[Congressional Record (Bound Edition), Volume 154 (2008), Part 16]
[Senate]
[Pages 22228-22230]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            FINANCIAL CRISIS

  Mr. COLEMAN. Mr. President, a man well acquainted with crisis, 
Abraham Lincoln, said this:

       I am a firm believer in the people. If given the truth, 
     they can be depended upon to meet any national crisis. The 
     great point is to bring them the real facts.

  I rise to affirm this confidence and lay out some of the basic facts 
and principles we face in this unprecedented financial crisis.
  Fact No. 1: We live in a world which is very different from the 
realities of a decade ago. The financial world is interconnected and 
reacts at the speed of digital transactions. There are no borders to 
hide behind or cooling off periods in which to contemplate at our 
leisure. Problems arise quickly and solutions must be found quickly yet 
responsibly.
  Fact No. 2: This crisis we face today touches each and every 
American. As the recent market events have proven, the crisis has 
entered a new and critically dangerous phase in which our entire 
financial system and economy hangs in the balance. The crisis we face 
today is as serious as any I have faced

[[Page 22229]]

in my 32 years of public service. When the Secretary of the Treasury 
talks about the possibility of a collapse of the American financial 
system, that gets your attention, as it should.
  Money market accounts, retirement savings, college and small business 
loans, and home mortgages are all at stake. This is not about Wall 
Street but about Main Street. It is about every street on which 
American families live.
  Just think of what you have to tell your son or daughter if they got 
accepted to some great school, and you are about to get that loan that 
you need to pay for that education, and then all of a sudden it is not 
there. Credit has dried up. Capital is not available. You are going to 
have to say: By the way, you can't go there now. I am sorry. Mom and 
dad cannot afford it.
  Small business owners depend on credit to stock their shelves, to 
supply the goods we buy. If this system collapses, freezes, how are 
they going to go about providing both goods and services to families, 
as well as the jobs of folks who work there? This is about every street 
on which American families live.
  Fact No. 3: This crisis, not unlike energy or health care, is too big 
for one party to solve. We must work together--Democrats, Republicans, 
House and Senate, administration and Congress. There was a moment of 
opportunity yesterday with the White House, Senator Obama and Senator 
McCain, and the leadership of both sides of the aisle from both Houses. 
After the debate tonight, we have to get back, as Americans, to figure 
out how we put this together to provide the stability this economy 
needs.
  People have asked a lot of questions about how we got there. Outright 
greed and mismanagement, coupled with an outdated financial regulatory 
system, have all been part of bringing us to this point. People were 
sold loans they could not afford. In some instances, I heard of ninja 
mortgages: no income, jobs, or assets, and yet they got packaged and 
securitized and passed on and sold to investors throughout the country 
and the world. Now it seems these securities are not worth what was 
paid for them. It has not only put companies in dire straits but our 
entire financial system as well.
  Our obligation now as Americans is to come together and do the right 
thing, and to do it now.
  Fact No. 4: The American people are watching. I have already heard 
from over 11,000 Minnesotans who have called or written to my office 
who have expressed their deep concerns about what is happening and what 
is being proposed. They say: Don't bail out Wall Street. My calls are 
running 10,000 against and maybe 100-and-something for. They say: Don't 
bail out Wall Street. Unfortunately, the way this stabilization plan 
was presented was such in which the public watched and saw it that way.
  Secretary Paulson proposed a $700 billion plan to rescue our 
financial system. People are concerned the plan did not provide for 
clear transparency, it did not provide for clear oversight. The 
consensus is, it amounted to a bailout of Wall Street. This is not what 
the American people want nor should they have that.
  While I share the administration's sense of urgency to act, I share 
the concerns of Minnesotans from all across the State and certainly 
Americans all cross the country. So I want to assure folks back home I 
am not going to move forward on a plan unless it puts taxpayers first 
and holds Wall Street accountable. But I also want to tell my citizens 
that it is our obligation and responsibility, before we get out of 
here--before we get out of here this weekend--to in fact put in place a 
plan that puts taxpayers first and holds Wall Street accountable. We 
need to get there. We must get there. We need a plan that provides 
effective oversight and transparency. We are not going to give the 
Treasury Department a blank check.
  There is talk about taking some of the options that have been put on 
the table and been discussed in the last days, that instead of $700 
billion as a blank check, that there are X dollars put up first, with 
the obligation to come back for further approval, with very clear and 
specific oversight, very clear and specific transparency. We must get 
there with a plan that holds Wall Street executives accountable for the 
terrible mistakes they made getting us into this mess--no golden 
parachutes. We are going to have to deal with executive compensation. 
If there is going to be Government assets involved, if they use the 
Government credit card, folks are going to have to comply with the 
terms and conditions.
  We must look into other individuals who enrich themselves on 
mortgage-related assets while fully knowing of their dangers. There is 
going to be a lot of looking back. In the long run, shareholders have 
to have a greater say about executive pay. We must get there with a 
plan that gets taxpayers the best value for their dollar. If we, 
ultimately, go forward with the Treasury's plan--or a variation of the 
plan because we are not going to go forward with that plan--this will 
be a plan in which the concerns of my colleagues in the House--they 
have expressed concerns; my colleagues in the Senate have expressed 
concerns. We need to go forward in a way that assures that distressed 
assets are bought--and when I say ``bought''--that distressed assets 
are acquired--I want to be clear about that--acquired at prices that 
are fair to the taxpayer and any returns that we get as assets come 
back into this fund after expended, that they have to go to debt 
reduction.
  We are talking about increasing the national debt from over $10.6 
trillion to over $11 trillion. As assets come back, as distressed 
assets regain value over time, as folks get back on their feet, we have 
to make sure those assets then are put into debt reduction, not more 
Government spending, not deepening the mess we are in already in this 
country.
  Over the long term, we cannot go back to business as usual. We need 
to aggressively undertake fundamental financial regulatory reform. 
First and foremost, any reform must include stronger regulatory 
oversight over the entire financial system. The sad reality is that 
some of our current system goes back to the Civil War era. It is like 
trying to fight a fire today with a bucket brigade. It is marked by 
ineffective coordination among regulators and redundant oversight in 
some areas and lack of oversight in others. Greater transparency and 
accountability must be factored in. We must ensure that market 
participants have a direct stake in their own actions so that taxpayers 
are not left holding the bag.
  In many ways, it has been described to me as almost a 9/11 kind of 
moment--that before 9/11, in the area of security, we were not able to 
think the unthinkable, and we did not have in place a system that 
allowed us to see and understand that the unthinkable was about to 
happen. In the situation we face now with this economy, we did not have 
the regulatory oversight, the transparency to deal with the complex 
financial instruments that are being used today, so we both did not 
think the unthinkable and we had no capacity to know that the 
unthinkable was about to happen. The unthinkable now stands in the 
shadows, as we talk about the potential meltdown of the American 
economic system. That cannot happen, and we will not let that happen.
  At the same time, we must put more cops on the beat to better detect 
possible threats to the financial system, such as conflicts of interest 
that could undermine the integrity of the system. And, finally, we must 
ensure greater regulatory flexibility in order to keep up with market 
innovations. Regulators should have the ability to intervene before a 
crisis reaches critical mass.
  What happens after the opening bell rings on Wall Street every day 
affects the folks in Hibbing, MN, just as much as the people in New 
York City. Wall Street executives must shoulder a great deal of 
responsibility for this crisis. If taxpayers are being asked to 
sacrifice, Wall Street too must share in the cost of rescuing the 
financial system.
  Hardworking Americans deserve to have the peace of mind that their 
stake

