[Congressional Record Volume 154, Number 149 (Thursday, September 18, 2008)]
[Senate]
[Pages S8996-S9001]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 THE VETERANS BENEFITS ENHANCEMENT ACT

  Mr. AKAKA. Madam President, of course, I am very disappointed that an 
objection has been made to this unanimous consent request. The intent 
of the request is to create a means by which there might be further 
action on this very important veterans legislation before the Congress 
recesses next week.
  On April 24, 2008, the Senate passed S. 1315, the Veterans' Benefits 
Enhancement Act of 2007, by a vote of 96-1. Since that time, the bill 
has languished in the House.
  This bill would improve benefits and services for veterans, both 
young and old. It includes numerous enhancements to a broad range of 
veterans' benefits, including life insurance programs for disabled 
veterans, traumatic injury coverage for active duty servicemembers, 
automobile and adaptive equipment benefits for individuals with severe 
burn injuries. In addition, the bill includes a provision that would 
correct an injustice done to World War II Filipino veterans over 60 
years ago. It grants recognition and full veterans status to all of 
these individuals, both those living inside and outside the United 
States.
  In order to cover the costs of S. 1315, the bill would overturn a 
court decision in a case known as Hartness. That decision allowed for 
certain veterans to receive an extra pension benefit based solely on 
their age, a result never intended by Congress. The purpose of the 
provision in S. 1315 is simply to restore the clear intent of Congress, 
but some have mischaracterized it as an attempt to withdraw benefits 
from deserving veterans and grant them to undeserving veterans. This 
misconception is the main reason that action on S. 1315 has been held 
up.
  I am not interested today in debating the merits of the bill--either 
the increased benefits or the revenue provisions--but rather ask that 
the Senator or Senators who object to the request to set up a 
conference with the House--advise me of their concerns to see if it 
might be possible to find a way forward. I am very committed to this 
veterans' benefit legislation and would like to see if we can reach 
final action before the end of next week. If we are not able to do so, 
I intend to renew my efforts in the next Congress.
  Madam President, 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. GREGG. 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 Senator from New Hampshire is recognized.
  Mr. GREGG. Madam President, I wish to return to the issue which has 
been the topic of the day--and should be, obviously--and that is the 
stress on the financial systems in the United States.
  Earlier in the day, I asked why we couldn't have an adult discussion 
of this subject rather than a lot of hyperbole and partisanship. I 
doubt it was my comments that energized it. In any event, the Senator 
from New York, Mr. Schumer, did come down and make a couple of points 
on how he thought we could proceed. I wish to comment on those specific 
points and elaborate a little bit.
  First off, the term ``Resolution Trust Corporation'' has been thrown 
around a great deal. I am, as I mentioned earlier today, rather 
familiar with that term because I was Governor of the State of New 
Hampshire at the time that we had the real estate meltdown in the 
Northeast and the Resolution Trust Corporation came in, as well as the 
FDIC under Chairman Seidman. Chairman Seidman did an extraordinary job, 
by the way, for us. We had to reorganize our banking system. The assets 
fell into the hands of the Resolution Trust Corporation, which then 
proceeded to dispose of those assets which basically had caused the 
banking system to fail in the Northeast and earlier in the Texas area.
  I think that vehicle was appropriate to that time. I think what we 
are hearing today in the term ``resolution trust'' is the concept, not 
the specifics of that vehicle. Thus, when Senator Schumer said it was 
inappropriate for Senator McCain to throw out the concept of resolution 
trust as an approach to addressing this extraordinarily critical 
matter, I think he may--I don't know, I can't speak for Senator 
McCain--I suspect Senator McCain's purpose was to talk about the 
concept of a government entity, such as the resolution trust, which 
comes in and basically relieves the pressure on the financial markets 
by creating value under assets which nobody at the present time can 
value. That is what we need. That is exactly what we need.
  I would not dismiss the idea out of hand. I would simply say it is a 
term of art now versus a specific structure, and the term of art is 
essentially stating that the Federal Government does have a role 
potentially of coming in and putting value on assets which cannot be 
valued by the market and which are locked down and which have caused 
the whole credit market in the Nation to freeze down.
  That is what has happened today, of course, in these mortgage-backed 
securities. Nobody knows the value of the security underlying the 
mortgage-backed security and, therefore, it is impossible to sell them 
and, therefore, the fluidity of the economy has been disrupted and, in 
fact, we are seeing a freezing of the economy as these securities hold 
in place instead of being traded.
  What has been suggested, and actually, interestingly enough, appears 
to be the suggestion of the Senator from New York, is we create some 
sort of structure which allows the Federal Government to step in and 
essentially put value underneath these mortgage-backed securities by 
using the good faith and credit of the American taxpayer to essentially 
set a price for those. He suggested a couple ways of doing this. Let me 
comment on those suggestions because I think they are worth commenting 
on.
  First, as the price of doing this, he suggests we should change the 
bankruptcy laws, a proposal debated here at some length earlier in the 
year, so bankruptcy courts would have the right to write down mortgages 
in bankruptcy. That is an appealing idea on its face because most of 
these mortgages are going to be written down anyway. But the issue 
becomes, what is the cost

