Congressional Record, Volume 157 Issue 59 (Wednesday, May 4, 2011)

[Congressional Record Volume 157, Number 59 (Wednesday, May 4, 2011)]
[Senate]
[Pages S2667-S2676]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

The Budget

Mr. HARKIN. Madam President, everyone in this body agrees that we
must take aggressive action to reduce the deficit, but we have to do it
right. Frankly, the best way to bring down the deficit is to help 15
million unemployed Americans get good middle-class jobs again. Those
hard-working Americans would be delighted to be on the tax rolls and to
be taxpayers once again. But, regrettably, the tea party budget passed
by the House Republicans last month takes us in the opposite
direction--it would weaken our economy and destroy jobs.
I have spoken previously on the Senate floor about the grave flaws in
the Republican budget. But beyond the misguided priorities in that
budget, I object to its premise. The premise of the tea party
Republican budget coming over from the House is that America is poor
and broke and we can no longer afford the investments that make
possible a strong middle-class and world-class economy. Indeed, some
House Republicans take the radical view that government has no business
investing in the middle class, period. I emphatically reject the
defeatist premise of this Republican budget. The United States of
America is a wealthy Nation--the wealthiest Nation in world history.
The problem is how that wealth has been shared or not shared among the
American people, with income inequality that is the highest among
developed countries. Let me repeat that. Right now, income inequality
in America is the highest among developed countries. So the problem is
how our wealth has been invested or misinvested, with trillions of
dollars squandered by money manipulators on Wall Street or funneled to
those at the top through tax cuts.
Unfortunately, the tea party budget, authored by Congressman Ryan,
would make these problems far worse. It lavishes yet more tax cuts on
corporations and the wealthy even as it slashes investments that
undergird the middle class in this country--everything from education
funding to Medicare and Medicaid. Let me state the obvious: If working
people in the middle class are going to take a hit in tough times, it
shouldn't be to take a hit to pay for tax breaks for millionaires and
billionaires.
Let's look at some of the particulars in this so-called deficit
reduction plan of the House Republicans. For starters, never before
have I heard of a deficit reduction plan that begins by demanding
trillions of dollars in new tax cuts, largely for corporations and the
wealthy. In addition to allowing the very wealthy to keep all of the
benefits of the Bush-era tax cuts and to keep them permanently, the
Republican budget would cut the top tax rate from 35 percent down to 25
percent. Let's again state the obvious: This doesn't reduce the
deficit; it digs the deficit hole much deeper.
Next, the Republican budget dismantles Medicare and Medicaid and lays
the groundwork for deep cuts to Social Security--changes that will
devastate the economic security of the middle class in this country.
The Republican budget says we cannot cut one additional dime from the
Pentagon budget because I guess to them there is no waste in the
Pentagon, there are no unnecessary weapon systems, no troops based in
Japan or Europe or elsewhere who could be brought home. Meanwhile, this
tea party Republican budget slashes Federal investments in everything
from education to infrastructure to law enforcement back to the levels
of the 1920s. Again, let me repeat that. It slashes Federal investments
in everything from education to infrastructure to law enforcement back
to the levels of the 1920s.
It also repeals Wall Street reform that we passed here, as well as
the consumer protections in the affordable care act, including the ban
on denying coverage for preexisting conditions. What has that got to do
with the deficit?
Their budget cuts funding for food safety, workplace safety,
environmental protection, and guts the commonsense regulation of
corporate America. It tells Wall Street bankers and speculators, health
insurance companies, credit card companies, and mortgage lenders: You
are free to go back to the reckless abusive practices of the past. We
will just trust you to do what is right for the American people.
To appreciate just how extreme and ideological this budget is, look
more closely at the blueprint for replacing Medicare with a voucher
system. The nonpartisan Congressional Budget Office estimates that by
2030, future seniors would have to pay two-thirds of the cost of their
private health insurance. Their out-of-pocket costs would average in
excess of $12,000 per person, per year--more than double the current

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cost to seniors. Yet this would pay for private plans that would
provide only half of current Medicare coverage. How many seniors can
afford to pay $12,000 annually out of pocket for health insurance that
only gives them half the coverage they have right now for Medicare? And
good luck finding affordable coverage if you are a 70-year-old with a
preexisting condition, such as heart disease. Good luck fighting
endless battles with your private health insurance company over that
one.
Madam President, does this tea party Republican budget reflect our
values and priorities as Americans? Is this the kind of country we want
to live in, the kind of country we want to pass on to our children? Of
course not. Americans don't want or expect a handout, but they
rightfully expect a government that lends a helping hand, not one that
stands in their way and not one that destroys the essence of the middle
class. The American people want a government that helps them to achieve
retirement security, a government that makes sure that when we put
money away for retirement, it is going to be there when we retire. The
American people want to maintain strong investments in education and
infrastructure.
To reduce deficits, the American people want shared sacrifice,
including an increase in revenues from those who can most afford it.
They want an end to taxpayer subsidies to oil and gas companies, and
they want to cut Pentagon spending. Yet the Republican budget does
exactly the opposite in every single respect.
Make no mistake, this tea party Republican budget puts us on a course
of disinvestment, drift, and decline. This budget wreaks of pessimism
and gloom and doom. As I said, its defeatist premise is that the United
States is poor and broke and we can no longer afford a strong and
secure middle class, we can no longer afford to prepare our young or
care for our elderly. Yet, bizarrely, the Republicans insist that we
can afford--we can absolutely afford--another enormous tax cut for
millionaires and billionaires.
I totally reject their premise. I reject this defeatist Ryan budget--
the premise that America is poor and broke.
Here is the truth: The United States is recovering from the largest
economic downturn since the Great Depression and from the damage caused
by very unwise budget decisions made over the last decade, and we are
growing wealthier by the day. Our entrepreneurial economy, our
technology, our universities and the arts are the envy of the world.
Americans are still the best educated and most productive people on
Earth.
Most importantly, Americans continue to be an optimistic, can-do
people. We have faced national trauma, including depressions and wars
and national disasters, many times before, and we have always rebounded
stronger and better than ever. We can overcome our current challenges
without sacrificing our great middle class and without abandoning our
seniors or people with disabilities and the less fortunate among us.
There is one important point of agreement on both sides of the aisle
here in the Senate: We agree the current budget deficits are
unacceptable. We must bring these deficits under control.
However, deficits are by no means our only urgent economic challenge.
An even greater challenge--a greater challenge--is our fragile economy
and the jobs crisis. Addressing this successfully will help reduce the
deficit. Now, the unofficial unemployment rate is 8.8 percent, but the
real unemployment rate, including people who are underemployed or who
have dropped out of the job market in frustration and are no longer
working, is a staggering 16 percent.
Meanwhile, our middle class is under siege. Our middle class is being
dismantled as fast as big corporations can shift our manufacturing jobs
overseas. People are losing their savings, their health care, their
pensions, and in many cases losing even their homes. With good reason,
the American people feel they are losing the American dream for
themselves and for their children.
That is why we cannot look at the deficit reduction challenge in
isolation. We cannot just take a slash-and-burn approach to the budget.
Smart countries do not just turn a chainsaw on themselves. Instead of
this tea party Republican budget, which is being sold through fear and
fatalism, we need a budget that reflects the hopes and aspirations of
the American people. We need a budget that brings deficits under
control in a way that allows us to continue investments that boost
competitiveness, create jobs, and strengthen the middle class.
I would add this: We need a deficit reduction plan that actually
attacks the sources of our current deficits. What are those sources?
Well, a remarkable article from the front page of Sunday's--May 1--
Washington Post by Lori Montgomery documented clearly how the huge
budget surpluses of the Clinton years were turned into the $1 trillion
budget deficit President George W. Bush passed on to President Obama.
The article states:

Voices of caution were swept aside. Political leaders chose
to cut taxes, jack up spending, and, for the first time in
U.S. history, wage two wars solely with borrowed funds.

