[Congressional Record Volume 158, Number 117 (Thursday, August 2, 2012)]
[Senate]
[Pages S5921-S5927]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
VETERANS JOBS CORPS ACT OF 2012--MOTION TO PROCEED--Continued
Mr. LIEBERMAN. Mr. President, 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.
The PRESIDING OFFICER (Mrs. Hagan). The Senator from Ohio.
Mr. BROWN of Ohio. Madam President, I ask unanimous consent that the
order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BROWN of Ohio. Madam President, I ask unanimous consent to speak
as in morning business for up to 20 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Wall Street Reform
Mr. BROWN of Ohio. Madam President, I rise to discuss the troubling
state of our financial system and the unfinished business of Wall
Street reform. I am here to talk specifically about too-big-to-fail
banks.
Decades of deregulation and laissez faire economic policies helped
the six largest U.S. banks grow from 18 percent of gross domestic
product only 25 years ago to 68 percent of gross domestic product in
2009. So it went from 18 percent in the mid-1990s to 68 percent of GDP
in 2009.
We know what happened next. During the financial crisis, these six
megabanks collected $1.2 trillion--just to understand that figure, if
we can--$1.2 trillion is $1,200 billion and $1 billion is $1,000
million. The six megabanks collected $1.2 trillion in Federal taxpayer-
funded support from the Treasury, from the FDIC, and from the Federal
Reserve.
Two years after we passed the Dodd-Frank Wall Street Reform Act--and
I supported it because it took many important steps--I am concerned we
are not seeing reform, nearly sufficient enough reform, in the
financial sector. As we uncover more and more risky, fraudulent, and
illegal activities, it seems far too clear that the American people
absolutely see this and believe Wall Street is back to business as
usual.
Since 2010, we have learned about a number of things. I am just going
to rattle off seven or eight significant, serious problems. Some are
illegal, some are accusations, some are alleging significant systemic
problems--all troubling issues that have happened just in the last
couple years: Investor lawsuits and SEC enforcement actions over
mortgage-backed securities; municipalities being sold overpriced credit
derivatives, bankrupting some of those municipalities, and think of the
hardship that causes these communities; the forging of foreclosure
documents and mortgage securities legal documents by five of the
Nation's largest servicers, leading to $25 billion in penalties--$25
billion in penalties--from these servicers forging foreclosure
documents and mortgage security legal documents--$25 billion in
penalties; the Nation's largest bank halting all consumer debt
collection lawsuits due to concerns about poorly maintained and
inaccurate paperwork; the Nation's largest bank losing $5.8 billion so
far--so far--on large, complex derivative trades that regulators either
missed or didn't understand or ignored; suspicions that 16 global
banks, including the three largest U.S. banks, manipulated LIBOR--the
London Interbank Overnight Rate--that is used as a benchmark for
mortgages, credit cards, student loans, and even for derivatives--
financial instruments that affect almost everybody in our country.
Continuing with the list of problems since 2010: a criminal bid-
rigging trial exposing illegal practices by many Wall Street banks in
arranging bids so banks could underpay for municipal bonds; former
employees of the Nation's largest bank alleging the company urged them
to steer clients to their own mutual funds because they were more
profitable to the bank, even though they paid investors lower returns
than other funds, while their clients presumably were trusting them to
act in their best interests; the Federal Energy Regulatory Commission
investigating whether the biggest U.S. bank manipulated prices in the
energy markets, forcing consumers to pay more; a $175 million
settlement by the Nation's fourth largest bank for discriminatory
lending practices in housing markets that include Cleveland and many
other cities. One can walk through these neighborhoods and see what
foreclosures have done to them, see what rigging, what other
dysfunctional servicers' behavior or illegal activities have done to
these communities and to these families.
Putting the numbers aside and the political speech aside, imagine for
a moment that a parent of 12- and 13-year-old daughters has to sit down
with them and say: Sorry, but dad lost his job a few months ago and now
we are losing our home.
Where are we going to move, Mom?
I don't know.
What school am I going to go to?
I don't know yet. We have to figure that out.
Imagine the personal hurt and hardship caused by a lot of these
things to
[[Page S5922]]
a whole lot of families in Cleveland and Mansfield and Cincinnati and
Dayton.
More problems since 2010: Regulators are investigating whether the
rate that establishes municipal bond prices is susceptible to
manipulation.
These are just 11 examples, all of them huge separately and in the
aggregate devastating, potentially--certainly devastating to many
individuals and potentially devastating in a huge way to our economy as
a whole. The list goes on and on and on.
Some experts say we can't--when we talk about potentially forcing
these banks to divest themselves because of their size, some experts
say our banks need to compete. They say: No, our banks need to compete
with the banks in other countries. But then does anyone truly believe--
do any of these bankers on Wall Street or bankers in my State who have
acted, frankly, more responsibly--the community banks and the credit
unions and the regional banks--does anybody truly believe we should
follow the European model where never-ending bank bailouts have become
the norm?
We know the world's largest bank, HSBC, at $2.55 trillion, helped
launder money from Mexican drug traffickers and Middle Eastern
terrorists. As we know by now--all over the newspapers--the eighth
largest bank in the world, the $2.4 trillion Barclays--the city where
the Olympics are being held--was the first bank caught manipulating the
LIBOR rate, not exactly models we should emulate.
Financial reform is supposed to reduce industry concentration. It is
supposed to end too big to fail. But the financial sector is even more
concentrated now than it was before the financial crisis.
