[Congressional Record (Bound Edition), Volume 154 (2008), Part 2]
[Senate]
[Pages 2910-2934]
[From the U.S. Government Publishing Office, www.gpo.gov]




NEW DIRECTION FOR ENERGY INDEPENDENCE, NATIONAL SECURITY, AND CONSUMER 
PROTECTION ACT AND THE RENEWABLE ENERGY AND ENERGY CONSERVATION TAX ACT 
                       OF 2007--MOTION TO PROCEED

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will resume the motion to proceed to H.R. 3221, which the clerk 
will report by title.
  The assistant legislative clerk read as follows:

       A motion to proceed to the bill (H.R. 3221) moving the 
     United States toward greater energy independence and 
     security, developing innovative new technologies, reducing 
     carbon emissions, creating green jobs, protecting consumers, 
     increasing clean renewable energy production, and modernizing 
     our energy infrastructure, and to amend the Internal Revenue 
     Code of 1986 to provide tax incentives for the production of 
     renewable energy and energy conservation.

  The ACTING PRESIDENT pro tempore. The Senator from Ohio.
  Mr. BROWN. Mr. President, I ask unanimous consent that after my 
remarks, the senior Senator from Rhode Island, Mr. Reed, be allowed to 
speak.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. BROWN. Mr. President, housing is on the minds of so many Ohioans 
these days, as it is on people's minds across the country. My State has 
the unfortunate distinction of leading the Nation in the percentage of 
property in foreclosure.
  Every day, 200 Ohio families lose their homes--200 families every 
single day. The strides we have made as a Nation in increasing home 
ownership in the last few years will be reversed if we don't act.
  The foreclosure crisis is having a tremendous impact on all of Ohio. 
No city, no region has been spared. The past few years have seen an 
explosion of predatory lending. The State of Ohio was slow to respond, 
while the Federal Government--regulators and Congress and the 
President--have been even slower to respond. Today, we pay the price.
  As late as this summer, President Bush and Secretary Paulson--the 
Bush administration--indicated the problem was largely contained and it 
would play itself out. So long as the problem was largely contained to 
Ohio, Michigan, Indiana, Illinois, and the Presiding Officer's State of 
West Virginia, the situation was nothing to worry about. But once the 
problem spread from Main Street, Cleveland, or Main Street, Dayton, to 
Wall Street, the administration suddenly became a bit concerned. Not 
overly concerned, mind you. For while it changed its tone a bit, its 
words have not been accompanied by much action. The budget submitted by 
President Bush shows, for example, no signs of a housing crisis. 
Congress appropriated $180 million for housing counseling last 
September at the urging of Senator Schumer, Senator Casey of 
Pennsylvania, and me, from the Banking Committee, but the President 
proposes only about one-third of that for the year ahead and criticizes 
the Reid proposal for continuing that funding.
  As cities see their crime rates go up and their property tax bases 
shrink and more and more homes and families vandalized, with copper and 
aluminum being stripped from these homes, the President proposes to cut 
the community development block grant by more than 20 percent.
  I appreciate Secretary Paulson's efforts to get voluntary action by 
lenders and servicers. That is a good thing, but it is not nearly 
enough. We have seen a rate of mortgage modifications rise from a 
measly 1 percent to a meager 3 percent. And I have to say, I am not 
confident how much progress even those numbers represent.
  My office just heard from a struggling homeowner in Ohio whose lender 
offered to reduce her interest rate from 11 percent to 10 percent. But 
after penalties and late fees were added to the principal, her monthly 
payment barely budged.
  Earlier this week, a couple from Lyndhurst, OH, joined Senators 
Klobuchar, Schumer, Durbin, and me in Washington to tell their story. 
John and Vicki Glicken went through a rough patch when John lost his 
job, but he found a new one, and they are doing their best to make 
their payments and stay in their home. They have done everything as 
citizens and as homeowners that we would ask, but doing so is going to 
be impossible for them so long as they are stuck with a loan that costs 
more and more every 6 months.
  These families, and millions like them across America, need our help. 
Instead, they are facing foreclosure on one side and a filibuster on 
the other. That is unconscionable.
  The legislation we are being prevented from considering, with the 
vote yesterday, when our efforts were blocked, would help hundreds of 
thousands of families like the Glickens. It would help the tens of 
thousands of communities from Ironton, across the river from West 
Virginia, to Steubenville, to Cleveland, to Dayton.

[[Page 2911]]

  I applaud Majority Leader Reid for trying to act on the legislation 
that would provide vital help to communities and families across the 
country. Under this bill, which I am proud to cosponsor, housing 
agencies would have access to lower cost financing; businesses that are 
struggling would get a boost; cities would be helped by an infusion of 
community development funds, big cities and smaller cities alike; and 
families would be able to restructure their debts and get back on their 
feet.
  The administration has made a lot of voluntary efforts to date, and 
to be sure, every bit helps. But the rate freeze will help only a very 
small sliver of people, of borrowers, and banks just aren't being 
responsive enough. They say they have no interest in foreclosing on 
homes, and that is perhaps true, but they do not seem to have the 
capacity to work out loans with people who could afford to make 
payments on a reasonable loan long term. I know lenders want to avoid 
becoming real estate owners, but they do not have the ability to deal 
with problems their lax underwriting standards have created, and they 
are obviously not in the business of rebuilding the communities this 
crisis has threatened.
  That is why I think Senator Harry Reid's legislation is so important. 
If we can spend $3 billion a week on the war in Iraq, we can find room 
in our budget to spend $4 billion a year to help communities across 
America get back on their feet. There are billions, tens of billions of 
dollars to rebuild Iraq. Yet President Bush says no to $4 billion to 
rebuild our cities.
  The administration has argued this constitutes a bailout for lenders 
and speculators. In Ohio, we are going to meet these people in the 
courthouse, all right, but I assure my colleagues it won't be to record 
the title on some sweetheart deal. Anybody who tries to make the 
argument that cities, both large and small alike, will use community 
development funds to bail out lenders and speculators has no clue what 
is going on in communities such as Springfield and Zanesville and 
Chillicothe.
  As we try to rebuild our communities, we must do everything we can to 
keep families in their homes. If lenders and their servicers can't keep 
up with the flood of foreclosures they are facing, it is essential we 
permit the bankruptcy courts to serve as a backdrop; otherwise, the 
problem only gets worse.
  Consider this, Mr. President: One of the ratings agencies is now 
predicting a 50-percent default rate for subprime loans made in the 
fourth quarter of 2006--a 50-percent default rate for securitized 
subprime loans. That is not lending, that is putting a bet on black at 
the roulette table with somebody else's home. What happens when that 
bet goes bad? A family is put out on the street, a neighborhood is 
hurt, and a town has one more magnet for trouble.
  The banks have trouble too. Nationwide, banks are recovering only 
about 60 cents on the dollar for what they are owed when a home goes 
into foreclosure. In Ohio, that number is only 35 cents, by one 
estimate. When lenders recover only 35 cents on the dollar on a 
foreclosure in my State, I don't think they have anything to fear from 
an alternative process that may result in avoiding foreclosure. Judges 
would only step in when voluntary efforts have failed and when a family 
is on the ropes.
  That is why the Reid bill's proposal to permit the modification of 
the mortgages on primary residences makes so much sense. We know 
servicers can't keep up with the flood of bad loans, so we need a 
backstop for the 600,000 or so families that may well end up in 
bankruptcy. Allowing bankruptcy judges to modify a loan on a primary 
residence, just as they can do today on a loan for a vacation home or a 
boat or a family farm or a small business, will not just keep a family 
in a home, it will keep the bank from a 65-percent loss on that 
property.
  Two years ago, there were a lot of slick promises made about how 
these loans could be refinanced. Today, we know that is just not the 
case. So we need to act, and we need to act soon so that 2 years from 
now we can focus again on expanding home ownership under reasonable 
terms rather than trying to stop the bleeding.
  Mr. President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The senior Senator from Rhode 
Island is recognized.
  Mr. REED. Mr. President, let me commend the Senator from Ohio for his 
very thoughtful and very persuasive remarks about a crisis that is 
gripping almost every family in this country. We are in an 
extraordinarily daunting moment in our history, and I was disappointed, 
to say the least, when our colleagues on the Republican side blocked 
consideration of the Foreclosure Prevention Act of 2008. Every 
household in this country is beginning to recognize the specter of 
decreasing house prices, and for many it is not just a looming 
potential, it is a reality, and it is forcing them to consider very 
difficult choices in their own family lives.
  We have had a situation over the last 8 years in which the income of 
working families has been stagnant, and in contrast, prices for items 
that are essential, such as energy and food and health care, have gone 
up dramatically. Families across this country have been squeezed by 
flat incomes and rising prices. But there was one point of hope and 
confidence, a foundation, at least, for their hopes going forward, and 
that was the value of their home because it was appreciating. Now that 
has reversed dramatically, and there are estimates that if nothing is 
done, if the administration continues to block efforts through their 
colleagues here in the Senate and the House, we could lose somewhere up 
to 30 percent of the value of homes throughout the United States, from 
their peak several years ago to the trough that is anticipated. That 
would mean the loss of $4 to $6 trillion in household wealth--a 
staggering figure. It is a figure that, from a macroeconomic 
standpoint, would have huge ramifications.
  But let us step down to the actual effects on a family. What does it 
mean? Well, it means your senior in high school who was planning on 
going to a prestigious college is not going there. They are going to 
find an alternative, maybe a State school or another school, because 
you were going to pay for that, partially, by taking some money out of 
your house, which was worth so much. If you didn't have adequate health 
care, that was the reassurance you had, that if there was a major 
health care crisis in your family--a child or your spouse--that at 
least you could go in and quickly get some money. Now that has 
evaporated. If you are a retiree or about to retire, your plan was 
pretty simple: You had a home you were going to sell and you were going 
to use the profits to help you fund your retirement.
  This housing crisis is affecting working families across the country. 
They are now discovering, around the kitchen table, that their plans 
are being frustrated. We have to do something.
  Yesterday, when this Senate failed to at least consider moving to 
legislation like this, I think it is a telling indication of the 
detachment from the reality of American lives that the administration 
and some of their colleagues here have.
  Today, in my home State of Rhode Island, an added complexity, 
unemployment, is beginning to creep up. And ``creep'' is probably too 
mild a word. It is 5.67 percent, the worst record of unemployment we 
have had since the mid-1990s. That is another blow to the working 
families in this country.
  So we must act. One other startling statistic to me is today it has 
been estimated that 10 percent of the households in America are upside 
down, not physically but financially. Ten percent of the homes, the 
mortgage is greater than the value of the home because of declining 
home prices.
  Now, what does that mean? Well, not only have you lost your nest egg, 
in many cases you now are in a situation of being tempted to just walk 
away from the home. Why are you making expensive mortgage payments at 
great sacrifice when the home is not worth it?

