[Congressional Record (Bound Edition), Volume 154 (2008), Part 17]
[Senate]
[Pages 23408-23445]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       CELEBRATE SAFE COMMUNITIES

  Mr. WEBB. I ask unanimous consent that the Judiciary Committee be 
discharged from further consideration of S. Res. 662 and the Senate 
proceed to its immediate consideration.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report the resolution by title.
  The legislative clerk read as follows:

       A resolution (S. Res. 662) raising the awareness of the 
     need for crime prevention in communities across the country 
     and designating the week of October 2, 2008, through October 
     4, 2008, as ``Celebrate Safe Communities'' week.

  There being no objection, the Senate proceeded to consider the 
resolution.
  Mr. WEBB. I ask unanimous consent that the resolution be agreed to, 
the preamble be agreed to, the motions to reconsider be laid upon the 
table, with no intervening action or debate, and any statements related 
to the resolution be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The resolution (S. Res. 662) was agreed to.
  The preamble was agreed to.
  The resolution, with its preamble, reads as follows:

                              S. Res. 662

       Whereas communities across the country face localized 
     increases in violence and other crime;

[[Page 23409]]

       Whereas local law enforcement and community partnerships 
     are an effective tool for preventing crime and addressing the 
     fear of crime;
       Whereas the National Sheriffs' Association (NSA) and the 
     National Crime Prevention Council (NCPC) are leading national 
     resources that provide community safety and crime prevention 
     tools tested and valued by local law enforcement agencies and 
     communities nationwide;
       Whereas the NSA and the NCPC have joined together to create 
     the ``Celebrate Safe Communities'' initiative in partnership 
     with the Bureau of Justice Assistance, Office of Justice 
     Programs, Department of Justice;
       Whereas Celebrate Safe Communities will be launched the 1st 
     week of October 2008 to help kick off recognition of October 
     as Crime Prevention Month;
       Whereas Celebrate Safe Communities is designed to help 
     local communities highlight the importance of residents and 
     law enforcement working together to keep communities safe 
     places to live, learn, work, and play;
       Whereas Celebrate Safe Communities will enhance the public 
     awareness of vital crime prevention and safety messages and 
     motivate Americans of all ages to learn what they can do to 
     stay safe from crime;
       Whereas Celebrate Safe Communities will help promote year-
     round support for locally based and law enforcement-led 
     community safety initiatives that help keep families, 
     neighborhoods, schools, and businesses safe from crime; and
       Whereas the week of October 2, 2008, through October 4, 
     2008, is an appropriate week to designate as ``Celebrate Safe 
     Communities'' week: Now, therefore, be it
       Resolved, That the Senate--
       (1) designates the week of October 2, 2008, through October 
     4, 2008, as ``Celebrate Safe Communities'' week;
       (2) commends the efforts of the thousands of local law 
     enforcement agencies and their countless community partners 
     who are educating and engaging residents of all ages in the 
     fight against crime;
       (3) asks communities across the country to consider how the 
     Celebrate Safe Communities initiative can help them highlight 
     local successes in the fight against crime; and
       (4) encourages the National Sheriffs' Association and the 
     National Crime Prevention Council to continue to promote, 
     during Celebrate Safe Communities week and year-round, 
     individual and collective action in collaboration with law 
     enforcement and other supporting local agencies to reduce 
     crime and build safer communities throughout the United 
     States.

  Mr. WEBB. 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. BOND. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Reed). Without objection, it is so 
ordered.
  Mr. BOND. Mr. President, I ask unanimous consent that I be permitted 
to speak as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BOND. Mr. President, I come today to talk about the subject that 
is on the minds of people all over America--certainly it is on the 
minds of my friends in Missouri--and that is the Emergency Economic 
Stabilization Act of 2008.
  Yesterday afternoon, the House of Representatives voted on this 
important bill. Unfortunately, the bill failed to gain sufficient 
support on the floor despite strong leadership from both the Democratic 
and Republican Parties. The negative outcome of the House vote is 
disappointing, and clearly the financial markets registered their 
displeasure. I was further disappointed by finger-pointing that 
occurred after the vote. But I am heartened that everyone realizes the 
financial credit crisis is still with us and that Congress needs to get 
its job done.
  We must get our job done. We will get it done. We owe it to our 
constituents, our communities, our economy, and our country. That 
means, first, no more finger-pointing, no more political blame games. 
Those we have to put off the table. We need to stop the bleeding. Right 
now, there is a fire raging. To mix the metaphors, we need to stem the 
flow of the bleeding or put out the fire. The institutions are asking 
for our help to come to this immediate rescue. Beyond that, we need to 
take a broad view of the needed changes in our regulatory system. There 
are mistakes and omissions. There is lots of blame to go around. There 
are lots of areas where Congress acted or did not act, the 
administration acted or did not act, and the agencies did not do the 
proper work.
  As a 22-year housing authorizer and appropriator, I have some strong 
views as to what needs to be done, and I have offered those on the 
floor, citing a letter I sent to the Secretary of the Treasury, the 
Chairman of the Federal Reserve, the SEC, and the leadership of the 
banking committees in both Houses. I would only amend that today to say 
we need, either in this bill or--probably in this bill--we need to 
raise the limit of the Federal Deposit Insurance Corporation insurance 
so that individuals, farmers, small businesses that may in the course 
of their business operation have more than $100,000 do not pull it out 
of the banks, thus endangering the capitalization of the banks. We want 
those people who are the lifeblood of our economy to be able to keep it 
in their local banks, the regional banks, the community banks, and not 
draw it out and put it in Treasurys.
  I heard today from a broker in Missouri who has been asked by small 
businesses if they can take their deposits out and put them in 
Treasurys. That may be a safe move, but right now that means they are 
going to reduce the deposits in that bank, which further puts pressure 
on banks, other institutions, that should not be any part of this 
problem.
  Now, Americans are angry about the prospect of using their tax 
dollars to fix Wall Street's problems. I, like many other Members of 
Congress, share that anger. I do not want to be doing this. I do not 
want to be supporting this. But what I really care about is protecting 
Main Street: the individuals, the families, the businesses, the 
farmers. We must act to prevent workers from missing paychecks, small 
businesses from failing, college savings plans and retirements put in 
jeopardy.
  This plan includes the transparency I called for when I spoke on this 
floor exactly a week ago. I was not satisfied with the Treasury plan. I 
said we must do something, but we must add three things: 
accountability, increased oversight, and increased transparency. Well, 
I called on my House and Senate colleagues to come together in a 
bipartisan fashion and work with the administration and other public 
and private sector experts to move quickly and boldly but responsibly 
to prevent another financial credit disaster. The leadership and 
negotiators from both sides did just that.
  It has been just 12 days since the Treasury Secretary and the Federal 
Reserve Chairman approached Congress about the need to act on this 
crisis. They said we must take temporary emergency action to get us 
through this financial crisis--the biggest financial crisis we have 
faced in a long time. As at least one commentator said, we are facing a 
financial ``stone age.''
  This crisis is real. This is a rare moment. This is an emergency. The 
credit markets have been struggling mightily for the past several weeks 
due to the subprime housing crisis and falling home values. Despite 
unprecedented intervention by the Federal Reserve and the Treasury, the 
credit market got worse. I commend those institutions for doing what 
they did, but that is not enough. They don't have enough tools in their 
toolbox. Clearly, it is time for a comprehensive and systematic 
approach in order to restore stability to the credit markets to make 
sure that all of us, and the entire wheels of the Nation, can have the 
credit we need to move.
  It is much more than about Wall Street; it is about average American 
families, individuals, small businesses, and farmers. Average American 
families are outraged at what is happening in the financial markets. 
They see excessive greed at the heart of the problem. They do not 
understand how many corporate executives make more in a day than many 
of them do in a year. They do not understand how some rich corporate 
executives can be paid to leave their company, given a golden parachute 
for failing at their job, not doing it and leaving their company in 
shambles. The folks in Missouri are also afraid this crisis will make 
them victims. They will be victims if we do

[[Page 23410]]

not put the taxpayer credit, the Treasury credit on the line. It has 
brought down the rich and powerful. It should not bring down Main 
Street. That is what we are worried about.
  Back in my home State of Missouri, I heard from seniors who were 
asking me about their retirement accounts, parents worried about their 
children's college savings, families worried about their checking and 
savings accounts, farmers worried about where their credit lines will 
be and whether they will be able to get operating loans so they can go 
into the fields next spring to plant, small business owners and 
homeowners worried about their mortgages. Folks are worried about their 
jobs, their children's future, and their financial security. There is 
also a lot of anger, frustration, and disgust at why we have gotten to 
this point.
  I have heard those feelings loudly and clearly. I share those 
feelings. As I said before, frankly, I don't want to be here--not as a 
Senator, not as a Missourian, not as an American, and not as a family 
man. But I believe this is something we have to do. We have no choice 
but to act. We must act because the financial well-being and health of 
all Americans and our economy is in jeopardy.
  However, we must act responsibly. That is why I demanded increased 
accountability, strong oversight, and more transparency so that the 
taxpayers, communities, small businesses, farmers, and our financial 
system are never put in this position again. This doesn't mean we are 
giving a blank check to the Treasury; this means just not bailing out 
those who made bad decisions with no consequences. This is one of the 
points I got 5,000 calls about last week. Almost 4,999 of them objected 
specifically to golden parachutes and to excessive compensation for top 
corporate executives. Well, the compromise that the negotiators worked 
out dealt with those. This also means and the negotiators came up with 
a system to ensure strong balances so that taxpayer funds are protected 
while achieving the goal of preventing a financial meltdown. This bill 
incorporates those measures.
  This bill increases accountability by giving the Treasury Secretary 
specific powers to reduce executive compensation and cut golden 
parachutes. This bill increases taxpayers' protections by giving 
taxpayers an ownership interest in the firms they are helping to bail 
out.
  In addition, we expect the Treasury to do the analysis and to work 
within the market system to buy mortgages and other debts that are now 
at fire-sale prices below the prices those mortgages or other debt 
would sell for when the credit markets begin to function once again. 
That is the first level of protection. The first level of protection is 
to make sure Treasury has the power to put liquidity back into the 
system by buying this now fire-sale property at a reasonable price, but 
one at which the Treasury can later recover, and at the same time 
taking this bad debt off the books of the companies. They will be 
crippled by selling it below what they bought it for, but they will 
have liquidity again.
  The bill provides stronger oversight by creating a special inspector 
general. It will empower our U.S. Government Accountability Office to 
conduct ongoing audits and reviews of the program. It creates a new 
oversight panel of executive officials such as the Federal Reserve 
Chairman, and it sets up a special congressional oversight panel. This 
bill provides more transparency by requiring the Treasury to disclose 
publicly all transactions made under the bill.
  These are very positive improvements in the bill.
  Let me be clear. I would not vote in support of any bill simply to 
bail out irresponsible, incompetent, and greedy bankers--whether they 
are Wall Street or elsewhere--or investors. I will vote in support of a 
bill that protects the average Missourian, the average American family, 
the individuals, the communities, the small businesses, and the 
farmers. This is about doing what is right, not necessarily popular--
and popular this is not.
  Without a bill of these elements, the Federal Government will 
continue to use existing authorities with taxpayer funds to rescue 
financial institutions. That is why we need a bill that provides 
taxpayer protection, accountability, transparency, and oversight, in a 
systematic, controlled manner. In other words, with or without this 
bill, taxpayers will be on the hook. They will be asked to chip in. The 
problem is now, when we have tried--or as the Treasury and the FDIC 
have done and the Federal Reserve has done--to rescue firm by firm, we 
are putting more money at risk, but we are not solving the basic credit 
problem. The credit illiquidity is still there.
  Last week, I talked with a friend who deals in municipal bonds. Those 
are the bonds State and local governments offer. They are the ones that 
finance the ongoing operations of States and of cities, of counties, of 
revenue districts, of special districts. She told me the market was 
totally frozen. They can't go to the market.
  Continuing to just let the system go downhill and provide rescues for 
individual banks that may get into problems is not going to solve the 
liquidity problem--liquidity problems faced by businesses that have to 
meet their payroll, liquidity problems which would face farmers who try 
to get operating loans, liquidity problems that would face the average 
family if they want to get a loan to buy a house or a car. They can't 
get it.
  This measure we are talking about is protecting savings, retirement 
accounts, and investments of Missouri families and American families. 
It is about making sure no Missouri worker misses a paycheck. To me, it 
is about Missouri businesses, small and large, not going under. To me, 
this is about helping struggling homeowners in default so they can get 
their mortgages reworked. To me, this is about Missourians getting car 
loans, home loans, and student loans. In summary, I believe it is what 
is best for my Missouri constituents.
  It is imperative that we continue to work on this bill and consider 
other ideas to improve it. As I mentioned earlier, now both 
Presidential candidates back a proposal to increase the current Federal 
deposit insurance guarantee level from $100,000 to $250,000. That is a 
very good idea. I urge my colleagues to consider this proposal. 
Frankly, I think, at least for the time being, we ought to up that 
limit, but we need to do it soon, and we need to do it responsibly so 
there will not be a silent, backdoor run on banks and small businesses 
that have needs for large amounts of operating cash don't take all 
their money out of the small banks they work with and leave those banks 
in a perilous condition.
  We need to pull together and do what each of us individually can do 
to address the crisis. This also means troubled homeowners must seek 
assistance in avoiding foreclosure. Help is available through home 
ownership counseling. It is available due to funding I was proud to 
work on with my colleague, Senator Dodd, to provide last year. We 
provided $180 million. Based on the preliminary data we saw from one 
organization counseling homeowners, 69 percent of those who received 
that counseling were able to avoid foreclosure. That counseling is 
available now. The program is working. But we need troubled homeowners 
to contact their counseling agency before they get into foreclosure. 
Contact them if you are having problems. Call the HOPE hotline: 888-
995-HOPE. Again: 888-995-HOPE. A lot of the problem can be solved for 
homeowners if they get counseling.
  Before closing, let me express my appreciation to the House and 
Senate leadership and lead negotiators and their staff for the hard 
work and long hours they have put in over the past week to pass the 
greatly improved proposal, originally coming from the Treasury. I thank 
especially Senators Dodd and Gregg for representing and leading the 
Senate in the negotiations. I am proud of my good friend and Missouri 
constituent Roy Blunt for his work, along with Chairman Frank in the 
House. Their work is not in vain. I expect we will finish the job--I 
hope this week. We have to do it. There is too much at stake not to do 
the job and do it well.

[[Page 23411]]




                          Tribute to Senators

                              John Warner

  Mr. President, today I join my colleagues in saying goodbye, thank 
you, and best wishes to good friends leaving the Senate, especially a 
couple of Senators with long and distinguished service. One of those, 
who has been a hero of mine for a long time and has become a good 
friend, is John Warner. He is a Member in the Senate well known for his 
patriotism, for his long service to both his State and his Nation, and 
perhaps more than any other Member of the Senate, he is known for being 
a gentleman in the true meaning of the word. I would say he is a 
Senator to whom we can all look up. I did when I arrived, and from the 
beginning I learned a great deal.
  Now, as a fellow UVA Law grad, my good friend, the squire from 
Virginia, John Warner, who is retiring after 30 years of service, has 
left an indelible mark on this body. We will miss as much, though, the 
presence of his wonderful wife Jeanne. I think all of us in the Senate, 
at Senate gatherings, at Senate family affairs, know how much Jeanne 
adds to our family. She is truly a wonderful lady. She has cleaned up 
the squire a good bit. My wife Linda and I always enjoy and look 
forward to seeing Jeanne and John after their service in the Senate 
because they are good friends.
  Not only do John and I share the UVA Law connections, but he and I 
were on a panel at his school, St. Albans, along with several other 
distinguished Members of the Senate, and we had the opportunity to go 
back to the school that he had attended and my son attended.
  Let me go back to what John Warner has done in his impressive 32 
years in the Senate. His service to the country began long before he 
was elected to this body in 1978. At age 17, John chose not to go back 
to St. Albans immediately but first chose to serve his country, 
enlisting in the U.S. Navy to help keep our Nation safe from Nazi 
Germany.
  He, again, answered his Nation's call to service at the outbreak of 
the Korean war, when he served in the U.S. Marine Corps.
  Since his service in our Armed Forces, John has been a tireless 
advocate for our military and for our veterans. For the soldier 
returning home after service, John has worked to improve the care our 
veterans receive, the care a grateful nation owes each and every one of 
our brave volunteers.
  As chairman of the Armed Services Committee, as vice chairman, as a 
ranking member, as a leader in the Armed Services Committee, John has 
worked to ensure that the military, particularly our troops on the 
field in battle, have the equipment and the resources they need.
  Under John's watch, the Senate always passed a Defense authorization 
bill, a feat that is not only achievable because of John's skill but 
because of the respect he has for Members on both sides of the aisle.
  John used this legislation year after year to modernize our military 
to make sure they meet 21st century needs. In this way and all others, 
John embodies the motto of his esteemed undergraduate Virginia school, 
Washington and Lee, which is ``Not Unmindful of the Future.''
  John has always kept that responsibility to the future in mind as he 
has worked to keep our fighting forces the best in the world.
  But he has also done much in other areas. It has been my pleasure to 
work with him on the Environment and Public Works Committee. He was an 
invaluable leader, from whom I learned much. He was a great friend in 
passing the highway bill in 1998. I followed his work later on while 
working on the current highway bill. I owe a great deal to the skill, 
to the advice, and the leadership he provided in making sure we could 
meet the needs of our highways and our bridges. His guidance and 
leadership were extremely vital for the success of the bill I worked 
on. He has also kept his responsibility of the future in mind during 
his tenure on the Senate Intelligence Committee.
  It has been an honor, a pleasure, and a treat to fight side by side 
with John on the Intelligence Committee. He has always been looking to 
the future, to all our futures. He worked on the committee to help us 
prevent another devastating attack on our soil such as 9/11.
  John was an invaluable ally on the committee in our efforts to reform 
and oversee our intelligence operations. Probably the most important to 
me, with John's help, we passed probably the most important legislation 
I have had the opportunity to lead--the Foreign Intelligence 
Surveillance Act--to assure we had an early warning system against 
terrorist attacks.
  Because of John's work in the Senate, his heart on the battlefield, 
our Nation is not only a safer place but, under his guidance, wisdom, 
and leadership, it has become a much better place.
  It has been a tremendous honor and privilege to serve with John 
Warner. He is an icon of the Senate. He will be missed for his ability 
to work across the aisle, for putting his country first, and for the 
friendship, personally, the friendship with Jeanne, his wife, and the 
rest of us. I join my colleagues in congratulating the Senator and his 
wife and thanking John for his many years of service.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. McCONNELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                              The Economy

  Mr. McCONNELL. Mr. President, yesterday's House vote has come and 
gone, but the threat to our economy has not. Congress must still act 
swiftly and decisively to protect millions of ordinary Americans from a 
credit crisis that they had no hand whatsoever in causing but which 
obviously threatens to reach into every single household in our 
country.
  Retirees are worried about their savings. Small business owners are 
panicked because the banks will not lend. Homeowners are watching the 
equity they have in their houses dry up.
  I am hearing from towns and municipalities throughout Kentucky that 
cannot find the money to finance new schools and other civic projects 
and from farmers and small business owners who are suddenly being told 
by their banks that a long-term loan is due. Others are being pressured 
to pay more or well ahead of schedule. These are people with good 
credit.
  I am hearing from people such as the retired school counselor in 
Anderson County who said she cannot afford to see her small retirement 
savings vanish. ``I have never written to any Senator or Congressman 
before now,'' she wrote. ``This is so important to our Government and 
its citizens.''
  One small business owner wrote me about a company he started in his 
garage that now employs 100 people. He said that because of the credit 
crisis, the interest rate he is paying on his building jumped 400 
percent. Speaking on behalf of all small business owners in his 
community, he had a simple message: ``Kentuckians need help now.''
  Here is what a woman from central Kentucky wrote to me about the 
financial rescue plan the House of Representatives rejected yesterday. 
She said:

       I hope you will not lose sight of the vast numbers of 
     innocent Americans who work tirelessly to create a better 
     future for our children and fellow Americans, who could be 
     financially wrecked by plummeting U.S. and overseas markets.

  If the rescue plan fails, this woman added, she is afraid she will 
have to sell off part of her family's farmland.
  The credit crisis is spreading. It has gotten too big to ignore, and 
it is too big for one party to solve on its own. Congressional leaders 
are assessing the legislative path forward, but one thing is clear: Any 
solution will be a bipartisan solution. Both sides have to work 
together, and we will stay until the answer is yes.
  There was a lot of frustration around here yesterday which led to a 
lot of accusations and blame. Today we must move forward together. The 
voters sent us to respond to crises, not to ignore them, and if you 
fail the first time, you

[[Page 23412]]

get back up and work with each other and you figure a way to get it 
done.
  We know what we need to do and we know we need to do it quickly and 
we know that time is not the ally of millions of Americans facing a 
serious threat to their way of life. The majority leader understands 
this, and he and I are working together to find a way to get to yes.
  Working together is the only way to get this rescue plan passed, and 
that is exactly what we intend to do.
  I yield the floor. 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. BENNETT. 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. BENNETT. Mr. President, I appreciate the statement of the 
Republican leader with respect to our determination to get this done. I 
think all of us should recognize that these are extraordinary times, 
and I want to sound a warning to those who have the opinion that 
yesterday's drop in the stock market was simply a one-time correction; 
that the stock market is coming back today, and that the markets are 
going to absorb the shock of the lack of action on the part of the 
House of Representatives.
  I would point out that markets are driven by future expectations, and 
when the stock market assumed, on the basis of the vote in the House, 
that we would not have any kind of Federal action on the financial 
rescue package, it dropped more dramatically than at any other time in 
its history in total number of points, and it dropped percentage-wise 
for the worst drop since 
9/11.
  Now, as there has been an expectation that the Congress will move, 
the stock market is back up today but nowhere near back up to the point 
it was before the drop occurred yesterday. If we break the expectation 
once again, this time the market will drop and there will be no coming 
back up. This time, your 401(k), your pension plan, your retirement 
account will be hurt in a way that will take years to recover.
  Let's talk about numbers to demonstrate the importance of this. One 
of the things we have heard with respect to the financial rescue plan 
is that $700 billion is far too big an amount for the taxpayers to 
absorb. Yesterday, over 1 trillion dollars' worth of market value was 
wiped off the books by the stock market drop. We must understand that 
it is ordinary people looking at ordinary pensions with their ordinary 
Main Street kind of 401(k) plans who lost that trillion dollars, and 
they lost it in a matter of minutes. The market plunged over 700 points 
in a matter of minutes, and 1 trillion dollars' worth of ordinary 
American value was wiped out.
  This is not a trivial event, and we should pay attention to it. As I 
say, the stock market now believes we are going to get serious about 
this and get something passed, and so it is up today about 250 points. 
But that is only one-third of the 777 points that were lost yesterday. 
We should not congratulate ourselves on the 250-point rally that it has 
somehow removed the sting of the 777-point drop that occurred 
yesterday.
  We keep hearing, well, the markets will adjust and everything will be 
all right and the stock market will be OK. But let's move away from the 
stock market to where the real problem lies, which is in the credit 
markets. We don't have a single barometer for the credit markets the 
way we do with Dow Jones following the stock market, but we have 
indications all along the way that the credit markets throughout the 
world have seized up; that is, banks are not loaning to banks, banks 
are not making credit available to those who have been their best 
customers as they wait to see how this works out. That is the place 
where those people who are saying this applies only to Wall Street are 
going to end up paying a huge price.
  I have used this example before, but I am finding it is being 
duplicated in other States. Amidst the avalanche of phone calls into my 
office from angry Utahns demanding that we vote against this because 
they say this is a bailout of Wall Street, there are one or two other 
phone calls that get through. One of them came from an auto dealer. In 
the city or town where he operates, he is the city's largest employer.
  He called and said: Senator, I know you are getting a lot of calls on 
the other side of this issue. Let me just point out one thing with 
respect to my business. I am the biggest employer in this town, and I 
may not be able to make payroll on Wednesday. The biggest employer in 
town, and none of my employees will get checks because the bank won't 
give me the line of credit that the bank has been making available to 
me for decades.
  That is the implication of the seizing up of the credit markets. That 
has nothing to do with the stock value of this particular car dealer. 
That has to do with the paychecks that go into the pockets of the 
people who fix the cars, who wash the cars, and who try to sell the 
cars. They are the ones who will pay the price of the inaction in the 
Congress.
  There are those who say, well, we should restructure the regulatory 
system so this doesn't happen again. We shouldn't act in such a 
precipitous fashion until we get all of these other issues on the table 
and discussed. Let's not act quickly.
  I am perfectly willing to agree that the regulatory structure we have 
basically going back to the 1930s is inadequate for the kind of world 
in which we now live. And I am perfectly willing to agree the 
restructuring should be a serious one and a deep one. If you do a 
serious and deep restructuring of the way we handle credit markets in 
this country and confer with our counterparts in other countries around 
the world so the world structure is intelligently constructed, you are 
talking months, if not a year or so. And while we are putting forward 
our pet theories as to how that should be done, with experts on talk 
shows and from think tanks pontificating on cable television, payrolls 
may not be met in towns in my State.
  This is a crisis that has to be dealt with now. We can deal with the 
restructuring of the financial regulatory system at our leisure, but we 
must not take our eye off the seriousness of the crisis, both in terms 
of its size and in terms of its pressure. This morning's financial 
journals make it clear that throughout many countries in the world they 
and their central banks have not yet addressed the seriousness of the 
crisis, and we will see problems overseas begin to wash up on our 
shores to make our problem that much worse if we don't act.
  There are those who say, well, we shouldn't give this much power to 
the Secretary of the Treasury. I don't like the idea of one man having 
this much authority. The proposal that has been put together creates an 
oversight board with real power. It creates a board that could rein in 
a Secretary of the Treasury who abused his power or who got out too far 
in front. It is my understanding that we have built-in congressional 
review in the bill that the House defeated--congressional review, 
congressional oversight--that could have said to a Secretary of 
Treasury: You are too far extended, and we are going to hold back on 
the authority we have given you.
  But we have a crisis that needs to be dealt with and needs to be 
dealt with now. We shouldn't be arguing over whether the city council 
should second-guess the police chief as he rushes to deal with a 
crisis, a police chief in whom the city council had confidence when 
they chose him in the first place. This Secretary of the Treasury is 
well known as one of the more expert money managers in the country. He 
has been completely open in all of his discussions with members of the 
leadership of both parties, and members of the leadership of both 
parties have expressed confidence in his ability to do this. They have 
created the oversight board that is in the bill that will pull him back 
if he does it improperly.
  The entire $700 billion will not be committed immediately--cannot be 
committed immediately. It must be handled in an orderly fashion. We 
understand from the Secretary that the

[[Page 23413]]

pattern of its disbursement will run at the level of about $50 billion 
a month. So we are not talking about giving $700 billion overnight in a 
single check to a single man for him to go out and waste. Those on the 
talk shows who make that comment simply demonstrate they do not 
understand what is in the bill.
  But the fact that the Secretary of the Treasury can say to the credit 
markets that are frozen: I have potentially $700 billion available to 
solve this problem, is a very powerful message that will help solve the 
problem. A very important part of the problem is the sense of 
confidence that we are serious about getting it done.
  If we say, well, we are going to give the Secretary of the Treasury 
$100 billion and see how it works, that sends a message we are not 
confident that this will do any good. If we are going to say, well, we 
want a board to examine every aspect of this proposal. We are not going 
to give the Secretary authority to move ahead decisively. That sends 
the message we are not confident this will work.
  The bill the House voted down which said the Secretary can say to the 
market that potentially we have $700 billion that can be applied to 
this problem, and he has full authority to commit it, subject to review 
of the oversight board and the ultimate review of Congress, that is a 
statement of confidence that the markets can believe.
  Now, let me talk just briefly about where the $700 billion number 
comes from. It is not pulled from out of the air. It is not a number 
that somebody thought up as sounding pretty big. The total amount of 
mortgages in the United States is approximately $14 trillion, and the 
percentage of those mortgages that are bad and probably cannot pay out 
is about 5 percent. Five percent of $14 trillion is $700 billion. But 
the assets that the $700 billion will acquire will not be all of the 
bad mortgages. The assets they will acquire will be a mixture of bad 
mortgages and good mortgages. Why? Because nobody knows which are the 
bad mortgages and which are the good mortgages. The only way we are 
going to find out is hold the mortgage to maturity and see which ones 
get paid and which ones don't. They are all packaged together.
  So the Secretary, by putting 5 percent of the total amount of 
mortgages available to acquire those that are questionable is sending a 
message of great confidence to the market by acquiring those mortgages 
and creating a circumstance whereby once the good ones pay out, the 
taxpayers will receive money back.
  Indeed, there are some who say the U.S. Government will make money. I 
don't happen to believe that it will, but I can't prove that it will 
not, and there is certainly an indication in past history that it will.
  If we go through the past circumstances, where the Federal Government 
has intervened in circumstances of need, starting with the Chrysler 
loans, the Federal Government made money on the Chrysler loans.
  Chrysler righted itself by virtue of having access to that money, 
paid interest on the loans, and the taxpayer received a financial 
benefit for the Government having entered into the Chrysler loan 
program.
  If I had been in Congress at the time, I probably would have voted 
against it for other reasons, but for financial reasons, it was a good 
deal. If you look at the deal that has been made recently with the 
Federal Reserve and Bear Stearns, the Federal Reserve stepped in with 
the Bear Stearns circumstances. What did they do?
  They forced the sale of Bear Stearns and then they opened the Fed 
window so Bear Stearns could borrow money. What happens when you borrow 
money? You pay interest. By making sure Bear Stearns did not go down, 
the Federal Reserve guaranteed that Bear Stearns will be able to pay 
the interest on the money that is made available to them. Who gets that 
interest when it is paid? The American taxpayer.
  It will be paid into the Federal Reserve account. When the Federal 
Reserve makes money, their surplus gets paid to the American taxpayer. 
The American taxpayer will receive a benefit, a financial benefit, from 
the deal that was made by the Federal Reserve and Bear Stearns. The 
same will be true with AIG, the insurance giant. They will be paying 
interest on the money that has been made available to them on a loan 
basis, and the taxpayer will receive that interest.
  So for those who are out there adding up the face value of every deal 
we have made and then adding it to the $700 billion and then telling us 
all that it is gone and there will never be any of it coming back to 
the Treasury, they are wrong. They are misleading the American people 
with that kind of talk. Frankly, it is those commentators who are 
adding up those numbers irresponsibly, who are driving the angry phone 
calls that are coming into my office and the office of everyone else 
here.
  Now, I understand their anger. I am sympathetic with their anger. I 
am as disappointed as anybody that we allowed this situation to get to 
where it is. But I say to those who are angry: Let's leave it up to the 
historians to sort out where the blame should go. Let's put out the 
fire right now. Let's not spend our time as the fire is burning running 
around trying to find out who the arsonist may have been, while the 
fire destroys the building. Let's free up the credit markets right now. 
Let's send a signal of confidence to the world markets right now. We 
should have done it on Monday in the House of Representatives. We did 
not.
  Negotiations are now going on between the leaders of both Houses and 
the leaders of both parties to try to find some new program that might 
pass. Once we do, we will get another vote. The Republican leader has 
made that very clear. The majority leader has made that clear. We are 
not leaving town until we get another vote.
  That is why the stock market is as encouraging as it is. But we must 
understand, if we do not act, the lack of confidence will produce a 
worldwide wave of credit seizing up, and it will be the small 
businesses, it will be the 401(k) plans, it will be the pension 
programs for teachers and nurses and others who are depending upon 
those plans for their retirement that will pay the price.
  Some will feel very virtuous about having voted against Wall Street 
and then turn around and find that their constituents generally have 
paid a huge price for that vote. The stock market took over $1 trillion 
worth of value out of the American economy in a matter of minutes on 
Monday afternoon. We must do everything we can to make sure that does 
not turn into $2 trillion, $3 trillion or $4 trillion wiped away 
because the Congress was not willing to stand up to its 
responsibilities.
  I have faith that ultimately we will. I have faith that the Members 
of the House and the Members of the Senate will ultimately recognize 
their responsibility and do the right thing.
  I go back to a quote by Winston Churchill, who commented on 
Americans, generally. He said:

       The Americans can always be depended upon to do the right 
     thing after they have exhausted every other possibility.