The article cites a new analysis by the nonpartisan Congressional
Budget Office which determined that ``routine increases in defense and
domestic spending account for only about 15 percent of the financial
deterioration. The biggest culprit, by far, has been an erosion of tax
revenue, triggered largely by two recessions and multiple rounds of tax
cuts.''
The article also notes that Federal tax collections now stand at
their lowest level as a percentage of the economy in 60 years.
Let me repeat that--their lowest level in 60 years.
Of legislation passed since 2001, when George W. Bush became
President, about half of the negative impact on deficits came from
reductions in revenue and nearly a quarter came from increases in
defense spending. One-half came from reductions in revenue.
I am talking now about what are the sources. What are the sources of
the deficit hole we are in? In 2001, we had huge surpluses. CBO said if
we maintained the same budget policies that by 2010 we would have paid
off the entire national debt. 10 years later, in 2011, we have a $1.4
trillion deficit. What happened? What decisions were made in those 10
years that put us in that hole?

As I said, the article by Lori Montgomery in the Washington Post
clearly points out, and the CBO clearly points out, that half of the
hole we are in came from reductions in revenue, one-quarter came from
increases in defense spending, and one-quarter from everything else.
As the CBO analysis makes clear, we do not just have a spending
problem, we have a revenue problem. The main source of our current
deficit problem is not the modest increase in domestic spending beyond
the one-time spending in the Recovery Act--which is rapidly coming to
an end. The principal source of our deficits is the deep tax cuts and
the surging Pentagon budget, 75 percent of our current problems.
Yet now the tea party Republican budget calls for trillions of
dollars and yet more new tax cuts, largely for those at the top. It
refuses to cut Pentagon spending in any significant way. It places
almost the entire burden of deficit reduction on programs that support
the middle class, seniors, people with disabilities, and those of low
income.
Americans are rightly asking some commonsense questions. If a
principal source of our deficit problem has been deep tax cuts largely
benefitting those at the top, shouldn't a big part of our deficit
reduction plan include allowing those unaffordable tax cuts to expire?
If ongoing domestic spending increases are only a minor source of our
deficit problem, why does this Republican budget take a slash-and-burn
approach to these programs which are so important to the middle class
and to working Americans? The answer, of course, is the tea party
Republican budget is not principally a deficit reduction plan. It is an
ideological manifesto that encompasses the entire party wish list,
everything from more tax breaks for the rich to dismantling Medicare
and Medicaid.
I have a simple test for judging any budget plan. What does that plan
do to give hope and opportunity to middle-class Americans who have been
hardest hit by the economic downturn?
To speak in terms specific to my State of Iowa, what did it do for
Webster City? Webster City is a community

[[Page S2669]]

like thousands of others across the United States. It is a town where
middle-class families work hard, play by the rules, sacrifice for their
children. But it is also a town where a decent middle class way of life
is threatened. Recently, in Webster City, IA, the Electrolux plant that
has been the town's economic engine for over 80 years closed its doors.
Production was moved to Juarez, Mexico. In the final round of layoffs
in March, 500 Iowans lost their well-paying, middle-class jobs.
This most recent factory closing comes on the heels of 222 plant
closings just in Iowa last year, destroying nearly 12,000 well-paying,
middle-class jobs. As we all know, each of these plant closures
reverberated on Main Street, with many local stores and restaurants
falling on hard times or going out of business themselves. Let's be
clear, the wrong kind of budget plan, one that indiscriminately slashes
funding for education and job training, infrastructure and research,
will deepen the plight of Webster City and similar communities across
America. Indeed, by accelerating the erosion of the middle class in
this country, such a plan will make our fiscal situation even worse.
There can be no sustainable economic recovery in the United States
without the recovery of the middle class. There can be no sustainable
solution to our budget challenges without a strong middle class, a
middle class that is getting its fair share of rising national income.
As I said earlier, we are growing wealthier by the day in America. We
are the wealthiest country in world history, and we are growing
wealthier by the day. But what we ought to make sure is that the middle
class will get its fair share of that rising national income.
Again, I think the test of a budget plan is this: Will it strengthen
the middle class in America? Will it require shared sacrifice with a
promise of shared prosperity in the long run? I have applied this test
to the tea party Republican budget and it comes up woefully short.
This tea party Republican budget cuts the top tax rate for
millionaires and billionaires from 35 percent down to 25 percent. How
will that help laid-off workers in Webster City?
The Republican budget dismantling Medicare and replacing it with an
absurdly inadequate voucher system, will that strengthen the retirement
security of seniors in Webster City?
This budget of the Republican tea party people guts Medicaid. Will
that improve the lives of seniors and people with disabilities who
depend on Medicaid to pay for nursing home care and home health care
assistance?
The tea party Republican budget slashes funding for Pell grants. Will
that improve the prospect for kids in Webster City who plan to go to
college but whose parents are now unemployed and without resources?
The tea party Republican budget makes Draconian cuts to everything
from food safety and law enforcement to environmental protection. How
will that improve the quality of life in Webster City and communities
across America? We know the answer to these questions. The bottom line
is, the Republican's budget offers more pain and no gain to the people
of Webster City. Instead of increasing opportunity, it sends a message
of surrender and defeat. Indeed, let's speak the plain truth. With this
tea party budget, Republicans have taken their class warfare to a new
level. They have launched an unprecedented assault on middle-class and
working Americans. Their message to struggling folks in Webster City
and communities like it across America is brutally clear: Tough luck. I
have mine. You are on your own.
This Republican tea party budget would drive down our standard of
living, shred the economic safety net, reduce access to health care and
higher education, and do damage to our public schools' ability to
prepare our kids for the jobs of the future. We can and must do better.
I have come to the floor to propose an alternative approach to the
Federal budget, a planned approach that will discipline the Federal
budget and bring deficits under control while continuing to make
critical investments in a stronger America. Best of all, we know this
approach can work because it is consciously modeled on the successful
budget policies of the 1990s.
Under President Clinton's leadership, Congress passed a bold economic
plan that combined tough-minded spending cuts with smart investments
and, yes, revenue increases. This created large budget surpluses and
put us on a track to completely eliminate the national debt within a
decade. It created a brief era of shared prosperity for the middle
class, with 22 million new jobs and 116 consecutive months of economic
expansion, the longest in American history.
I say to the people across America, we can do this again. The key to
renewing America and restoring our economy is to revitalize the middle
class. This means reducing deficits while continuing to invest in
education, innovation, and infrastructure, boosting American
competitiveness. It means restoring a level playing field with fair
taxation, an empowered workforce, and a strong ladder of opportunity to
give every American access to the middle class.
We have the resources, both financial and human, to do these things.
I repeat what I said earlier, the central falsehood in the tea party
Republican budget is its assumption that America is poor and broke; its
assumption that we can no longer afford to invest in a prosperous and
secure middle class. Again, I say emphatically, we are not poor and we
are not broke. We have the highest per capita income of any major
country. As I said earlier, the problem is how our wealth is
distributed, how it is managed, and how it has been invested--or should
I say ``misinvested.''
Income inequality in the United States has reached levels not seen
since immediately before the Great Depression. Middle-class Americans
are working harder than ever, but they are falling behind. Real average
incomes have not gone up since 1979, more than three decades ago. Let
me repeat that: Average real incomes haven't gone up since 1979, more
than three decades ago. In fact, over the last decade, the average
income of working Americans has actually declined while those in the
top 10 percent of income earners and wealthy in America, their incomes
and their wealth has soared to new levels. Vast wealth because of tax
breaks and other government preferences have flowed to millionaires and
money manipulators who pay a tax rate that is lower than that paid by
their chauffeurs and secretaries.
In 2007, the top 25 hedge fund managers took home an average income
of $892 million--yes, you heard that right, $892 million each, average
income for 1 year. Over the last decade, the average income of the top
1 percent in America increased by an average of more than one-quarter
of a million dollars a year. Again, let me repeat: The top 1 percent of
income earners in America, their income increased by an average of more
than one-quarter of a million dollars a year for 10 years. I ask, who
in their right mind believes these people need another giant tax cut?
People do not hate the rich. To the contrary, most Americans aspire
to do well and to achieve financial independence. That is a big part of
the American dream. But Americans do resent it when the wealthy and
powerful manipulate the political system to reap huge advantages at the
expense of working people and the middle class. Ordinary people think
the game is rigged and unfair, and you know what? They are right. Yet
this tea party Republican budget says to middle-class Americans again:
Hey, tough luck. I have mine. You are on your own. Your retirement
security is expendable. Your access to health care and college is
expendable. Your desire for quality public schools is expendable. Your
quest for a modernized transportation system is expendable. All these
things, according to the Republican budget, are expendable in order to
create a Tax Code even more favorable to the rich and the powerful and
the privileged.
This is deeply wrong. The middle class is the backbone of this
country, and it is time our leaders showed the backbone to defend it.
We need an alternative, a budget that invests in education and
opportunity for all Americans, a budget that invests in the retirement
security of the middle class and, yes, a budget that does not abandon
the less fortunate among us, including seniors and people with
disabilities.
As we saw in the 1990s, we can do these things at the same time we
are bringing deficits under control. This will require smart, prudent
reductions