[[Page 2912]]

  These are real problems people across the country are facing. It is 
no longer a localized problem. It is no longer a certain section of the 
country is having a bad time, but the rest of the country is doing 
well. Nationwide, for the first time since the Great Depression, we 
have seen housing prices decline. That is a phenomenon that has to be 
dealt with. Ignoring it or suggesting that we are indifferent to that, 
as I think one can assume from the action of yesterday, is, I think, 
not only wrong, it is bad policy. It also is bad policy because the 
sooner we take proactive action, the more effective we will be in 
lessening the consequence of this crisis on working Americans.
  We are going to act eventually. This is not going to go away. The 
staggering numbers that Senator Brown pointed to, the estimates that 
there are so many more interest rate resets and so many more people 
will be overwhelmed by these alternative mortgages, these subprime 
mortgages, that is not fiction; that is the projection of the financial 
analysts. It is going to happen.
  We have to move now. If we move now, we move deliberately. We cannot 
eliminate some of the pain, but we can certainly lessen it. We also 
have to recognize, too, that we can only help those who are prepared to 
carry and shoulder the mortgage going forward. But I think if we act, 
if we act properly, we cannot only make progress, but we can respond to 
what is becoming an overwhelming cry for relief for American families 
across this country.
  In Rhode Island, for example, we have seen mortgage delinquencies 
increase from 6,100 in the third quarter of 2005, to 10,300. Again, 
Rhode Island is the smallest State in the Union. We have 1 million 
people. So these numbers, when you project them to Ohio, are much 
larger. But in my State, we are, unfortunately, seeing unprecedented 
foreclosures.
  According to the Joint Economic Committee, the number of subprime 
foreclosures in Rhode Island will total 5,800 between the third quarter 
of 2007 and 2009. We are seeing an acceleration and, in fact, we have 
the dubious distinction of having the highest foreclosure rate in New 
England. There are other parts of the country that are worse, but we 
have that unfortunate distinction.
  We are going to see the cost of these foreclosures in Rhode Island 
rise to an estimated level of $670 million from the end of 2007 to 
2009. Those are huge figures from a small State like mine. In fact, 
forecasters are estimating that the foreclosure cost could total nearly 
$104 billion nationwide. But one of the things about these numbers that 
the numbers are growing--I have been looking closely at this crisis 
since last April when I was chairman of the Subcommittee on Securities 
and Insurance. We had a subcommittee hearing on securitization of 
subprime mortgages and the experts estimated that the subprime crisis 
was going to result in $19 billion in losses worldwide; that it was 
over because the mortgages were no longer being issued; that we were in 
a situation that would be almost self-correcting if we just let the 
markets work their will.
  Well, that $19 billion in terms of losses to financial institutions 
is now being estimated to be as high as $600 billion worldwide, and the 
losses keep growing and growing and growing.
  Again, I think another strong rationale for immediate action, not 
simply letting the market take its course, is we are seeing not only a 
deterioration in the financing mechanisms in the mortgage market, but 
this liquidity crisis is spreading over to other financing mechanisms. 
We have seen financing mechanisms for municipal bonds, for example, 
literally shutting down. There was a technique where municipalities and 
hospitals would, on a weekly basis, reset the rate for their bonds in 
an auction. The auctions have failed. The Port Authority of New York 
just a few weeks ago went from an interest rate of 4 percent to 20 
percent, the default rate.
  I have talked to a hospital in my State. I asked them, among many 
other issues, what is happening with respect to their financing. Their 
rates are shooting up because their option securities are not working 
any longer.
  This credit crisis, this liquidity crisis, is spreading from 
mortgages to car loans to securitization of credit card receipts to 
municipal securities, and it is slowing down the economy.
  Now, the President does not think we are going into a recession. But, 
frankly, most everybody else does think we are going into recession. 
And we have to act, not only to directly respond to this housing 
crisis, but also to pull this country back as quickly as we can from 
this pending recession.
  I think one of the most important lines of approach to dealing with 
this problem is bolstering the housing market. That was one of the 
major engines that moved our economy for so many years. If we let it 
deteriorate, if we just shrug our shoulders and say, eventually, it 
will come back, we not only will see a very poor housing market, we 
will see a recession. And it will be more severe and more consequential 
than it ought to be.
  Now, the Federal Reserve has cut interest rates dramatically. We, 
very quickly, in a bipartisan fashion, passed a $168 billion stimulus 
package that will help. But I do not think it is going to be sufficient 
unless we make significant efforts to deal with the housing problems 
that are affecting all Americans today.
  The administration proposed a Hope Now Plan, a voluntary effort to 
deal with foreclosure problems. And, again, as Senator Brown pointed 
out today, to date 3 percent of potential foreclosures have been 
avoided through this voluntary effort. This is not an effective way to 
deal with the huge problems that threaten the economic well-being of 
this country and all of the families of America. This administration is 
great on slogans but poor on strategy and execution. Just a week after 
I was talking to the Under Secretary of the Treasury about the Hope Now 
Program, I said: Well, do you have a plan B? This does not seem to be 
working.
  ``No, this will work. We will have the metrics in a few weeks.'' Then 
the administration announced another program. I think it is called the 
Lifeline Program. Well, we need something more than slogans. We are 
going to need something more than hopeful wishes that everyone will get 
along and coordinate together. We need definite help for the homeowners 
in our communities.
  Embedded in the legislation that Senator Reid proposed was that 
specific kind of help: foreclosure counseling funding, CDBG monies for 
communities to deal more comprehensively with the problems caused by 
foreclosures, because one of the consequences of foreclosure is it is 
not just the individual's home, statistical analysis over many years 
points out very clearly that the surrounding homes lose value when 
there is a foreclosure on the block. And if those homes are on the 
tipping point, guess what. They will tip into foreclosure. I do not 
think I have to tell anyone in this Chamber, because we have seen it 
before, that once you have this growing sort of malaise in the 
community, it spreads block by block by block by block until you have a 
community-wide problem of not only foreclosures but of despair.
  I am taking, I think unfortunately, an example from Senator Brown's 
State. But I read a few weeks ago about a community in the Midwest, 
either Ohio or Pennsylvania, and it was an old ethnic community. In 
fact, I think the nickname for the community was Slavic Town. There, 
the foreclosures have been so extensive that literally gangs are going 
in and ripping off the vinyl siding, the plumbing. They are taking out 
the copper piping because it has been abandoned, this forlorn 
community, in the heartland of this great country.
  A tragic case was a retired gentleman who was trying to protect his 
property which he had worked for all of his life. He was killed by some 
of these marauding gangs. That is here in America. We are just going to 
sit back and say: Well, the market will adjust someday. No, I think we 
have to do much more.
  Unfortunately, because of the policies of this administration, we are 
not as well positioned to do what we have

[[Page 2913]]

to do. Yesterday Chairman Bernanke was before the Banking Committee. In 
response to a question by Senator Dodd, he said: Frankly, we are in a 
worse position today than 8 years ago to deal with this crisis, the 
housing crisis. Falling productivity, falling value of the dollar--
yesterday, the dollar hit a new low against the Euro, and I think today 
against other currencies. Surging oil prices--yesterday the price of 
oil went to $102 a barrel, which is translated automatically at the gas 
pump into higher gasoline prices, higher heating oil prices.
  These are huge, huge, huge problems. Because of decisions made by 
this administration, we do not have surpluses we had 8 years ago. We 
are committed to a conflict in Iraq which costs $190 billion a year. 
And even with a change in policy, there will be, unfortunately, not a 
dramatic shift in spending in the next several months because it takes 
time to disengage and to change policies.
  So we are seeing economic vulnerabilities because of, I think, the 
policies of this administration. We have forfeited the strength we had 
8 years ago to deal with these issues. We understand, too, from looking 
across the globe at other countries that if you do not move promptly 
and aggressively and deal with problems like this, they do not go away, 
they get worse.
  In the 1980s, we had a S&L crisis. It took about 2\1/2\ to 3 years 
for, first, the Reagan administration, then the George Herbert Walker 
Bush administration to deal with it. In those 2\1/2\ years, experts on 
either side of the aisle pointed out that the cost of remediation went 
up and up and up. I fear that is the same situation we are going to 
have today unless we deal promptly and immediately with this housing 
situation.
  Again, I think the vote yesterday to stop consideration of 
legislation to help deal with this crisis was very short-sighted and 
unfortunate. Now, as I said before, the legislation we would have 
considered, the Foreclosure Prevention Act, of which I am a proud 
cosponsor, deals with, in a very pragmatic way, many of the features of 
the housing crisis that are of immediate concern: the $200 million 
foreclosure counseling, and part of that has to be not only setting up 
the counseling but also outreach. We have to do more of that.
  It also allows State housing finance agencies to increase their 
bonds, raise capital to buy mortgages to essentially take out the 
current mortgage holders, renegotiate the terms with the borrower, and 
put them in a mortgage plan they can live with and afford. In fact, the 
President has called for that, but he is objecting to its inclusion, I 
presume, in this legislation. Then there is a change in the Bankruptcy 
Code, which has been carefully tailored so as not to roil the financial 
markets. It would allow a very limited category of individuals who have 
these subprime mortgages to go into bankruptcy court and allow the 
bankruptcy judge to set up a new payment plan. The first criterion he 
or she would have to look at is the fact that these individuals do, in 
fact, qualify for bankruptcy protections, that if there is a 
restructuring of their mortgage loan, they can carry out the terms of 
that loan.
  This is not only giving people a chance who don't have the 
wherewithal to take up that opportunity. There is also language in the 
bill that sets the lowest rate charged as the prime rate, plus a 
premium for risk. So this does not allow a bankruptcy judge to take an 
11-percent mortgage and make it a 1-percent mortgage or a zero-percent 
mortgage. There is a very narrowly tailored exception. As my colleague, 
Senator Brown, pointed out, you can do that with a second home. You 
could do that with a farm, if you are in bankruptcy. I don't see why, 
in this particular crisis, we cannot extend that same protection to 
homeowners who have subprime mortgages and need immediate help. I think 
it would accelerate efforts to not only help these individuals in 
bankruptcy, but it would send a strong message to the financial 
community that unless they get engaged with working out these 
foreclosures and mortgages, there is the alternative of bankruptcy 
court which, if they think it is so onerous, then they should be even 
more incentivized to work with borrowers to ensure foreclosure doesn't 
take place and new mortgage terms are negotiated.
  An additional element in this legislation is language I suggested as 
a way to prevent a reoccurrence in the future of this type of mortgage 
problem by giving the borrowers, in a timely way before they close on 
the loan, specific information that is essential. The most specific 
information is the maximum payment they would pay under the terms of 
the mortgage. There is a lot of discussion about people who were 
winking at each other across the table, can't afford the mortgage, but 
``I will take it if you give it to me.'' Many people honestly walked 
in, sat down, and thought they were getting a mortgage of 5 or 6 
percent with a payment on a monthly basis of perhaps $1,500 or $2,000. 
Tough to afford, but it was within their budget. But lo and behold, 
years later or months later, that initial teaser rate became much 
higher. That maximum payment should be disclosed. A borrower should be 
able to look at the piece of paper and say: At some point in this 
mortgage, I will have to be paying $2,500 a month. That is the type of 
information people need to know. Frankly, many would say: I can't 
afford that.
  There is a suggestion I have heard so often in the debate that we 
would be rewarding families and homeowners who were trying to take 
advantage of a good deal with these subprime mortgages. The impression 
I have, from talking to people in Rhode Island, is that for many 
families, going back 2 or 3 years, they found themselves saddled with 
extraordinary credit card debt at interest rates that could be as high 
as 15 to 18 percent. Why? If you have a health care problem, where do 
you go? The first response is to put it on the credit card. If you have 
to go to an emergency room and you don't have health care insurance, if 
you have an unexpected expenditure, the first thing you do is to put it 
on the credit card. So many families were stuck with a huge credit card 
bill.
  Somebody walks in and literally sells them a bill of goods by saying: 
You have 18 percent interest rates. I can put you in a mortgage for 2 
years at 9 percent. Of course, it goes up a little later. The little 
later was not dwelled upon. So for many families, this was not an 
irresponsible, irrational act. They were buying time, in other words. 
They were hoping this would be a bridge to a better future, that they 
would get a raise at the job so they wouldn't have to depend on their 
credit cards and, when the reset came up, they would be able to 
refinance. Little did they know that many of these subprime mortgages 
were constructed so there was a prepayment penalty exactly at the time 
the reset took place. So as you tried to get out of it, you discovered 
you would be paying a huge penalty.
  The point I wish to make is we have families who now, for the last 
almost decade, have been struggling. They have exhausted all their 
options. The last option was their home. Now that option seems to be 
evaporating in terms of financial strain and support. What we have to 
do is respond. I believe that is the nature of Government, to respond 
to the genuine concerns, the genuine expectations of the people we 
serve. I defy anyone in this Chamber to go back to their States and 
talk not just to low-income families but to every family and say: 
Shouldn't we be doing something dramatic, challenging, visionary, and 
doing it immediately with respect to housing? The answer would be an 
overwhelming yes. We should listen to the people of America.
  I yield the floor.
  Mr. DORGAN. I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DORGAN. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.