My colleagues will remember what I said at the outset. In 1995, 18
percent of GDP was the assets of these banks. The six largest banks had
18 percent of GDP in 1995. By 2009, it was 68 percent, and it is even
worse today--the top 10 banks' assets, 6 percent in 2006, now 77
percent at the end of 2010 and growing, presumably, as a result of
mergers during the financial crisis. Three of the four largest
megabanks have grown by an average of more than $500 billion--grown by
an average of more than $500 billion. They are in the vicinity of $800
billion and $1 trillion and $1.5 trillion and $2 trillion in assets.
The six biggest U.S. banks have combined assets that are twice as
large as the rest of the top 50 U.S. banks put together. Think about
that. The six largest U.S. banks, their assets total this; and the next
largest 50 U.S. banks--big banks, to be sure; hundreds of billions in
assets--total even less than the six largest.
According to Robert Wilmers, the CEO of M&T Bank, the six biggest
banks in the United States account for 35 percent of all U.S. deposits,
53 percent of U.S. banking assets, 56 percent of all mortgages, and 93
percent--93 percent--of trading revenues.
This is just six banks that wheel such immense power in our economy.
The message to the markets is clear: These trillion-dollar megabanks
are too big to manage, they are too big to regulate, and they continue
to be too big to fail. We still have work to do.
For all of its benefits--including a new consumer protection agency
and oversight of derivatives--the Dodd-Frank legislation relies upon
regulators to get it right this time.
But given their track record--sometimes being too close to the people
they regulate, so-called regulatory capture; sometimes there just are
not enough of them; other times they may not have the expertise to be
able to chase around some of the smartest, best educated, most
experienced banking executives who know how to game the system. Also,
as I said, as to these regulators, we simply do not have enough of
them.
That is why I am skeptical. That is why we need to go beyond the
central provisions of Dodd-Frank that increase capital, that establish
living wills, that establish a process for orderly liquidations. Those
are all good things. But, clearly--I just mentioned these 10 or 11 or
12 problems; those are just the biggest ones--clearly, those are not
enough.
Members of Congress in both political parties agree that banks need
to have much more capital to cover their losses--much more of a
financial capital cushion. We agree institutions should issue more
stock, should restrict dividends, should retain their earnings to build
bigger buffers. But while countries such as Switzerland are considering
19 percent capital requirements--a ratio of about 5 to 1--U.S.
regulators are staying within the Basel III international capital
standards, which FDIC Director Tom Hoenig has said simply will not
prevent another financial crisis.
There is also a living will process that is intended to make it
easier to resolve large, complex institutions. We talked a lot about
that in Dodd-Frank.
Institutions are supposed to tell regulators how they can be
dismantled to protect the financial system as a whole and to protect
Middle America when they get into financial trouble. But the proof will
be in the results.
So far regulators have yet to begin a process of simplifying the six
largest banks that have a combined 14,420 subsidiaries. Six banks have
14,420 subsidiaries.
I mention that number because, Madam President, as you think about
every look at these six banks, every quantifying number I try to give,
every observation of these six banks, every delineation of what these
six banks do and what they are, this speaks of these huge, these
behemoth banks that are too big to fail--these six banks. They are too
big to regulate, and they are too big to manage.
There is title II Orderly Liquidation Authority. I have heard my
colleagues, including the ranking member on my subcommittee, Senator
Corker from Tennessee, who coauthored title II, note that the FDIC and
Treasury could keep failing banks on life support rather than liquidate
them. Is that what we want when we think of too big to fail, too big to
manage, too big to regulate?
I have talked to regulators who have privately told me and told
Graham Steele of my staff that they believe our banks are still too big
to be allowed to fail because the collapse of banks that size could
potentially crush the economy.
We remember the fear in the voices of some of the top people in the
Bush administration when they talked to us in the fall of 2008 about
what was happening to our financial system. I do not think we have
answered those fears nearly well enough.
This is not capitalism the way it should be. It is not right. Some of
my colleagues think the answer to too big to fail requires repeal of
Dodd-Frank--this is about as silly as it gets--and a return to the same
unfettered free market approach that Alan Greenspan championed for
decades and that led us into this mess--except Alan Greenspan does not
even think we should have that again, even though he was the No. 1
cheerleader, he and the Wall Street Journal editorial board, for an
unfettered, unregulated Wall Street. He is, to his credit--and I do not
give him credit for much in most of the last 10 years--but, to his
credit, he has acknowledged that, yes, indeed, he was wrong; that this
unfettered, unregulated Wall Street capitalism simply did not work for
our country. He acknowledges doing that again would be a recipe for
financial crises and bailouts as far as the eye could see.
Instead, we must face the reality that too big to fail is simply too
big, and we must enact the SAFE Banking Act because too big to fail and
too big to manage and too big to regulate has become the norm,
especially among these large six behemoth institutions.
The SAFE Banking Act, my legislation, would place reasonable limits
on the share of deposits and the volatile nondeposit liabilities that
any one institution could take on. It would require the largest
financial companies to fund themselves with more of their own
shareholders' equity and less leverage. It would put an end to the
government's implicit and explicit support for megabanks--specifically,
the six largest Wall Street institutions that, as I spelled out
earlier, are in a class by themselves.
