[Congressional Record Volume 154, Number 105 (Tuesday, June 24, 2008)]
[Senate]
[Pages S5983-S5992]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    AMERICAN HOUSING RESCUE AND FORECLOSURE PREVENTION ACT OF 2008--
                               Continued

  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, the Senate is not in a quorum call, I 
expect.
  The PRESIDING OFFICER. The Senate is not in a quorum call.
  The Senator from North Dakota is recognized.
  Mr. DORGAN. Mr. President, I ask unanimous consent to speak for 10 
minutes and that 10 minutes be applied to the 30 hours postcloture.
  The PRESIDING OFFICER. Is there objection?
  Mrs. BOXER. Mr. President, reserving the right to object, and I will 
not object, I ask unanimous consent that following Senator Vitter--he 
is going to speak next for approximately 5 minutes--I then be 
recognized to speak for up to 20 minutes.
  The PRESIDING OFFICER. Is there objection?
  Hearing none, it is so ordered.
  The Senator from North Dakota is recognized.
  (The remarks of Mr. Dorgan pertaining to the introduction of S. 3183 
are printed in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.'')
  Mr. DORGAN. Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Mr. VITTER. Mr. President, I rise to speak on the housing bill before 
this body now and to speak about an important omission from the 
managers' amendment that is before the Senate. This is just one piece, 
one narrow issue, but it is an important one that will affect many 
folks in the housing market and throughout America. I am talking about 
the need to provide a transition period for the implementation of the 
new GSE regulatory structure in the bill.
  A large part of this legislation on housing recovery is devoted to 
GSE regulatory reform. GSE means ``government-sponsored enterprises''--
regulatory reform regarding those entities. This is a huge undertaking, 
with wide-reaching consequences for the mortgage and housing industries 
and our economy generally.
  This GSE reform title would combine the regulatory authority and 
personnel of three distinct agencies--HUD, the FHLB, and the OFHEO--to 
create an entirely new GSE supervisor with broad, far-reaching powers 
over this $3 trillion part of our economy, the housing finance system. 
The effects of new regulatory powers would not be limited even to the 
housing industry, as big as it is. The vast global investment in GSE 
securities and the 8,000 member banks that obtain liquidity and other 
services from our Federal Home Loan Bank system would also be 
significantly affected.
  Given the far-reaching and very significant impact of this part of 
the bill--this very significant consolidation of three separate 
agencies--I think simple common sense would dictate that implementing 
that sort of measured change should be done with great care and over 
some reasonable time period. That is why the House in its legislation 
recognized the need for an orderly transition. Their bill included a 
uniform effective date of 6 months after enactment to allow the 
President to begin the appointment process immediately but to give that 
6-month transition to a very new regulatory structure.
  Unfortunately, the bill before us in the Senate today does not 
include this transition period in this language.
  Under the Senate substitute amendment, the powers of the new agency 
would be effective immediately, potentially destabilizing our housing 
market, causing real concerns among many in that important market.
  I am very concerned about this. I think it is a significant omission, 
a significant problem, a significant issue. Making the powers of a new 
agency effective immediately, before the three existing agencies are 
combined and before expert personnel can be transferred and this new 
agency staffed is putting the cart before the horse. At a time of great 
instability in the mortgage and housing markets, we should use care to 
preserve consumer and market confidence by ensuring a smooth transition 
and regulatory stability.
  That is why I am strongly urging the adoption of the House approach 
with regard to this specific issue. It would ensure a gradual 
transition of no less than 6 months, allowing for careful and efficient 
consolidation. In our push to make the housing and mortgage markets 
stronger and more responsive to the American people, let's also make 
certain we don't break what we didn't need to fix in the first place.
  I urge my colleagues in the Senate to adopt this commonsense, 
reasonable, balanced House approach with regard to a 6-month 
transition.
  With that, I yield the floor.
  The PRESIDING OFFICER. The Senator from California is recognized.
  Mrs. BOXER. Mr. President, is it necessary that I ask to speak as in 
morning business? I am taking time off my postcloture time.
  The PRESIDING OFFICER. The Senator may be recognized under cloture.
  Mrs. BOXER. I thank the Chair.


                       Drilling in Pristine Areas

  Mr. President, I am going to discuss, in about a 20-minute timeframe, 
a couple issues that are swirling around this country and the Senate, 
and I wish to go on record on both of them. One has to do with 
President Bush and Senator McCain's proposal to open pristine areas off 
America's coastline to offshore oil drilling as an answer, they say, to 
high gas prices. I am going to, hopefully, debunk that argument, and I 
hope I can do it convincingly.
  The second area is going to be my feeling on the FISA bill, which is 
coming to us tomorrow--the Foreign Intelligence Surveillance Act bill.
  I think I can start off where Senator Dorgan ended. He has been 
brilliant on the point that speculation in oil futures is what is 
responsible for a good deal of this horrific runup in the price of gas 
at the pump. We need to do something about these speculators. We have 
been blocked from doing that by the Republican leadership. I wish to 
quote Michael Greenberg, a former director of trading and markets for 
the Commodity Futures Trading Commission, who testified before the 
Senate Commerce Committee. He said:

       Going after the speculators will bring down the price of 
     crude oil to get at least a 25 percent drop in the cost of 
     oil and a corresponding drop in the cost of gasoline.

  Testifying Monday before a House Energy and Commerce Committee 
subcommittee, Michael Masters, of Masters Capital, said:

       The price of crude oil would drop to a marginal cost of $65 
     to $75 a barrel, about half of the current $135.

  Imagine, the experts are telling us speculation is responsible for 
about 25

[[Page S5984]]

to 50 percent of the cost runup of gasoline. We are trying desperately 
to close that Enron loophole, to ensure that the speculators are once 
again regulated. There is a Bill Nelson bill, S. 3134, which would say 
all energy future contracts will fall within the regulatory format they 
were at before. So we can do this.
  Where are President Bush and Senator McCain on going after the 
speculators? I don't hear them suggesting that. I don't see my 
Republican friends embracing this. They have already stopped us a 
couple times from doing it. If we want to do something about the price 
of gas, let's go after the speculators, and it will result in a very 
quick reduction in these outrageous price increases. We have the 
Strategic Petroleum Reserve which is 97 percent full. George Bush's 
father took some oil out of there after the first gulf war. President 
Clinton also took some out of there, and it had the impact of lowering 
the price. In other words, they are adding a supply from the Strategic 
Petroleum Reserve. Again, it is 97 percent full. This is the moment 
when we could tap it. It will make a difference, and it will get to the 
people, within a few short days. Thirteen days from a Presidential 
decision, we could have more oil on the market.
  Our colleagues agreed with us to stop filling SPR, but we don't have 
their support for taking some out--and, of course, you would return it 
at another time.
  Here is a big one, and I will show you this chart. Remember, the 
President and Senator McCain said open all the coastal areas to 
drilling--these pristine areas. So you have to ask yourself: Well, have 
we run out of places to drill offshore? The answer is no. What about 
onshore? No. Oil companies hold leases to nearly 68 million acres of 
Federal lands that are not producing oil. This land could produce 4.8 
million barrels of oil each day--six times the peak production from 
drilling in the Arctic--and it would double total U.S. oil production. 
Let me say that again--68 million acres of oil leases are being held 
today by the oil companies. I say they should use it or lose it. Here 
we have people saying: Oh, give them more. That is akin to saying to a 
kid, whom you are trying to get to do something, I will buy you an ice 
cream cone if you do XYZ; but they are holding two ice cream cones in 
their hands now.
  Let me show you what 68 million acres looks like. First, I will show 
you the onshore, which is about half of that. Look at the red areas on 
the map. This is onshore, 34.5 million acres that are unused by the oil 
companies. They will not drill there, but now they want more leases in 
the most beautiful parts of America.
  This is ridiculous. It is a phony idea. It is not going to bring down 
gas prices 1 cent, according to the Bush Energy Department. It will 
have no impact--maybe by 2030. I am looking at some of the Senate 
pages, and they will be moms and dads by then.