[[Page 2914]]


  Mr. DORGAN. Mr. President, I wish to follow on the comments offered 
by Senator Reed of Rhode Island. This issue of the subprime mortgage 
scandal is a big one. It is affecting not just people who are losing 
their homes this week or next month; it is affecting all home values 
everywhere. We had this unbelievable bubble exist with respect to home 
values, but the collapse has been precipitous and has hurt a lot of 
people. It is a circumstance where people have discovered the mortgage 
interest rate they had not understood fully has been reset, they now 
have mortgage payments they can't possibly make, and they are 
discovering their home is gone. There is foreclosure on the mortgage.
  I wished to talk a little about what has caused all of this. This has 
been a trail of greed. When you look at the wreckage of this scandal, 
you see two trails--a trail of greed and a trail of tears. A trail of 
greed by some mortgage brokers, not all, some mortgage banks, not all, 
a good many hedge funds, not all, and speculators. They were all making 
a lot of money. This was great while the party continued. Then all of a 
sudden it was discovered that none of this made much sense.
  Let me describe what was happening and why it didn't make sense. Zoom 
Credit. You get up in the morning, brush your teeth and shave and you 
have a television set there and watch television in the morning and see 
the advertisements. Here is one, a company called Zoom Credit:

       Credit approval is just seconds away. Get on the fast track 
     at Zoom Credit.

  At the speed of light, they will approve you for a car loan, a home 
loan, and a credit card. Even if your credit is in the tank, Zoom 
Credit is like money in the bank. It doesn't matter if you are not 
creditworthy. Come to us, we want to give you a loan.
  Millenia Mortgage Corporation:

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

  What they are not saying is that is all reset at the back end of the 
loan, which means the homeowner will pay a lot more for that mortgage.
  Countrywide is the biggest mortgage company. By the way, Mr. Mozilo, 
man of the year, was honored by everybody, made a lot of money, made a 
big old mortgage company bigger. Here is what they say:

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

  That is the kind of business they are soliciting.
  Mr. Mozilo did real well, $142 million or so for himself. They all 
did well. Here is what they did. They put these mortgages out and in 
some cases they cold called people on the phone. People were in an 
existing home with an existing mortgage. They said: What are you paying 
for your mortgage payment? We have a new instrument we wanted to put 
you in at a 2-percent interest rate. Don't tell them there is an escrow 
payment, just tell them what the 2 percent payment will be. And don't 
tell them that 2 percent is going to reset, or quintuple in a couple 
years and they will not be able to pay it. We want to put you in a new 
mortgage.
  So a whole lot of unsuspecting folks went into these new mortgages. 
It all seemed too good to be true, and it was. But in the meantime, 
everybody was making money. There is the old story about in the old 
days when they were making sausage, they would take meat and sawdust 
and pack them together in the sausage, packing sawdust into sausage. 
That is what they did. They put out these subprime loans and the 
subprime loans were kind of attractive because, even as they were 
putting people into these new instruments, the brokers were making a 
fortune. I read that if they could make a $1 million jumbo subprime, 
they could get as much as a $25,000 payment up front for the broker. 
That is the broker's fee. So then the mortgage company now has a 
mortgage that is going to reset at a very high interest rate, and so 
then they package this up. They slice it and dice it with other 
mortgages. They package it up similar to sausage. And when they cut it 
up, they call it securitizing it and they start selling it. They can 
portray a much higher yield for this piece of sausage because they have 
these subprime mortgages in there, but nobody knows exactly how much is 
subprime and how much is real.
  Then they sell it to the hedge funds. The hedge fund thinks this is 
great. They are not making hundreds of millions of dollars. The top 
guys are making more than $1 billion in a year. They say: What we want 
to do is buy some of these securitized instruments. So they do.
  So the broker makes a lot of money. The mortgage company makes a lot 
of money. The hedge fund makes a lot of money. There are some people 
who are buying homes as flippers. They and the brokers were in cahoots. 
They also were greedy. The notion was, buy this home, get a 2-percent 
mortgage, you can flip it in 2 years because that housing bubble is 
going up. You will do nothing but make money. Then you had speculators, 
hedge funds, mortgage banks, and brokers.
  All of a sudden the whole thing wrecked, collapsed. Why? Because it 
never made any sense. It was a house of cards. You can't be putting a 
lot of mortgages out there to people who can't afford them, people who 
can't abide by the terms.
  I have described three companies, including the largest company, that 
said: You have bad credit? Come to us.
  I have also, in the Commerce Committee at a hearing, heard testimony 
about how the brokers' pitch went to borrowers out there who were in a 
home with a good mortgage, and they persuaded them, I think through 
terms that were never fully disclosed to the homeowner, to get a new 
mortgage, a new subprime mortgage. Then when it resets all of a sudden, 
this family is done. They can't possibly afford to stay in that home.
  Here is what the carnage is. This is FedEx Stadium. This is the 
largest football stadium in the NFL. It holds about 90,000 people, 
slightly more. Last month in January, we had foreclosures in this 
country in 1 month that meant about 20,000 more than are seated in this 
stadium are out of a home, in 1 month. In the next 2 years, it is 
estimated there will be 60 of these stadiums full of people who will 
have lost their home. Think of that.
  Now, there is a new credo here in this Chamber, apparently, this 
week. It is not even new, I guess. It is well practiced. It is by the 
minority: Don't just do something, sit there.
  This is an urgent problem, and all week long we have seen the 
minority decide, in two clotures motions, they would insist on 30 hours 
postcloture. What did that mean? That meant that starting Tuesday, 
midday, when I was on the floor with the Indian Health Care Improvement 
Act--the last thing we did this week was to pass the Indian Health Care 
Improvement Act on Tuesday--and then the minority insisted on two 30-
hour periods, taking us to Friday, so that nothing could get done to 
try to address this housing issue, to try to address a very serious 
issue.
  By the way, this is not just affecting the people I have described. 
It is not just affecting the people who would sit in that stadium--
120,000 people who are out of a home as of January. It affects every 
other home and every other homeowner. The folks around that home--in 
the neighborhood, in the community--their home values are impacted by 
homes that are now vacant whose upkeep is not guaranteed. There are a 
whole lot of folks who are affected by this, and this country's economy 
is affected by it in a very dramatic way.
  I know the President yesterday said he was surprised when a reporter 
talked about projections of $4-a-gallon gasoline. A reporter said: Mr. 
President, there are projections of $3.50 or $4-a-gallon gasoline. What 
do you think about that? The President said: Well, I have not heard of 
those.
  We have a lot of problems in this country. Gasoline and oil prices 
are one; the subprime mortgage scandal another; unbelievable 
speculation, for example, in the energy markets. Let me describe, for a 
moment, that issue.