Remember those numbers. The six largest banks: 35 percent of all
deposits, 53 percent of all U.S. banking assets, 56 percent of all
mortgages, 93 percent of trading revenues. Those six institutions have
that kind of power in the economic marketplace in large part because of
actions here.
Regulators and banking leaders are increasingly voicing support for
this bill.
[[Page S5923]]
Former Federal Reserve Chairman Paul Volcker recently said the
J.P.Morgan episode might be an illustration that these banks are too
big to manage.
Former FDIC Chairman Sheila Bair says shareholders and regulators
could force banks to break up, but this legislation would be the most
direct way to do it.
Richard Fisher, the president of the Federal Reserve Bank of Dallas,
and James Bullard, president of the Federal Reserve Bank of St. Louis,
agree that more needs to be done to address the problem of too-big-to-
fail banks.
Last week, the architect of the too-big-to-fail banking model, former
Citigroup CEO Sandy Weill, said the biggest banks should be broken up.
Increasingly, this is not a partisan issue. The ranking member of the
Banking Committee, Republican Senator Shelby from Alabama, supported
the SAFE Banking Act when it was a floor amendment, when it was the
Brown-Kaufman floor amendment.
I have heard from more and more of my colleagues on both sides of the
aisle that they might have voted against it a couple years ago as a
floor amendment, but things have gotten worse. The idea is sounding
better and better to them.
This legislation would protect taxpayers by putting megabank
shareholders on the hook for losses and ending bailouts for good.
At a time of increasing fiscal restraint, our Nation can ill-afford
to waste precious taxpayer dollars bailing out our largest banks in
their recklessness.
My legislation would benefit the community banks that are at an
unfair competitive disadvantage because megabanks have access to
cheaper funding based upon the perception that the government stands
behind them.
Studies estimate this support gives megabanks a 70 to 80 basis point
funding advantage. Madam President, 70 to 80 basis points means three-
fourths, four-fifths of a percent on interest advantage, if you will--a
subsidy encouraged, provided, for that matter, by the expectation of
taxpayer support of up to $60 billion per year.
So if you are one of the six big banks, you can borrow money in
capital markets at a lower cost than if you are a community bank in
Carey, OH, or a community bank in Sandusky or a mid-sized bank in
Columbus or Akron, OH, because the market knows we will not let those
six biggest banks fail. So their lending is a little less expensive
because there is a lot less risk.
My legislation will benefit investors, as many experts agree that the
sum of the parts of the largest megabanks is more valuable than the
banks as a whole. So under our legislation, when they begin--these six
megabanks, with assets from $800 billion to $2.2 trillion--when they
begin to divest themselves, there is a reasonably good chance they will
be worth more in the aggregate than they were in the whole.
It will benefit Main Street families and businesses because increased
competition will result in better prices, and fraudsters will be
punished with the full force of the law. Just about the only people who
will not benefit from my plan are a few Wall Street executives who,
frankly, have done just fine in the last 10 years.
We simply cannot wait any longer for regulators to act. Wall Street
has been allowed to run wild for years. Their watchdogs are either not
up to the job or, in some cases, complicit in their activities.
How many more scandals will it take before we acknowledge that we
cannot rely on regulators to prevent subprime lending, dangerous
derivatives, risky proprietary trading, and even fraud and
manipulation?
Even if the regulators wanted to do the job--and I think they do--it
would require 70,000 examiners to examine a trillion-dollar bank with
the same level of scrutiny as a community bank.
The regulation of the community banks is plenty, but when its comes
to the six largest banks, we are not even close. Again, they are too
big to fail, they are too big to manage--look at what has happened,
those examples I gave--and they are too big to regulate.
We cannot rely on the market to fix itself. The six largest Wall
Street megabanks are essentially an oligopoly and a cartel, making true
competition impossible.
Megabanks' shareholders and creditors have no incentive to end too
big to fail because they get paid out when banks are bailed out. They
get paid out when banks are bailed out. And banking laws prevent
meaningful management shakeups because any hostile takeover effort
would require Federal Reserve approval.
That is why it is time for Congress to act in the interests of the
American public. It is time to restore the public's confidence in our
financial markets. It is not there now, to be sure. It is time to put
an end to Wall Street welfare and government subsidies. We have seen
far too much of that. It is time to enact the SAFE Banking Act.
I yield the floor.
The PRESIDING OFFICER. The Senator from Rhode Island.
Mr. WHITEHOUSE. Madam President, I see the Senator from North Dakota
on the Senate floor, and I wonder if he seeks recognition. He is my
chairman on the Budget Committee. I am inclined to give him precedence.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. CONRAD. Madam President, through the Chair, I would say to my
colleague, I do have a matter that is a parliamentary inquiry that is a
matter that is important for us to resolve. I do not want to intrude on
the Senator's time.
Mr. WHITEHOUSE. Madam President, may I suggest that the Senator
proceed, and it would be helpful to me if he could give me an
indication, first, of how long he might be and, second, that we enter
into a unanimous consent agreement that I be recognized following his
remarks.
Mr. CONRAD. No more than 4 minutes.
Mr. WHITEHOUSE. Perfect.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. WHITEHOUSE. I thank the Senator.
The PRESIDING OFFICER. The Senator from North Dakota.
Parliamentary Inquiry--Fiscal Year 2013 BCA Sequestration
Mr. CONRAD. Madam President, I come to the floor today to clear up
some confusion with respect to the Budget Control Act of 2011. Some
have suggested that the Budget Control Act indirectly authorized the
Senate to use a fast-track process to modify the across-the-board cuts
scheduled to go into effect next year due to failure of the Joint
Select Committee on Deficit Reduction.