  Let's look at the offshore leases. Look at this. These are the 
offshore leases that the oil companies hold. They are not using them. 
Yet, still, President Bush and Senator McCain--and this is a flip-flop 
by Senator McCain; he has always supported protecting the beautiful 
areas, but they are now saying it is necessary now to sell off the 
family jewels.
  I have to tell you, coming from a State--and the Senator in the chair 
does as well--where an unspoiled coastline is our ticket to a tourist 
industry, a fishing industry, a recreation industry, an industry in 
America that provides, today, $70 billion in a coastal economy--$70 
billion and millions of jobs. In my State, it is about $11 billion or 
$12 billion and a quarter of a million jobs.
  So you have to ask this question to the President and Senator McCain: 
We all want to help our middle class and our working poor pay for the 
price of gas. We want to bring down the price of gas, or we want to 
give them alternatives to having to fill their cars; we all want to do 
that. Let's give real answers. Let's not give an answer that could 
threaten a huge coastal economy. Our families are having a very hard 
time paying for gas. Imagine what happens when they lose their jobs 
because the coastal economy is now going to go. What good is that? 
Millions of jobs are at stake.
  So rather than go after the speculators, rather than look at the 
Strategic Petroleum Reserve, rather than tell the oil companies, look, 
you can double production and you are not doing it, rather than ask the 
Federal Trade Commission to investigate supply manipulation--and I can 
give you story after story of supply manipulation. In my own State, we 
had a large company--Shell Oil--try to close down a refinery. They said 
it wasn't making money and there were no buyers. Untrue. We called our 
State attorney general. He got involved. We found out they were making 
money and that there were buyers. They just want to manipulate the 
supply. Because of our involvement, and especially the attorney 
general, that refinery was sold. That was 2 percent of our State's 
supply at the pump.
  So these oil companies do not come to this with clean hands. We know 
it. This administration gives them a pass, saying let the speculation 
fly, and let the oil companies sit on these leases; forget about using 
the CFTC, forget about going to the World Trade Organization and 
lodging a complaint against OPEC because they are anticompetitive. They 
don't do that. They are not doing anything to extend the tax credit for 
the most fuel-efficient vehicles. That expired because they put a cap 
on it, on how many cars would have to be sold before you no longer get 
this tax credit. They don't do any of the things that would help us 
now. I don't see them saying: Let's make sure our transportation 
districts locally have enough funds to add more buses and to add more 
ferry boats. We could be doing these things now.
  What is their answer? Drill, drill, drill, drill, drill. Where? The 
most pristine areas of our coasts--these areas that are a gift from 
God. Millions of dollars have gone into setting aside marine 
sanctuaries. We will put it all at risk because oil companies see it as 
an opportunity to get more leases, increase their portfolio, and 
increase the assets on their books.
  I have to say I hope the American people will look at this proposal 
the same way they looked at the gas tax holiday. When that first came 
up, having a gas tax holiday, John McCain recommended it, saying this 
is going to mean good news at the pump. The truth is it threatens the 
highway trust fund because those are the funds that go into the highway 
trust funds so we can take care of our highways. There was nothing in 
the proposal that would have led to a lowering of the price of 
gasoline. Other costs could have been passed right on to the consumer.
  So it is amazing to me that we now have another proposal that is 
basically the same kind of proposal: Drill, drill, drill, and put at 
risk a $70 billion coastal economy. First, the gas tax holiday put at 
risk the highway trust funds. This proposal puts at risk a $70 billion 
coastal economy and millions of jobs that go with it, and it doesn't 
even account for the fact that there are so many acres--68 million 
acres--leased to oil companies that they have not produced.
  It seems to me the American people will understand that this so-
called solution to high gas prices, which the President's own Energy 
Department says will not save a penny, is another phony solution. It is 
not real. When we look at the long term, what we know is we have to 
pass global warming legislation. When we do that, when the private 
sector puts a price on carbon, we are going to see technologies erupt 
from America that are going to make us competitive. We will export 
those technologies.
  We know when we take care of our environment, in the long run, our 
economy gets stronger. We need to invest in transportation. We need to 
go after OPEC. We have to go after the speculators. We know we will 
see, with global warming legislation, investments in cellulosic 
ethanol, which is going to compete with fossil fuel, and we know it is 
going to work.
  So there are short-term answers to these gas prices, and I laid them 
out, and there are long-term answers, and I laid those out. I am not 
the only person in the Senate who has these ideas. But to put out a 
phony solution to a real problem does not help us and it jeopardizes a 
lot of jobs and a coastal economy.
  I look forward to working with my colleagues on going after the 
speculators and doing all I need to do.

[[Page S5985]]

  I ask unanimous consent that I be given an additional 10 minutes on 
my time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. BOXER. Mr. President, this debate over gas prices and the long-
term and short-term solutions is going to go on for a while. I look 
forward to addressing them, both in my committees of jurisdiction and 
on the floor.


                 Foreign Intelligence Surveillance Act

  Mr. President, we are about to get a Foreign Intelligence 
Surveillance Act bill that is going to come to the Senate probably 
tomorrow. I know that a lot of my colleagues worked very hard and very 
long to try to get a compromise on this bill. I have to say that there 
is a portion of this bill that I believe is egregious and will prevent 
me from voting for this bill. It is because I believe one of the most 
basic tenets of our freedom is justice. Looking at justice, we have to 
see what lies at the heart of justice. And what lies at the heart of 
justice is the search for the truth. If you block the truth from coming 
out, if you don't allow a search for the truth, you don't find justice. 
I worry very much about that.
  Throughout our history, whenever the U.S. Government has violated the 
trust of the American people, we have worked to regain that trust by 
seeking the truth and allowing for a full examination of the abuses of 
Government power. We can see that in the history of America. Sometimes 
these egregious acts take many years to uncover. I am thinking of the 
Tuskegee experiments. Of course, we have to go back to the days of 
slavery. Go back to the Jim Crow laws. Go back to the era of the 
Vietnam war and the tenure of J. Edgar Hoover, who headed the FBI. We 
knew in that particular case that the CIA and the FBI, under J. Edgar 
Hoover--he headed the FBI--he engaged in spying on the political 
activities of American citizens. He was spying on famous, important 
people, such as Martin Luther King. He was spying on people at the 
highest levels of Government. He was also spying on the American 
people. Pictures were taken at rallies where people were trying to 
argue for an end to the Vietnam war.
  In 1975, the Church Committee, which would later become the Senate 
Committee on Intelligence, looked into allegations of covert and 
illegal spying by the Federal Government on Americans. What did the 
committee find? The committee found that, indeed, there had been spying 
on Americans by the FBI and the CIA.
  Here is what is interesting. What did the Congress do when they found 
out, in horror, that the Government was spying on the people? They 
passed the Foreign Intelligence Surveillance Act in 1978. It set up a 
new court with authority to approve electronic surveillance but only on 
a case-by-case basis. Since that time, we have updated FISA to reflect 
the changes in the threat we face in America and to reflect the new 
technologies.
  Suddenly, in late 2005, we learned that the U.S. Government--our 
Government, the Bush administration--had violated the trust of the 
American people again when the New York Times published a story 
exposing a warrantless surveillance program authorized by President 
Bush shortly after 9/11. Since that time, Congress and the American 
people have been grappling with the disclosure and working, with no 
help from this administration, to find out what happened. We cannot 
find out exactly what happened, who was spied upon. Was I spied upon? 
Were you spied upon? How many people were spied upon? What information 
was gained?
  In putting together the FISA bill, I do believe House and Senate 
members tried hard to find a balance and figure out a way to get to the 
truth, but I feel they have fallen short because what we will have 
before us when this bill comes before us is not only a bill that will 
deny the court the ability to make a judicial determination as to the 
legality of the spying program, but it will effectively guarantee 
immunity for the telecommunications companies that cooperated with the 
administration and violated the privacy of their customers.
  You have to know that we had laws in place that specifically said to 
telephone companies: You cannot invade the privacy of your customers. 
What apparently happened was the Government went to them and said: We 
are asking you to disregard the law.
  I understand the predicament of the companies, although there was one 
company that refused to cooperate. One company refused to cooperate. 
They said: No, we are not going to do it. But all the others 
cooperated. And now we have a situation where we know the telephone 
companies responded to the Government and said: OK, we will disregard 
that law on your say-so.