[[Page 2915]]

  We are doing two things right now that are unbelievably inept and 
hurt every American. One, the Department of Energy--at a time when oil 
is $102 a barrel, and the price of gasoline is bouncing up, and there 
are some people thinking about getting a loan to fill their car with 
gas--the Department of Energy is sticking oil underground. We have a 
Strategic Petroleum Reserve. It is 97 percent full.
  The Department of Energy is taking oil coming off the Gulf of 
Mexico--royalty-in-kind payments to the Federal Government--and instead 
of putting that oil in the supply to put downward pressure on oil and 
gas, 50,000 to 60,000 barrels of oil a day right now are going 
underground into our domes to be saved. That is unbelievably inept, in 
my judgment. Why on Earth, when oil is $100 a barrel, would you take 
oil that belongs to the American people and put it underground? And 
they are going to go from 50,000 to 60,000 barrels of oil a day to 
125,000 barrels of oil per day in the second half of this year.
  I have a piece of legislation to try to shut this down. I am going to 
do everything I can to stop it. Oil that is coming into the Federal 
Government ought to be in the supply pipeline to put downward pressure 
on oil and gas. It is that simple. I do not understand why the American 
consumer is being burned at the stake here with gas prices and the 
Department of Energy is carrying the wood. What are they thinking 
about?
  Now, there is another thing that is happening that, in my judgment, 
needs a full investigation by this Government. Oil is $100 a barrel, 
gas is $3, $3.50 a gallon, going, perhaps, to $4 a gallon. Who knows? 
We have had testimony before the Senate Energy Committee by experts who 
say there is not one bit of justification for oil being more than $55 
or $60 a barrel. The supply/demand fundamentals in no way justify 
current prices of oil.
  Here is what is happening. Hedge funds are neck deep in the futures 
market for oil, speculating on oil futures. Investment banks are neck 
deep in the oil futures market. In fact, for the first time, some 
investment banks are actually buying oil storage.
  Now, why would an investment bank want oil storage? Buy oil, take it 
off the market and store it because when prices increase you sell it 
and you make money. There is a carnival of greed, in my judgement, in 
the oil futures. This is an unbelievable amount of speculation. Nobody 
is paying much attention to it. It is not very sexy. I know of very 
little reporting on it, even.
  But you have two things happening to the American consumers in this 
area of gas prices and the cost of energy that are just unbelievable. 
One is, we are sticking oil underground when we should not be, to take 
oil out of the supply. That is the Federal Government doing that. No. 
2, we have unregulated hedge funds--and most hedge fund activity, as 
you know, is not subject to regulation--and an unbelievable amount of 
speculation by hedge funds, investment banks, and others in oil futures 
has driven this price well beyond the justification of the price of 
oil, given the supply-and-demand relationship. That is something we 
have to deal with. That comes on top of and at the same time we see the 
wreckage that comes from this housing scandal--the subprime loan 
scandal.
  As I said before, some are content to sit around here and thumb their 
suspenders and act important and look important and wear their blue 
suits but do nothing. Is that why one gets elected? Is that why one 
aspires to public service: to do nothing in a time of urgency?
  I think this economy faces great peril for a lot of reasons. We have 
a trade deficit that is the highest in history. Two billion dollars a 
day we import more than we export. We have a budget deficit that is way 
out of control, way off track.
  The President says: Well, my budget deficit that I propose is $425 
billion for this coming year. No, it is not. He has asked to borrow 
$700 billion for this coming year--$700 billion. Now, you put that $700 
billion with a $700 billion trade deficit and you are talking about 
borrowing, in 1 year, almost $1.4 trillion--10 percent of the value of 
our economy.
  It is unbelievable to me. This country is off track and we have to 
fix it. One portion of it is energy. One portion is trade policy. One 
portion is fiscal policy. Today I was talking about a subprime loan 
scandal that is affecting housing, and housing is an engine in this 
country. Housing is a very important economic engine.
  That is why we want to pass a stimulus package dealing with housing 
to try to at least catch and at least deal with--in a responsible, 
appropriate way; not rewarding speculators, but trying to help 
homeowners--we want to do that in a way that will begin to shore up and 
provide some foundation to an economy that is in trouble.
  Mr. President, I have said what I have come to say. I think there is 
a lot to do. It is very important for the Senate to take action. I hope 
next week will be a better week than this week. We do not need delays. 
We do not need stalling. What we need is action. We need bipartisan 
action working on pieces of legislation that will improve this 
country's economy and reach out to those folks in the trail of tears, 
in the wreckage of the subprime loan scandal, to say to them: We want 
to see if we can find a way to help you keep your home. Home ownership 
is a very important part of American life. The housing industry itself 
is a very important engine of opportunity for this county's economy. My 
hope is we can do something important in the next week that will 
address both of these issues.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. Who yields time?
  The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I understand I have up to a half hour to 
speak at this time.
  The ACTING PRESIDENT pro tempore. The Senator can speak as long as he 
wishes.
  Mr. DOMENICI. I thank the Chair.
  Mr. President, yesterday I spoke about the work we have done, and the 
challenges we still face, with regard to energy policy. I return to the 
floor today to complete my remarks.
  I concluded yesterday by putting a pricetag on our dependence on 
imported oil. Experts estimate that foreign oil will cost us $400 
billion just this year. This expense will impact our economy in a 
number of ways, including our trade balance. In December 2007, imported 
crude oil accounted for 61 percent of the national trade deficit, or an 
all-time high of $36 billion. The trade deficit, propelled by high oil 
prices, has factored into the decline of the dollar.
  Yesterday, Fed Chairman Ben Bernanke testified that the cost of 
energy is being passed through and reflected in the increase in prices 
of core consumer goods and services. Other experts believe that 
increasing energy prices and lower economic growth could lead to a 
return of ``stagflation.''
  Our dependence on foreign oil also has a negative impact on job 
creation in America. The National Defense Council Foundation concluded 
that imported oil deprives the U.S. economy of more than 2.2 million 
jobs per year. Choosing to import oil to meet our energy needs exports 
more than our money--it also exports jobs. Choosing to produce energy 
here at home would keep those jobs within our borders, and help 
countless Americans earn a good living.
  The National Defense Council Foundation also identified several more 
``hidden costs'' of oil imports, including oil-related defense 
expenditures, lost economic activity, reduced domestic investment, lost 
Government revenues, and the cost of periodic supply disruptions. 
Together, these total $825 billion per year, nearly four times the 
amount that America spent directly on acquisition of foreign oil in 
2005.
  The money we export for oil flows directly into the economies of 
foreign nations around the world. Oil-producing nations spend these 
revenues on national defense, education, health care, social programs, 
infrastructure, financial instruments, and to bolster their own energy 
security. As these nations use American dollars to pay for

[[Page 2916]]

investments in their own futures, we are forced to spend money we do 
not have, and forgo our own priorities.
  The fact that many of the major oil-exporting nations are 
undemocratic only makes matters worse. We import much of our oil from 
Canada and Mexico. Unfortunately, beyond North America, most of our oil 
comes from countries such as Saudi Arabia, Venezuela, Nigeria, Iraq, 
and Algeria. Worldwide, the top oil exporting nations also include 
Russia and Iran.
  Many regimes in oil-rich nations are unstable and unfriendly. Anti-
Americanism is prevalent throughout the Middle East. The same Saudi 
lands that are used to produce 10 million barrels of oil per day also 
provide a staging ground for the advancement of radical Islam. While 
the State Department has listed Iran as a sponsor of terrorism since 
1984, oil revenues allow that regime to weather heightened sanctions.
  Our reliance on foreign oil continues at our own peril. We pay huge 
sums for oil, but even this premium cannot guarantee the availability 
of supplies. A recent study identified 24 significant oil supply 
disruptions between 1950 and 2003. These lasted an average of 6 months, 
and reduced the world's supply of oil by up to 12 percent. Recent 
events around the world reveal that our supply of oil is still 
incredibly vulnerable to disruption.
  In Nigeria, conflict over oil wealth reduced that nation's daily 
output by 25 percent last year. Dozens of workers have been kidnapped 
there, nearly leading Shell to suspend all of its operations in the 
Niger Delta region. In Iraq, more than 460 attacks on oil pipelines, 
facilities, and personnel have occurred in the past 4 years.
  Not all supply disruptions will be caused by natural events or 
manmade strife, because much of the world's oil is controlled by 
irrational, often unpredictable leaders. Venezuelan President Hugo 
Chavez recently threatened to stop sending his country's oil to America 
because of a British court ruling. The simple truth is this: in a world 
without spare production capacity, every major production loss, no 
matter where it occurs, can boost oil prices--and even short-term 
increases heighten the long-term costs to our Nation.
  Many foreign leaders are using oil as a diplomatic weapon, and 
establishing diplomatic ties with growing energy consumers. Such 
relationships legitimize the regimes in power and allow them to secure 
regional influence. We have seen the Putin regime use its vast 
resources as leverage throughout Eastern Europe. But perhaps the best 
example of this type of petro-influence can be seen in Venezuela. The 
Chavez regime peddled influence by distributing nearly $5 million in 
financial assistance per day last year to nations throughout Latin 
America. Venezuela also used revenue from its oil sales to subsidize 
bus tickets for Londoners and home heating oil for Americans.
  Nearly all of us, and nearly all of our constituents, can agree that 
America's dependence on foreign oil must end. Before I discuss some 
solutions to the problems I have outlined, I will provide historical 
context for them.
  Attempting to bolster America's energy security is not new to 
Washington. In 1973, my first year in Congress, President Nixon gave a 
major address on energy. He proposed a very aggressive initiative, 
called `Project Independence', stating:

       Let us set as our national goal, in the spirit of Apollo 
     with the determination of the Manhattan Project, that by the 
     end of this decade we will have developed the potential to 
     meet our own energy needs without depending on any foreign 
     energy sources.

  At the time of that speech, net imports accounted for approximately 
28 percent of U.S. crude oil demand. Thirty-five years later, imports 
account for more than 60 percent. Imports have grown because the gap 
between domestic supply and demand has been allowed to widen--
consumption has steadily increased over the years, while production 
dwindled.
  In 2005, the United States consumed 21 million barrels of crude oil 
per day, but that same year, domestic production hit a 50-year low. The 
result established a record for oil imports--13.7 million barrels per 
day--but not a ceiling on them. According to the EIA, oil usage will 
rise 30 percent by 2030, even as alternative sources of energy account 
for a much greater percentage of our energy supply.
  These estimates show that, while our goals have been admirable and 
ambitious, we are heading in the wrong direction. As consumption rises, 
and domestic production falls, oil imports continue to increase and our 
hand is weakened diplomatically, militarily, and economically. As we 
debate catch phrases like ``energy independence,'' ``energy security,'' 
and ``energy freedom''--we miss the point. And that is, we must 
immediately adopt policies to reverse the course we have been on since 
before 1973, and the course that our best experts estimate will 
continue beyond 2030.
  Part of the problem is created by the talking points originating in 
Washington. Although the goal of ``Project Independence'' was never 
met, the same rhetoric is still used to define the challenges we face. 
Invoking the Apollo missions and the Manhattan Project ignores the hard 
truth that an effective long-term energy policy will not be a race to 
the finish line. As President Nixon asserted, we will need the spirit 
and determination of past endeavors. We will need our brightest minds 
and best science. But this time, we do not seek a one-time goal--to 
land the first man on the Moon, or to develop the first atom bomb. 
Instead, we seek a fundamental shift in how our Nation powers its 
economy. The widening delta between domestic production and consumption 
will continue to swell unless we change course.
  Throughout this debate, we must be straight about these challenges. 
We must be honest with the American people and honest with ourselves. 
Given our growing energy needs, and our reliance on foreign oil, we 
should not promise energy independence within a term of office. In the 
absence of scientific breakthroughs, the strengthening of our energy 
security that we seek will take substantial time and effort to achieve. 
But we can begin to move in that direction today.
  There are no easy solutions or quick fixes to our energy challenges. 
As we debate these issues, we should not propose to overhaul the 
traditional energy industries without also addressing the likely 
impacts that such actions will have. And we should not seek to 
transition away from traditional sources of energy until new 
technologies are affordable, available, and acceptable to the public.
  Those of us in Congress share a common goal--to reduce our dependence 
on foreign oil--but there are deep divisions over how to achieve it. As 
a result, the Congressional Record is filled with legislation that 
undermines our ability to move toward this goal. These measures were 
drafted with good intentions. However, good intentions are not enough, 
especially when they are not matched with the wisdom and experience 
necessary to achieve these goals we seek. This Congress is in danger of 
failing in this regard.
  Last year, Congress passed an omnibus appropriations bill in the 
place of several individual bills. As time dwindled, attention was 
diverted away from damaging provisions that were inserted in that bill 
and passed with little notice and no debate. Among these provisions was 
a moratorium on oil shale regulations, which could delay the 
commercialization of one of America's most promising resources. Our 
Nation holds 62 percent of the world's oil shale deposits. This equals 
nearly five times the proven conventional oil reserves of Saudi Arabia. 
Just imagine the possibilities if we unleash American ingenuity to 
access these resources.
  Another provision in that bill imposed new fees for domestic oil and 
gas permits, which will increase the cost of business and ultimately 
heighten the cost of energy for American consumers. As we have seen our 
domestic production level off over the past several years, it is 
irresponsible to adopt policies that accelerate this trend. Yesterday, 
the House Democrats chose the unwise path of raising taxes on our 
domestic energy producers by $18 billion. Additionally, some in the 
majority seek to make it more difficult for our