Madam President, if that claim were true, it would result in a
fundamental change in Senate procedures and prerogatives. However, it
is clear in looking at both the statutory language and Congress's
intent in passing the Budget Control Act that this claim is completely
without merit.
First, let's look at what the law actually says. The key provision at
issue is section 258A of the Deficit Control Act of 1985. Section 258A
would allow the majority leader to introduce a joint resolution to
modify or provide an alternative to a sequestration order--and I
quote--``issued under Section 254.'' That joint resolution could not be
filibustered and would pass the Senate with a simple majority vote. The
sequestration orders under section 254 were put in place two decades
ago to enforce deficit targets and discretionary spending limits that
have long since expired.
A sequestration order under the Budget Control Act is not an order
issued under section 254. The Budget Control Act created a new
sequestration process under a completely different section of the law:
section 251A. Section 251A explicitly authorized a new set of
Presidential sequestration orders in fiscal year 2013 for both
discretionary and direct spending, and did so without any reference at
all to the old section 258A procedures. The statutory language is
clear, therefore, that these old procedures do not apply to
sequestration under the Budget Control Act.
=========================== NOTE ===========================
On page S5923, August 2, 2012, in the last column, four times,
the Record reads: . . . section 258(a) . . .
The online Record has been corrected to read: . . . section 258A
. . .
========================= END NOTE =========================
=========================== NOTE ===========================
On page S5923, August 2, 2012, the Record reads: . . . different
section of the law: section 251 (a). Section 251 (a)
explicitly authorized a new . . .
The online Record has been corrected to read: . . . different
section of the law: section 251A. Section 251A explicitly
authorized a new . . .
========================= END NOTE =========================
It is also clear that Congress never intended for section 258A
procedures to apply. There was no discussion of this issue on the floor
of either House. There was no discussion of this in the Budget Control
Act negotiations between congressional Republicans and the White House,
and there was no discussion of this among Democratic Senators.
Moreover, the Budget Control Act and the Deficit Control Act of 1985
are completely separate budget enforcement mechanisms enacted 26
[[Page S5924]]
years apart and under entirely different circumstances.
=========================== NOTE ===========================
On page S5924, August 2, 2012, the Record reads: . . . to apply
the 258 procedure . . .
The online Record has been corrected to read: . . . to apply the
258A procedure . . .
========================= END NOTE =========================
=========================== NOTE ===========================
On page S5924, August 2, 2012, the Record reads: Madam
President, is it correct that section 258(a) . . .
The online Record has been corrected to read: Madam President,
is it correct that section 258A . . .
========================= END NOTE =========================
Simply put, there is zero evidence of any congressional attempt to
apply the 258A procedures to the Budget Control Act sequestration. In
order to confirm this for the Record, I would like to pose a
parliamentary inquiry to the Presiding Officer.
Madam President, is it correct that section 258A of the Deficit
Control Act of 1985 does not apply to the fiscal year 2013
sequestration?
The PRESIDING OFFICER. The Senator is correct.
Mr. CONRAD. I thank the Chair. I think it is an important decision to
get affirmed publicly so that we might proceed and not be engaged in
distractions.
I thank the Chair.
I yield the floor.
The PRESIDING OFFICER. The Senator from Rhode Island.
NIH Funding
Mr. WHITEHOUSE. Madam President, last spring Cathy Hutchison picked
up a cup of coffee and took a sip. Now, why have I come to the floor of
the Senate to talk about Cathy Hutchison picking up a cup of coffee
last spring and taking a sip? Because 15 years earlier, Cathy Hutchison
was working in her garden when she suffered a stroke that left her
paralyzed.
Cathy did not just lose the ability to use her arms and legs, she
also lost the ability to speak. I am sorry to say this condition is not
unique to Cathy. It happens regularly enough that there is a medical
term for it, locked-in syndrome. That is how Cathy lived for nearly 15
years: alert and mentally sharp but unable to move or speak, a prisoner
in her own body.
All of this changed last spring when, for the first time in nearly 15
years, Cathy picked up that cup of coffee and took a sip. Cathy
Hutchison is a patient enrolled in a clinical trial at Brown University
in Providence, RI. They are testing a neural interface device known as
BrainGate.
BrainGate works by placing a small sensor on the brain. The sensor is
connected to a computer that interprets the brain's signals to control
a specially designed robotic arm. The university researchers asked
Cathy to imagine that she was moving her arm in different directions.
Then they monitored which neurons fired for those corresponding
movements, all in her imagination.
Using this brain wave information, researchers attached a robotic arm
to the computer. The computer translated the electrical impulses
detected by the sensor in Cathy's brain back into commands to tell the
arm what to do.
Cathy communicates through a device that allows her to type using the
movement of her eyes, and she typed that she was ``ecstatic'' about the
new technology and hopes it can be expanded to one day allow her to
walk again.
The BrainGate team is also working to determine if this technology
can ultimately be used to help individuals paralyzed by stroke or
injury to regain greater independence. BrainGate is an example of what
is possible when the best minds in science and engineering come
together for the common good.
Researchers from Brown University, the Department of Veterans
Affairs, Massachusetts General Hospital, and the German Aerospace
Center collaborated on this project. Their efforts were supported by a
grant from the National Institutes of Health, as well as funding from
the Veterans' Administration, and several private foundations.
