[Congressional Record (Bound Edition), Volume 154 (2008), Part 14]
[Senate]
[Pages 19110-19127]
[From the U.S. Government Publishing Office, www.gpo.gov]




   NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2009--Continued

  The PRESIDING OFFICER. Who seeks recognition?
  Mr. LEVIN. 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.
  Mr. DURBIN. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DURBIN. I ask unanimous consent to speak as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator is recognized.


                              The Economy

  Mr. DURBIN. Mr. President, we continue to read today, as we did 
yesterday, about dramatic changes in the American economy, particularly 
the problems facing many of our larger financial institutions.
  Not that many weeks ago, the Federal Government stepped in when Bear 
Stearns was in a terrible economic state and took over the 
responsibility for that company. It was an extraordinary decision 
because this is a company that we had not regulated as a Federal 
Government, not one at least in detail. We knew their transactions and 
balance sheets, but we put the full faith and credit of the American 
people and our Treasury behind rescuing Bear Stearns.
  Then a little over a week ago the decision was made by this 
administration to do the same for two entities, Government-sponsored 
entities, Fannie Mae and Freddie Mac. These were the major institutions 
for housing in America. Between them, some 50 percent of all mortgages 
were being held. It was understandable that decision was made because 
the alternative was unthinkable. If Fannie Mae and Freddie Mac should 
collapse, it would jeopardize not only mortgages and homeowners but 
also the American economy. It is such a large part, it is 
understandable that the administration stepped in to make that 
decision.
  Now this week comes a new round. Lehman Brothers, a company in New 
York which has prospered for many years, now faces bankruptcy, and 
along with it the question of the future of Merrill Lynch, a major 
brokerage house which appears to be in line to be acquired by Bank of 
America.
  These are dramatic and unsettling events and a reminder to all of us 
that the state of the American economy is not as sound and solid as we 
would like to see it. But those are the events which happened at the 
highest levels of finance and the highest levels of Wall Street.
  All of us representing our constituents--I represent Illinois--have 
traveled around our States and met with small business men and women, 
family farmers, and families as well, talking about the situation they 
face today. They do not make the headlines as Merrill Lynch or Lehman 
Brothers, but they should because if you go across the board and talk 
to these working families, these middle-income families, you will find 
that over the last 7 or 8 years, this country has not been kind to 
them. Their spending power has been reduced. They continue to work. 
They are productive workers. America's economy is a productive economy. 
And yet they have not been rewarded for their work. Their wages have 
not kept up with the cost of living. They have fallen behind under this 
Bush administration some $2,000 worth of spending power at a minimum. 
These are the people who are paying $4.50 per gallon of gasoline trying 
to figure out how to get back and forth to work and to meet their 
obligations to their families and friends.
  These are folks who are struggling with the cost of groceries and 
clothing. They are the same ones trying to figure how in the world to 
put their kids

[[Page 19111]]

through college so their kids will not end up with student loans that 
look like their first mortgages.
  They are worried also about health care, about the health insurance 
plans that do not cover as much this year as they did last year. They 
are worried about the out-of-pocket payments they may have to make. 
They realize, most of them, they are one diagnosis away from 
bankruptcy. That is the reality of life in the economy beyond Wall 
Street.
  So when you look across the board at this economy, you realize the 
fundamental weaknesses of what we face today. Of course, the housing 
market has been the catalyst for some of the problems we now see. It 
turned out that the greed of Wall Street, of the overreaching of some 
companies, led to loans and mortgages which were totally unwise.
  Many of those now have resulted in foreclosures, where people are 
having to leave their homes. Their misfortune is being visited on their 
neighbors. I recently had an appraisal on my home in Springfield. It is 
the same home I lived in when I was first elected to Congress many 
years ago. I have been there a long time. I have to tell you the value 
of my home has gone down 20 percent.
  Why? It is not because we did not keep it up--we do a fairly good job 
with that--it is because the economy is weak in my hometown of 
Springfield, IL, and foreclosures nearby have taken their toll on the 
value of my home. We made all of our mortgage payments, but the value 
of our home went down 20 percent. That is the reality a lot of people 
are facing. My story is not one that should bring tears to anybody's 
eyes; we will get through it. But a lot of folks cannot. They cannot 
get through this, and that is where we are in the economy today.
  How did we reach this point? We reached this point when we adopted a 
mentality that was dominant in this city for so long that, first, get 
Government off my back. Government is my enemy. Deregulate.
  That was a pretty popular mantra around here 10 or 15 years ago. In 
fact, a lot of people laughed about it. Even people such as the 
venerable wise critic, Rush Limbaugh, said: If we close down the 
Federal Government no one would even notice.
  Well, he was wrong when he said it. He would certainly be wrong today 
because what has happened to us is a reminder that there is an 
appropriate and important role that Government needs to play. As strong 
as our entrepreneurial free market economy is, if it is not subject to 
oversight and accountability, it can spin out of control.
  That is what happened with this subprime mortgage market. Instead of 
having appropriate oversight and accountability, loans were made which 
made no sense whatsoever, and eventually that credit operation 
collapsed leading to the foreclosures we see today.
  What we see on Wall Street now with many of these investment banks 
going under are credit institutions which are not subject to Government 
regulation. It is like playing ``off the books.'' If a business does 
that, the IRS comes in and says: You have just violated the law. You 
are supposed to put everything on the books and report to us.
  Well, there is a whole world of credit and finance that is ``off the 
books'' when it comes to regulation and oversight by the Federal 
Government. And that is the world that is collapsing. It is an 
indication to me that when we faced a similar situation 75 years ago, 
with the Great Depression, that Franklin Roosevelt got it right. He 
understood that the economic problems in America called for sensible 
regulation and disclosure and transparency and accountability.
  He created agencies which responded to the economy of the day. 
Regulation, yes, but without that regulation, unfortunately, the market 
was spinning out of control to the detriment of everyone, not just 
business owners but workers, farmers, and people who are just trying to 
get by.
  We need to return to a mindset which says there is an appropriate 
role for Government. There are things which our Government can do which 
private industry, on its own devices, will not do. That is why we need 
to be more sensible when it comes to regulation.
  Yesterday, the Republican candidate for President, John McCain, said:

       Our economy, I think still the fundamentals of our economy 
     are strong.

  I would say that Senator McCain does not accurately portray our 
economy today. I wonder which economy he is talking about? Is he 
talking about an economy with record unemployment, the highest in 5 
years? Is he talking about an economy with record home foreclosures, 
the most since the Great Depression? Is he talking about an economy 
where people's savings that they count on for the future--the value of 
their home or their 401(k) or their retirement account--have been 
diminished by the state of this economy? He cannot be talking about the 
economy where middle-income families have fallen behind in their 
spending power, where they find it difficult to live paycheck to 
paycheck, let alone save some money. He cannot be talking about an 
economy with $4.50 gasoline, with diesel fuel that is even more 
expensive, and jet fuel that is running the aviation industry out of 
business.
  What economy is John McCain talking about? It is interesting how 
close his quote comes to one from another person who happened to be 
elected President. His name was Herbert Hoover; the date was October 
25, 1929. This was just shortly before, days before, the great stock 
market crash.
  Here is what President Herbert Hoover said then:

       The fundamental business of the country, that is production 
     and distribution of commodities, is on a sound and prosperous 
     basis.

  That was said days before the stock market collapsed. This quote from 
John McCain yesterday is reminiscent of President Hoover. It shows the 
same lack of connection to the real world in which people are living.
  When it comes to Senator McCain's philosophy and how we should 
approach these issues, he has been pretty outspoken. It has been 
printed this morning in an article in the New York Times written by 
Jackie Calmes. She wrote:

       In early 1995, after Republicans had taken control of 
     Congress, Mr. McCain promoted a moratorium on Federal 
     regulations of all kinds. He was quoted as saying that 
     excessive regulations were ``destroying the American family, 
     the American dream,'' and voters ``want these regulations 
     stopped.'' The moratorium measure was unsuccessful.

  He told the Wall Street Journal last March: ``I'm always for less 
regulation, but I am aware of the view that there is a need for 
government oversight'' in situations like the subprime lending crisis, 
the problem that has cascaded through Wall Street this year.
  Senator McCain concluded: ``But I am fundamentally a deregulator.''
  Later that month Senator McCain gave a speech on the housing crisis 
in which he called for less regulation saying:

       Our financial market approach should include encouraging 
     increased capital in financial institutions by removing 
     regulatory, accounting and tax impediments to raising 
     capital.

  Senator McCain has been consistent. He has opposed Government 
oversight, accountability, and regulation. Now, it can go too far. Do 
not get me wrong. We have seen it at its worst. But if you do not have 
a fundamental oversight effort being made by the Government, then 
consumers and the economy are at the mercy of those who go too far.
  Inevitably they will go too far. I can recall the savings and loan 
crisis, leading to a taxpayers bailout. I now see the problems in the 
subprime mortgage situation leading to a taxpayers bailout of Fannie 
Mae and Freddie Mac, Bear Stearns, and maybe others. If we do not keep 
an eye on their activities and demand accountability, we will end up 
paying the price.
  That is why this election is so fundamental. If we want to continue 
the economic policies of the Bush-Cheney administration that have led 
us to this sorry moment, then Senator McCain is clearly the person who 
should lead this country for the next 4 years. But if we are going to 
change those policies, if we are going to give middle-income and 
working families a fighting chance in this economy, if we are going to 
have a Tax Code written not to reward wealth but to reward work for a 
change, then

[[Page 19112]]

we need a change in Washington. We need to have a new approach, not 
only a new economic and tax policy but the kind of regulation that 
provides protection from the excesses of the market. Even Senator 
McCain yesterday referred to the greed on Wall Street. Left unchecked, 
unfettered, this greed can spin out of control. That is why there is 
such a fundamental choice facing American families in only 7 weeks.
  I ask unanimous consent to have the New York Times article to which I 
referred printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the New York Times, Sept. 16, 2008]

               In Candidates, 2 Approaches to Wall Street

                           (By Jackie Calmes)

       Washington.--The crisis on Wall Street will leave the next 
     president facing tough choices about how best to regulate the 
     financial system, and although neither Senator Barack Obama 
     nor Senator John McCain has yet offered a detailed plan, 
     their records. and the principles they have set out so far 
     suggest they could come at the issue in very different ways.
       On the campaign trail on Monday, Mr. McCain, the Republican 
     presidential nominee, struck a populist tone. Speaking in 
     Florida, he said that the economy's underlying fundamentals 
     remained strong but were being threatened ``because of the 
     greed by some based in Wall Street and we have got to fix 
     it.''
       But his record on the issue, and the views of those he has 
     always cited as his most influential advisers, suggest that 
     he has never departed in any major way from his party's 
     embrace of deregulation and relying more on market forces 
     than on the government to exert discipline.
       While Mr. McCain has cited the need for additional 
     oversight when it comes to specific situations, like the 
     mortgage problems behind the current shocks on Wall Street, 
     he has consistently characterized himself as fundamentally a 
     deregulator and he has no history prior to the presidential 
     campaign of advocating steps to tighten standards on 
     investment firms.
       He has often taken his lead on financial issues from two 
     outspoken advocates of free market approaches, former Senator 
     Phil Gramm and Alan Greenspan, the former Federal Reserve 
     chairman. Individuals associated with Merrill Lynch, which 
     sold itself to Bank of America in the market upheaval of the 
     past weekend, have given his presidential campaign $300,000, 
     making them Mr. McCain's largest contributor, collectively.
       Mr. Obama sought Monday to attribute the financial upheaval 
     to lax regulation during the Bush years, and in turn to link 
     Mr. McCain to that approach.
       ``I certainly don't fault Senator McCain for these 
     problems, but I do fault the economic philosophy he 
     subscribes to,'' Mr. Obama told several hundred people who 
     gathered for an outdoor rally in Grand Junction, CO.
       Mr. Obama set out his general approach to financial 
     regulation in March, calling for regulating investment banks, 
     mortgage brokers and hedge funds much as commercial banks 
     are. And he would streamline the overlapping regulatory 
     agencies and create a commission to monitor threats to the 
     financial system and report to the White House and Congress.
       On Wall Street's Republican friendly turf, Mr. Obama has 
     outraised Mr. McCain. He has received $9.9 million from 
     individuals associated with the securities and investment 
     industry, $3 million more than Mr. McCain, according to the 
     Center for Responsive Politics, a watchdog group. His 
     advisers include Wall Street heavyweights, including Robert 
     E. Rubin, the former treasury secretary who is now a senior 
     adviser at Citigroup, another firm being buffeted by the 
     financial crisis.
       If many voters are fuzzy on the events that over the 
     weekend forced Lehman Brothers Holdings Inc. into bankruptcy 
     and Merrill Lynch & Company. to be swallowed by the Bank of 
     America Corporation, the continuing chaos among the most 
     venerable names in American finance--coming on top of the 
     recent government seizure of mortgage giants Fannie Mae and 
     Freddie Mac and the demise of the Bear Stearns Companies--has 
     stoked their anxiety for the economy, the foremost issue on 
     voters' minds.
       So it was that first Mr. Obama and then Mr. McCain rushed 
     out their statements on Monday morning before most Americans 
     had reached their workplaces.
       To the extent that travails on Wall Street and Main Street 
     have both corporations and homeowners looking to Washington 
     for a hand, that helps Mr. Obama and his fellow Democrats who 
     see government as a force for good and business regulation as 
     essential. Yet Mr. McCain has sold himself to many voters as 
     an agent for change, despite his party's unpopularity after 
     years of dominating in Washington, and despite his own 
     antiregulation stances of past years.
       Mr. McCain was quick on Monday to issue a statement calling 
     for ``major reform'' to ``replace the outdated and 
     ineffective patchwork quilt of regulatory oversight in 
     Washington and bring transparency and accountability to Wall 
     Street.'' Later his campaign unveiled a television 
     advertisement called ``Crisis,'' that began: ``Our economy in 
     crisis. Only proven reformers John McCain and Sarah Palin can 
     fix it. Tougher rules on Wall Street to protect your life 
     savings.''
       Mr. McCain's reaction suggests how the pendulum has swung 
     to cast government regulation in a more favorable political 
     light as the economy has suffered additional blows and how he 
     is scrambling to adjust. While he has few footprints on 
     economic issues in more than a quarter century in Congress, 
     Mr. McCain has always been in his party's mainstream on the 
     issue.
       In early 1995, after Republicans had taken control of 
     Congress, Mr. McCain promoted a moratorium on federal 
     regulations of all kinds. He was quoted as saying that 
     excessive regulations were ``destroying the American family, 
     the American dream'' and voters ``want these regulations 
     stopped.'' The moratorium measure was unsuccessful.
       ``I'm always for less regulation,'' he told The Wall Street 
     Journal last March, ``but I am aware of the view that there 
     is a need for government oversight'' in situations like the 
     subprime lending crisis, the problem that has cascaded 
     through Wall Street this year. He concluded, ``but I am 
     fundamentally a deregulator.''
       Later that month, he gave a speech on the housing crisis in 
     which he called for less regulation, saying, ``Our financial 
     market approach should include encouraging increased capital 
     in financial institutions by removing regulatory, accounting 
     and tax impediments to raising capital.''
       Yet Mr. McCain has at times in the presidential campaign 
     exhibited a less ideological streak. As he did on Monday, he 
     from time to time speaks in populist tones about big 
     corporations and financial institutions and presents himself 
     as a Theodore Roosevelt-style reformer. He supported the Bush 
     administration's decision to seize Fannie Mae and Freddie 
     Mac, the mortgage giants, and he has backed as unavoidable 
     the promise of taxpayer money to help contain the financial 
     crisis.
       Other than Mr. Gramm, who as chairman of the Senate Banking 
     Committee before his leaving Congress in 2002 worked to block 
     efforts to tighten financial regulation, Mr. McCain's closest 
     adviser on matters of Wall Street is John Thain, the chief 
     executive of Merrill Lynch, who has raised about $500,000 for 
     Mr. McCain. Unlike Mr. Gramm, Mr. Thain has a reputation as a 
     pragmatic, nonideological, moderate Republican. That the men 
     are Mr. McCain's touchstones is typical of his small and 
     eclectic mix of advisers, making it hard to generalize about 
     how Mr. McCain would act as president.
       A prominent McCain supporter, Gov. Tim Pawlenty of 
     Minnesota, signaled how Mr. McCain would try to make his 
     antiregulation record fit the proregulation times that the 
     next president will inherit. Mr. Pawlenty suggested in an 
     interview on Fox News that, given the danger that ``any 
     future administration'' would go too far, Mr. McCain would be 
     the safer bet to protect against ``excessive government 
     intervention or excessive government regulation;''
       Mr. Obama also does not have much of a record on financial 
     regulation. As a first-term senator, he has not been around 
     for the major debates of recent years, and his eight years in 
     the Illinois Senate afforded little opportunity to weigh in 
     on the issues.
       In March 2007, however, he warned of the coming housing 
     crisis, and a year later in a speech in Manhattan he outlined 
     six principles for overhauling financial regulation.
       On Monday, he said the nation was facing ``the most serious 
     financial crisis since the Great Depression,'' and attributed 
     it on the hands-off policies of the Republican White House 
     that, he says, Mr. McCain would continue. Seeking to showcase 
     Mr. Obama's concerns, his campaign said Mr. Obama led a 
     conference call on the crisis early Monday that included Paul 
     A. Volcker, the former chairman of the Federal Reserve; Mr. 
     Rubin; and his successor as treasury secretary, Lawrence H. 
     Summers.
       Later, citing Mr. McCain's remarks about the economy's 
     strong fundamentals, he told a Colorado crowd that Mr. McCain 
     ``doesn't get what's happening between the mountain in Sedona 
     where he lives and the corridors of power where he works.''
       One reason for both men's sketchy records on financial 
     issues is that neither has been a member of the Senate 
     Banking Committee, which has oversight of the industry and 
     its regulators. Under both parties' leadership, the committee 
     often has been a graveyard for proposals opposed by lobbyists 
     for financial institutions, including Fannie Mae and Freddie 
     Mac, which last week were forced into government 
     conservatorships.
       Industry lobbyists' success in killing such regulations 
     meant senators outside the banking panel did not have to take 
     a stand on them.