[[Page S8997]]

of that on the marketplace. If the mortgage underwriter knows there is 
a potential that the mortgagee may file bankruptcy and that mortgage 
may be adjusted significantly in bankruptcy, then the cost of that 
mortgage is going to go up and go up a lot because it is going to have 
to cover the premium and some actuarial estimate of how many mortgages 
might end up in bankruptcy, might end up being written down.
  As we know, bankruptcy doesn't deal with secured assets such as a 
mortgage in the sense it doesn't write them down. The secured assets 
come first. This proposal has its upside from a standpoint of being 
attractive to a way of getting these mortgages performing again. But it 
has the downside of probably creating a much higher price for mortgages 
in the marketplace in the initial offerings.
  Of course, what we want to do is make mortgages more readily 
available in a sound and reasonable way, not in a speculative way, the 
way they were in the last few years under the subprime system.
  There may be a way to do this. I wouldn't close the door to it. I 
simply say, in looking at this, we have to be realistic and recognize 
that the cost of writing mortgages in this way will go up, and there 
may be a way to keep that price from being excessive by limiting the 
availability of that option. So I am willing--not that it is my role, 
but I would certainly think it is something to look at.
  The second idea the Senator suggested was that we allow the Federal 
Government to basically buy into troubled banks and get what I presume 
would be equity back by creating a new entity, a new agency to do that.
  That is also an interesting idea, and I respect the fact he brought 
that idea forward. I suggest that is a long, complicated exercise, 
however, and we are not in a period where we have a whole lot of time. 
What we need is something that is going to make sense soon and give us 
some fluidity in the marketplace reasonably quickly.
  Probably the only way we are going to accomplish that is to pursue a 
course of the Federal Government injecting itself into the process by 
purchasing mortgage-backed securities in some manner, maybe through one 
of the agencies we have already gotten possession of--Freddie Mac, 
Fannie Mae, or one of our other agencies--and taking them off the books 
of these entities and reselling them in some way that recoups value to 
the taxpayer. That gets liquidity into the process, and it hopefully 
gets a stability into the pricing mechanism for these mortgage-backed 
securities which are at the core of our problem.
  Honestly, if we had done this or taken this type of route with 
stimulus 1, where we used $160 billion, we probably could have abated 
this entire problem or at least muted it significantly because that is 
a lot of money, $160 billion. If we had not handed it out in $600 
increments to everybody to be spent to buy a television made in China 
so the Chinese benefited from it--we didn't benefit from it--instead, 
if we had put it on the problem, which is the mortgage issue and the 
fact there was a lot of debt nonperforming and where you couldn't 
ascertain the value and use it to settle out that part of our economy, 
we might have made great strides earlier, and we might not be where we 
are today, which is in such dire straits.
  I think it is good at least that the topic has been opened, and I 
congratulate Senator McCain for being willing to stick his toe into 
this rather choppy water and do it in a way that isn't in the tradition 
of what one would call classic conservative politics. He is basically 
suggesting we might need to look at a major initiative through the 
Government to stabilize the situation. That is a departure. He should 
be congratulated for being strong enough, creative enough, and mature 
enough to be willing to step into that direction.
  I wish, quite honestly, Senator Obama was saying something similar. 
Senator Obama continues to talk, unfortunately, in hyperbole on this 
issue, sort of out here on some other planet, relative to the reality 
of the on-the-ground problem. At least Senator McCain is talking about 
the problem in a mature, substantive way. Obviously, the ideas haven't 
totally evolved or developed yet, but he is opening a dialog that I 
think is very constructive to the question of how we get to a solution, 
as Senator Schumer, quite honestly, did in his proposal.
  As I said, I have outlined what I think is the point to begin the 
dialog. This may all be moot anyway because there is significant rumor 
that the Treasury and the Fed are moving much faster than the Congress, 
which should not be a surprise, which they usually do. That is why we 
have them. The Treasury did a good job, in my opinion, on Freddie Mac 
and Fannie Mae, and the Fed did the right thing with AIG.