[[Page 2917]]

military to purchase unconventional fuels from our allies in Canada. On 
top of that, some in the majority still seek to undo lease agreements 
that American companies have to produce energy in the Gulf of Mexico. 
This makes no sense.
  These backward policies prevent us from building on the success of 
recent energy bills. Legislative efforts to open a small section of the 
Arctic Coastal Plain have now been thwarted for over 25 years. Much of 
our Outer Continental Shelf also remains closed for energy leasing. 
Combined, these areas contain more than 100 billion barrels of oil and 
450 trillion cubic feet of natural gas.
  Using old fears about energy production, and ignoring new concerns 
about energy prices, policymakers are locking up our energy potential. 
It is clear that this approach has failed, and that we need to find a 
new way to reach smart consensus on energy policy.
  For too long, the debate on energy has been dominated by extreme 
ideologies. Discourse has deviated into an ``either/or'' approach, 
where participants are accused of being beholden to either ``big oil'' 
or ``environmental extremism.'' In an almost equally divided Senate, 
and at a time when party control is split between the legislative and 
executive branches, there is no better time to bridge this divide.
  We must take action on an aggressive agenda of both new and old 
energy ideas. Some of these proposals have been labeled as Republican 
ideas, and others have been labeled as Democratic ideas. We must 
recognize that reasonable policies to reduce our dependence on foreign 
oil are American ideas, not partisan agendas. We must affirm that these 
policies are worth pursuing, because additional steps can and should be 
taken to reduce the amount of energy this nation imports.
  A strong energy policy will rely upon three types of initiatives: 
those that increase the responsible production of domestic energy; 
those that accelerate the research, development, and deployment of 
renewable and alternative sources of energy; and those that 
significantly enhance our Nation's ability to conserve energy. There is 
broad agreement that two of these three areas are critical to America's 
energy security. I see them outlined in the measures introduced in 
Congress, and they are built upon in the energy proposals of those 
running for President.
   In modern politics, most people would be satisfied with two out of 
three. But when we miss a critical piece of the puzzle--the one that 
matters most in the near-term, and would have the greatest immediate 
impact--then we can safely say, as I do now, that our efforts will fall 
short of the goal.
   I speak, of course, of the continuing disagreements over domestic 
production. We must, without delay, produce more energy at home. 
American energy, produced by our workers, must be used to power our 
homes, businesses, and vehicles.
   Increasing domestic production will not be a stand-alone solution. 
But with proven reserves of more than 21 billion barrels of oil, and 
undiscovered reserves of more than 100 billion barrels, it is simply 
unacceptable that America fail to meet a greater share of our own needs 
with domestic energy resources.
   The good news is that we have the resources, the technology, and the 
support of most Americans. The bad news is that so far we have been 
unable to muster the political will--we cannot even build consensus to 
inventory these areas and gain an accurate assessment of our Nation's 
energy reserves. To have a fair and informed debate, we must know the 
extent of our resources. And then we must tap them with the ingenuity, 
skill, and technology at our disposal.
   We must listen to the people of Alaska and open the Arctic Coastal 
Plain to responsible leasing for the exploration and production of oil 
and natural gas. ANWR is an emotional subject for many folks, so let's 
stick to the facts. First, to the critics who say that oil from ANWR 
will take 10 years to come on-line--you are probably right. But to use 
this as an argument against development is like refusing to save for 
your retirement because you are not retiring next year. It will take 
time and patience to develop the resources of Alaska's North Slope. 
From experience, we know that starting this process a decade ago would 
have ensured greater domestic oil production when we needed it most.
   In 1995, Congress did pass legislation to open a small portion of 
the Coastal Plain to oil and gas leasing. But President Clinton vetoed 
the legislation, and more than a decade later, an estimated 10.4 
billion barrels of oil continue to sit under our own soil. The week of 
that veto, the average price of crude oil was $19 per barrel. This 
week, the price has risen to about $102 per barrel. I would say that 
conditions have changed enough to warrant a fresh debate on this topic.
   Congress must also open more of the Outer Continental Shelf, as we 
did in the Gulf of Mexico in 2006. Last year, an amendment that would 
have allowed leasing off the coast of Virginia was defeated on a near 
party-line vote. That vote was a step in the wrong direction. Offshore 
America holds tremendous energy potential, and it is essential that the 
American energy industry have greater access to explore and produce in 
this area.
   Continuing to restrict the OCS will sacrifice billions of dollars 
that could be used to develop our Nation's future energy supplies. 
Opening it would augment our supply of traditional fuels--and dollars 
that now go overseas to acquire oil could remain within our own economy 
and could be used to develop alternative sources of energy. The 
conventional fuels of the 20th century can be used to pioneer those of 
the 21st century, but we must first find the courage to put ourselves 
on such a forward-looking and pragmatic path.
   Equally important to increased domestic production will be measures 
to expedite the on-shore permitting process. A good example of why is 
Alaska's natural gas pipeline. Permitting and activities related to 
permitting that project may add more than 5 years to its timeline. This 
is just one example, but it is representative of an increasingly 
burdensome process. Permitting must be streamlined, not only to prevent 
energy producers from investing abroad, but also for the sake of 
growing our energy production.
   As I have indicated, our Nation has a great quantity of oil locked 
up off of our coasts, beneath our permafrost, and within our shale. 
These areas can provide a stable supply of energy as we transition to 
alternative fuels. But oil is not the only resource that can be 
developed at home and depended upon to meet our energy needs. We are 
also fortunate to have vast reserves of coal: some 270 billion 
recoverable tons, which would last for 240 years at the current rate of 
consumption. That coal can be turned into fuels that help meet our 
transportation, manufacturing, and electric power needs.
   Because of the emissions that result when coal is converted to 
energy, we will need cleaner methods to ensure the protection of our 
environment. To me, this is an opportunity. Our Nation has a proud 
heritage of innovation, and there is no reason to believe this strong 
record will not continue in the future. As our most abundant and 
affordable fossil resource, we cannot simply cross coal off the list. 
Any serious effort to strengthen our energy security must include coal.
   One of our best prospects is to advance the development of coal-to-
liquid fuels. As an alternative to oil, coal-to-liquid fuels have many 
merits: It will reduce emissions of sulfur dioxide, nitrous oxide, 
particulate matter, and other pollutants when compared to conventional 
fuels. Coal-to-liquid fuels have been commercially demonstrated in 
other countries, can be moved through existing pipelines, and can be 
used in existing vehicles. Commercialization of this resource will 
create investment in rural communities, thousands of good-paying jobs, 
and cheaper energy for American consumers. Despite this potential, two 
amendments to advance this type of fuel were defeated on party-line 
votes in the most recent energy debate.
   Future generations of automobiles will be powered by the advanced 
battery. The Government must redouble

[[Page 2918]]

its efforts to ensure the research, development, and deployment of 
these technologies. Reliable and rechargeable batteries will be 
critical to the success of hybrid vehicles, which hold tremendous 
promise for reducing the amount of oil consumed in the transportation 
sector.
   The policies I speak of are just a few of the options available to 
us. We should also increase the number of flex-fuel vehicles on the 
road, and the number of stations that offer blended fuels. We should 
offer incentives to existing refineries, and encourage the expedited 
construction of new ones, to reduce the amount of gasoline we import. 
We continue to lament that while our refinery capacity has improved at 
existing sites, we have not built a new refinery in 30 years. We must 
rethink our policies to match the modern challenge we face. Again, 
these are just a sampling of the policy options available to the 
Congress as we seek to chart a more responsible path forward.
   As a member of the Senate Energy Committee for nearly 30 years, and 
its chair or ranking member for much of the past decade, I obviously 
have strong views on the energy policies that will best serve our 
Nation. But I also recognize that we must work together to find common 
ground. We did this in the past on energy policy, and we can do it 
again.
   The costs of our dependence on foreign oil are enormous and 
increasing. The consequences of removing money from our economy, and 
sending it to often-volatile oil-producing nations, are becoming clear. 
Few positives will ever be drawn from this arrangement.
   When we import oil, we export our jobs and we export our wealth. We 
strengthen regimes that are intent on undermining our interests, 
opposed to the spread of democracy, and unwilling to extend some of the 
most basic freedoms to their own people. When we import oil, we 
threaten our national security and our economic strength. As we look 
ahead, we must remember that for today and the foreseeable future, we 
need oil. We should put our American energy resources to use.
   This is my final year in the U.S. Senate. It is a privilege and an 
honor to serve the people of New Mexico and this country. But it is not 
just the end of my time in the Senate that approaches; the time to 
reduce our growing dependence on foreign oil is also upon us.
   It is my sincere hope that we will use this year and the future to 
work together on policies that will move us toward our energy security 
goals. This will require us to set aside our differences and make 
difficult decisions. It will require us to come to the table with open 
minds and positive intentions. In an era defined by its bitter 
partisanship, this will not be easy. But given the stakes--our national 
security, our economic strength, and our standing in the world--that is 
exactly what we must do.
  The ACTING PRESIDENT pro tempore. The Senator from Missouri is 
recognized.
  Mr. BOND. Mr. President, I am here today to talk about some very 
positive things that the Republicans in the Senate hope to do to help 
those people who are caught in a real crisis. We have the HOME Act that 
my colleague from New Mexico has discussed, and I want to discuss some 
specific housing proposals that we believe will help people who are 
caught in the tremendous crisis of the subprime meltdown and the 
economic conditions it imposes on them.
  Too many families in my State of Missouri and across the Nation, 
including in West Virginia, the State of the Presiding Officer, are 
feeling the pain of the housing crisis, and they need our help now.
  There are 57,000 people in Missouri who are delinquent on their 
mortgages, with 20 percent of Missouri subprime borrowers behind on 
their payments. These families, like many across America, can least 
afford higher housing costs as they are being hit with heating bills, 
higher health care costs, and more pain at the gas pump.
  I am proud to gather with my Republican colleagues to introduce the 
Home Ownership, Manufacturing and Economic Growth Act, or HOME Act, of 
2008.
  The housing relief provisions of the Republican HOME Act will provide 
help for folks such as Willie Clay of Kansas City, MO, caught up in 
this subprime mortgage mess. Willie is a former Vietnam war paratrooper 
who lives mainly on Government disability checks. Willie was recently 
highlighted in a Kansas City Star article entitled ``American Dreams 
Built on a Shaky Foundation of Subprime Loans.''
  Willie Clay lives in the Kansas City neighborhood of Ruskin Heights, 
a modest community of hard-working families and tidy ranch homes, a 
place where folks of modest means can share in the American dream by 
owning their own home.
  In 2004, Willie refinanced his mortgage for a total of $101,000. As 
you can see from the size of the loan, Willie was not a rich man. He 
was like so many other Americans--just looking for a little bit of 
money to pay off medical bills, his car loan, and some credit card 
bills.
  Willie took out a subprime loan with an adjustable rate. It started 
out at a fixed 8.2 percent. He had no problem making his payments. But 
then, last October, the fixed rate interest ended and the new 
adjustable rate reset at 11.2 percent. It is set to rise again in March 
to 12.2 percent, and even higher in the coming months.
  Willie told the Kansas City Star:

       If the rate goes up again, I can't afford it.

  Willie and his wife Ina will have to give up their home and move to 
an apartment. Willie now admits that he never fully understood how an 
adjustable rate worked when he agreed to the new loan. ``I didn't have 
the education to understand it,'' Willie said. ``And they didn't 
explain it to me. I thought if the interest [rate] went down, the 
payment went down. If the interest rate went up, your payment stayed 
the same.''
  Willie was also trapped with a $2,500 prepayment penalty, committing 
him to the loan for at least 3 years. Willie is not alone. His entire 
neighborhood is suffering through this crisis. There are more than 500 
foreclosures in his ZIP Code alone. On Willie's block, there are 
already several empty houses.
  This is wreaking havoc on the neighborhood, its property values, even 
its basic fabric, as families struggle to make ends meet.
  That is why I believe so strongly that we need to help folks such as 
Willie Clay and families across the Nation. The Kansas City Star 
suggested that we require tougher disclosure requirements so that 
borrowers have no question about the terms of the deal. They believe 
home buyers should encounter crystal clear disclosure forms, stating 
the loan amount, interest rate, whether the rate will reset under 
certain conditions, and any prepayment penalty.
  We heard the needs of Willie Clay and thousands of families like his 
across America. We heard the suggestions of the Kansas City Star and 
many others with ideas on how to fix this mess, and we propose taking 
action. This institution must take action.
  First, the Republican HOME Act will help families like Willie's 
suffering now with $10 billion to refinance distressed subprime 
mortgages. Our proposal would authorize State housing finance agencies 
to issue $10 billion in tax-exempt bonds and use the proceeds to help 
homeowners refinance subprime mortgages.
  Second, in order to help families avoid foreclosure and help them 
keep their homes, Republicans will expedite the delivery of $180 
million approved by Congress in December to provide counseling and help 
for families in distress. I was proud to cosponsor that in the 
appropriations bill with my colleague from Connecticut, Senator Dodd.
  As I announced earlier this week, the first block of these funds has 
just gone out, and we will ensure that remaining funds are delivered as 
quickly as possible.
  Third, Republicans support helping neighborhoods like Willie's by 
providing $15,000 tax credits to purchase over the next year a home in 
or approaching foreclosure. Senator Isakson of Georgia will talk more 
about that. We support the so-called net operating loss carryback 
provision to help firms that suffered operating losses lower their tax 
burdens.

[[Page 2919]]

  Last, Republicans support protecting families who are applying for 
new loans. People deserve to know and understand what they are signing 
before they sign it. Anyone who ever bought a house and confronted the 
stack of small-type paperwork written in legalese knows what I mean. I 
used to be a lawyer, and I have been presented with those stacks of 
documents. They are so overwhelming that, unless you have a half day to 
spend, you are never going to read them. Even as a lawyer, I will tell 
you they are not the easiest things to understand.
  Our proposal will require a plain English explanation of key loan 
conditions. Borrowers will see in big type any teaser or introductory 
rate, their payment, and when it expires. They need to know they are 
agreeing to an adjustable rate and what that rate will be and how much 
a new payment will be. I doubt that Willie Clay was ever told his 
mortgage rate could go up over 12 percent. That is unconscionable. I 
don't think they ought to be allowed to raise adjustable rates beyond 
what they disclose in the initial disclosures to the borrowers. They 
need to be notified of any prepayment penalty, and they will be 
reminded there is no guarantee they can refinance their loan before the 
introductory rate expires. These are the very things Willie and 
thousands of borrowers did not understand when they agreed to their 
loans. Hopefully, this will protect future families who want to share 
in the American dream.
  In contrast to the Democrats' plan, Republicans will avoid making 
home ownership more expensive, especially for low-income families 
through harmful bankruptcy changes that increase the cost of borrowing 
or encourage costly litigation.
  If my colleagues on the other side succeed in using bankruptcy to 
write down all the mortgages and essentially destroy the basic terms of 
the contract, guess what will happen. What will happen is that nobody 
will get a loan at a reasonable rate anymore. Any rates that are 
offered to homeowners will have to have a risk premium built in, 
probably 1.5 percent or more. Each quarter of a percent will mean 
500,000 families cannot get a loan. So that would mean that if this 
proposal coming from the other side is implemented, some 6.5 million, 
at least, families will be denied the opportunity to get a home loan 
because of the risk built in by a congressionally mandated cram-down of 
the interest rate terms, breaking the terms of the contracts which have 
been signed.
  Republicans will also oppose plowing billions of dollars into big 
Government programs that do not help our neediest families now. We will 
oppose adding more dollars to programs that are still flush with funds 
they were given in December. We want a responsible, effective, and 
fiscally conservative package that can be adopted without wreaking 
havoc on our economy, without destroying our budget, yet helping the 
people who most need help.
  Right now, we are threatened by the position of the majority leader 
of being shut out from offering any amendments. We want to move 
forward. We want to move forward on a responsible plan that allows the 
Republicans to decide what amendments they will offer. We are not going 
to be told by the majority leader that he is the one who decides what 
amendments we offer. Where has that ever worked in this Senate, telling 
a block of Senators, minority Senators, 49 of us, that we cannot offer 
an amendment unless we get the approval of the majority leader? There 
is a body on the other side of the Capitol that may be able to do that, 
but the strength of this body is we do not get crammed down on the 
amendments we can offer.
  I have talked with a number of my colleagues on the other side of the 
aisle, and they agree that our proposals make sense. We just want to 
have votes on the proposals we think are effective, fiscally 
conservative, and will not endanger the homeowners whom we seek to 
help.
  If we can work together--and I believe there is plenty of opportunity 
for a bipartisan compromise--on housing proposals we will help families 
like Willie Clay's and neighborhoods such as Ruskin Heights in Kansas 
City to get through this crisis. I urge my colleagues to support the 
home proposals we will be offering when we are given an opportunity to 
offer those amendments.
  Mr. President, I ask unanimous consent to have printed in the Record 
the article to which I referred from the Kansas City Star.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Kansas City Star, Dec. 30, 2007]

     American Dreams Built on a Shaky Foundation of Subprime Loans

                             By Paul Wenske

       Willie Clay remembers the day a loan broker showed up and 
     sold him on consolidating his debts by refinancing his south 
     Kansas City home.
       The former Vietnam War paratrooper, who lives mainly on 
     government disability checks, jumped at the chance to pay off 
     medical, car and credit-card bills. That was in 2004.
       Now he realizes it was ``a big mistake.'' In October, his 
     8.2 percent interest rate on the new $101,000 home loan shot 
     to 11.2 percent. It is set to rise to 12.2 percent in March--
     and higher yet in subsequent months.
       ``If the rate goes up again, I can't afford it,'' said 
     Clay, who lives in a tidy ranch home in Ruskin Heights with 
     his wife, Ina. ``We'll have to move to an apartment.''
       Welcome to subprime hell, where interest rates are going 
     through the roof and the bottom is falling out of home 
     values.
       The ZIP code in which Clay lives has had more than 500 
     foreclosures--one of the highest rates in the city, according 
     to RealtyTrac, a national firm that tracks foreclosures. On 
     his block, many neighbors' homes are empty. Clay worries his 
     may be next.
       Clay, who thought his adjustable rate could go down but 
     would never go up, is another victim of the subprime 
     implosion. He and millions of other low- to moderate-income 
     Americans bought or refinanced homes with creative terms that 
     began with lower ``teaser'' interest rates designed to rise 
     after several years.
       At the time, it seemed like a good deal. Home values were 
     soaring. Lenders seemed to have barrels of money to lend--
     even to borrowers with less-than-perfect credit--stoking the 
     American dream of homeownership and fueling the torrid 
     housing market from 2004 to 2006.
       But housing prices cooled in late 2006, just as adjustable 
     rates started to creep upward. Now many loans are going bad 
     as families find they can't afford their monthly payments and 
     can't get refinanced by lenders who have tightened credit.
       Foreclosures are at record highs, with Kansas City's 
     foreclosures up 80 percent just since last year.
       Thousands of Americans could lose their homes when at least 
     2 million subprime-loan interest rates are set to rise again 
     this spring. President Bush recently announced a plan to 
     freeze the rates on as many as 1.2 million of those loans. 
     Some experts estimate the eventual cost to the economy will 
     be more than $223 billion.
       For many, the help comes too late.
       In metropolitan Kansas City, more than 34,290 adjustable-
     rate loans are ready to reset, putting more homes at risk, 
     according to an analysis of mortgage data by the Center for 
     Responsible Lending.
       ``What this foretells is foreclosures will get worse before 
     getting better,'' said Kelly Edmiston, a senior economist at 
     the Federal Reserve Bank of Kansas City, who has crunched the 
     numbers. ``We haven't really seen the peak yet.''


                            what went wrong?