  The PRESIDING OFFICER. The Senator from California.
  Mrs. BOXER. Mr. President, before the hour of 2:30, I ask unanimous 
consent to be recognized for 5 minutes.
  The PRESIDING OFFICER. Is there objection?

[[Page 19113]]


  Mrs. BOXER. I also ask unanimous consent that the Republican leader's 
time begin 5 minutes after I begin.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. BOXER. Mr. President, I rise to address the Senate not only as a 
Senator from the largest State in the Union, a State that is 
experiencing many problems that started with the housing crisis about 
which we talked a long time ago, before the Fed stepped in and did 
something, but I also rise as an economics major. I received my degree 
in economics. My minor was political science. I was a stockbroker a 
long time ago on Wall Street. I know a little bit about Wall Street, 
and I know a little bit about the times we are in right now. I worked 
on Wall Street when John Kennedy was assassinated. It was a horrible 
time. Confidence was shattered. The stock market actually closed down 
for a period. Now we are facing a meltdown. The fact is, we are all 
going to work and hope that it doesn't melt all the way down.
  On the day that we learn about Merrill Lynch, which was the gold 
standard of brokerage houses, and AIG, what I understand is the largest 
insurance company in America, when we hear about that and about Lehman 
Brothers, which we also hope can survive in some form via purchase--and 
certainly we know thousands of people have lost everything--to hear a 
U.S. Senator--namely, Senator McCain--say the fundamentals of this 
economy are strong sends cold shivers up and down my spine. To think 
that anyone would say that, one would have to go back to the days of 
Herbert Hoover, President of the United States, the day after the 
market crashed in 1929 and we entered the Great Depression. He said:

       The fundamental business of the country, that is production 
     and distribution of commodities, is on a sound and prosperous 
     basis.

  We have Senator McCain memorializing this attitude and these words.
  I wish to spend the rest of my time going through the fundamentals of 
this economy. I will come back and speak later when I have a little 
more time to expand.
  In 1999, the average American family spent $3,261 on cost-of-living 
expenses; in 2007, $7,585. The average household earned less in 2006 
than they did in 2000. Incomes are going down. Expenses are going up--
groceries, heating, gas, health care. The fundamentals of our economy 
are strong? As Senator Obama said: What economy? Not this economy. The 
average household earned less in 2006 than they did in 2000. Job growth 
during this administration has been the slowest since Herbert Hoover in 
1929, the Great Depression. Our economy has lost jobs for 8 straight 
months; 84,000 jobs were lost last month. The fundamentals of this 
economy are strong? What?
  One in five Americans is unemployed for more than 26 weeks, an 
increase of 8.2 percent over 2001. Americans living in poverty 
increased by 5.7 million since 2000, and 37 million Americans live in 
poverty. The fundamentals of this economy are strong? Spare me.
  Existing home sales fell by 22 percent in 2007. President Bush 
inherited a surplus. We now have an enormous deficit. The debt has 
increased over $4 trillion since 2001. We are spending $10 billion a 
month in Iraq. The money is leaving the country. We are not making the 
investment. The fundamentals of this economy are strong?
  Every American, I don't care what party--Republican, Democratic, 
Independent--should be up in arms about a leader looking at these 
figures. I have only given a little of the story. Let's get real. The 
fundamentals of this economy are weak. The people are anxious, and they 
should be. It is time for change.
  I yield the floor.
  The PRESIDING OFFICER. The time of the Senator from California has 
expired. Who seeks recognition?
  Under the previous order, the time until 3:06 is equally divided, 
with the Republican leader controlling the first 15 minutes and the 
majority leader controlling the last 15 minutes.
  Mrs. BOXER. 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.
  Mr. KYL. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KYL. Mr. President, unfortunately, we are in a situation with 
this bill where we have not been able to reach an agreement on how to 
proceed. I say this notwithstanding the Herculean efforts by the 
chairman and the ranking member of the committee. Senator Warner 
informed me a moment ago about the negotiations that have been ongoing, 
literally over the weekend, and yet it appears that notwithstanding 
their best efforts it has been impossible to find a way to move forward 
on this bill that encompasses amendments or embodies those amendments 
in a managers' amendment to the bill such that the Members, at least on 
our side, would feel comfortable proceeding to close off debate on the 
bill and bring debate to a close so we could move on with the bill. 
Unfortunately, I believe we have had two votes so far on this bill. I 
think one of those was on an amendment I offered, or it was accepted.
  In any event, I think they have accepted two amendments, we have had 
two votes, and I am informed that over the past three Department of 
Defense authorization bills, we had a rollcall vote average of 21 votes 
per bill. That is about right for a Defense authorization bill. This is 
one of the most important bills we have each year. There is a lot of 
Member interest. The committee has always allowed a robust debate and 
amendments by Members and, an average, as I said, of 21. We have had 
two so far. Clearly we are not ready to stop this bill. There is more 
work to be done. Frequently, amendments are embodied in a managers' 
amendment, on average, of 192 amendments that were agreed to during the 
consideration of the last three DOD authorization bills. As I said, 
this year the majority has accepted but two.
  Now, on our side we had hoped we would have a unanimous consent 
agreement that could be entered into at this point to obviate the 
necessity of the vote on cloture. It appears now that that will not be 
the case. So unfortunately we are in a situation where we are clearly 
not ready to call an end to this bill. There is still a lot more work 
to be done. The two managers have tried very hard to reach an 
agreement. That has not been possible to do. Therefore, at least for 
me--and I don't pretend to speak for everyone on the Republican side--
but at least for me, I can't in good conscience vote to close off 
debate, bring this bill to a close when there are so many outstanding 
issues that I know Republicans wish to bring to closure. There is one 
in particular I will mention before I close.
  There is this matter of earmarks. What we had resolved to do in the 
Senate was to say that only legislative language would be sufficient 
for a so-called earmark to have the force of law. You couldn't put 
earmarks in report language and then expect the executive branch to 
adhere to those earmarks when it spent the money appropriated by 
Congress. Well, once again, we have the specific items of spending that 
some call earmarks not put in legislative language except by reference. 
I know both Senator Warner and Senator DeMint and some others had 
proposed amendments to deal with that. I would have liked to have voted 
on a Senator Warner amendment to deal with that subject but, 
apparently, without a unanimous consent agreement, that is not going to 
be possible. So there are a variety of things that remain to be done. 
If we vote for cloture on the bill, they are not going to get done.
  Therefore, reluctantly, as I said, it will be my position to vote 
against cloture on this bill.
  Mr. REID. Mr. President, has all time of Senator McConnell expired?
  The PRESIDING OFFICER. There is 1\1/2\ minutes remaining on the 
Republican side.
  The Senator from Virginia is recognized.
  Mr. WARNER. Mr. President, this will be one of the most difficult 
votes that I will have had to cast in my almost 30 years in the Senate. 
I must say

[[Page 19114]]

to my dear friend, the chairman of the committee, we have worked 
together these years and we just made our last efforts in the cloakroom 
to try and bridge the gap--I respect both sides--bridge the gap. We 
failed, and now we are confronted with cloture. I then searched my 
conscience: What do I do? Because I am definitely more than 
sympathetic, completely in support that the minority has to have 
certain rights and a certain ability. That is the way this institution 
is constructed.
  I shall vote for cloture for the following reason: I ran a quick 
mental calculation. It was 63 years ago, in January of 1945, that I 
joined the U.S. Navy. If I had to point to the one single thing in my 
some 40 years plus of public service that has meant the most to me 
personally, it is working with and learning from the men and women of 
the Armed Forces of the United States. My military career on active 
duty is of no great consequence, but my learning experience was 
enormous, and I have tried through these 30 years in the Senate to pay 
back to this generation and future generations of men and women all the 
wonderful things, including two GI bills, that were done for me.
  So I could not have this, being almost the last vote that I will cast 
in these 30 years, in any other way than be consistent with my 
conscience, as I have tried to do the best, and will continue to do the 
best, on behalf of the men and women of the Armed Forces and their 
families.
  I thank my colleagues.
  The PRESIDING OFFICER. The time of the Senator has expired.
  The Democratic leader is recognized.
  Mr. REID. Mr. President, I had the opportunity in August to travel to 
Afghanistan. I always try to find the Nevada troops and I was able to 
do that because there are a lot of them over there. But I talked to 
troops--not Nevada troops but American service men and women. I have 
had the good fortune of being able to go to Iraq and talk to our 
military in Iraq. To try to explain to them that we are not doing a 
Defense authorization bill because minority rights aren't protected, I 
mean what is--what are we doing? This will be the 94th time we voted on 
cloture this Congress--the 94th time--far breaking any records ever in 
the history of our great country; more than double.
  My friend, the distinguished Senator from Arizona, says they are not 
ready to end this debate. We have a professional staff. The Republican 
staff of the Armed Services Committee is as professional as you can 
get, and that on the Democratic side is as professional as you can get, 
led by two of America's all-time great Senators: Levin and Warner. I 
say that without any degree of trying to make them feel good. It is the 
truth. They are two of the great Senators in the history of our 
country. They have worked as hard as they could to put together a 
Defense authorization bill. Now, let's assume we don't do anything to 
that bill and cloture is invoked and we pass that bill. Wouldn't that 
be a great time to celebrate here? Because you know what would happen? 
We would have a conference with the House and work out whatever 
differences in their bill and our bill.
  This is about earmarks? Oh, come on. We have had congressionally 
mandated spending since we have been a country. Why? Because our 
Founding Fathers set the country up that way. We have three separate 
branches of government. We don't have a king. We have a President. He 
doesn't make all the decisions. Benjamin Franklin and all of those men 
who met in Philadelphia wanted us to have three separate branches of 
government and they determined what our duties would be in the 
Constitution. One of them is to determine the spending. That is our 
role. That is our obligation. Now, are these two men trying to hide 
something from the American people, trying to sneak something in to 
help a military base someplace in America? No. Everything is 
transparent. This earmark is only one of the issues of the day to give 
somebody something to talk about, to talk about how bad government is.
  During the past 8 years, our Armed Forces--the best trained, the most 
courageous armed forces the world has ever known--have been stretched 
to the limit. I don't say this; our military commanders say it. Both 
civilian and military leaders of our country say we have to help our 
military. History will remember that during these years, despite 
tremendous strain, our military accomplished everything asked of them 
with heroism and success. We have all been to the funerals. I never 
understood until I went to Afghanistan what Shane Patton went through 
as a SEAL in Afghanistan. I went to that funeral and I thought why is a 
SEAL in Afghanistan. There is no water there. He is there doing the 
things they are trained to do--going after terrorists--and he was 
killed in the process. It won't be easy to rebuild our Armed Forces. It 
must be a priority of our next President to give them proper rest, 
proper training and equipment when they are deployed, and proper 
physical and mental health care when they return from combat.
  Part of my security detail as the majority leader--because people 
don't like what I do and say, I have had people threaten me. I have had 
as a part of my security detail a guy by the name of James Proctor. 
Since I was assistant leader and leader, he has been with me all that 
time, but it has been interrupted by three tours of duty to Iraq. He is 
an Army officer. Three tours of duty. He leaves his little family and 
heads off to Iraq. For James Proctor--to tell him we are not doing a 
Defense authorization bill because of earmarks or because we didn't 
have enough time to debate it, it is laughable, and he would laugh. 
They would all laugh. It is unfair.
  So next January 20, I guess, we will see what we can do to move 
forward, because we have to rebuild our Armed Forces. In the meantime, 
Congress can begin, I hope, to do something in the interim. We can 
begin now by passing the Defense authorization bill, a sensible, 
bipartisan bill that will honor our troops and enhance our national 
security.
  Just a few things: For men and women in uniform, this bill will give 
almost a 4-percent increase--exactly 3.9 percent increase--a pay 
raise--to our troops and other military personnel. Do they deserve it? 
Of course they do. If this bill doesn't pass, do they get it? Of course 
they don't. This will mean more money in the pockets of military 
families struggling to make it from one paycheck to the next. It will 
help returning heroes afford a place to live or go back to school. We 
invest in Defense health programs for men and women which, among other 
things, prevent the need to raise TRICARE fees. This bill will fight 
terrorism and protect our national security, and to tell James Proctor 
and people who have served gallantly in this military that we are not 
moving forward on this because minority rights aren't protected?
  This bill funds international nonproliferation efforts to combat 
weapons of mass destruction as well as programs that will help us 
prepare the homeland for chemical or biological attacks. This bill will 
increase funding for special operations command to train and equip 
forces and support ongoing military operations. If we hear one thing 
when we go to Afghanistan, they will tell you how important special 
operations officers and troops are. This bill provides funds supporting 
the development and use of unmanned aerial vehicles.
  Creech Air Force Base--named after General Creech who ended his 
career and his life in Nevada--was named after him, a great military 
officer. Indian Springs Air Base, it used to be called. It is midway 
between Las Vegas and the Nevada test site. This facility was going to 
be closed, until they determined these drones were some of the most 
important things in the military, and this legislation takes into 
consideration how important unmanned aerial vehicles are. This 
legislation helps reinforce special intelligence capabilities within 
the Army and the Marine Corps. This is a very good piece of 
legislation, an important step toward rebuilding our Armed Forces and 
protecting the American people.
  I wish I had words adequate to express my personal appreciation--and 
I can speak for everyone on this side of