BrainGate is just one of the most recent in a long list of medical
breakthroughs that are made possible by our National Institutes of
Health. The NIH is the cornerstone of our commitment to medical
research for the benefit of humanity.
Research supported by the NIH has led to medical advances that have
saved and improved countless lives while making America the world
leader in discovery and innovation. More than 80 Nobel prizes have been
awarded for research supported by the National Institutes of Health.
In Rhode Island, Brown University has received NIH grants to support
cutting-edge research on a multitude of diseases, including cancer,
dementia, and muscular dystrophy. In fact, the scope of projects at
Brown that receive NIH support is so diverse that the university
describes its NIH-backed research as covering everything from autism to
Alzheimer's. Yet there are those in Congress who have suggested cutting
the NIH's budget.
Let's be clear about what cutting the NIH's budget means. It means
cutting off funding for research that has provided Cathy Hutchison her
first taste of physical independence in 15 years. It means telling the
millions of Americans suffering from cancer that they have to wait
longer for lifesaving research. It means suffocating a vibrant area of
innovation and job creation.
Cutting the NIH budget has ripple effects far beyond just one Federal
agency. Quite simply, it will hurt job growth. Medical research is one
of the fastest growing fields nationwide. In Rhode Island and across
the country, cities are undergoing a renaissance sparked by the growth
of high-paying careers in medical research.
I have heard friends on the other side of the aisle talk at length
about how we need to do more to create jobs. Well, I could not agree
more. Now is no time to put jobs at risk by cutting back on the
research funding that makes them possible. I know the Appropriations
Committee recently reported a bill to the floor that would increase the
NIH budget by $100 million for the coming fiscal year. I applaud my
colleagues on the Appropriations Committee for their commitment to this
vital agency, and I hope we will soon be able to vote on their measure.
But there is something looming on the horizon that will render this
$100 million increase all but meaningless. I am talking, of course,
about sequestration, under which it is estimated that NIH will face not
a $100 million increase but a $2.4 billion cut.
I know a lot of my colleagues have discussed the effect that the
sequester will have on defense spending, but it is important to
remember that 50 cents out of every dollar of cuts that will occur
under sequester will come out of nondefense spending, including
specifically the NIH.
``Devastating'' is the word that keeps being used when people are
asked how sequester would affect our National Institutes of Health.
That is how NIH Director Dr. Francis Collins described the effect of a
nearly 8-percent cut to the agency's budget. Those who are familiar
with science know how important it is in ongoing experiments that there
be a consistent data set through the period of the research.
When we interrupt research for financial reasons, we can damage the
value of research conducted in other years. I agree with my colleagues
that we must reduce our long-term deficit, but when we cut funding that
creates jobs and leads to lifesaving medical breakthroughs we are
pursuing policies that are the epitome of penny-wise but pound-foolish.
I hope we in the Senate can work together to find sensible solutions
that reduce the deficit while maintaining our longstanding commitment
to medical research and innovation. We owe that much to Cathy and to
the millions of Americans whose futures will be brighter thanks to the
research and jobs made possible by our American National Institutes of
Health. When Cathy Hutchison interacts with the BrainGate program, it
is hard not to get the sense that we are looking into the future, a
future where people like Cathy will know that disease or injury will
not transform their bodies into a prison.
It was Arthur C. Clarke who said ``any sufficiently advanced
technology is indistinguishable from magic.'' For Cathy, for the
BrainGate research team, and indeed for anyone who may one day benefit
from this remarkable technology, that sip of coffee last spring taken
by Cathy Hutchison was a moment of magic. Let's commit ourselves to
providing Cathy, the BrainGate team, and all of those who are relying
on us in this body to provide the support they need to keep making
magical moments like this possible.
I yield the floor.
The PRESIDING OFFICER. The Senator from Colorado.
Production Tax Credit
Mr. UDALL of Colorado. Madam President, I am here again on the Senate
floor, as I have been on 14 previous occasions, to urge all of us, to
urge my colleagues in the Senate and, of course, our colleagues down
through the Rotunda in the House to extend the production tax credit
for wind. It is also known by its shorthand as the PTC.
[[Page S5925]]
The reason I am here on the floor, as I have said many times before,
this is about jobs. If we do not extend the production tax credit as
soon as possible, we will lose good-paying American jobs. It is that
simple. It is that straightforward.
I am going to keep speaking on the floor of the Senate until my
colleagues decide to act, until Congress decides to take the necessary
action to extend the production tax credit and protect American jobs. I
want to underline that. We are going to protect American jobs and help
secure our energy future in the 21st century where clean energy will be
a dominant part of the mix.
It has been a treat to come to the floor to do this on one hand
because I am touring the country. I focus on a State when I come to the
floor. Today I want to focus on the great State of Oregon, where the
wind industry is a major part of their economy, and where the PTC's
positive ripple effects have been felt statewide.
In short, Oregon is a national leader in wind power. I want to share
some of the statistics to make the case. According to the American Wind
Energy Association, Oregon ranks sixth in power derived from wind. The
wind energy industry supports roughly 3,000 jobs in Oregon. That number
is poised to grow but only if we extend the production tax credit.
As we look at the map of Oregon, we can see that Oregon has installed
extensive wind power projects along the Colombia River Valley in the
northern part of the State. The Colombia basically delineates the State
of Oregon from the State of Washington on the right here along its
northern boundary. There are enough projects there producing enough
power so that 700,000 homes would have electricity from those wind-
power projects.