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in spending, and it will require reform of the Tax Code to make it
fairer and more equitable, a Tax Code that asks more from those at the
top whose incomes have skyrocketed in recent decades.
Let me speak first about spending cuts. I hope I have set an example
with my own appropriations subcommittee, the Subcommittee on Labor,
Health and Human Services, Education, and Related Agencies of the
Appropriations Committee. The fiscal year 2011 spending bill that was
enacted last month cuts spending in these areas by almost $6 billion
and eliminates dozens of individual programs. I also serve on the
Appropriations Subcommittee on Defense. Of course, I believe we can
make major spending cuts without harming our national security. I agree
with Secretary Gates, who has urged us to terminate the additional C-17
cargo planes and a new amphibious fighting vehicle. I would also save
$12 billion by terminating the V-22 Osprey, which even Dick Cheney
labeled a turkey and tried to cancel it.
I would also save $80 billion over the next decade by reducing the
number of Active-Duty military personnel stationed in Europe and Japan.
Most importantly, it is time to save hundreds of billions of dollars
by speeding up the return of our troops from Iraq and Afghanistan. It
costs an estimated $1 million a year to deploy and support each soldier
deployed in those wars. That is an extravagance we can do without.
We can also make cuts close to home. I represent a farm State, and I
have a strong record of supporting a true farm income safety net.
However, in this time of strong commodity prices, record levels of net
farm income, the USDA--the Department of Agriculture--is still paying
out nearly $5 billion a year in direct payments to farmers, having no
relationship to farm income or commodity prices or to what they are
even planting. No question, we can save some money here while still
making sure farmers have a good solid income safety net protection
system.
We also must find additional deficit reduction in the area of health
care. Once again, the tea party Republican budget flunks the test. It
does not reduce spending on health care, it just shifts costs. It
shifts the costs to seniors and others by making them pay most of the
bills themselves.
By contrast, the new health reform law actually cuts health care
costs. Again, according to CBO, it reduces the deficit by hundreds of
billions in the first decade and by more than $1 trillion--the health
reform bill cuts the deficit by more than $1 trillion in the second
decade, while preserving and strengthening Medicare, not dumping it on
the backs of seniors. It does so by rewarding health care providers for
the quality of care, not the quantity. It does so by placing a sharp
new emphasis on wellness and prevention, keeping people out of the
hospital in the first place. It does so by creating an independent
commission of doctors, nurses, medical experts, and consumers, to
examine patient data and recommend the best ways to reduce wasteful
spending and ineffective procedures, while preserving the quality of
care.
We can and must build on the health care savings in the Affordable
Care Act. But my friends on the other side of the aisle want to repeal
the Health Reform Act. But they do not say where they are going to get
the money to make up the $1 trillion hole it will blow in the budget in
the next decade.
The enormously successful deficit reduction campaign of the 1990s
insisted on a balanced approach: spending cuts and revenue increases.
Revenue increases were concentrated on the most affluent Americans,
those who could most easily afford it, and who benefited the most from
the strong economy and the stock market that followed. This must be our
template as we raise necessary revenues to reduce future deficits.
By all means, we must allow the Bush era tax breaks for the
wealthiest 10 percent of Americans to expire immediately. To put it
bluntly, they do not need it, and we cannot afford it. The fact is,
high-income Americans did extremely well in the 1990s under the higher
rates of the Clinton years, and they will continue to do very well in
the future, while contributing their fair share to bringing deficits
under control.
I also strongly agree with President Obama's proposal to limit
itemized deductions for the wealthiest 2 percent of Americans, a reform
that would reduce the deficit by $320 billion over 10 years. We need to
end the outrageous gimmicks in our Tax Code. Just one example. The
``carried interest'' loophole allows many hedge fund managers to pay
taxes at just a 15-percent rate on part of their bonuses, a far lower
rate than middle-class Americans pay.
As I said earlier, in one recent year, the top 25 hedge fund mangers
took home an average income of $892 million a year each. Let's tax this
income the same way we tax the income of teachers and truckdrivers.
In addition, I strongly favor a modest speculation tax on certain
types of financial transactions, a .25-percent tax--that is one-quarter
of 1 percent tax--on each stock transaction, and a similar tax on
options, futures, and swap transactions.
In order to minimize the impact on ordinary American investors, this
would exclude transactions in tax-benefited pension accounts such as
401(k)s and IRAs and defined benefit plans.
Some might say, well, this sounds kind of a pie in the sky. Well,
Great Britain currently levies a tax on stock transactions that is
twice as high as what I am proposing--twice as high as what I am
proposing. There is no question that Wall Street can easily bear this
modest tax.
John Bogle, the legendary founder of the Vanguard Mutual Fund Group,
has long advocated such a speculation tax, a transaction tax, in order
to ``slow the rampant speculation that has created such havoc in our
financial markets.''
We also should be working to eliminate the tax provisions which
promote the shifting of jobs to other countries. The President's budget
proposes the elimination of over $100 billion in international tax
breaks in this area.
A prudent but aggressive mix of spending reductions and tax
increases, combined with stronger economic growth and an end to the
wars in Iraq and Afghanistan, will bring Federal deficits under
control. This will restore the fiscal discipline that was squandered in
the years after President Clinton left office.
Best of all, this restored fiscal foundation will allow us to
continue making critical investments in transportation and
infrastructure, education and energy, investments that will put
Americans back to work, strengthen our global competitiveness, and
prepare our workforce for the future.
Make no mistake, we have no time to waste. While the United States
has been distracted and weakened by foolish wars and speculative
bubbles, our competitors have been charging ahead. We have lost major
ground to China and to other rapidly growing economies, including
Brazil, South Korea. We are playing catchup and the stakes are
enormous.
Across America, roads are crumbling, bridges are collapsing. Our
formerly world-class interstate highway system is increasingly
overwhelmed. Mass transit systems, including Washington's once proud
Metro system, have fallen into disrepair. We have a backlog of nearly
$300 billion in school construction and modernization.
In infrastructure, we currently invest less than one-third of what
Western Europe does as a percentage of GDP. China has tripled its
investment in education, and is building hundreds of new colleges and
universities at a time when we are slashing school budgets and laying
off teachers.
The tea party Republican budget makes this investment gap far worse.
It proposes to cut funding for transportation by 25 percent, and for
education by 25 percent, and in future years would cut those
investments even more deeply. Congressman Ryan has the audacity to tell
us this is ``a path to prosperity.'' Common sense tells us it is a
bridge to nowhere.
These statistics are not abstractions. Investments in education,
infrastructure, and innovation directly translate into more and better
jobs, higher incomes, stronger economic growth. That is why we need to
get America moving again.
For starters, we need a massive new commitment to infrastructure
expansion and modernization, truly a Marshall plan for America. The
first step is to adopt a solid 6-year surface transportation
reauthorization bill that will allow us to modernize our transportation
system.