[[Page 19115]]

the aisle--for the work done by Chairman Levin and John Warner. There 
are no two more honorable people in the world; whether they are rabbis, 
priests, ministers, there is no one who has more credibility and 
honesty than these two men. I have had conversations with these two 
fine Senators, where they said: This is what I am going to do. Do I 
need to check back with them and ask: Do you really mean what you said? 
No. Their word is their bond. Once they have said it, that is it.
  I feel very bad. Senator Levin is going to have another opportunity 
to do one of these bills, but this man, Senator Warner, won't unless we 
invoke cloture. We need to do that so that he can participate in coming 
up with the final bill that will lead to a conference with the House of 
Representatives. For 30 years--as I have said on the floor before, I 
don't know his predecessors--I served with a number of them--but the 
State of Virginia could not have had a better Senator than John Warner. 
They could have had one as good but nobody better. These two men have 
done their very best. I accept the product they have given us, the 
product we have right here, now, today. I accept it. Let's pass it. 
Let's invoke cloture on it, and if there are germane postcloture 
amendments, we will take care of those. That is what these men do.
  Now, I want to say one other thing. Let's not forget that the ranking 
Republican on the Armed Services Committee is Senator John McCain. I 
understand the Presidential campaign takes candidates away from what 
goes on here. Both parties realize that. But it certainly would have 
helped move this legislation forward if the ranking member of this 
committee, the Republican nominee for President, had shown leadership 
and a commitment to this cause by talking to his fellow Republicans and 
saying: Come on, we need to get this passed. Not a word publicly or 
privately, that I know of.
  We have a chance to do the right thing by coming together to invoke 
cloture and move toward passing this legislation. I hope all Senators, 
Democrats and Republicans, will join to move forward so we can honor 
and promptly care for our military families, while enhancing our 
country's ability to meet the security challenges we face.
  Let me say that, while I talked about John Warner, I want to close by 
talking about Carl Levin. I, too, don't know all of his predecessors. I 
do know a little history. There could have been a Senator as good as 
Carl Levin from Michigan but no one any better.
  We deserve this legislation. The country deserves this legislation. 
These two managers deserve this legislation. Let's invoke cloture. It 
will give us an opportunity to complete this legislation. I hope we can 
do that.
  I ask unanimous consent that Senator Levin be given 2 minutes to 
close the debate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Michigan is recognized.
  Mr. LEVIN. Mr. President, I thank the leader and I thank Senator 
Warner for his statement in support of cloture. It is a difficult and 
courageous vote. I commend them on it.
  The issue here is not earmarks; the issue is a perception that is 
being perpetrated that it is about earmarks. This green book is our 
committee report. It lists all of the items to be added to it and 
subtracted. This white book is our bill. It incorporates the charts and 
lines from the committee report and is incorporated into this bill as 
law. The lines here--add-ons, subtractions, all of the requests of the 
President that weren't touched, by the thousands--are incorporated by 
reference in our bill.
  The amendment of Senator DeMint, who wants to eliminate the 
incorporation by reference, has exactly the opposite effect. All the 
line items that were added or subtracted would not be part of the bill 
if the DeMint amendment were agreed to. They would remain in the 
committee report without incorporation by reference in the bill. It 
goes exactly the opposite direction of making ``earmarks'' part of law.
  The Warner amendment, on the other hand, would incorporate not just 
by reference but all of the language in the thousands of lines in the 
bill. The problem is that it would take so much time, according to the 
Government Printing Office, to do that, we probably could not get to 
conference and back to the Senate unless we had a lameduck session. We 
don't know that we will.
  We cannot jeopardize this bill, which means so much to the men and 
women in the Armed Forces, by a requirement that achieves no purpose 
because the lines are already incorporated by reference, that achieves 
only the perception of a purpose, which apparently meets some political 
needs of people who are out campaigning. That is not enough to 
jeopardize the Defense bill.
  This bill means everything to the men and women in the armed 
services. It should mean everything to us because they mean everything 
to us. We cannot jeopardize this bill by any action which may make it 
impossible for us to bring back a bill from conference.
  I wish to end by again complimenting Senator Warner. He has been 
absolutely wonderful in trying to work out a unanimous consent 
agreement. I treasure our 30 years together. I wish we could end this 
with a cloture vote that would allow us to finish positively the great 
effort he has put in. I hope we can get 60 votes for cloture.


                             Cloture Motion

  The PRESIDING OFFICER. Under the previous order, pursuant to rule 
XXII, the clerk will report the motion to invoke cloture.
  The assistant legislative clerk read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     hereby move to bring to a close debate on S. 3001, the 
     National Defense Authorization Act for Fiscal Year 2009.
         Carl Levin, Patrick J. Leahy, Bernard Sanders, Robert P. 
           Casey, Jr., Claire McCaskill, Sheldon Whitehouse, 
           Benjamin L. Cardin, Robert Menendez, Bill Nelson, 
           Charles E. Schumer, Richard Durbin, Thomas R. Carper, 
           Patty Murray, Amy Klobuchar, Jon Tester, Jeff Bingaman, 
           Harry Reid.

  The PRESIDING OFFICER. By unanimous consent, the mandatory quorum 
call is waived.
  The question is, Is it the sense of the Senate that debate on S. 
3001, the National Defense Authorization Act for Fiscal Year 2009, 
shall be brought to a close?
  The yeas and nays are mandatory under the rule.
  The clerk will call the roll.
  The bill clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Delaware (Mr. Biden), 
the Senator from Massachusetts (Mr. Kennedy), the Senator from 
Massachusetts (Mr. Kerry), and the Senator from Illinois (Mr. Obama) 
are necessarily absent.
  I further announce that, if present and voting, the Senator from 
Massachusetts (Mr. Kerry) would vote ``yea.''
  Mr. KYL. The following Senators are necessarily absent: the Senator 
from Texas (Mr. Cornyn), the Senator from Florida (Mr. Martinez), and 
the Senator from Arizona (Mr. McCain).
  Further, if present and voting, the Senator from Texas (Mr. Cornyn) 
would have voted ``nay.''
  The PRESIDING OFFICER (Mr. Sanders). Are there any other Senators in 
the Chamber desiring to vote?
  The yeas and nays resulted--yeas 61, nays 32, as follows:

                      [Rollcall Vote No. 200 Leg.]

                                YEAS--61

     Akaka
     Baucus
     Bayh
     Bingaman
     Boxer
     Brown
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Clinton
     Cochran
     Coleman
     Collins
     Conrad
     Dodd
     Dole
     Dorgan
     Durbin
     Feinstein
     Hagel
     Harkin
     Inouye
     Johnson
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     McCaskill
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Salazar
     Sanders
     Schumer
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Tester
     Warner
     Webb
     Whitehouse
     Wicker
     Wyden

[[Page 19116]]



                                NAYS--32

     Alexander
     Allard
     Barrasso
     Bennett
     Bond
     Brownback
     Bunning
     Burr
     Chambliss
     Coburn
     Corker
     Craig
     Crapo
     DeMint
     Domenici
     Ensign
     Enzi
     Feingold
     Graham
     Grassley
     Gregg
     Hatch
     Hutchison
     Inhofe
     Isakson
     Kyl
     McConnell
     Sessions
     Shelby
     Thune
     Vitter
     Voinovich

                             NOT VOTING--7

     Biden
     Cornyn
     Kennedy
     Kerry
     Martinez
     McCain
     Obama
  The PRESIDING OFFICER. On this vote, the yeas are 61, the nays are 
32. Three-fifths of the Senators duly chosen and sworn having voted in 
the affirmative, the motion is agreed to.
  Mr. DURBIN. Mr. President, I move to reconsider the vote by which the 
motion was agreed to and to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. REID. Mr. President, I want to express my appreciation to 
everyone. I tell all Senators that Senator Warner and Senator Levin are 
going to do everything they can to process this bill. We are going to 
complete this bill by tomorrow night, and we will get the bill to 
conference.
  We can get a bill. Everyone who has something they want to do, talk 
to these two managers and they will do the best they can. This is an 
important bill, and the Senate realized that. I think this is really a 
good day for the Senate.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. MENENDEZ. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MENENDEZ. Mr. President, I ask unanimous consent to speak as in 
morning business with the time to run postcloture.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                              The Economy

  Mr. MENENDEZ. Mr. President, there is no doubt Wall Street and Main 
Street are in a crisis. The floodgates from the subprime storm have 
ripped open and the effects are clearly devastating--unemployment is up 
and markets are down.
  While I may not be able to predict what is coming next, I would like 
to talk a little bit about how we got here. Americans may not have been 
tracking the exact moves and, I believe, the negligence on the part of 
the Bush administration that has led us to this point, but we certainly 
understand the consequences.
  For New Jersey, my home State, financial losses on Wall Street mean 
job losses at home. I am worried about the 1,700 employees of Lehman 
Brothers in Jersey City. I am worried about the 6,000 employees at 
Merrill Lynch in Hopewell. I am also worried about those families and 
others who are going to have to face foreclosure or watch their home 
values plummet. And I am worried about millions of retirees and people 
approaching retirement who are going to realize that their life savings 
are under attack and diminishing as quicksand below their feet.
  Everyone is demanding to know what got us here. Well, what got us 
here to a large degree is that for the last 8 years we have had an 
administration that has turned a blind eye to financial markets and 
deregulated at every turn, playing Russian roulette with our economy. 
Their regulatory changes gave lenders the chance to invent new ways to 
make bad loans and to pass off the risks on investors.
  The Federal Reserve had a power given to it long ago by a Democratic 
Congress to fight predatory lending. For more than 7 years of the Bush 
administration it failed to use it. If they had acted, many predatory 
lenders wouldn't have been allowed to pedal bad loans, which investment 
banks bought and then went bust and spurred this crisis.
  There are so many parts to this pattern of deception and neglect. In 
1994, a Democratic Congress passed the Homeowner's Equity Protection 
Act. It was the first statute to fight predatory lending. That was in 
1994. That law mandates that the Federal Reserve must issue regulations 
to prohibit abusive and deceptive practices. But how long did it take 
the Federal Reserve to do so? It took the Federal Reserve 14 years--
from 1994--to implement these regulations.
  Senator Sarbanes, the former chairman and sometimes ranking member of 
the Banking Committee, and Senators Schumer and Dodd have repeatedly 
introduced legislation to protect against predatory lending. Not once 
has any Republican been a cosponsor in the Senate. Yet we have been 
hearing a lot about Senator McCain suggesting that all of a sudden he 
has seen the light. But he wasn't here all those years.
  Even after reaching a bipartisan agreement on the Foreclosure 
Prevention Act and its successor, the Housing and Economic Recovery Act 
of 2008 in June, Republican Senators delayed the final passage of the 
legislation for weeks--for weeks. Between the two bills, Republicans 
had six filibusters to prevent the passage of this legislation.
  Notwithstanding what was happening throughout the country, as a 
member of the Senate Banking Committee in March of 2007--well over a 
year and a half ago--I raised the prospect of a tsunami--my word--of 
foreclosures. But the administration said: Oh, no, that is an 
overexaggeration. Unfortunately, I wish they had been right and I had 
been wrong. But the fact is, we haven't even seen the crest of that 
tsunami take place.
  A few months later, as foreclosures mounted, they assured us that the 
problems we were concerned about might bring broader consequences to 
the economy. But oh, no, all those who came before our committee, all 
the financial leaders of this administration--the Secretary of the 
Treasury, the head of the Federal Reserve, and the regulatory side of 
the Securities and Exchange Commission--oh, no, those problems would be 
contained to only the housing market, even though they couldn't even 
see the foreclosure crisis being the tsunami it has become.
  In July I asked them about the prospect of a bailout of Fannie Mae 
and Freddie Mac, but they couldn't foresee that either or they were 
misleading the committee. I see the distinguished chairman of the 
Banking Committee is here, and he will recall they were asked head on. 
They asked for incredible authorities. Yet they could not foresee the 
possibility, even as the mortgage crisis continued to rear its ugly 
head in dimensions that some of us predicted a year and a half ago. 
Those who are in charge of the regulatory process, appointed by the 
Bush administration, ultimately could not see.
  So even in the face of all that, we had the White House issue 
numerous veto threats against the bill that was critical to try to get 
to the very root cause of what is happening in America today--the 
housing foreclosure crisis--which has created this ripple effect in all 
our financial institutions. Yet they were issuing veto threats--veto 
threats. How could you be so blind or how could you be so much in the 
interests of one sector that you are unwilling to mitigate the risks on 
behalf of the American people?
  This is not new. Look at 2005. In 2005, the House of 
Representatives--I was a Member there at the time--passed a bipartisan 
GSE reform bill by a vote of 331 to 90. GSEs are those Government 
entities; that is, Fannie Mae and Freddie Mac. We wanted to have a 
strong reform bill. It was offered by Republicans. Mike Oxley, the 
chairman at that time, a Republican, working with Barney Frank, offered 
the bill. It passed overwhelmingly. In the House of Representatives--I 
served there for 13 years--I can tell you, when you get a vote of 331 
to 90, that is about as bipartisan as you can get.
  That bill was offered here by Senate Democrats exactly as it passed 
the House. But it was blocked by the White House. Even Mike Oxley, the 
former Republican chairman of the House committee, said recently:

       We missed a golden opportunity that would have avoided a 
     lot of the problems we are

[[Page 19117]]

     facing now if we had not had such a firm ideological position 
     at the White House and the Treasury and the Fed. What did we 
     get from the White House? We got a one-finger salute.