[[Page 22230]]

in the financial system is appropriately safeguarded and that they are 
not put on the hook for the mistakes of corporate America.
  Times are tough. Folks are having a hard enough time dealing with 
high energy costs and making ends meet. In the short term, we need to 
act for the sake of our economy. In the long term, we need major reform 
that protects the American taxpayer and works for our economy. 
Maintaining a viable and robust financial system is critical to each 
and every American's future.
  We have to recognize there are a lot of questions out there, even at 
this hour on Friday night, as we are moving toward what I hope will be 
putting in place a system that protects the taxpayer, that holds Wall 
Street accountable. We are talking about assets, and there is a 
discussion about Government buying assets. At what price? If we buy it 
above market price, are taxpayers being ripped off to protect 
shareholders and bondholders? That should not be allowed to happen. If 
we are to buy assets, then what kind of system do we need to have in 
place to evaluate and oversee those assets? Are we creating more 
bureaucracy, more cost, for which, in the end, the taxpayers will 
suffer? Could we avoid that, while looking at loans--secure loans, of 
course, being preferable--but even in cases where there are not enough 
assets to secure the loans, moving forward from a loan perspective?
  These are the kinds of questions I know those at the table right now 
need to answer. They need to answer them with a first and foremost 
principle that the taxpayers must be protected.
  Finally, I wish to say that even as we move forward--as we have to 
move forward to provide stability to the American economic system--we 
must understand that this is not getting us out of the woods; that, in 
fact, those challenges to our economy are still there, including the 
threat of the recession, or the reality of the recession, and I think 
the economic numbers from this quarter will demonstrate that it is, in 
fact, where we are today. But greater danger lies ahead in our 
financial system, so the expenditure of Government resources now must 
be done in a way that keeps in mind that there are going to be some 
major issues that are going to have to be confronted in the near 
future. There may have to be some further action by this Government to 
provide stability in order to keep this country moving forward. Those 
considerations cannot be blocked out as we look at the crisis of the 
moment. We need to recognize that there are challenges that still await 
us.
  The American people throughout our history have come together at 
every crisis that has threatened our national or economic security. We, 
in Congress, working closely with the administration, must protect 
their interests by working quickly, in a bipartisan way, to help secure 
a better, safer, and sounder tomorrow. Now is the time for 
statesmanship, not partisanship. Now is the time for leadership. Now is 
the time to come together to generate confidence in the American body 
politic and in the people that will then reflect confidence in our 
economic system, that will give the opportunity for a better and 
brighter future.
  I yield the floor and note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Ms. LANDRIEU. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. LANDRIEU. Mr. President, I understand that Members can come to 
the floor to speak for up to 10 minutes in morning business. I ask 
unanimous consent to extend that to 15 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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