  I would support granting the telecom companies indemnification--in 
other words, having the Government step in and be the party that has to 
pay the price--but this immunity provision that is in the bill blocks 
us from finding the truth. Remember what I said when I started: The 
essence of justice is to get to the truth, and we are not going to be 
able to get to the truth. We are not going to know exactly how this 
program ran. We don't know enough. The Bush administration, in my view, 
trampled on the Constitution, and we are not doing anything in this 
bill to provide accountability. Frankly, if we just left out this 
provision and passed the rest of the bill, we would let the courts do 
their job. Fine. But, no, no, we have to add this provision and 
essentially set up kind of a new law now to deal with this spying 
operation.
  I don't think we can hold up the Constitution when it suits us and 
set it aside when it hinders us. That is not what the Constitution is.
  The supporters of this compromise will say: Wait a minute, Senator 
Boxer, we have a provision in there that says the telecom companies 
have to prove they were asked by the Government to do this activity. We 
know they were asked by them. That is why I don't want to punish the 
telecom companies.
  Mr. President, I tell you what I do want to do: find out the truth. 
That, the truth, I want to find out. I have to believe that if we don't 
change Title II of this bill, we are perpetuating a coverup. I use that 
word advisedly because I don't think we will ever get to the truth of 
what happened here.
  I support giving our country every tool necessary to track down the 
terrorists. I voted to go to war against bin Laden, and I am disgusted 
that he is still out there taunting us, all these days, all these 
years, despite George Bush. Dead or alive, we will get him. Where is 
he? I want to go after al-Qaida. I want to go after bin Laden. I think 
we do have to provide all the tools that are necessary, but we also 
must uphold the Constitution and the rights of our citizens.
  This granting of immunity will block the courts from moving forward 
and learning whose privacy was violated. I want to be able to look in 
the eyes of my constituents in California, 38 million people, and say: 
I know you were in that group of people, and I feel terrible, and we 
are going to make it right for you; or, I know you were not involved in 
being caught up in this net.
  These are extraordinary and difficult times. Our sons and daughters 
were sent to Iraq to fight for our freedoms. We have to listen to what 
former Justice Marshall says:

       History teaches us that grave threats to liberty often come 
     in times of urgency, when constitutional rights seem too 
     extravagant to endure.

  Our Constitution is not an extravagance. It is the centerpiece, the 
very essence of a democracy. It is what our sons and daughters are 
fighting for abroad. How could we say on the one hand to our soldiers: 
Go fight for our freedoms, go fight for the freedoms in our 
Constitution, while at home we are covering up the erosion of those 
freedoms?
  The bill was improved upon, and I am glad Title I improved the way we 
go about protecting the rights of our citizens and balances it with the 
need to get this information. I am very pleased with that. But it seems 
to me, if you believe in the truth, then I don't see how you grant this 
type of immunity.
  Again, I would substitute the Government, I would indemnify these 
companies. I am not interested in hurting them. But I want to get to 
the truth. We have a really good way to do that, which is to strip this 
part from the bill. We will have our rights protected then. We will 
have the tools we need to fight terrorism. We must do better than this.
  So unless there is some miracle that happens overnight and we see 
some changes, I will be forced to oppose this bill. I am hoping we will 
have an opportunity to vote on a substitute that will

[[Page S5986]]

keep the rest of the bill intact but eliminate this egregious provision 
which really is very troubling. Anyone who lived through the days of J. 
Edgar Hoover and the kind of spying that went on, who understands FISA 
was passed to protect Americans has to be alarmed.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Sanders). The Senator from Missouri.
  Mr. BOND. Mr. President, I came to the floor for another subject, but 
I do wish to tell my friend from California that we will have an 
opportunity to talk about the FISA bill that was passed. The bill we 
passed in the Senate with an overwhelming bipartisan majority protected 
civil liberties of American citizens much further than they have ever 
been protected even under existing criminal law, we provided more 
protection.
  The Senate committee looked at the essence of the terrorist 
surveillance program for which we recommended that retroactive immune 
liability protection be provided for those who cooperated. They 
cooperated in good faith on the basis of the representation by the 
intelligence community that there was a Presidential directive 
authorized by the Attorney General. It was authorized under the clear 
constitutional authority of article II of the U.S. Constitution, 
supported by the MOFA that was passed by Congress. We determined that 
they were entitled to protection.
  As a lawyer, I have read all of the documents. I am convinced that 
the bill we passed does not in any way give away any rights or 
protections.
  Anybody who objects to the granting of this liability protection 
should know that we do not protect Government officials or the 
Government itself from lawsuits. If one wants to challenge it, file 
suit against the Government, file suit against Government officials, 
but don't ruin the business reputation of those who, in good faith, as 
good citizens, provided the intelligence that was needed to keep our 
country safe and to keep our soldiers and marines, such as my son, on 
the field safe from battlefield attacks. They provided that 
information, and we owe them better than to haul them before a court to 
have them exposed to the vengeance of terrorists or people who didn't 
like what they did. We owe our security in the United States better 
than to lay out in an open court proceeding all of the things our 
intelligence community can do to stop terrorist attacks--terrorist 
attacks which have not occurred in this country since September 11, 
2001, which were certainly planned and underway before they were 
interrupted.

  I can't go into any more on the floor. Any Member of the Senate is 
entitled to have that information in confidential SCIFs where we 
discuss classified information. I invite them to be briefed, and I will 
have much more to say about the FISA law when we get on the debate.


                           Missouri Flooding

  But I come to the floor today to share some observations with my 
colleagues, and anyone else who may happen to be watching, about the 
natural disaster that is going on right now in my State of Missouri.
  If you turn on the television, you will probably see the flooding 
that is expanding over an area west of St. Louis County and St. Charles 
County. The Eagle Point levee breached last night, and that is only the 
latest example. Many other levees have also been breached.
  This past weekend, I went to visit the people on the front lines. I 
met with State and local officials, who are prepared and are responding 
extremely well, given the prolonged damages, the challenges, and the 
extensive duration of the flood. This effort, I am proud to say, is a 
good testament to how bad disasters can be mitigated from becoming 
worse disasters when competent local and State leaders and volunteers 
proactively take steps at the immediate scene of the disaster.
  At Winfield, MO, on Friday afternoon, right along the Mississippi 
River, I met with volunteers from the Salvation Army, the Red Cross, 
Missouri Civil Air Patrol, local law enforcement's emergency planning 
officials, the Missouri National Guard, and local and surrounding 
community volunteers. It was inspiring to see how people came together 
to help protect lives and property. Over 1,000 volunteers--some of my 
staff members joined with them--filled sandbags and built the levees. 
They were joining neighbors, church groups, civic groups, and other 
people coming in to help. By that afternoon, they said they were going 
to have to call and say: We don't have need for more volunteers now, so 
wait until there is a problem elsewhere.
  As always, the National Guard acted valiantly. Their work has given 
businesses and families the critical time they need to get important 
assets out of harm's way where levees are in danger of failing. And so 
far--knock on wood--we have come through with minimal personal damage. 
People from all walks of life across Missouri and across the 
heartland--neighbors came in from Illinois--have pitched in to help. It 
has truly been an all-hands-on-deck effort, and I couldn't be more 
proud of them. I thanked them in person, and I come here on the floor 
to express my thanks to them.
  Missourians and our midwestern neighbors have pulled together and, as 
it turns out, they may be doing too great a job of fighting the floods. 
Local communities have been burdened with the financial strain that 
comes with any disaster. Communities along the Mississippi have 
invested hundreds of thousands of dollars in pumps and sandbags, and 
untold tens of thousands of volunteer efforts in trying to protect 
property and lives. While these current investments made are small 
compared to cleanup costs, our small towns, our communities, still need 
Federal help.
  I come here today to report, regrettably, that despite national news 
coverage day after day of the destruction in Missouri, FEMA has still 
not declared Missouri a Federal disaster area. Our families and 
communities along the Mississippi River are investing every resource 
they have to mitigate the disaster while FEMA figures out the extent of 
the disaster.
  Not only has this flood destroyed homes, but it is currently 
saturating tens of thousands of acres of some of our State's most 
productive farmland. In addition to waiting for the waters to recede, 
farmers will have to remove the debris the Mississippi River leaves 
behind before they can plant their crops. I don't know if you have ever 
been to a flood scene, but it isn't just a whole bunch of land getting 
wet; it brings in everything you don't want to have on your land, and 
you can't plow it, you can't even mow it because of all the debris 
left.
  Many have heard the saying ``knee high by Fourth of July.'' That used 
to be a reference to corn height in Missouri, if you wanted a good 
crop. Now, in a good year, if it isn't six feet tall, then you are way 
behind. But this year, regrettably, in talking about the height of 
corn, there is a lot of land where we are going to be talking about the 
height of water.
  USDA, FEMA, and other Government agencies, I hope and I expect, will 
provide emergency funds to clean up the disaster. I am pleased I have 
been joined by my other colleagues from the Midwest to fund these 
programs in supplemental appropriations bills that will ensure disaster 
victims receive much needed aid. We have to continue to do our part in 
the Senate to make sure these flood victims will be able to get their 
feet back on the ground. I have joined with eight of my colleagues in 
cosponsoring Senator Grassley's disaster tax package, which will also 
help.
  But, I repeat, none of these actions will provide any relief until 
Missouri gets a disaster declaration. And with everyone in Missouri 
doing their part--his and her part--acting responsibly and responding 
locally, I urge FEMA to do its part and approve the predisaster 
declarations they asked our State officials to make. We know there is 
going to be more work in finding out the total extent, but anybody who 
looks at the pictures on the television and who doesn't believe this is 
a major disaster, is saying, I am not believing my own lying eyes, 
because it is right there for them to see. I wish FEMA would start the 
mechanism rolling.
  We know we have a lot of work to do, we have a lot of disaster, but 
we are thankful in our hearts for minimal human damage and the 
tremendous human outreach. It is time for the Federal Government's 
emergency management agency to get off the dime and move.
  I thank the Chair, and I yield the floor.