  His words, the chairman of the House Financial Services Committee, 
which passed the bill in a big bipartisan vote. We couldn't get it 
through here in the Senate.
  I find it incredibly difficult to see that one of our colleagues who 
is running for President, Senator McCain, now talks about all of these 
issues. He has a new ad out suggesting he is a reformer. But he was 
part of the same Bush views. He basically was in support of most 
lifting of regulations.
  So as the tsunami approached--the one that we were told, when I 
raised it a year and a half ago, they couldn't see--the administration 
was consistently on the back side of that tsunami, watching it sweep 
toward us, watching while the American people got washed under.
  We have had 8 years of our regulatory entities. Who are they? The 
Securities and Exchange Commission, the Federal Reserve, the OCC--the 
Office of the Comptroller of the Currency under the Treasury 
Department. Instead of being the cops on the beat to ensure we have a 
marketplace that is balanced--yes, we believe in a free marketplace 
and, yes, we believe in free enterprise, but an unregulated 
marketplace, as we found, is one that has excesses. The reason there 
are regulators is to make sure there is balance at the end of day. But 
when those who are supposed to be the cops on the beat--the 
regulators--hit the snooze button instead of going into action so we 
can prevent or mitigate what we are now facing, we see the 
consequences.
  Some of my colleagues on the other side of the aisle call this scheme 
``the ownership society,'' which means today: You are on your own. A 
strong belief in this scheme has led Senator McCain, in the face of 
this crisis, to repeat the same old claim yesterday that the 
fundamentals of the economy are strong. Housing foreclosures are 
defying gravity, and he continues to make statements that defy reality. 
Great financial institutions collapse, and Senator McCain has generally 
supported deregulation as the answer. That is like trying to say you 
want to take cops off the street to deal with a riot.
  I have a real concern as we now move forward. We are where we are as 
a result of economic and regulatory policies of the Bush administration 
that John McCain thinks are the sound underpinnings of a good economy 
and how we continue to move forward. It is unacceptable. That is not 
change. That will not change the course of where we are headed in this 
economy. That will not change the course of the consequences to 
millions of Americans.
  This is not just about wealthy investors. Look at the consequences. 
Look at what is happening. When Lehman Brothers has to close, not only 
are those 1,600 jobs in New Jersey at risk, but it affects all of those 
who had mortgages, all of those who used a service, all of those who 
bought a product, all of those who went out to eat in restaurants, all 
of those who, in fact, employed someone else to give them a service 
while they were working. The ripple effect is very significant.
  When people get their statements for their retirement accounts, 
whether it be a 401(k) or a thrift savings or whatever, we are going to 
see what that means to people in real life. Some are going to look and 
say: I am going to have to keep working because I cannot continue this 
way.
  I want to echo what one of my distinguished colleagues, the Senator 
from Illinois, said a few weeks ago in Colorado:

       Enough. Enough of more of the same. Enough denial about our 
     challenges. It is time to develop solutions.

  We look forward to having the Secretary of the Treasury before the 
Banking Committee this Thursday. There are very tough questions to be 
answered, not only about what has happened but what we are doing as we 
move forward.
  It is enough of more of the same. Enough denial about our challenges. 
It is time to develop solutions. I believe we have to act fast to 
provide an economic stimulus package targeted to provide relief to 
those most in need, in ways that stimulate our economy and 
infrastructure.
  Let's be clear, we have to recognize the potential for what we call 
moral hazard. We can't have everyone on Wall Street think they can go 
to any excess whatsoever and the Government will bail them out. But at 
any given time in this process we have to look at what entity creates 
the risk. We are in one of the most precarious moments in our financial 
history. What entity creates perhaps a systematic risk, something that 
creates such a widespread risk that we have to look at that as an 
individual case and determine whether there is a different governmental 
action to be recognized.
  In general, as we move forward, I certainly hope the legislation 
Senator Dodd and Senator Shelby worked on together, that went through 
six filibusters and a bunch of veto threats by the President and 
finally got through into law, is now actively pursued starting on 
October 1, which is when it goes into effect. We cannot have any of the 
Bush administration agencies and regulatory entities involved not be 
ready to go on October 1 to start providing relief on those hundreds of 
thousands of foreclosures--not only for those families but at the same 
time to try to make those performing loans so we can prop up all of 
these functioning institutions at the same time so all of us as 
Americans get some relief from an economy that is definitely headed in 
the wrong direction.
  In general, as we move forward we have to establish which failures 
are isolated and which present a systemic risk to the entire financial 
system.
  Second, it is fundamental to the health of our economy that we help 
homeowners stay in their homes. The housing market is not just a center 
of the crisis, it is also a pillar of our society. Taking steps to 
shore it up makes sense on so many levels. Especially as this school 
year gets underway, we can't sit back and watch children get thrown out 
not only from their homes but pulled from their schools.
  Third, we absolutely must hold administration officials and 
regulators accountable. I myself promise to do my part when they come 
before the Banking Committee this week and next. They better be 
prepared for some tough questions and some straight answers. I am tired 
of hearing that you could not foretell what some of us were telling you 
and others about the tsunami of foreclosures. We could have stemmed the 
tide. We could have acted in a regulatory process to make sure that was 
minimized.
  When you are asked what is the possibility of a bailout of Fannie Mae 
and Freddie Mac, I am tired of being told you can't foresee that 
happening, and just a month and a half later you have a very 
significant bailout--and you can't tell us how much the taxpayers will 
be on the hook for it.
  I am tired of being told by some of our colleagues, such as Senator 
McCain, that this economy has all the right underpinnings and all the 
right regulatory processes. That is a fantasy world. It is a world that 
ultimately Americans cannot afford. They cannot afford that type of 
thinking in terms of where we go over the next 4 years.
  I look forward to those opportunities, moving forward this week and 
the next, to try to turn the course of where we are for all Americans 
and for our Nation as a whole.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, I will be very brief.
  I commend our colleague from New Jersey, a wonderful member of the 
Senate Banking Committee who has been invaluable over the last 18 
months as we confronted a morass of problems that, as he very properly 
and accurately points out, began building up years ago.
  This did not all of a sudden happen 18 months ago. As I said so many 
times, this was not a natural disaster. This was avoidable. That is the 
great tragedy of all of this. Had we had regulators on the beat--as he 
describes it, cops on the beat--had the legislation that passed 
overwhelmingly in this

[[Page 19118]]

Congress actually been enforced with regulations promulgated dealing 
with deceptive and fraudulent practices in the residential mortgage 
market as many as 4 years ago--without a single regulation, under the 
leadership of this administration, being promulgated--we could have 
avoided the ``no doc'' loans, the liar loans, the subprime predatory 
lending, luring innocent people into dreadful situations that these 
brokers and lenders knew they could never afford to pay and then 
packaging them and branding them triple-A mortgages and selling them 
off as quickly as they wrote them to get paid off themselves and then 
pass on the responsibility to someone else. All of that history is 
replete as to how this situation unfolded. Now, of course, they want to 
avoid the blame for the consequences--this crowd does--for what 
happened.
  The Senator from New Jersey laid it out very well. The public needs 
to know that. They also need to know what we should be doing together 
to get it right. We have a lot of work in front of us to get it right, 
but in order to get it right, we also have to acknowledge what went 
wrong, and there is a long history of what went wrong here.
  I welcome the remarks of my colleague and thank him for his 
leadership and look forward to working with him.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. LEVIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LEVIN. Mr. President, now that cloture has been invoked on our 
bill, we are going to be working very hard with Senators who have 
germane amendments that have not been cleared to see if we can make 
progress on such amendments. We not only request that Senators who have 
such amendments come promptly to the floor to meet with us or our 
staffs, but we also have to recognize that any such amendment, if it is 
not in a cleared package, would require consent, given the 
parliamentary situation. We have a cleared package already, which I 
think is upwards, perhaps, of 90 amendments or so, which we would hope 
to add to before we offer it to the Senate by unanimous consent.
  After Senator Warner has an opportunity to speak, I think we will put 
in a quorum call and do some other work we need to do in order to get 
to the next stage in this bill. Hopefully, we can now move promptly on 
this bill now that cloture is invoked. I thank the Senator from 
Virginia for all he did to make that possible.
  The PRESIDING OFFICER. The Senator from Virginia is recognized.
  Mr. WARNER. Mr. President, as the distinguished chairman said, we 
have some 90 amendments now cleared. Now that the issue of going 
forward is also at this time clear, there should be an impetus to move 
forward such that the package of 90-some can grow, hopefully by 30 or 
40, before close of business tonight and possibly we can consider 
moving that as quickly as we can. We are ready to assist all Senators 
with regard to their amendments filed and, indeed, otherwise. We are 
here to try to ascertain our ability to put them in a package that is 
cleared; if not, despite the parliamentary situation, to help them 
secure a vote.
  The PRESIDING OFFICER. The Senator from Michigan is recognized.
  Mr. LEVIN. Mr. President, we will, of course, do our very best, 
working with Senators, to add to this package. There are some 
possibilities there. Again, I wish to alert Senators to the fact that 
we are in a postcloture situation, which means they must be germane 
unless there is unanimous consent to the contrary. Also, the 
parliamentary situation is such that it would require consent. But as 
the Senator from Virginia wisely points out, we are going to do our 
very best to not be limited to technicalities if we can get consent of 
the body to obviate those technicalities.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Ms. STABENOW. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mrs. McCaskill). Without objection, it is so 
ordered.


                              The Economy

  Ms. STABENOW. Madam President, I come to the floor, as many of my 
colleagues have on this side of the aisle, to express my outrage and my 
amazement at the continued comments of one of our colleagues, who is 
not here but is running for President, Senator John McCain, when even 
as Wall Street now is crumbling--we have seen the actions of the last 
couple days--he continues to say the fundamentals of the economy are 
strong. No matter what caveats he puts on it, he says the fundamentals 
of the economy are strong. That shows how out of touch he is, as is the 
President whom he works with, George Bush, and those who support this 
view that the fundamentals of the economy are strong.
  I remember a while back coming to the floor after comments were made, 
as well, about at that time the chief economic adviser for Senator 
McCain. Even though this person has now stepped down--also a former 
colleague--from that position, we know he is still very close to 
Senator McCain and is involved in his efforts and so on. That is 
Senator Phil Gramm, whom I served with on the Banking Committee. He was 
the chairman of the committee when I was first taking my place in the 
Senate. To hear Senator Phil Gramm, who worked so closely with Senator 
McCain--we assume, based on their long relationship and the positive 
things Senator McCain has said, that he would play a major role in a 
new administration under John McCain, and he has said as well, in 
addition to Senator McCain repeating that the fundamentals of the 
economy are strong, we also remember former Senator Phil Gramm's 
comment that this is just a psychological recession; it is all in our 
minds. He said it is psychological and Americans have become a nation 
of whiners--a nation of whiners.
  I am wondering if people made it up or if they were hallucinating 
when they lost their jobs this year; 605,000 Americans have lost good-
paying jobs this year, since this past January. Were they 
hallucinating? Was this a figment of their imagination? Is it a figment 
of their imagination that they cannot make their mortgage payment or 
put food on the table or pay their electric bill or go to the gas pump 
and be able to refuel with outrageously high gas prices? Of course not. 
Of course not.
  We have seen the economy unfolding in a way so that only those who 
are very wealthy, who have the ability to take their capital anywhere 
in the world, can succeed under this philosophy that has been in place, 
this Republican philosophy of no accountability, no transparency, no 
one watching in the public interest as people have made decisions that 
have undermined pensions of working people. Heaven forbid, can you 
imagine if Lehman Brothers had been managing Social Security payments 
for millions of senior citizens, which is, by the way, something else 
Senator McCain wishes to see happen, privatizing Social Security.
  What we have seen is an undermining of the fundamentals of what has 
been the strength of our economy--good jobs, not just supply, but 
supply and demand, putting money in people's pockets so they can afford 
to take care of their families and keep the economy going.
  In addition to 605,000 people who have lost their jobs since the 
beginning of this year, we had 3.5 million manufacturing jobs lost, and 
counting, since 2001, since President Bush came into office. Madam 
President, 3.5 million people were not hallucinating. It was not a 
figment of their imagination that they lost their job and that their 
families have been put into a tailspin as they are now trying to figure 
out where they go from here to try to keep some semblance of the 
American dream.
  The fundamentals of the economy are strong, says Senator John McCain. 
We