  Monday we exhausted our every other possibility. It is time to do the 
right thing. We in this body, as well as those in the other body, need 
to rise to the occasion.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. I ask unanimous consent to speak as in morning 
business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                                 Taxes

  Mr. GRASSLEY. Mr. President, beginning in the third week of July, I 
have come to the floor quite often to compare the tax plans of Senator 
McCain and Senator Obama, our two Presidential candidates. I have 
talked about the relationship between party control and the likelihood 
of tax hikes or tax cuts. I have used the infamous thermometer chart to 
demonstrate. I am not going to go through all of it again because I 
have talked about it several times on the floor of the Senate.
  But up on the top, you can see that when a Democratic President 
controls

[[Page 23414]]

the White House and the Congress at the same time, you had the biggest 
tax increase. And then, if you come down through there, you find in 
various phases you have more or less tax decreases or tax increases, 
and you have the most tax decreases when you have a Republican 
President and a Republican Congress.
  Now, that is over the last 28 years, approximately. In another speech 
I talked about the 1992 campaign promise of the middle-class tax cut. I 
contrasted the promised tax cut with the 1993 tax legislation that 
contained a world record price increase. I have used this chart that is 
going up there now to depict what it would look like with 16 years of 
tax hike amnesia and Rip Van Winkle.
  In our first week back after the August recess, I returned to these 
topics and I discussed the effects of the proposed 17- to 33-percent 
increase in the top two rates. I focused on small business activity and 
how increased taxes hurt that small business activity and hurt the job 
creation machine of our great economy, which is small business.
  Last week, I discussed the impact of Senator McCain's and Obama's tax 
plans on seniors. Earlier this week, I discussed the fiscal effects of 
Senator McCain and Senator Obama's plans. Today, I focus on how both 
tax plans would affect the middle class. The press and the candidates 
have focused a lot of attention on the middle class. In fact, I 
remember a speech of Senator Obama's alluding to something about he 
never heard Senator McCain in the debate last week say anything about 
the middle class.
  Well, Senator McCain is not comfortable in the class war-type 
rhetoric that some people are comfortable using, and he talks about the 
middle class a lot when he talks about small business and working men 
and women. So we have heard a lot about the middle class. So I wish to 
concentrate on that.
  My discussion today will focus on tax policy. But to get a handle on 
what is and is not middle-class relief, we need to see if we can define 
the term ``middle class.'' Today I think we need to get answers to 
several questions as we try to get to the bottom line of where Senators 
McCain and Obama are on middle-class tax relief.
  The first question would be: What is the definition of ``middle 
class''? To get at this question, we need to see what the two 
candidates say about who is in the middle class and how their plan 
defines the middle class.
  The second question would be: Where are Senators McCain and Obama on 
the current law of middle-class tax relief that is set to expire. I am 
referring to the family tax relief provisions that expire at the 
beginning of 2011 and the alternative minimum tax fix.
  To get to that question, we need to look at where each candidate's 
record has been on bipartisan tax relief. We also need to look at what 
they plan to do with these expiring tax relief provisions, which means 
when the tax laws of 2001 and 2003 sunset December 31, 2010.
  The third broad question is: Where would Senator McCain and Senator 
Obama further reduce or hike taxes on middle-class families? To get an 
answer to this question we will take a look at each of the candidate's 
new proposals for middle-class tax cuts.
  If you turn to factcheck.org, you will find the definition is not 
simple about what is a middle class. According to factcheck.org, there 
is no clear definition of middle class. Here is what they say there:

       Middle class means different things to different people and 
     politicians. There is no standard definition, and, in fact, 
     an overwhelming majority of Americans say they are middle 
     class or upper middle class or working class in public 
     opinion polls. Hardly anyone considers themselves lower class 
     or upper class in America.

  I ask unanimous consent to have this material printed in the Record 
at the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. GRASSLEY. I have a chart that breaks down the answers to a Pugh 
Research Center poll. Among other questions, the poll asks whether 
folks thought of themselves as upper class, upper middle class, middle 
class, lower middle class, and lower class. In other words, basically 
dividing the country into different quintiles.
  According to the poll, 53 percent of Americans considered themselves 
middle class, 19 percent consider themselves upper middle class, and 19 
percent consider themselves lower middle class. So you have this 
outstandingly high percentage of 92 percent of Americans who consider 
themselves something other than upper class or lower class.
  Since we are examining Senator McCain's and Senator Obama's tax 
plans, it is fair to ask about their definition of middle class.
  On August 16 of this year, Senator McCain appeared on Pastor Rick 
Warren's forum at Saddleback Church in Albuquerque, NM. Pastor Warren 
asked Senator McCain to draw a line, in tax relief dollar terms, 
between the middle class and the rich. Senator McCain's answer reflects 
the ambiguity of the factcheck.org definition. I quote Senator McCain:

       I think the rich should be defined by a home, a good job, 
     an education and the ability to hand our children a more 
     prosperous and safer world than the one we inherited.
       So if you're just talking about income--

  Then on television there was kind of a laugh and smile at that 
point--

     how about $5 million? No, but seriously, I don't think you 
     can. I don't think seriously that the point is I'm trying to 
     make, seriously, and I'm sure that comment will be distorted 
     but the point is . . . that we want to keep people's taxes 
     low, and increase revenues. . . . So it doesn't really matter 
     what my definition of rich is because I don't want to raise 
     anyone's taxes. I really don't.

  How does Senator Obama define the middle class? In an interview with 
Fox News of Bill Hemmer, Senator Obama answered the question this way:

       You know, what I would say is, if you are making more than 
     $250,000, then you're more than middle class. You're doing 
     better. If you are making less than $250,000, then you are 
     definitely somewhere in the middle class. And if you're 
     making $150,000 or less, then I would think most Americans 
     would agree you're middle class. So that's why the fact that 
     you are making less than $250,000, you will not see your 
     taxes go up under an Obama administration. And you will see 
     tax cuts with more money in your pocket, if you are making 
     less than $150,000.

  I ask unanimous consent to have printed in the Record the Bill Hemmer 
interview.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                     Obama Defines ``Middle Class''

                           (By Major Garrett)

       Washington.--I wanted to throw out for consideration and 
     debate a question I've found myself asking Democrats, 
     Republicans, Independents and economists for years: who is in 
     the middle class?
       In the 1990s, the answers I received were almost entirely 
     linked to income figures--the income of a family of four, or 
     three or of a single person in his or her twenties, or an 
     elderly person on a fixed income determined how close or how 
     far they were from ``middle class'' status.
       About the time of millennium, I began to notice that the 
     answer to who was ``middle class'' began to change from 
     relatively precise figures to very broad income strata. It 
     was as if politicians--particularly at the national level--
     began to believe that incomes varied as widely as the core 
     cost of living. Therefore, an income designation, for 
     example, linked to the U.S. Census Bureau definition of 
     median or mean income for an individual or family, would no 
     longer work as a means of defining with precision who was or 
     was not middle class.
       In other words, individuals or families in New York, Los 
     Angeles, Chicago, San Francisco, Boston or other high-cost 
     urban areas could earn three times the median or mean family 
     income and still feel strapped by month-to-month costs.
       In other words, middle class status seemed over time to be 
     less rooted in specific income figures, but regional 
     differences in income and cost-of-living. It also seemed to 
     reflect a sense among politicians and some economists that 
     ``middle class'' is not just a matter of figures, but also a 
     state of mind.
       At my suggestion, my colleague Bill Hemmer was kind of 
     enough to ask Sen. Barack Obama in London how he defined the 
     middle class.
       Here is the transcript of that exchange:
       HEMMER: You mentioned the economy. You travel back to the 
     U.S. this weekend. You're going back to a country with a 
     limping economy, ``ailing,'' I think, is one of the words The 
     Economist used at the end of last week.
       You have suggested that taxes will be raised on some 
     Americans. You have also

[[Page 23415]]

     suggested that taxes will be lowered for some Americans. In a 
     limping or an ailing economy, why raise taxes on anyone?
       OBAMA: Well, the--because we also have a $400 billion or so 
     budget deficit, because we've also got to invest in 
     infrastructure. We've got to deal with the fact that a lot 
     more people are unemployed and are going to need unemployment 
     benefits. We've got to shore up the housing market because 
     people are experiencing foreclosures.
       And that's why I've structured a change in the tax code 
     where if you are making $150,000 a year or less, you're 
     getting a tax cut, 95 percent of the American families will 
     get a tax cut.
       HEMMER: What do you consider . . .
       OBAMA: And the people who are going to see their income 
     taxes raised, go up, are making more than $250,000 a year. So 
     you and I will pay a little bit more in taxes because we can 
     afford it. And what that allows us to do is to help the vast 
     majority of Americans who are really hurting in this economy.
       HEMMER: I know we're pushed for time. Can you give me a 
     definition of the middle class based on income, within a 
     range?
       OBAMA: You know, what I would say is, if you are making 
     more than $250,000, then you're more than middle class. 
     You're doing better. If you are making less than $250,000, 
     then you are definitely somewhere in the middle class.
       And if you're making $150,000 or less, then I think most 
     Americans would agree that you're middle class. So that's why 
     the fact that if you are making less than $250,000, you will 
     not see your taxes go up under an Obama administration. And 
     you will get tax cuts and more money in your pocket if you 
     make less $150,000.
       I think that's the right way to promote the kind of bottom-
     up economic growth that's going to make a difference in 
     people's lives.
       Here is how the government tabulates two different types of 
     mid-point incomes in America. The Census Bureau calculates 
     median income (the precise mid-point between all tabulated 
     incomes) and the mean income (the average of all the 
     tabulated incomes) of families and individuals. The figures 
     below are for families and individuals for 2006.
       Income of family households in U.S. in 2006 (most recent 
     year available)Median: $59,894 Mean: $77,315
       (Source: Census Bureau: Income, Poverty, and Health 
     Insurance Coverage in the United States: 2006, http://
www.census.gov/prod/2007pubs/p60-233.pdf and Current 
     Population Survey: Annual Social and Economic (ASEC) 
     Supplement, http://pubdb3.census.gov/macro/032007/faminc/
new07_000.htm)
       Income of all households in U.S. in 2006 (most recent year 
     available)Median: $48,201 Mean: $66,570
       (Source: Census Bureau: Income, Poverty, and Health 
     Insurance Coverage in the United States: 2006, http://
www.census.gov/prod/2007pubs/p60-233.pdf and Current 
     Population Survey: Annual Social and Economic (ASEC) 
     Supplement, http://pubdb3.census.gov/macro/032007/hhinc/
new06_000.htm)
       So, the question I set before those of you who wish to 
     discuss and debate are these: what is the middle class; are 
     you in the middle class; have you always been there and do 
     you ever imagine you live better than ``middle class''; and 
     to what extent does your conception of ``middle class'' 
     affect your view on how high taxes should be which income 
     category.
       Let the discussion and debate begin.

  Mr. GRASSLEY. Senator McCain doesn't adopt a sharp line definition of 
middle class. Senator Obama defines middle class as everyone below 
$150,000. Senator Obama defines as a neutral area those earning between 
$150,000 and $250,000. Senator Obama defines families earning above 
$250,000 as upper class.
  Now that we have the stated definitions of middle class, let's take a 
look at where Senators McCain and Obama would change the current family 
tax rate. If you take a look at Senator McCain's plan, you can get a 
handle of where he wants to cut middle-class taxes. In effect, you can 
get an idea of where Senator McCain believes further middle-class tax 
relief ought to go. Senator McCain would lower current law levels of 
taxation in two widely applicable proposals. The first would double the 
dependent personal exemption for a family of four. This relief would 
apply to taxpayers with incomes up to $120,000. This new tax relief 
would be phased out for those families between $50,000 and $120,000. I 
have a chart that shows which groups of families would be affected by 
Senator McCain's tax proposal. It is called the regular tax, between 
$32,000 and $132,000, by increasing the dependent personal exemption 
from $3,500 to $7,000.
  The other area of family tax relief that Senator McCain is targeting 
is relief from the alternative minimum tax. During the last couple of 
weeks, the House and Senate have debated AMT extension bills. Take a 
look at the Congressional Record and examine the debate. If you do, you 
will see nearly all the Democrats and most Republicans in both bodies 
describe the overreach of the alternative minimum tax as a middle-class 
family tax problem. If the AMT patch is almost universally defined as 
middle-class tax relief, then a fair question is: Who benefits from 
this fix?
  I have a chart that shows this. The chart refers to a Joint Committee 
on Taxation analysis of the last fix that became law, meaning the 2007 
alternative minimum tax fix. You can see how it affected people in 
different categories. You will see from the chart that the AMT patch 
benefited families between $40,000 and $50,000 on the low end. And as 
we travel across the chart, you will see the biggest category of 
families benefiting to be in the $75,000 to $100,000 category and the 
$100,000 to $200,000 category. Roughly half the families benefiting, 
over 9 million, earned between $100,000 and $200,00. On the higher end, 
we find about half a million families earning between $200,000 and 
$500,000 also benefited from making sure that the alternative minimum 
tax doesn't hit middle-income people, a group of people who could be 
hit if Congress didn't fix it from year to year so that they didn't get 
hit. This year that number is 23 million people who would get hit if 
the Senate hadn't passed the bill we did last week.
  The AMT patch relief conforms to polling data on how Americans define 
themselves. The AMT patch problem that the patch remedies spreads 
across a broad swath of American taxpayers, as we saw from the chart.
  Senator McCain's second major tax relief proposal would build upon 
the alternative minimum tax fix. Senator McCain would extend the 
alternative minimum tax fix and enlarge it, starting in the year 2013. 
Under Senator McCain's plan, we would start to reduce the reach of the 
alternative minimum tax by expanding the patch by 5 percent per year on 
top of the increase in exemption amount of the patch for inflation. 
That proposal would provide more relief to some of the 4 million 
families currently paying the alternative minimum tax.
  If we step back and take a look, we see that Senator McCain would 
further reduce regular taxes for families between $32,000 and $120,000. 
Again, we have up the same chart. Senator McCain would extend the AMT 
patch and gradually enhance it, and most of the families who would 
benefit from the AMT patch have incomes between $50,000 on the low end 
and $200,000 on the high. So it looks as if Senator McCain's 
operational definition of middle class probably conforms to the 
definition that we find in public opinion polls.
  Senator Obama's stated definition of the middle class, in terms of 
further tax relief, consists of taxpayers earning under $150,000. Let's 
take a look at how his plan would operate. Senator Obama used a 
different definition of middle class in contrasting his tax relief plan 
with that of Senator McCain. Here is what Senator Obama's campaign 
said:

       According to the Tax Policy Center, the Obama plan provides 
     three times as much tax relief for middle-class families as 
     the McCain plan.

  Behind that claim is a comparison of the Tax Policy Center analysis 
of Senators McCain's and Obama's plans, proposals on families in the 
middle-income quintile. The middle-income quintile refers to the middle 
20 percent of all families in America. According to the Tax Policy 
Center, that band of income runs between $37,596 and $66,354. I have a 
chart that depicts the band of income that would represent that middle 
income. We would point here to Senator Obama's tax relief down there, 
the light blue, between $37,000 and the $66,000 figures. As we can see, 
this is a much smaller group, 20 percent of the population topping out 
a bit above $66,000 a year income. That is far below the $150,000 and 
$250,000 figures Senator Obama mentioned in the Fox News interview I 
placed in the Record.
  On the AMT patch, Senator Obama supports his words ``fiscally 
responsible'' AMT reform, whatever that vague concept means. Unlike 
Senator McCain, Senator Obama conditions extension of the AMT patch on 
his notion

[[Page 23416]]

of ``fiscal responsibility.'' The Tax Policy Center assumes that this 
means that Senator Obama would extend the AMT patch and index it for 
inflation. However, this is just one think tank's interpretation of 
Senator Obama's statement that he supports fiscally responsible AMT 
reform. But for the sake of comparison, at least until 2013, the two 
candidates seem to be targeting the same middle-class family 
population. I depicted that band of middle-class tax relief on the 
chart, as we can see.
  When we look at how both plans operate, Senator McCain's plan targets 
new regular family tax relief at middle-class families between $32,000 
and $120,000. Senator Obama targets new regular family tax relief at 
middle-class families between $38,000 and $66,000. Both candidates 
target the same population for AMT patch extension. Senator McCain 
proposes additional alternative minimum tax relief by expanding the AMT 
patch in the year 2013 and beyond.
  Let's turn to the second question. The question is, How will Senators 
McCain and Obama deal with middle-class family tax relief that will 
expire? The bipartisan tax cuts, from 2001 and 2003, provide a very 
large amount of tax relief to middle-class families. So the question 
is, Should we allow this tax relief to expire, as it will at the end of 
2010? And if Congress doesn't do anything, as you have heard me say, we 
will get the biggest tax increase in the history of the country without 
even a vote of Congress because that is what sunsets do. You go back to 
old law. These 2001 and 2003 bipartisan tax cuts are set to expire at 
the end of 2010. If these tax cuts are extended, then in 2011 a married 
couple making $50,000 with two children would save an average of $2,300 
on their tax bill. It is clear enough. I don't have to dwell on what 
the chart says. If we don't do anything for this class of taxpayers, 
the tax bill is going to go up $2,300 per year.
  Likewise, you can take any class of people, but let's look at a 
single mom with two kids who makes $30,000 a year. She would save an 
average of $1,100 off of her tax bill in 2011, if the 2001 and 2003 tax 
cuts are extended--the same wall only with different figures. The 2001 
and 2003 bipartisan tax relief bills provide much needed tax relief, 
almost all of which is scheduled to expire by the end of 2010. This 
bipartisan tax relief doubled the child tax credit, allowed this child 
tax credit to be used against any AMT liability, and made a large 
portion of this child tax credit refundable. This bipartisan tax relief 
also permanently extended the adoption tax credit and increased the 
credit to $10,000 per child. This bipartisan tax relief also increased 
the dependent care credit to a maximum of $6,000. In addition, it also 
provided tax relief from the marriage penalty. This bipartisan tax 
relief also provided a number of tax relief provisions to help make 
education more affordable.
  For example, one provision gave a deduction up to $4,000 for college 
tuition and related expenses. In addition, another provision increased 
the annual limit on contributions to education IRAs from $500 a year to 
$2,000 a year.
  I believe it is useful to look at where the candidates have been with 
respect to their positions on middle-class tax relief. Senator McCain 
has consistently supported middle-class tax relief in his Senate 
career. As far as I am aware, Senator McCain has never voted to raise 
taxes on middle-income families. Senator McCain helped prevent tax 
increases on middle-income families in 2004 by voting for the Working 
Families Tax Relief Act of 2004. Senator McCain's budget votes have 
consistently provided room for the extension of the lower income tax 
rates as well as suspension of the harmful PEP and PEASE provisions 
that are now being phased out because of the 2001 tax bill. In 
addition, Senator McCain has been consistently a supporter of even the 
repeal of those two provisions.
  On the other hand, Senator Obama voted for the Democratic budget and 
the budget conference report this year that did not provide room to 
protect Americans in the 25-, 28-, 33-, and 35-percent tax brackets 
from being hit with this tax increase that will automatically happen at 
the end of 2010 because of sunsets. So we get, as I said once before, 
the biggest tax increase in the history of the country, without a vote 
of Congress.
  According to the IRS, single individuals falling within the 25-
percent bracket in 2008 start at taxable income of more than $32,550. 
They earn taxable income of no more than $78,850. Singles in the 28-
percent bracket will earn taxable income of more than $78,850 or less 
than $164,550.
  Senator Obama said in the Presidential candidates' September 26, 
2008, debate he would not raise taxes a dime on people making under 
$250,000. But his two budget votes in 2008 do not provide room for him 
to keep that promise. In fact, he could not even make good on that 
promise to those singles making over $32,550 on taxable income based on 
the Democratic budget he voted for.
  Instead, these taxpayers with over $32,550 in taxable income would be 
hit with a hidden marginal tax rate increase in the PEP and PEASE 
categories as well as a transparent marginal tax rate increase 
according to the budget that Senator Obama voted for.
  I turn now to the harmful alternative minimum tax, or the AMT. Both 
parties agree the AMT is a tax on the middle class that the middle 
class should never have to pay. Why it hits them--and they should never 
have to pay it--and why Congress takes corrective action is because it 
was never indexed. In addition, both parties deserve blame for the 
problem we have, that the AMT is not indexed. However, the Omnibus 
Budget Reconciliation Act of 1993, passed strictly on party-line votes 
by a Democratic majority and signed into law by President Clinton, did 
even a lot more damage to the alternative minimum tax.
  In the 1993 tax bill, the exemption level was increased to $33,750 
for individuals and $45,000 for joint returns, but this was accompanied 
by yet great increases beyond what was already in law. Importantly, as 
in previous bills related to the AMT, these exemption amounts were not 
indexed for inflation. By the way, the 1993 tax increase was passed on 
strictly party-line votes, with the Democrats supplying the majority.
  Once again, graduated rates were introduced, except this time they 
were 26 percent and 28 percent. By tinkering with the rate, as well as 
the exemption level of the AMT, these bills were only doing what 
Congress has been doing on a bipartisan basis for almost 40 years, 
which is to undertake a wholly inadequate approach to the problem that 
keeps getting bigger. By ``problem'' I mean taxing middle-income people 
by the alternative minimum tax--a class of people whom it was never 
supposed to apply to.
  Aside from this futile tinkering I suggested from the 1993 bill, 
Congress--and, of course, we have tinkered with the AMT over the years 
to keep it from hitting additional middle class--Congress has in other 
circumstances completely ignored the impact of tax legislation on 
taxpayers caught by the AMT. In the 1990s, a series of tax credits, 
such as the child tax credit and the lifetime learning credit, were 
adopted without any regard to the AMT. The AMT limited the use of 
nonrefundable credits, and that did not change.
  However, Congress quickly realized the ridiculousness of this 
situation and waived the AMT disallowance of nonrefundable personal 
credits, but it only did it through the year 1998. In 1999, the issue 
again had to be dealt with. The Congress passed the Taxpayer Refund and 
Relief Act of 1999. In the Senate, only Republicans voted for the bill. 
That bill included a provision to finally repeal the alternative 
minimum tax that was on the books from 1969 to that point. Senator 
McCain voted in favor of this bill to repeal the AMT. However, then-
President Clinton vetoed the bill. So we still continued to have the 
alternative minimum tax.
  Later on, in 1999, an extenders bill, including a fix good through 
2001, was enacted which held harmless AMT for a little while longer.
  In 2001, we departed from these temporary piecemeal solutions to fix 
the AMT through the tax bill of 2001. That bill permanently allowed the 
child tax

[[Page 23417]]

credit, the adoption tax credit, and the IRA contribution credit to be 
claimed against a taxpayer's AMT. While this was certainly not a 
complete solution, it was a step in the right direction. More 
importantly, the 2001 bill was a bipartisan effort to stop the further 
intrusion of the alternative minimum tax hitting the middle class. The 
package Senator Baucus and I put together effectively prevented 
inflation from pulling anyone else into the AMT through the year 2005.
  Our friends in the House originally wanted to enact a hold harmless 
only through the end of 2001. But the final compromise bill signed by 
the President increased the AMT exemption amount through 2005. Since 
the 2001 tax relief bill, the Finance Committee has produced bipartisan 
packages to continue to increase exemption amounts to keep taxpayers 
ahead of inflation, including the bill of 2005. Most currently, the 
2007 AMT patch was extended in late 2007. Hopefully, the House will go 
along with what we did last week, and we will extend that through 2008.
  These packages put together since 2001 are very unique in that they 
are the first sustained attempt undertaken by Congress to stem the 
spread of the AMT through inflation, hitting the middle class who was 
never intended to be hit.
  Now, admittedly, these were nothing but short-term fixes. But they 
illustrate a comprehension of the AMT inflation problem and what needs 
to be done to solve it.
  I now look at how the candidates have voted with respect to the AMT. 
Senator McCain has consistently voted to protect Americans from the 
alternative minimum tax. Senator McCain voted for the Tax Refund and 
Reconciliation Act of 1999, which contained a proposal to completely 
phase out the AMT. In fact, in the Senate, that conference report 
passed on Republican votes only, including Senator McCain's. In 2001, 
when the AMT patch began, Senator McCain supported the Senate version 
of the tax relief bill that patched the AMT for a longer period of 
time. Moreover, Senator McCain voted for the Tax Increase Prevention 
and Reconciliation Act of 2005 and later bills that extended the AMT 
patch.
  In stark contrast to Senator McCain's voting record of providing 
relief from the AMT, Senator Obama voted against the AMT patch 
contained in the Tax Increase Prevention and Reconciliation Act of 
2005. Also, Senator Obama opposed Republican budgets in 2005 and 2006 
that provided revenue room for the AMT patch. Senator Obama supported 
the 2007 Democratic budget that omitted any revenue room for such an 
AMT patch. In 2008, Senator Obama supported the Democratic budget that, 
for the first time in this election year, provided some tax relief 
revenue room for fixing the AMT.
  Senator McCain supported the 2008 Republican budget that provided 
similar revenue room for the AMT.
  Therefore, when looking at each candidate's voting record, the 
conclusion that becomes apparent is Senator McCain has been much more 
supportive of middle-class tax relief than Senator Obama.
  I will now turn to that third and final question I posed at the 
beginning of my remarks: What new proposals do the candidates offer on 
middle-class tax relief? We are going to move from the actions of the 
candidates and look, instead, at their words and what we can anticipate 
on whoever is sworn in on January 20 next year.
  Let's take a look at Senator McCain's tax plan. Senator McCain 
proposes to extend all of the 2001 and 2003 bipartisan tax relief. In 
other words, for the most part, it seems to me you can say Senator 
McCain does not want to increase taxes, by keeping the present tax 
policy basically where it has been, at least as far as not sunsetting 
in 2010 what we did in 2001 and 2003 and, hence, not get the biggest 
tax increase in the history of the country, without even a vote of 
Congress, because that is what happens when those tax provisions 
expire. Also, that is where you go back to that family of four getting 
a $2,300 tax increase on a married couple making $50,000. Likewise, a 
single mom with two kids who makes $30,000 a year would save an average 
of $1,100 if the 2001 and 2003 tax cuts are extended. Now, we have gone 
through those figures before, but they are up here on the chart so you 
can recall what I previously had said. But I think it is necessary to 
emphasize it because that is exactly what is going to happen at the end 
of 2010 if Congress does not step in and keep the American people, but, 
more importantly, the American economy, from being harmed by the 
biggest tax increase in the history of the country without a vote of 
the Congress.
  In addition, Senator McCain proposes additional AMT relief by 
expanding the AMT patch in 2013 by indexing the patch by an additional 
5 percent per year in addition to the indexing done for inflation, 
until the joint exemption amount is $143,000, at which time the patch 
would only be indexed for inflation. Therefore, those families making 
$143,000 and below would eventually be exempt from the AMT, and this 
$143,000 amount would be indexed for inflation.
  Senator McCain would also double the dependent exemption from the 
current amount of $3,500 to $7,000. Senator McCain proposes to do this 
by increasing the dependent exemption by $500 each year beginning in 
2010, until it reaches that $7,000 by the year 2016.
  Therefore, this would provide significant additional tax savings for 
any married couple or single parent with one or more children. The tax 
relief provided by the doubling of the dependent exemption would be in 
addition to tax relief provided by the alternative minimum tax patch 
and extension of the 2001 and 2003 tax cuts.
  Now, let's look at Senator Obama. He has said he is in favor of 
extending what he calls the Bush tax cuts, except for those Americans 
who make over $250,000 a year. As I have mentioned before, these should 
not be referred to as the ``Bush tax cuts,'' because if President Bush 
had gotten his way in 2001, they would have been much more than what 
they were. So Senator Baucus and I sat down in 2001. We were the 
leaders of the Finance Committee, as we are still; in his case, the 
chairman now, and I am ranking Republican. We worked on a bipartisan 
basis and did something significantly different than what President 
Bush wanted to do.
  Regardless, Senator Obama says he would extend all of the 2001 and 
2003 bipartisan tax relief for those making $250,000 or less. This 
includes the provision I discussed above regarding the 2001 and 2003 
bipartisan tax relief, including lowering some of the marginal tax 
rates, providing marriage penalty relief and doubling the amount of the 
child tax credit to $1,000 per child.
  Although Senator Obama's voting record might indicate otherwise, 
Senator Obama claims that he is in favor of ``fiscally responsible AMT 
reform.'' The Tax Policy Center assumes this means using the 
alternative minimum tax patch and indexing that patch for inflation to 
prevent more middle-class Americans from being hit by the AMT each 
year.
  Senator Obama is proposing a new $500 tax credit called the making 
work pay credit that has the effect of exempting the first $8,100 of 
earnings from the Social Security tax. He also proposes a credit of up 
to $800 equal to 10 percent of the mortgage interest paid by Americans 
who do not itemize deductions.
  Senator Obama also proposes turning the current nonrefundable saver's 
tax credit into a refundable credit, and the maximum credit for a 
married couple is $500.
  Senator Obama proposes to rename the HOPE and lifetime learning 
credit by calling it the American opportunity tax credit. In addition, 
he would like to increase the maximum amount of this refundable credit 
from $1,800 to $4,000 and to make the credit refundable.
  Finally, Senator Obama claims he wants to expand the earned-income 
tax credit in various ways. He also claims he wants to expand the child 
and dependent care credit by making it refundable.
  I turn now to examine whether Senator McCain's and Senator Obama's 
promises regarding middle-class tax relief are realistic. Even if we 
assume

[[Page 23418]]

both Senators want to enact all the tax cuts they are promising, could 
they deliver on these promises?
  The nominally nonpartisan Tax Policy Center estimates that Senator 
Obama's tax plan will lose $2.9 trillion over 10 years when compared to 
current law. I have used this chart before in my speeches. I won't go 
into detail, but you can see the Obama plan is the top red line there 
which says how much it would lose. As I mentioned in a previous speech, 
this $2.9 trillion figure inaccurately assumes that Senator Obama's 
plan will be partially offset by $925 billion in revenue raisers. The 
Tax Policy Center refers to Senator Obama's $925 billion number as an 
``unverifiable campaign-provided revenue estimate.'' As I mentioned in 
that previous speech, a more realistic estimate of revenue raisers over 
10 years is approximately $220 billion, meaning Senator Obama's tax 
plan would actually lose another $705 billion in revenue. Therefore, 
the total revenue lost from Senator Obama's plan is not $2.9 trillion 
over 10 years but instead is approximately $3.6 trillion over 10 years.
  The figure for Senator McCain's plan is higher. As my colleagues can 
see, the Tax Policy Center shows Senator McCain's plan to prevent 
widespread tax increases would lose revenue of $4.2 trillion over 10 
years. In addition, as I mentioned in my prior remarks to the Senate, 
Senator McCain's proposal assumes revenue raisers of $365 billion. If 
we net that $365 billion number against the known revenue raisers 
number of $220 billion, we find that Senator McCain's plan is short of 
revenue raisers by $145 billion. Therefore, adding this $145 billion to 
the revenue loss of $4.2 trillion that the Tax Policy Center estimates 
for Senator McCain's tax relief plan results in total revenue loss of 
$4.3 trillion.
  The National Taxpayers Union, also referred to around here as the 
NTU, is a nonpartisan public policy research organization. The NTU's 
analysis, updated September 25, 2008, says that Senator McCain's plan 
would include new spending of $92.4 billion per year. According to the 
NTU, this would result in spending increases of $924 billion over 10 
years. Adding this $924 billion in estimated new spending to the 
revenue loss from Senator McCain's tax plan, this results in a total of 
$5.2 trillion of revenue loss, plus spending for Senator McCain's plan.
  Now let's look at Senator Obama's tax and spending plans. Would 
Senator Obama's Democratic colleagues who have an obsession with pay-
as-you-go on the tax side but not on the spending side, including House 
Blue Dog Democrats, go along with increasing the deficit approximately 
$3.6 trillion by Senator Obama's proposed tax cuts? This is even before 
taking into account the spending increases Senator Obama is proposing.
  According to the nonpartisan NTU's analysis, which was updated 
September 25, 2008, Senator Obama has proposed to increase spending by 
$293 billion per year, which amounts to $2.9 trillion in additional 
spending over the 10-year window the Congressional Budget Office uses. 
Therefore, Senator Obama is proposing tax and spending programs that 
would increase the deficit by $6.5 trillion before even considering the 
cost of interest resulting from such an astronomical addition to our 
national debt. Therefore, Senator Obama proposes to increase the 
national debt by a whopping $1.3 trillion more than Senator McCain over 
that next 10-year period.
  A portion of Senator Obama's March 13, 2006, speech regarding fiscal 
responsibility is posted on his campaign Web site. A portion of this 
speech states:

       If Washington were serious about honest tax relief in this 
     country, we would see an effort to reduce our national debt 
     by returning to responsible fiscal policies.