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We also need robust new investments in clean, renewable, domestically
produced energy. This will lower our energy costs in the long term, and
will reduce our dependence on some of the most unstable countries in
the world.
Early in the 20th century, we provided the emerging oil energy with
subsidies to accelerate its growth. Today, we must provide similar
policies to accelerate America's transition to a clean energy economy,
including long-term tax credits for a renewable energy generation, and
for infrastructure investments for biofuels, as well as smart grid
technologies to enable broader renewable energy use. The goal should be
25 percent of our energy from renewable resources by 2025.
In the field of education, we need major new investments. This begins
with Federal support for universal preschool education to ensure that
every child is ready to learn and succeed in school. It means an
ambitious reauthorization of the elementary and secondary education
bill that close the gap between world-class schools in affluent
suburbs, and struggling schools in poor urban and rural communities. It
means providing resources to ensure that the goal of graduating
students who are college and career ready applies equally to students
with disabilities.
In closing, in my remarks today I have offered not just an
alternative approach to bringing deficits under control but an
alternative vision of the role of the Federal Government. Going back to
the 1930s, the American people have supported and strengthened an
unwritten social contract. That social contract says we will prepare
our young and care for our elderly. That social contract says if you
work hard and play by the rules, you will be able to rise to the middle
class or even beyond. That social contract says a cardinal role of
government is to provide a ladder of opportunity, so every American can
realistically aspire to the American dream.
In one fell swoop, this tea party Republican budget rips up that
social contract. It replaces it with a winner-take-all philosophy,
again, that tells struggling, aspiring people and communities across
America: I have got mine. You are on your own.
As I said at the outset, the Republican budget is premised on the
idea that America is poor and broke, that our best days are behind us,
that we have no choice but to slash investment required in order to
keep our middle class strong. I totally disagree.
America remains a tremendously wealthy and resourceful nation. We are
an optimistic, forward-looking people. We are a purposeful and can-do
people, and we expect our government to be on our side, the side of the
middle class. We expect it to be an instrument of national greatness
and purpose, allowing us to come together to achieve the big things we
cannot achieve as individuals, things such as building an interstate
highway system, mapping the human genome, one day discovering a cure
for cancer.
Through our government, we come together to provide a ladder of
opportunity to give every citizen a shot at the American dream, a
ladder of opportunity that includes quality public schools and
universities, Pell grants, the GI bill, job training. Through our
government, we come together to ensure that our citizens have a secure
retirement with guaranteed access to health care, and to ensure that
the less fortunate among us are not abandoned to the shadows of life.
I am convinced that the great majority of Americans share this
positive can-do vision. We refuse to be dragged backward into a winner-
take-all society where the privileged and the powerful seize even a
greater share of the wealth, as the middle class struggles and
declines.
Americans are a tough and resilient and optimistic people. We can and
will work together to meet the great challenges of our day. We can and
will, indeed we must, restore the middle class as the backbone of a
stronger, richer and fairer America.
I yield the floor.
The PRESIDING OFFICER (Mr. Manchin.) The Senator from Texas.
Mr. CORNYN. Earlier today we had a cloture vote on the nomination of
Jack McConnell to be a United States District Judge for Rhode Island,
and 63 Senators voted to cut off debate and to move then to a final
vote on confirmation which will occur, I am told, around 5:30, shortly.
But first I wanted to come to the floor and expand a little bit on
some of my earlier comments with regard to this nomination and why I am
so strongly opposed to it just to make a few other comments.

Thirty-three years ago I became a lawyer, a member of the legal
profession. While I have heard as many lawyer jokes as a person can
stand in a lifetime, I am actually proud of the legal profession. What
attracted me to it was study of the law, the rule of law, and the
majesty of law being made by elected representatives of the American
people speaking for the American people themselves; a profession that
observes a rule of ethics, that is not just who can get the most the
fastest but one that actually requires lawyers to practice according to
a standard of ethics.
Third, the obligation and the responsibility that comes with
representing a client; in other words, it is not the lawyer who is
speaking on his or her own behalf but a lawyer who is speaking on
behalf of a client, whether they have been arrested and charged with a
crime, whether they have been injured in an accident and seeking
compensation for some wrongdoing and to deter future acts, similar
actions in the future, whether it is a commercial dispute over a
contract or some other relationship. I believe it is the rule of law
and our adherence to ethical standards and the fact that the legal
profession serves the interests of clients who need help, many of whom
don't have a voice themselves, or certainly the capability of
representing themselves, who need somebody who can help them.
But I have to tell my colleagues that it is because of my respect and
admiration for the legal profession that it makes me angry when I see
people making a mockery out of the foundational principles I just
mentioned: the rule of law, ethics, and the fiduciary duty owed to a
client.
After I practiced law for a while, I had the great honor of being
elected to and serving as a district judge in my home city of San
Antonio. So not only did I represent clients as an advocate in court, I
had the responsibility of presiding over trials and making sure people
were treated impartially, the same, and according to the rule of law;
that it was not a matter of who they were or how much money they had
but that everybody could have access to our system of justice.
Later I was honored to be elected to serve on the Texas Supreme Court
for 7 years where I was an appellate judge and I wrote legal opinions,
basically grading the papers of some of those trial judges and making
sure that indeed we had equal justice under the law. Then I served as
attorney general for 4 years before I came here, during which time I
became acquainted with a certain class of entrepreneurial lawyers whom
I think threatened the very rule of law I have been talking about.
I previously talked about my objections to Jack McConnell's
nomination and confirmation to serve as a Federal judge because I
believe he intentionally misrepresented certain facts before the Senate
Judiciary Committee. Mr. McConnell and his firm have been sued in Ohio
for stealing and maintaining custody of certain stolen documents in a
lead paint lawsuit which I will speak about in a moment. As a matter of
fact, earlier today I introduced an article which demonstrates that
legal dispute still is raging and is not yet resolved. Yet the Senate
is moving ahead and will likely confirm someone to a life-tenured job
as a Federal judge who may ultimately be found responsible. I don't
know, he could be vindicated. But why are we taking the risk that this
individual who will be given a lifetime job as a Federal judge might
ultimately be found culpable in something that is certainly
disqualifying if he is responsible for it?
But I wish to speak just a little bit more about--well, I wish to
tell a story. I think it helps make the point I wish to convey.
Once upon a time there was an enterprising lawyer and some of his law
partners who were trying to figure a new way to make a lot of money.
One of them said:
``Well, I have a plan to do that. First, we have to pick a product or
sector of

[[Page S2672]]