[[Page 19119]]

are, in fact, looking at an example of what it means to live under a 
philosophy of President Bush, John McCain, and the Republicans, and 
what actually happens if their philosophy comes into being, in terms of 
actions.
  For the first time, in the time I can remember, we saw from 2001 
until 18 months ago a time when the House, the Senate, and the 
Presidency were all in the hands of the same party. We had a chance to 
see what they believe in, what are their values, what are their 
philosophies.
  What we have seen is a philosophy that has raised greed to a national 
virtue, that has viewed public regulation and accountability in the 
public interest, to protect public resources or public funds, as 
something to be scoffed at and to be unwound, to deregulate, to make 
sure that the areas of Government that have responsibility, that are 
accountable for our financial systems, our monetary systems, our energy 
resources and other areas, in fact, are not held accountable.
  We have seen an administration and a Republican philosophy that 
doesn't work for the majority of Americans. It works for a few. If you 
are one of the folks who is out there trying to make sure you can make 
as much money as possible for yourself and your friends, you may have 
done pretty well. But there has been no willingness to understand the 
consequences for the majority of Americans or to accept any 
responsibility to make sure that the majority of Americans can benefit 
from the resources and opportunities and wealth of this great country.
  This culture of greed and corruption, supported by Senator McCain and 
President Bush and others for 6 years running, has led to Enron. I 
remember having people sitting in my office who had everything in their 
company's pension. They worked for Enron. They lost it all. They lost 
it all because of the schemes and the lack of accountability and 
oversight. They lost everything in their pension plans and they sat in 
my office and said: Thank goodness for Social Security because that is 
all I have left.
  The same folks who gave us the Enron debacle want to privatize Social 
Security, including John McCain. No-bid contracts, such as Halliburton 
in Iraq; continual tax cuts only for the wealthiest Americans; weak 
oversight of public industries, regulated industries, regulated in the 
public interest; a disregard for the Constitution; and now the latest 
economic crisis we see.
  Fundamentally, the question is: Who are we as a country and do we 
want to continue these failed philosophies? That is not by accident. I 
suggest this is the result of a world view, a set of values and 
philosophies that does not put the majority of Americans and our 
country first, but basically puts in place the idea that greed is good 
and you should make it while you can, and we are going to make sure we 
strip away any public protections so your ability is unfettered to do 
what you want to do for yourself as opposed to what needs to be done on 
behalf of the American people.
  If we don't have a change in this country, we are going to see the 
same failed blueprint with more of the same failed results, disastrous 
results. That is why I believe so strongly we need a change in 
direction and a change of values to put the American people first.
  Again, our colleague, Senator McCain, who has said that the 
fundamentals of the economy are strong, has worked to deregulate 
markets, has called himself a deregulator. Unfortunately, it is those 
policies that have gotten us to where we are today.
  This is the most serious financial crisis since the Great Depression. 
And what is the plan at this point? To study the problem. Senator 
McCain has said today we should study the problem.
  We don't need another commission. What we need are people who will 
make sure that the accountability, the oversight, the power that is 
here to stop price gouging, to bring oversight to what is going on is 
actually used. It hasn't been used under this administration. For 6 of 
the last 7\1/2\ years there was every effort, in fact, to pull back on 
who was put on boards and commissions, the regulators, the overseers. 
They essentially were made up of people who didn't believe in the 
mission, who didn't believe they were there for the public interest.
  Right now we have a situation where there are 84,000 Americans who 
lost their jobs last month, 90,000 Americans who lost their homes last 
month. They don't want another study. They don't want another 
commission. They want leaders who get it. They want leaders who 
understand their role in this Government of ours, this public trust we 
have, not on behalf of just ourselves and our friends but on behalf of 
everybody in this country, to make sure the rules are fair, that they 
are followed, and that everybody has a chance to make it. That is what 
it is supposed to be about.
  I am also reminded that Senator McCain has chaired the Commerce 
Committee and oversaw a massive deregulation scheme that gutted our 
oversight of these markets. Where is the accountability? Instead of 
protecting consumers and preventing abuse, the special interests ruled. 
And Chairman McCain oversaw that effort.
  The same economic philosophy of the Bush administration joined by 
Senator McCain for the last 8 years has been to give more and more to 
those who have the most, ignore the ability of others to make sure they 
can have what they have earned--their job, their pension, that Social 
Security is strong, they can afford to put food on the table and pay 
for the gas and be able to have what we all expect as Americans that 
will be available to us if we work hard and follow the rules.
  We have had the same philosophy in place, the same philosophy that 
has brought us 8 straight months of job loss, the same economic 
philosophy that has left incomes stagnant while families find 
themselves spending twice as much on the basics of their life.
  Real household income is down. Imagine, we were lower in 2007 than in 
the year 2000. Incomes were lower in 2007 than they were in 2000. We 
are in a generation of having real concerns, and rightly so, that our 
children's lives and economic circumstances will not be as good as our 
own.
  The same philosophy has led to gasoline inching upwards to $5 a 
gallon, and the same economic philosophy that leaves 47 million people 
without health insurance, leaving them worried about whether their 
children will be cared for when they are sick. The same philosophy has 
been in place since 2001 with this President with 6 years of no balance 
and accountability, just one world view, 18 months of our coming in now 
and slowing the trend down, working hard to bring in some 
accountability, even though there are unprecedented Republican 
filibusters to stop us.
  But we have seen a philosophy that has failed. We need to be taking 
actions to stop the fraudulent, risky, and abusive lending practices, 
and that has been proposed over and over again. I commend Chairman Dodd 
of the Banking Committee and Chairman Baucus of the Finance Committee 
and all those who have brought forward proposals that will make a 
difference.
  We need to modernize the rules for a 21st century marketplace that 
will protect American investors and consumers. We have been proposing 
those changes. We also know we have in place a series of mechanisms 
that would hold special interests accountable and be able to make sure 
that people's incomes and pensions and the economy in general are 
protected. We just haven't used it.
  I stand with another colleague of ours, Senator Barack Obama, who has 
said if you borrow from the Government, you should be regulated. There 
should be public accountability, transparency, if you are borrowing 
from the Government. If we want to stop abuses of the public trust, we 
need to have openness, we need to know what is going on in the markets, 
we need to know what is going on. If we want to protect the American 
people, we need to regulate dangerous practices, such as predatory 
lending.
  We know there is so much that we need to do right now. First is to 
address the hole we are in economically, and the next is to stop 
digging, stop

[[Page 19120]]

making it worse. Stop tax breaks for those who have already done so 
well, even in these terrible circumstances. We need to make sure we are 
focusing on those who have worked so hard all their lives, and their 
families who are looking for the opportunity to be successful in 
America. They want to know they are going to have a fair chance to do 
that, that the rules are going to be fair, they are not going to be 
stacked against them and in the interest of a special few, which is 
what has been happening since 2001 over and over.
  Let me go back to my original comment and look at the 3.5 million 
manufacturing jobs lost since 2001. Our colleague, John McCain, says 
the fundamentals of the economy are strong. I beg to differ. The 
fundamentals of the economy for Americans working hard every day making 
a paycheck, trying to make ends meet, worrying about whether they are 
going to have a job, health care, send the kids to college, put food on 
the table, pay for the gas and all the other things, for them the 
economy is not strong.
  People are working too hard, making too little, and paying too much 
every day, and we do not need another study or another commission. We 
need leaders who get it, who have the right values, who understand, who 
have the intestinal fortitude to stand up and fight for the American 
people, the middle-class families who are sick and tired of what has 
been going on.
  I can tell you, coming from the great State of Michigan, the people 
of Michigan have had enough. We have had enough. We can't take more of 
this. We can't take 4 more years of this. We can't take 4 more days of 
this. We have had enough. But to change it, I believe strongly that we 
need to understand this is not just an accident that we are where we 
are. It is a conscious philosophy. It is actions and inactions that 
have been taken by those in charge--by this President, supported by 
Senator John McCain, supported by Republicans in the House and the 
Senate--that have created the situation that has fostered the 
circumstances in which we find ourselves.
  We can't do this anymore. We need to make sure government works for 
real people, real people who have had enough. I can't say it more 
strongly: We have to stop traveling down the road we are on, following 
this philosophy that has run us into extremely dangerous economic 
territory.
  Mr. President, I yield the floor, and I suggest the absence of a 
quorum.
  The PRESIDING OFFICER (Mr. Menendez). The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. TESTER. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. TESTER. Mr. President, are we on the Defense bill or in morning 
business?
  The PRESIDING OFFICER. We are on the Department of Defense bill under 
cloture.
  Mr. TESTER. Mr. President, I want to take a moment to thank Chairman 
Levin and Senator Warner for their willingness to work with me on the 
amendment that has been accepted into the managers' package. This 
amendment provides some additional comfort to family members whose 
loved one is killed while serving in the military by allowing the 
Defense Department to pay for travel to a memorial service honoring a 
servicemember killed on Active Duty.
  Currently, the law allows for the services to provide transportation 
of family members to a burial service of a servicemember killed on 
Active Duty. Although the law makes this voluntary, the services, much 
to their credit, all make this travel available to the families. 
However, current law does not allow travel to memorial services. With 
many families split up over long distances, this can be particularly 
painful when a parent or sibling of one of our fallen heroes cannot 
afford to travel to a memorial service held by a unit or even other 
members of the family. Although some charity groups have been able to 
help these families attend memorial services for their fallen loved 
ones, when servicemembers die in service to their country, it is this 
country's moral obligation to help their families in every possible 
way.
  This amendment would allow the Secretary of each service to allow 
family members of fallen heroes to attend one memorial service as a way 
of helping to honor those who give the ultimate sacrifice--their 
lives--to our Nation. It would be voluntary. The services do not have 
to participate, but at least they would have the option, which is 
something they currently do not have.
  Earlier this year, a constituent of mine suffered the loss of his 
son. He died in a hospital in Canada after being injured in Iraq. He 
was on a transport flight from Germany to Walter Reed when his 
condition worsened and the plane diverted to Halifax. When my 
constituent's ex-wife sought to have a memorial service for their son 
in Phoenix prior to the burial at Arlington National Cemetery, the Army 
had to tell the man, whose son had given his life for our country, that 
the country could not help him attend that memorial service.
  I think we can do better. I think we should do better. This amendment 
will allow us to do better.
  When a soldier or marine or airman goes to war, the whole family goes 
to war. When a servicemember gives the ultimate sacrifice and is killed 
in service to our Nation, we need to do the right thing for the family. 
That is why I have offered this amendment. Again, I thank Chairman 
Levin and Senator Warner for working together to help get this 
amendment into the managers' package.
  Mr. President, I yield the floor, and I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. SANDERS. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SANDERS. Mr. President, I ask to be able to speak as in morning 
business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                              The Economy

  Mr. SANDERS. Mr. President, this week we have learned that Lehman 
Brothers, one of the oldest financial institutions in our country, an 
investment bank that has survived two world wars and a Great 
Depression, has proven that even it could not survive 8 long years of 
deregulation and lax oversight by the administration of George W. Bush. 
It is going bankrupt.
  Yesterday we also learned that the beleaguered Merrill Lynch, the 
largest brokerage firm in this country, will be bought out by Bank of 
America, the largest financial depository institution in this country. 
Now we are also learning that AIG, the largest insurance company in the 
United States, and Washington Mutual, the largest savings and loan 
association in this country, are also in deep financial trouble. The 
list of troubled banks that the FDIC maintains is growing larger and 
larger.
  In addition, last week, to avert a complete mortgage meltdown, we saw 
the Bush administration bail out Fannie Mae and Freddie Mac, putting 
tens, if not hundreds, of billions of dollars of taxpayer dollars at 
risk. Earlier this year, we saw the Federal Reserve orchestrate the 
takeover of Bear Stearns, a deal backed by $30 billion in taxpayer 
dollars.
  At the same time, Americans are still paying outrageously high prices 
at the gas pump. Prices are still over $3.50 a gallon, even though the 
price of oil is now down to almost $90 a barrel. Every little hiccup to 
send gas prices up or down with virtually no connection to real supply 
and demand indicators.
  Up to this point, the Republicans in the Senate have prevented us 
from taking any real action to rein in those volatile energy markets, 
so oil could be down this week, but any kind of rumor or instability, 
whether man made or natural, could send those same prices soaring 
again.
  I think it is important the American people understand why we got to 
where

[[Page 19121]]

we are today; why we are in a situation where millions of workers are 
fearful about being able to heat their homes in the wintertime while 
workers all over this country are finding it very difficult to fill 
their gas tanks. Is what occurred simply bad luck? Are we at the bottom 
of the so-called business cycle? How do these happenings occur to what 
was once the strongest economy in the world with the greatest middle 
class?
  If we take a deep look at what is going on in terms of the financial 
crisis we are suffering through today and the volatile energy prices we 
are suffering through today, we can understand that both are the result 
of deliberate policy decisions made by the Congress and the 
administrative negligence on the part of the Bush administration. These 
deliberate policies were the result, to a significant degree, of the 
power and influence of corporate lobbyists--who also make huge campaign 
contributions--representing some of the most powerful special interests 
in the world, whether it is big oil, big coal or whether it is the 
largest financial institutions in the world.
  What these lobbyists fought for and secured was selling deregulation 
snake oil, deregulation snake oil backed with millions in campaign 
contributions. That is what I think is the overlying issue as we look 
at the financial crisis facing Wall Street and the soaring and volatile 
prices in terms of oil.
  All too often when bad things happen because of failures here in 
Washington, both parties generically blame it on the other and no one 
stands up and tries to point out what, where, why and, most 
importantly, who is behind these bad policies. As an Independent, I 
think that breeds a cynicism and an anger and a frustration on the part 
of the American people about the political system of our country.
  Well, in this case, I think the American people deserve a little more 
of an explanation. It has been their hard-earned dollars that have been 
needlessly spent on $4 a gallon gasoline. It is their retirement 
savings and, my God, I wonder all over this country the kind of 
frustration that exists today with the volatility in the stock market 
going down 500 points yesterday and what people are worried about, 
whether their 401(k)s are going to be worth very much in the future. 
These are very frustrating times for the American people.
  In the case of both of these current crises, the financial services 
and energy crisis, one of the major actors and perhaps the main actor 
in creating what we have seen today is a former Senator from Texas 
named Phil Gramm. In terms of our financial crisis, one of the reasons 
we are in the mess we are in today is because of the enactment of the 
Gramm-Leach-Bliley Act in 1999. As you may recall, this legislation was 
responsible for deregulating the financial services industry by 
completely repealing the Glass-Steagall Act.
  Now, I was a Member in the House of Representatives at the time. I 
was a member of the House Banking Committee when this legislation was 
being debated. I remember that debate very well because I was in the 
middle of it. Let me tell you, I do not mean to be patting myself on 
the back, but I think it is important to take a little bit of a look at 
recent history.
  This is 1999 during the debate. This is what I said as a member of 
the House Banking Committee:

       I believe this legislation will do more harm than good. It 
     will lead to fewer banks and financial service providers, 
     increased charges and fees for individuals, consumers and 
     small businesses, diminished credit for rural America, and 
     taxpayer exposure to potential losses should a financial 
     conglomerate fail. It will lead to more mega mergers and a 
     small number of corporations dominating the financial service 
     industry and a further concentration of economic power in our 
     country.