  Senator Obama's proposal to increase the national debt by $6.5 
trillion is inconsistent with his statement regarding a return to 
fiscally responsible policy.
  Even if he really did want to provide the tax relief he is promising, 
would a Democratic Congress let Senator Obama make good on most of his 
promises that would provide middle-class tax relief? Also, would a 
Democratic Congress fight attempts by Senator McCain to enact the tax 
relief proposals he has made?
  Similar promises to those made by Senator Obama were made by 
candidate Clinton in 1992. Candidate Clinton said taxes wouldn't be 
raised on people making under $200,000 a year. However, President 
Clinton then raised taxes on everyone making $20,000 and over in 1993.
  Perhaps Senator Obama would be able to provide some of the tax relief 
he has been promising but only to those Americans falling within his 
narrow version of the middle class, stopping at individuals making 
$66,000 or less, that he has been using in his campaign ads stating 
that he will provide three times more tax breaks than Senator McCain. 
Senator Obama has changed his definition of the middle class from 
$250,000 and below in his public statements to those making $66,000 and 
below in his campaign ads and on his campaign Web site. This is 
definitely a change, but if you make more than $66,000, I wouldn't 
think this is a change you would ever want to believe in. One man's 
change is another man's flip-flop.
  Considering the history when the Democratic Party has had control of 
the House, the Senate, and the Presidency--and I am going to put my 
thermometer chart back up here--considering the history of when the 
Democratic Party had control of the House, the Senate, and the 
Presidency, are you confident that Democrats won't raise taxes on you 
if you make $67,000, which is above the middle class, according to one 
of Senator Obama's two inconsistent definitions of middle class? As 
history has shown us, the largest tax increases come when Democrats 
control the House, the Senate, and the Presidency, and you see it at 
the top of the thermometer there. The lowest levels of taxation happen 
when you have a Republican President and you have a Republican 
Congress. As you look at the bottom, the figures appear at the bottom 
of the thermometer.
  We need to carefully scrutinize Senator Obama's claims that Senator 
McCain wouldn't provide any tax relief at all for 100 million 
Americans, citing the IRS statistics of income tax stats. Moreover, 
Senator Obama has criticized Senator McCain's tax relief plan by saying 
that Senator McCain's plan would not provide any direct tax cut other 
than increasing the dependent exemption. Even the nominally nonpartisan 
Tax Policy Center states that Senator McCain would provide tax cuts for 
all Americans, as did the 2001 and 2003 bipartisan tax relief packages.

                               Exhibit 1

       Q: Is there a standard, accepted definition of what 
     constitutes the ``middle class''?
       Is there a standard, accepted definition of what 
     constitutes the ``middle class''? Politicians are fond of 
     talking about how the middle class will be affected by 
     policies and laws, but rarely do they define who is actually 
     part of that group.
       A: No, there isn't. ``Middle class'' means different things 
     to different people--and politicians.
       There is no standard definition, and in fact, an 
     overwhelming majority of Americans say they are ``middle 
     class'' or ``upper-middle class'' or ``working class'' in 
     public opinion polls. Hardly anybody considers themselves 
     ``lower class'' or ``upper class'' in America.
       It's possible to come up with a definition of what 
     constitutes ``middle income,'' but it will depend on how 
     large a slice of the middle one prefers. If we look at U.S. 
     Census Bureau statistics, which divide household income into 
     quintiles, we could say that the ``middle'' quintile, or 20 
     percent, might be the ``middle'' class. In 2006, the average 
     income for households in that middle group was $48,561 and 
     the upper limit was $60,224. But we could just as reasonably 
     use another Census figure, median family income. In 2006, the 
     median--or ``middle''--income for a family of four was 
     $70,354. Half of all four-person families made more; half 
     made less.
       Journalist Chris Baker examined the ambiguous meaning of 
     the term ``middle class'' in a 2003 Washington Times story. 
     He, too, found no generally accepted definition, but he did 
     get this broad one from Jared Bernstein, an economist at the 
     liberal Economic Policy Institute: ``There are working 
     families who can pay their bills, but they have to really 
     think about such minimal expenditures as picking up a pizza 
     after work, going to the movies, making a long-distance 
     telephone call. They may have some investments, but they 
     depend on each paycheck for their well-being.''

[[Page 23419]]

       But others could have different definitions. Baker 
     interviewed a man who earned about $100,000 a year and a 
     woman who made $35,000, both of whom said they were middle 
     class.
       Public opinion polls show how slippery the term can be. An 
     Oct. 2007 poll by the Kaiser Family Foundation, Harvard 
     School of Public Health and National Public Radio asked 1,527 
     adults what income level makes a family of four middle class. 
     About 60 percent said a family earning $50,000 or $60,000 fit 
     that description. But 42 percent answered an income of 
     $40,000 and 48 percent said $80,000 were both middle class.
       Other polls suggest that 90 percent or more of Americans 
     consider themselves to be ``middle class'' or ``upper-middle 
     class'' or ``working class.'' An April 2007 poll by CBS News 
     found that of 994 adults surveyed only 2 percent said they 
     were ``upper class,'' and 7 percent said they were ``lower 
     class.'' In another poll, taken by Gallup/USA Today in May 
     2006, 1 percent said they were ``upper class,'' and 6 percent 
     said they were ``lower class.'' Interestingly, since 12.3 
     percent of Americans were living below the official federal 
     poverty level in 2006, these poll findings suggest many who 
     are officially poor still consider themselves to be ``middle 
     class'' or ``working class.''
       So what do politicians mean when they say ``the middle 
     class''? Good question. Each politician may be talking about 
     a different group of Americans, but the message many voters 
     hear is that the politician is talking about them.
       For example, Democratic presidential candidate John Edwards 
     calls for ``tax breaks to honor and strengthen three pillars 
     of America's middle class: savings, work, and families.'' One 
     of his proposals is to expand a tax credit to give dollar-
     for-dollar matches on savings up to $500 a year. Some version 
     of that credit would be available to families earning up to 
     $75,000.
       Republican candidate Mitt Romney, meanwhile, has proposed 
     eliminating ``taxes on dividends, capital gains, and interest 
     on middle class families.'' He defines ``middle class'' as 
     anyone with an adjusted gross income of under $200,000--and 
     acknowledges that such a proposal would affect ``over 95 
     percent of American families.''--Lori Robertson


                                sources

       U.S. Census Bureau. 2006 American Community Survey. Income 
     tables, accessed 23 Jan. 2008.
       NPR, the Kaiser Family Foundation, and the Harvard School 
     of Public Health. Survey: Public Views on SCHIP 
     Reauthorization. Survey conducted Oct. 8-13, 2007. 17 Oct. 
     2007.
       Survey by CBS News, April 9-April 12, 2007. Retrieved 23 
     Jan. 2008 from the iPOLL Databank, The Roper Center for 
     Public Opinion Research, University of Connecticut.
       Survey by USA Today and Gallup Organization, May 5-May 7, 
     2006. Retrieved 23 Jan. 2008 from the iPOLL Databank, The 
     Roper Center for Public Opinion Research, University of 
     Connecticut.
       Baker, Chris. ``What is middle class?; Income isn't 
     necessarily sole measure.'' The Washington Times, 30 Nov. 
     2003.

  Mr. GRASSLEY. I yield the floor.
  The PRESIDING OFFICER (Ms. Klobuchar). The Senator from North Dakota 
is recognized.
  Mr. DORGAN. Madam President, are we in a period of morning business?
  The PRESIDING OFFICER. We are postcloture on the motion to concur.


                              The Economy

  Mr. DORGAN. Madam President, I wish to talk about what is happening 
in the economy, the consequences, a bit about what happened yesterday, 
and what I think we should do going forward.
  Yesterday, as most Americans now know, the stock market had a very 
significant down day--777 points down. Today it is up over 300 points 
as I speak.
  We have gone through a very difficult time for a long period of time 
in this country. I wish to talk about the causes of it and the 
consequences of it. I am not going to, as some do, come to the floor to 
describe one party or another that is responsible for this or that. I 
don't think that is particularly helpful today. But I do wish to say 
that, tracking back to a couple of significant events--one in 1999 when 
the Congress, without my support, passed a piece of legislation that 
essentially repealed what is called the Glass-Steagall Act. This 
legislation was put in place by Franklin Delano Roosevelt during the 
Great Depression to protect banks and depositors by separating banks 
from riskier enterprises of real estate and securities--I pulled out 
some of Franklin Delano Roosevelt's radio addresses.
  Here is an address he made in 1933. As my colleagues know, this is a 
President who had to confront the Great Depression, and here is what he 
said:

       We had a bad banking situation. Some of our bankers have 
     shown themselves either incompetent or dishonest in their 
     handling of the people's funds. They had used the money 
     entrusted to them in speculations and unwise loans. This was 
     of course not true in the vast majority of our banks, but it 
     was true in enough of them to shock the people for a time 
     into a sense of insecurity . . . It was the government's job 
     to straighten out this situation and do it as quickly as 
     possible . . . After all, there is an element in the 
     readjustment of our financial system more important than 
     currency, more important than gold, and that is the 
     confidence of the people. You people must have faith; you 
     must not be stampeded by rumors or guesses. Let us unite at 
     banishing fear. We provided the machinery to restore our 
     financial system. It is up to you to support it and make it 
     work.
  That was Franklin Delano Roosevelt in 1933. In 1934, he said this:

       The second step we have taken in the restoration of normal 
     business enterprise has been to clean up thoroughly 
     unwholesome conditions in the field of investment. In this we 
     have had assistance from many bankers and businessmen, most 
     of whom recognize the past evils in the banking system, in 
     the sale of securities, in the deliberate encouragement of 
     stock gambling, in the sale of unsound mortgages and in many 
     other ways in which the public lost billions of dollars. They 
     saw that without changes in the policies and methods of 
     investment there could be no recovery of public confidence in 
     the security of savings.

  Sounds a little like today, although Franklin Delano Roosevelt then 
took very aggressive steps to say we are going to separate banking from 
risk. You are no longer going to be able to have an FDIC-insured 
deposit institution called a bank and merge it with the speculation in 
real estate and securities. You just cannot do it. The Congress passed, 
at the President's request, something called the Glass-Steagall Act. 
That lasted for nearly 80 years, until 1999, when it was repealed.
  There was a story this morning in a Wisconsin newspaper quoting me 
and quoting my late colleague, Paul Wellstone, who sat at the end of 
that row. We both spoke on the Senate floor. There were eight of us who 
opposed the Financial Modernization Act, they called it, because they 
always wrap bad things in good names. The Financial Modernization Act, 
what a misnamed act, but it repealed the Glass-Steagall Act. It set the 
stage for large financial holding companies. It set the stage for banks 
to be engaged in more risk. They said: We have to do this to move 
forward. Senator Phil Gramm actually led the charge. Gramm-Leach-Bliley 
was the name. Modernization they called it.
  Some of us said it was going to be an unbelievable debacle. Here are 
a couple things I said when it passed the Senate the first time:

       I say to the people who own banks, if you want to gamble, 
     go to Las Vegas. If you want to trade in derivatives, God 
     bless you, do it with your own money. Do not do it through 
     the deposits guaranteed by the American people.

  Further, I said on the same day on the floor of the Senate:

       This bill will, in my judgment, raise the likelihood of 
     future massive taxpayer bailouts.

  I wish I had been wrong. I take no joy in being right.
  When the bill came back in November as a conference report and eight 
of us voted against it in 1999, I said:

       Fusing together the idea of banking, which requires not 
     just safety and soundness to
     be successful but the perception of safety
     and soundness, with other inherently risky
     speculative activity is, in my judgment,
     unwise . . .

  Then I said on the same day in November 1999 before the vote:

       We will in 10 years time look back and say: We should not 
     have done that

  Repeal Glass-Steagall--

     because we forgot the lessons of the past.

  What did we allow to happen as a result of all of this? We have seen 
today a substantial amount of activity as a result of the collapse on 
Wall Street and in the banking industry. Here are just a few of the 
actions most recently. J.P. Morgan decided to buy Bear Stearns because 
Bear Stearns was going to go belly up. And over a weekend, they worked, 
and the Federal Reserve Board and the Secretary of Treasury said the 
taxpayers will put up $29 billion so that J.P. Morgan can buy Bear 
Stearns so Bear Stearns doesn't have to go belly up.
  I was looking in the Wall Street Journal today, and there is 
something

[[Page 23420]]

about Bear Stearns. It is kind of interesting because it relates to 
what I am going to talk about in a whole range of these areas. It 
relates to something I call ``dark money.'' That is a massive amount of 
money, essentially like money in a casino, that is moving around 
speculating that no one can see, no one knows who has it, where it is, 
how much it is.
  This article is entitled ``Too Much Money Is Beyond Legal Reach,'' 
from the Wall Street Journal. It talks about the ``$1.9 trillion, 
almost all of it run out of the New York metropolitan area, that sits 
in the Cayman Islands, a secrecy jurisdiction. And another $1.5 
trillion is lodged in four other secrecy jurisdictions.''
  Then they say:

       Most recently, two Bear Stearns hedge funds, based in the 
     Cayman Islands, but run out of New York, collapsed without 
     any warning to its investors. Because of the location of 
     these financial institutions--in secrecy jurisdiction, 
     outside the U.S. safety net of appropriate supervision--their 
     desperate financial condition went undetected until it was 
     too late.

  You run the dark money through hedge funds, through Bear Stearns, 
through the Cayman Islands, it all goes belly up, no one even knows it 
is there. Then we have to find in a weekend that the American taxpayers 
should put up $29 billion so that J.P. Morgan can bail out a failed 
Bear Stearns.
  Madam President, $300 billion immediately following that was 
available to investment banks that are unregulated because the Federal 
Reserve Board said: Investment banks can come to our loan window and 
get loans directly from the Federal Reserve Board. Never in the history 
of this country has that been allowed. Only FDIC-insured regulated 
banks could do that. It is estimated that $300 billion in direct loans 
from the window of the Federal Reserve Board went out to unregulated 
Wall Street firms.
  Then bailing out Freddie and Fannie. J.P. Morgan Chase in Lehman 
financing. They have been around since the Civil War and went belly up 
through bad investments. AIG, the insurance company, goes belly up, and 
so there is an $85 billion loan provided by our Government to prevent 
their failure. Why did they fail? We are told a small unit in England 
with about 375 employees were engaged in something I will talk about in 
a bit, credit default swaps, which is essentially a huge gamble, and it 
pulled that whole company down, so the Federal Government had to bail 
them out with $85 billion. And $50 billion has now been pledged as 
guarantees for certain money market funds.
  In recent days, Washington Mutual, a big bank, had to be taken over. 
Then in more recent days we have had Wachovia bank subsumed.
  Here is what is happening. We have all these financial institutions 
we are told are too big to fail, which means we guarantee them. The 
Federal Reserve Board has a list of firms too big to fail. They are 
apparently not too big to regulate, just too big to fail, so the 
American taxpayer has to guarantee it.
  Here is what has happened as a result. Bank of America buys Merrill 
Lynch. Washington Mutual is put on top of J.P. Morgan Chase. Citigroup, 
yesterday, buys Wachovia. What we have done is continued to consolidate 
even bigger and bigger firms. These three firms comprise almost one-
third of all the banking activity in America now. Too big to fail? What 
is the answer? Make them bigger. It doesn't make any sense to me, but 
that is exactly where it is going.
  Let me describe what I think is no-fault capitalism. You have all 
this dark money, and what has happened is you have had all of these 
fancy financial engineers who have concocted in recent years since 
1999--since the shackles were taken off to do whatever they want, by 
and large, and since this administration came to town bragging it 
wasn't going to regulate. We hired the regulators, paid the regulators, 
but they boasted they were not interested in regulating anything.
  I am quoting Steven Pearlstein who wrote a terrific piece on this 
earlier this year:

       Wall Street has been brilliant at dreaming up other 
     financial innovations that picked up where junk bonds left 
     off. These included complex futures and derivatives 
     contracts; loan syndication; securitization; credit default 
     swaps; off-balance-sheet vehicles; collateralized debt 
     obligations . . .

  And on and on.
  What happens is this financial engineering that was so brilliant put 
everybody at risk--everybody. He says junk bonds were the first. I know 
something about junk bonds because I am the person who passed the 
legislation that brought down that market on junk bonds when, in fact, 
Michael Milken, sitting in his car in the morning riding as a 
passenger, going to work at Drexel Burnham, was wearing a miner's hat 
with a lamp on it so he could study his financial sheets. What he was 
doing is creating junk bonds and parking them in federally insured 
institutions.
  The hood ornament of the excess back in those days was that the 
American taxpayers eventually ended up having to own and take 
possession of nonperforming junk bonds in one of America's largest 
casinos. Think about the stupidity of all that. I passed the 
legislation that shut that down, so I know about those excesses.
  Now we have credit default swaps and CDOs and so many other exotic 
instruments and, by the way, so complicated that a lot of people don't 
even know what they are. Even those who have issued them cannot very 
easily understand them. What they have done is been able to hide risk, 
liabilities and losses from investors. ``They have given traders a 
greater ability to secretly manipulate markets,'' Mr. Pearlstein says, 
and I agree.
  Let me talk about this chart, the no-fault capitalism portion.
  Merrill Lynch went belly up. What did the CEO of Merrill Lynch make 
last year? He made $161 million for running a company that got into 
trouble and had to be purchased. I don't understand.
  John Mack, Morgan Stanley--they got into trouble--$41 million 
compensation last year.
  Bear Stearns, the first company I mentioned, we had to arrange the 
purchase, the American taxpayers had to put up $29 billion to guarantee 
it, and the CEO of Bear Stearns made $34 million last year.
  Lehman Brothers went belly up. The CEO made $22 million last year.
  Washington Mutual went belly up. The CEO made $14 million last year. 
By the way, they just had a new CEO, or did. He had been on the job 3 
weeks and signed a contract for a $7 million bonus for signing and a 
$12 million termination fee. I understand that has been voided. But it 
just shows you the same money is ricocheting around in the halls of 
these firms.
  AIG, Martin Sullivan--we had to bail out AIG he made $14 million last 
year.
  The question is, Where is the discipline? There is so much money 
ricocheting around Wall Street from all of these issues, and now we are 
told they all went sour. There are toxic, mortgage-backed securities, 
and the American taxpayers somehow have to come up with the money.
  Let me talk for a moment about hedge funds. Warren Buffett once 
called hedge funds ``financial weapons of mass destruction'' because of 
the damage they can do to Wall Street in an instant. I just talked 
about some $20 million, $160 million for folks running failed 
institutions. Let me talk about the big income earners. The big income 
earners were John Paulson. He was the top of the heap last year. John 
Paulson made $3.7 billion. That means when he came home from work and 
his wife said, How did we do this month, sweetheart? he said: Well, we 
made $300 million this month. Madam President, $3.7 billion. Or perhaps 
he would say to his spouse: I made $10 million today. That would be 
more accurate--$10 million a day. John Paulson was the top income 
earner last year.
  How did he make that money? In a hedge fund he bet very big in the 
drop of housing values and made $15 billion for his hedge fund. By the 
way, he also hired former Federal Reserve Board Chairman Alan Greenspan 
as an adviser. Yes, that is the same Alan Greenspan who was content to 
be an observer as this housing bubble burst, as predatory lending 
existed, and all these exotic instruments and all those mortgages I 
will talk about in a moment were created and traded. Nothing

[[Page 23421]]

really seems too wacky these days in the world of finance.
  There are some wonderful and creative people who work in finance and 
who run America's corporations and, by the way, many of them are worth 
their weight in gold. But what I see here is a form of no-fault 
capitalism in which a substantial amount of money is paid to some who 
run these corporations right into the ground, run their financial firms 
right into the ground with unbelievably risky bets on credit default 
swaps, collateralized debt, in which they back their balance sheet with 
risk, in some cases even move it offshore to tax haven countries at 
unbelievable risks, and then the American taxpayers are told: You know 
what. It didn't work very well, and you need to pay for it.
  Let me go through the roots of this situation. I have done this many 
times. But as people sit on the edge of the chair watching what is 
happening to the Dow Jones Industrial Average today, they need to 
understand what is the root rot that exists out there, what is spoiled 
and rotten at the bottom. Let me describe what happened. It is not very 
complicated.
  Almost every American has heard the radio and television ads over 
recent years: You know what you really need to do is get a better home 
mortgage, and we have one for you. We will give you a home mortgage 
where you get a 2-percent interest rate. Yes, that is right. Sounds 
unbelievable; it is not. We will give you a 2-percent interest rate on 
your home mortgage. We are not going to tell you, at least not very 
loudly, that it is going to reset in 3 years to 10 percent, but we can 
get you in at 2 percent. And by the way, home values are increasing. 
Get this loan at 2 percent, cut your monthly mortgage payment by two-
thirds, and then, if 3 years from now you can't pay the reset mortgage, 
you can sell the house. Between now and then, you will make a lot of 
money anyway because home values are continuing to go up. That was the 
sales pitch.
  So here is what happened all around this country. Here is Countrywide 
mortgage bank. They were purchased. They were run by a guy named 
Mozilo. He was given the Horatio Alger Award. Barron's named him one of 
the 30 most respected CEOs in America. In 2006, he made $142 million. 
As he was touting his company's stock, the New York Times reports he 
was selling $130 million of his company's stock, even as he was 
describing what a wonderful stock it was.
  But here is what Countrywide said. They were advertising:

       Do you have less than perfect credit? Do you have late 
     mortgage payments? Have you been denied by other lenders? 
     Call us.

  That is their advertisement. If you have bad credit, call us. We will 
give you a loan. The biggest mortgage bank in the country, run by a CEO 
who made a fortune and then got out--and by the way, he got away with 
it--before the company went down.
  But it wasn't only Countrywide. Here is what Millennia Mortgage said:

       12 months, no payments. That's right, we will give you the 
     money to make your first 12 months' payments if you call in 
     the next 7 days. We will 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.

  Here is a mortgage company saying, get a home mortgage from us and 
you don't have to make a payment for 12 months. They didn't, of course, 
say we are going to put that on the back end and that, ultimately, you 
will pay more for that home, and we are going to increase the interest 
rate.
  Zoom Credit. I don't know who the CEO is or what he made, but here is 
what 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 consolidations, too. Bankruptcy, slow credit, no 
     credit--who cares?

  That is unbelievable, isn't it? So we had all these mortgages put out 
there, and we had a lot of people buying them, and here is what would 
happen. Countrywide would get a broker. They would sell somebody one of 
these mortgages--perhaps call them at home at night and say: You want 
to cut your home mortgage payment by two-thirds? We have a good deal 
for you. So they would go to Countrywide, they would securitize the 
loan, package them together with other loans into what is called a 
security, and then they would sell it upstream. They would put good 
loans in with bad loans, subprime with regular. They would cut them, 
slice them and dice them and hedge funds and investment banks and 
others would buy them. They didn't have the foggiest idea what they 
were doing. By the way, the rating companies were rating these as 
pretty good securities. So everybody was fat and happy and making lots 
of money.
  Now, the result is that all these companies--and Wachovia is a good 
example because Wachovia was bought by Citigroup yesterday. Wachovia 
bought a company called Golden West about a year and a half ago, and 
Golden West was putting out these options mortgages. By the way, these 
are mortgages in which they advertise, we will give you a no 
documentation mortgage. You don't have to document your income. Or we 
will give you a no doc or low doc loan. No doc meaning you don't have 
to document how much money you make.
  They also say that if you can't pay all your principal, that is okay. 
You can pay a part of the principal of the mortgage. Or you don't have 
to pay any principal, just pay interest. Or you don't have to pay any 
principal or all the interest, just part of the interest. Or with 
Millennia, you don't have to make any payments for the first 12 months. 
It got better and better and better. Why did they do that? Because they 
were locking people into bad mortgages--mortgages with teaser rates, 
very low, 2 percent in some cases, to be reset to a much higher rate in 
3 years--and then they would lock in a prepayment penalty so you could 
never get out of it. Or to get out you would have to pay a huge 
penalty. Then they would sell it upstream. As they sold it upstream, 
they would sell a security that promised a 10-percent interest rate in 
3 years with a prepayment penalty so it was unlikely the person could 
get out of it, and that security then had a higher yield. All these 
folks were amazed that they were able to buy securities with such a 
wonderful rate of return.
  In the meantime, of course, it all collapsed. Because all those 
securities got out there on the balance sheets of these companies 
buying these securities in the name of greed--big returns. Then it all 
turned sour and began to smell like rotten fish, lying out there on the 
balance sheets, these nonperforming assets. It all turned sour. It 
began to pull under companies that were unwise enough to make these 
investments, and they were companies all over the country.
  I mentioned some of the ways they did it. This is describing part of 
it. No documentation loans, low documentation loans. Even as we talk 
about its impact on the economy, if you think this has stopped, it has 
not. There is a credit lockup in this country, they say. Probably so, 
in some areas. But I went to the Internet a couple days ago and I 
found, under a search for a no doc income loans, I found 325 different 
places on the Internet that provide these kind of home loans right now: 
No credit check. Bad credit loans.
  It has not yet stopped. Here is part of what I found on the Internet.

       Easy loan for you. Do you have bad credit? Get approved 
     today.

  You can go find that on the Internet right now. Here is another one 
you can find on the Internet right now: speedybadcreditloans.com. Think 
of that. How unbelievably ignorant, speedybadcreditloans. When we face 
the crisis we now face because of this unparalleled greed and the toxic 
mortgage-backed securities that exist on the balance sheets of all 
these companies, threatening to bring down these corporations, and they 
are still selling them.

       SpeedyBadCreditLoans. Bad credit, no problem. No credit, no 
     problem. Bankruptcy, no problem.