the economy that is unpopular, even though it is legal. For example,
tobacco.''
``Exactly,'' one of the lawyers said. ``We pick a product like
tobacco, and we sue the manufacturer and make a lot of money.''
``The problem is we have already tried to do that in individual
lawsuits that are designed to compensate victims and deter wrongdoing,
but we lost all of those lawsuits.''
``Well,'' the enterprising young lawyer who suggested this plan said,
``we did, but now we have a new legal theory. We have a new approach.
And it is a legal theory that has never actually been embraced or
accepted by the courts.''
One of the other lawyers said, ``Well, how does that work? What is
the theory?''
To which the other responded, ``Well, the theory really doesn't
matter because this case will never be tried, but it will be settled
for billions of dollars.''
That takes us to the second part of the plan. The truth is, the
client or the person who would be represented is not an individual
victim who was harmed as a result of some wrongdoing by the
manufacturer of the product, but instead of that it is the State--a
State. How do you get hired to represent a State? Well, you have to get
the attorney general--my former job. You have to get the attorney
general, who is the chief law enforcement officer of the State, to
basically hire you and then to delegate to you the sovereign law
enforcement power of the State--in this case to sue the makers of a
product. Part of this scheme is you sue not just for damages to one
individual or a group of individuals, you sue for essentially everyone
in the State, alleging billions of dollars in damages.
The key reason this is so important to this scheme, of course, is
because this is a break-the-company lawsuit. By that I mean it is an
existential threat to the existence of this company, far bigger than
any legal threat they may have faced in the past, because the damages
are enormous. Every potential juror who would sit in judgment of the
case being a constituent, a resident of that State, would stand to
benefit in some way or another by any judgment rendered against this
company. Then, of course, there is the power of the State itself to
launch, perhaps, a negative publicity campaign against this company or
sector to erode the stock value of this company in order to compel them
or force them into a settlement posture.
Well, part of this scheme is that even though the chances of winning
in court are very slim, even a small risk of losing everything--wiping
out shareholders, retirees, pension funds, and employees--even that
small risk is enough to cause the defendant to consider coming to the
settlement table. True, even if you have a chance--liability is very
thin and you think you aren't responsible--you still have to navigate
the maze of litigation through the trial and the appellate and the
Supreme Court. You know you might just win if you can outlast their
adversaries. But in the meantime, as I indicated earlier, the stock
price takes a beating, management is consumed with defending the
lawsuit rather than running the business, and millions of dollars are
being spent on their own lawyers in order to defend this case.
Well, in this story the law partners of this enterprising young
lawyer say: That sounds like a great plan. We could earn a lot of
money.
The lawyer proposing this says: Well, we can earn more than you can
possibly imagine because our compensation may well exceed $100,000 an
hour.
Well, how do you do that? No one can charge $100,000 an hour as a
legal fee.
Well, this is the best part from their perspective. They would not
actually negotiate an hourly fee under the supervision of a judge that
reflects prevailing ethical standards. Instead, they will negotiate a
deal with this attorney general for the State on a contingency fee
basis in a no-bid, noncompetitive contract. So then they would get a
percentage of any amount of money recovered in this bet-the-company
lawsuit. Since there are no costs up front for the taxpayer, the State
attorney general would look like a hero, even if the lawsuit was
unsuccessful. But if he succeeds, these lawyers would get a significant
percentage of an astronomical sum of money. No funds would be
appropriated by the legislature to finance the litigation, so the State
official can make the ethically fallacious and ethically dubious claim
that no tax dollars will be used to pay legal fees. The official enters
into this no-bid contract for legal services with lawyers whose future
political support, including campaign contributions, is assured. The
official can expect to be lauded as a popular hero in the press by his
willingness to take on an unpopular industry.
Now, as part of this scheme and story, to leverage the chances for
success, these lawyers then cherry-pick the court where the lawsuit is
filed, a court well known for being friendly to these sorts of claims.
Seeing the handwriting on the wall, ultimately as part of this scheme,
the plan would be that the defendants, even though they are not--the
chances of proving them responsible are very thin, the risk of losing
and losing the company are so huge that they decide to go to the
settlement table.
Well, here is the deal. The plaintiff's lawyers say--under this
scheme, and in some ways it turns out to be a lifeline to the
defendants--first, the good news: The defendants will survive. They
won't be at risk of losing the company--the employees, the stock price,
the pensioners, the retirees who depend on the existence of the
company.
Secondly, the business will continue to operate and--here is the best
part--the judgment that will be entered will ultimately, from the
standpoint of the company, bar any future lawsuits. The defendants
agree rather than paying a lump sum settlement out of their current
assets to pay hundreds of billions of dollars to these lawyers and the
State out of future profits.
How do you make sure you don't have to dip into your current assets?
Well, basically, the defendants agree under this arrangement to raise
the price of their product for consumers. So, ultimately, the consumers
pay, and the defendants will pay the attorney's fees out of this same
income stream.
Now, these lawyers in this story believe this is really a stroke of
genius. While no person who has allegedly been injured by this product
will receive a penny--and, indeed, as a result, the defendant will not
be deterred from engaging in that sort of conduct, nor will, as I say,
any victim be compensated--the State recovers a windfall of damages
without having to appear to raise taxes, although the increased price
for the product is passed along to consumers.
As a result of this deal, the defendant's stock price rebounds, they
can stay in business essentially as a partner with this law firm whose
legal fees will be paid out of future sales revenue, and the State
official who agrees to this ingenious scheme is elected to higher
office in part on the strength of this David v. Goliath story. The only
problem with this story is that it is no fairy tale.
So who are these lawyers who dreamed up this ingenious scheme to
partner with a State official to be able to be delegated the sovereign
power of the State and collect fabulous wealth in the form of
attorney's fees that no judge will award and no jury will award because
it is part of this settlement? Jack McConnell, the nominee, and his law
firm.
His Web site says: McConnell played a central role in the historic
litigation against the tobacco industry in which $246 million in all
was recovered, it says, on behalf of the State attorneys general,
serving as a negotiator and primary drafter of the master settlement
agreement. As a result, Mr. McConnell told us in the Judiciary
Committee, he expects to collect between $2.5 million and $3.1 million
a year from now through 2024. What is more, Jack McConnell now finds
himself nominated to be a Federal judge in whose court future ingenious
but ethically dubious schemes can be expected to have a warm reception.
This is the type of thing Stuart Taylor--a well-respected legal
commentator--called, he said: The rule of law has now morphed into
these sorts of schemes into the rule of lawyers. He has talked about
the sequel to this litigation I have described in this story which was
the lead paint lawsuit, which we have talked about a little before,
which was unanimously rejected by the Rhode Island Supreme Court--
frivolous litigation.

[[Page S2673]]

As a matter of fact, Mr. McConnell and his law firm were assessed
fees of over $200,000. But Mr. Taylor said: It is litigation of this
type which has perverted the legal system for personal or political
gain at the expense of everyone else. Strong words, hard words, but I
think the Senate needs to know the type of nominee we are voting on,
and the American people need to know what the record of this nominee
is, so then they can hold the Senators who vote for his confirmation
accountable.
But this is not a partisan issue. It is not. This is not even about
ideology. This is about ethics. This is about upholding the rule of
law.
Mr. President, I ask unanimous consent that after the close of my
remarks, a Wall Street Journal article, dated January 12, 2000, by
Robert B. Reich, be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. CORNYN. Mr. Reich was Secretary of Labor during the Clinton
administration, and he wrote an article in the Wall Street Journal that
I think is particularly appropriate to what I am talking about. The
lead of the article from this prominent Democrat, a Cabinet Secretary
under Bill Clinton, is: ``Don't Democrats Believe in Democracy?'' That
is the title. I will not read all of it, but I will read just a few
sentences.
In talking about this kind of government-sponsored litigation by
outsourcing the responsibilities of the sovereign government and the
elected officials to contingency fee lawyers, whose only motive is
maximizing their personal profit, he said:

. . . the biggest problem is that these lawsuits are end
runs around the democratic process. We used to be a nation of
laws, but this new strategy presents novel means of
legislating--within settlement negotiations of large civil
lawsuits initiated by the executive branch. This is faux
legislation, which sacrifices democracy to the discretion of
administration officials operating in secrecy.

Well, I agree with Secretary Reich. I think this is a threat to our
democracy. Again, I do not think it should be viewed as a partisan
issue, even though he has that provocative headline and he is talking
about members of his own party who have endorsed and initiated some of
this type of litigation.
We had an earlier vote, as I said, where 63 Senators voted to close
off debate, and we will have a vote here in short order. I know some
Senators have indicated they voted to close off debate because they
felt that was the appropriate vote to make, but they were going to vote
against Mr. McConnell's nomination. So we will see how many votes he
gets. But we know if it is a party-line vote, there are 53 Democrats in
this body and 46 Republicans. If it is a party-line vote, Mr. McConnell
is going to be a Federal judge. But I think it is important to make the
Record crystal clear as to the type of nominee Senators are voting on.
I think it is my responsibility to my constituents, it is my
responsibility to the Senate, to express the strong objections I have
to this nominee. Surely--well, I know there are better people for the
President to nominate in Rhode Island. Two of them serve in the Senate.
There are other qualified people who could be nominated, and I believe
this ethically challenged nominee--who, according to the words of
Stuart Taylor, is among a class of lawyers who have perverted the legal
system for personal and political gain at the expense of everyone
else--is the wrong person for this job. So I will be voting against the
nomination.
I yield the floor.