[[Page S5987]]

  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. CARDIN. Mr. President, first, let me say to my friend from 
Missouri, we do see the videos of what is happening in his State with 
the devastating floods, and the people of Maryland agree with the 
Senator's statements. We want to make sure FEMA does the right thing.
  Certainly the Senator is very concerned about the circumstances, and 
we want to do everything we can to help the people of Missouri and the 
other States that have been devastated by these floods. It has 
obviously had a dramatic impact on many lives, and this is when our 
Nation needs to come together to help those who have been devastated. 
So the Senator will have our support, and I wanted him to know that.
  Mr. President, the bill we are considering now in postcloture is the 
bill the House sent over to us to deal with the housing crisis. I was 
very encouraged with the vote earlier today, and I hope we are on the 
verge of passing this much needed legislation so we can work out our 
differences between the House and the Senate. I know we still have some 
procedural hurdles we have to overcome, but I hope my colleagues will 
act quickly so we can complete our work on this very important housing 
bill.
  The people of Maryland, the people around the Nation, are hurting 
today because of what is happening in the housing market. We know it 
was the housing market that triggered our current economic problems. We 
know throughout the country there has been a large number of these so-
called subprime adjustable rate mortgages that were issued over 
the last several years, and as a result of the declining housing market 
and the adjustable rate mortgages and subprime mortgages, we have 
record numbers of foreclosures around the Nation, including my own 
State of Maryland.

  We are not only seeing a record number of foreclosures, we are also 
seeing circumstances where homeowners' equity in their property is 
actually negative. That means the money they owe on their mortgage is 
exceeding the value of their property. And with declining markets, it 
is becoming more and more difficult for individuals to be able to sell 
their homes, so we anticipate there could be continued problems of more 
foreclosures. That means it is very important that this Congress act.
  We also know it not only affects the individual whose home is at 
jeopardy, but it affects the entire neighborhood. When there is a 
foreclosure in a community, the value of all the homes in that 
community declines. Local governments are also seeing a dramatic 
reduction in property tax revenues as a result of the decline of 
property values. Just at the time we need local government being more 
active in helping people who are going through tough economic times, 
they are finding it more difficult to act.
  I thank Senator Dodd and Senator Shelby for bringing forward a 
bipartisan bill, a bill that now stands an excellent chance of being 
enacted, and a bill that the people of this Nation desperately need. It 
would do something about the housing problems in this country, so I do 
thank them for their patience and their work.
  I see Senator Dodd is on the floor, and I personally thank him for 
the work he has done. We are now on the verge, I hope, of passing this 
very badly needed legislation, the key features of which are going to 
help the people of Maryland and around the Nation.
  This bill deals with properties that are in danger of being 
foreclosed by trying to prevent foreclosure. I think that is one of the 
things we should be doing here. The HOPE for Homeowners Act will help 
up to 400,000 or 500,000 homeowners on a voluntary basis get their 
mortgages refinanced, at no cost to the Government, using FHA, in order 
to make it affordable and to prevent foreclosure. That, to me, is 
smart. It is good for the homeowner, it is good for our economy, and it 
is a great investment for taxpayers because it will save them money by 
having less foreclosures in their communities.
  The legislation also helps communities in desperate need. The CDBG 
funds are increased to help the communities that have been hardest hit 
through the numbers of foreclosures, but then, moving forward, we do 
something about the housing crisis in this country. We provide 
affordable housing funds, which we desperately need in Maryland and 
throughout the Nation.
  We also provide more money for counseling. I say to Senator Dodd that 
I had a meeting in Baltimore with housing counselors who are 
overwhelmed. They cannot handle the number of people seeking their 
help, so the funds provided in this legislation will help them help 
people who want to get counseling, but the services are not available 
in so many communities around the country.
  The new disclosure requirements will also help people who will be 
moving forward because they will know what they are doing and have less 
chance of ending up in trouble in the future.
  I also want to comment on the provisions in this legislation that 
ease the credit crunch. Today, it is very difficult to find affordable 
mortgages. Obviously, lenders are being much more cautious and it is 
difficult today, if you live in a minority community or you live in a 
modest-income neighborhood, to be able to get a mortgage. Yet banks are 
willing to write mortgages. In the subprime mortgage industry, there 
were so many people, particularly from minority communities, who were 
steered into subprime loans. These individuals could have had 
traditional mortgages and they wouldn't have been in trouble today. Now 
there are many people who need help in finding an affordable mortgage.
  In this legislation, with the GSEs, the government-sponsored 
entities--Fannie Mae, Freddie Mac, and the Federal Home Loan--and the 
reforms in the FHA--raising the loan limits and by changing some of the 
underwriting--they will provide more mortgages to modest-income 
families in America, so those who are in the market to buy homes and 
who want to be in the market to buy homes will have a much easier time 
finding an affordable mortgage in order to move forward. That will be 
good for home ownership, which is good for our neighbors, and it is 
going to be good for our economy.
  I also thank Senator Baucus of the Senate Finance Committee for 
bringing forward some changes, some amendments to this legislation, 
which I think are very important. I had a meeting in Baltimore and met 
with the real estate community, and they told me several months ago we 
needed to do something to try to get first-time home buyers into the 
market. If the Federal Government could offer some incentives, it would 
help in freeing up the market, which is going to be good for our 
economy. At that time, I filed an amendment that would have provided a 
first-time homeowner's tax credit. I thank Senator Baucus for bringing 
out a similar proposal in the bill that is before us for first-time 
home buyers. The Federal Government will help participate in their 
buying a home and will offer them a credit of up to 10 percent of the 
cost of the home, up to $8,000, which will ultimately be an interest-
free loan that the Federal Government will invest in an individual 
buying their first home, for modest-income families.
  To me, that makes sense. We want to encourage young people who can 
afford to own homes to buy homes, but they are reluctant to get into 
the market today because they do not know what is going to happen with 
the property values. When the Federal Government helps them buy that 
home, they are going to be more confident this is the right time to 
come into the market and to buy that home.
  I think this provision can make a huge difference, and I appreciate 
the Senate Finance Committee adding it to the good work of the Banking 
Committee.
  As I said earlier, this is an important bill. Today's vote was an 
important vote. We are on the path to getting it enacted. I urge my 
colleagues, let's work out our last differences, and let's get the 
votes we need to get on the floor of the Senate. Let's move this bill 
forward. Let's reconcile the differences with the House. Let's get it 
to the President. Let's get it into law so we can help the housing 
situation around the Nation.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Michigan is recognized.
  Ms. STABENOW. Mr. President, first, I commend Senator Dodd and 
Senator Shelby for working so hard to bring this bill to the floor--
Senator Chris

[[Page S5988]]

Dodd for his wonderful leadership on the House bill.
  I ask unanimous consent to speak as in morning business for 10 
minutes and the time be charged postcloture.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                         Creating American Jobs