  Unfortunately, that is exactly what is happening today, and I would 
much prefer to have been wrong than right. But on the other hand, 
former Senator Phil Gramm--who I should mention to you has been Senator 
McCain's top economic adviser--at that time had a very different 
opinion of the legislation which bears his name. Senator Gramm at that 
time said something very interesting about that piece of legislation. 
This is what he said:

       Ultimately the final judge of the bill is history. 
     Ultimately, as you look at the bill, you have to ask 
     yourself, will people in the future be trying to repeal it? I 
     think the answer will be no.

  Well, put me down as a Senator who believes we need to repeal Gramm-
Leach-Bliley. Put me down as a Senator who believes we need to restore 
strong Government oversight of the banking industry. Put me down as 
someone who believes we need to have firewalls in the financial 
services sector so that we do not have the domino effect we are seeing 
right now.
  There was a reason Congress enacted reforms of the banking industry 
in the 1930s, and that was because we did not want to repeat the 
mistakes that caused the Great Depression. Failing to have learned from 
our mistakes, it looks as if we are doomed to repeat them.
  The lesson here is that left to their own devices, company executives 
will make poor decisions and put their investors' capital at risk. The 
important lesson here is that poorly regulated financial markets 
invariably endanger the health of the entire economy and, of course, as 
this world becomes more and more interlocked, in fact, the economy of 
the entire world.
  In that context, the extreme economic ideology of people such as 
former Senator Gramm, and for that matter Senator McCain, says that the 
people of this country should simply stand back and allow executives in 
Wall Street boardrooms to make decisions with no public oversight that 
have the potential of wrecking our economy. In other words, deregulate 
them, let them do whatever they want in order to improve their bottom 
line, and the Government does not have to watch to see what the 
implications of their decisions are for our country or for our 
taxpayers.
  I disagree with Senator Gramm's perspective. People who want to 
gamble their own money are certainly welcome to do that. But when your 
actions have the ability to dry up credit for businesses all over our 
country, when your actions can dry up mortgages for people who 
desperately want to buy a home or stay in their home, when your actions 
depress the value of Americans' savings, we need public oversight, and 
it should be strong oversight with the primary mission being to protect 
the American public from the reckless greed that has brought us to 
where we are today.
  In former Senator Gramm's world view, when it comes to protecting the 
American consumer and the safety and soundness of our financial 
institutions, Government is not the answer, Government is the enemy, 
Government is terrible. But when banks fail, all of a sudden, guess 
what happens. The Government has no choice but to intervene to prevent 
the entire economy from collapsing. The Gramm-McCain version is one 
where profits are private, going to the very wealthiest people in this 
country, but risk is public, being assumed, by and large, by the 
middle-class and working people of this country. It is socialism for 
the very rich, and free enterprise for everyone else.
  Unfortunately, former Senator Gramm was not satisfied by having set 
up the dominos in 1999 that made our current financial crisis possible. 
In 2000, he decided his loot-and-burn economics had to be applied to 
the energy markets as well now. This is an achievement. First you go 
after deregulating the financial markets, and then you move to energy. 
And out of his efforts in energy, of course, the so-called Enron 
loophole was born. Senator Gramm, who was then Chairman of the Banking 
Committee, was one, if not the main proponent of the provision 
deregulating the electronic energy market that we now know as the Enron 
loophole.
  Was this done through a deliberative process with debate and 
hearings? Actually, no, it was not. This very important provision was 
slipped into a massive unrelated bill with no discussion and no 
hearings, and the American people today are paying the price for that.
  The Federal agency that oversees those energy markets was the 
Commodity Futures Trading Commission,

[[Page 19122]]

the CFTC. Conveniently, the head of that agency at the time was a Wendy 
Gramm. Yes, you guessed it, it was his wife. And Wendy Gramm had become 
head of the CFTC after being on the board of directors of, well, you 
guessed it, the Enron Corporation. Even Hollywood could not come up 
with a plot quite so transparent.
  The result of this deregulation of the energy markets has, according 
to many experts who have testified before Congress, allowed speculators 
on unregulated markets to artificially drive the cost of a barrel of 
oil up to over $147 a barrel.
  My colleagues, including Senator Dorgan and Senator Cantwell and many 
others, have laid out the way that speculators have driven up oil 
prises in many well-researched presentations here on the floor and a 
number of Senate committees. I applaud them for their leadership. But 
all of this speculation and all of the millions and billions of dollars 
that Americans have spent on exorbitantly priced gasoline would not 
have happened if it had not been for the efforts of Senator Gramm 
pushing through the so-called Enron loophole.
  As central as Senator Gramm was in creating the financing and energy 
disasters we are currently facing, he was aided and abetted by the Bush 
administration's willingness to simply look the other way. Even with 
all of the harm that has been done to the economy, President Bush still 
refuses to acknowledge it. One wonders what world he is living in.
  And, shockingly, Senator McCain is singing from the same song sheet. 
On September 15, Senator McCain said:

       The fundamentals of our economy are strong.

  Does that sound familiar? Well, it should. Since 2001, President Bush 
and members of his administration have repeatedly described the economy 
as strong and getting stronger: Thriving, robust, solid, booming, 
healthy, powerful, fantastic, exciting, amazing, the envy of the world.
  Those are the adjectives used by the President and members of his 
administration over the last 8 years. What economy are they looking at? 
The fact is, when it comes to the economy, Senator McCain and President 
Bush do not get it. Is it a surprise to anyone that Senator Gramm, who, 
until fairly recently, was Senator McCain's major economic adviser on 
his campaign, described Americans as ``a nation of whiners'' who are 
suffering through a ``mental recession''?
  Was it a surprise? What is surprising is that Senator McCain is 
trying to pass himself off as a maverick when he looks to the same 
people, people such as Senator Gramm, who laid the groundwork for our 
current economic problems.
  While Senator McCain and President Bush think the fundamentals of our 
economy are strong, while they talk about how robust things are, the 
reality is the middle class in this country is collapsing. And if we do 
not make the kind of bold changes we need to make, for the first time 
in the modern history of America our children will have a lower 
standard of living than we do.
  We are looking at the American dream as an American nightmare. We are 
moving in the wrong direction economically as well as in so many other 
areas.
  Since President Bush has been in office, nearly 6 million Americans 
have slipped out of the middle class and into poverty. How do you think 
the fundamentals are strong when 6 million more Americans enter the 
ranks of the poor? Since Bush has been in office, over 7 million 
Americans have lost their health insurance. Now well over 46 million 
Americans are without any health insurance at all, and even more are 
underinsured. Does that sound like the fundamentals of the economy are 
strong?
  Since President Bush has been in office, over 3 million manufacturing 
jobs have been lost, total consumer debt has more than doubled, median 
income for working-age Americans has gone down over $2,000 after 
adjusting for inflation. They do not get or do not care that prices on 
almost everything we consume are going up and up and up.
  Today the typical American family is paying over $1,700 more on their 
mortgages, $2,100 more for gasoline, $1,500 more for childcare, $1,000 
more for a college education, $350 more on their health insurance, and 
$200 a year more for food than before President Bush was in office.
  In addition, home foreclosures are the highest on record, turning the 
American dream of home ownership into the American nightmare. The 
unemployment rate has skyrocketed. Since January of this year, we have 
lost over 600,000 jobs. Adding insult to injury, the national debt has 
increased by over $3 trillion, and we are spending $10 billion a month 
on the war in Iraq, making it harder and harder to do anything to help 
the struggling middle class.
  Is it any wonder that Rick Davis, Senator McCain's campaign manager, 
recently said: ``This election is not about issues''? If my economic 
policies were to follow President Bush's and the economy was in a state 
of near recession and unemployment was up and median family income went 
down and more people were losing health insurance and more and more 
people were in debt, the foreclosure rate at the highest rate in 
American history, if all those things were happening, I would certainly 
also run on a campaign not having anything to do with issues 
whatsoever. That is what I would do. I would run away from all of those 
issues. That is certainly John McCain's strategy. Who can blame him?
  John McCain claims to be offering change. But on issue after issue, 
he is offering more of the same--more tax breaks for the very rich, 
more unfettered free-trade agreements that will cost our country 
millions of good-paying manufacturing jobs, more tax breaks to big oil 
companies ripping off the American consumer at the gas pump; in other 
words, more of George Bush's failed policies that have led to a 
collapse of the middle class, an increase in poverty, and a wider gap 
between the very rich and everyone else.
  John McCain and George Bush may be right in one respect: If they are 
talking about the wealthiest people and the most profitable 
corporations, the economy is fundamentally strong. Things could not be 
better for those people, that small segment of our society. In fact, 
one can make the case--and economists have--that the wealthiest people 
have not had it so good since the robber baron days of the 1920s.
  Right now--this is really quite an astounding fact--the top one-tenth 
of 1 percent of income earners earn more income than the bottom 50 
percent. That gap between the people on top, who are busy trying to 
build recordbreaking yachts and all kinds of homes, busy buying jewelry 
that is unbelievably expensive--one-tenth of 1 percent earn more income 
than the bottom 50 percent--that gap is growing wider. Also the top 1 
percent own more wealth than the bottom 90 percent. We as a nation have 
the dubious distinction of having the most unfair distribution of 
wealth and income of any major country on Earth.
  The wealthiest 400 people have not only seen their incomes double, 
their net worth has increased by $640 billion since President Bush has 
been in office. Can we believe that? The wealthiest 400 Americans have 
seen their net worth increase by $640 billion since George Bush has 
been in office. Today, the richest 400 Americans are now worth over 
$1.5 trillion. At the same time, we have the highest rate of childhood 
poverty; 20 percent of our children live in poverty. We have working 
families lining up at food banks because they don't earn enough to pay 
for food.
  Apparently, all of that is not good enough for Senator McCain and for 
President Bush. They insist that those tax breaks be made permanent. In 
George Bush's and John McCain's world, those are the Americans who are 
struggling. The wealthiest 400 Americans just can't make it on $214 
million a year. It must be pretty hard to scrape through and get the 
food and shelter a family needs, so obviously those are the guys who 
need a tax break.
  We have had almost 8 years of President Bush's economic policies. 
They follow, of course, 8 years of the policies of President Clinton. I 
think it is important to say a word to compare what

[[Page 19123]]

happened during those two administrations.
  I happened, as a Member of the House, to have disagreed with 
President Clinton on a number of issues. But I think when we look at 
his overall economic record and contrast it to the overall economic 
record of President Bush and the policies Senator McCain would like to 
follow, the record speaks for itself.
  Take a look at job creation, how many new jobs have been created. 
Under President Clinton, almost 23 million new jobs were created. That 
is a pretty good record. Did every one of those jobs pay the kind of 
wages we would like? No. But nonetheless, almost 23 million new jobs 
were created in Clinton's 8-year term. Under President Bush, less than 
6 million jobs have been created.
  Under President Clinton, more than 6 million Americans were lifted 
out of poverty and into the middle class. Under President Bush, the 
exact opposite has occurred. Nearly 6 million people who were in the 
middle class have been forced into poverty. Under President Clinton, 
median family income went up by nearly $6,000. That is a lot of money. 
Under President Bush, median family income is going down.
  The Republican Party for years has told us they are the party of 
fiscal responsibility above all. Yet, under President Bush, the 
national debt has increased by more than $3 trillion. Under President 
Clinton, we had Federal surpluses as far as the eye could see. Under 
President Bush, we have had Federal deficits as far as the eye can see.
  There is a clear choice to be made this year. That choice is, does 
Government work for all of the people, for the middle class, for 
working families, for people who are struggling, or do we continue to 
develop policies which represent the people on the top who, in fact, 
have never had it so good since the 1920s?
  The future of our country is at stake. I personally believe we cannot 
afford 4 more years of President Bush's policies.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Salazar). The Senator from North Dakota.
  Mr. DORGAN. Mr. President, the wreckage all of us observed yesterday 
and the consequences of a 504 point drop in the stock market and the 
concern in this country about its economic future can be traced to a 
lot of things. I wish to talk about some of them for a few minutes. I 
want to show a couple charts that describe some of the origin of what 
has weakened this economy, and then I will talk about how this all 
happened.
  Almost everyone in this country in recent years has seen ads like 
this from Countrywide, the biggest mortgage banker in the country. 
Countrywide had an advertisement that said: Do you have less than 
perfect credit? Do you have late mortgage payments? Have you been 
denied by other lenders? Call us.
  Countrywide Bank, the biggest bank of its type in America, saying, 
essentially: You have bad credit? You need money? Call us. Most people 
would probably hear that, as I did over the years, and think: How can 
they do that? How does that work. You advertise that if people have bad 
credit, they ought to come to you.
  Here is Millenia Mortgage. They said:

       Twelve months, no mortgage payment. That's right. We will 
     give you the money to make your first 12 payments if you call 
     in the next 7 days. We pay it for you. Our loan program may 
     reduce your current monthly payment by as much as 50 percent 
     and allow you no payments for the first 12 months. Call us 
     today.

  Here is a mortgage company saying: Come on over here, get a mortgage 
from us. We will give you a home mortgage. You don't even have to make 
the first 12 months' payment. We will make it for you. They don't, of 
course, say here that what they will do is stick that on the back of 
the mortgage and add interest to it. But that is what they are 
advertising.
  Here is Zoom Credit. All of these are television, radio ads. They 
said:

       Credit approval is just seconds away. Get on the fast track 
     at Zoom Credit. At the speed of light, Zoom Credit will 
     preapprove you for a car loan, a home loan or a credit card. 
     Even if your credit's in the tank, Zoom Credit's like money 
     in the bank. Zoom Credit specializes in credit repair and 
     debt consolidation too. Bankruptcy, slow credit, no credit--
     who cares?