       Blame is easy to spread around for the subprime mess, said 
     William M. Dana Jr., the president and CEO of Central Bank of 
     Kansas City and the immediate past chairman of the Missouri 
     Bankers Association.
       Dana cited lax underwriting standards, borrowers who didn't 
     understand the terms of their loans, and regulators who 
     weren't paying enough attention.
       Consumer advocates, however, said borrowers with little 
     experience in home buying got caught up in a frenzy, fed 
     mainly by nontraditional lending institutions and thinly 
     regulated brokers who were more intent on making fat 
     commissions than making quality loans. Big national banks 
     also dove into the market with subprime subsidiaries.
       ``You had an army of salespeople who were hired to go door 
     to door and sell these things very aggressively,'' said 
     Michael Duffy, the managing attorney of Legal Aid of Western 
     Missouri, who noted that subprime loans are more complex than 
     conventional loans, yet borrowers often received less loan-
     disclosure information.
       Elma Warrick, the executive director of the Kansas City 
     Home Ownership Center for HomeFree-USA, said: ``People were 
     just happy to be told they could get a home. Quite frankly, 
     they didn't know what questions to ask.''
       Clay acknowledged that he never fully understood how an 
     adjustable rate worked when a Wells Fargo Financial broker 
     sold him on the deal.

[[Page 2920]]

       ``I didn't have the education to understand it,'' Clay 
     said. ``And they didn't explain it to me. I thought if the 
     interest went down, your payment went down. If the interest 
     rate went up, your payment stayed the same.''
       What's more, Clay's loan included thousands of dollars in 
     added charges and carried a $2,500 prepayment penalty, which 
     tied him to the debt for at least three years.
       Steve Carlson, a spokesman for Wells Fargo Financial, a 
     division of Wells Fargo & Co., said that while he could not 
     comment specifically on Clay's case, the company does not 
     make home loans ``unless we believe the customer has the 
     ability to repay the loan.'' Carlson said the bank works with 
     customers to avoid foreclosure and find options ``based on 
     the customer's financial ability to repay the debt.''
       Adjustable-rate loans aren't new, but they had been used 
     primarily by borrowers with good credit who didn't intend to 
     hold on to a house long, because they planned to sell it or 
     move.
       In recent years, a new breed of lenders and brokers saw a 
     way to use the subprime market to keep home sales revved up.
       Lenders targeted urban neighborhoods where new borrowers 
     were itching for the chance to buy. Because those 
     neighborhoods usually had lower average credit scores, often 
     reflecting riskier credit, lenders felt justified to charge 
     more. And they did.
       Nearly 28 percent of the home-purchase loans made in 
     Jackson County from 2004 to 2006 were subprime, federal 
     mortgage records show. That compares with less than 10 
     percent in more affluent Johnson County.
       Teaser rates made the loans appear affordable. ``These 
     loans wouldn't have been made without the teaser rate,'' 
     Edmiston said.
       From 2003 to 2004, adjustable-rate mortgages nearly 
     doubled--growing to more than 50 percent of all originations 
     in Kansas City, according to Federal Reserve data.
       Loan offers became increasingly creative, offering no money 
     down or interest-only payments that began low, but 
     skyrocketed nearly 200 percent in a few years. TV ads induced 
     consumers to borrow against 125 percent of the value of their 
     home--a recipe for disaster for most cash-strapped borrowers.
       Subprime sales even took off in middle-income tracts, 
     according to a study of Kansas City's 5th Congressional 
     District by Compliance Technologies, a Washington firm that 
     provides lending intelligence services to financial 
     institutions.
       Critics say that raises questions about whether some 
     borrowers were steered to subprime loans when they might have 
     qualified for cheaper conventional loans.
       While most mainstream banks in Kansas City resisted the 
     subprime stampede, newer lenders rushed in. More than 98 
     percent of the loans that H&R Block's Option One Mortgage 
     Corp. made in Kansas City from 2004 to 2006 were subprime, 
     federal loan figures show. More than 97 percent of NovaStar 
     Mortgage's loans were subprime in that time.
       In contrast, only a small percentage of loans sold by 
     established local banks were subprime. None of the nearly 
     1,000 metro loans that Kansas City mortgage banker James B. 
     Nutter & Co. made was subprime.
       Ironically, Clay bought his Ruskin Heights home in 2000 
     with a conventional 30-year loan from Nutter & Co. It was for 
     $76,000 with a fixed 6.5 percent interest rate.
       Company president James Nutter Jr. questioned why Clay was 
     directed into a costlier subprime loan when he refinanced his 
     house in 2004. Nutter said that Clay--even with more debt--
     probably would have qualified for a cheaper conventional loan 
     from his company or another local lender.
       ``Especially with him being a veteran,'' Nutter said, 
     noting that some brokers appeared to steer lower-income 
     borrowers into subprime loans ``to make more money.''


                         wall street connection

       Soaring subprime profits quickly attracted Wall Street 
     investors.
       As fast as brokers sold more teaser-rate loans, they 
     quickly bundled them into packages and sold them like 
     securities to investors, who pumped even more money into the 
     subprime market.
       The Compliance Technologies study showed that more than 
     half of the subprime loans made in Kansas City's 5th District 
     were securitized and sold off to investors.
       ``Originators were making loans based on quantity rather 
     than quality,'' said Kurt Eggert, a law professor at Chapman 
     University in Orange, Calif., who served on the Federal 
     Reserve's consumer advisory counsel. ``They made loans even 
     when they didn't make sense from an underwriting 
     standpoint.''
       Mark Duda, a research affiliate at Harvard University's 
     Joint Center for Housing Studies, said that because brokers 
     were so intent to quickly sell off loans to investors, they 
     had little incentive to make sure the loans were suitable for 
     borrowers.
       ``They were setting people up to fail,'' Duda said.
       By sheer numbers, more whites got subprime loans--but as a 
     percentage, blacks were more likely to be steered into 
     subprime loans and usually paid more for them.
       An analysis by The Kansas City Starof home-purchase loans 
     from 2004 to 2006 in the metro area showed that blacks were 
     placed in subprime loans nearly 50 percent of the time and 
     Hispanics about 32 percent of the time. Whites, however, got 
     subprime loans only 16 percent of the time.
       These findings are supported by Compliance Technologies' 
     analysis. Examining a larger pool of both home-purchase and 
     refinance loans in the 5th District, the firm found that last 
     year blacks were placed in subprime home-purchase or 
     refinance loans nearly 66 percent of the time.
       That compared with 41 percent for Hispanics and 29 percent 
     for whites.
       Blacks also were consistently charged an interest rate that 
     was at least a half a percentage point higher, said Maurice 
     Jourdain-Earl, the managing director of Compliance 
     Technologies--meaning, ``all things being equal, their 
     monthly mortgage payments are going to be higher.''
       U.S. Rep. Emanuel Cleaver, a Democrat who represents the 
     5th District, contends that brokers knew some minorities were 
     less sophisticated about buying homes.
       ``This was designed to ensnare Latinos and African-
     Americans,'' said Cleaver, a member of the House Financial 
     Services Committee. ``These brokers get their money on the 
     front end. So they don't care. They're gone.''


                           subprime implosion

       As adjustable interest rates climbed, many subprime 
     borrowers could not make their payments. In some cases, 
     homeowners and real-estate investors also had tapped all the 
     equity from their homes. As prices fell, they owed more than 
     their homes were worth.
       When the new homeowners couldn't sell or refinance their 
     homes, they often walked away from them. As the inventory of 
     unsold houses grew, prices plummeted even more.
       In 2004 and 2005, homes nationally were appreciating, on 
     average, more than 12 percent a year, according to Federal 
     Reserve data. By 2007, they were losing about 1.5 percent in 
     value each year. Kansas City homes went from appreciating an 
     average of 4.5 percent a year to dipping nearly 1 percent in 
     value.
       Wall Street investors now are left holding worthless real-
     estate securities. Subprime lenders are stuck with billions 
     of dollars in bad loans, which they have had to write off. 
     Many are going broke.
       ``It's like any Ponzi scheme,'' said Duffy of Legal Aid. 
     ``Artificially high values drive more investments, that drive 
     more artificially high values, that drive more investments, 
     until the values get unrealistically high and the whole 
     scheme collapses. That's what you see now.''
       Ruben Flores, a Johnson County real-estate investor, worked 
     as a loan officer in NovaStar's loss-mitigation office in May 
     when things started collapsing.
       ``It was like triage,'' he recalled.
       Flores said that loan officers--each handling portfolios of 
     200 or more borrowers--worked 70 to 80 hours a week trying to 
     salvage as many souring loans as possible.
       But the losses have left once-high-flying NovaStar 
     struggling to stay out of bankruptcy. Option One has 
     shuttered its business and plans to write off $125 million in 
     bad loans. Wells Fargo and other big national banks have cut 
     back or stopped making new subprime loans.
       Meanwhile, Congress is grappling with ways to help 
     homeowners clean up the mess and make sure it doesn't happen 
     again--including tougher regulations and penalties.
       The good news is that tighter underwriting standards are 
     being restored. The bad news is that foreclosures probably 
     will continue to haunt neighborhoods such as Clay's for at 
     least another year.
       Foreclosures, however, ripple throughout communities, 
     lowering home values, decreasing tax revenues, and inviting 
     blight and crime. So even if you didn't have a subprime loan, 
     you probably will feel their pain in 2008.
       ``Subprime problems have become everyone's problem,'' said 
     Martin Eakes, the chief executive officer of the Center for 
     Responsible Lending.
       A look at where subprime loans and foreclosures are most 
     prevalent in the KC metro area.


                        WHAT'S A SUBPRIME LOAN?

       Subprime loans are generally defined as those given to 
     borrowers with weak or damaged credit. Lenders charge higher 
     interest rates because the loans are seen as riskier.


                 METHODOLOGY FOR THE DATA ANALYSIS/MAPS

       The home-loan data used for this analysis comes from the 
     Home Mortgage Disclosure Act database, which is compiled by 
     the Federal Financial Institutions Examination Council. The 
     data include millions of records from all home-loan 
     applications, but for the purposes of this study, much of the 
     information was not considered. The only records that were 
     analyzed were for loans in Kansas or Missouri that were used 
     to purchase a one- to four-family home, which means homes 
     that were not apartment buildings. Refinancing loans, home-
     improvement loans and loans not secured by a first lien were 
     not considered. Only records from 2004 through 2006 were 
     analyzed because prior to 2004 the Federal Financial 
     Institution Examination Council did not have an indicator for 
     subprime loans. A subprime loan is any loan with an interest 
     rate 3 or more percentage points higher than the Federal 
     Treasury yield on securities, according to the Federal

[[Page 2921]]

     Financial Institutions Examination Council. The home-mortgage 
     data were joined to the map based on census tract numbers and 
     state and county identifiers. The maps accompanying this 
     story were assembled using census tract shape files obtained 
     from the Missouri Spatial Data Information Service and the 
     Kansas Geospatial Community Commons.