Exhibit 1

[From the Wall Street Journal, Jan. 12, 2000]

Don't Democrats Believe in Democracy?

(By Robert B. Reich)

If I had my way there would be laws restricting cigarettes
and handguns. But Congress won't even pass halfway measures.
Cigarette companies have admitted they produce death sticks,
yet Congress won't lift a finger to stub them out. Teenage
boys continue to shoot up high schools, yet Congress won't
pass stricter gun controls. The politically potent cigarette
and gun industries have got what they wanted: no action.
Almost makes you lose faith in democracy, doesn't it?
Apparently that's exactly what's happened to the Clinton
administration. Fed up with trying to move legislation, the
White House is launching lawsuits to succeed where
legislation failed. The strategy may work, but at the cost of
making our frail democracy even weaker.
The Justice Department is going after the tobacco companies
with a law designed to fight mobsters--the 1970 Racketeer
Influenced and Corrupt Organizations chapter of the Organized
Crime Control Act. Justice alleges that the tobacco companies
violated RICO by conspiring to create an illegal enterprise.
They did this by agreeing to a ``concerted public-relations
campaign'' to deny any link between smoking and disease,
suppress internal research and engage in 116 ``racketeering
acts'' of mail and wire fraud, which included advertisements
and press releases the companies knew to be false.
A few weeks ago, the administration announced another large
lawsuit, this one against America's gun manufacturers.
Justice couldn't argue that the gun makers had conspired to
mislead the public about the danger of their products, so it
decided against using RICO in favor of offering ``legal
advice'' to public housing authorities organized under the
Department of Housing and Urban Development, who are suing
the gun makers on behalf of their three million tenants. The
basis of this case is strict liability and negligence. The
gun makers allegedly sold defective products, or products
they knew or should have known would harm people.
Both of these legal grounds--the mobster-like conspiracy of
cigarette manufacturers to mislead the public, and the
defective aspects of guns or the negligence of their
manufacturers--are stretches, to say the least. If any
agreement to mislead any segment of the public is a
``conspiracy'' under RICO, then America's entire advertising
industry is in deep trouble, not to mention health
maintenance organizations, the legal profession, automobile
dealers and the Pentagon. And if every product that might
result in death or serious injury is ``defective,'' you might
as well say goodbye to liquor and beer, fatty foods and sharp
cooking utensils.
These two novel legal theories give the administration
extraordinary discretion to decide who's misleading the
public and whose products are defective. You might approve
the outcomes in these two cases, but they establish
precedents for other cases you might find wildly unjust.
Worse, no judge will ever scrutinize these theories. The
administration has no intention of seeing these lawsuits
through to final verdicts. The goal of both efforts is to
threaten the industries with such large penalties that
they'll agree to a deal--for the cigarette makers, to pay a
large amount of money to the federal government, coupled
perhaps with a steep increase in the price of a pack of
cigarettes; and for the gun makers, to limit bulk purchases
and put more safety devices on guns. In announcing the
lawsuit against the gun makers, HUD Secretary Andrew Cuomo
assured the press that the whole effort was just a bargaining
ploy: ``If all parties act in good faith we'll stay at the
negotiating table.''
But the biggest problem is that these lawsuits are end runs
around the democratic process. We used to be a nation of
laws, but this new strategy presents novel means of
legislating--within settlement negotiations of large civil
lawsuits initiated by the executive branch. This is faux
legislation, which sacrifices democracy to the discretion of
administration officials operating in secrecy.
It's one thing for cities and states to go to court (big
tobacco has already agreed to pay the states $246 billion to
settle state Medicaid suits, and 28 cities along with New
York state and Connecticut are now suing the gun
manufacturers; it's quite another for the feds to bring to
bear the entire weight of the nation. New York state isn't
exactly a pushover, but its attorney general, Eliot Spitzer,
says the federal lawsuit will finally pressure gun makers to
settle. New York's lawsuit is a small dagger, he says. ``The
feds' is a meat ax.''
The feds' meat ax may be a good way to get an industry to
shape up, but its a bad way to get democracy to shape up.
Yes, American politics is rotting. Special-interest money is
oozing over Capitol Hill. The makers of cigarettes and guns
have enormous clout in Washington, and they are bribing our
elected representatives to turn their backs on these
problems.
But the way to fix everything isn't to turn our backs on
the democratic process and pursue litigation, as the
administration is doing. It's to campaign for people who
promise to take action against cigarettes and guns, and
against the re-election of House and Senate members who
won't. And to fight like hell for campaign finance reform. In
short, the answer is to make democracy work better, not to
give up on it.

Mr. GRASSLEY. Mr. President, I rise today to speak in opposition to
one of President Obama's most controversial nominees, Mr. Jack
McConnell, who has been nominated to be U.S. district judge for the
District of Rhode Island.
He has dedicated his professional career, and enriched himself in the
process, by bringing dubious mass tort litigation. I believe he has
demonstrated a result-oriented view of the law. He has repeatedly
demonstrated that he is highly partisan. And given his history of
intemperate and highly partisan remarks, I do not believe he is capable
of being an impartial jurist.
First, Mr. McConnell is an active partisan, a little more so than
most nominees recently before the Senate. Mr. McConnell and his wife
have donated at

[[Page S2674]]

least $700,000 to elect Democrats, over $160,000 in 2008 alone. He has
served as treasurer of the Rhode Island Democratic State Committee. He
is a member of Amnesty International USA and has served as a director
at Planned Parenthood of Rhode Island. Partisan political activity is
not disqualifying on its own. My concern is that Mr. McConnell is so
steeped in political activity and ideology that it may be impossible
for him to be an impartial jurist--even if he earnestly believes that
he can.
We can legitimately question whether his partisanship will influence
his judicial philosophy. He has made a number of sharp partisan
political statements, including one in which he indicated that only
Democrats fight for ``economic and social justice and opportunity for
all.'' He has called for a more ``active government'' and
redistribution of wealth, and claimed that ``health care should be a
right of citizenship.'' When Republican Gov. Lincoln Almond kept the
Rhode Island government open during a snowstorm in 1996, Mr. McConnell
commented to the press that the decision was ``typical of the cold-
hearted Republican attitude of disregarding workers' needs.'' He went
on to argue against the Governor's appeal to the cost efficiency of
keeping agencies open by saying that ``[we] could bring child labor
back, which would be cheaper, too.''
Mr. McConnell has often portrayed his mass tort cases as movements
against societal injustices. He has said that these cases represent
``wrongs that need to be righted and that is how I see the law.'' He
has said that he is ``an emotional person about injustice at any
level--personal, societal, global.'' These statements indicate an
activist viewpoint. This is not what I want in a Federal judge.
Second, Mr. McConnell has a view of the law that I believe is outside
the mainstream of legal thought. Much of McConnell's career has been
devoted to bringing some of the most controversial mass tort litigation
of recent years. He has pursued the manufacturers of asbestos, tobacco,
and lead paint, whose actions he believes to be ``unjust.'' In bringing
many of these cases, Mr. McConnell has often stretched legal argument
beyond its breaking point. An example is the ``public nuisance'' theory
he pursued in the Rhode Island lead paint case. Well-respected
attorneys have said Mr. McConnell's theory ``just [did not] mesh with
centuries of Anglo-American law'' and a former attorney general called
the lead-paint cases ``a lawsuit in search of a legal theory.''
The Rhode Island Supreme Court unanimously ruled against him in State
v. Lead Industries Associates, Inc. In a well-reasoned opinion, the
court found that there was no set of facts that he could have proven to
establish that the defendants were liable in public nuisance.
Mr. McConnell's reaction to that opinion illustrates my third major
concern--that he lacks appropriate judicial temperament. Although the
opinion was based firmly in the law, Mr. McConnell saw fit to publicly
and harshly criticize the court's decision in a Providence Journal
editorial. But his criticism made little reference to points of law.
Rather, his major complaint was simply that, in his view, ``justice was
not served.'' His op-ed lambasted the court for ``let[ting] wrongdoers
off the hook.'' Not only were these statements intemperate, even for an
advocate, but they reflect a results-oriented view of judging. Mr.
McConnell did not focus on the court's analysis or argue that it
wrongly applied the law. He argued that the ``wrongdoers'' weren't
punished. In other words, the result didn't fit with his notion of
justice, so it was the wrong result.
Mr. McConnell was also deeply involved in State lawsuits against
tobacco companies. However, beyond litigation, he has shown an open
hostility to tobacco companies. He told the press in 1999 that he would
``like Congress to put the Cigarette makers out of business.'' He has
even gone so far as to compare people who opposed smoking bans in
restaurants to the supporters of racial segregation, saying ``some
people might like having all-White restaurants so they don't have to
sit with Blacks, but we don't allow it.''
A fourth concern relates to the manner in which Mr. McConnell
conducts his business. I am not suggesting illegal or unethical
behavior, but it is a bit unseemly. He and his firm, Motley Rice, have
often brought these controversial mass tort litigations cases while
representing State attorneys general on no-bid contingency fee
contracts. According to an April 24, 2009, Wall Street Journal
editorial:

