Foreclosure rates have
been growing at record levels for some time, and last year alone 1.5
million of our fellow families in this country had their homes enter
into a foreclosure.
Each and every day, over more than 8,100 families enter foreclosure.
Every single day, 8,100 families on average enter foreclosure. The
projections are that foreclosure rates will remain at historic highs
for the foreseeable future. The investment bank Credit Suisse just
released a report in which they predict that 6.5 million homes will
fall into foreclosure over the next 5 years. They state:
The coming flood of new foreclosures could put 8.4 percent
of total homeowners, or 12.7 percent of homeowners with
mortgages, out of their homes.
The scenario they are describing is one in which one out of eight
American families with a mortgage could lose their homes. That is a
chilling prediction.
Robert Schiller, the widely respected economist from Yale University
who helped invent the so-called Case-Schiller Index that is used
throughout the country and the markets to measure the change in home
values, gave a speech recently in New Haven, CT where he said there is
a good chance that housing prices will fall further, perhaps by as much
as 30 percent since their peak in the late part of 2006. If that were
to happen, it would mean the decline in home prices would be greater
now than it was during the Great Depression back in the 1920s and 1930s
of the previous century.
These are indeed historic times with historic challenges. Already we
have seen home prices decline nationally for the first time since the
Great Depression. For the first time since the Federal Reserve began
keeping track of home equity in the 1940s, Americans today own less
than half the value in their homes.
The effect this is having on our economy cannot be overstated. Martin
Feldstein, who served as President
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Reagan's chief economist, recently wrote in the Wall Street Journal:
The 10 percent decline in home prices has cut household
wealth by more than $2 trillion, reducing consumer spending
and increasing the risk of a deep recession.
That means American families have lost more than $2 trillion of
wealth. Losses of that magnitude are staggering. That is almost 20
percent of our Nation's GDP. Put another way, a national loss of wealth
of $2 trillion means a typical family of four would have lost over
$25,000 of wealth due to the current housing market crisis. This sharp
loss in wealth for the average American homeowner comes at a time when
they face record high prices for essentials of American life: Food,
gasoline prices--as we have heard about today the cost of gas has been
increasing every day--health care, and the cost of higher education. So
the so-called foreclosure crisis is affecting far more than only those
facing foreclosure. It is affecting nearly all of us in every
imaginable way. As one home falls into foreclosure, the value of
countless other homes in those neighborhoods is falling as well. If Dr.
Schiller's predictions come to bear and home prices fall by 30 percent
nationally, then the loss to American families will exceed $6 trillion.
That is more than half of our Nation's annual GDP. It would mean the
typical family of four would have lost approximately $80,000 of wealth.
That is more than most American families earn in an entire year.
The nationwide implications of this crisis help explain why consumer
sentiment is at historic lows. Americans' expectations for future
economic growth are at the lowest level in 35 years since the deep
recession of the early 1970s.
These negative views about our economic prospects are based on the
real experiences of most Americans. The Pew Center conducted a recent
survey of Americans' views not only on the economy as a whole but on
their personal well-being. The Washington Post characterized the Pew
Center's finding as:
Offering the gloomiest assessment of economic well-being in
close to half a century, a new survey has found that most
Americans say they have not made progress over the past 5
years as their incomes have stagnated and they have
increasingly borrowed money to finance their lifestyles.
By almost any measure, Americans are struggling more and more than
they have at any time in recent memory. Real median family income has
fallen this decade as the cost of gasoline, health care, and college
tuition, have risen at levels far outstripping any increases in
paychecks. To keep pace with these rising costs, Americans have turned
to borrowing from credit cards and their homes. But now, as the crisis
in our capital markets begins to threaten sources of liquidity for
people, such as mortgages, student loans, and other types of lending,
the American economy is in a precarious place, to put it mildly. That
is why we need new policies and new action to prevent this recession
from becoming more severe, and to lay the foundation for our recovery.
The Federal Reserve is engaged in a series of interest rate cuts as
they continue to aggressively use monetary policy to try and deal with
the recession we are facing. But the Fed is running out of pages in its
playbook to address the growing crisis of credit and confidence that
has taken hold of our financial markets and threatens to undermine our
Nation's economy. Until we more thoroughly address the core issue
behind this recession--namely, the problems in the housing market and
the foreclosure crisis--we are unlikely, in my opinion, to put our
economy back on the right track. Fed Chairman Ben Bernanke understands
the seriousness of this problem. In a recent speech on the subject of
foreclosures, he said:
High rates of delinquency in foreclosure can have
substantial spillover effects on the housing market, the
financial markets and the broader economy. Therefore, doing
what we can to avoid preventable foreclosures is not just in
the interest of lenders and borrowers. It's in everybody's
interest.