  That is what Zoom Credit was saying to customers. You got bad credit, 
you have been bankrupt, who cares? Come and get a loan from us. They 
say: We don't care if you have bad credit.
  In fact, here is what they also say: Get a loan from us. We will give 
you what is called a ``low doc'' loan or a ``no doc'' loan. If you have 
bad credit, we will give you a ``low doc,'' which means we will give 
you a home mortgage and you don't even have to document your income for 
us. You don't have to prove your income to us. That is called no 
documentation. Bad credit, come and get a loan from us. No 
documentation, that is OK. It is unbelievable and unbelievably 
ignorant.
  I pulled this off the Internet. Perfect credit not required. No-
income-verification loans. Pretty interesting, isn't it? Come and get a 
mortgage from this company. You don't have to verify your income, and 
you don't need perfect credit. Here is a company on the Internet that 
wants to give you a home loan. It says: You can get 5 years' fixed 
payments with a 1.25-percent interest rate. That is interesting, isn't 
it? Of course, it is a sham, the 1.25-percent interest rate you get to 
pay. Again, bad credit? Come to us, we will give you a mortgage. You 
don't want to document your income, that is OK. Bad credit and no 
documentation. And by the way, we will give you a 1.25-percent interest 
rate.
  All of us, when we were kids, went to western movies from time to 
time. In virtually every movie, they had the guy who came into town 
with a couple old mules driving a slow wagon. He wore a silk shirt and 
striped pants, and he was selling snake oil. It cured everything from 
hiccups to the gout. He was selling snake oil from the back of his 
wagon. This is not in an old western. These are companies on the 
Internet, on television, on radio.
  I go back to Countrywide, the largest mortgage broker. Do you have 
less than perfect credit? Come to us. We want to invite you, get a 
mortgage from us. That is what happened.
  Now the stock market collapses on Monday. What is the relationship? 
The relationship is that our economy is reeling from the wreckage of 
the subprime loan scandal. What does that mean, subprime loans? All of 
this starts with some brokers out there who are selling mortgages. Then 
they sell to it a mortgage bank, and then the mortgage bank securitizes 
it and sells it up to a hedge fund, and the hedge fund probably sells 
to it an investment bank. What they do is, they loan money to people 
with bad credit and provide no documentation or they loan money to 
people with good credit and give them teaser rates with resets and 
prepayment penalties that the people can't possibly pay 3 years later 
and set them up for failure and then sell these loans in a security. As 
they used to pack sawdust in sausage, they pack bad loans with good 
loans. They slice them and dice them and sell them up the stream.
  So now you have loans, a cold call to a person who had a home by a 
broker saying: You are paying 6 percent interest rate on your home 
mortgage? We will give you one for 1.25 percent. We will dramatically 
reduce your home mortgage monthly payment. And by the way, we are not 
going to emphasize this--in fact, we may just mention it in a whisper--
ultimately, it is going to reset, and it will be 10 percent in 3 years. 
And by the way, you don't have to document your income. At any rate, 
you can't pay with your income at a 10-percent rate in 3 years, but it 
doesn't matter, you can sell that home and flip it between now and 
then. Don't worry about it. That is the kind of thing that was going on 
with an unbelievable amount of greed--with the brokers, with the 
mortgage companies, with the hedge funds, the investment banks, all 
grunting and snorting and shoving in the hog trough here. They were 
making massive amounts of money, and the whole thing collapsed, just 
collapsed.
  Now, how does it happen that it helps cause a bankruptcy in France or 
a

[[Page 19124]]

bankruptcy in Italy or a 504-point drop of the stock market here in the 
United States on Monday and so many other failures? Bear Stearns 
doesn't exist anymore, Lehman Brothers is going bankrupt. I could go 
through them all. How is it that all of this is happening, all of this 
carnage and wreckage as a result of this greed?
  Let me go back just a bit. Two things, it seems to me. No. 1, there 
are a bunch of folks who were fast talkers who decided they were going 
to sell Congress on financial modernization. We have learned this 
lesson. This lesson existed in the 1930s. In the Roaring Twenties, it 
was ``Katy, bar the door,'' anything goes, and the economy collapsed 
into a Great Depression. Franklin Delano Roosevelt, with the New Deal, 
said: This isn't going to happen again. Banks were failing. Banks were 
closing. Depositors couldn't get their money. Franklin Delano Roosevelt 
and the New Deal repaired that economy by saying: We are going to 
separate commercial banking institutions from other risky enterprises. 
We are not going to let banks get engaged in real estate and securities 
and insurance. We are not going to do that because this is the very 
perception of safety and soundness. Safety and soundness determines 
whether a bank is safe and sound. If you injure that perception by 
fusing risky enterprises--real estate, for example, and securities 
underwriting--with traditional banking issues, you do a great 
disservice to this country's economy. So they were separated with the 
Glass-Steagall Act, for example.
  In 1999, the Financial Modernization Act was passed. I was one of 
eight Members of the U.S. Senate to vote against it because it repealed 
the Glass-Steagall Act. Oh, they all promised firewalls. It didn't mean 
a thing. I warned then, and I warn again now: These are the significant 
consequences of forgetting the lessons of the 1930s which are going to 
haunt us, and they are haunting us.
  So what happens is they not only passed a Financial Modernization Act 
which repeals Glass-Steagall and the very things we put in place to 
protect against this sort of thing--the mingling of risky enterprises 
with banking--they not only do that, but George W. Bush wins the 
Presidency and he comes to town and he appoints regulators--i.e., 
Harvey Pitt to run the Securities and Exchange Commission, just as an 
example. What is the first thing he says when he gets to town? He says: 
You know something, you should understand that the Securities and 
Exchange Commission is a business-friendly place now. Right. Well, that 
is what happened in virtually every area of regulation. People were 
appointed who didn't have the foggiest interest in regulating. The 
whole mantra was to deregulate everything: Don't look, don't watch, 
don't care. As a result, in virtually every single area, we saw this 
kind of greed and unbelievable activity develop across this country.
  So now we went through this period with a housing bubble built up 
with these subprime mortgages, and then we saw the whole thing go sour 
and people wonder why. It is not surprising at all that it went sour. 
What is surprising to me is how so many interests got sucked in by this 
and how unbelievably damaging it has been to the American economy.
  How could they have missed what was going to happen here? We had some 
of the biggest investment banks in the world that were buying 
securities that had bad value mixed in with securities, and they didn't 
know it, they say. Where is the due diligence? How on Earth could that 
have happened?
  Now, there is a kind of a no-fault capitalism and no-fault politics 
going on around here. No-fault capitalism--all of those folks who said: 
Get Government off my back. We want to run these big enterprises the 
way we want to run them. Then they run them into the ground, and they 
need to have the Federal Reserve Board open--for the first time in 
their history--a window for direct lending to investment banks just as 
they do to regulated banks. Why? Because they were worried they were 
too big to fail. If an enterprise such as that is too big to fail, why 
is it too small to regulate? Why is it that all of the regulators sat 
on the sidelines while something that most people don't even know 
about--$40 trillion in value of credit default swaps were out there, 
and much of it is as a result of dramatic borrowing and leverage. It is 
a house of cards with a big wind coming, and that wind can play havoc 
with this financial house of cards.
  So the no-fault capitalism portion of it is that they do what they 
want to do--make a lot of money. We all know what the compensation has 
been: unbelievable money for those at the top who are running these 
organizations. Then it takes a nosedive, and a bunch of our bankers and 
others convene in New York and they just say: All right, who are we 
going to save, who are we going to prop up, or who are we going to give 
a direct loan to? That is no-fault capitalism. No-fault politics: It is 
all of those who were running around here thumbing their suspenders 
saying: Well, we have to deregulate, we have to do this and that. Let's 
ignore the lessons of the 1930s. Let's get rid of Glass-Steagall. Let's 
let commercial banks get engaged in securities underwriting and other 
risky activities. All of those folks are now saying: Well, that is not 
what caused this problem. In fact, they are still strutting their stuff 
saying the economy is strong.
  The economy is not strong. The economy is dramatically weakened as a 
result of what these folks did to the economy and as a result of this 
administration's decision that regulation is a four-letter word. I have 
news for them: Regulation has more letters than four, and regulation is 
essential to the functioning of this kind of Government.
  I think free markets are very important. I believe in capitalism and 
the free market system. I don't know of a better allocator of goods and 
services than the marketplace, but I also understand the marketplace 
needs a regulator. There need to be regulators who make certain that 
when the marketplace gets out of whack, somebody calls it back in. 
Regulators are like referees, except these regulators in this 
administration had no striped shirts and no whistles to call fouls 
because they didn't think anything represented a foul. It was ``let the 
buyer beware.''
  Now, what happens next? Well, regrettably, none of us know. We don't 
know what will happen after yesterday. We don't know what will happen 
the rest of the week. We don't know what else is there. Some say the 
biggest reset of mortgages will occur in the fourth quarter of this 
year, which is very soon now. We don't know the consequences of all of 
this because this was a spectacular, unbelievable trail of greed that, 
in my judgment, has dramatically injured this country.
  What is important now is for us to try to create some sort of a net 
to catch this economy and then put it back on track with really 
effective regulation--and decide that we are going to have sound 
business principles and we are going to relearn the lessons of the 
past. We shouldn't have to relearn them, but we will. We understood the 
lesson from the 1930s. We taught it in our colleges, about the 
fundamentally unsafe condition of merging risk with banks. Yet, I can 
recall when it was sold to the Congress as financial modernization. It 
was the big shots getting their way, and we all pay a dramatic penalty 
for it.
  ``The economy is strong,'' my colleagues have said. Senator McCain--
and I wouldn't normally mention him on the floor of the Senate. He is 
out there running for the Presidency. But since Senator McCain grabbed 
pictures of me and several others and put them in television 
commercials to suggest, here is what is wrong, perhaps maybe it is OK 
for us to say what is wrong are those who were such cheerleaders for 
taking apart that which was to protect this country in the first 
place--Glass-Steagall and others. They knew better--should have known 
better--and what is wrong is those who aided and abetted and carried 
the wood in the last 7 years to say to regulators: Don't bother 
regulating. Get your paycheck. We will give you a paycheck. Just be 
friendly. Don't regulate. Don't look. Those who did that did a great 
disservice to this country, in my judgment.

[[Page 19125]]

  Now, I recognize this is not a political system in which one side is 
always all right and one side is always all wrong. That is not the 
case. It just is not. Both political parties for a long time have 
contributed much to this country. But I would say this: We have been 
through a period that I think is devastating to this country's economic 
future. A lot hangs in the balance.
  I think if the American people want more of the same, then they can 
sign up for that. They can say: Well, we kind of like what is going on 
here. We like the notion that regulators were told not to regulate and 
complied aggressively. We like the notion that we have nearly 700,000 
people who have lost their jobs just since the first of this year. We 
think that has gone really well. We like the fact that the price of oil 
doubled from July of last year to July of this year. We think that is 
just fine. If people really believe that--we like all of these things--
there is certainly a way to continue that, and that is just to say to 
all those who are running in support of President Bush's policies: Boy, 
let's just keep doing it. But it seems to me--the old law says when you 
are in a hole, stop digging. It seems to me the American people 
understand that very well.
  It is time now--long past the time--for this country to get back to 
fundamentals and for the American people to insist from their 
Government the kind of responsibility that Government should manifest 
in terms of its responsibility to protect the marketplace, to protect 
the American taxpayer, to try to do things that help all Americans, 
help lift up all Americans.
  My colleague described a bit ago the circumstance in this economy 
where the wealthy have gotten very wealthy--much wealthier--and then 
the folks in the rest of the population are struggling to figure out: 
How on Earth can I keep my job. We have all of these folks sending 
these jobs to Asia. How do I keep my job? Or if I keep my job, why is 
it that they withdraw my health insurance and no longer provide health 
insurance? Why do I not have a retirement program anymore? That is what 
working people face every single day. They get out of bed, many of them 
work two jobs, they work hard, trying to do the right thing, and they 
discover the folks at the very top are getting by with really huge 
incomes.
  By the way, last year the top income from a hedge fund manager was 
$3.6 billion--$3.6 billion--and they pay a 15-percent top income tax 
rate. Isn't that unbelievable? By the way, they don't even pay that, in 
most cases, because they try to run their carried interests, as they 
call it, through tax-haven countries in a circumstance where they can 
defer compensation and avoid paying even the small 15 percent income 
tax rate. So when somebody comes home making $3.6 billion and the 
spouse says: How did you do today, honey? Well, pretty well. This 
month, I made $250 million. That is a far cry from what most American 
working people would understand or accept, in my judgment. When you see 
what is happening at the top compared to what is happening to the rest, 
there is something wrong with this economy.
  Now, I have just described in some detail what happened to cause this 
subprime collapse. To most people--it is a term that is almost 
foreign--subprime lending. Yet much of it is at the root of the 
dramatic problems we now have: the failure of investments, the 
difficulty of all kinds of institutions that loaded up with this. Why 
did they load up? Because the people who sold these subprime mortgages 
put prepayment penalties in them. They loaded them with very low 
interest rates at the front end and then a reset to very high interest 
rates on the back end--in most cases, 3 years--and then put prepayment 
penalties in so you couldn't get out of it. So when they securitized it 
and sold the security upstream to the hedge funds and the investment 
banks, they looked at that and said: This is really good. We have a 
huge, built-in, high income from these mortgages, and the borrower 
can't get out of it because there is a prepayment penalty. That is why 
they paid premiums for it. That is why they all thought they were 
getting rich. It was unfettered greed. They all made money in the short 
term, and the American economy takes a giant hit in the longer term.
  Finally, let me just say I don't think this is a case that is like 
all other cases. We are challenged in lots of ways on many different 
days here in the Congress. This is a different challenge. This 
country's economic future hangs in the balance, and the question is, 
Will we have the leadership? Will we exhibit the leadership to do this?
  Mr. President, the answer has to be yes. We cannot decide no, maybe, 
maybe not. The answer has to be that this requires new, aggressive 
leadership. We have a Presidential campaign going on now, and I happen 
to support Senator Obama. I think it is critically important to look at 
the history and the record of the candidates to find out who is going 
to support the kinds of things that are necessary to get this country 
back on track.
  I have talked previously a couple times about John Adams' description 
of trying to put a new country together when he would write to Abigail. 
He traveled a lot and was in Europe as they were trying to put this new 
country together. He would write to his wife Abigail and say 
plaintively in letters: Who will provide the leadership for this new 
country of ours? Where will the leadership come from? Who will be the 
leaders? Then in another one he would lament that there is only us--me, 
George Washington, Ben Franklin, Mason, Madison, and Jefferson.
  In the rearview mirror of history, that was some of the greatest 
human talent ever assembled, and this country was given leadership. 
Every generation asks, where will the leadership come from? If ever 
there was needed new leadership to step forward and say we need a new 
way, not the old way, we need to put America back on track, to get our 
grip and our traction, it is now.
  I think our economy is in significant peril. I know what happened to 
it. The question is, how do we fix this mess? How do we deal with the 
wreckage? I hope the debate we have--let me just say in this discussion 
about running for President, I have seen so much dishonesty with 
respect to the television commercials that have been run and the making 
of issues and about the phrases that are used. It is unbelievable to 
me. The one thing I will say I admire is that Barack Obama--whom I have 
campaigned with in this country--is talking about the future, about 
issues, and he is talking about raising up this country, which I think 
is so important at this point. We need that leadership now.
  Mr. President, with that, I am going to speak later this week on some 
other issues. I wanted to talk today about the issue of the two points 
that I think have dramatically weakened this country: One, the 
salesmanship of the Financial Modernization Act. Eight of us--myself 
included--voted against that in the Senate, believing that it would 
damage this country, and indeed it has. Second, the arrival of George 
W. Bush, who decided he didn't believe in Government regulation. We now 
see the carnage and wreckage that has resulted from that. This country 
deserves better and will get better, in my judgment.
  Mr. WHITEHOUSE. Mr. President, as we debate legislation to authorize 
more than $600 billion for our Armed Forces, we have a responsibility 
to the taxpayers who foot the bill to make sure that money is being 
used as carefully and as wisely as possible. Today I rise in support of 
an amendment offered by Senator Sanders and cosponsored by myself and 
Senator Feingold that exposes unnecessary and wasteful spending within 
the Department of Defense and offers a solution.
  From storage warehouses to assembly lines, the Department of Defense 
is sitting on billions of dollars in parts and supplies that are in 
excess of the military's requirements--everything from jet engines to 
springs to fuel tanks.
  The Army, Navy, Air Force, and other Department of Defense agencies 
currently possess $30.63 billion of unneeded spare parts, in addition 
to $346 million of excess spare parts that are on-order--parts that are 
still being