  Another issue that has been raised, however, that is giving us some 
problems is the short-selling issue. There has been a lot of discussion 
about short selling, how it has been predatory and inappropriate. It is 
true. There is no question but that naked short selling is a serious 
problem. I congratulate the SEC for pursuing aggressive rules on the 
equity side of naked short selling so people have to cover what they 
are doing.
  But when you do an event on short selling on the equity side, it 
opens short selling on the debt side. If a short seller thinks a 
company is a target and they are going to go after that company, a 
person who is approaching this from a very predatory approach on the 
equity side and the equity side is shut down by the SEC or, more 
importantly, by financial houses, with the British action which 
basically bars short selling from financial houses until the beginning 
of next year, then that short seller is probably going to move over to 
the debt side.
  Spreads jump dramatically, and the practical effect of that is it 
becomes virtually impossible for people to borrow money because the 
spreads are so high, and that is an equally contracting event. It makes 
commercial paper very hard to move.
  I do hope that as we look at the short-selling issue, we not only 
look at the equity side but we also look at the debt side. In that 
arena, there are a lot of different ideas that have been suggested. One 
that I heard is that you should--and I don't know that this works, but 
I think it is worth throwing out--is that you have to look at the 
credit default swap arena and have more transparency so people know 
what the risks are and they know what the value is and they know what 
is going on in this arena.
  That can be done through creating some sort of clearinghouse along 
the lines of what we do with S&P futures. That has been a suggestion. 
Maybe that is the way to go.
  In any event, we cannot fix half of this equation, in my opinion, and 
expect the markets to not adjust in a way that actually continues the 
retardation of the markets or the retardation of the economy because of 
the lack of transparency on the debt side as to who owns what and what 
the spreads are. Not the transparency on the spreads but the fact that 
people are not going to be able to get commercial paper because the 
spreads will be too high as a result of the short selling.
  I am not talking about eliminating it. I am not even talking about 
chilling. I am talking about making it more transparent, and that I 
think will be very helpful.
  In any event, it seems to me at least we are getting some good and 
positive discussion on these issues around here, which is a change, and 
hopefully we can continue on this track. It may be that the Congress 
will be out of session before anything can be done, and that may 
actually be good, too, if we don't have anything good to do. But as a 
practical matter, I think we have to maintain our flexibility as a 
government, and we have to be willing to support those who are trying 
hard in this area to try to get our markets back operating at some 
level of normalcy, specifically the Secretary of the Treasury and the 
Chairman of the Fed. And we should not try to hyperbolize this issue 
and create an atmosphere where the well of opportunity to look at 
things that are different and creative, maybe outside the tradition of 
the ideology of one side or the other, is poisoned by excessive 
partisan discussion.

  Madam President, I yield the floor, and I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.

[[Page S8998]]