  I think I have described what has put out a substantial amount of 
toxic investments throughout this country,

[[Page 23422]]

which has caused unbelievable chaos not just in this country but across 
the world. I think there are a number of things we ought to do.
  I know the discussion yesterday was about a $700 billion bailout, or 
rescue fund, that did not survive in the House of Representatives. I 
hope now those who are going to put together some changes to that 
plan--I assume there will be some changes, and I do support some of the 
discussion today about increasing the size of bank accounts that are 
FDIC insured from $100,000 to $250,000. If we had changed that over 
time for the value of money, it would be well over $200,000 now. So I 
believe it would be useful and provide some confidence to provide that 
additional insurance to a $250,000-per-account level. But I strongly 
feel that a couple other things have to be done.
  We can't let this moment pass, and we can't have this economy in 
peril because of the greed and the avarice of some who decided to take 
dramatic risks and to gamble with other people's money. We can't do 
that. We can't proceed without deciding we are going to regulate hedge 
funds and regulate the trading of derivatives. We cannot do it. Where I 
come from, you call that leaving the gate open. You have to close the 
gate.
  In 1999, and even beyond, these institutions and traders and others 
were allowed to go hog-wild here and do almost everything with almost 
no supervision and no regulation. We have to learn from that and 
understand that part and parcel of this action by the Congress has to 
be re-regulation. Now, I have talked about the three Rs that are 
necessary, and I believe you have to do all of it here. I am willing to 
support something that deals with some kind of recovery. I understand 
the need to address this. But I also think you have to do some reform 
and you have to do some regulation at the same time.
  You can't say to the American people, by the way, ante up a bunch of 
money for recovery and forget reform and forget regulation. If we don't 
patch that which we tore in 1999 and decide to take apart again the 
fundamental banking functions of the federally insured institutions, if 
we don't separate them from the inherent risk that exists in investment 
banking and others, where they take these risks with things such as 
swaps and collateralized debt obligations and others, if we don't 
understand the lesson, we are destined to repeat it, just as sure as I 
am here. You have to have reform. Reform is to back up some steps and 
to decide to protect the banking institutions from excessive risk. 
Regrettably, we went in the wrong direction in 1999. I think we need to 
go back some ways.
  Second, there is so much dark money out in this economy that you 
can't see. Hedge funds. We must have a regulatory provision for hedge 
funds. I am not suggesting the recovery bill itself has to describe the 
specific set of regulations, but the bill can, as it has in a couple 
other areas, describe a rulemaking process for regulating hedge funds. 
The same is true with respect to derivative trading. We have been told 
there is somewhere around $62 trillion in notional value of credit 
default swaps out in this country. Most people think that sounds like a 
foreign language. They wouldn't even know what it is. It is an 
unbelievable amount of insurance out there against securities that have 
become toxic--securities that are lying and smelling, fouling in the 
bowels of the balance sheets of some of these corporations. We have to 
do something that does reform and regulation. There may never be 
another moment to be able to do it.
  I understand a whole lot of folks have been opposed to this for a 
long time. I have pushed it for years on the floor of the Senate. 
Senator Feinstein, I, and many others have been pushing for regulation 
of hedge funds and the regulation of derivative trading. But as I 
indicated when I started, when you have a Bear Stearns that has 
derivative or credit default swaps running through the Cayman Islands 
and they go belly up, and nobody even knew it was there--and they 
helped pull down this firm--then you wonder how does that happen 
outside the gaze or view of regulators? How on Earth does that happen?
  We have, unfortunately, been looking only at this question of 
providing the funding. As I said, I am willing to consider a process 
that deals with rescue. I am willing to consider that. But I believe 
that if we move past this moment and don't address the reform and the 
regulation piece, we will be back again--maybe in 5 years, maybe 10 
years. We will be back again, almost certainly.
  Warren Buffett once said, when I talked to him on the phone, that 
there is an old saying on Wall Street: You can't see who is swimming 
naked until the tide goes out. Well, you know what, the tide is going 
out. We have lots of trouble, and now we see the consequences of 
unbelievable, rampant speculation in institutions that should have 
known better. We have to try to protect the financial system of the 
United States from collapsing. I understand that. We have to do that. 
But we cannot possibly ask our constituents to believe in that mission 
if we don't also provide the regulation and reform that must accompany 
it. We can't do half a job.
  As I indicated, I am not suggesting that legislation has to, in the 
130-some-page bill, describe exactly how you regulate hedge funds or 
how you regulate derivative trading.
  But I do believe we ought to describe a specific date by which a 
rulemaking process proceeds for that regulation.
  Mr. DOMENICI. Would the Senator yield?
  Mr. DORGAN. I would be happy to yield.
  Mr. DOMENICI. Senator, first, I apologize for not hearing all of your 
remarks. I was in earshot when I heard you talking about available 
credit, talking about what you could find on the Internet. You showed 
these advertisements where people are still in the business of trying 
to sucker Americans into buying things they cannot afford and vice 
versa, those companies that are treating our Americans who cannot 
afford things as suckers and getting them in and telling them to buy 
things they ultimately cannot pay for. Is that part of your talk here 
today?
  Mr. DORGAN. That is correct. My point was, that which has occurred 
that has caused this unbelievable collapse, I think the Senator from 
New Mexico would agree that what has precipitated this is the massive 
amount of failure out there of mortgage-backed securities that are held 
on the balance sheets of these financial institutions. They turned out 
to be sour. It has begun to pull down on some of these institutions.
  My point was that you can go to the Internet today and you can find 
exactly the same kind of irresponsible advertising that existed for a 
long time, including the biggest mortgage bank in the country, 
Countrywide, which is saying: Bad credit, come over here, we will give 
you a loan. The same things exists. Go to the Internet today, and you 
will find exactly the same kind of advertising.
  Mr. DOMENICI. I think Countrywide has been taken over by Bank of 
America.
  Mr. DORGAN. It has.
  Mr. DOMENICI. Let me say to the Senator--and I am giving you an 
observation--what has happened, it seems to me, in terms of our efforts 
to pass a rescue package is that we started out by talking about a 
bailout--somebody did--and also, at the same time, a Wall Street 
bailout. You know, what caught my eye as a Senator wondering whether I 
was going to help with this, until I found out that there was no 
bailout and Wall Street was not being bailed out, what was happening 
was--well, let's take the biggest purveyor of mortgage-backed 
securities, and that happened to be Fannie Mae and Freddie Mac. They 
had most of them. What they really were, were mortgages on homes that 
people bought by the hundreds of thousands. As a matter of fact, those 
two entities have mortgaged more than half, well over half--almost two-
thirds of all American houses. They had taken these mortgage-backed 
securities and they were selling them. That is how they made this 
inordinate amount of money over the last 10 or 12 years. Then what 
happened is those mortgage-backed securities--people

[[Page 23423]]

started looking at it and tried to find out: Where did they get the 
mortgages?
  I wanted to add to your scenario of where all of these bad, what we 
might call toxic assets, which are mortgage-backed securities that are 
in default, where did they come from and where are they? And I wanted 
to make sure that your wonderful talk about this subject included the 
fact that for a period of time the U.S. Government was pushing very 
hard on Fannie Mae and Freddie Mac to accept mortgages on homes that 
any reasonable person knew could not be afforded, could not be paid 
for, and they were pushing thousands of them to get people in homes 
even if they could not pay for them. And that is thousands of those--
hundreds of thousands are coming home to roost now, as I understand it, 
and we do not even know where we are, but we find out when a bank 
starts failing because they are using this as their equity--they bought 
them--and it turns out to be sour because they are not paying on the 
mortgage. You go look, and there is a house there backing up that 
mortgage, and maybe a family was in it, but they are already 6 months 
in default and they have left the place and it is falling down, and you 
have a mortgage here that you are holding.
  I do not think we ever painted properly for the American people that 
this was not a bailout of Wall Street; it was an effort to buy up those 
assets, these mortgages that were out there that were not going to be 
paid, that could not be paid, and they had gone sour. We are trying to 
buy them and let the system work while we try to repackage them and 
sell them. It could very well be, Senator--I think you would agree--
that when this $700 billion, or whatever number it is, is used, it will 
come back to the Federal Government as they sell the toxic assets they 
buy. They will be buying them and bundling them and selling them again, 
and they may bring more money 3 or 4 years from now than you paid for 
them.
  So in no way is it a bailout. It is a buyout, if anything. I wondered 
if you had thought of it that way. Is that a fair reading, as you 
understand things?
  Mr. DORGAN. Well, let me talk about the banker's role for a minute, 
because the way the Senator describes it is part of my concern. It used 
to be that when you bought a home, you would go down to the local 
savings and loan or the local bank and try to negotiate a home loan. 
Then sitting across the desk, they would evaluate what kind of job do 
you have, how much family income do you have, how secure is your job, 
is this a loan we want to provide to you because of the risk, and so 
on. They would make a judgment about you. They would check your credit 
rating. That is the way it would work. It doesn't work that way in most 
cases now. It does in some cases, in most cases not. This has become a 
big go-go effort to get home loans out there, securitize them, and sell 
the mortgage-backed securities.
  So when we are talking about banks buying mortgage-backed securities, 
I asked the question: Why should they be buying mortgage-backed 
securities? They shouldn't even have the right to buy mortgage-backed 
securities that are cut into these little pieces of sausage and sent 
upstream when they do not even know what is in them. How many of them 
are subprime? They don't have any idea. All they see is an advertised 
yield that says: Well, if I buy this security, I am going to get a big, 
fat income from it.
  Going back, I would like to see us get back to the day when a 
mortgage is something negotiated across the desk from the local banker. 
I would like to see the day when you can take a look at the balance 
sheet of a bank--and I would say in my home State most of our bankers 
have not been engaged in this at all. They do not have toxic mortgages, 
by and large. They have not invested in these things. But this became a 
go-go industry--I described some of them, and I will do it again in a 
minute--with massive amounts of money being made, on Wall Street, I 
might say. So Wall Street was wallowing in cash. You know it and I know 
it--I mean, the highest income earner last year, $3.7 billion; that is 
$300 million a month, $10 million a day.
  So I understand why the American people are angry. They are saying, 
you know: If you have to do something to rescue the financial system, 
for gosh sakes, don't let the system collapse, but they also say: Let's 
clean up this carnival of greed that existed around here that caused 
this to happen.
  So that is why I think the American people--I do not know who uses 
the term ``bailout'' or ``rescue,'' but that is why the American people 
looked at this and said: Wait a second, I want you to do the whole job, 
not half a job. In my judgment, half a job is putting up whatever money 
you need at this point. Perhaps there is a better way to do it. Perhaps 
we ought to invest in the capital structure of some of the failing 
institutions and get a return from that. The other side of it is to 
decide that, in addition to whatever we decide on the money, we are 
going to re-regulate and reform. If those two things are not in the 
bill, I hope those who are now negotiating will put that in the bill 
because I think the American people might better understand what is 
going to be done.
  Mr. DOMENICI. Let me say in closing that I am not sure that a 
recovery bill--that we have time to do the kind of reshaping of the 
regulatory system that the Senator so aptly describes. I don't know 
that it can be done. That requires an awful lot of hearings and 
thinking.
  I would hope this bill doesn't fail when they have it ready because, 
as somebody as knowledgeable as you--and you know the problem and you 
know we are going to have a big failure in our system that is going to 
affect far more people than the culprits who got us into it. I would 
hope that ultimately you would help to pass the bill. But I understand 
you would like other things that are going to be needed. We are going 
to have to do them. I will not be here. I wish you luck. It has been 
hard to revamp Freddie Mac and Fannie Mae, but it has been done. I am 
just not expert enough today to tell you that all of the problems with 
Fannie Mae and Freddie Mac have been solved because we changed their 
rules when we helped and tried to stabilize them within the last month. 
And they are the biggest purveyors of these mortgage-backed securities.
  A mortgage-backed security is just a mortgage and a loan put into a 
package, and it becomes a security so that it can be traded as a 
security instrument instead of a mortgage being passed around. 
Sometimes there are lots of them in there, sometimes there are fewer.
  But I would hope that, like many others, you would express yourself 
and talk to the American people about the problem but also suggest that 
we have to do something now or the banking system, which is our 
lifeblood--we do not think it is, but the financial system is our 
lifeblood--will go belly-up.
  I believe, like you, that there are many changes to be made, but I 
sure hope we can pass this bill and then in due course have hearings 
and insist that we change the regulations, impose new ones, and do some 
of the things you have been talking about.
  I thank you for letting me--I have had plenty of opportunity here on 
the floor, and I did not mean to barge in on you, but I thought maybe 
we could have a couple of minutes of exchange so we understand mutually 
the problem.
  Let me also say, Fannie Mae and Freddie Mac fooled a lot of us. I 
don't ask that as a question of you because I do not want to ask you 
whether you know it or not, but they were the instrument that permitted 
America to have so many millions of homes in the hands of our people. 
But they were, at certain times, the instrument of pushing through, as 
mortgage-backed securities, hundreds of thousands of mortgages on homes 
that were being bought by purchasers who it was known could not afford 
what they were buying. They were in the merry business of the more the 
merrier, whether they pay or not, and they got away with that, and they 
fooled me. I am not sure whether they fooled you, but they fooled a lot 
of Senators and Representatives. I think they have been caught, and I 
think they are doing business differently. But they

[[Page 23424]]

were the biggest ones. You can talk about a bank here and there or 
someone running an advertisement that looks as though it is bad, but 
they were the ones that were pushing those through. And maybe they were 
asked to by the Government. There seems to be an enabling act passed 
that said they were supposed to get out there and do that even if the 
people could not afford it.
  Our American people ultimately, when this episode has ended, are 
going to be embarrassed with us that during this big-boom era of 
housing, we were forcing on the market hundreds upon thousands of loans 
and mortgages in the hands of people that it was known upfront would 
not be able to pay for the houses. That is what they are going to be 
surprised about, when they find out that was the case as the hearings 
commence on changing regulation, as you are suggesting, because we are 
probably going to be able to identify how many hundreds of thousands of 
those kinds of loans--they have a name; the name slips me, but we call 
them toxic assets, but they are subprime loans. Fannie Mae and our 
Federal Government pushed so that we would sell more houses and get 
more people in housing. We made a bad mistake.
  I yield the floor.
  Mr. DORGAN. I appreciate the comments of my colleague from New 
Mexico. He has been involved in all of the great debates in this Senate 
for a long time. I always appreciate his thoughts and comments.
  Let me say that the collateralizing and securitizing of these exotic 
instruments was not something that was done for fun; it was because it 
could become very profitable to securitize everything, roll them up 
into these little sausage deals and sell them upstream. Everybody was 
making a lot of money doing it, and nobody knew what was in them. The 
interesting thing is that at least when you negotiated your home loan 
across the desk of the banker in the old days, if you found a time when 
you really could not make your payment--something happened, an illness 
in the family or something happened--you went back to the bank and sat 
down and said: Look, here is my situation. Can we work something out? 
And the banker, in most cases, would say: I understand. Let's work 
something out. Nowadays, you do not know who has the mortgage. The 
local bank does not have it anymore; they have sold it. Countrywide 
mortgage bank had it. They do not have it for a very long period of 
time. They have sold it to two or three different people, so you do not 
even know who has it.
  That is why, as these things go belly-up, because I think they had 
predatory lending, I think they had terms in them that were 
unbelievable, resetting mortgages, and so on. These homeowners were set 
up for failure, and they have no one to go talk to to work it out.
  That is precisely why one of the most important provisions that 
should be in this new agreement, and I hope is in a new agreement, is 
something that some now strongly object to; that is, in a bankruptcy 
proceeding, allowing a bankruptcy court to discharge and allow the 
renegotiation of that home loan. They would allow the renegotiation of 
a second home or a mortgage on a boat or a mortgage on almost anything 
else but not the prime home. That makes no sense.
  If you believe--and I think most people do--that the foundation of 
this mess we are in is these bad mortgages out there, these toxic 
securities, then the quickest and best and most effective way to begin 
putting some sort of a foundation under home values is to allow those 
with those home loans that are troubled to be able to negotiate with 
somebody; in this case, through a bankruptcy court, to negotiate that 
they could continue to pay, albeit at a lower interest rate. At least 
you would have someone who can stay in their home. You would have 
someone who is making a payment every month, probably not what they had 
intended to pay, but they are making the payment. They are in the home. 
They have provided some value to that mortgage. All of a sudden that 
provides a foundation. Instead of empty homes and mortgages that are 
destroyed, you have someone living in the home with a mortgage and 
making monthly payments on it. That would provide some stability for 
home values. It would keep some people in their homes. We have 2 
million people this year who will have lost their homes. That is pretty 
unbelievable.
  My colleague said it would be hard to put together a regime of doing 
the necessary regulation of hedge funds or regulation of derivatives 
trading. It would be difficult to do that. I am not suggesting they 
have to do that. I am suggesting that they mimic what they did in the 
original bill on a couple other pieces and require by law a rulemaking 
on the regulation of hedge funds, require by law a rulemaking on the 
regulation of derivatives by a date certain. They don't have to 
describe to me exactly what the rulemaking would require in detail or 
what the regulation would require in detail. At least we ought to 
expect that we begin to reform and regulate, even as we try to rescue. 
One of the important things the American people continue to ask--and it 
is a very important question--is, who is accountable for all of this? 
Not just how did it happen, but who is accountable? Who has been made 
accountable? The answer is no one. They all got away with their big 
bonuses and their money. The consequences are, we are bailing all these 
organizations out. We are creating bigger banks. These three banks will 
represent one-third of all the banking business in America now with 
these new acquisitions. It used to be that we had these folks who were 
too big to fail. Now we have gotten them too ``bigger'' to fail. So no 
matter what happens to them, the American taxpayer has to be the 
backstop. We are going to have to bear the consequences of their 
failure because they are bigger. They were too big to fail previously. 
Where is the accountability for predatory lending that was out there? 
Where is the accountability for brokers who were putting people into 
subprime loans. They qualified for other loans, but they still put them 
in subprime. A substantial portion of subprime loans were put to people 
who would qualify for regular loans. They put them in loans with very 
bad conditions in which they were almost destined to fail, with higher 
interest rates being reset in the future.
  People are also concerned about this issue of compensation. There are 
some great CEOs in this country. There are people running companies and 
banks and others who do a great job. But this has been a wild ride for 
unbelievably excessive compensation. Why is it that we read that 
Washington Mutual failed and last year the CEO made $14 million? For 
what? Maybe the board of directors will answer for what. Or AIG, the 
CEO made $14 million last year. They had a little operation over in 
London that nearly brought that whole company down. We had to bail them 
out. Lehman Brothers, $22 million the previous year, Merrill Lynch, 
$161 million. There is plenty of reason for the American people to take 
a look at all that and say: That is a carnival of greed, creating 
exotic financial instruments they can't even explain that are so 
complicated. Trading them upward and backward and sideways, everybody 
making massive amounts of money, and then all of a sudden it goes belly 
up and starts to pull down the entire financial system. All of a sudden 
we are talking rescue, but nobody is talking regulate.
  As I said, in my part of the country, they say that is not closing 
the gate. You have to close the gate. You have to shut the gate. If you 
don't include reform and if you don't include regulation, we are not 
going to solve this problem.
  The next day and a half we will talk a lot about these issues. My 
hope is whoever is negotiating--I know some, and I have been in 
meetings last evening on this subject--will understand the need that 
some of us feel that anything that is done require the issues of reform 
and regulation that do not now exist in the plan that has been offered.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Whitehouse). The clerk will call the roll.

[[Page 23425]]

  The assistant legislative clerk proceeded to call the roll.
  Mr. DODD. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DODD. Are we in morning business?
  The PRESIDING OFFICER. We are postcloture on the motion to concur.
  Mr. DODD. I ask unanimous consent to speak as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                              Paul Newman

  Mr. DODD. Mr. President, I rise to celebrate the life of a man and a 
friend who passed away this past weekend, an American icon to many 
Americans--in fact, not only to Americans but to people all over the 
world--for more than half a century, a remarkable philanthropist in his 
generosity, a terrific husband, father to six children, a daredevil 
both on the screen and off.
  In words that have added poignancy at this moment, Paul Newman once 
said, ``We are such spendthrifts with our lives. The trick of living is 
to slip on and off the planet with the least fuss you can muster. I'm 
not running for sainthood. I just happen to think that in life we need 
to be a little like the farmer, who puts back into the soil what he 
takes out.''
  The New York Times concluded its obituary of Paul Newman with those 
words. But I would like them to begin my remarks, because I don't think 
that will be the last thing people should consider when they remember 
Paul Newman, but the very first.
  Where the charitable work of public figures today often seems 
motivated less by the public interest than by public relations, Paul 
Newman was a rarity.
  An enormous celebrity whose commitment to making a difference meant 
far more to him than any box office, critical notice or award 
nomination. Believe me. Having known him or 25 years, I can attest to 
that.
  A star, with genuine humility, he cared deeply about the people, not 
only of this country but around the world, and made a significant 
contribution to their benefit in his own way. We are all, of course, 
familiar with the Newman's Own brand, which raised nearly a quarter-
billion dollars for charitable causes in a quarter century.
  But that was only part of the story. Paul also founded the Hole In 
the Wall Gang camps for children with life-threatening diseases that 
began in Ashford, CT and has since opened three on three different 
continents.
  Those camps serve more than 15,000 children annually, with all 
services provided free of charge to everyone.
  He also founded the Rowdy Ridge Gang Camp, for families recovering 
from drug addiction and survivors of spousal abuse.
  These were no vanity causes to which he simply attached his name and 
face.
  Paul was intimately involved in their operations and success.
  In fact, just this afternoon, I spoke with a friend of mine. I serve 
on the advisory board of the Hole in the Wall Camp in Ashford, CT, but 
a good friend of mine is on the board of directors of that camp. He had 
flown from San Francisco to be back in Connecticut today where people 
in the Hole in the Wall Gang camp are gathering to remember Paul 
Newman. They each got up and talked about his intimate involvement with 
that camp. Believe me, as someone who has been involved on a daily 
basis, he worked and cared about the maintenance of that facility, as 
he did the ones on the other two continents I described.
  Indeed, these examples remind us that every endeavor to which Paul 
Newman committed himself over his 83 years shared one fundamental 
quality: They were the product of an enduring appreciation for the 
special, unique place he was afforded in our society.
  You could not spend any time with Paul without noticing that he had 
remarkable life.
  A wife and family that were not there simply to support him, but to 
push and prod him, to tease him, to that wonderful kind of vitality we 
see in vibrant families, a career that afforded him opportunities and 
experiences many of the characters he played could not have imagined.
  And Paul Newman knew it.
  But as much as he recognized the good fortune behind his success, he 
also understood the obligations that came with it.
  This was never someone who pretended to be something he was not. He 
did not rise from poverty or grow up in a broken home. His father was, 
in fact, a successful entrepreneur himself from the Shaker Heights 
section of Cleveland, OH.
  But to watch Paul's Oscar-nominated turn in that remarkable courtroom 
drama, ``The Verdict,'' is to witness someone whose true kinship was 
not with those who came from wealth, from power or privilege, but with 
those who struggled, who earned, who overcame.
  For all his generosity, kind-heartedness, and compassion, there was 
another side to this man, one that was utterly driven to succeed, 
whether it was acting or directing, film or theater, charity or 
business.
  I suspect I was not the only friend of Paul's who did not share his 
passion for racing, which he often did at our State's Lime Rock Park.
  But compared to Hollywood, Paul found racing's lack of pretension 
refreshing.
  The pure love he had for the sport was what made it such a thrill for 
him--a thrill he pursued into his eighties.
  He was impossible to pigeonhole. I loved his sense of humor and 
irony, a devilish spirit which hid--just barely--a contempt for the 
predictable and lazy you couldn't help but admire.
  He once commented that the ``single highest honor'' paid to him was 
learning he was 19th on Nixon's so-called ``enemies list'' assembled by 
Charles Colson.
  He named the Hole in the Wall Gang camps after Butch Cassidy's band 
of outlaws and offered cowboy hats to children who had lost their hair 
because of chemotherapy.
  The first vat of Newman's Own salad dressing was stirred with a canoe 
paddle, to give some idea of his sense of humor.
  And one of the biographies he wrote for a local production read, 
``Paul Newman is probably best known for his spectacularly successful 
food conglomerate. In addition to giving the profits to charity he also 
ran Frank Sinatra out of the spaghetti sauce business. On the downside, 
the spaghetti sauce is outgrossing his films.''
  Let it never be said there wasn't a sparkle in those famous blue eyes 
of Paul's to the end.
  In a career that required him to fabricate many a character and 
experience, Paul Newman's rebellious yet playful quality always struck 
me as completely genuine.
  It often masked and helped him promote some very serious work.
  A resident of Westport, CT he made enduring contributions to our 
State. Some will remember that he insisted on holding the first movie 
premiere in New Haven history when ``Butch Cassidy and the Sundance 
Kid'' made its debut at the Roger Sherman theater. The Presiding 
Officer is familiar with that community.
  But for the sprinkle of glitter a star of Paul's magnitude brought to 
Connecticut, the difference he made to our communities was far more 
lasting--from helping to preserve open spaces such as the Trout Brook 
Valley and renovate the Westport Historical Society and its Country 
Playhouse, to the active role he played in government at the local, 
State, and Federal levels.
  Like all Americans at this hour, I will miss him, a great guy and a 
good friend. As much as I will miss his friendship and his performances 
on the television screen or at the movie theater, I will miss being 
reminded every time that we saw him just how good and decent a man he 
truly was.
  Our thoughts and prayers are, obviously, with Joanne, his lovely 
wife, his daughters, and the rest of the Newman family.
  I wanted to thank them for sharing with us these many years a great 
guy.
  Mr. President, I have a wonderful obituary that was written in the 
New York Times. I ask unanimous consent that it be printed in the 
Record.

[[Page 23426]]

  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the New York Times, Sept. 28, 2008]

       Paul Newman, a Magnetic Titan of Hollywood, Is Dead at 83

                          (By Aljean Harmetz)

       Paul Newman, one of the last of the great 20th-century 
     movie stars, died Friday at his home in Westport, Conn. He 
     was 83.
       The cause was cancer, said Jeff Sanderson of Chasen & 
     Company, Mr. Newman's publicists.
       If Marlon Brando and James Dean defined the defiant 
     American male as a sullen rebel, Paul Newman recreated him as 
     a likable renegade, a strikingly handsome figure of animal 
     high spirits and blue-eyed candor whose magnetism was almost 
     impossible to resist, whether the character was Hud, Cool 
     Hand Luke or Butch Cassidy.
       He acted in more than 65 movies over more than 50 years, 
     drawing on a physical grace, unassuming intelligence and good 
     humor that made it all seem effortless. Yet he was also an 
     ambitious, intellectual actor and a passionate student of his 
     craft, and he achieved what most of his peers find 
     impossible: remaining a major star into a craggy, charismatic 
     old age even as he redefined himself as more than Hollywood 
     star. He raced cars, opened summer camps for ailing children 
     and became a nonprofit entrepreneur with a line of foods that 
     put his picture on supermarket shelves around the world.
       Mr. Newman made his Hollywood debut in the 1954 costume 
     film ``The Silver Chalice.'' Stardom arrived a year and a 
     half later, when he inherited from James Dean the role of the 
     boxer Rocky Graziano in ``Somebody Up There Likes Me.'' Mr. 
     Dean had been killed in a car crash before the screenplay was 
     finished.
       It was a rapid rise for Mr. Newman, but being taken 
     seriously as an actor took longer. He was almost undone by 
     his star power, his classic good looks and, most of all, his 
     brilliant blue eyes. ``I picture my epitaph,'' he once said. 
     ``Here lies Paul Newman, who died a failure because his eyes 
     turned brown.''
       Mr. Newman's filmography was a cavalcade of flawed heroes 
     and winning antiheroes stretching over decades. In 1958 he 
     was a drifting confidence man determined to marry a Southern 
     belle in an adaptation of ``The Long, Hot Summer.'' In 1982, 
     in ``The Verdict,'' he was a washed-up alcoholic lawyer who 
     finds a chance to redeem himself in a medical malpractice 
     case.
       And in 2002, at 77, having lost none of his charm, he was 
     affably deadly as Tom Hanks's gangster boss in ``Road to 
     Perdition.'' It was his last onscreen role in a major 
     theatrical release. (He supplied the voice of the veteran 
     race car Doc in the Pixar animated film ``Cars'' in 2006.)
       Few major American stars have chosen to play so many 
     imperfect men.
       As Hud Bannon in ``Hud'' (1963) Mr. Newman was a heel on 
     the Texas range who wanted the good life and was willing to 
     sell diseased cattle to get it. The character was intended to 
     make the audience feel ``loathing and disgust,'' Mr. Newman 
     told a reporter. Instead, he said, ``we created a folk 
     hero.''
       As the self-destructive convict in ``Cool Hand Luke'' 
     (1967) Mr. Newman was too rebellious to be broken by a brutal 
     prison system. As Butch Cassidy in ``Butch Cassidy and the 
     Sundance Kid'' (1969) he was the most amiable and antic of 
     bank robbers, memorably paired with Robert Redford. And in 
     ``The Hustler'' (1961) he was the small-time pool shark Fast 
     Eddie, a role he recreated 25 years later, now as a well-
     heeled middle-aged liquor salesman, in ``The Color of Money'' 
     (1986). That performance, alongside Tom Cruise, brought Mr. 
     Newman his sole Academy Award, for best actor, after he had 
     been nominated for that prize six times. In all he received 
     eight Oscar nominations for best actor and one for best 
     supporting actor, in ``Road to Perdition.'' ``Rachel, 
     Rachel,'' which he directed, was nominated for best picture.
       ``When a role is right for him, he's peerless,'' the film 
     critic Pauline Kael wrote in 1977. ``Newman is most 
     comfortable in a role when it isn't scaled heroically; even 
     when he plays a bastard, he's not a big bastard--only a 
     callow, selfish one, like Hud. He can play what he's not--a 
     dumb lout. But you don't believe it when he plays someone 
     perverse or vicious, and the older he gets and the better you 
     know him, the less you believe it. His likableness is 
     infectious; nobody should ever be asked not to like Paul 
     Newman.''
       But the movies and the occasional stage role were never 
     enough for him. He became a successful racecar driver, 
     winning several Sports Car Club of America national driving 
     titles. He even competed at Daytona in 1995 as a 70th 
     birthday present to himself. In 1982, as a lark, he decided 
     to sell a salad dressing he had created and bottled for 
     friends at Christmas. Thus was born the Newman's Own brand, 
     an enterprise he started with his friend A. E. Hotchner, the 
     writer. More than 25 years later the brand has expanded to 
     include, among other foods, lemonade, popcorn, spaghetti 
     sauce, pretzels, organic Fig Newmans and wine. (His daughter 
     Nell Newman runs the company's organic arm.) All its profits, 
     of more than $200 million, have been donated to charity, the 
     company says.
       Much of the money was used to create a string of Hole in 
     the Wall Gang Camps, named for the outlaw gang in ``Butch 
     Cassidy.'' The camps provide free summer recreation for 
     children with cancer and other serious illnesses. Mr. Newman 
     was actively involved in the project, even choosing cowboy 
     hats as gear so that children who had lost their hair because 
     of chemotherapy could disguise their baldness. Several years 
     before the establishment of Newman's Own, on Nov. 28, 1978, 
     Scott Newman, the oldest of Mr. Newman's six children and his 
     only son, died at 28 of an overdose of alcohol and pills. His 
     father's monument to him was the Scott Newman Center, created 
     to publicize the dangers of drugs and alcohol. It is headed 
     by Susan Newman, the oldest of his five daughters.
       Mr. Newman's three younger daughters are the children of 
     his 50-year second marriage, to the actress Joanne Woodward. 
     Mr. Newman and Ms. Woodward both were cast--she as an 
     understudy--in the Broadway play ``Picnic'' in 1953. Starting 
     with ``The Long, Hot Summer'' in 1958, they co-starred in 10 
     movies, including ``From the Terrace'' (1960), based on a 
     John O'Hara novel about a driven executive and his unfaithful 
     wife; ``Harry & Son'' (1984), which Mr. Newman also directed, 
     produced and helped write; and ``Mr. & Mrs. Bridge'' (1990), 
     James Ivory's version of a pair of Evan S. Connell novels, in 
     which Mr. Newman and Ms. Woodward played a conservative 
     Midwestern couple coping with life's changes.
       When good roles for Ms. Woodward dwindled, Mr. Newman 
     produced and directed ``Rachel, Rachel'' for her in 1968. 
     Nominated for the best-picture Oscar, the film, a delicate 
     story of a spinster schoolteacher tentatively hoping for 
     love, brought Ms. Woodward her second of four best-actress 
     Oscar nominations. (She won the award on her first 
     nomination, for the 1957 film ``The Three Faces of Eve,'' and 
     was nominated again for her roles in ``Mr. & Mrs. Bridge'' 
     and the 1973 movie ``Summer Wishes, Winter Dreams.'')
       Mr. Newman also directed his wife in ``The Effect of Gamma 
     Rays on Man-in-the-Moon Marigolds'' (1972), ``The Glass 
     Menagerie'' (1987) and the television movie ``The Shadow 
     Box'' (1980). As a director his most ambitious film was 
     ``Sometimes a Great Notion'' (1971), based on the Ken Kesey 
     novel.
       In an industry in which long marriages might be defined as 
     those that last beyond the first year and the first 
     infidelity, Mr. Newman and Ms. Woodward's was striking for 
     its endurance. But they admitted that it was often turbulent. 
     She loved opera and ballet. He liked playing practical jokes 
     and racing cars. But as Mr. Newman told Playboy magazine, in 
     an often-repeated quotation about marital fidelity, ``I have 
     steak at home; why go out for hamburger?''