  Ms. STABENOW. Mr. President, I have to say that I was quite amazed 
and shocked yesterday to hear the proposal that certainly flies in the 
face of what I believe needs to be happening for Michigan and other 
States that have been the backbone of the manufacturing economy in our 
country, the backbone of the middle class. It was a proposal to turn 
our way of handling American jobs and the economy into a game show. We 
do not need a game show. We do not need prizes down at the end of some 
long line for doing what needs to be done in order to create innovation 
and be able to focus us on the next generation of advanced battery 
technology or any other technologies. What we need is something 
thoughtful and sustained, ongoing investments to create jobs in the 
United States.
  The last 8 years we have not seen that. We have not seen a 
willingness to step up and aggressively invest in advanced battery 
technology research or any other areas where we would be able to get 
the kind of jobs and production we need in the United States. I remind 
the Chair that, as he knows so well, just since January we have lost 
325,000 good-paying jobs in America. As the distinguished Presiding 
Officer and I have both come to the floor to speak about good-paying 
American jobs, middle-class jobs for middle-class families, we continue 
to lose jobs.
  I am very proud to be a part of a majority that is tackling that, 
focusing on investments, on jobs rebuilding America, on investments in 
the future. We passed a budget resolution a little earlier this year 
that included a green-collar jobs initiatives, which I was proud to 
offer. It had strong support from our Presiding Officer. Among things 
that we listed and we put into the budget resolution was advanced 
battery funding. This is something I know our appropriators are taking 
seriously. I also know my colleague, Senator Levin, is focusing on this 
in the Department of Defense authorization. I know we are serious about 
investing in the future now, today--putting dollars in to partner with 
the private sector to get us to that next generation of vehicle that is 
so critical.
  One of the things about which I am extremely concerned is that other 
countries have been investing for years, and we have not seen the same 
kind of investments proposed year after year in the President's budget 
or supported by our colleagues on the other side of the aisle.
  When Toyota first made the Prius, we heard a lot about it. They made 
this with advanced batteries made in Japan. What is more concerning is 
when Ford Motor Company first made the Ford Escape Hybrid--and I am 
very proud they did--they looked around and couldn't find the advanced 
battery in America. They got it in Japan.
  We cannot afford to be on a road to dependency on foreign technology 
as we are trying to get off of dependence on foreign oil. This needs 
more than proposals that feel like game show prizes down at the end of 
a road, a road we may not be able to get to if we are not serious as a 
country about what we need to do in making investments right now.
  Germany has announced a great battery alliance which will invest over 
$650 million in advanced lithium-ion batteries. It is specifically 
aimed at helping German auto companies.
  South Korea, by 2010, will have spent $700 million on advanced 
batteries and developing hybrid vehicles.
  China has invested over $100 million in advanced battery research and 
development.
  Over the next 5 years, Japan will spend $230 million on advanced 
battery research. It is spending $278 million a year on hydrogen 
research for zero emission fuel cell vehicles.
  These countries understand they need to step up to compete in a 
global economy and partnering with their automobile industry. We need 
to do no less.
  We have picked one segment of the economy, the automobile industry, 
in which we have placed a major new mandate--an $80 billion mandate on 
fuel efficiency. We need to do everything we can to help them achieve 
that. But they will not get there unless now--this year, next year, the 
year after--we are supporting and partnering on efforts for advanced 
battery technology research and development. Not the basic research, 
the basic research is being done. Now we are at a point where we need 
to have the technology developed to deal with issues around the size 
and the weight of the vehicle and the reliability of the batteries and 
all of the issues that bring it to the point for marketing and sales. 
We are very close. But our country needs to be taking this very 
seriously right now if we are going to have good-paying manufacturing 
jobs, high-tech manufacturing jobs in this country, particularly in the 
automobile industry.

  I thank our majority leader and our chairman of the Budget Committee 
who placed dollars into the budget. I thank all of those who will be 
involved as we move forward to implement our efforts to invest in 
advanced battery technology research. I only wish the passion that was 
shown yesterday would be shown on the Senate floor, would be shown in 
votes for the budget resolution, would be shown in votes for 
appropriations, would be shown in votes and leadership speaking up as 
the President, year after year, has woefully underfunded his requests 
for advanced battery technology research.
  We are past time to get this done. It should not be treated as 
something that is trite but as something that is very serious and very 
doable if we are willing to step up and partner and make the 
investments that need to be made, as every other country is doing.
  Our companies today are not competing with other companies around the 
world. They are competing with other countries around the world, other 
countries that understand that whoever gets to advanced battery 
technology first will have the edge. Whoever is getting the hydrogen 
fuel cell technology first will have the edge. Whoever gets to that 
next technology will find themselves in the position to be the leaders 
in a global economy. We need to understand that and take that 
seriously. I am proud to be part of a majority that does, and we are 
working very hard.
  We have moved the ball down the road and have more to do, but I am 
amazed to hear the kinds of discussions that have gone on in the last 
24 hours as it relates to jobs and the economy and prizes. The prize 
for us is a good-paying job and a strong middle class and keeping 
advanced manufacturing in this country. We do that by being serious and 
sustained and thoughtful, by providing dollars on the front end, by 
making sure we understand the seriousness of the competition around the 
world, and having a sense of urgency about American jobs.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. NELSON of Florida. Mr. President, I ask unanimous consent that 
the order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. NELSON of Florida. Mr. President, we are on the bill having to do 
with homes and foreclosures. I want to speak on the bill, and then I 
would ask unanimous consent that I be allowed to speak thereafter as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. NELSON of Florida. I will be offering an amendment which I think 
will be adopted or embraced, approved, cleared by both sides. It is a 
bipartisan amendment with Senator Coleman. It is to give some 
commonsense relief to homeowners who are trying to stay in their home 
while their home is under foreclosure.
  If a homeowner is there and doesn't have any cash, the homeowner has 
fewer options of what to do if the bank is foreclosing on the home. But 
suppose the homeowner has a retirement fund, a private retirement fund, 
a 401(k) retirement fund. We have allowed, under current law, for the 
ability of a homeowner to take money out of that retirement fund, 
without paying the 10 percent penalty, to take it out of the retirement 
fund before retirement for

[[Page S5989]]

the purpose of purchasing a home. But if it is a homeowner with a home 
that is under foreclosure and they need cash, under current law, if 
their only source of cash is that retirement fund, in order to pull it 
out, they have to pay a 10-percent penalty. It seems it is common sense 
and the kind of public policy that we would want to adopt to give the 
homeowner the means of avoiding foreclosure by being able to tap into 
some of their cash in their retirement fund in order to save their 
home.
  That is what the amendment is all about. It is simple. It waives the 
10-percent penalty for folks wishing to make an early withdrawal from 
their retirement fund in order to avoid foreclosure.
  We put some parameters, some boundaries around it so it cannot be 
abused. We say homeowners have to show they are participating in a 
government- or industry-sponsored foreclosure prevention program, such 
as the ones we are setting up in this bill, the HOPE NOW or the HOPE 
for Homeowners programs. Both of those are established in the bill 
before us today. That is one parameter. Another parameter is, we make 
this thing limited for 2 years so it will not go on and on. The 
foreclosure crisis is right now. We want to help homeowners stay in 
their homes. We limit it for 2 years.
  The third parameter, we put a limit of $25,000 on what they can take 
out of their retirement fund. We are going to give that homeowner, once 
they take the money out and they save their home, the ability to put 
that money back into their retirement fund within a 3-year period and 
not have to pay income tax on that money. A normal retirement fund, you 
take money out of the fund, you will have to pay income tax on it. If 
the purpose is to get a ready source of cash to help them stay in their 
home under foreclosure, we want to give them that opportunity to get it 
back in their retirement fund and not have to pay income tax. They have 
to do that--another one of those parameters--within 3 years.
  The cost is fully offset. I want to give an example. We all, from our 
States, get horror stories. I got one from a retired Air Force sergeant 
who lives in Stuart, FL. He recently lost his job and, in order to stay 
in his home, pay his mortgage, he liquidated his 401(k) savings and 
paid the 10-percent penalty. The bill we are considering today gives, 
in another provision, a tax credit for first-time homeowners to buy 
their first home. But unless we do it with this provision, we are going 
to penalize folks such as Wayne who didn't have any source of cash 
except his 401(k) in order to try to do his best to save his own home 
using his own money.
  It is true that for most people, a home is the greatest single source 
of wealth. It seems to me it is common sense that we would have this 
narrowly defined, limited exception to allow homeowners to use every 
tool available within their power to stay in that home and not have it 
foreclosed. That is the amendment I will be offering at an appropriate 
time. I believe we have received clearance from Senator Grassley. I am 
trying to get clearance from Senator Baucus, then the two managers of 
the bill, and the Banking Committee, to get clearance from them.