  Ms. KLOBUCHAR. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Brown). Without objection, it is so 
ordered.
  Ms. KLOBUCHAR. Mr. President, we have some startling new figures 
about how difficult it has become for the middle class to get by. We 
now have some new numbers, through the Joint Economic Committee and the 
work of Professor Elizabeth Warren, that in fact the average middle-
class family has lost about $2,000 in wages, $2,000 per year, for the 
last 8 years, and the expenses have now gone up about $4,400 per year. 
That is a net loss of $6,400 per year. And with family childcare, you 
add an additional $1,500 per year. This is how much more expensive it 
was than 8 years ago.
  So we are seeing more and more families in debt, more and more 
families having trouble getting by due to the failed economic policies 
of this administration, and as we have seen from the events of the past 
week, the country is facing an enormous financial crisis, probably the 
largest we have seen since the Great Depression.
  Although the administration is still wary to admit this is a 
recession, we have seen time and time again over the last 8 months more 
and more jobs lost. Many institutions--some that have been on Wall 
Street for decades, some for a century--are finding themselves in the 
same position as many families were when their house was foreclosed on, 
with nowhere to go, and secretaries with nothing to their name. People 
had their retirement money in stock in the company. They were depending 
on that stock for their future but now have nothing to their name. This 
week we saw things take an even greater turn for the worse.
  When Chairman Bernanke was in front of the Joint Economic Committee 
back in April, days after the Bear Stearns buyout, there was some talk 
that maybe that would stabilize things. But Wall Street was simply in 
denial. When you look at this past decade, Mr. President, you can see 
it was a decade of greed, a decade of risk, and there wasn't much fear 
in how those deals were made--jumbo mortgages, securities with no 
backing. Too much, too much, too much.
  Look at IndyMac in California, and Fannie Mae, Freddie Mac, Lehman 
Brothers, Merrill Lynch, AIG, and all of these firms that insisted they 
were solvent, until the eleventh hour. That practice put everyone's 
savings at risk.
  Next week, in our Joint Economic Committee, we are going to be 
hearing from Chairman Bernanke and discussing exactly where we go from 
here. I believe in this country. I believe we will move forward. But I 
can tell you lax regulation, decaying agencies, and some of the people 
who were put in charge of them have led us to where we are today.
  I saw it firsthand on the Commerce Committee with the Consumer 
Protection Agency, a shadow of its former self, with 50 percent fewer 
employees than it had during the Reagan era. Big surprise when these 
toxic toys started coming in from places such as China. There was no 
one there to mind the store. There was one guy named Bob in a back 
room.
  When you look at these mortgage instruments, there was no one 
watching over them, no one to enforce the rules. As a former 
prosecutor, I know you can have all the laws on the books, but if you 
don't have people enforcing them and people who are committed to the 
purpose of making sure that regular people are protected in this 
economy, it is not going to matter what laws are on the books.
  We also had rampant change in some of our regulations--the Enron 
loophole. We had the chair of the Commodity Futures Trading Commission 
before a joint meeting with our Agriculture Committee, and I asked him 
if he didn't want some more tools in his arsenal so he could maybe look 
at what is going on with these trades and the speculation going on with 
foreign countries. Even if you don't want to use them, I asked him: 
Don't you want those tools we can give to you? As a prosecutor, I 
figured I wouldn't use every law that was on the books, but I always 
wanted more tools to look at things.
  He said: No, we are fine the way we are. It was that attitude, Mr. 
President, that got us where we are today. So we are going to have to 
change things in this country. We are going to have to get some 
balance. I believe in vigorous entrepreneurship. My State is home to 
nine Fortune 500 companies and many thriving small businesses. We 
believe in entrepreneurship in our State, but we also believe there 
must be a balance and there must be fairness and somebody minding the 
store. And that has been lacking over the last 8 years.
  We do have an opportunity as we look at how we are going to get this 
economy moving. I mentioned there was so much greed and not enough fear 
in the last 8 years. Well, now we stand on the precipice of where we 
don't have too much fear, but we want to move forward as an economy, 
and there is one thing we know we can do immediately in the next few 
days. We can make sure the incentives are in place to keep moving 
forward with this new green economy to compete with other countries and 
have the right incentives in place.
  I am talking about the extenders for renewable energy that have 
really led to a boom in my State. We are third in the country with wind 
energy. Southwestern Minnesota is home to hundreds of large-scale wind 
turbines, helping to make us a leader in wind power. Along with 
biofuels, these wind energy farms have spurred a rural economic 
renaissance in that part of our State.
  Let me give a few examples of this and examples of hope for this 
economy as we go forward and how we can put incentives in place so we 
can keep going.
  I see my friend from Kansas across the aisle, and I know he has a 
picture of a wind turbine in his front office. We know there is a 
future for this country with development in this area.
  In 1995--and this is just an example from Minnesota--SMI & 
Hydraulics, Inc. began their business in Porter, MN, primarily as a 
welding and cylinder repair shop for the local farmers and businesses. 
Today, SMI & Hydraulics, which manufactures the bases for the wind 
towers we see all across this country, just recently expanded a 
facility to 100,000 square feet and created over 100 new jobs in just 
this little town. It is a barn with these big wind bases that actually 
come out of it. It is an amazing success story.
  Last year, the renewable electricity sector pumped more than $20 
billion into the U.S. economy, generating tens of thousands of jobs in 
construction, transportation, and manufacturing. Throughout the 
country, renewable energy has led us down a path toward new jobs, lower 
energy bills, and enhanced economic development. We need to move this 
country forward.
  For me, and the State of Minnesota and so many other areas across 
this country, the protection tax credit is critical to realizing this 
goal. The protection tax credit, in combination with strong State 
renewable electricity standards, has been a major driver of wind power 
development in Minnesota. That is why I was so concerned we might 
actually lose it. All the studies show if you let it go, about 8 months 
before it is forecasted to go off, you have an enormous drop in 
investment, and that is exactly what we don't need now in this country. 
We need a plan to go forward.
  I personally would like to see it go into effect for 3, 4, or 5 
years. I have a bill with Senators Snowe and Cantwell to put it in 
place for 5 years. But if all we can agree on today is to extend it for 
another 1 year for wind, solar, geothermal, and all kinds of renewable 
products and wasted energy, that is what we should be doing. But I will 
try. We are working on a bipartisan basis with a group of Senators to 
extend it for at least 3 years for renewable fuel sources. Because as 
we struggle with this economy we know, as we say in Minnesota, the 
approach is not just going to be a silver bullet, it is going to be 
silver buckshot. It is going to involve all kinds of energy production, 
increased energy production. But it is also going to involve looking at 
things in a new way. That has been lacking so much, this long-term look 
at our economy while other countries have leapfrogged us. While we 
developed the technology for wind and solar, we have been leapfrogged 
by other countries. Anyone who watched the Olympics in China knows what 
we are up against on the world stage for competition. They saw not only 
the athletes from all over the world but they