The Biglow Canyon Wind Farm is the ninth largest wind farm in the
Nation. And Oregon's Second Congressional District, which is a very big
district, much like the Western Slope district, Colorado's Third
District, ranks fourth in the United States for installed wind
capacity. Over the last decade, one county alone, a relatively small
county, Sherman County, has seen over $18 million in revenues coming
into that county due to the simple presence of the wind energy
industry.
That money has helped Sherman County do impressive things. They have
created jobs and improved their infrastructure, including building a
new public school and library, supporting the Sherman County History
Museum, and installing solar panels on county property. A hybrid system
is in use using renewable energy with those solar panels. Those are
impressive achievements.
Oregon's wind energy potential is tremendous. Currently there are
plans to more than triple the amount of power that Oregon gets from
wind.
That would mean a total of 9,000 megawatts of electricity. That would
power over 2 million homes. Moreover, such a move, such an investment,
would create thousands of jobs.
I want to go back to my main point. The wind production tax credit
has been a major driver of this growth in the last decade, encouraging
some wind energy producers to invest in Oregon and the rest of our
country. The PTC has encouraged American innovation, and innovation is
how we will grow our economy. It has supported American companies in
the wind energy sector. I know the Presiding Officer knows this--and I
look forward to the opportunity to talk about her State of North
Carolina in the future. The PTC has enticed foreign companies to bring
their operations--jobs--to the United States. Because of the PTC, these
companies are building factories and offices in the United States.
I want to talk about Vestas, a Danish company that has a significant
manufacturing presence in Colorado--four different plants. Last
Saturday, I was at a Vestas plant in Pueblo. They support many jobs in
Colorado. Vestas also has a strong presence in Oregon. In fact, their
U.S. headquarters is located in one of the most livable cities in the
world, that being Portland. Vestas has made a real statement about the
potential here in the United States.
Again, the point I am making is it is clear to me and a large,
growing, and bipartisan group of colleagues in both Houses of Congress,
including both of my colleagues from Oregon, Senators Merkley and
Wyden, that extending the production tax credit is the right thing to
do. It is the right thing to do for our future, for our economy, and
for our environment. Without the PTC--if you look at the other side of
this success story--the sustained growth of the wind industry in recent
years will slow--it already has--and possibly halt, and we actually may
see good-paying American jobs being lost to China and other countries.
Why would we want that to happen? We cannot let that happen. The
continued uncertainty is not right and not fair when it comes to our
U.S. wind industry and the people who work in that sector.
Last Saturday, I heard from the workers at the Vestas plant in Pueblo
that they didn't know whether they were going to have jobs in a few
months. The looks on their faces alone should motivate all of us to get
the wind production tax credit extended. This is also an opportunity
for us in Congress to show the American public that we are not as
dysfunctional as a Congress as the public believes. This is a chance to
support economic growth and American manufacturing right here in our
country. The American people expect us to produce results, and we can
only do so by working together.
I fear that the wind production tax credit has become a political
football. We have a chance to show the American public, who are sick of
campaign year rhetoric and politics, business as usual and
partisanship, that we can rise above that. I reiterate that this is a
perfect opportunity for us because this is not a partisan issue. It has
widespread support from both parties across our country. I have been
highlighting that fact over the last few weeks.
What can we do? We ought to understand that the production tax credit
equals jobs. We ought to pass it as soon as possible. As I wind down, I
note that the Senate Finance Committee is meeting right now to consider
a tax extenders package. I know many colleagues on the Senate Finance
Committee, including Oregon's senior Senator Ron Wyden, are working to
include the PTC in the package. I add my voice to those who are already
in place, urging the Finance Committee to pass an extension of the PTC
today as a part of the tax extenders package, and then let's move the
full Senate to the point where we can pass the PTC as soon as possible.
Why? Because we are protecting American jobs and we are preparing the
ground for additional job creation that is crucial, growing, and
exciting in the 21st century to the wind energy industry.
I thank the Chair for what her State is doing for wind power. I look
forward to talking about North Carolina.
With that, I yield the floor.
The PRESIDING OFFICER. The Senator from Rhode Island.
Mr. WHITEHOUSE. Madam President, I am delighted to follow the
distinguished Senator from Colorado and commend him for his persistence
and his passion on preserving the wind production tax credit. We have,
as he will recall from our previous discussions together on the floor,
facilities that we hope to have going up offshore of Rhode Island very
soon that will provide a local source of energy for us, reduce our
reliance on imported oil, and create significant and well-paying jobs
at home. So I am glad to be his wingman in this pursuit and thank him
for his leadership.
Climate Change
Madam President, yesterday marked the end of what is expected to be
one of the top five warmest months on record. The USDA recently
declared nearly 1,400 counties in 31 States, including, I am sure, many
in Colorado, disaster areas as a result of the ongoing drought. NASA
and NOAA declared the last decade the warmest on record. In 2011, we
faced 14 weather-related disasters that totaled more than $1 billion in
damage each. We already have several more that have occurred in 2012.