                              Oil Futures

  Why has oil hit, last week, $140 a barrel, and why is it, within the 
last couple days, somewhere in the high 130s? We have had testimony now 
from the president of Shell Oil Company. We have had testimony from an 
executive of ExxonMobil. The two respective testimonies say that under 
the normal marketplace for oil, a world marketplace of supply and 
demand, one of them testified oil ought to be at $55 a barrel, not 
$140, and the other one testified it ought to be somewhere between $35 
and $65 a barrel, not $140. So why is it at $140?
  It is true that little ``jitterations'' in the marketplace, any 
little minicrisis in any part of the world is going to send jitters 
into the financial marketplace. That is going to cause upward pressure. 
The fact is that China and India, of course, having so much consumption 
of oil, makes it tighter. But even so, with all that, they said it 
ought to be in the range of somewhere between $35 and $65 a barrel.
  The reason it isn't is because 8 years ago, in the dead of night just 
before Christmas in the year 2000, the Senate, adjourning to go home, a 
provision was slipped into an unrelated bill that deregulated energy 
futures contracts. It was called the Enron loophole because it 
benefited Enron. We saw that a couple years thereafter in electricity 
contracts in California having been bid up and bid up and bid up, and 
that caused a great crisis that ultimately caused blackouts in 
California. Then, when Enron unraveled financially, we found out about 
that. But nothing was done to reregulate the agency, the Commodity 
Futures Trading Commission, the CFTC.
  A lot of our colleagues here think we just reregulated them last 
Thursday night in the farm bill. But we only partially reregulated them 
when we passed the farm bill over the President's veto. What that was, 
was new power of the CFTC to go in on an ad hoc basis on an individual 
oil contract, with certain other limitations, to examine it and then 
determine if it wants to regulate it. I don't want to do that.
  The bill I have filed--and I have Senator Dorgan, Senator Obama, and 
Senator Boxer as cosponsors--takes us back to the status quo before the 
Enron loophole was passed, which is the trading mechanisms attached to 
the United States have to be regulated if it is energy futures 
contracts. It is very simple. As a matter of fact, my bill is only two 
words. It inserts the words ``or energy'' in there to reregulate energy 
futures contracts.
  What is regulating? That Commission would decide, for example, that 
they are going to require that if you are going to bid on these future 
contracts for oil, you are going to have to use that oil. It is people 
now who don't have any intention of using oil who go into these markets 
and speculate and bid up the price. It is believed that if we plugged 
this loophole, the price of gasoline will drop by half. That is pretty 
dramatic. Yesterday, the House of Representatives had testimony that 
the price of oil per barrel would drop by over half. That is pretty 
dramatic.
  People are hurting. Every Senator knows that. Our people are hurting. 
This $4 gas is hurting our people financially. They are not able to 
make financial ends meet. So if we want to do something, we have to get 
to where we can do something about it.
  Why did the price of oil futures jump $11 in 1 day? Do you know what 
the airline industry has told us? That 1-day jump of $11 a barrel cost 
the airline industry $4 billion extra. They can't survive like that. 
This is an entity we want to survive. They transport us about the 
country and the world. We can do something about it, if we have the 
political will.
  This Senator is going to continue to pound on this issue to try to 
get the attention, and we are getting some heft, when Dorgan and Obama 
and Boxer all start signing up. It is a very elegant, very simple 
thing. You go back and plug the loophole that was unplugged back in 
December of 2000 and allow the Government to do what it ought to do by 
saying that the commodity exchanges have to regulate the trading of oil 
futures contracts.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DODD. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mrs. McCASKILL). Without objection, it is so 
ordered.
  Mr. DODD. Madam President, to inform my colleagues and others 
interested, we are making progress on various amendments that people 
are proposing to the housing bill. As the majority leader has 
indicated, the only amendments we are going to consider are housing 
amendments. This is a housing debate. These are the issues on which 
people are anxious to see resolution so we can begin to make some 
serious movement on the foreclosure crisis in our country.
  I have a long list of potential amendments, some 44 of them. I am not 
sure all are going to be offered. Some, because we are in a postcloture 
environment, might fall. But I strongly urge those who have amendments, 
Democrats and Republicans, to come to the floor to meet with staff to 
try to resolve their amendments if at all possible, to reach some 
compromise on

[[Page S5990]]

them so they can be agreed to or in some cases clarity as to how to 
proceed so we can begin to organize how these amendments can be 
handled.
  It is my intention shortly on a couple of amendments--a Democratic 
amendment and a Republican amendment--where we have reached agreement 
and compromise, to propose those, as my colleague from Alabama will, 
and to agree to those amendments, and then at some point my hope is to 
try to propose a unanimous consent proposal to accommodate those who 
insist on floor votes, to accommodate those with time agreements so we 
can have some clarity as to how the rest of this bill will unfold.
  There are complicated procedural hurdles we have to weave our way 
through, but I think, given the overwhelming vote of 83 to 9 on 
cloture, there is a strong bipartisan desire to complete this housing 
measure. We have the opportunity to do that. I need Members or staff, 
whomever they designate, to come over with their amendments to give 
Senator Shelby and I an opportunity to try to resolve them, to declare 
whether they are going to qualify for working out some agreement. That 
would be a great help. There are some, I know, to which we can agree. 
There are other matters that Members want to bring up on this bill, but 
I know there is going to be strong resistance--and properly so--by the 
majority leader to entertain ideas that are not pertaining to housing. 
There will be other opportunities, and there have been other 
opportunities, for the consideration of such ideas, but they are not 
going to be a part of this bill, knowing that when we go to the other 
body with provisions that will not be accepted by the other body, they 
will kill those ideas, as well as this one, the housing bill.
  So for reasons that are very practical, not political, we have to 
stay on the theme we are dealing with, housing, foreclosures, and what 
we can do to put our housing situation on a far better footing and give 
the institutions and the regulatory bodies the necessary reforms and 
tools that allow them to do their jobs. That is fundamentally what is 
at the heart of this legislation.
  The other body has completed their proposals, and we are talking with 
them in productive meetings, with Congressman Frank, chairman of the 
House Financial Services Committee, along with Jack Reed, our colleague 
from Rhode Island, talking about how we might resolve some of these 
differences on these two bills.
  There are a number of efforts ongoing. Even though we have not been 
engaged in a public debate in this Chamber over the last several hours, 
there is movement.
  Those who have amendments, I strongly urge them to come to the floor, 
bring their ideas, and see if we can't resolve how we are going to 
handle them, either a vote up or down to agree to them or inform the 
authors that they will probably fail in a postcloture environment.
  I am grateful to all of our colleagues for their support this morning 
on invoking cloture and getting us close to adoption of this 
complicated housing proposal. We had very strong votes beginning in 
December with the FHA modernization bill, in April with the foreclosure 
proposals, and most recently 19 to 2 out of our committee on this 
particular proposal, and, of course, the vote this morning on cloture, 
83 to 9. So there is a strong indication that I take from our 
colleagues' actions that there is a desire to get this bill done. We 
have the opportunity to do that in the next few hours, a day or so, to 
complete this process before the Independence Day recess.
  The ideas I just suggested, the proposals we are making, will help us 
come closer to that reality if people will take advantage of them.
  Mr. BUNNING. Madam President, I want to speak directly to the folks 
at home right now. In the last few days, we have heard Senators say 
that we are in a historical crisis that requires action by the Federal 
Government. Supporters of this bill say it directs relief to homeowners 
who desperately need it, and deserve it. But they are trying to sell 
you on the cover of a book without letting you see what is inside. I 
like to know what kind of product I am buying before I open my wallet. 
As U.S. Senators, we have a responsibility to dig through any piece of 
legislation before we open up your pocketbook.
  This bill is over 600 pages long. I have seen portions of it in the 
Banking Committee and the Finance Committee, but for the first time we 
are seeing the whole package here on the Senate floor. I am not buying 
it, and I do not think you, your children, and your grandchildren 
should have to either. Let me tell you why.
  This bill puts you, the taxpayer, at risk. It creates a new, 
permanent tax on mortgage business done by Fannie Mae and Freddie Mac. 
That tax threatens the solvency of those institutions and permanently 
punishes the shareholders, many of which are institutional investors 
such as pension funds. The tax also reduces the amount of capital these 
GSEs can provide to the mortgage lending system in a moment of serious 
liquidity issues in the market.
  Furthermore, the FHA is already projecting losses of over $4.6 
billion from existing loans, which will wipe out 22 percent of its 
capital reserves. The Congressional Budget Office has estimated that 
participants in the FHA refinancing program will re-default at a rate 
of 35 percent. That is more than one out of every three loans 
refinanced through the program. We are putting more bad loans on an 
already broken program that can't handle the risks it currently has. Is 
that a good idea? Of course not.
  The author of this bill says it does not put the taxpayer on the 
hook. That is just not true. First, the tax on Fannie Mae and Freddie 
Mac will be paid by ordinary Americans, either through higher costs for 
future mortgages or through lower share prices in their retirement 
accounts. Is that fair? No.
  Second, taxpayers are on the hook for any losses beyond what is being 
taken from the GSEs. Supporters of this legislation say that will not 
happen, but even their own numbers show just how likely it is for this 
program to be bankrupt in a few years. The CBO score for losses only 
fits within the GSE tax set aside for the program because they assume 
less than a third of the refinancing authority is used. I think time 
will prove all those assumptions wrong. The real question in my mind is 
when will we have to bail out FHA and who is going to pay for it?
  This bill not only creates a dangerous new tax, but also uses that 
revenue to fund housing initiatives off the books of the Federal 
Government. Under this bill, Fannie Mae and Freddie Mac will be 
assessed $500-800 million annually by the Federal Government. At least 
for the first year, that money will be used to cover the inevitable 
losses to the FHA from a bailout program for irresponsible and 
undeserving lenders and borrowers. The balance of that money will pay 
for a permanent slush fund for housing causes that will end up 
benefitting partisan groups, some of whom have recently had workers 
indicted for voter fraud. Additionally, there is an extra $150 million 
in counseling funds for these partisan groups, with even less 
accountability attached to those funds.
  Another provision that has received little attention is $4 billion in 
emergency spending to buy foreclosed homes. That is nothing more than a 
gift to the banks, who by definition are the ones who have foreclosed 
homes to sell. These funds will have the perverse effect of increasing 
foreclosures because banks know there is going to be a willing buyer.
  And if these tax and spend policies weren't enough, this bill vastly 
increases an already overreaching Federal bureaucracy. It nearly 
doubles the size of the FHA. It assigns important decisionmaking 
responsibilities with regard to this program to a board created of 
various agency heads, not Congress. It creates a new trust fund for 
``affordable housing'' that is permanent and mandatory, outside the 
normal appropriations process. It requires loan originators to 
participate in a National Mortgage Licensing System and Registry. If 
you are a fan of big government, this bill definitely delivers.
  But I am only skimming the surface. Unfortunately, it gets much 
worse. Make no mistake--this bill is a huge bailout for our Nation's 
lenders. The bill's author has said this bill is going to help the 
everyday man. Let's take a closer look and see what you think.