[[Page S8999]]

saw the precision with which the Chinese were able to pull off that 
opening ceremony in those Olympics.

  We have to get our act together. We have to get our act together for 
our economy and be sensible and not look at 1-day solutions and 1-day 
spins. We have to have a plan for this economy, and this is a start, 
but we also have to have some balance in our regulatory system so our 
economy can function and our businesses can function as they were meant 
to.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The senior Senator from Kansas is recognized.
  Mr. BROWNBACK. Mr. President, I join my colleague from Minnesota. I 
have a map that shows the wind energy capital of the world, the Saudi 
Arabia of wind, right in the middle of our country. I have a nice 
corner here in Minnesota with some good wind power. We have a lot right 
here in the middle of the country in Kansas and we want to harvest it. 
I am delighted to see that the wind energy piece in the production tax 
credits is in the bill, the tax extenders bill. That is what I wanted 
to come to the floor, because it is critical to the investment taking 
place for wind power generation. We are doing that in this particular 
bill.
  I, as well as my colleague from Minnesota, wish to see these 
production tax credits extended for a series of years rather than one; 
planning that arrives in a 3 to 5-year window would give a lot better 
opportunity for capital to come into the business. I think this is a 
critical piece we have to get done.
  I met with my Kansas wind energy associates yesterday, people putting 
in these units on a big scale, and small scale. They are saying we need 
to have these credits in place.
  I was at Pratt Community College about a month ago. They have put in 
three midsize wind turbines that are cutting down the community 
college's electric bill about $1,000 a week. They are looking at it and 
saying this credit is a great one, it has a nice payoff. It is right in 
this zone where we have high wind electric generation. It is working 
and working well.
  I do note for my colleagues, on this particular issue you cannot rob 
Peter to pay Paul. This is the sort of thing where you have to do all 
the energy issues. You can't punish one or another. We need all of it. 
We have said that for some period of time. I hope we would start to do 
that.
  The unfortunate piece of the tax extenders is the pay-for provision 
of it, where it is going at the refining capacity in the United States. 
I do not think that is wise at all. I want to cover this briefly here.
  Of the $17 billion energy portion of this tax package, that is being 
paid for mostly by tax incentive freezes and adjustments to other 
sectors of the energy industry, primarily the refining sector. That is 
not where we should go. We need more refining capacity, not less. It is 
not the sort of thing that we should rob from one piece of the energy 
pie and sector to put it in another one. That is not the way to go 
forward on this. It is to grow the entire energy piece.
  This bill will alter current law and freeze a manufacturing tax 
deduction at 6 percent instead of the current law, which would raise it 
to 9 percent by 2010 for the sale and exchange of oil, natural gas, or 
primary refined products. This is something that was going to be used 
by refineries to expand refining capacity and was going to provide a 
tax deduction from 6 to 9 percent. That is a good incentive. It will 
see the refining industry that is important to my State as well that is 
looked at, a refining industry that has been punished by Hurricane Ike, 
in rebuilding, to use that money to encourage more refining capacity in 
the United States. We need to do it rather than to tax it.
  That is why I urge, when we look at these in the future, we do not 
punish one piece of the energy sector to pay for another one. I support 
wind power generation. It is key and critical. I am very supportive of 
the wind package in here. I want to make sure that we do all in the 
energy field because we need all of it in the energy field. We do not 
want to continue sending $500 billion overseas every year for oil. Much 
of that goes to countries that do not like us. We need to be able to do 
more of the production and the refining here in the U.S., and the 
current state of the technology will allow us to do it.
  We have somewhere between 10 and 18 billion barrels of oil available 
under 2,000 acres in ANWR, along with another 45 billion barrels 
available in the offshore and deep water areas of the Gulf of Mexico. 
Unfortunately, many of those proposals, we are not going to be able to 
vote on here. We need to be able to get at that oil and we need to be 
able to get at the oil shale production in the western United States--
in Utah, Wyoming, and Colorado.
  I note to my colleagues, we need to do all of it. On this side of the 
aisle I think they will find support for all of it, but not to pick 
pieces of it.
  There is another thing I want to point out, and I don't have the map 
here, but I think it is illustrated by the map I do have here. We have 
a lot of electric wind power capacity generation, given the strength of 
wind we have in our State. But we need to be able to move that to 
markets; we need to be able to move it to markets in my State but also 
be able to move it across State lines as well to be able to take 
advantage of this energy production. To do that you need backbone lines 
to be able to move it.
  A lot of times you are going to need that wind to mix with, whether 
it is natural gas electric production, coal or nuclear production. We 
need to expand those so you have the base load there to build the wind 
energy into, to have the pipelines of electricity to move it to various 
places in the market throughout the country.
  We need a 21st century grid. That is going to require not just wind 
being harnessed to it but also the base power being generated for times 
in the season and places where wind is not blowing, to be able to move 
it. I urge my colleagues to look at this as the total package. That is 
how we move this forward and how we balance the three E's of energy, 
environment, and the economy. It is all of them working together to get 
us a more stable economy, having more of this energy production here at 
home and having a better environment in the process. It is not just 
throwing any of these out in the process to get that done.
  I hope in a new Congress, when we can look at these things, and in a 
new administration, I hope we can look at these things together and 
work them all in together, balancing those three E's to move the 
country forward.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BROWN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Whitehouse.) Without objection, it is so 
ordered.
  Mr. BROWN. I ask unanimous consent to speak for 5 minutes as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BROWN. Mr. President, in the last 18 or 19, 20 months since I 
have been a Member of the Senate, joined by my friend from Rhode 
Island, I have held, around my State, about 115 or so roundtables in 
most of Ohio, all of Ohio's 88 counties, from Mahoning County to 
Ashtabula to Williams County, from the southeast to the southwest, all 
over the State, listening to groups of 15 to 20 people for an hour and 
a half or so tell me about their hopes and their dreams and what we can 
do to build their communities and help strengthen the middle class in 
the State.
  I hear regularly, in more emphatic terms almost every month, about 
the anxiety facing our State's middle-class families. They can be as 
rural as Fulton County or Highland County, they can be as urban as 
Cuyahoga or Franklin or Hamilton County, or they can be in between, 
places such as Mansfield and Lima and Zanesville and Chillicothe and 
Portsmouth. I hear people in Ohio who work hard, who play by the rules, 
and they are watching too many of their jobs or their neighbors' jobs 
move overseas. They are seeing their own health care and energy costs 
soar. In far too many cases, even in unionized plants, they are seeing 
their pensions disappear.
  I hear this sense of betrayal. People understand--intuitively 
understand--that in most of the last 8 years, especially up until last 
year but even so,