I have come to the floor today to discuss the science of climate
change. Virtually all respected scientific and academic institutions
have agreed that climate change is happening, and that human activities
are the driving cause of this change. A letter to Congress from a great
number of those institutions in October 2009 stated that:
Observations throughout the world make it clear that
climate change is occurring, and rigorous scientific research
demonstrates that the greenhouse gases emitted
[[Page S5926]]
by human activities are the primary driver. These conclusions
are based on multiple independent lines of evidence, and
contrary assertions are inconsistent with an objective
assessment of the vast body of peer-reviewed science.
If I were to translate that last phrase into layman's terms, it would
basically mean if you are saying anything different, we should be
looking for your motives.
This letter was signed by the heads of the following organizations:
the American Association for the Advancement of Science, American
Chemical Society, American Geophysical Union, American Institute of
Biological Sciences, American Meteorological Society, American Society
of Agronomy, American Society of Plant Biologists, American Statistical
Association, Association of Ecosystem Research Centers, Botanical
Society of America, Crop Science Society of America, and a great many
others.
These are highly esteemed scientific organizations, and they don't
think the jury is still out on climate change. They recognize that, in
reality, the verdict is in, and it is time to act.
Over the weekend, Dr. Richard Muller, professor of physics at the
University of California-Berkeley, and also director of the Berkeley
Earth Surface Temperature Project, and a former MacArthur Foundation
Fellow--a so-called genius grant award winner--revealed in a New York
Times op-ed how he has become a converted climate skeptic. He cites
findings from his research, which ironically was partially funded by
the Koch brothers, that the Earth's land temperature has increased by
2\1/2\ degrees Fahrenheit in the past 250 years and 1\1/2\ degrees over
the past 50 years. He states:
Moreover, it appears likely that essentially all of this
increase results from the human emission of greenhouse gases.
Unfortunately, human emission of greenhouse gases is on the rise. In
2011, the famed Mauna Loa Observatory documented the biggest annual
jump yet in carbon dioxide. A monitoring station in the Arctic this
year measured carbon dioxide at 400 parts per million for the first
time, which is 50 parts per million higher than the maximum
concentration at which scientists predict a stable climate. Of course,
400 parts per million is way outside the 170 to 300 parts per million
bandwidth that has existed on this planet for the past 8,000 centuries.
For 800,000 years, we have been between 170 and 300 parts per million,
and now in the bellwether leading-edge Arctic area, we cracked 400 in
our climate.
A 2012 report by the IPCC concludes that climate change increases the
risk of heavy precipitation. Rhode Islanders are no stranger to heavy
precipitation. In 2010, we saw flooding that exceeded anything we have
seen since the 1870s, when Rhode Island first started keeping records.
At the height of the rains, streets in many Rhode Island cities and
towns looked more like rivers than roads. Local emergency workers
sailed down Providence Street, a main road in West Warwick, by boat and
jet skis--down a main road on boats and jet skis--in order to assist
residents trapped by the floodwaters. Of course, we cannot link that
exact storm to climate change, but we know that climate change is
increasing the risk of extreme weather events like this one. It is
loading the dice for more and worse storms.
As a New Englander, I was concerned by a report released this week by
Environment America, titled ``When It Rains, It Pours.'' The report
found that in New England ``intense rainstorms and snowstorms [are]
happening 85 percent more often than in 1948. The frequency of intense
rain or snowstorms nearly doubled in Vermont and Rhode Island, and more
than doubled in New Hampshire.'' Not only are these inundations
happening more often, but the largest events are actually dumping more
precipitation--around 10 percent more on average--across the country.
For States such as mine, these storms are dangerous, expensive, and
cause lasting damage.
We are moving down a troublesome and unknown path. The best we can do
now is to prepare for dramatic environmental shifts. We must look to
science and scientists and use the best available data to protect and
prepare both our natural and built environments, which sustain us and
our economy. Ensuring the integrity of our infrastructure in the face
of a rapidly changing climate is essential. I want to focus for a
minute on that infrastructure. Coastal States face a particularly
unique set of challenges, so the infrastructure challenge for Rhode
Island is worse than many places. We face what I call a triple whammy,
as we must adapt not only to extreme temperatures and unusual weather
but also to sea level rise.
As average global temperatures rise, less water will be stored in
snowpack and on the ice sheets of Antarctica and Greenland. We also
know that at higher temperatures water expands to greater volume, so
that leads to a sea level rise, which is predicted to range from 20 to
39 inches by 2100, with recent studies showing that the numbers could
be even higher due to greater than expected melting of glaciers and ice
sheets. This is not a theory. We are into the realm of measurement.
Long-term data from tide gauges in the historic sailing capital of
Newport, RI, show an increase in average sea level of nearly 10 inches
since 1930. At these same tide gauges, measurements show that the rate
of sea level rise has increased in the past two decades compared to the
rate over the last century. This is consistent with reports that since
1990 sea level has been rising faster than the rate predicted by models
used to generate IPCC estimates.
Sea level rise is one thing, and the increase in storm surges that
will accompany it is even worse and promises to bring devastation to
our doorsteps. Critical infrastructure in at-risk coastal areas--roads,
powerplants, wastewater treatment plants--will need to be reinforced or
relocated. Additionally, our estuaries, marshes, and the barrier
islands that act as natural filtration systems and buffers against
storms will be inundated, with little time or space to retreat and move
inland as they have in the past. The oncoming weather is coming on too
fast.