I pledge to continue to work every day--as I know my colleagues on
the Senate Banking Committee will, as well as those in the House
Financial Services Committee under the leadership of Congressman Barney
Frank and as I am confident all of us in this Chamber will--to do
everything we can to address these issues from the perspective of what
we can do as part of the national legislature. That is why I am pleased
to say that through these efforts, what we have brought to the floor of
the Senate over the last several weeks has enjoyed broad-based
bipartisan support. We will now be coming back again in the coming
days. The leader of our Chamber, Senator Reid, has committed that we
will get to this as soon as we possibly can, given the crowded agenda
he has to deal with. But we cannot, in my view, allow this Congress to
continue to move forward in the coming days without addressing the
remainder of these issues.
I cannot promise absolutely that everything we have offered is going
to change the world dramatically. But there is one thing I hope it does
do and that is restore confidence in the American families, whom the
Members of this Congress serve, both Democrats and Republicans, are
doing everything in their power to try and prevent foreclosures,
restore confidence in the marketplace, and make it possible for the
American dream of home ownership not to become the nightmare it has for
far too many fellow citizens. It is at the core of everything else we
are grappling with. We have seen the problem spill over into credit
cards, financial services, commercial lending, student loans, and at
the heart of all of this is the foreclosure problem.
That is what every single responsible economist, regardless of
political ideology, has concluded. They have said there are steps we
can take to make a difference--those steps we have created in a
legislative manner to bring to this body. Our hope is we will enjoy the
kind of broad-based support we have had in our committee. Anybody who
has watched this body knows that when you get a 19-to-2 vote in
committee on a matter such of this, you get some indication of the
willingness of members to work together to make a difference. Senator
Shelby and I and the other members of the committee will continue to do
that. We hope to put on the President's desk by July 4 this
comprehensive financial services Banking Committee proposal, dealing
with FHA, dealing with the government-sponsored enterprises, dealing
with affordable housing, dealing with counseling, dealing with the
community development block grant program, as well as tax ideas that we
think could help, and the Hope for Homeowners Act, which is critical to
try to put the brakes on this foreclosure problem.
I wished to take some time this afternoon to share with my colleagues
that this problem grows more serious. It is growing more troublesome,
spreading beyond our national borders, in terms of what the subprime
market and the purchase of those mortgage-backed securities has done to
the markets, not only in this country, but abroad as well.
This is our major responsibility, in my view and I think we have a
commitment to address it. Senator Shelby and I have worked very well
together over the past number of weeks to try to fashion this
legislative proposal.
I commend Barney Frank, my friend from Massachusetts, who is chairman
of the Financial Services Committee in the other body, and other
Members for the job they are doing together as well. I hope that in the
remaining days, before the July break--hopefully sooner than that--we
will be able to present to our colleagues a final proposal bringing
together these ideas for their consideration and support as we do our
part to try to make a difference in getting this economy and the
confidence of the American people back on track.
With that, I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER (Ms. Cantwell). The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mrs. MURRAY. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Economy
Mrs. MURRAY. Madam President, I rise this evening amid new and very
pressing concerns about the future of our economy. Today, millions of
Americans are struggling to keep their homes. The price of just about
everything, from gas, college, health care,
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you name it, is on the rise, and families from coast to coast are
wondering how they are going to make ends meet.
Just last week, we saw new and shocking statistics illustrating this
crisis. With the price of the American Dream going up, working families
seem to be facing new challenges every day. Last week, it was a new
report from the Department of Labor. They told us the overall
unemployment rate rose from 5 percent to 5.5 percent in May, up from
4.5 percent just 1 year ago. That is 861,000 new unemployed people in 1
month, bringing the total to 8\1/2\ million people unemployed in
America today in May. Today, there is even more bad news. Gas has, for
the first time, hit an average of $4 a gallon.
Madam President, the American people are hurting. While job creation
and wage levels are dropping, prices are going up. Everything costs
more, but families don't have enough money to spend. The bottom line is
the American Dream is slipping through the fingers of too many
Americans, and we have to do something about it.
Now, this evening I want to talk specifically about oil and gas
prices because this week the Senate is going to have an opportunity to
take a step in the right direction and put consumers first. Tomorrow
morning, we are going to vote on a Democratic bill that seeks to
address the root causes of these high gas prices because we are
committed to putting consumers first and to fixing the root causes of
high gas prices so these solutions have a real lasting effect.
We want to force big oil to pay its fair share and invest in clean
and affordable alternative energy sources. We want to protect consumers
from price gougers who rip off Americans and greedy oil traders who
manipulate this market. We want to stand up to OPEC and countries
colluding to set high oil prices. These basic, commonsense steps will
attack the root causes of high gas prices, but they are only the
beginning.
Step 2 has to include a long-term strategy to decrease our dependence
on oil and promote clean renewable energy. That is why later this week
we are going to propose billions of dollars in tax breaks to promote
those new energy sources. Our plan seeks to address the high price of
gas at the pump now, but it will also help to ensure that energy is
affordable for years to come.