[[Page S9000]]

still, how they feel this Government has betrayed the middle class. 
When President Bush had control of the House and Senate, with the 
Republican majority in the House and Republican control of the Senate 
and Bush and Cheney in the White House, they saw the drug companies 
writing the Medicare laws; they saw the insurance industry dictating 
health care policies; they saw the oil industry ramming through energy 
legislation; they saw Wall Street pushing these job-killing trade 
agreements through the House and through the Senate. They understand, 
again intuitively, that the Bush-Cheney-McCain ideology that markets 
can always police themselves is bankrupt.
  Every year of the Bush administration and every year of Republican 
control of the House and Senate, we heard this mantra, this 
conservative orthodoxy that markets always do the right things; that 
markets can police themselves; that any regulation is evil; just open 
our country, no reason for environmental rules, no reason for worker 
safety rules, no reason for rules, period, governing financial 
institutions.
  Let's take one issue. Imagine if George Bush and Dick Cheney and John 
McCain had gotten their way 3 years ago, in January 2005--I believe 
January or February. President Bush and John McCain and Dick Cheney 
authored their scheme, their legislation--call it legislation--to 
privatize Social Security. This risky, reckless privatization scheme 
they were trying to push through Congress met incredible opposition, 
not just from Democrats in Congress--because we believe strongly in a 
Social Security that works, not one that is privatized, that Wall 
Street gets its hands on--but the American people spoke resoundingly, 
loudly, clearly that they did not want this Social Security 
privatization.
  But go back. Imagine if the voters of Rhode Island or the voters of 
my State of Ohio--if George Bush and John McCain had gotten their way 3 
years ago with that risky scheme to privatize Social Security, imagine 
what American seniors would think today as their private Social 
Security accounts disintegrated before their eyes. Imagine the next 
Social Security statement they would get after we have had a week like 
this, when they opened up the envelope that was mailed to them that 
itemized how their private accounts were doing, their Bush-Cheney-
McCain private accounts.
  Imagine what choices they would face. Their food prices are already 
going up. Gas prices are through the roof. Heating prices, especially 
in States such as Rhode Island and Ohio--imagine what seniors in Dayton 
and Findley and Bowling Green and Akron and Canton would think when 
they opened their Social Security statements and saw what had happened, 
as they look forward to the winter and high energy prices.
  Look at John McCain's economic advisers. I have not been privileged 
to serve in the Senate that many years. I was in the House then, and I 
was not here when Phil Gramm served as a Senator. Phil Gramm was John 
McCain's economics mentor. John McCain looked to Phil Gramm for advice 
about economics. Phil Gramm is the one who said we are not in a 
recession; we are in a mental recession. Americans should just get over 
this. Then he told Americans to quit whining. It is easy for Phil Gramm 
who, I assume, has a pretty good pension. I also know he is now an 
investment banker and adviser to large corporations. I am sure he is 
making a salary of several multiples of what he was making in the 
Senate. So, to him, recession doesn't much matter. He is still cashing 
his bonus checks. I am sure he doesn't whine about his economic 
situation. But I am equally sure he doesn't understand the economic 
woes of people in Galion and Cambridge and Bellaire, OH.
  I am equally sure both John McCain and Phil Gramm probably own more 
homes each than almost anybody in any of those communities and don't 
face these kinds of economic problems. Phil Gramm said he wants to be 
Treasury Secretary if John McCain is elected.
  Look at one of his other advisers, Carly Fiorina, ousted CEO of 
Hewlett Packard. She pretty much failed at her job, was ousted, and was 
given a huge golden parachute. She is John McCain's chief economic 
adviser in the campaign. Phil Gramm was the mentor. Now Carly Fiorina 