                        Beginnings in Cleveland

       Paul Leonard Newman was born on Jan. 26, 1925, in 
     Cleveland. His mother, the former Teresa Fetzer, was a Roman 
     Catholic who turned to Christian Science. His father, Arthur, 
     who was Jewish, owned a thriving sporting goods store that 
     enabled the family to settle in affluent Shaker Heights, 
     Ohio, where Paul and his older brother, Arthur, grew up.
       Teresa Newman, an avid theatergoer, steered her son toward 
     acting as a child. In high school, besides playing football, 
     he acted in school plays, graduating in 1943. After less than 
     a year at Ohio University at Athens, he joined the Navy Air 
     Corps to be a pilot. When a test showed he was colorblind, he 
     was made an aircraft radio operator.
       After the war Mr. Newman entered Kenyon College in Ohio on 
     an athletic scholarship. He played football and acted in a 
     dozen plays before graduating in 1949. Arthur Newman, a 
     strict and distant man, thought acting an impractical 
     occupation, but, perhaps persuaded by his wife, he agreed to 
     support his son for a year while Paul acted in small theater 
     companies.
       In May 1950 his father died, and Mr. Newman returned to 
     Cleveland to run the sporting goods store. He brought with 
     him a wife, Jacqueline Witte, an actress he had met in summer 
     stock. But after 18 months Paul asked his brother to take 
     over the business while he, his wife and their year-old son, 
     Scott, headed for Yale University, where Mr. Newman intended 
     to concentrate on directing.
       He left Yale in the summer of 1952, perhaps because the 
     money had run out and his wife was pregnant again. But almost 
     immediately, the director Josh Logan and the playwright 
     William Inge gave him a small role in ``Picnic,'' a play that 
     was to run 14 months on Broadway. Soon he was playing the 
     second male lead and understudying Ralph Meeker as the sexy 
     drifter who roils the women in a Kansas town. Mr. Newman and 
     Ms. Woodward were attracted to each other in rehearsals of 
     ``Picnic.'' But he was a married man, and Ms. Woodward has 
     insisted that they spent the next several years running away 
     from each other.
       In the early 1950s roles in live television came easily to 
     both of them. Mr. Newman starred in segments of ``You Are 
     There,'' ``Goodyear Television Playhouse'' and other shows.

[[Page 23427]]

       He was also accepted as a student at the Actors Studio in 
     New York, where he took lessons alongside James Dean, 
     Geraldine Page, Marlon Brando and, eventually, Ms. Woodward.
       Then Hollywood knocked. In 1954 Warner Brothers offered Mr. 
     Newman $1,000 a week to star in ``The Silver Chalice'' as the 
     Greek slave who creates the silver cup used at the Last 
     Supper. Mr. Newman, who rarely watched his own films, once 
     gave out pots, wooden spoons and whistles to a roomful of 
     guests and forced them to sit through ``The Silver Chalice,'' 
     which he called the worst movie ever made. His antidote for 
     that early Hollywood experience was to hurry back to 
     Broadway. In Joseph Hayes's play ``The Desperate Hours,'' he 
     starred as an escaped convict who holds a family hostage. The 
     play was a hit, and during its run, Jacqueline Newman gave 
     birth to their third child.
       On his nights off Mr. Newman acted on live television. In 
     one production he had the title role in ``The Death of Billy 
     the Kid,'' a psychological study of the outlaw written by 
     Gore Vidal and directed by Robert Mulligan for ``Philco 
     Playhouse''; in another, an adaptation of Ernest Hemingway's 
     short story ``The Battler,'' he took over the lead role after 
     James Dean, who had been scheduled to star, was killed on 
     Sept. 30, 1955. Mr. Penn, who directed ``The Battler,'' was 
     later sure that Mr. Newman's performance in that drama, as a 
     disfigured prizefighter, won him the lead role in ``Somebody 
     Up There Likes Me,'' again replacing Dean. When Mr. Penn 
     adapted the Billy the Kid teleplay for his first Hollywood 
     film, ``The Left Handed Gun,'' in 1958, he again cast Mr. 
     Newman in the lead.
       Even so, Mr. Newman was saddled for years with an image of 
     being a ``pretty boy'' lightweight.
       ``Paul suffered a little bit from being so handsome--people 
     doubted just how well he could act,'' Mr. Penn told the 
     authors of the 1988 book ``Paul and Joanne.'' By 1957 Mr. 
     Newman and Ms. Woodward were discreetly living together in 
     Hollywood; his wife had initially refused to give him a 
     divorce. He later admitted that his drinking was out of 
     control during this period.
       With his divorce granted, Mr. Newman and Ms. Woodward were 
     married on Jan. 29, 1958, and went on to rear their three 
     daughters far from Hollywood, in a farmhouse on 15 acres in 
     Westport, Conn.
       That same year Mr. Newman played Brick, the reluctant 
     husband of Maggie the Cat, in the film version of Tennessee 
     Williams's ``Cat on a Hot Tin Roof,'' earning his first 
     Academy Award nomination, for best actor. In 1961, with ``The 
     Hustler,'' he earned his second best-actor Oscar nomination. 
     He had become more than a matinee idol.


                        Directed by Martin Ritt

       Many of his meaty performances during the early '60s came 
     in movies directed by Martin Ritt, who had been a teaching 
     assistant to Elia Kazan at the Actors Studio when Mr. Newman 
     was a student. After directing ``The Long, Hot Summer,'' Mr. 
     Ritt directed Mr. Newman in ``Paris Blues'' (1961), a story 
     of expatriate musicians; ``Hemingway's Adventures of a Young 
     Man'' (1962); ``Hud'' (1963), which brought Mr. Newman a 
     third Oscar nomination; ``The Outrage'' (1964), with Mr. 
     Newman as the bandit in a western based on Akira Kurosawa's 
     ``Rashomon''; and ``Hombre'' (1967), in which Mr. Newman 
     played a white man, reared by Indians, struggling to live in 
     a white world.
       Among his other important films were Otto Preminger's 
     ``Exodus'' (1960), Alfred Hitchcock's ``Torn Curtain'' (1966) 
     and Jack Smight's ``Harper'' (1966), in which he played Ross 
     Macdonald's private detective Lew Archer.
       In 1968--after he was cast as an ice-cold racecar driver in 
     ``Winning,'' with Ms. Woodward playing his frustrated wife--
     Mr. Newman was sent to a racing school. In midlife racing 
     became his obsession. A Web site--newman-haas.com--details 
     his racing career, including his first race in 1972; his 
     first professional victory, in 1982; and his co-ownership of 
     the Newman/Haas Indy racing team, which won eight series 
     championships.
       A politically active liberal Democrat, Mr. Newman was a 
     Eugene McCarthy delegate to the 1968 Democratic convention 
     and appointed by President Jimmy Carter to a United Nations 
     General Assembly session on disarmament. He expressed pride 
     at being on President Richard M. Nixon's enemies list.
       When Mr. Newman turned 50, he settled into a new career as 
     a character actor, playing the title role--``with just the 
     right blend of craftiness and stupidity,'' Janet Maslin wrote 
     in The New York Times--of Robert Altman's ``Buffalo Bill and 
     the Indians'' (1976); an unscrupulous hockey coach in George 
     Roy Hill's ``Slap Shot'' (1977); and the disintegrating 
     lawyer in Sidney Lumet's ``Verdict.''
       Most of Mr. Newman's films were commercial hits, probably 
     none more so than ``The Sting'' (1973), in which he teamed 
     with Mr. Redford again to play a couple of con men, and ``The 
     Towering Inferno'' (1974), in which he played an architect in 
     an all-star cast that included Steve McQueen and Faye 
     Dunaway.
       After his fifth best-actor Oscar nomination, for his 
     portrait of an innocent man discredited by the press in 
     Sydney Pollack's ``Absence of Malice'' (1981), and his sixth 
     a year later, for ``The Verdict,'' the Academy of Motion 
     Picture Arts and Sciences in 1986 gave Mr. Newman the 
     consolation prize of an honorary award. In a videotaped 
     acceptance speech he said, ``I am especially grateful that 
     this did not come wrapped in a gift certificate to Forest 
     Lawn.''
       His best-actor Oscar, for ``The Color of Money,'' came the 
     next year, and at the 1994 Oscars ceremony he received the 
     Jean Hersholt Humanitarian Award. The year after that he 
     earned his eighth nomination as best actor, for his 
     curmudgeonly construction worker trying to come to terms with 
     his failures in ``Nobody's Fool'' (1994). In 2003 he was 
     nominated as best supporting actor for his work in ``Road to 
     Perdition.'' And in 2006 he took home both a Golden Globe and 
     an Emmy for playing another rough-hewn old-timer, this one in 
     the HBO mini-series ``Empire Falls.''
       Besides Ms. Woodward and his daughters Susan and Nell, he 
     is survived by three other daughters, Stephanie, Melissa and 
     Clea; two grandchildren; and his brother. Mr. Newman returned 
     to Broadway for the last time in 2002, as the Stage Manager 
     in a lucrative revival of Thornton Wilder's ``Our Town.'' The 
     performance was nominated for a Tony Award, though critics 
     tended to find it modest. When the play was broadcast on PBS 
     in 2003, he won an Emmy.
       This year he had planned to direct ``Of Mice and Men,'' 
     based on the John Steinbeck novel, in October at the Westport 
     Country Playhouse in Connecticut. But in May he announced 
     that he was stepping aside, citing his health.
       Mr. Newman's last screen credit was as the narrator of Bill 
     Haney's documentary ``The Price of Sugar,'' released this 
     year. By then he had all but announced that he was through 
     with acting.
       ``I'm not able to work anymore as an actor at the level I 
     would want to,'' Mr. Newman said last year on the ABC program 
     ``Good Morning America.'' ``You start to lose your memory, 
     your confidence, your invention. So that's pretty much a 
     closed book for me.''
       But he remained fulfilled by his charitable work, saying it 
     was his greatest legacy, particularly in giving ailing 
     children a camp at which to play.
       ``We are such spendthrifts with our lives,'' Mr. Newman 
     once told a reporter. ``The trick of living is to slip on and 
     off the planet with the least fuss you can muster. I'm not 
     running for sainthood. I just happen to think that in life we 
     need to be a little like the farmer, who puts back into the 
     soil what he takes out.''

  Mr. DODD. 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. COLLINS. 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. COLLINS. Mr. President, could the Chair inform us whether there 
is an order for proceeding? It was my understanding we were 
alternating, going back and forth. I would inform the Senators on the 
floor I have a 5-minute tribute to Senator Warner. But I am unaware of 
what the order is.
  The PRESIDING OFFICER. There is no order or agreement. We are 
operating postcloture under the motion.
  Mr. MENENDEZ. Mr. President, if I may.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. MENENDEZ. Mr. President, I had intended to speak, but with an 
understanding that is the presentation by the Senator from Maine, I ask 
unanimous consent that after the Senator from Maine is recognized by 
the Chair, I would be recognized following that.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Maine.
  Ms. COLLINS. Thank you, Mr. President. And I thank the Senator from 
New Jersey.


                          Senator John Warner

  Mr. President, throughout our Nation's history, the Commonwealth of 
Virginia has provided leaders of uncommon courage, dedication, and 
vision. The names that are revered in the Old Dominion are honored 
across America: Washington, Jefferson, Monroe, Mason, and Henry, to 
name but a few.
  Today, as the 110th Congress draws to a close, we say farewell to 
another great Virginian, a great patriot, public servant, and 
distinguished colleague whose name history will add to that honor roll: 
the name of our friend and colleague, Senator John Warner.
  Senator Warner's career mirrors those of the Founding Fathers in many

[[Page 23428]]

ways. During World War II, when freedom was under attack, he enlisted 
in the U.S. Navy at just 17 years of age.
  Following the war, he rejoined civilian life, earned a college 
degree, and entered law school. At the outbreak of the Korean war, he 
suspended his studies to serve his Nation once again, this time as an 
officer in the U.S. Marine Corps.
  After he returned from Korea, he completed his law degree but 
remained an officer in the Reserves, always ready to answer the call of 
his Nation. Senator John Warner truly exemplifies the American 
tradition of the citizen soldier.
  As a civilian, John Warner continued to serve: as an assistant U.S. 
attorney, as Under Secretary of the Navy, and as Secretary of the Navy. 
During his 5 years in the Navy's Secretariat, he demonstrated another 
American tradition: a commitment to both military strength and 
diplomacy.
  It is fitting that one so steeped in the best of America's traditions 
was chosen by the President, in 1976, to coordinate our Nation's 
bicentennial celebrations in all 50 States and in 22 foreign countries.
  It was in 1978 that the wise citizens of Virginia sent John Warner to 
the U.S. Senate. For 30 years, the people of America have been 
grateful. The hallmark of Senator Warner's service in the Senate has 
been his absolute and unwavering commitment to a strong national 
defense. It has been my honor to serve with him on two committees that 
bear directly upon that commitment--the Senate Armed Services Committee 
and the Senate Homeland Security Committee.
  As the chairman and ranking member of the Armed Services Committee, 
Senator Warner has consistently upheld the pledge he took to defend 
America when he enlisted in the Navy 63 years ago. His support for our 
men and women in uniform, for their families, and for our veterans is 
unwavering. He has been an effective and strong advocate for 
modernizing our military to meet the challenges of the 21st century.
  Senator Warner also understands that America's future does not just 
depend upon defending our Nation against attack. I am proud to have 
worked with him on climate change legislation, and his leadership on 
the America's Climate Security Act with our friend, Senator Joe 
Lieberman, demonstrates his commitment to protecting our environment 
and to securing our energy future.
  Senator Warner's career has been defined by his involvement in some 
of the most pressing issues of our time. But he has also worked hard on 
those seemingly smaller issues that make a big difference in people's 
lives. As just one example, he joined me in authoring the tax deduction 
for teachers who spend their own money on classroom supplies. Whether 
in uniform or in our classrooms, John Warner believes those who serve 
have earned our gratitude and our support.
  Also, we remember John Warner's pivotal role at a time when our 
institution of the Senate was at a threshold of chaos and dysfunction. 
I refer to his leadership in the so-called Gang of 14, which worked out 
a compromise on judicial nominations that helped save this institution 
from what would have otherwise been a very bleak time.
  Senator Warner has continued and enhanced the best traditions of this 
Nation and of the Commonwealth of Virginia in countless ways. One that 
must be mentioned, before I conclude my remarks, is his unfailing 
civility and courtesy toward his Senate colleagues. Regardless of the 
significance of the issue or the intensity of the debate or the 
strength of his colleagues' feelings, Senator Warner has always 
tempered staunch advocacy for his convictions with the utmost respect 
for the convictions of others.
  On a personal note, he has been a wonderful friend and mentor to me, 
the Senator from Maine. I know all Americans join me today in thanking 
Senator John Warner for his dedicated decades of service to his 
country, whether in times of peace or war, and in wishing him all the 
best in the years to come.
  Thank you, Mr. President.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. WARNER. Mr. President, it is sometimes somewhat breathless to be 
seated on this Senate floor knowing that just maybe 48 hours remain of 
my career in the Senate. I shall remain in office through early 
January, but I tell you, it takes me a few minutes to assemble my 
thoughts. But in your case, I would say: Look at the many things we 
have worked on together.
  This fine Senator is so proud of the Naval installations in her 
State. We visited the shipyard together, indeed the facilities at 
Portsmouth. The ships are made there. The ships are berthed there. It 
has been home to the U.S. Navy, I imagine, from the earliest days of 
the formation of our Colonies and the first of the ships we had.
  I hope what I am about to say is fully understood. But those of us--I 
have had some modest career in the Navy in my lifetime--but we always 
refer to the ship in an affectionate way, as if it were a female. 
Indeed, it does protect the sailors at sea with its steadiness and its 
seaworthiness, and we often refer to the ships as the fighting lady.
  I say to the Senator, I would hope that you would accept that as an 
accolade, the fighting lady from Maine. We have watched you under the 
toughest of circumstances. One time I remember working with you and 
your tenacity was fierce, and you really sort of turned back a lot of 
my thoughts which I thought were so important. But it worked out in the 
end. You prevailed and that was the development of the legislation 
which reconstructed, reformulated so much of our intelligence 
community. That was truly a masterful accomplishment on your part.
  Again, the reason I am a bit breathless is when I first came to the 
Senate, these 30 years ago, there were not any ladies in the Senate at 
that time. We were joined in my class by Nancy Kassebaum from Kansas, a 
wonderful lady. Believe me, she very quickly established her own 
stature. We all admired her tremendously as a very strong Senator, 
which she was throughout her career. But from that small beginning 
commenced the transformation of the Senate in many ways--from the one 
lady--she certainly was a fighting lady, too--to where today we have 
many. As a matter of fact, we do not even count them anymore because 
they just have gotten into the full fabric of the Senate and everybody 
is just totally unconscious to that except, I guess, people like 
myself, with a wandering eye, constantly taking a look at the dress one 
day and compliment my dear friends.
  But on a serious note, we have had a marvelous, strong friendship and 
working relationship, and I shall miss you dearly, as I will this 
institution. But I do leave with the thought that you are one of the 
great strengths of this institution which will be called upon, as it is 
in this hour. The Nation calls upon this body to save it.
  I was looking last night, as I was trying to drift off to a rest, at 
the famous poem that was written, ``O Ship Of State.'' Do you remember 
that poem? And America today is looking to its Congress like few times 
in history. ``O Ship Of State''--I have that poem on my desk.
  At this time, I ask unanimous consent to have that poem printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                            O Ship of State

                    (By Henry Wadsworth Longfellow)

     Thou, too, sail on, O Ship of State!
     Sail on, O Union, strong and great!
     Humanity with all its fears,
     With all the hopes of future years,
     Is hanging breathless on thy fate!
     We know what Master laid thy keel,
     What Workmen wrought thy ribs of steel,
     Who made each mast, and sail, and rope,
     What anvils rang, what hammers beat,
     In what a forge and what a heat
     Were shaped the anchors of thy hope!
     Fear not each sudden sound and shock,
     `Tis of the wave and not the rock;
     `Tis but the flapping of the sail,
     And not a rent made by the gale!
     In spite of rock and tempest's roar,
     In spite of false lights on the shore,
     Sail on, nor fear to breast the sea!
     Our hearts, our hopes, are all with thee.
     Our hearts, our hopes, our prayers, our tears,

[[Page 23429]]

     Our faith triumphant o'er our fears,
     Are all with thee,--are all with thee!

  Mr. WARNER. I see the Senator is desiring to speak.
  But those two things remind me that this great ship of State will 
sail on and you will be at the helm. I wish you the best.
  Ms. COLLINS. Mr. President, I thank the Senator from Virginia for his 
very kind and thoughtful comments. At a time when we are attempting to 
pay tribute to him, he, of course, is gracious to others.
  I thank the Senator from New Jersey for his tolerance on the extra 
time.
  The PRESIDING OFFICER. Under the previous order, the Senator from New 
Jersey is recognized.
  Mr. MENENDEZ. I ask unanimous consent to speak as in morning 
business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MENENDEZ. Mr. President, I was happy to yield to the 
distinguished Senator from Maine on her recognition of Senator Warner. 
I certainly join in her comments about Senator Warner, as we did 
recently when the Senator appeared before the Senate Foreign Relations 
Committee and recognized his tremendous service to this institution and 
to the country. I often say, as I said to him before at the hearing, 
that, in fact, I am privileged I came to the Senate at a time when I 
got to serve with John Warner and to see some of the finest traditions 
of service in this country. I appreciate his tremendous service, not 
just to the people of Virginia but to the people of this Nation.
  Mr. WARNER. Mr. President, I thank the gracious Senator from New 
Jersey. I appreciate those remarks. Although it has been short-lived, 
we have had a good, strong working relationship; not always on the same 
side on several issues, but that is what democracy is all about. I 
thank the Senator.
  Mr. MENENDEZ. I thank the distinguished Senator from Virginia.


                              The Economy

  Mr. President, I rise to talk about the financial crisis our country 
is facing. I think to classify it as such is an understanding most 
Americans have. It is not an overstatement. The reality shows that 
today in a Washington Post ABC News poll, most Americans see the 
current financial situation as a crisis, and there is overwhelming 
concern that the failure of the House of Representatives to pass the 
economic recovery package may very well deepen that problem.
  I think it is important to note the poll also revealed significant 
public concern with the bill that Congress rejected yesterday. Few 
voters have said the package did enough to protect ordinary Americans 
and nearly half said it did not go far enough to shore up the Nation's 
economy. Half said the failed plan did not do enough to help the 
broader economy, and 61 percent said there was insufficient assistance 
for the general public.
  I think it is important, as we try to move forward in this 
institution and show some leadership, to keep those realities in mind--
of what our constituents back at home are saying. They recognize there 
is a crisis. They also recognize there is a challenge to them in the 
mainstream economy, and they felt as though that specific package 
didn't do enough for them. So many Americans--I would say the great 
majority of Americans--who are meeting their obligations with 
tremendous stress and challenges, who meet their monthly mortgage 
payments--have for years and have continued to do so--what they 
reasonably want to know is what do they get out of this?
  As my home State newspaper, the Star Ledger, said: Why, they continue 
to ask, should taxpayers have to subsidize the stupidity of people who 
were either greedy or maybe failed to do their homework? They go on to 
say in the editorial the real problem in Washington is that no one has 
made a cogent argument for why, in essence--this is paraphrasing--for 
why, in essence, we need to have a response and what does it mean to 
those who are not investment bankers or whose homes aren't in 
foreclosure.
  I think the economists generally agree the Nation's economy is at a 
serious risk of the flow of credit threatening to freeze beyond where 
it is already. We see the interest rates at which banks lend to each 
other rising each and every day, suggesting that lenders are hoarding 
cash. I think that gets to the question of what the editorials have 
said in my home State and others as well: So then what is the case to 
be made?
  Well, with banks leery of lending to each other, credit markets 
contract, making it difficult for businesses to obtain loans for 
expansion, to start new ventures or even to cover bills until 
unanticipated revenue comes in; car loans dry up, causing further 
suffering among the already ailing automakers; credit card interest 
rates rise, and all that forces, in essence, markets to shed jobs, 
creating more unemployment. Overall, this bleak fiscal picture causes 
consumers to scale back on spending, and then the little shop on Main 
Street closes as well. That is a broad brush. I would like to get to 
some of the specifics of how that affects us.
  When we have watched the news or picked up a newspaper over the last 
few months, we see top stories about the problems of big institutions: 
Bear Stearns and Washington Mutual and Wachovia. It has been easy to 
see what dire straits our financial system is in, but what is not 
making the headlines is what this economic crisis means for people in 
our hometowns.
  We have heard a lot about mortgage-backed securities, credit default 
swaps, and overnight lending rates. To be very honest with my 
colleagues, to a large number of Americans that is a foreign language--
but not about what they actually mean in terms of mortgages, credit 
card bills, and week-to-week budgets of our families. Those are items 
which they clearly understand and speak about around the kitchen table 
as they face challenges.
  I think some of us have been left with a mistaken impression that 
this crisis is just about Wall Street. I am worried people on every 
street in this country, who are being powerfully affected by this 
crisis, are being forgotten.
  Now, the heart of this crisis is the housing market. So many houses 
are going into foreclosure that now it is hard for anybody to get a 
loan of any kind, to buy a home, to invest in a business or have that 
business grow, to get a college education. There is a credit freeze so 
businesses can't grow. They can't pay expenses. They can't look to the 
future. It is becoming a financial wildfire, ravishing our economy and 
burning away at the fabric of our communities. The crisis stretches 
across every city in, for example, my home State, but it is replicated 
across the landscape of the country, North and South and East and West.
  In Newark, there is a single mother who has lost her job and now 
holds down three different part-time jobs to make up for it, while her 
kids are at home by themselves. In Clifton, there is a couple who work 
two jobs and bring in $4,000 a month together, but when the mortgage 
payment, the car payment, the electricity and gas, utility bills come 
in, and the grocery bills and the credit card bills come in every 
month, they worry they can't make ends meet. In another part of the 
State, there is a builder who is finding it almost impossible to get 
funding to keep his business going. Banks want bigger deposits, bigger 
monthly payments, and stricter payment deadlines.
  Today, I wish to focus on what the credit crunch means for every New 
Jerseyan and American--the jobs, the businesses or anyone who needs a 
loan to drive a car or go to college--and what it means for those who 
are closer to the twilight of their life and are thinking about their 
retirement and what that retirement has meant to them in terms of what 
is taking place and what will continue to take place if we see no 
action and how they may very well have to extend the time in which they 
thought they could retire.
  Let's talk about businesses, especially small businesses, because 
they are the ones that create 75 percent of all the jobs in America. We 
have always been an entrepreneurial people. We have always had the 
ideas and are willing to take intelligent risks to start a business, 
and those businesses are the ones that create jobs. They

[[Page 23430]]

rent stores. They buy buildings. Those people who are employed 
ultimately are gainfully employed in a way that they have income to 
spend in other businesses for goods and services they need, which 
employ other people, and, of course, these businesses pay revenues, to 
their local, State, and Federal entities. So we can see the cycle of 
how important they are.
  Now, if you want to start a business, this is one of the worst 
climates in our history to do so. Loans aren't available, even to 
people with good credit, and especially not to entrepreneurs who are 
getting started. So that dream of Americans having business ownership 
is now miles further away. But the credit crunch hurts small 
businesses. There are those of us who every day are feeling restricted 
in our spending and frugal when we open our checkbooks. That means we 
aren't going, for example, to see this lady at the counter. She is 
ultimately at the other end of the business cycle. We are restricted in 
our spending. This is a reality. It is a reality we feel in our lives. 
We see what is happening in the country. We may already have faced some 
pressures in our own economic circumstances in a personal family way, 
so we hold back. We say: Let's see what will happen. How do I decide? 
So we restrict our spending and we are frugal when we open our 
checkbooks. That is probably in many ways smart, but there is also a 
consequence. That means a lot of us aren't going out to eat as much, 
which means the waitress isn't getting the tips she depended on to 
bring home for her family and the challenges her family has, and owners 
of that business aren't getting the checks they depend on, which means 
restaurants have to either contract dramatically the size of their 
workforce, or, in the acute set of circumstances, they have to close. 
It means the local retailer--perhaps from whom we buy the treat we have 
once a week at the end of a long week or a gift we are buying for a 
family member or a friend's birthday--will see depleting sales. As 
their cash input decreases, they have to decrease their output, and 
they will be giving pink slips to their employees. It means we see more 
of this sign that says ``store closed'' for business. It means the 
local lunch spot or the barber will not have the same lunchtime rush or 
the same Saturday appointments. While we certainly can all live without 
a haircut as frequently or without eating our favorite sandwich, those 
shop owners depend on our steady business. They depend on that 
appointment to make ends meet. When, in fact, that doesn't happen, 
there is a consequence to them and those who work there and the 
families of all who are situated there.
  Small businesses don't have access to capital because banks have 
severely cut back in lending. So, for example, when my dear father was 
alive, he was an itinerant carpenter, and he used to go to the lumber 
shop where he had a little bit of credit to get some supplies as he did 
the business--the work for the people who hired him--but that lumber 
store obviously had to get their suppliers and the credit that, in 
fact, they needed to get those supplies there, to then extend credit to 
him so he would be able to go ahead and do the job and then get paid 
and then pay for his supplies and the chain goes on. When, in fact, 
that chain is broken, there is a consequence, and the consequence of 
that is people lose their employment. There is a ripple effect. It is 
not only they who lose their employment but all the resources they had 
in making the purchase of goods and services that ultimately hired 
other people and who had families and who had needs and who made 
expenditures. So we see the consequences of that.
  In the construction field, for example, we have a set of 
circumstances where, in fact, you have contractors who get a job in 
southern New Jersey, but he doesn't get paid for that job upfront.
  He makes a bid. It might be a public contract or it might be a 
private construction project. He doesn't get paid up front. So that 
contractor needs credit.
  What does he need the credit for? He needs the credit for the 
supplies to bring to the job to do the work. He needs credit for 
floating so that he can keep his payroll going for the people he has to 
pay up front every week so they can do the work that creates the home 
or the building or the business structure that ultimately will pay 
them, and they will repay their credit from their suppliers and then 
ultimately be able to make a profit.
  Again, all of those construction materials that are provided to that 
contractor, those people, those entities have credit as it relates to 
those who provide the supplies that they sell to contractors. So there 
is, again, an intricate balance of all of these interests coming 
together in a way that affects the person wearing a hard hat on the 
front lines of building the infrastructure, the homes, the churches, 
and the businesses of our community.
  Again, the reality: When a credit freeze takes place, the pink slips 
start getting printed, and the workforce is suddenly unemployed. Now 
the contractors cannot pay their suppliers, so their cash inventory 
drops and their ability to issue payroll at the end of the week is also 
jeopardized, and it pushes more families into the ranks of the 
unemployed. It is a vicious cycle occurring far away from Wall Street, 
but it is affecting our families, our neighbors, our friends on Main 
Street.
  The credit crunch changes our ability to shop. Every business to some 
degree depends on this credit process for what they sell and the 
supplies they get. We often use our credit cards in the process of 
purchasing those goods. But when manufacturers cannot get loans that 
they need to keep the manufacturing process going to create the 
products that ultimately get consumed at a store where the store takes 
credit and purchases it from them but gets maybe 30 days, 60 days the 
manufacturer needs to continue to produce the product so that 
ultimately it goes to that store where ultimately consumers seek to 
purchase, in fact, they cannot get the money to keep the product on the 
shelves, and, of course, the cycle is clear.
  Look at farmers. New Jersey is called the Garden State. I often tell 
my friends you have to get off the turnpike if you want to know what 
the Garden State really looks like. We have spinach. We are in the top 
two or three in spinach. We have a whole host of speciality products--
peach orchards, cranberry bogs, blueberries, to mention some.
  For farmers, crop planting depends greatly on the amount of available 
credit. Farmers cannot plant next year's crop if they cannot get this 
year's loans. So from cranberries to blueberries to all of these other 
products, everything you buy at the grocery store is going to be more 
expensive. Some food products may wind up in very short supply. They 
are going to be more expensive because even if you have a great credit 
history--as the cranberry bogs in the pinelands of New Jersey--if you 
have a good credit history but the credit crunch creates a higher and 
higher standard for what you will borrow and under what terms and 
conditions you will borrow, that is going to be reflected ultimately in 
the end cost of the product we consume on the dining room table.
  We have a challenge that is direct for farmers, for family farmers, 
and for all of us as consumers as we put fruits and vegetables on the 
table for our families to consume, and that has a direct consequence to 
us.
  Credit cards. As loans become more and more difficult and expensive 
to get, people will continue to increase their usage of credit cards. I 
hope if people have some disposable money that they will pay down their 
credit card debts. That is a good thing to be doing in these times and 
not be looking at spending a lot of interest on credit card debt. This 
is a good time, if you have the resources, to pay down credit card 
debt.
  I know so many families who tell me they are using that credit card 
as they have transitions in jobs, as they meet some of their 
challenges. We see credit card interest rates which are already rising, 
and they will continue to escalate as banks look for ways to recoup the 
losses resulting from those defaults that are taking place.