Mr. McConnell and his firm helped pioneer the practice of
soliciting public officials to bring lawsuits in which
private lawyers are paid a percentage of any judgment or
settlement. The law firms front the costs of litigation and
are compensated if the suit is successful. But such
contingency-fee arrangements inevitably raise questions of
pay to play. And private lawyers with state power and a
financial stake in the outcome of a case can't be counted on
to act in the interest of justice alone.

There are numerous examples of campaign contributions by Mr.
McConnell and/or his wife in States where he or his firm was conducting
or soliciting litigation. These include Rhode Island, Ohio, Washington,
Vermont, and North Dakota.
In another instance, as part of a settlement in the Rhode Island lead
paint case, DuPont was to pay $2.5 million to the International
Mesothelioma Program at a Boston hospital, which is run by a former
Motley Rice expert asbestos witness, Dr. David J. Sugarbaker. According
to press reports, the payment was intended to satisfy a $3 million
pledge previously made by Motley Rice to Dr. Sugarbaker to secure a
seat on the executive advisory board of the program.
My problem with this is the way the facts have dribbled out and the
spin that Mr. McConnell has tried to put on this payment. Although both
Rhode Island and DuPont claimed that the agreement was not a legal
settlement, the agreement involved a commitment by DuPont to contribute
over $12 million to charity and a commitment by the State of Rhode
Island to dismiss the case against DuPont. DuPont refused to pay any
attorneys' fees because they were disputing the permissibility of the
State's use of private counsel on a no-bid contingency-fee contract.
Nonetheless, DuPont agreed to make a sizeable donation to charity to
settle the case.
In my view, the donation to the Boston hospital is highly suspect.
Settlement money that was supposed to help reduce lead poisoning in
Rhode Island in effect was diverted to offset a debt of Mr. McConnell's
law firm. The chairman of the Rhode Island Republican Party described
the problem as follows: ``McConnell's law firm had a $3 million
obligation to a Boston hospital, and so as part of the settlement, $2.5
million of that obligation was paid by DuPont.''
Mr. McConnell does not dispute this characterization of the $2.5
million payment. Despite claims by Attorney General Lynch that the
payment would not satisfy Motley Rice's obligation to the hospital, he
said ``I don't see why it shouldn't, and I don't see anything nefarious
or wrong with that.'' The controversy regarding the settlement
intensified when attorneys from another firm who had worked on the case
on a contingency fee basis disputed the payment, claiming it was a
``legal fee'' that they were not being allowed to share in.
Fifth, I am concerned that Mr. McConnell has approached this
confirmation process with either a lack of diligence or a lack of
candor. I am particularly troubled by the way Mr. McConnell handled
himself before the committee. I believe Mr. McConnell, at best, misled
the committee when he testified about his familiarity with a set of
stolen legal documents that his law firm obtained during the lead paint
litigation. When asked about these documents during his committee
hearing, he testified that he saw the documents ``briefly,'' but that
he was not familiar with them ``in any fashion.''
But several months after his hearing, Mr. McConnell was deposed,
under oath, about those same documents. In his sworn deposition, Mr.
McConnell testified that he was the first lawyer to receive the
documents. He drafted a newspaper editorial citing information that
came directly from those documents. He testified that he reviewed and
signed a legal brief that incorporated the stolen documents. And, even
though he told the committee that he was not familiar with the
documents ``in any fashion,'' during his deposition he testified that
he did not see any indication on the documents that

[[Page S2675]]

they were confidential or secret. How could he know the documents were
not confidential or secret, if, as he testified before the committee,
he was not familiar with them ``in any fashion''? Given these facts, it
is hard to square Mr. McConnell's testimony before the committee with
his sworn deposition testimony a couple months later.
The litigation over these documents remains ongoing. We do not know
how it will conclude. We do not know whether Mr. McConnell and his law
firm will be held liable for the theft of these documents. But what is
the Senate going to do if we confirm this individual, and at some later
date he or his law firm is found liable for theft? At that point, it
will be too late. Members will not be able to reconsider their votes.
The Wall Street Journal recently opined that Mr. McConnell's ``changing
story about his lead paint advocacy is enough by itself to disqualify
him from the bench.'' I could not agree more.
In another instance, I asked in written questions the degree of
awareness or notification that he or his law firm had regarding rallies
that were held outside or near the Superior Court in Providence during
the lead-paint trials in September 2002. He replied ``None.'' However,
there is email traffic that indicates Mr. McConnell was, in fact, aware
of the demonstrations. This email was produced in the lead paint
litigation as part of Sherwin Williams's motion for a new trial. In
other words, Mr. McConnell and his firm had this in their possession
when he was asked about it by the committee.
Inconsistent answers were provided with regard to Mr. McConnell's
relationship with the ACLU as well. In response to the question ``Did
you, in fact, represent the ACLU in the matter?'' Mr. McConnell said
``I entered an appearance as counsel.'' Yet in response to another
question regarding any matters in which he provided legal services to
the ACLU or any affiliate thereof, he replied, ``I have never provided
legal services to the ACLU or any affiliate thereof.'' I find this
answer confusing at best.
These types of responses indicate, at a minimum, a careless approach
in his response to the legitimate inquiries of this committee. They
could also be viewed as indicating a lack of candor. Either way, they
do not reflect the standard we should expect from an individual who
seeks confirmation to the Federal judiciary.
These concerns lead me to believe this nominee is not qualified to
serve as a U.S. district judge. Finally, I note Mr. McConnell received
a low rating from the ABA--a rating of substantial majority qualified,
minority not qualified.
My concerns are shared by the U.S. Chamber of Commerce, and I take
their views very seriously because the Chamber only rarely takes
positions on judicial nominations. In a letter to this committee, the
Chamber wrote:

Mr. McConnell's actions during his career as a personal
injury lawyer and past statements demonstrate his disregard
for the rule of law, an activist judicial philosophy and
obvious bias against businesses.