is his chief economic adviser. She said she doesn't think John McCain 
is capable of running a corporation, and she wanted to be Vice 
President.
  I guess I should not be surprised that Ohio's middle-class families 
intuitively understand they can't afford four more of Bush, Cheney, and 
McCain, of deregulation and privatization, how so many in this 
institution--and unfortunately, Senator McCain--are so out of touch 
with the middle class of Ohio, the people he is going to ask to vote 
for him. I think none of us are fooled by this latest change in 
rhetoric where Senator McCain is all of a sudden showing an anger at 
what these companies and Wall Street have done.
  As we know, John McCain was one of the cheerleaders not just for 
privatization of Social Security, he was also a cheerleader for 
deregulation, saying we have way too many regulations, too many 
environmental, worker safety, consumer product safety, and health 
regulations and rules on Wall Street.
  We know when you relax regulation of consumer product safety, you get 
toxic toys coming from China. When you relax regulation on food safety, 
you get too many cases of E. coli. You get too many contaminated 
ingredients that end up in drugs such as Heparin that killed several 
people in Toledo, contaminating prescription drugs. When you weaken 
environmental laws, we know what happens. When you weaken food safety 
laws, consumer product safety, all the things that Americans care 
about, and when you deregulate Wall Street, we know what happens. It is 
pretty clear but nowhere is it clearer than it is on Social Security. I 
know the Senator from Rhode Island and I and the majority of people in 
this Senate want to protect Social Security, don't want to privatize 
it. John McCain, George Bush, and Dick Cheney tried to privatize it 
back in 2005. We know if they get a majority in the House and Senate, 
they will try to privatize Social Security again. It is bad for the 
American people.
  We saw this week the best illustration yet of what happens if this 
crowd in Washington, the people who are so out of touch with the middle 
class--John McCain, George Bush, Dick Cheney--if they get their chance 
ever to privatize Social Security, far too many of my constituents will 
be hurt.
  Mr. DURBIN. Will the Senator yield for a question?
  Mr. BROWN. Yes.
  Mr. DURBIN. I thank the Senator for his comments. This whole concept, 
the underlying philosophy that you will hear from President Bush and 
Senator McCain with his support, is the notion of the ownership society 
which, to put it in shorthand, means: Just remember, we are all in this 
alone. They believe when it comes to at least the issue of Social 
Security, it would be preferable to divert money from current benefits 
and to put it in the stock market. That was the notion supported by 
John McCain and President Bush which the American people rejected. It 
is my understanding as well that Senator McCain has taken this 
ownership society idea to the notion of health insurance too, that they 
would penalize employers that provide health insurance and give people 
a tax break to go out into the market and go shopping for their own 
health insurance policies.
  I ask the Senator if he has any reaction to the notion of individuals 
and families shopping for health insurance, not as part of some pool 
where they work but on an individual family basis.
  Mr. BROWN. The first thing Senator McCain would do is tax those 
health care policies that tens of millions of Americans have. In my 
State there are an awful lot of still pretty good health care policies, 
health care coverage, often negotiated by unions, often extended 
voluntarily by employers. Senator McCain wants to tax the worth of 
those policies. So if you have a policy worth $6,000 for your family, 
then that would be taxed under the McCain plan. He turns around then 
and gives some tax breaks in their place. But the net effect simply 
means it isn't going to work.
  It goes to the heart of our philosophy as a people, the values we 
hold. The values that we hold, in my view, are about communities. We 
really are in this together. Our country works best when we are 
cooperating, working together. We pulled together after September 11. 
We pulled together during