[[Page 23431]]

  This is an issue I raised before about credit card reform. We need to 
pursue reform in several sectors of our financial industry. We already 
have credit card debt in this country that collectively equals $850 
billion. Now we are seeing the consequences of those who find 
themselves using their credit cards in this economy who ultimately are 
facing higher interest rates and, should they be somewhat late, higher 
fees for those payments for being slightly late. Then we will see a 
ripple effect of those fees pushing people beyond their limits, and 
when they get pushed beyond their limits artificially, they are in 
default. When they are in that default, they find themselves with a 
whole host of new charges that continue to push up their debt. We need 
to do something about this situation. But it is part of the reality of 
our present existence that, in fact, we see this driving up as we 
speak. That is a consequence to the average consumer in this country.
  I had a teacher in New Jersey who recently showed how hard it is 
getting for anyone to get a car loan. This teacher is not living within 
the community in which she teaches. She has to drive there. It is not a 
location where public transit is easily available. This teacher in New 
Jersey, who has driven to work every day for the past few years, has to 
buy a new car because hers is broken down. But the auto lending market 
essentially has been closed to buyers with credit scores of less than 
720.
  By the way, 720 is an excellent score. Yet finding the resources for 
an auto loan, not having the money to put it all out to purchase a car 
up front in cash--they need the opportunity to get access to that auto 
loan, and even with scores of 720 or less, they are finding it 
increasingly difficult to do so. Even if they have some savings and 
just want a modest new car to take them where they need to go to work, 
unless they have excellent credit, they quite simply are not going to 
get a loan to get that car.
  If we don't act soon, we are going to see students who will have 
trouble paying for their education. Parents trying to save for their 
children's college education will see their investments shrink, along 
with the stock market. College endowments that invest in the stock 
market are also getting hit hard, which makes it harder for them to 
provide financial assistance to students.
  If students need loans--and I know in my own life, someone who grew 
up poor in a tenement, the first in my family to go to college, if it 
wasn't for what we have done in the Federal Government through Pell 
grants and Perkins loans and also through other loans, I would not have 
been the first in my family to go to college and then law school.
  Students who manage to find loans will carry a higher interest rate 
than they would otherwise, leaving our graduates with crushing debt. We 
are already seeing so many of our children graduate with enormous debt. 
They graduate with a diploma in one hand and enormous debt in the other 
one. That is only going to rise under the current circumstances--
crushing debt before they even enter the job market.
  When they do leave school and start to look for a job, at this point, 
these graduates in the next year or two are going to be greeted by one 
of the worst job markets in 5 years. We are already at 6.1 percent 
unemployment and rising. We will see inaction only create a greater 
percentage of unemployment than we have experienced, and that will be 
some of the highest unemployment we have seen in well over a 
generation.
  In addition to burdening young people who are just about to launch 
their careers, failing to act will exacerbate the already difficult 
situation facing those who are winding down their careers and looking 
forward to retirement. We saw yesterday that the Dow lost the 
equivalent of $1.2 trillion in value. That is not just about wealthy 
people who have money to make investments in stocks. That is about 
those who have 401(k)s, that is about pension plans that make 
investments on behalf of their pensioners, that is about a broad 
breadth of all of us.
  Failing to act exacerbates the already difficult situation facing 
those who are winding down their careers and looking forward to 
retirement. When I looked before, the Dow was going back up, but the 
problem is that we see no sense of stability. Losses are real. It is 
not just the point on the Dow; it is the overall S&P performance as 
well. These people will see their decades of savings continue to shrink 
smaller and smaller as their IRAs, 401(k)s, and mutual funds drop in 
value.
  Yesterday's stock market alone accounted for approximately a $1.2 
trillion loss. Without action, those losses will only get worse.
  I know that a lot of people do not want to look at their 401(k)s 
right now, but everyone is going to have to look at them eventually. 
Those on the cusp of retirement cannot afford to wait several years for 
the market to stabilize on its own. They will be forced to stay in the 
job market long after they planned on retiring. That is a cruel reality 
for people who have worked a lifetime to help create families, build 
communities, and now find themselves in this challenge as they go into 
those years in which they thought their hard work would pay off. These 
hard-working Americans, who worked hard their whole lives, need us to 
act in a strong and sensible way to ensure that 30 years of savings do 
not get largely eliminated within 30 days.
  Let's talk about mortgages, which is at the heart of what our 
challenges are and the foreclosures that are mounting.
  The credit crunch affects your mortgage even if you pay it on time 
because if you have a mortgage, whether you pay it on time or not, you 
are going to find it difficult, if not impossible, to refinance your 
mortgage or to take out a second mortgage if you need it for the 
college education of your children or if, God forbid, there is an 
illness in your family that isn't covered by the insurance you have, if 
you have insurance, or if you are underinsured. You are going to find 
yourself with higher rates and different lending conditions.
  Your neighbors who are struggling and who are walking away from their 
homes because there is a padlock on the front door--their loss; you may 
think they maybe didn't make the right decisions, maybe they are part 
of that 6.1 percent unemployment who lost their jobs and now find 
themselves in a set of circumstances where they cannot meet the 
mortgage payment, maybe some should have known better. But regardless 
of the circumstances, whether they lost their job, don't have the 
income stream they had before to pay their mortgage, or whether it is 
because they were led to bad mortgages--I have people come into my 
Senate offices in New Jersey, and when we look at their information, we 
see they could have been very responsible borrowers at fixed rates, but 
they were led to mortgage instruments that, yes, were lower at the 
beginning but ultimately ballooned later. It is a crime that those 
mortgage lenders drove them to those products, knowing they could have 
been a very responsible borrower and had the ability to pay a long-term 
loan at a fixed rate, they led them to those products and had them 
choose a mortgage product where now they find themselves losing their 
home.
  Neighborhoods with foreclosures bring down home values for everyone 
in that community. I looked at the Center for Responsible Lending, and 
I looked at what they are saying about some of our challenges. In New 
Jersey alone, there are approximately 53,000 homes, and rising, in 
foreclosure. By the way, we are not the worst State in the Nation in 
this regard but by way of example. What does that mean? That affects 
neighborhoods and other homes and becomes a multiplier effect of 
enormous proportions.
  When a home forecloses in your neighborhood, the overall value of 
homes in that neighborhood falls. In New Jersey, that is the equivalent 
of about an $11,000 loss on your home. Having done absolutely nothing, 
paying your mortgage, being responsible, you still lost $11,000 on your 
home because of foreclosures taking place in your neighborhood. When 
there is a multiplicity of those foreclosures taking place in your 
neighborhood, it drives the value down even more.

[[Page 23432]]

  That has a consequence too. When values are driven down, as a former 
mayor I can tell you that means the ratable base begins to shrink. When 
the ratable base of all values begins to shrink, that is less taxes 
being paid. When that happens, there are two decisions to make. Either 
you cut services--police, fire, education--or you have to raise taxes 
collectively. Of course, that has a spiraling effect in and of itself.
  This foreclosure crisis is very much a reality not only for those who 
are losing and/or have lost their homes, but it is very real for those 
of us who still have a home because our home simply isn't worth as much 
as we paid for it.
  The credit crunch makes it harder to get financing to go buy a home 
presently. We have a story of someone who, totally responsible, good 
job, buys a condo and gets preapproved for their loan and they sign a 
contract. But a week before the closing, they are told the market in 
which they have purchased is declining and now they have to come up 
with twice the downpayment they had originally been approved for. So 
that may mean that home doesn't get sold, that person has to make other 
choices or, if they have any assets to meet the greater downpayment, 
they now have to make other choices in their lives as well. So the 
house sits on the market continuing to lose value and affects the 
values of all other homes in that neighborhood. That has a consequence 
for all of us.
  I have tried to outline what some of the challenges are. Let me talk 
about what I hope we will consider moving toward. As bad as the 
situation has gotten, with hundreds of thousands of Americans losing 
their jobs and millions losing their homes, energy and health costs 
sky-high, with businesses in trouble and loans of any kind incredibly 
hard to come by, most Americans have been morally opposed to the rescue 
plan leaders in Congress and the administration presented. Most 
Americans aren't too interested in a plan that risks rewarding those 
who got us into this mess, and they are absolutely right to be 
outraged.
  I, personally, as someone who in March of 2007, at a Senate Banking 
Committee hearing, raised the fact that we were going to face a tsunami 
of foreclosures and that we should be ahead of the curve and deal with 
that reality, unfortunately, had the administration say to me at that 
hearing that it was an exaggeration. Well, unfortunately, we haven't 
even seen the crest of that tsunami, and this is the issue that is at 
the core of our challenge. So I am, personally, incredibly angry that 
the greatest economy in the world has been brought to this point.
  But let us be very clear: Those people who brought us into this 
process have to be brought to justice, but while we consider that, the 
reality is we are all facing a consequence. That said, the need for 
accountability doesn't take away the need for action to rescue the 
system they damaged. As much as maybe some reckless CEO deserves to 
lose their job, we can't watch 2 to 3 million Americans lose their jobs 
to achieve that result. We can't let the entire system fail to punish 
the few who brought us to where we are today.
  We have already lost over 600,000 jobs this year alone. We have a 
6.2-percent unemployment rate--the highest in 5 years. In some 
communities, such as the Latino community, it is 8 percent unemployment 
and rising. We have to be very clear. If the crisis continues, it is 
going to drastically change our way of life for the worse. So doing 
nothing is not an option. If we don't shore up the economy's 
foundation, the floor is going to cave in on all of us. We have to do 
something to thaw out the credit market, restore trust in our financial 
system, and put out this economic wildfire before it is too late.
  Once we saw centuries-old financial institutions fail, once we saw 
our credit markets freeze up and Americans' savings begin to disappear, 
the question wasn't do we have to act, the question was how to craft a 
plan that would work and would give maximum protection to the taxpayers 
who might fund it.
  Now, I believe there is something that wasn't in the plan but that 
should be included, and I appreciate Senator Obama's suggestion of it 
today, where he proposed lifting the current limit on the Federal 
Deposit Insurance from its current limit of $100,000 to $250,000. He 
said he believed it would be:

       A step that would boost small businesses, make our banking 
     system more secure, and help restore public confidence in our 
     financial system.

  Right now, the Federal Deposit Insurance Corporation guarantees 
deposits up to $100,000 for every citizen or business. Meaning that if 
the bank goes down, the Federal Government guarantees your first 
$100,000 are safe. This would raise that limit, at least for a period 
of time.
  The FDIC has a long history of experience in protecting taxpayers 
from an infusion of public capital, especially by preferred stocks and 
warrants. They know what is the right stock and warrant. These are the 
guarantees for taxpayers. It would stop the flight by small businesses 
from some banks to those banks that are considered too big to fail but 
leaves other institutions without the resources to be part of the 
lending that is necessary in the community. Deposits would stay in 
these institutions because there would be newfound confidence, and 
others would now be depositing their money because they would have a 
higher insurance level, of up to $250,000, which would provide 
liquidity to lend to those very businesses that may be placing their 
resources there. Again, these are the small businesses that create 75 
percent of all the jobs in the country.
  So I hope we will look toward including that provision. I think it is 
a good one. Change is a good part of what we are seeking to do with an 
institution that has a long history of being successful on behalf of 
the taxpayers.
  I also hope we will look at homeowners. I had a pastor in my home 
State of New Jersey who had been working with not only his congregation 
but others with his community development organization to try to save 
homes. We are told that, in fact, we are getting the lenders and the 
banks to reconsider the mortgages and refinance them and work with 
people so they can stay in their home and be responsible borrowers. It 
is better to have a performing mortgage versus one that is 
nonperforming and is a negative asset to that bank. So if we can keep 
people in their homes, making it a performing mortgage and making sure 
it is, in fact, an asset and not a liability to those institutions, we 
should do that.
  Yet recently we had a situation--one example--of a home in New Jersey 
with a $238,000 mortgage. The homeowner was in foreclosure crisis. They 
offered to give $220,000 of the $238,000 through the community 
development corporation. The bank said no. So they are getting zero. 
Instead of getting zero, they were going to get $220,000 of the 
$238,000--an $18,000 difference--and they said no. So the community 
development corporation went to the foreclosure sale and bid the 
$238,000, the full amount of the mortgage. What did the bank do? They 
bid it up to $240,000. So they preferred to have this person go in 
foreclosure. They bid more than they were even getting on the mortgage, 
even though they could have been made whole, and at the end of the day 
they had a mortgage that was nonperforming. So we need to do a lot 
better, a lot better at what is the core of the problem.
  I think the New York Times said it well when they said:

       Homeowners were also given short shrift with provisions 
     that mainly urged lenders and the Treasury to do more to help 
     them. That's unconscionable. The financial crisis is as much 
     a problem for homeowners as for Wall Street investment 
     bankers. Appeals to lenders' better natures has not worked to 
     bring lasting relief to homeowners. If they are still not 
     working in the coming months, Congress needs to revisit the 
     issue.

  I agree with them totally. It should be a basic principle of our 
actions now, that if we have to rescue Wall Street from their profit-
seeking failures, we should also rescue homeowners, many of whom are in 
trouble through no fault of their own. Remembering Main Street is 
beneficial to all of us, and remembering that a foreclosure in our 
neighborhood affects the value of every house on the block and brings 
down the broader economy, it doesn't make

[[Page 23433]]

sense to simply sign off on a plan that keeps the CEO in their office 
but kicks a family out of their home.
  If we are going to solve the problems that are at the root of the 
crisis, we have to provide real relief for struggling homeowners. That 
is incredibly important. One of those ways is through Fannie Mae and 
Freddie Mac. They are now Federal entities. Not only were they 
federally backed at one time, but they have now been taken over by the 
Federal Government. They do not need legislation to have a 90-day 
freeze on mortgages that may be in foreclosure. We can try to rework 
those mortgages and make them performing loans and keep people in their 
homes. We can make them positive assets versus negative assets for the 
bank, and that is one thing we can do without any action. But we need 
the Government and the administration to move in that direction. That 
also further limits taxpayer exposure.
  Finally, let's go back to that poll. What did Americans say? They 
understand this is a crisis, but they don't see the connection in their 
lives, and I have tried to make that. They also didn't think there was 
enough in the package to deal with the challenges they face. Therefore, 
I know our colleagues, many on the other side of the aisle, didn't vote 
for the stimulus package we offered as Democrats. But it is time to 
hear what Americans are saying to you. It is time for a new economic 
stimulus package targeted at creating hundreds of thousands of good-
paying jobs so we can offset the 600,000 that were lost over the course 
of this year and to prevent cuts in critical services for millions of 
Americans. I hope we will revisit that.
  We should institute a loan program to help jump-start one of the most 
important economic engines in America--small business. As I have said 
before, because of this severe credit crunch, many small businesses--
especially those starting out but many well-established businesses--are 
having trouble finding credit on the private market. I think emergency 
loans should be available to small business along the lines of what we 
provide during a natural disaster. This is a pretty big financial 
storm, and temporary relief can make a big difference. After all, these 
are the businesses that create 75 percent of America's jobs.
  Tom Friedman put it well when he said:

       If our economy were a car, the financial markets would be 
     the transmission, but they're not the engine. The engine of 
     American prosperity is American innovation. And until we get 
     that engine revved up again, investing in higher education 
     and advanced energy, we are going to be driving over a rough 
     stretch of road.

  Most importantly, if the Federal Government is either going to take 
on these bad assets or find some other way of capitalization, there 
must be regulatory reform as well. Those regulations must be robustly 
enforced. We can't have the cop on the beat, which is the regulator, 
ultimately hitting the snooze button instead of being at their post and 
making sure we don't have excesses in the marketplace in a way that 
ultimately leads us to where we are today.
  So we never find ourselves in this position again if we pursue robust 
regulation and its enforcement. If we do not do that, we will send the 
message that it is okay for firms to behave recklessly, and we will be 
forced to follow this challenge further down the line.
  I do not mean to say that the movement toward a rescue plan, with 
some of the additions I talked about, whether in that plan or following 
on, is going to bring the sunlight of prosperity tomorrow. I think no 
one here should believe that. But the consequences would be far 
greater.
  I think it was said best in the past when President Hoover said, 
``The fundamental business of the country is on a sound and prosperous 
basis.'' Well, we are not on a sound and prosperous basis. It sounds 
similar to some of the comments being made today. We need to address 
some of these fundamentals. This in and of itself will not be it.
  So I hope the Senate will stay even after we meet this challenge in 
the next day or so, and hopefully the House will follow the leadership 
that has taken place here. I hope we will understand that there are 
still challenges in the days ahead. The administration has left us with 
bad choices, but they are choices, nonetheless, that we have to deal 
the best and act on in the Nation's interests at the end of the day.
  As a member of the Banking Committee, I agree with Chairman Dodd. We 
should have sessions to look very closely at the regulations we need, 
this administration and the one in the future. This one does not have 
too much left to it to adopt. We need a strong response, but we need 
one that is well calibrated, has the appropriate oversight, and we want 
to make sure Main Street is protected as much as Wall Street.
  The financial crisis we face is not an academic exercise. I know some 
people talk about this esoterically. It is not an academic exercise. I 
hope people do not treat it that way because in an academic exercise, 
you can be wrong and the consequences are not great. If we think this 
is an academic exercise and we are wrong, then the consequences will be 
very significant. It is a threat to our everyday way of life, and if we 
do not act, we risk the flood of suffering washing over the entire 
country.
  This is one of those moments that each Member of the Senate and each 
Member of the House must look to determine the courage that is 
necessary to act in the face of something that is not very popular, 
obviously.
  We might take a page out of John F. Kennedy's book ``Profiles in 
Courage.'' In that book, which is stories of courage that have taken 
place in this institution and in the other in moments of great 
importance to the country, he said in that book: In whatever arena of 
life one meets the challenge of courage, no matter the sacrifices he 
makes--the loss of his friends, his fortune, his contentment, even the 
esteem of his fellow man--the stories of past courage can teach, they 
can offer hope, and they can provide inspiration, but they cannot 
provide courage itself. For this, each man--and, I would add, each 
woman--must look into his own soul.
  Preventing collapse, helping those in need--that is our challenge. I 
hope that, with some changes and a commitment to do more in the 
mainstream economy, we will have every Member look in their own soul 
and provide the courage that is necessary to do what is right for our 
country and its people.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Before my colleague from New Jersey leaves the floor, I 
wish to commend him for his comments. I had an opportunity--I was not 
on the floor the whole time but was in the adjoining offices. Of 
course, with modern technology, we have the opportunity to listen to 
each other and express our views. I commend him on his. It was a very 
thorough and important hour to take. We have few opportunities which 
allow us to have a chance to lay this out as the Senator from New 
Jersey has just done, going back and examining sort of the autopsy of 
all of this.
  We are sort of caught up in the moment and exactly what is happening 
from moment to moment with the stock market and the bond market, the 
credit markets across the country and the unemployment numbers. But I 
think going back and understanding the genesis of this is tremendously 
valuable. We have some very important and difficult decisions to make 
in the next few days that are critically important. He has outlined 
them as well. None of them are perfect. None of us like being here. But 
we have a challenge in front of us.
  I think he did an admirable job of explaining this, of where we have 
come and the idea of how we come back to the decision we make in the 
next 24 or 48 hours but also what needs to be done after that to make 
sure we do not find ourselves back here in a matter of weeks or months 
grappling with even more compound and difficult economic choices.
  So I did not want to miss the opportunity to come out and thank you.
  Mr. MENENDEZ. I appreciate Senator Dodd's words, and I appreciate, 
above all, his leadership on the Banking Committee and here in this 
institution. You took a document that was

[[Page 23434]]

sent to us that had no protections, no guarantees, and certainly 
nothing for the homeowner, and you dramatically made it better. I know 
you are working to look at what else can be done.
  Above all, I appreciate the statements you have made moving beyond 
the immediate crisis, the leadership you will exert on the committee to 
have us immediately look at some of these other challenges which are 
incredibly important for the Nation and a reassurance to the American 
people. I appreciate the Senator's leadership.
  Mr. DODD. I thank the Senator for that. The Senator has pointed out, 
of course, just as the Presiding Officer, his great interest in these 
matters, and the Senator from New Jersey is, of course, a very 
worthwhile member of our committee, as is the Presiding Officer.
  As we look at these questions, and I intend to do that. In fact, I am 
not going to wait long. Our intention is that on the committee, we will 
move aggressively--in a matter of days--to examine further as to how we 
arrived in this situation, No. 1; No. 2, to monitor how the bromide 
that we have been offered by the Secretary of the Treasury, the 
solution to all of this, is working; and then thirdly, of course, how 
do we reconstruct or construct anew the architecture for a 21st-century 
financial services economy or one that depends upon financial services 
as much as this one does?
  Clearly, the architecture of our regulatory system, some rules of 
which go back to the 19th century--many, of course, were adopted in the 
wake of the Great Depression back in the 1920s and 1930s--needs to be 
revisited. The world is a very different place today, much more 
complicated, global in its complexity, and clearly warrants a fresh 
look at some new structures. And it is my intention as the committee 
chairman, along with my colleagues who serve on the committee and 
others who are involved in these issues, that we begin our work very 
quickly to address those questions.
  I see my friend and colleague from Virginia. Of course, the irony or 
ironies is I was just about to talk about him, and this was not 
prearranged, him arriving on the floor, and he may have some comments 
to make as the system here allows us to go back and forth. I really 
came over to commend Senator Menendez, but I have some comments I want 
to make about my friend from Virginia, but I do not want to deprive him 
of the opportunity to be heard.
  Mr. WARNER. No. I have been very honored to be on the floor in 
connection with certain tributes, and I just by coincidence am here. 
But I am hopeful that the distinguished chairman could maybe tell us, 
the Senate--I am quite anxious; I have been here throughout the day, 
most of it--what is the state of the resolution of this very important 
problem that faces our Nation here today?
  Mr. DODD. Well, I can tell you, my friend, the majority leader, 
Senator Reid--I know from having met with him earlier today--is in 
constant consultation and discussions with the leadership of the 
Republican minority of this body as well as the Democratic and 
Republican leadership of the other body, the House of Representatives, 
to determine when and how we can go forward on the legislation that we 
crafted both here and there over the last 2 weeks to respond to this 
economic crisis we are in.
  I am proud to have been involved, and I am sad to have been involved. 
Normally, we craft bills and we take pride in the fact that we are 
solving a problem, and I hope we are in this case. But I am fairly 
confident we will be able to get to another vote and that the other 
body will bring up the matter as well. The order of all of this is 
being discussed as you and I stand in this Chamber. No final 
conclusions have been reached about that, but I know people are working 
hard to determine how best to proceed forward.
  The last thing we need is to have this not work again. We better 
decide whether we are serious about this. This is a difficult vote--I 
would not suggest otherwise--but it is an important one. I know that 
those who cast votes yesterday are having some second thoughts about 
the condition they placed us in and are trying to find a way to get 
back on track again. So I am very optimistic we can do that. I know the 
White House is now engaged much more aggressively than it has been on 
this issue, which I welcome. I know the leadership of the House is also 
working on this. I do not want to predict things with any great 
certainty, but I am quite confident we are working in the right 
direction and we should end up with a very positive result within the 
next 24 or 48 hours.
  Mr. WARNER. I thank the distinguished chairman of the Senate Banking 
Committee for those remarks. I found the work product that you and 
others produced and which was distributed yesterday to be of great 
value. I was prepared to move forward and add my voice in support. But 
I yield now, of course, to the circumstances as the consequence of the 
House's action last night.
  I think the leadership on both sides is very diligent; that is, the 
leadership--our Senate distinguished majority leader, Senator Reid, and 
Senator McConnell, the minority leader--is working on this, and I do 
hope we can bring this to some sort of a resolution tomorrow.
  You know, it is interesting, as I sit here to talk to the Senator 
from Connecticut, our friendship goes back almost the full 30 years I 
have been in the Senate. And last night, when I went home with a bit of 
a heavy heart for fear that this situation was of such consequence as 
to almost every single American, I was trying to reflect, as I so often 
do, on other chapters of history which confronted our great Republic 
and other nations, because this is a global problem, as the chairman 
knows. I put together some remarks that I thought something of giving 
on the floor at some point in time. But I went back to a very famous 
letter. And the reason I raise this, I think my good friend, the 
Senator from Connecticut, and I have discussed many times the chapter 
of history during World War II and the role your father played at the 
conclusion of that war in terms of the Nuremberg Trials. You yourself 
have written eloquently on this period. So just by coincidence, I went 
back and I thought about the year 1941 and, in particular, January of 
1941 when Great Britain at that time was undergoing the full wrath of 
all of Hitler's military might. It was one of the darkest hours in the 
long history of the British Empire.
  You recall that Roosevelt penned a short note, a letter, to 
Churchill, and it was hand delivered to Churchill by Wendell Willkie, 
who was coincidentally in London. Roosevelt chose the first five lines 
of that famous poem of Henry Wadsworth Longfellow:

     THOU, too, sail on, O Ship of State!
     Sail on, O UNION, strong and great!
     Humanity, with all its fears,
     With all the hopes of future years,
     Is hanging breathless on thy fate!

  And I simply say to those, the leadership of our body and the 
leadership of the House, they might read that because that is how 
serious this problem is. It may have some parallels. That was a war, 
but in a sense we are in an economic titanic struggle to regain, in the 
United States, the confidence among our citizens--I am not talking 
about Wall Street or Main Street, I am talking about every citizen--a 
sense of confidence and how we must henceforth conduct our business for 
the better, the greater betterment for all Americans, whether they are 
rich or poor.
  I just thought of that stanza. I found a great deal of encouragement 
and fell off to sleep thinking maybe tomorrow will be a better day. 
Thus far it seems to me it has been productive.
  I thank the Senator. I enjoy always talking history with my friend 
from Connecticut.
  Mr. DODD. I love that as well. My colleague from Virginia, during 
moments of stress and strain over the years, when it looks as though 
all is lost and we could never come back together, he has pulled me 
aside in one corner or niche of this building, and I can hear him say 
it over and over again, in the words of Winston Churchill: Never, 
never, never give in. We are at one of those moments.

[[Page 23435]]


  Mr. WARNER. The Presiding Officer is a man who is a great student of 
history. We shared a few words earlier today about this situation. I 
think I best yield the floor so you can get down to it. I wish you 
great luck in all of your work, and good fortune, because it is so 
vitally important not just at home but indeed for the whole world.


                              John Warner

  Mr. DODD. I thank the Senator. This is not a prearranged or prestaged 
event. It was my intent at this moment to spend a few minutes talking 
about my friend from Virginia with whom I have just shared, once again, 
another memorable moment, as he talks about the moment we are in. That 
is characteristic of my friend from Virginia. One of the reasons he 
will be missed, with his well-deserved retirement, is that throughout 
my 28 years here--actually I have known John Warner a bit longer than 
that, but we have served here together for almost three decades--in 
every moment I can think of that we have been in a moment not unlike 
the moment we are in--none quite so grave economically--it has always 
been the posture and position of John Warner to see this body not as 
one that is divided by this architectural divide that separates us by 
party, which must confound and confuse the public as they look at us, 
wondering if we ever begin to think of ourselves as Americans with a 
great privilege of serving in this historic institution, that we would 
come together to find solutions to problems.
  It has been characteristic of John Warner, from the first moments I 
have known him, to always see this divide as being sort of a silly 
barrier; that it probably would be a wise, although probably not a 
welcome idea, that the seating arrangements ought not to be based on 
party but maybe some other configuration where you actually have to sit 
next to someone you may disagree with or of a different party from time 
to time. That, in itself, may serve as a crucible in which better 
decisions might be reached.
  I am going to miss him very much on many different levels. We have 
only served on a couple of committees together over the years, not by 
choice but by circumstance. Yet on those occasions, I have enjoyed 
immensely the work of John Warner. There have been times--and he will 
remind me often--when we haven't shared a philosophical standpoint in 
common over the years. But on levels far more significant and far more 
important to me--and I would hope with other Members as well--my 
relationship with John Warner is one based on a love of this 
institution, the importance of it. The hope and the aspirations of a 
people depend upon it. That, more than anything else, is what I have 
enjoyed so much about working with John Warner, his reverence for this 
body.
  I will use the words of John Stennis, the former chairman of the 
Armed Services Committee--the position which John Warner now holds--who 
spoke at a Democratic caucus meeting. He paused when he stood up for 
several seconds and said nothing at all, and the room quieted, as you 
might imagine, to a stillness. The first words of John Stennis were: I 
am a Senate man.
  I thought, what a remarkable moment, how he began his discourse with 
us, those of us who were new, by describing himself as a person of this 
institution. John Warner is a Senate man. He has done many things of 
great import in his life. But if I were to be asked by people what is a 
good example of a Senate person--I guess more politically correct 
today, given the fact that we have a lot of diversity of gender in this 
institution--John Warner has been a Senate person. He understood the 
historical value of this institution and the importance it continues to 
play. While we have had our differences philosophically, we have 
enjoyed great friendship on a personal level.
  I cherish in my office a wonderful photograph of John Warner and I 
sailing together in my Old Friendship sloop off the coast of 
Connecticut and Rhode Island, enjoying great dinners together, a game 
of tennis every now and then over the years. So beyond the political 
discourse and the substantive debates or disagreements, there are 
relationships here that are far more significant on a human level than 
that.
  I was thinking the other day about one of these battles that goes on 
from time to time. This one was over which State was going to win the 
contract to build the Seawolf submarine. The Presiding Officer from 
Rhode Island would have certainly taken the side of the New England 
point of view. It was a serious discussion about whether it would be in 
Newport News or in Connecticut and Rhode Island that the contract would 
be awarded. There was a lot of jockeying back and forth, a serious 
debate and discussion. It ultimately worked out well for both States 
and the country as a result. But the final decision came down that 
Connecticut was going to be awarded that contract.
  In a moment like that, after weeks and weeks of back and forth, you 
might expect that the delegation or the Member you have been dealing 
with on the other side would feel embittered or upset, a variety of 
emotions that would normally be put on the negative side of the ledger. 
I don't think I have ever told this to too many of our colleagues. I 
arrived back in my apartment that night feeling good about the result 
and the fact that it worked out well. And there on the outside of my 
door was a package. I opened it and there was a first edition copy of 
Jack London's ``The Seawolf.'' It was sent to me by my colleague from 
Virginia, with a congratulatory note on Connecticut and Rhode Island 
prevailing in this particular contest; that the country would be better 
if we all worked together to get this new piece of military hardware 
built.
  I thought to myself, what an incredible gesture at a moment like 
this, the sensitivity, the appreciation, seeking out a first edition 
copy of Jack London's ``The Seawolf,'' the very program we were talking 
about. That is the kind of person John Warner has been.
  While there will be great debate and discussion, and he has certainly 
done a fantastic job working with Carl Levin on the Armed Services 
Committee and has been a great custodian of guaranteeing and protecting 
our Nation's security during that tenure, it is those moments of 
arriving home that night many years ago and picking up that book that I 
still cherish and have by the way. I will read it to my daughters at an 
appropriate time in their lives, a great story in and of itself. It is 
moments like that.
  I wish you the very best, dear friend.
  Mr. WARNER. Mr. President, I thank my friend. I must say to you that 
John Stennis, if I had to name five individuals in this institution--I 
think I have served with 272 Senators--John Stennis would be one. He 
was a magnificent man. As a matter of fact, I have his old desk. In his 
final days here he called me in one day and he said: I want you to have 
this desk. Of course, it was a long story, but there it is. I still 
have it in my office. He was a great teacher.
  Scoop Jackson was another great teacher. I hope some of the young 
Senators, that maybe they have learned from you and me. Who knows. But 
in those days, those were men of formidable strength intellectually, 
command presence, and they were great teachers. Stennis was foremost 
among them all.
  I thank my dear friend for his comments.
  Mr. DODD. I thank my friend for his distinguished career. There are 
plenty of references to that in the Record. I thought I would share at 
least a couple of personal anecdotes.
  Mr. WARNER. We finally solved the submarine problem by, I think you 
built part of the ship--we call them ships now rather than boats--and 
we built the other part. They are put together in the yards of the two. 
They are sailing the seven seas today. That program is running on, and 
our sole production of submarines now is in Connecticut and in 
Virginia, putting the parts together.
  Mr. DODD. That is right. We hope it works. At the time that happened, 
I kept thinking of the person who once described a camel as being a 
horse that was designed by Congress in the sense of building two parts 
of this boat and welding them together. It was a perfect congressional 
result of a matter. Nonetheless, I cherish those comments.