[[Page 19126]]

produced or delivered, but that the military already knows it doesn't 
need. The Air Force has $18.7 billion of excess spare parts on hand; 
the Navy has $7.7 billion, and the Army has $4.21 billion. On-order 
excess spare parts are at lower but still unacceptable levels. The Air 
Force has $1.3 billion in excess parts on-order; the Navy has $130 
million, and the Army has $110 million.
  It gets worse. Branches of the Armed Forces have millions of dollars 
of spare parts on-order that they have already decided they will 
dispose of when they arrive. If a retailer like Target or Best Buy or 
Kmart controlled its inventory so poorly that it had $307.48 million 
worth of items on-order that it knew it would have to dispose of 
immediately upon arrival, that company would quickly go bankrupt. The 
Air Force has $235 million of spare parts marked for disposal; the Navy 
has $18.18 million, and the Army has $54.3 million. That's a 
nonsensical and unacceptable waste of taxpayers' money.
  The Defense Department's inventory management systems are a big part 
of the problem: they are incompatible, duplicative, and ill-equipped to 
the task of managing such a massive volume of parts and supplies. Don't 
just take my word for it. Over the last decade, the General 
Accountability Office has repeatedly flagged these inventory management 
systems as ``high-risk,'' vulnerable to fraud, waste, abuse, and 
mismanagement. If American companies can get this right, there is no 
reason that America's military can't.
  Waste in excess inventory is part of a bigger problem of waste in the 
Department of Defense. The distinguished chairman of the Armed Services 
Committee, Senator Levin, recently cited a GAO report detailing $295 
billion in cost overruns and an average 21-month delay on Pentagon 
weapons systems. The GAO report recommends strong congressional 
oversight of defense programs. To that end, the reporting mechanisms of 
the Sanders-Feingold-Whitehouse amendment increase oversight and 
prevent waste in the Department of Defense.
  Our amendment calls on the Department of Defense to cut waste and fix 
the problem. This measure would require the Secretary of Defense to 
certify to Congress that the Army, Navy, Air Force, and Defense 
Logistics Agency have reduced by half their spare parts that are on-
order and already labeled as excess. Until this certification is 
completed, the amendment would withhold $100 million from the defense 
budget for military spare parts.
  Our amendment would also require the Department of Defense to come up 
with a plan to reduce the acquisition of unnecessary spare parts and 
improve its inventory systems. It would then require quarterly progress 
reports to Congress, including reports on the levels of excess 
inventory that are on hand and on-order.
  Our troops deserve the best equipment and the best supplies we can 
give them to help them do their jobs and keep us safe. Leaving billions 
of dollars of spare parts to rust away in warehouses just doesn't serve 
that purpose. I urge my colleagues to support this commonsense, 
important amendment.
  Ms. MIKULSKI. Mr. President, I rise today to express my thanks and 
appreciation to Chairman Levin and Senator Warner for their outstanding 
efforts on the bipartisan National Defense Authorization Act for Fiscal 
Year 2009.
  I would especially like to recognize Senator Warner for his 
stewardship of this bill this year, and his determined role managing 
the bill on the floor over the last few weeks. Senator Warner has 
played a role in most of the Defense authorization bills over the last 
40 years. His sage counsel and steady hand on the rudder are an 
invaluable asset to the Senate in meeting our commitment to our men and 
women in uniform.
  I would like to thank the committee for supporting $1.3 billion in 
military construction and base realignment and closure funding for 
Maryland's military installations. This funding is especially critical 
to ensuring that the BRAC transition of Walter Reed Army Hospital to 
the National Military Medical Center in Bethesda, MD, stays on track. 
We owe it to our wounded warriors and their families to give them world 
class medical facilities that they deserve.
  This bill also makes great strides in continuing to focus on the 
Dole-Shalala recommendations that outline the best courses of action 
for improving the quality of care for our wounded warriors. This bill 
requires the Department of Defense to establish Post Traumatic Stress 
Disorder and Traumatic Brain Injury Centers of Excellence and conduct 
pilot programs to better treat these disorders. The bill will also 
require that the Department of Defense to develop uniform standards and 
procedures for disability evaluations of recovering servicemembers 
across military departments. I commend the committee for continuing to 
make quality military health care a priority.
  This legislation provides vitally important increases in authorized 
funding for our National Guard. This bill shows a clear and substantial 
commitment to restore and improve the homeland defense capabilities and 
readiness of our National Guard. I am very pleased that the committee 
increased the authorization of the Army's procurement budget by $391.2 
million for dual-purpose equipment in support of National Guard 
readiness. In addition to giving our National Guard the tools and 
equipment they need, this bill also enhances Guard and Reserve family 
support programs.
  In closing, I commend Chairman Levin, Senator Warner, and their 
staffs for putting together a bill of which we can all be proud. This 
bill sends the message that we in the Senate remain committed to 
supporting our troops, both in combat and at home.
  Mr. REED. Mr. President, I commend the work of my colleagues on the 
Armed Services Committee on this important legislation which I hope 
President Bush will sign into law prior to the start of the fiscal 
year. In this tremendous time of transition for our military, we owe 
them a law that will enable the DOD to execute this year's budget 
efficiently and effectively.
  This bill provides a budget that allows the DOD to plan for future 
threats, combat current threats, and provide for the welfare of our 
brave veterans both past and future.
  It should also be noted that this year's bill and the authorization 
bills from the preceding 28 years could not have been completed without 
the statesmanship and the strong bipartisan leadership provided by 
Senator John Warner. This will be Senator Warner's final authorization 
bill during his nearly 30 years on the Senate Armed Services Committee, 
on which he also served as chairman and ranking member. In his nearly 
60 years of serving our country both in and out of uniform, he has 
always upheld his commitment to our brave service men and women with 
the highest standards of honor and integrity
  I would first like to point out a few of the highlights of the 
National Defense Authorization Act currently being considered:
  Authorizes a much needed 3.9 percent across-the-board pay raise for 
the brave men and women of our armed forces. This pay raise is a half 
percent higher than that requested by President Bush;
  Fully funds Army readiness and depot maintenance programs to ensure 
that forces preparing to deploy are properly trained and equipped;
  Authorizes $26.1 billion for the Defense Health Program, which 
includes the $1.2 billion necessary to cover the rejection of the 
administration proposal to raise TRICARE fees;
  Requires the Secretaries of Defense and VA to continue the operations 
of the Senior Oversight Committee to oversee implementation of Wounded 
Warrior initiatives; and
  Fully funds the eight ships requested in the President's budget, 
including full funding for the third ZUMWALT class destroyer. This ship 
is critical to maintaining the technical superiority that our Navy has 
enjoyed on the oceans throughout the world. The future maritime fleet 
must be adaptable, affordable, survivable, flexible and responsive. The 
ZUMWALT class provides all of these characteristics as a

[[Page 19127]]

multimission surface combatant, tailored for land attack and littoral 
dominance. It will provide independent forward presence, allow for 
precision naval gun fire support of Joint forces ashore, and through 
its advanced sensors ensure absolute control of the combat air space. 
All of this capability is based on today's proven and demonstrated 
technologies. We cannot build the same ships that we did 20 years ago 
and hope to defeat tomorrow's emerging threats.
  This year I once again had the honor of serving as the chairman of 
the Emerging Threats Subcommittee. Senator Dole served as the ranking 
member of the subcommittee and working together, our subcommittee 
produced good results in the bill now before the Senate. The Emerging 
Threats and Capabilities Subcommittee is responsible for looking at new 
and emerging threats to our security, and considering appropriate steps 
we should take to develop new capabilities to face these threats.
  In preparation for our markup, Senator Levin, the distinguished 
chairman of the committee, provided guidelines for the work of the 
committee, including the following two items:
  Improve the ability of the armed forces to counter nontraditional 
threats, including terrorism and the proliferation of weapons of mass 
destruction, and
  Promote the transformation of the armed forces to deal with the 
threats of the 21st century.
  In response, our subcommittee recommended initiatives in a number of 
areas within our jurisdiction. These areas include:
  Supporting crucial nonproliferation programs and other efforts to 
combat Weapons of Mass Destruction (WMD);
  Supporting advances in medical research and technology to treat such 
conditions as traumatic brain injury and post-traumatic stress 
disorder;
  Increasing investments in new energy technologies such as fuel cells, 
hybrid engines, and alternate fuels to increase military performance 
and reduce costs;
  Increasing investments in advanced manufacturing technologies to 
strengthen our defense industrial base so that it can rapidly and 
efficiently produce the materiel needed by our Nation's warfighters; 
and
  Increasing investments in research at our Nation's small businesses, 
Government labs, and universities so that we have the most innovative 
minds in our country working to enhance our national security.
  Specifically, some notable initiatives in this bill that originated 
in the Emerging Threats and Capabilities Subcommittee include:
  Authorizing more than $120 million in the area of nonproliferation 
and combating weapons of mass destruction, including $50 million for 
denuclearization activities in North Korea; $20 million for the 
Cooperative Threat Reduction program; and more than $50 million for 
chemical and biological defense programs.
  Consolidating funding for the Mixed Oxide, MOX, program in the 
National Nuclear Security Administration, NNSA, as a nonproliferation 
activity, rather than as part of the nuclear energy budget as the 
budget requested.
  Clarifying that excess fissile material disposition is an NNSA 
nonproliferation responsibility.
  Establishing a nonproliferation scholarship fund to deal with 
shortages in technical and other fields such as radiochemistry and 
nuclear forensics.
  Adding $25 million to nonproliferation research & development, R&D, 
for nuclear forensics and other R&D activities.
  Authorizing the Cooperative Threat Reduction Program and providing an 
additional $10 million for new initiatives outside of the former Soviet 
Union, $1 million for Russian chemical weapons demilitarization, and $9 
million for nuclear weapons storage security in Russia to complete the 
work under the Bratislava agreement.
  The bill also includes a number of legislative provisions that will 
enhance the Department's ability to procure and use critical defense 
technologies, such as:
  Legislation that would implement recommendations of the National 
Academy of Sciences to help ensure that the DOD develops and procures 
printed circuit boards that are trustworthy and reliable for use in 
defense systems;
  Legislation that would implement the recommendations of the Defense 
Science Board seeking to enhance the Department's ability to ensure 
that microelectronics procured from commercial sources, including 
foreign sources, and embedded throughout defense systems are reliable 
and trustworthy; and
  Legislation requiring the development of a joint government-industry 
battery technology roadmap to ensure that a healthy and innovative 
defense industrial base for batteries exists in the United States, to 
support a variety of requirements in military vehicles, computers, and 
other equipment.
  Relative to science and technology funding levels, the bill would 
increase the Department's investments in innovative science and 
technology programs by nearly $400 million to over $11.8 billion; and 
fully support the Secretary of Defense's initiative to increase 
university defense basic research funding and increase the level by 
nearly $50 million over the President's request.
  In the area of force protection, the bill includes a provision that 
would increase the amount and quality of testing performed on force 
protection equipment, such as body armor, helmets, and vehicle armor, 
before it is deployed to the field, to ensure that our soldiers and 
marines have the best available equipment and protection.
  In order to enhance our ability to combat international terrorist 
groups, the bill would fully fund the $5.7 billion budget request, and 
add over $20 million for items to help find and track terrorists, 
including intelligence, surveillance and reconnaissance packages; 
extend authorization to the Special Operations Command to train and 
equip forces supporting or facilitating special operations forces in 
ongoing military operations, and increase the funding available for 
this activity; and increase funding for DOD's Regional Defense 
Combating Terrorism Fellowship.
  Concerning counterdrug programs, the bill includes a provision that 
would extend the authority to use counterdrug funds to support the 
Government of Colombia's unified campaign against narcotics cultivation 
and trafficking, and against terrorist organizations involved in such 
activities. It also includes a provision that would extend the 
Department's authority to use counterdrug funds to support law 
enforcement agencies conducting counterterrorist activities.
  This is a good bill. The members of the committee and the committee 
staff have worked many hours to get this bill to the floor. We are a 
nation at war and the military needs this bill. I urge my colleagues to 
work together to pass it so that we can conference with the House and 
send it on to the President for his signature.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. LEVIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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