One consequence of rising sea levels is that local erosion rates in
Rhode Island have doubled from 1990 to 2006, and some freshwater
wetlands near the coast are transitioning to salt marsh. Increased sea
level and erosion puts critical public infrastructure at risk. In one
example, we have a small but vibrant coastal community, Matunuck, where
beaches have eroded 20 feet over the past 12 years. The town has to
face difficult decisions as the only road connecting about 1600
residents and several restaurants and businesses is protected now by
less than a dozen feet of sand from the ocean. This road, which
provides access for emergency vehicles and lies on top of a water main,
must be protected. But what are the costs of protecting this piece of
road for areas nearby or farther down the shore? Often when you protect
one area of beach from erosion by hardening or altering the shoreline,
you do so to the sacrifice of other areas. It takes science and data to
sort out how to do that right.
These are not easy decisions for communities. To best protect
infrastructure and the communities and families who live in these at-
risk areas, we have to, as a nation, plan ahead. We have to use the
best and most reliable science, and we have to be able to prioritize
adaptation efforts.
In North Carolina, the State legislature considered a measure that
would have severely restricted the ability of their Coastal Resources
Commission to employ scientific estimates of future sea level rise.
That is the ultimate case of the ostrich burying its head in the sand--
in this case, the beach sand. This type of thinking will cost money and
lives in the future.
In Rhode Island, we are taking a different approach.
We have to if we want to protect public health and safety. Rhode
Island has 19 ``high hazard'' dams that have been deemed ``unsafe'' by
our Department of Environmental Management. We have 6,000 onsite waste
water treatment systems located near the coast, several landfills that
may be susceptible to coastal erosion and evacuation routes that could
be underwater as sea levels rise.
In 2008, our Coastal Resources Management Council adopted a climate
change and sea level rise policy to protect public and private
property, infrastructure, and economically valuable coastal ecosystems.
The policy states the following:
The Council will integrate climate change and sea-level
rise scenarios into its operations to prepare Rhode Island
for these new,
[[Page S5927]]
evolving conditions and make our coastal areas more
resilient.
It is the Council's policy to accommodate a base rate of
expected 3-5 foot rise in sea level by the year 2100 in the
siting, design, and implementation of public and private
coastal activities and to insure proactive stewardship of
coastal ecosystems under these changing conditions. It should
be noted that the 3-5 foot rate of sea-level rise assumption
embedded in this policy is relatively narrow and low. The
Council recognizes that the lower the sea level rise estimate
used, the greater the risk that policies and efforts to adapt
sea-level rise and climate change will prove to be
inadequate.
This policy is already helping the State make smart decisions. For
example, when a new pump station was needed at a sewage treatment
plant, CRMC looked at sea-level rise models before determining where it
should go, avoiding future relocation costs or malfunction in the face
of flash flooding and sea level rise.
In 2010, our general assembly created the Rhode Island Climate Change
Commission to study the projected impacts of climate change on the
State, develop strategies to adapt to those impacts, and determine
mechanisms to incorporate climate adaptation into existing state and
municipal programs. A draft progress report from the Commission lists
many ways the state is planning to adapt to climate change, including:
Creating a ``Structural Concept and Contingency Plan to Inundation of
the Ferry Terminals and Island Roadway Systems''; creating the
``Central Landfill Disaster Preparedness Plan''; national grid, our
electricity and natural gas utility, undertaking a ``Statewide
Substation Flooding Assessment''; the Army Corps of Engineers, FEMA,
and the Rhode Island Emergency Management Agency conducting a
``Hurricane and Flooding Evacuation Study''; and the list goes on and
on.
In the town of North Kingston, RI, they have taken the best elevation
data available, and modeled 1, 3, and 5 feet of sea-level rise, as well
as 1 foot of sea-level rise plus 3 feet of storm surge. By overlaying
these inundation models on top of maps identifying critical
infrastructure such as roads, emergency routes, railroads, water
treatment plans, and estuaries, the town will be able to prioritize
transportation, conservation, and relocation projects. They are also
able to quantify the costs of sea-level rise. In one small area of the
town, 1 foot of sea-level rise would put two buildings, valued at $1.3
million, underwater. Five feet of sea-level rise, however, jeopardizes
116 buildings valued at $91 million.
Similarly, by modeling how sea-level rise will impact estuaries,
towns can preserve areas that will stay wetlands or undeveloped areas
that will become wetlands in the future, as opposed to areas that will
be lost. Estuaries act as nurseries for our hugely valuable fisheries,
and protect our homes, buildings and communities from storm surge.
There is already limited funding to protect these important ecosystems
and this kind of planning promotes efficiency in spending.
Let me close by saying that it is now well past time for us as a
country to start making policy that helps us adapt to the emerging
scientific reality that our actions indeed do affect our environment.
For those of us who are ocean States, the state of our oceans and
coastlines is particularly significant, and I urge my colleagues to
support our National Endowment for the Oceans, which got all the way
into the conference committee on the highway bill before it was taken
out in an unfortunate, unwise, and, frankly, unfair maneuver.
We are at a place now where nature could not be giving us clearer
warnings. Whatever higher power there is--and we each have our own
beliefs on that--that higher power that gave us our advanced human
capacity for perception, for calculation, for analysis, for deduction,
and for foresight has laid out before us more than enough information
for us to make the right decisions. Only a wild and reckless greed or a
fatal hubris could blind us to the distress signals coming from our
oceans, our atmosphere, and our world. Fortunately, these human
capacities still provide us everything we need to act responsibly but
only if we will.
I thank the Presiding Officer, and I yield the floor.
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