[[Page S9001]]

World War II. When we pull together and work together, things work for 
everybody so much better.
  Senator McCain is taking up where George Bush and Dick Cheney left 
off. They think it is every man and woman for himself or herself: 
privatization of Social Security, messing with employer-based health 
benefits as they are, without replacing them with anything that makes 
any sense. The ``you are on your own'' attitude makes no sense for the 
American people. The more people know about this, the more upset they 
are going to be.
  Mr. DURBIN. I don't know if the Senator, when he was a Member of the 
House, ever served with Phil Gramm, who is from Texas. I did. Then 
Senator Gramm came over and represented the State of Texas in the 
Senate. For the longest time, Senator Phil Gramm was the economic 
adviser to John McCain, not just on a campaign basis but on a personal 
basis. They shared a lot of thinking together. It was Phil Gramm's 
inspiration that moved us to this moment now where we have a lack of 
oversight, a lack of accountability when it comes to basic investments 
and credit institutions. The Gramm-McCain view of the world was 
government should step aside and get out of the way for the magic of 
capitalism and the magic of the free market. There is no question that 
the entrepreneurial spirit is a major part of the success of America, 
but time and again in history we have seen that if there is not a 
government entity involved in oversight, demanding accountability, many 
times the forces in the market go to extremes.
  What we have seen in the last 2 weeks are the extremes of the Phil 
Gramm-John McCain approach to regulation. In fact, Senator McCain 
prided himself by saying he was one of the leading deregulators in the 
Senate. In the last couple days, as companies have been crashing and 
taxpayers have been picking up the bills, he now says he favors 
regulation. I ask the Senator, isn't this part of the same mindset, 
privatizing Social Security, privatizing health care, and basically 
removing the government from market operations that can ultimately 
damage investors, savers, retirees, and the taxpayers?
  Mr. BROWN. There is no question. Earlier we were talking about Phil 
Gramm, who says we are in the middle of a recession and Americans 
should quit whining; Phil Gramm, whose income is many times what it was 
in the Senate, and we are paid very generously in this body. John 
McCain has followed the policies of the Bush-Cheney administration, but 
he gets his advice, if he ever strays, from Phil Gramm. Phil Gramm was 
his mentor on his economic views.

  If you remember John McCain said several times in the last couple 
years, I don't know much about economics. He may or may not. 
Apparently, he doesn't know much. But what he does know comes from this 
very corporate, very privatized way of thinking that Phil Gramm has 
taught him. He has carried that into the campaign as Phil Gramm 
continues to advise him on economic matters. Just because John McCain 
is saying some things today that you and I agree with about going after 
Wall Street and that I want regulation, his whole history is 
deregulation, fighting for deregulation, doing Wall Street's bidding, 
doing the oil industry's bidding, doing the health insurance companies' 
bidding.
  Mr. DURBIN. I would ask the Senator from Ohio, is it fair to say when 
it comes to regulation that Senator McCain was against it before he was 
for it?
  Mr. BROWN. I think he was against it before he was for it. He was for 
the head of SEC, Chris Cox, and now he is against him. Maybe tomorrow 
he will want Secretary Paulson fired. I don't know. He has been for a 
lot of things before he has been against them, unfortunately. I thank 
the Senator from Illinois.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Washington is recognized.

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