[[Page S5991]]

  The FHA program created by this bill refinances borrowers who have 
defaulted on their mortgages into government-insured loans. Just how 
much of those loans does the government insure? One hundred percent. By 
creating this program, this bill limits how much lenders can possibly 
lose through mortgage transactions. When you invest in a business 
venture or in the stock market does the Federal Government cap your 
losses? No. But when it comes to big banks this bill willingly 
transfers downside risk of future losses right to the FHA and you, the 
American taxpayer.
  As I said before, CBO estimates at least one in three mortgages 
refinanced under this bill will default again. Therefore, we have put 
in motion a scenario where taxpayers take the hit rather than the 
lenders who made that loan to a risky buyer who bought a house he could 
not afford, with a mortgage he could not afford. That is a bailout for 
the lender any way you slice it.
  Probably the most glaring flaw is that the bill offers no way to keep 
out irresponsible and undeserving borrowers. In fact, borrowers are not 
required to show that they did not lie on their original mortgage 
application. To qualify for the bailout, borrowers get to sign a piece 
of paper saying they did not lie the last time they signed for a 
mortgage. This bill subjects the FHA to another wave of fraud that 
these no-documentation loans experienced in the primary market.
  Borrowers who have not demonstrated an ability to pay can get a 
bailout because there is no requirement that borrowers have made any 
timely payments on their original mortgage. There is no income cap on 
eligibility for the program. As written, this bill would allow 
homeowners with houses valued at up to $550,000 to qualify for a 
bailout. In my county in Kentucky, which is one of the most expensive 
in the whole State, the median home price is $270,000. So this bill 
would give a bailout to people with homes valued at twice the median 
price. The American people are compassionate and often willing to help 
those in need. But I do not think giving a bailout to anyone who owns 
such an expensive home is fair to the average American. If you recall 
from the economic stimulus debate, my colleagues on the other side of 
the aisle vehemently opposed rebates for ``rich'' taxpayers. Now when 
it comes to bailing out banks that made risky loans, all income classes 
of borrowers can qualify.
  The list of problems goes on and on. Mortgage professionals, people 
who by definition should have known better, can qualify for the 
bailout. People who defaulted on government loans before can come back 
to the trough. People who drained all the equity in their homes to buy 
flat screen TVs and new cars can qualify. This seems to me like a 
surefire way to set a program up for failure at a time when the FHA is 
reporting record losses.
  The tax division of this bill also is flawed in several respects. In 
particular, it includes a $9.8 billion tax increase on small businesses 
that the Senate Finance Committee has never held hearings to review. 
This credit card reporting provision will result in a vast increase in 
paperwork for credit card companies and in millions of confusing and 
possibly misleading notices sent to the IRS and taxpayers.
  Another provision that needs more work is the new limitation on the 
gain exclusion for the sale of a second home. This provision applies to 
any second property owned by the taxpayer, including an investment 
home. That means that taxpayers who lose their principal residence and 
move into a vacation home or investment property will also lose the 
benefit of gain exclusion. Is that the drafter's intent? This 
legislation has not been well thought out. That scenario should be 
excluded, and I have no doubt it would have been if this bill had 
followed the normal course through the Senate Finance Committee.
  There are a few provisions in this bill which are worthwhile and 
needed. Most importantly, the bill creates a strong new regulator for 
Fannie Mae and Freddie Mac. Congress has been trying to pass such a 
bill for years, and it is sorely needed and worth passing on its own. 
But the proponents of the bailout are holding those needed reforms 
hostage to get their bailout.
  I and many others hoped to offer amendments to try to mitigate the 
damage this bill could do. Unfortunately we have been blocked from 
doing so. On a bill of this magnitude that is irresponsible and 
unacceptable.
  One of my amendments would have made refinancing more affordable for 
the vast majority of homeowners by allowing them to write off interest 
points paid on a home mortgage in the year paid. For no good reason, 
the Tax Code requires homeowners to treat points differently, depending 
on when they are incurred. If they are incurred in an original purchase 
financing, the points are deductible, just as they would be under my 
amendment. If they are incurred in a refinancing, the points can only 
be deducted ratably, over the life of the loan. The difference is so 
significant that it will affect the ability of millions of homeowners 
to afford refinancing.
  The whole idea of bailing out people who took a gamble and lost is an 
irresponsible way to spend the taxpayers' money. I do not think the 
people back in Kentucky sent me to Washington to bailout speculators, 
Wall Street executives, and people who drained the equity in their 
homes to buy flat screen televisions and new cars.
  This bill is simply the wrong kind of housing policy for Congress to 
be engaging in and is fatally flawed. Even the sponsor of the bill has 
admitted on the Senate floor that he is not even sure it is going to 
work, but he hopes it will. As the most deliberative body in the world, 
I think we can do better. In fact, we owe it to our grandchildren to do 
better. Who is going to bail them out when FHA is left with $300 
billion in bad debt? On behalf of the people of Kentucky, this Senator 
is not buying this bailout bill.
  Mr. BROWN. Madam President, I am pleased the Senate has turned to the 
Housing and Economic Recovery Act, which in large part was the 
responsibility of three of my colleagues, Senator Dodd, Senator Reed 
from Rhode Island, and Senator Shelby, which will provide much needed 
relief to our country's homeowners and the communities they live in.
  Ohio has been at the center of this storm for a number of years, and 
after years of neglect from the Federal Government, I am pleased that 
we are finally about to act. Congress needs to help and it needs to act 
quickly.
  I understand we have an agreement that limited amendments today to 
those that are relevant. This agreement I hope remains in effect 
through the consideration of the legislation.
  Ohio set a record for foreclosures last year, some 83,000 
foreclosures. That is more than 1,000 a week. That is close to 200 a 
day. More precisely, every week about 1,500 families have lost their 
homes. The end is nowhere in sight. These families need our help now. 
They do not need political posturing on unrelated issues. We have seen 
too much of that. That can wait until we are done with this bill.
  This fall, by some estimates, we will see the peak of the subprime 
mortgage resets. One research firm predicts half the subprime loans 
made in the fourth quarter of 2006 will fail. That is not lending; that 
is gambling with someone else's house.
  The people who were sold these loans, and the neighborhoods they live 
in, must be among our highest priorities. The needs of communities are 
critical because this crisis has an impact far beyond the people who 
lose their homes. Whenever a home goes in foreclosure, the value of 
neighboring homes drops by about 1 percent. Crime goes up. Just when 
property tax revenues are plunging and the resources of a city or town 
are stretched to the limit, more resources are needed, and there is 
less ability to deliver to help people.
  The Foreclosure Prevention Act which we passed in April has been 
incorporated in this legislation before us. It will provide close to $4 
billion in aid to communities so they can rehabilitate or in some cases 
knock down abandoned homes in neighborhoods.
  The bill will fund more counseling to help people rework unfair 
loans. Yesterday in Columbus I visited a neighborhood on East 21st 
Street where the Columbus Housing Partnership has been so helpful in 
counseling many people. More than 100 people, they say, have had their 
homes saved because of this counseling. Two of them were with me on 
East 21st Street yesterday.