[[Page 23436]]

  I wish you the very best. Thank you for your service to our country.


                              Chuck Hagel

  I wanted to mention as well a couple of other colleagues who are also 
retiring. If I could, one is my great friend from Nebraska, Chuck 
Hagel, with whom I have served on both the Banking and the Foreign 
Relations Committees for the past 12 years, truly a wonderful person. 
We have worked together on a number of issues.
  He got his first job at 9 years of age when he began to help his 
family economically. He was 16 when his dad died and took over raising 
his family along with his mother. I believe most of my colleagues are 
aware that he was a true hero of the Vietnam war. He saved his brother 
who, in fact, was serving with him in that conflict.
  He has done a remarkable job in his public service years as well. We 
serve on the Foreign Relations Committee together and the Banking 
Committee. Whether the issue has been Iraq, Serbia, or Croatia, Cuba, 
regardless of who comes before our committee, no one asks tougher 
questions or gets straighter answers than Chuck Hagel.
  On Cuba, for instance--again, an explosive issue politically--Chuck 
and I offered a resolution to end the embargo in Cuba because we agreed 
that the current policy toward the island has failed the Cuban people 
and the American people alike and because we refused to let America 
wait on the sidelines while the future of one of our closest neighbors 
is determined by others.
  It is that kind of courage that he brings to the debate, kind of 
blows through it all and says: What is the right thing for our country 
and, in this case, the people of Cuba?
  On the Banking Committee, Chuck and I worked for months to reinvent 
the infrastructure of our Nation with the creation of a national 
infrastructure bank, 2\1/2\ years developing that bill. In fact, it was 
Chuck who convinced me we ought to announce the outcome of our work one 
day in August last year. I argued with him a bit. I said: No one will 
pay any attention to announcing an infrastructure bill in August. Who 
wants to hear about infrastructure in August.
  Chuck said: No, let's have that press conference and let people know 
what we are doing.
  We met in the gallery at 10 a.m. I think we had two reporters who 
showed up. I said: I think I was right, Chuck. No one cares about 
infrastructure.
  By 5 o'clock that afternoon, Chuck Hagel and I were on every TV 
screen in America because, regrettably, of the great tragedy in 
Minneapolis that occurred that afternoon. The bridge collapsed. Of 
course, infrastructure was the subject matter for the next weeks to 
come. So, once again, Chuck Hagel understood the timing of an issue in 
bringing it up and how important it was for our Nation. Little did we 
know that tragedy would fall on interstate 35-W over the Mississippi 
River.
  There again was Chuck Hagel, standing with a colleague of a different 
background, putting aside ideology and politics to work together to 
find new and innovative ways to address the Nation's most urgent 
priorities. That is Chuck Hagel, a remarkable person and a very good 
Senator over the years. Patriotic, never partisan, tough but fair, 
always engaged, sometimes even confrontational, but never, ever 
belligerent, a strong Member. This institution will miss Chuck's 
ability to transcend politics and serve the American people. As such, 
the people of Nebraska deserve our thanks for sending Chuck Hagel to 
serve with us over these past 12 years. I will miss him. We all wish 
him the very best. He served our Nation very well during his service.


                             Pete Domenici

  The last Member I want to talk about is Pete Domenici with whom I 
have had the privilege of working on so many issues over the years. In 
fact, only a few weeks ago I was honored to be asked to come and speak 
on behalf of Pete Domenici in Las Cruces at New Mexico State University 
where the Center for Public Policy is named for Pete Domenici. It was 
quite a gathering at which I was the keynote speaker, where Pete was 
being recognized for his contribution to the State and our country.
  Jim Baker, former Secretary of State, spoke at the conference as well 
over that weekend. It was quite a gathering of people from that State 
to express their appreciation for Pete's 36 years of serving the people 
of his home State. Again, a legislative record that is clear and almost 
without peer in many ways.
  Because of Pete Domenici our country will soon recognize that mental 
illness is as serious as any physical illness. He, Ted Kennedy and Paul 
Wellstone were so pivotal in making us all aware of how important this 
issue is. Without Pete's leadership, I don't think this would have 
happened. Without Pete going to his colleagues and saying: Let me tell 
you about my family--he had the courage to talk about his own family 
and what they have been through--it has made a difference. Today 
millions of people will benefit as a result of Pete's leadership on an 
issue that is going to make a difference in their lives. Because of 
Pete's leadership, candidates for President in both parties now 
acknowledge that we have to be serious about doing something about 
global warming; again, serious about reducing our emissions, ending our 
dependence on oil.
  Again, John Warner and Pete Domenici are classic examples of people 
who step out of what you might normally associate them with on an issue 
and get involved and make a difference, almost overnight, because they 
said this is worthy of our attention and certainly serious, so serious 
that it demands action.
  Thanks to Pete's relentless vigilance, I am confident that safe and 
secure nuclear energy, which I happen to be a supporter of as well, 
will play a large role in helping us address one of our largest 
problems in the years ahead. Because of Pete, last year over 5 million 
children in 51 counties studied what character means in the classroom. 
Pete and I are the authors of that idea. It started out as a small idea 
in his State and my State, to insist that part of the day, on the 
athletic fields, in classes--not just for some 15 minutes--students 
embrace one of the six pillars of great character and make it a part of 
the seamless garment of a classroom.
  Today, as I say, in 51 counties, as well as in virtually almost every 
State, Character Counts is there, to help children learn early on the 
importance of what honesty and integrity mean, among the other pillars 
of good character.
  Yet when we talk about Pete and what he has accomplished for our 
communities and our country, we would be doing a great disservice if we 
were to sum up his legacy as some series of issues. My affection for 
these Members I am talking about transcends the substantive issues 
which they have championed over the years. It goes deeper than that.
  Pete's contribution to the Senate will be measured in a volume of 
bills he introduced with a number of votes he took; some 13,000, by the 
way, for which I think there are only 8 or 10 Senators who have a 
similar record.
  But who Pete Domenici is, is much more than that. Long before he was 
a Senator, Pete was a wonderful father and husband. He grew up in a 
remarkable family, an immigrant family to our country--the classic 
American story. Many of our fellow colleagues can tell similar tales of 
how they arrived in this great Nation of ours and the contributions 
they have made.
  Long before he dreamt of becoming chairman of the Senate Budget 
Committee, Pete was a boy counting pennies at his father's grocery 
business in New Mexico. So often all we hear about politicians is 
negativity--and it breeds cynicism, too much, frankly. But in my 
experience, the most effective legislators have remarkable strength and 
an inner confidence. That is Pete Domenici in so many ways.
  You only need to know his wife Nancy, whom Jackie and I have gotten 
to know--they are neighbors of ours on Capitol Hill. We have had 
wonderful dinners together on Sunday nights, with Pete doing some of 
the cooking, and Nancy, I suspect, doing most of it, but Pete taking 
credit for most of it,

[[Page 23437]]

as we would gather and have wonderful family gatherings, as they would 
embrace and cherish the new arrivals of my family, my two daughters. So 
we are losing not just a colleague but a neighbor and a friend and a 
person I care deeply about.
  Together, these two people, Nancy and Pete, have raised eight 
wonderful children. As one of six myself, their house reminds me so 
much of growing up in my own house--kids, very independent thinkers, 
all challenging their parents on every imaginable subject matter, and 
then going out the door and parroting their parents' positions on every 
issue--the parents never to appreciate the fact that their words were 
actually carrying the day. It can be messy in those households, but it 
is never boring, and certainly never so in the Domenici household as 
well.
  That is why there is one legislative accomplishment that best 
captures Pete Domenici, and that is the Character Counts bill that we 
started together in 1994. Character Counts was founded on a simple 
notion: that core ethical values are not just important to us as 
individuals, they form the foundation of a democratic society as well.
  Values like trustworthiness and respect, responsibility and fairness, 
caring and citizenship are at the core of who Pete is as a human being. 
Despite the fact that it was Pete's own family, heritage, and faith 
that taught him character's importance--his mother and father, the nuns 
in his Catholic school--he recognized something that too often gets 
lost today: that in a society that celebrates our differences--our 
heritage, our personal interests as individuals--character is the one 
thing that transcends them, whether they be cultural, religious, 
economic, or social.
  Somewhere along the way we lost that as a country. We forgot how 
important character is to the strength of our families, our 
communities, our institutions, and who we are as individuals.
  Quite frankly, when Pete retires at the end of this year, in a matter 
of days now, I am worried we will be losing a piece of that from the 
institution in which he and I serve--the value that he has brought on 
this subject matter and so many others.
  So let me say thanks to Pete for his warmth and friendship, and I 
wish him and Nancy the very best in the years to come. He is a 
remarkable individual and one who will make a difference in whatever he 
decides to do with the remainder of his life. I thank him for all of 
his contributions, and I look forward to seeing him and Nancy as often 
as we can in the years to come.


                              Wayne Allard

  Mr. President, I, again, want to say a kind word or two about Wayne 
Allard as well, who is retiring. We serve on the Banking Committee 
together. He has a wonderful family history dating back decades in 
Colorado. Some of the earliest arrivals from the East were the Allard 
family in northern Colorado. That family has made wonderful 
contributions.
  Wayne has been a wonderful member of the Banking Committee. We have 
not spent a lot of time on many issues together, but I can tell you, on 
issues such as regulatory reform and working together to see we had a 
good housing bill last summer, Wayne Allard was a very constructive and 
positive member, and he can be very proud of his contribution to this 
body.
  Certainly, as to the landmark Transportation bill we sent to the 
President just a few years ago, Wayne Allard was as much responsible 
for that as any Member of this body, coming from a State where you 
normally would not think of transportation issues, certainly not mass 
transit issues as being pivotal. But Wayne Allard played a very 
important role in all of that.
  So to Wayne Allard, his wife Joan, and their family, I wish them the 
very best as well in their retirement years.
  Again, Mr. President, to my friend, John Warner, a special thanks, my 
dear friend. Now, when they say there is a white-haired Senator roaming 
around the floor, they will not have to guess whether it is the guy 
from Virginia or the guy from Connecticut, unless someone else arrives 
here with a full head of white hair. So to the white-haired caucus, 
again to John Warner, I thank you, dear friend.
  Mr. WARNER. Mr. President, I thank our distinguished colleague.
  Mr. President, I see the distinguished majority leader.
  Mr. REID. Mr. President, I am going to give a speech regarding 
Senator Warner in just a minute.
  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. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                              John Warner

  Mr. REID. Mr. President, it is very standard in the Senate, we say 
``the distinguished gentleman,'' and we say that a lot, and we mean it. 
But it is never more meaningful than when you refer to John Warner as a 
distinguished gentleman because that says it all. If there were ever a 
distinguished gentleman, John Warner is that person.
  I can remember when I first came to the Senate 22 years ago, I was so 
fortunate. I was placed on the Environment and Public Works Committee. 
John Warner, even though he had been here a while, was one of the 
relatively new members of that committee. Some people had been there 
for so long. John Chafee was the ranking Republican on that committee. 
What a wonderful man he was. But anyway, John Warner, he took such good 
care of me. He looked out for me. I sat on the other side of the dais, 
but he took good care of me. We were able to do some good things.
  I was fortunate, I was subcommittee chairman my freshman year. 
Senator Warner will probably remember this. We worked on a number of 
things. One of the things we worked on was Alar. It was a product that 
people sprayed on cherries, apples, grapes to keep them from falling 
off the trees and vines more quickly. We legislated and legislated, and 
we were never able to get anything passed, but we accomplished what we 
set out to do because through the hearing process we focused so much 
attention on this that people stopped using it.
  John Warner is a distinguished gentleman. There is no more 
distinguished gentleman than the man we refer to as John Warner--John 
William Warner. I love his stories. He talks about his dad who was a 
physician.
  When John was 17, he had in his heart that it was important to wear 
the uniform of the American serviceman. He volunteered for the Navy so 
he could fight in World War II. He says he did not do any fighting, but 
he would have if he had been called upon to do so.
  After his first tour of duty, he returned home to his native 
Virginia, where he attended Washington and Lee University on the GI 
bill, and then the University of Virginia Law School, which, by the 
way, then and is now a very difficult school to get in. It is always 
rated as one of the top 10 law schools in America. It is a great 
school.
  His legal studies were interrupted again to be in the U.S. military, 
this time as an officer in the Marine Corps during the Korean war. His 
10 years in the Marine Corps earned him the rank of captain, CAPT John 
Warner.
  When he completed law school, he was selected as a law clerk by one 
of the outstanding and historic circuit court judges: E. Barrett 
Prettyman. What a name: E. Barrett Prettyman. But those of us who have 
been in the practice of law have always recognized that Prettyman wrote 
some pretty opinions. He was a renowned lawyer and, of course, now we 
have a Federal courthouse named after Judge Prettyman as a result of 
his being such an outstanding judge. John Warner worked for him.
  After 4 years as an assistant U.S. attorney, John Warner was 
appointed and confirmed as Under Secretary of the Navy, then as 
Secretary of the Navy.
  Then, one of my fond memories of John Warner is his telling a story. 
He was Under Secretary; John Chafee, whom I had the good fortune to 
serve

[[Page 23438]]

with in the Senate, was the Secretary of the Navy. The Vietnam war was 
ongoing. They were asked by the Secretary of Defense, Melvin Laird, to 
come down and see what was going on at the Capitol Mall. So, as Senator 
Warner said, they left their Cadillacs someplace else that was supplied 
to the Secretary and the Under Secretary, and they took off their fancy 
clothes and came down to the Capitol Mall. And look around they did. 
There were tens of thousands of people here, tens of thousands--
hundreds of thousands of people at the Mall. They were demonstrating 
against the war. Frankly, after listening to the speeches and watching 
the crowd and seeing the fervor of the crowd, both Secretary Chafee and 
Under Secretary Warner returned to the Pentagon and recommended to 
Melvin Laird that he better take a close look at this war, that things 
would have to change, based on their observation of what was happening 
on the Capitol Mall that day.
  That is John Warner perfectly described: Someone who gathers the 
facts, and after having an understanding of the facts, issues his 
honest opinion as to what is going on. He and John Chafee, two 
wonderful human beings, two dedicated servants of the U.S. military 
returned back to the Secretary of Defense and said: Things have to 
change.
  After serving in the Department of the Navy, he did a number of other 
things. But the story I try to tell is, I repeat, a real John Warner 
portrayal because he is always eager to listen to all sides of an 
issue. He is always willing to part from conventional wisdom in order 
to do the right thing, and then once he says he is going to do 
something, that is it. So after serving in the Department of the Navy, 
he decided he would accept the challenge of being the national 
coordinator for America's bicentennial celebration in 1976. As my 
colleagues know, there are a lot of things that happened during that 
period of time under his leadership. But as a little side story, there 
is a story about Virginia City, NV. Virginia City, NV, at one time was 
a thriving place of some 30,000 or 40,000. It was the reason Nevada 
became a State so far ahead of most Western territories. In 1864, we 
became a State. But as part of his going around the country, as you do 
when you have a job such as his, raising money and giving speeches, he 
was asked to go to Virginia City, this historic place in Nevada. He had 
never been there. It is a very winding road to get up there, and it is 
a dangerous road. But he was looking forward to being there because one 
of the patrons in the area--there are some people who are wealthy in 
Virginia City--decided to have dinner in honor of the bicentennial 
celebration. So John Warner and his entourage arrive in little Virginia 
City, which now, by the way, is not 30,000 or 40,000, it is a very 
small community of maybe, if we are lucky, a thousand--but probably 
not. He goes to the assigned place. He knocks on the door. There is no 
answer. He looks in the window, and you can see the beautiful table, it 
is all set. It is a banquet in this beautiful home. So someone with 
John Warner goes to the local law enforcement and says: Could you help 
us? Because they thought maybe something was wrong. So the local deputy 
comes and looks in the window with everybody else, walks around the 
house, and he comes to Senator Warner and says: Mrs. So-and-so is in 
her vapors. The dinner will not go forward. In Nevada, rather than ``in 
her vapors,'' we would have said she is too drunk to a have a party. 
But anyway, John Warner, being the gentleman he is, responded that was 
okay. Although he came to Virginia City, he did not have dinner at that 
home that night. He went someplace else for dinner.
  I heard Senator Dodd's remarks about him. John Warner is a unique 
individual. I see the Presiding Officer who is a brandnew Senator. 
During that time, we had something called the nuclear option, and I 
heard Senator Collins talk about this today. Senator Collins was 
talking about how John Warner silently was the leader of that situation 
that took place. I talked to John Warner during that period of time. 
John Warner told me what he was going to do. I never once told anyone 
publicly what he said he would do, but we all knew where he was. I knew 
where he was. He was on the right side of the issue. Because of his 
credibility, the issue, with the help of some new Senators such as the 
Presiding Officer from Colorado, was settled to the good of the 
country.
  John Warner is a person who has class. He has clout and he has 
tremendous courage. John Warner was sitting as a Senator. A Democratic 
Senator was his colleague. A person was running as a Republican against 
his colleague in the Senate, somebody whom John Warner didn't agree 
with, and he said so. That takes courage. Think about that. You are a 
Republican from a Republican State. You are sitting with a Democrat. 
The person who is the nominee for the party is somebody whom you would 
think the senior Senator from Virginia would support. John Warner, as a 
matter of conscience, couldn't do that, and he didn't. Everybody said 
``that is the end of John Warner. He will never get reelected.'' But, 
of course, it only caused his popularity to grow in the State of 
Virginia because they know John Warner is a person who supports people 
for whom they are, what they do, not any political party.
  John Warner was elected in 1978 to the first of five terms 
representing the Commonwealth of Virginia. Three years ago, he became 
the second longest serving Senator in the history of the Commonwealth 
of Virginia. It is without any elaboration or fluff of any kind that 
now, in his 30th year as a Senator, John Warner has rightly earned the 
reputation as one of America's alltime great legislators. He is an 
expert in a number of different areas: national security. He is a 
champion for the men and women in the military, there is no question 
about that; he served as chairman and now the ranking member of the 
Senate Armed Services Committee; he is a leader on environmental 
issues; he served as long-time senior member of the Environment and 
Public Works Committee, where I had the pleasure of serving with him.
  John Warner is going to return to private life at the end of the 
year. The family, our family, our Senate family will lose a tremendous 
leader and friend. In a place where one's integrity is paramount, I 
have not known anyone more honest and honorable than John William 
Warner. I have served throughout my career with lots of people at city 
level, county level, State level, in the House of Representatives, and 
in the Senate. I have served with hundreds and hundreds of men and 
women. There may be, John Warner, people who are as honest and as 
honorable as you, but never have I met anyone more honorable and more 
honest than you. Our country is grateful to you for your service. Even 
though the people of Nevada don't know you, if they did, they would be 
as grateful as I am for what you have done for our country: Dedicated 
service in the Senate, in the Armed Services Committee, for the cause 
of democracy.
  He knows everybody. I was talking to him the day before yesterday 
when Paul Newman died. I said: Did you know Paul Newman? He said: Yes. 
My son went with his daughter for a couple years. I said to him: Was 
his daughter as pretty as Paul Newman was handsome? He said: More so. 
That kind of speaks to his son, too, doesn't it?
  John Warner, a man who had an estate in Virginia, decided a number of 
years ago to no longer have that and moved into the city. I wish I had 
the words to express, to communicate, to tell him of my affection, my 
admiration. But even though I may not be able to express it very well, 
I want John Warner to know that John Warner will always be in my heart.
  The PRESIDING OFFICER (Mr. Salazar). The Senator from Virginia is 
recognized.
  Mr. WARNER. Mr. President, I think sometimes Senators should be seen 
and not heard from. That might be this moment for me. I am deeply moved 
and humbled by your comments, my dear friend and leader of this body, 
at this time. As I was talking with Senator Dodd about history and how 
both of us have an interest in the great events of

[[Page 23439]]

our Nation, we talked about the challenges facing America tonight and 
how fortunate we are to have leaders such as yourself and Senator 
McConnell on this side of the aisle to lead our Nation out of this 
situation. I am glad we didn't dwell on those heavy matters. We touched 
on the light ones as we talked together. How well I remember you as the 
chairman of the committee; you remember we worked on batteries. For 
some reason, the lead battery was the center focus at that time.
  Mr. REID. I say to my friend, now it is a big issue. We tried a long 
time ago.
  Mr. WARNER. That is right. But we got some money and put it into 
research of batteries, which hopefully might be contributing in the 
future to our deliverance from the problems we have with reliance on 
foreign oil and greater use of our motor vehicles operated by natural 
gas. But I could go on.
  Mr. REID. Mr. President, could I interrupt my friend and say one 
thing? I wish to say this because I try not to be envious. Envy is not 
anything that is good, but I have to admit that I am so envious of your 
hair. I mean, for a man--I mean, I am envious. I have to acknowledge 
that. It is great. I wish I could get up in the morning and go to the 
mirror and have that.
  Mr. WARNER. I am about breathless at the moment, but if you will 
spare me a minute to tell a story about that. My mother lived to be 96 
years old and she bequeathed this to me. But I can tell you a number of 
times calls come into my office and people will inquire and ask for the 
Secretary, not me, and they will say my husband has a bit of a problem, 
but it can be solved if the Senator would say where he gets his wig. So 
I am not--that is true. It has happened about a dozen times in my 30 
years. So that is one of the great things----
  Mr. REID. So you will forgive me of my envy?
  Mr. WARNER. Yes.
  Mr. REID. Thank you.
  Mr. WARNER. But I thank my distinguished leader. I also wish to say, 
on behalf of my wife, the deep affection our two wives have. They have 
been privileged to serve the responsibility of shepherding the annual 
event for the First Lady. When that occurred in my house, everything 
stopped. I mean all engines, everything. The total focus for weeks was 
that luncheon. I think my wife succeeded your wife.
  Mr. REID. That is right.
  Mr. WARNER. My wife learned the meticulous manner in which your wife 
planned that event. But the wives play a vital role in this 
institution. While we sit here and have what I call the good old 
democracy mind and we argue between each other in the quietude of the 
evening, our wives will put us together and all is forgotten. That is 
the strength of this institution.
  I thank my good friend. I do not deserve the rich remarks he made, 
but I accept them in the sense that he made them.
  The PRESIDING OFFICER. The Senator from Illinois.


                              John Warner

  Mr. DURBIN. Mr. President, I join in the tributes of my colleagues 
who are leaving the Senate on the Republican side. There are only three 
ways to leave the Senate. You can retire, you can lose, or you can die. 
They have chosen the best of the three options, to leave of their own 
will.
  The first Senator to whom I wish to pay tribute is on the floor. That 
is Senator John Warner of Virginia. I have listened to the tributes 
from Senators Harry Reid and Chris Dodd and so many others and I join 
in the chorus. I will not recount John's illustrious career and service 
to our country. But he was kind enough a few weeks ago, when I called 
and said I do a cable show, can I drop by his office, and he agreed to 
it. We have captured forever, in this little cable show I do, his 
office. Some of the memorabilia tell the story of his life and the 
story of Virginia and the U.S. Navy, I might add, and he also shared so 
many great stories of his service to our country in so many different 
capacities--in the Navy, in the Marine Corps, in the President's 
Cabinet, and in the Senate.
  I think of John Warner and his gentlemanly ways as I hope not a 
throwback to the Senate of the past but perhaps an inspiration of the 
Senate of the future because his friendship transcends party label.
  There have been times in the Senate when he has proven, with his 
independence, that he looks at issues honestly and directly and 
sometimes has broken from the ranks of his fellow Republicans when he 
felt it was necessary. I know he thinks long and hard before he makes 
those decisions.
  There have been times when he showed extraordinary leadership during 
this contentious debate over this war in Iraq. He and Senator Levin 
exemplified the very best in the Senate. Even when they disagreed, they 
were totally respectful of one another, they were deferential to one 
another's feelings and interest. Yet they served the national purpose 
by engaging in a meaningful, thoughtful debate on an extremely 
controversial issue.
  During the course of the last several years--John Warner may not 
remember this, but I will never forget it--when I got into hot water on 
the floor of the Senate for words that were spoken, John Warner was one 
of the first to come to me afterward. He put an arm on my shoulder and 
said: Look, we all make mistakes. Carry on.
  I know it is probably something he has forgotten, but I never will. I 
thank him for that generous spirit and compassion, which I hope will be 
part of my public service career in the future, as has exemplified his 
own. He showed courage so many times and foresight that will be part of 
his legacy.
  As Harry Reid mentioned, the courage to step out in his own home 
State against all the odds and to take on a member of his own party 
with whom he disagreed in a very public way, that wasn't missed. We 
noticed all across America that you were willing to show that kind of 
courage.
  In the Senate recently, if Senator Barbara Boxer was on the floor--if 
she hasn't already done it, I am sure she will when she returns--she 
will tell you, were it not for John Warner's leadership, the debate on 
the issue of global warming would not have gone forward in the Senate 
this year. Both Senator Warner and Senator Lieberman stepped up and 
found a bipartisan approach to deal with this issue. We did not pass 
it. I wish we had. But we certainly engaged in debate many thought was 
impossible. We brought it to the floor. We engaged the Senate and the 
American people in a thoughtful consideration of an issue that will be 
here for generations to come.
  I consider it a great honor to have served with John. I think he is 
an exceptional individual. Virginia was lucky to have him as their 
voice in the Senate for 30 years. America was lucky to have him in 
service to our country in so many different capacities.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. WARNER. Mr. President, I thank my colleague for his very 
thoughtful remarks. Our relationship has been one that included both 
wives. I recall an event we attended, and immediately the next morning 
my wife received from you a book which she, being an avid reader, 
stayed in that book for the evenings that went on for a week or so. 
That is the way this great institution works. It is not all on the 
floor before the television cameras.
  Senator Durbin is a strong leader, a tough adversary. I wish to say 
how much I have enjoyed working with you through these years. I wish 
you and my other colleagues well because you have a great challenge in 
the next few days or two. We have to solve--and you will be part of 
that leadership team dealing with it, along with colleagues on this 
side--we have to reach the right solution to restore America's 
confidence in the lifeblood of this Nation; namely, its economics.
  I thank the Senator. I wish to add that my mother very proudly always 
claimed Illinois as her State.
  Mr. DURBIN. Mr. President, we are honored being the home of your 
mother's birthplace. I failed to mention one other bill that I think is 
so important, and that is the extraordinary assistance Senator Warner 
gave to his colleague, Senator Webb, when it came to the new GI bill. 
That bill passed, and it will dramatically improve the lives of

[[Page 23440]]

so many veterans and their families because we stepped forward in a 
bipartisan fashion. It was the first thing Senator Webb said to me as a 
new Senator was his goal, and he would be the first to add he could 
never have achieved it without the support of his colleague from 
Virginia.
  Mr. WARNER. Mr. President, how thoughtful to raise that, not in the 
context of this Senator but Senator Webb. I have great respect for him, 
particularly his military career, which is extraordinary, where mine is 
of far less consequence. I joined him. He was the leader on that 
legislation. I always said I was the sergeant in the mere ranks of his 
platoon. But it did, and it enabled me to add one more chapter to what 
I have tried to do so much: to repay to the current generation, the men 
and women who very bravely wear the uniform, all the wonderful things 
that were taught me by previous generations of men and women who wore 
the uniform from whom I learned so much throughout my entire career and 
public life.
  That is landmark legislation, I say to my good friend from Illinois. 
It is something that is well-deserved for the men and women and their 
families. I commend you for bringing up that about our good friend and 
colleague, Senator Webb.
  I yield the floor.


                              Chuck Hagel

  Mr. DURBIN. Mr. President, 12 years ago when I came to the Senate, I 
was joined by a new Senator from Nebraska, Chuck Hagel. Chuck became a 
friend, and we have worked together on a number of issues over the 
years. He also, in a weak moment, agreed to do my cable show. I went to 
his office. We talked about his background; first, his service in 
Vietnam, something I particularly admire, the courage he showed in 
volunteering to serve in our Army, and then coming together with his 
brother in the same unit and both of them under fire. Both of them 
served our country in combat. He came back and was a successful 
businessman. He went on to serve the people of Nebraska and eventually 
to serve in the Senate.
  We have worked over the years together. I have always found him to be 
a gentleman. His word is good, and he has the courage to step up and 
take a position once in a while that may not be popular, even in 
Nebraska.
  I know his leadership on the issue of the war in Iraq will be 
remembered because, during the last 2 years when we struggled to find a 
way to bring this war to a close, he is one who would cross the aisle 
and join us in an effort to find a reasonable way to end this conflict 
in an honorable manner. I respect him so much for that.
  I have one special little measure of gratitude for Chuck Hagel. There 
is a bill I introduced which is as near and dear to me as any I 
considered. It is called the DREAM Act, to give literally tens of 
thousands of children across America who came to this country, were 
brought here by undocumented parents, grew up as Americans, never 
knowing any other life, any other culture, maybe not knowing any other 
language but English, and now find themselves graduating high school 
with no country. They are told officially by American law they are not 
wanted or needed and asked to leave. They have nowhere to go. This is 
home. They want a chance, just a chance to be part of America's future 
in a legal way.
  This DREAM Act has been controversial because it relates to 
immigration, and that is not an easy issue. Chuck Hagel stepped up and 
cosponsored that legislation with me, and I will never forget it. It 
meant a lot for him to show that kind of courage.
  Even though we did not prevail, someday we will, and when that day 
comes, I will honor him on the floor for his exceptional courage on 
this matter that means so much to so many young people across our 
country.