With gas prices on the rise, there has been a lot of finger-pointing
in recent weeks, but you don't have to look very hard to see who is to
blame and who is benefiting from these skyrocketing prices. While our
working families have been scrimping, the economic downturn hasn't even
registered for big oil. The major oil companies reported record
increases in profits last quarter. ConocoPhillips recorded first
quarter profits of $4.1 billion, beating their previous record by $600
million, with Shell and BP also reporting huge gains.
The reason is that over the last 7\1/2\ years, Republicans have
backed an energy policy that does little but give oil companies tax
breaks and special favors while our middle-class families pay the
price. In the first month of the Bush administration, oil prices
averaged $29.50 a barrel. Now, almost 8 years later, the price has more
than quadrupled. It is over $130 a barrel this week and pushing toward
$140 a barrel. When President Bush first took office, Americans were
paying $1.46 a gallon to fill their tanks, and this week gas prices are
averaging a whopping $4 a gallon. We have gone from $1.46 to over $4 a
gallon in this Bush administration.
What is most disturbing to me and to American families all across the
country is how fast these gas prices are rising. Six weeks ago, I came
on the floor of the Senate and spoke on the same subject, saying a lot
of the same things, and at the same time I was saying how shocking it
was to see the national average at $3.60 a gallon. But in just a few
weeks prices have gone up another 40 cents a gallon. I am a little
scared to do the math and see what increase that is going to translate
into by the Fourth of July, just a few weeks away or, even worse, Labor
Day. Instead, I think it is time we come together for action in the
Senate.
I mentioned the national averages already, but in my home State of
Washington and the home State of the Presiding Officer, drivers are
paying even more. The average cost of a gallon of gas in Washington
State is now $4.22. Yesterday, in my State, I paid $4.29 a gallon.
Right now, AAA is saying that gas costs $4.22 in my State. That is the
average. That is 44 cents higher than just a month ago, 95 cents higher
than a year ago, and 20 cents higher than the national average. And our
truckers are being hit really hard. AAA found the average price of a
gallon of diesel is $4.89 a gallon in my home State. That is 40 cents
higher than a month ago and $1.84 higher than just a year ago.
When I travel around Washington State, gas prices are the first thing
people talk to me about, and they have written me countless letters
asking for help. Everyone asks what we are going to do about this
matter. While they are cutting back their budgets in my home State,
they do not see any action in Washington, DC. And I have told them time
and again that Democrats want to act, but we need help to do that from
our Republican colleagues. They will have a chance to help us do that
tomorrow.
But I am concerned that Republicans are more interested, from what I
am hearing, in just blocking our progress and whatever we want to do
here than actually taking any meaningful action for the people who are
hurting so badly at home today. In fact, for the past several days, we
have already seen, from what I have heard, a parade of Republican
Senators out on the floor complaining about high gas prices, and in
many cases blaming Democrats for failing to address this crisis over
the past 16 months. They are bringing out their charts and showing the
price of gas when Democrats took over Congress and what the price is
now, and they ask us all to simply forget the real reason for this
crisis--the misguided energy policy that this administration has
pursued for years.
But I don't think the American people are going to forget that. They
are not going to forget it was this administration that asked oil and
gas companies to write their energy plan. The American people aren't
going to forget the only real idea coming from the other side is to
drill our way out of the problem. And they are not going to forget that
this is an administration closer to the oil and gas industry than any
in our history. We are not going to forget either, and that is why we
are fighting for change. We have already won higher fuel economy
standards and new investments in renewable energy sources, but we know
we need to do more because Americans know that we cannot rely--we
cannot rely--on big oil to solve our energy problems.
Madam President, the energy policy isn't the only area where
Republicans have put special interests ahead of our American families.
For 7\1/2\ years, President Bush and the Republicans in Congress have
chosen to stand by while our highways are crumbling, hundreds of
thousands of our veterans go homeless every night, and millions of our
families struggle to keep a roof over their heads. In the last year,
our new Democratic majority has had to fight Republicans and the
administration for resources to address everything from veterans health
care to the foreclosure crisis our families are facing. I think the
legacy of this administration is going to be nothing but red ink and
broken promises.
People in my home State of Washington are very worried about the
future. They want to be sure their children will have economic
security. They want a solution to our energy problems that are going to
keep us safe and protect our environment for the long run. And the same
is true, I know, across the country. Americans are hurting because of
these high gas prices. It doesn't matter whether they are Republican or
Democrat, they want help.
I know Republicans and oil companies are not going to give up on the
status quo easily here. But Democrats on our side have been fighting
for policies that will help us cut those prices, create jobs, and keep
our air and water clean and, most importantly, our Nation secure.
We are committed to taking strong action that will stop rewarding
these oil companies and start looking out for our American families. We
are going to keep up that fight. If my Republican colleagues want their
constituents to have help, if they want to take action that will stop
this pain at the pump, the solution is very simple: Vote yes with us
tomorrow morning so we can move to a bill that will begin to solve this
problem.
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(Mr. SANDERS assumes the Chair.)
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