[[Page S5992]]

  This is no easy task. Once upon a time you took out a loan with your 
local bank to buy a home, you knew people at the bank, they knew you, 
and the bank had a stake, as much stake in your success as you did.
  Today, especially for subprime loans, that is seldom the case. The 
voice on the phone and the owner of the loan could be anywhere in the 
world. Help in navigating the mortgage maze is essential. But the 
problem is too big for one-by-one approaches. No matter how hard 
counselors and servicers work--and they are doing yeoman work all over 
the country, Toledo, Cleveland, Dayton, and Springfield, all over my 
State and all over the country. No matter how hard they work, we need a 
more comprehensive approach to help homeowners who could afford to stay 
in their homes if they had a fair mortgage.
  The bill before us establishes a temporary program within the Federal 
Housing Administration that, on a voluntary basis, would allow lenders 
and borrowers to refinance their mortgages into a more affordable and 
stable product.
  The HOPE for Homeowners Act would help perhaps half a million 
families. But the impact is far wider, as their neighbors and 
communities will be helped as well if we can avoid foreclosure for 
these homes in the neighborhoods.
  These provisions are not a bailout for borrowers or lenders. 
Borrowers get no subsidy from the Federal Government. They will have to 
pay a mortgage on their property like everybody else. The difference is 
they will now have a standard 30-year fixed rate loan based on the true 
value of the property, rather than an exploding adjustable rate 
mortgage based on an inflated appraisal. Lenders, meanwhile, will have 
to take a loss by writing down the mortgage below the actual value of 
the property if they choose to participate.
  In many cases it will be in their interest to do so. With bank-owned 
homes selling at a fraction of the outstanding mortgages on them, many 
will want to accept a smaller loss. If the program works as we hope, it 
should provide liquidity to the mortgage market so that lenders will be 
able to again make prudent loans.
  The legislation also creates an affordable housing fund. With our 
stock of affordable housing both aging and shrinking, this fund will be 
vital to the many families who are struggling to keep a roof over their 
children's heads.
  Families who are ready to buy a home will be helped in several ways 
by this legislation. First, it includes a modernization of the FHA 
program. What we saw over the past several years was an incredible 
shrinking of the market share for FHA loans as borrowers opted for 
riskier loans instead. The legislation would update the FHA program, 
increasing limits for high-cost areas and streamlining its operation. 
Second, home buyers will be eligible for a credit of $8,000 in the form 
of a 15-year interest-free loan. This credit is phased out for higher 
income taxpayers, and it will last 1 year. But it should provide help 
not only to home buyers but help to stabilize markets around the 
country.
  The bill includes several other noticeable tax provisions. It 
provides an additional $11 billion of mortgage revenue bonds, so that 
State housing agencies can respond to the housing crisis in a way that 
best suits their situation. It provides a measure of property tax 
relief to people who do not itemize on their taxes, an estimated 28 
million taxpayers.
  This legislation provides a needed overhaul to the regulation of 
Fannie Mae and Freddie Mac and the Federal Home Loan Banks. This is an 
issue that has been debated for years. We have now reached a point 
where we can move forward. The bill creates a new independent regulator 
with broad authority equivalent to that of other Federal financial 
regulators. The new regulator will be able to establish capital 
standards, management standards, and review and approve new products. 
It will have teeth too, as it will be able to enforce its orders 
through various means.
  This new regulator will draw from various agencies already in place, 
and it will be required to undertake rulemaking in several areas. I 
hope my colleagues will give some attention to the transition from the 
current regulatory regime to the new one. It has taken us years to get 
to this point in the legislative process. It is unlikely that a new 
regulator can be created to do a competent job overnight.
  Let me conclude by commending Chairman Dodd and Ranking Member Shelby 
for bringing us to this point today, and especially to the majority 
leader for his work in getting there. No one in the Senate wants to 
help people who engaged in fraud or speculation. But hundreds of 
thousands of people were sold mortgages designed to fail. These people 
can stay in their homes with a fair mortgage but will be on the street 
without our assistance. They deserve our help. They deserve it now.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. REID. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


            Unanimous Consent Agreement--Executive Calendar

  Mr. REID. Madam President, I ask unanimous consent that 
notwithstanding rule XXII, the Senate now proceed to executive session 
to consider Calendar No. 630, the nomination of Helene White to be a 
United States circuit judge for the Sixth Circuit; that there be 4 
hours for debate with respect to the nominations covered under this 
agreement today, with the time equally divided and controlled between 
the leaders or their designees; that upon the use or yielding back of 
time, the Senate proceed to vote on confirmation of Calendar No. 630; 
that if the nominee is confirmed, the motion to reconsider be laid upon 
the table and that President Bush be immediately notified of the 
Senate's action; that upon confirmation of Calendar No. 630, the Senate 
then proceed to the consideration and vote on confirmation of the 
following nominations in the order listed, Calendar Nos. 631 and 632; 
that with respect to any vote sequence, there be 2 minutes of debate 
between votes and that any succeeding votes be limited to 10 minutes 
each; that upon confirmation, the motions to reconsider be laid upon 
the table, en bloc, the President be immediately notified of the 
Senate's action, provided that no further motions be in order, and the 
Senate then resume legislative session; further, that on Thursday June 
26--this coming Thursday--notwithstanding rule XXII, if it is 
applicable at all, at a time to be determined by the majority leader, 
following consultation with the Republican leader, the Senate proceed 
to executive session to consider Calendar Nos. 627 and 628; that they 
be debated concurrently for 1 hour, with the time equally divided and 
controlled between the leaders or their designees; that upon the use or 
yielding back of time, the Senate proceed to vote on confirmation of 
the nominations in the order listed, with 2 minutes of debate time 
equally divided and controlled in the usual form between the votes, and 
the second vote in the sequence be 10 minutes in duration; that upon 
confirmation, the motion to reconsider be laid upon the table, en bloc, 
the President be immediately notified of the Senate's action; further, 
that if Calendar No. 630 is not confirmed, then all aspects of this 
agreement are null and void, with no further intervening action or 
debate, and the Senate then resume legislative session; that any time 
consumed under this agreement count postcloture, if applicable, 
provided that no further motions be in order.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Madam President, I ask unanimous consent that in the 
consent request I initiated, where I read the words ``then all aspect 
of this agreement are null and void, with no further intervening action 
or debate,'' the words ``no intervening action or debate,'' which I 
read into the Record, be deleted.
  The PRESIDING OFFICER. ``No further intervening action or debate'' 
shall be deleted from the request.
  Mr. REID. That is correct, Madam President.
  The PRESIDING OFFICER. Without objection, it is so ordered.




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