                             Pete Domenici

  Pete Domenici of New Mexico has been an institution in the Senate for 
many years. It has been a pleasure to serve with him for 12. I once 
visited New Mexico and went to a roadside stand where they sell these 
Christmas wreaths made out of chili peppers. There was a Mexican-
American lady. I started to buy the Christmas wreath to take home to my 
family, and I said to her: So I understand you have a Senator in this 
State named Domenici. Oh, I love Pete Domenici, she said, and went on 
and on about what a great man he was, how much she liked him. She said: 
You know, I am a Democrat, but I am a Domenici Democrat. I always voted 
for Pete. I think he is a good man.
  He is a good man. He and his wife Nancy have raised a good family. He 
has done so many things. He feels passionate about so many issues, but 
the one I wish to particularly credit him for leadership on is the 
issue of mental health parity.
  He and Paul Wellstone stood up on that issue when nobody else would. 
Paul passed away 6 years ago in a plane crash. We have continued to 
find a way to pass that bill. We still have a chance in the closing 
hours of this session, and I hope we do.
  In a magnanimous gesture, Pete came forward and said this should be 
known as the Wellstone-Domenici bill; Paul Wellstone deserves top 
billing on it. I am glad he did that. It showed character and the kind 
of man he is. We need to pass that bill before we go home, not just for 
Pete Domenici and the memory of Paul Wellstone but for the millions of 
people across America counting on us to make sure victims of mental 
illness are given fair treatment under hospitalization policies across 
this Nation. He certainly deserves it.


                              Wayne Allard

  The last is Wayne Allard. Wayne Allard is a colleague of mine who 
made a promise to the people of Colorado that he would not run for 
reelection, and he kept his word. He did not stand for reelection this 
year. Wayne and I had an interesting responsibility, assignment, to 
deal with the legislative appropriations bill. It does not get a lot of 
attention because it just deals with Capitol Hill and the people who 
work here. But this Nation's Capitol is a great American treasure. 
Wayne took it so seriously. He held more thoughtful hearings about this 
Capitol and the new Capitol Visitor Center. He asked the hard questions 
and did it in a respectful, gentlemanly way. I was honored to sit next 
to him and to participate in those hearings.
  I came to know him and his family and respect him. We get to see one 
another in the Senate gym in the morning. I go there in the morning for 
no obvious reason, but I get to at least socialize with Wayne and a 
number of other colleagues. I am going to miss him and wish him the 
very best.
  Those Senators leaving our ranks leave positive memories for this 
Senator from Illinois. The fact that I have been able to serve with 
them, know them, and count them as friends, I count as one of the real 
blessings of my service in the Senate.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. WHITEHOUSE. Mr. President, I had occasion to share my thoughts 
about the Senator from Virginia before and do not intend to expand on 
those remarks at this point other than to note that I think all of us, 
particularly those of us who are new, very much feel we are graced by 
this institution and by the opportunity we have to serve in it. Some of 
us have the opportunity to grace it back, and Senator Warner of 
Virginia has certainly done that.
  I ask unanimous consent that at the conclusion of my remarks, the 
distinguished Senator from Iowa, Mr. Grassley, be recognized.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WARNER. Mr. President, I wish to express my appreciation, as 
always, to my good friend. This man will leave his mark in this 
institution. I tell all that with a great sense of pride, as will the 
Presiding Officer. I have come to know him and work with him on many 
occasions.
  I yield the floor.


                  Department of Justice Investigations

  Mr. WHITEHOUSE. Mr. President, I am particularly gratified to be 
speaking about this now because you, the distinguished Senator from 
Colorado, were formerly the attorney general

[[Page 23441]]

from Colorado at a time when I was the attorney general of Rhode 
Island, and I just want to make a quick point.
  We all recall the very unfortunate tragedy, really, that befell the 
Department of Justice as a result of extremely unfortunate decisions 
made at the management level which culminated in the forced 
retirement--the firing, if you will--of a significant number of U.S. 
attorneys for political reasons. The fallout from that disaster has 
obviously been profound: the Attorney General resigned, the entire top 
structure of the Department of Justice is gone, and a lengthy 
investigation has taken place into what happened.
  In the last 2 days, the Office of Inspector General at the Department 
of Justice and the Office of Professional Responsibility of the 
Department of Justice have released their report. It is about this 
big--it is 348 pages, I think--and I have been through it.
  First of all, I want to compliment the Office of Inspector General 
and the Office of Professional Responsibility on the work they did. It 
is an exhaustive, thorough, and profound piece of investigative 
research. But what sticks out more than anything else from that report 
to me is the fact that former White House appointees refused to be 
interviewed. The former counsel, a lawyer, to the White House refused 
to be interviewed. The President's political adviser refused to be 
interviewed. More than that, the White House itself refused to provide 
internal e-mails relevant to this investigation to the Department of 
Justice.
  We have been denied those things on grounds of executive privilege, 
but there is no executive privilege between the White House and an 
executive agency. So there were no grounds for refusing to cooperate 
and refusing to provide those materials. There was no legal 
justification for it. They just said no.
  Worse still, as the Presiding Officer knows, there is an office 
within the Department of Justice known as the Office of Legal Counsel--
I repeat, within the Department of Justice. The Office of Legal Counsel 
itself refused to provide a document in its possession to the Office of 
Inspector General and the Office of Professional Responsibility in this 
investigation. It was a triple stonewall--the former White House 
officials, the White House itself, and the Office of Legal Counsel with 
respect to this one White House document. As a result, the inspector 
general's report itself concludes that their investigation was 
hampered--that is their word--that their investigation was hindered--
that is their word--and that there were gaps left in this investigation 
as a result of the failure of the White House to cooperate and 
instruction to the OLC not to produce the document. And indeed, one of 
the people who refused to cooperate--a former White House employee, 
former White House Counsel Miers--indicated that the reason she wasn't 
was because to cooperate with this would be inconsistent with White 
House instructions not to cooperate with Congress.
  So here is the point. Where is the Attorney General in this? You have 
been an attorney general; I have been an attorney general. What happens 
when you are in charge of an investigation and your investigators are 
hampered and hindered in their investigation in a way that leaves gaps 
in the investigation as a result of noncooperation by your own 
administration? What do you do? We were elected to our positions as 
attorney general. We would have known what to do.
  I think this is a very important moment in the history of the 
Department of Justice. It is a contest of wills between the White House 
refusing to cooperate and the Department of Justice going about its 
legitimate investigative function. I think the Attorney General has an 
important role. I think it is vital for the Attorney General to stand 
with his investigators, with his Office of Inspector General, and with 
his Office of Professional Responsibility. I think he has no choice, 
without doing lasting damage to the Department of Justice and creating 
forever the precedent that when it comes to the investigative 
responsibilities of the Department of Justice, White House 
participation is optional, even when the investigation leads into the 
White House. That is an admission by the Department of Justice at the 
highest level, by the Attorney General himself, that the White House is 
above the law in this country, which I don't think is the right answer.
  I haven't been in that position. I know it is a tough call. But other 
Attorneys General have been in that position and they have faced that 
tough call. Just recently, we learned that Attorney General Ashcroft 
was prepared to resign in a similar face-off with the White House. 
Backed by Deputy Attorney General Comey and others in the Department 
and faced with that stern resolve by those men, the White House blinked 
and backed down. So the question now is, Does Attorney General Mukasey 
have that same stern resolve or will he be the one who blinks and backs 
down? He has appointed a new Special Prosecutor, but we don't know what 
is going to happen there.
  As a former attorney general, the Presiding Officer knows well that 
could disappear into a grand jury, be protected by Rule 6(e) secrecy of 
the grand jury, and never be heard from again. This could be a way to 
put the investigation aside and quiet it rather than to see it through. 
But what the Attorney General can do is march up to the White House and 
say: This noncooperation is not tolerable, it is not acceptable, and I 
will not stand for it. One of two things is going to happen: Either the 
White House is going to cooperate with my investigation or I am going 
to resign.
  That is the position the Attorney General is now in.
  Winston Churchill used to talk about the fine agate points on which 
great institutions and history turn. I think Attorney General Mukasey 
is at one of those points, and the question for him now is, Do you 
blink or do you stand with your investigators?
  Mr. President, I thank the distinguished Senator from Iowa. I said I 
would be brief, and I was only marginally brief. Perhaps by Senate 
standards I was brief but not by real standards, and I appreciate his 
patience.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa.


                     Tax Treatment Health Insurance

  Mr. GRASSLEY. Mr. President, I want to visit with my colleagues for a 
bit about the tax treatment of health insurance. Republicans and 
Democrats who have studied the issue agree that the current tax 
treatment of health insurance is inequitable. Others believe our 
current tax rules increase health care spending and contribute to the 
growing number of uninsured, to add to other negative aspects of the 
present tax treatment of health insurance. Congress needs to take a 
very hard look at the Tax Code when it takes up health care reform.
  There are a number of ways to structure a proposal that would change 
the tax treatment of health insurance. Today, I wish to talk about the 
way Senator McCain structures his proposal to change the tax treatment 
of health insurance. The reason I want to do this is because, as the 
senior Republican tax writer, it is my obligation to set the record 
straight.
  For too many weeks, I have heard inaccurate statements made about 
McCain's proposal for a tax credit for health insurance proposals, and 
I have heard them from mostly Democrats. For example, my friend, the 
senior Senator from Illinois and the majority whip, was on the floor of 
this Chamber on Thursday, September 11, saying that ``Senator McCain 
will tax Americans' health insurance.'' The very next day, the junior 
Senator from Ohio, in an exchange with the majority whip, also said 
that Senator McCain ``wants to tax those health care policies that tens 
of millions of Americans have.'' The senior Senator from Delaware has 
also been saying Senator McCain wants to tax people's health 
insurance--not here on the floor but on the campaign trail as the 
Democratic nominee for Vice President. He has also been saying that in 
television interviews. The junior Senator from Illinois consistently 
makes this explosive claim on the stump.
  Well, using the words of my distinguished friend: Enough. Whether or 
not

[[Page 23442]]

the tax credit for health insurance proposals taxes a worker's health 
insurance, the claims that have been made are half-baked, and this is 
the reason: The critics of the McCain plan fail to mention a key 
component of his proposal. That key component is that Senator McCain 
would provide every American who purchases health insurance a tax 
credit.
  It appears that the critics overlook--or maybe they just don't 
understand--that the tax credit provides a bigger tax benefit to people 
than they would receive under the current system. So people would be 
better off under the McCain plan. Don't the critics want to help lower 
and middle income workers better afford health insurance? Don't they 
want to help the uninsured? Senator McCain is on the side of these 
Americans, while his critics are favoring the status quo.
  Another false claim I have heard is that the tax credit proposal 
would ``deny the deduction employers can take when they pay for all or 
a portion of their employees' health insurance.'' Again, that is flat 
wrong. Even Senator Obama has said that employers will pay taxes on 
health insurance under the McCain plan.
  In the recent Presidential debate, my friend from Illinois said:

       Here's the only problem: Your employer now has to pay taxes 
     on health care that you're getting from your employer.

  I am taking the floor now to tell the junior Senator from Illinois 
and his Democratic colleagues, and especially the American people, that 
Senator Obama's description of his rival's proposal is inaccurate. 
Employers--and I emphasize this--will not pay taxes on the health 
insurance they offer to their workers.
  I want to discuss how this issue is playing out in the media. Here is 
one instance. This past Sunday, on ABC ``This Week,'' Senator McCain 
was interviewed. In the interview, Senator McCain was asked about the 
accuracy of Senator Obama's claim that the McCain proposal for the tax 
credit for health insurance would ``tax health benefits for the first 
time by taking away the deduction that employers now get to provide 
health benefits.''
  Here are the facts: The McCain plan does not--I repeat, does not--
take away the employer deduction.
  Employers will not pay taxes on health benefits. Businesses will 
continue to be able to deduct health care expenses as they do now, and 
they will continue to be able to provide health care, as they do now.
  For employers, then, there will be no change. No change. Finally, and 
most importantly, Senator Obama's campaign has consistently stated that 
the McCain tax credit proposal would ``raise taxes on the middle 
class.''
  The left-leaning think tanks, funded by the likes of George Soros and 
company, have been making that same claim. So again I say enough. The 
McCain tax credit for health care insurance proposal would not increase 
taxes on the middle class. To the contrary, the proposal would provide 
low- and middle-income workers with, get this, a tax cut. But do not 
take my word for it. I would like to have you listen to the Tax Policy 
Center, a nonpartisan think tank that has received notoriety for 
analyzing the tax plans of Senator McCain and Senator Obama.
  The Tax Policy Center illustrates that the McCain tax credit for 
health insurance produces a tax cut for workers. Len Burman, director 
of the Tax Policy Center, said, ``It is mostly a tax break,'' when he 
was interviewed by CBS News on September 15.
  I ask unanimous consent to have the CBS News report printed in the 
Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. GRASSLEY. The bottom line, the McCain tax credit for health 
insurance would not affect the employers' business deduction nor would 
employers pay taxes on health insurance. The proposal would not raise 
taxes on the middle class, rather it would provide a tax cut for the 
middle class.
  Finally, while the proposal taxes workers' health insurance, Senator 
McCain is providing the same workers with a tax credit, which is a 
bigger tax benefit than low- and middle-income workers receive under 
our current system.
  I am going to slow down. Let me explain how health insurance is 
currently taxed. And the reason is because it is vitally important that 
my Senate colleagues and my friends in the media understand the current 
rules governing the taxation of health insurance. To be clear, there 
are very distinct tax rules that apply to, one, an individual 
purchasing their health insurance; two, an employer paying for all or a 
portion of its employees' health insurance; and, three, workers 
purchasing insurance through their employer.
  Unfortunately, most people mix up these three different kinds of tax 
rules. For example, far too often I have heard people get the employee 
exclusion, which I will explain in a moment, confused with the employer 
business deduction. So I have a chart that lays it out. Employee 
exception and employer business deduction is not equal. Employee 
exclusion is for the worker; employer business deduction is for the 
employer.
  The employee exclusion is there. Well, a worker purchasing health 
care through his or her employer does not pay income or payroll taxes 
on the cost of the health insurance policy.
  In other words, the amount of health insurance coverage that is paid 
for by the employer is excludable from income. This means that the cost 
of the employer-provided health insurance is not taxable for income or 
payroll tax purposes.
  In addition, the amount of the health insurance coverage that is paid 
for by the individual worker on their own behalf through a salary 
reduction arrangement reduces the worker's taxable income. This means 
that a worker has less income on which to pay income and payroll taxes.
  As the chart says, the employee's exclusion is the tax benefit 
provided to the worker. Let's drill down on the employee exclusion for 
a moment. I want to explain how this tax benefit works.
  Tax 101 teaches us that the tax benefit that you get from a tax 
exclusion, just like a tax deduction, is based on the tax bracket you 
are in. This means if you are in a high tax bracket, you receive a 
bigger tax benefit than someone in a lower tax bracket. So it is very 
regressive.
  Here is a chart that illustrates how regressive the current employee 
exclusion of the cost of employer-provided health insurance really is.
  So we have a new chart. Take a look at it. Here we assume that the 
average cost of a family's health insurance policy would be about 
$12,000. After all, the coverage that Members of Congress get costs 
around $12,000. So this ought to be a good number to use. As you can 
see, a worker in the 10-percent tax bracket would receive 1,200 
dollars' worth of benefits. Compare this with a tax benefit that an 
upper income worker receives, and you find out it is $4,200 a year, a 
great amount of inequity.
  We have to ask ourselves, is it fair that low- and middle-income 
workers receive a smaller tax benefit for health insurance than upper 
income workers receive?
  Now, what is the employer business deduction? Here an employer paying 
for all or a portion of its employees' health insurance can deduct the 
amounts they pay as ordinary and necessary business expenses, no 
different than the employer can deduct wages. In essence, the Tax Code 
treats employer contributions for health benefits as compensation. This 
is consistent with how economists view employer contributions for 
health benefits. It is as simple as that.
  It is important to note that the employer business deduction is a tax 
benefit provided to the employer. So we put the original chart back up. 
I did not want to leave out another very important tax benefit for 
health insurance, or should I say, the lack of a tax benefit. I am 
speaking about the fact that people who purchase their own health 
insurance generally do not receive a tax benefit under our current 
laws.
  They could if they were self-employed, but I am talking about people 
not self-employed or not otherwise employed or employed where they do 
not

[[Page 23443]]

have health insurance, and you want to buy it on your own. In this 
case, the individual purchases his or her own insurance with aftertax 
dollars out of their own pocket. These individuals are able to deduct 
medical expenses that exceed 7.5 percent of their adjusted gross 
income, but only if the individual itemizes their return. And exceeding 
the 7.5 percent of gross income to get an income tax deduction for 
health care and health insurance is not very common. That is why only 
about 6 percent of all tax returns claim the deduction above that 7.5 
percent.
  Let's now turn to how changing the current tax rules in the same 
manner, as contemplated by Senator McCain, would affect people and 
would affect employers. I want to explain to my friends who are 
critics, and I have told you who those Senators are, and my friends in 
the media, how the McCain tax credit for health insurance would 
actually work.
  We can quickly cross the impact any changes would have on employers 
off the list right away. The reason: As I have said two or three times, 
employers will not be affected, contrary to what several Senators have 
said criticizing the health insurance plan of Senator McCain. Everyone 
needs to understand this key fact because the critics keep getting it 
wrong.
  In other words, let me say for a fourth or fifth time: Employers will 
not be affected by how the McCain tax plan works.
  Let's talk about individuals purchasing their own health insurance. 
As I mentioned, under the current tax laws, these people generally do 
not get a tax benefit. The McCain tax credit for health insurance 
proposal would give these people a meaningful tax benefit and do it for 
the very first time. The tax credit could be used by the individual to 
reduce the cost of their health insurance. In this case, the individual 
would not be required to spend as much of their own hard-earned money 
on health insurance as they do under the current system.
  If the tax credit exceeds the pricetag of the individual's health 
insurance policy, the excess may be used for other health care 
expenses. You could use it like for copays or deductibles.
  Now we get to the most important part. I am going to explain how 
workers will be affected by the McCain tax credit for health insurance. 
I would like all of my colleagues, whether you are Republican or 
Democrat, and particularly my friends in the media, to pay close 
attention because the senior Senator from Arizona has structured his 
tax credit for health insurance in a very unique way.
  Let's get back to the basic. As I stated, health insurance that a 
worker purchases through his or her employer is not taxable to the 
worker. Again, this is referred to as the employee exclusion. The 
exclusion, however, has two parts. So we will look at a new chart.
  No. 1, the worker does not pay income taxes on the cost of coverage; 
and, two, the worker does not pay payroll taxes on the cost of 
coverage. Very clear on the chart. The proposal advanced by my friend 
from Arizona would maintain the payroll tax exclusion. So let me 
repeat. The cost of health insurance a worker gets through their 
employer would not be taxed for payroll tax purposes. This goes for the 
employer as well.
  That is why I have emphasized that the employers do not pay any taxes 
under the McCain plan. With regard to income taxes, Senator McCain 
converts the current income tax exclusion into a tax credit. Let me say 
it another way. The McCain tax credit for health insurance proposals 
does not eliminate the income tax exclusion. Instead, the income tax 
exclusion is converted to a tax credit.
  So here, let's go back to tax 101. As I discussed earlier, tax 101 
teaches us that a tax exclusion, just like a tax deduction, is tied to 
your tax bracket. A tax credit, on the other hand, is not tied to your 
tax bracket. Rather, the tax credit reduces your tax liability dollar 
for dollar. This means that, by definition, a tax credit is more 
valuable to a lower-income taxpayer. So if you were to convert the 
income tax exclusion into a tax credit, you would effectively be 
increasing the tax benefits for low-income workers.
  Depending on the dollar amount of the tax credit, this would also be 
true for middle-income workers as well. So this is what I am saying: I 
am saying the McCain tax credit for health insurance is effectively 
increasing the tax benefit for low- and middle-income workers. I am 
saying the McCain tax credit makes the tax treatment of health 
insurance more equitable because every worker is receiving the same tax 
benefit.
  How can some of my friends on the other side oppose making the 
current tax treatment of health insurance more equitable? Do my friends 
not want to help out low- and middle-income workers? Let me show my 
colleagues and my friends in the media how the McCain tax credit for 
health insurance produces a tax cut.
  Under the proposal, the health insurance a worker purchases through 
his or her employer would be taxed like compensation for income tax 
purposes. But, unlike compensation paid in the form of taxes, the 
proposal would not subject the cost of employer-provided health 
insurance to payroll taxes, as I have discussed. This means that amount 
of taxes a worker would be required to pay on the cost of their health 
insurance would only depend on the worker's income tax bracket.
  Under the proposal, the worker would apply the tax credit against the 
new income tax liability that is generated from taxing the worker's 
health insurance.
  In other words, the tax credit would offset any new income tax 
liability. As illustrated in this chart, because the new income tax 
liability would be less than the tax credit, the worker would actually 
receive a tax cut.
  So let's take a closer look at the chart. We have several different 
brackets. Let's assume a family of four purchases a family health 
insurance policy of $12,000 through its employer. Under the proposal, 
this family would pay income taxes on a $12,000 policy. Let's assume 
this family would be in the 25-percent tax bracket. This family would 
pay $3,000 in additional income taxes. This new tax liability would be 
offset by a $5,000 tax credit for family health insurance. As a result, 
$2,000 would be left over. This means the family would receive a $2,000 
tax cut. This is a tax cut that would be greater if a family purchased 
even less expensive coverage.
  As we can see, the tax credit for health insurance produces a tax cut 
for all workers. The tax cut is progressive because workers in the 10-
percent bracket are receiving almost five times the tax cuts for the 
workers in the 35-percent tax bracket.
  You can see again, by looking at the chart, that a worker in the 10-
percent tax bracket would receive a $3,800 tax cut, compared to the tax 
cut for an upper income worker in the 35-percent tax bracket of $800.
  Like most campaign-related proposals, there are a number of questions 
of how the idea will impact people in the long run. As the senior 
Republican tax writer, I will ask these questions. If I determine that 
Congress needs to tweak the proposal here or there to improve it, I 
will recommend that we do so. But only time will tell whether we have 
to undertake such an exercise.
  I hope my friends on the other side and those in the media have heard 
me. I hope they work on getting it right because it is clear, No. 1, 
that the McCain tax credit for health insurance produces a tax cut for 
workers; two, that the McCain tax credit for health insurance provides 
a tax benefit to people purchasing their own insurance and doing this 
for the very first time; and, three, that the proposal does not 
adversely impact employers in any way, shape, or form.

                               Exhibit 1

                           [From CBSNews.com]

               The Truth About McCain and Insurance Taxes

       Washington, September 15, 2008.--It's one of the most 
     explosive and important political charges of the election: 
     ``He wants to tax your health benefits,'' Barack Obama said.
       Obama's charge was that that John McCain wants to tax the 
     health insurance benefits. Americans buy through employers, 
     CBS News correspondent Wyatt Andrews reports.

[[Page 23444]]

       ``That's a $3.6 trillion tax potentially increase on middle 
     class families,'' Obama said. ``That will eventually leave 
     tens of millions of you paying higher taxes.''
       John McCain wants a multi-trillion dollar tax on the middle 
     class? Here are the facts.
       Obama has the tax part correct, but the impact on the 
     middle class is exaggerated--most people will see tax cuts.
       McCain has proposed to end one of the largest tax breaks in 
     the entire economy. Some 60 million Americans buy health 
     insurance thru employers tax-free, and McCain would indeed 
     begin to tax the value of the benefit.
       However McCain also proposes to give the money back as a 
     tax credit, $2,500 for individuals, $5,000 for families. 
     ``Let's give them a $5,000 refundable tax credit to go out 
     and get the health insurance of their choice,'' McCain said. 
     ``It's mostly a tax break,'' said Len Burman of the Tax 
     Policy Center.
       The non-partisan Tax Policy Center says except for the very 
     richest Americans, most people buying insurance will see a 
     tax cut.
       ``Families at all income levels would pay lower taxes, at 
     least on average,'' said Burman. ``On average, is about a 
     $1,200 tax cut in 2009.''
       On the issue of energy, meanwhile Gov Palin touts her 
     energy expertise based on Alaska's production.
       ``My job has been to oversee nearly 20 percent of the U.S. 
     domestic supply of oil and gas,'' she said.
       Here are the facts: According to the Energy Department, 
     Palin's numbers are high.
       Alaska provides 14.3 percent of America's crude oil, and 
     only 2.6 percent of its natural gas. You can check out the 
     Energy Information Administration statistics here.
       On the health care debate, the Obama campaign tells CBS 
     News that one day, the middle class will be hit by a McCain 
     tax increase--but the experts CBS News consulted said that 
     day is 10 years away.

  Mr. MENENDEZ. Mr. President, I rise in support of the Passenger Rail 
Improvement and Investment Act and the rail safety bill.
  I thank Senator Lautenberg, the senior Senator from New Jersey, for 
being a tireless advocate for rail travel and for successfully 
shepherding these two essential bills to the floor and hopefully to 
final passage. In a time of high gas prices, rising air fares, 
increasing traffic congestion and concerns about greenhouse gas 
emissions, rail travel can give Americans a sensible alternative mode 
of travel.
  Unfortunately, we have not provided rail travel the funding it needs 
to truly flourish. Every year since 2002 Amtrak has had to scrape by 
and continue operations on a yearly basis without adequate funds to 
maintain the rail system over the long haul. The system is at a 
breaking point. Amtrak's equipment is aging and no amount of 
maintenance can keep old equipment in service forever.
  And our rail infrastructure is at the breaking point at a time when 
our citizens need this system the most. In July Amtrak had more 
passengers than in any month in its 37 year history. But Amtrak is not 
just a transportation system that serves 25 million people each year. 
Amtrak is also an economic engine that creates jobs, fights sprawl, and 
fosters economic activity. I know firsthand the benefits of Amtrak 
because over one hundred thousand New Jersey commuters depend on 
Amtrak's infrastructure every day.
  Some critics want Amtrak to be the only major transportation system 
in the world that operates without government subsidy. This prompts a 
question. Do we ask roads to pay for themselves? Some of my colleagues 
like to think that gas taxes pay for roads, but this has never been the 
case. The Texas Department of Transportation recently revealed that not 
a single road in Texas has ever been fully paid for by a gas tax and 
most roads recoup less than half their costs from the gas tax.
  Asking transportation to pay for itself is a standard that is simply 
impossible to meet and a standard we do not hold any other mode of 
transportation to. Over the last 35 years we have spent less money on 
Amtrak than we will on highways in this year alone. When you factor in 
State and local subsidies for infrastructure and parking some studies 
suggest that up to 8 percent of our gross national product is spent on 
subsidies for automobile use.
  This bill will not give all the funds I think Amtrak deserves or 
needs to meet its full potential, but I think this legislation finally 
authorizes the funding Amtrak needs over the next 6 years to plan 
ahead, adequately fund its operations and finance some critical capital 
improvements. But these funds are not free.
  The bill requires Amtrak to tighten its belt while simultaneously 
improving service. The bill requires reforms that will reduce Amtrak's 
operating costs by 40 percent. In addition, the bill provides funds for 
States to provide new passenger rail service between cities. In some 
instances these State operations will likely provide service that 
complements existing Amtrak service just as the recent light rail 
projects in New Jersey have done. But in other cases these funds may 
actually create competition for Amtrak for service between some cities. 
And this bill will also require Amtrak to use its resources to provide 
a new level of service that improves on-time performance, upgrades on-
board services, and provides easier access to other transportation 
systems.
  The Amtrak bill has also been combined with critical rail safety 
legislation that would strengthen our railroad security apparatus by 
investing $1.6 billion in critical transportation safety initiatives.
  Tragically, we learned just over 2 weeks ago how important railroad 
safety is when a Metrolink commuter train plowed head-on into a Union 
Pacific freight locomotive just outside of Los Angeles. Twenty-five 
people lost their lives and over 135 people were injured in the 
deadliest train crash this nation has seen in 15 years.
  Every one of those 25 Americans woke up and got ready for work that 
Friday morning just like any other day. Mothers and fathers kissed 
their children goodbye after breakfast, never assuming this would be 
the last time they would see their loved ones. Weekend plans were 
made--but were never fulfilled. That fateful Friday morning not only 
ended the lives of these 25 Americans, but took away 25 mothers and 
fathers, sons and daughters, brothers and sisters from family members 
who will never be the same.
  When people board a train in the morning on their way to work, they 
deserve to have peace of mind that they will reach their destination 
safely. This legislation would take significant steps to give the 
American people this peace of mind. It ensures that railroad officials 
have the resources and tools to do their job safely and effectively by 
implementing training standards for all safety-related railroad 
employees and requiring train conductors be certified that they are up 
to speed with the newest systems in place.
  The bill also reforms hours-of-service requirements for crews and 
signal employees so that these critical workers are at their sharpest 
and most alert while on duty. In addition to these measures designed to 
reduce human error, we must also address the shortcomings in our rail 
infrastructure. Crumbling tracks, deteriorating bridges, and failing 
signals create an environment where it is only a matter of time before 
the next rail disaster strikes. This legislation fills many of these 
gaps by authorizing millions of dollars for critical improvements to 
infrastructure and safety features to make our rail network as safe as 
possible.
  This bill also ensures that safety rules are strictly adhered to by 
strengthening the Federal Railroad Administration's enforcement tools 
and increasing the penalties for safety violations.
  It is important to remember that our railroad network is not just 
critical to commerce and transportation but to national security as 
well. When the terrorist attacks on September 11 crippled our aviation 
sector, our Nation relied heavily on trains to make up the shortfall. 
This illustrates just how important a safe, efficient, well-operated 
rail transportation network is to all aspects of our nation's well-
being--from commercial and economic capacity to national security.
  With record high gasoline prices, congested highways and airports 
that are experiencing record delays, we need all of the alternative 
forms of transportation we can provide to the frustrated American 
traveler. I urge my colleagues to recognize that a strong, well-funded 
and safe rail system is essential to our country. Please join me in 
voting for this critical bill.

[[Page 23445]]

  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Menendez). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. SALAZAR. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________