For the reasons I have articulated--one, his active partisanship
which I believe he will carry with him into the judiciary; two, his
legal theories being outside the mainstream; three, his lack of
judicial temperament; four, his questionable business practices; and
five, his lack of candor with the committee--and other concerns which I
have not expressed today, I shall oppose this nomination.
I will conclude by saying this. I have supported the overwhelming
majority of President Obama's judicial nominees. If it were up to me, I
would not have nominated many of those individuals, but I supported
them nonetheless. Mr. McConnell is in an entirely different category. I
believe he misled the committee when he testified before us. For that
reason alone, I do not think he should be rewarded with a lifetime
appointment to the Federal bench. Even if I did not have that concern,
I could not support this nominee.
Mr. LEAHY. Mr. President, earlier today, the Senate took a step
toward restoring a longstanding tradition of deference to home state
Senators with regard to Federal District Court nominations. The Senate
turned away from what Senator Reed rightly called a precipice. Eleven
Republican Senators joined in voting to end a filibuster of the
nomination of Jack McConnell to the District Court for the District of
Rhode Island. A supermajority of the Senate came together to reject a
new standard, which I believe is being unfairly applied to President
Obama's district court nominees. Now, more than a year after his
nomination, nearly a year after his confirmation hearing, and after
having had his nomination reported positively by a bipartisan majority
of the Judiciary Committee three times, the nomination of Jack
McConnell will finally have an up-or-down vote in the Senate.
The Senate should have debate on judicial nominations, and Senators
should be free to vote for or against any nomination. A few hours ago
the Senate voted to invoke cloture and now we are proceeding to hold a
final confirmation vote on this nomination.
There was no need for cloture to be filed on this nomination. There
were no ``extraordinary circumstances'' that held up this nomination
for over a year. Why was the Senate not able to reach a time agreement
to debate and vote on this nomination last year? It was the obstruction
that prevented us from doing so. It was wrong for the Senate to knuckle
under to business lobbies and it was right for the Senate to reject
that opposition.
In fact, in the days leading up to the filibuster vote and in the
hours since, no great number of Senators has spoken in opposition to
this nomination. Only a handful of Senators from the minority
leadership spoke at all. Only one such Senator has spoken in opposition
since cloture was invoked.
With judicial vacancies at crisis levels, affecting the ability of
courts to provide justice to Americans around the country, we should be
debating and voting on each of the 13 judicial nominations reported
favorably by the Judiciary Committee and pending on the Senate's
Executive Calendar. No one should be playing partisan games and
obstructing while vacancies remain above 90 in the Federal courts
around the country. With one out of every nine Federal judgeships still
vacant, and judicial vacancies around the country at 93, there is
serious work to be done.
I will support the nomination of Jack McConnell, just as I have each
of the three times it was before the Judiciary Committee. Mr. McConnell
is an outstanding lawyer. He is supported by his home State Senators,
Senator Reed and Senator Whitehouse. Each has spoken passionately and
persuasively in support of his nomination.
As I noted earlier, Mr. McConnell's nomination has been reported by a
bipartisan majority of the Judiciary Committee three times. His
nomination also has bipartisan support from those in his home State.
Leading Republican figures in Rhode Island have endorsed his
nomination. They include First Circuit Court of Appeals Judge Bruce
Selya; Warwick Mayor Scott Avedisian; Rhode Island Chief Justice Joseph
Weisberger; former Rhode Island Attorneys General Jeffrey Pine and
Arlene Violet; former Director of the Rhode Island Department of
Business Barry Hittner; former Rhode Island Republican Party Vice-Chair
John M. Harpootian; and Third Circuit Court of Appeals Judge Michael
Fisher.
The strident opposition to this nomination has been fueled by the
corporate lobby, who oppose Jack McConnell because he is a good lawyer.
They oppose him because he successfully represented plaintiffs,
including the State of Rhode Island, in lawsuits against lead paint
manufacturers. Some in the Senate may support the lead paint industry.
Some in the Senate may oppose those who wish to hold lead paint
companies accountable for poisoning children. That is their right. But
as I said earlier in opposing the filibuster of this nomination, nobody
should oppose Mr. McConnell for doing what lawyers do--vigorously
represent clients.
I also hope no Senator opposes this nomination based on what I
believe to be a distortion of Mr. McConnell's testimony before the
committee. As chairman of the Judiciary Committee, I take seriously the
obligation of nominees appearing before the Committee to be truthful. I
would be the first Senator to raise an issue if there were any
legitimate question as to the accuracy of Mr. McConnell's testimony.
But there is not.
Far from establishing that Mr. McConnell was untruthful with the
committee, the deposition transcript

[[Page S2676]]

cited by some who oppose his nomination in fact validates Mr.
McConnell's testimony to the committee. There has been no inconsistency
in Mr. McConnell's testimony, either to the committee or in sworn
testimony in a deposition. Jack McConnell is not a party to the
lawsuit. He has been accused of no wrongdoing. There is no basis to
believe that Mr. McConnell did not answer questions from members of the
committee truthfully. Some Senators may feel strongly that Mr.
McConnell and his firm were wrong to sue lead paint companies, but
there is simply no basis for believing that Mr. McConnell was
untruthful with the committee. I hope other Senators will reject those
conclusions.
With more than 25 years of experience as an outstanding litigator in
private practice, Mr. McConnell has been endorsed by The Providence
Journal, which wrote: ``In his legal work and community leadership [he]
has shown that he has the legal intelligence, character, compassion,
and independence to be a distinguished jurist.'' This debate should
focus on Mr. McConnell's qualifications, experience, temperament,
integrity, and character. Any fair evaluation of his qualifications
would reveal a nominee worthy of confirmation.
I congratulate Jack McConnell and his family on his confirmation
today. I commend Senator Reed and Senator Whitehouse for their
steadfast support and all they have done to ensure that the Senate vote
on this nomination.
The PRESIDING OFFICER. The Senator from Rhode Island.
Mr. REED. Mr. President, I ask unanimous consent that the remaining
time postcloture be yielded back and the Senate proceed to vote on the
confirmation of the nomination of John J. McConnell, Jr., to be a U.S.
District Judge for the District of Rhode Island; that the motion to
reconsider be considered made and laid upon the table with no
intervening action or debate; that no further motions be in order to
the nomination; that the President be immediately notified of the
Senate's action; the Senate then resume legislative session and proceed
to a period of morning business for debate only until 7:30 p.m., with
Senators permitted to speak for up to 10 minutes each.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The question is, Will the Senate advise and consent to the nomination
of John J. McConnell, Jr., of Rhode Island, to be United States
District Judge for the District of Rhode Island?
Mr. WHITEHOUSE. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from Hawaii (Mr. Akaka), the
Senator from California (Mrs. Boxer), and the Senator from Washington
(Mrs. Murray) are necessarily absent.
I further announce that, if present and voting, the Senator from
Hawaii (Mr. Akaka) and the Senator from Washington (Mrs. Murray) would
each vote ``yea.''
Mr. KYL. The following Senators are necessarily absent: the Senator
from Oklahoma (Mr. Coburn) and the Senator from Kansas (Mr. Roberts).
The PRESIDING OFFICER (Mr. Bennet). Are there any other Senators in
the Chamber desiring to vote?
The result was announced--yeas 50, nays 44, as follows:

[Rollcall Vote No. 66 Ex.]

YEAS--50

Baucus
Begich
Bennet
Bingaman
Blumenthal
Brown (OH)
Cantwell
Cardin
Carper
Casey
Conrad
Coons
Durbin
Feinstein
Franken
Gillibrand
Hagan
Harkin
Inouye
Johnson (SD)
Kerry
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Manchin
McCaskill
Menendez
Merkley
Mikulski
Nelson (NE)
Nelson (FL)
Pryor
Reed
Reid
Rockefeller
Sanders
Schumer
Shaheen
Stabenow
Tester
Udall (CO)
Udall (NM)
Warner
Webb
Whitehouse
Wyden

NAYS--44

Alexander
Ayotte
Barrasso
Blunt
Boozman
Brown (MA)
Burr
Chambliss
Coats
Cochran
Collins
Corker
Cornyn
Crapo
DeMint
Enzi
Graham
Grassley
Hatch
Hoeven
Hutchison
Inhofe
Isakson
Johanns
Johnson (WI)
Kirk
Kyl
Lee
Lugar
McCain
McConnell
Moran
Murkowski
Paul
Portman
Risch
Rubio
Sessions
Shelby
Snowe
Thune
Toomey
Vitter
Wicker

NOT VOTING--5

Akaka
Boxer
Coburn
Murray
Roberts
The nomination was confirmed.
The PRESIDING OFFICER. Under the previous order, the motion to
reconsider is considered made and laid upon the table, the President
will be immediately notified of the Senate's action, and the Senate
will resume legislative session.

____________________