  Mr. BOND. Mr. President, I yield the floor and suggest the absence of 
a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Ms. STABENOW. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Ms. STABENOW. Mr. President, in listening to my friend from Missouri 
who just spoke, I was surprised that this is all being debated now in 
the context of the fact that yesterday our Republican colleagues 
stopped us from proceeding to the very measure everyone is now talking 
about and wanting to make changes and improvements to. There are ideas 
my friend from Missouri talked about that I think are worthy of 
discussion and debate. Some we may very well support.
  The reality is that we are here today because colleagues on the other 
side of the aisle stopped us from even proceeding to have a debate. So 
it seems to me it is a little disingenuous to say we want to be doing 
all these measures--and we agree there is an incredible sense of 
urgency about what is happening now to families--yet, at the same time, 
rather than proceeding to the bill and offering amendments, such as an 
amendment to remove a provision if there is concern on bankruptcy on 
which I happen to disagree--I think it is very difficult to explain to 
people why their vacation home, which I hope to have some day in 
beautiful northern Michigan, would be covered by bankruptcy provisions, 
but my home, my primary residence where my children grew up, where I 
raised my family, would not be protected. So I do not understand that 
difference. That is a debate worth having. If our colleagues had 
allowed us to go to the bill, we could have had that discussion, we 
could have had that debate about whether that provision should be in 
the bill.
  I come to the floor today to urge colleagues--and Senator Reid has 
renewed his motion to go to the bill--we cannot begin to deal with an 
issue which colleagues are saying on both sides of the aisle is 
incredibly important, which has a great sense of urgency to it, if we 
are not allowed to go to the bill.
  This reminds me of time after time in the Senate where we as a 
majority have brought forward urgent issues that affect American 
families and American communities and asked that they be considered, 
that we have an opportunity to debate and take action, and we have been 
blocked time and time again--in fact, a record 72 times now, which is 
more than the 2-year average of any Senate 2-year session. We now have 
72 times that our Republican colleagues have blocked us from being able 
to proceed to do the American people's business on issues that are 
incredibly important.
  I welcome colleagues to come to the floor next week, to support 
Senator Reid's motion to go to the debate, and to look at a variety of 
ideas that need to be addressed on this critical issue.
  We all know that for a majority of Americans--Mr. President, I know 
in West Virginia as in Michigan--when folks want to get into the middle 
class, the first thing they do is go out and buy a home, to have that 
equity in a home, to be able to save equity in their home--no more 
renting; they are going to buy a house. I know in Michigan that is step 
1 for people who are working very hard to get that home for their 
family, to be able to save for the future. That is the primary way that 
people, in fact, in this country do save for their future: build up 
that equity so they can use it to offset the cost of college for their 
children, to save for retirement, to use it in a medical emergency, 
which is happening way too often now in our country.
  Equity in the home, knowing that you can invest and have your home, 
is a basic part of what we all call the American dream in this country, 
and that is in great jeopardy right now for too many families.
  Mr. President, 87,000 people went into foreclosure in this last year 
just in Michigan, and we have one of the highest foreclosure rates in 
the country right now. That has happened for a variety of reasons. We 
talk a lot about the financial mortgage arrangements, ARMs--adjustable 
rate mortgages--that are coming due and interest rates going up. That 
is certainly part of it. We also have another piece that is very true 
in Michigan and my guess is around the country that relates to 
predatory lending practices.
  I have a very large number of great Michiganians who are African 
American or from other minority communities who could be in a prime-
rate mortgage right now but were sold a subprime mortgage. They were 
put into a much more fragile situation with less accountability.
  We know of situations where senior citizens have been followed home 
from church in Detroit, forming relationships with our seniors where 
they have been talked into totally refinancing their home. They paid 
for their house, had no mortgage payment, but were told that if they 
wanted to refinance, they could get that new furnace they needed, they 
could fix the roof, or they could pay for those medical bills, and they 
were placed in a situation through predatory practices that has now 
jeopardized their ability to even have their home.
  Then we have another factor which I believe is the largest factor 
going on right now, which is the underlying fundamentals in the economy 
and the fact that too many people are losing their jobs or seeing their 
incomes go down. Certainly, for us in Michigan, it is different than 
these ARMs resetting. For us, it is about the fact that families are 
losing their jobs. Families are going from a middle-income job of $25 
an hour to $14 an hour and trying to figure out how they are going to 
pay the bills and keep a roof over the heads of their family.
  I happen to believe the best stimulus is a good-paying job, and that 
is something also of great urgency on which we need to be spending our 
time. I am very proud of the fact that as we move forward in the next 2 
weeks in the discussion of our values and priorities through the budget 
for next year, they will be laser focused on jobs and what we can do to 
help people keep and get the American dream by working hard and having 
a job and creating opportunities for themselves and their families.
  We have in front of us the opportunity to do something immediately to 
help people. We have a bill that includes a number of provisions. Some 
of them the President talked about in his State of the Union Address. 
That is a good idea; we incorporated it.
  We are talking about adding to the number of preforeclosure 
counseling offices. We have heard from lenders, we have heard from 
families and communities that the most important thing is to help 
people before they lose their house, before they are 90 days behind, 
when someone thinks they might be having a problem, or they know in 6 
months they are going to be faced with this situation of their payments 
going up--start now and work with lenders.
  We also know that most people--not most but many--do not answer the 
phone when the lender calls. They are worried about what is going to 
happen and do not think they have any way out, so they just wait. By 
helping people with counseling, we can stop a lot of this on the front 
end and help people refinance. For people trying to do that, it is 
tougher now because we have this complicated situation going on where 
they go to a lender, they get their mortgage, and that loan is then 
sold, and they don't know who owns it. So who do you talk to when you 
are trying to figure out how to make some accommodation to refinance? 
So, having counselors will help.
  We put money in the budget this year because it was a priority for 
our majority, adding $200 million to help people on the front end, so 
they could work

[[Page 2922]]

their way out of this. That is very important. Also, we allow State 
housing agencies to issue $10 billion more in refinancing bonds so 
State and local communities can help refinance homes. That is 
incredibly important, and something that has been widely supported on 
both sides of the aisle.
  We also have said that community development block grant money should 
be able to be used to purchase and rehab foreclosed properties, again, 
to help communities. We have to stop this. We have to stop this where 
it is. I think we can help create some certainty in the markets by 
helping families right now and creating also some confidence in the 
markets going forward. That can be done by using the CDBG dollars for 
communities to refinance and help families stay in their homes.
  Also, in a balanced approach, we have addressed what is happening on 
the business side for home builders. We agreed to include in our 
original package in the Senate--with the help of our distinguished 
Presiding Officer on the Finance Committee, one of our top leaders on 
the Finance Committee--a tax issue, net operating loss, to allow home 
builders to go back a couple of years to a better time and address some 
of their issues so there is not the pressure to sell their inventory, 
the unsold homes at the moment, and allow them a little breathing time. 
We have included that in this provision as well to support the industry 
itself. This is a very balanced package that took the input of the 
leadership on the Banking Committee and the Finance Committee which 
looked at proposals that were bipartisan--by the President, by a number 
of people--that had brought forward something that will help. We don't 
pretend it is a magic bullet. I wish there were one; I don't think 
there is. But it is a very reasonable approach that has been put 
forward.
  So here we are. We have this situation where colleagues now on the 
other side of the aisle, the leader on the other side of the aisle, 
comes forward with a package and says, this is what we want to do; we 
need to be able to pass these measures. Yet he has blocked us from even 
getting to the housing issue, to the bill itself. He has blocked us 
from getting there.
  I have to say, this reminds me of one other issue that is very 
related, and certainly is critical for me in Michigan, that has also 
been blocked time and time again, and which was a part of our original 
stimulus package we did in the Senate, of which I am very proud. I 
think it was a very good proposal, and I was proud of the work we did. 
In that proposal, we did something else that is very important right 
now for middle-class workers and families. We extended unemployment 
compensation benefits for families. It is viewed as one of the top two 
ways to stimulate the economy.
  If you are unemployed, you are going to take every dollar that comes 
in the door to pay the mortgage, to keep the lights on, the heat on, 
pay for food, and do the things you need to do for your family. We know 
it is stimulative. We also know, from a moral standpoint, it is the 
right thing to do to help families. That has been blocked as well. I 
see them related because we now have people who have been unemployed 
for longer periods of time than they ever wanted to be and who are in 
these situations. Maybe to keep going they did a home equity loan, and 
now that is not working and they find themselves in a situation of 
foreclosure. One of the ways we can help on housing is to give people 
some stability in their income.
  I heard colleagues, when we debated this on the other side of the 
aisle, saying, well, it is encouraging people not to work. I would love 
to have the President or the Secretary of the Treasury or colleagues 
come, if they have not talked to folks in their own State, to Michigan 
and talk to folks who want desperately to work, and are working at very 
minimal wage jobs right now to try to keep going.
  Nationally, we know there are 7.7 million unemployed people today who 
are competing for 4 million jobs, which is why I say the best long-term 
stimulus is a good-paying job. I am glad our budget is going to focus 
on jobs, but the reality is we want to help stabilize families right 
now because there are hundreds of thousands of people--millions, 
actually--in a situation where extending unemployment benefits for 13 
weeks, and an additional 13 weeks for high unemployment areas, is 
exactly what needs to happen. I hope we are going to address that as 
part of what we are doing here as well.
  In 2002, there was an extension of unemployment benefits, and the 
national unemployment rate is roughly the same right now. It was 5 
percent then, and it is nationally 4.9 now. We hear from the Bureau of 
Labor Statistics and from Goldman Sachs that by the beginning of next 
year the national rate is going to be 6\1/2\ percent--6\1/2\ percent 
nationally. I am in a unique situation because I will take that. Our 
rate right now is 7.6 percent in Michigan, so I would take 6\1/2\ 
percent. The reality is we are seeing a dramatic rise in unemployment, 
and more and more families are going to find themselves in a situation 
of not being able to pay the mortgage, not being able to do what they 
need to do for their families.
  I think this is a fundamental issue for families--for middle-class 
families. We are talking about people who work and who find themselves 
in a situation, because of a multitude of issues--where the job is not 
there anymore--where they need help to continue to keep their family 
together, and keeping their house is incredibly important. I have 
72,000 people in Michigan who are scheduled to lose their unemployment 
benefits by June. I have over 10,000 people a month who are losing 
their unemployment benefits, and we don't have the jobs for them. This 
is incredibly serious.
  So I am, one more time, asking my Republican colleagues not to block 
that when it comes to the floor. It is a very important part of the 
economic picture for people, and it is time for us to get about the 
business of fixing the economy, of supporting efforts that are going on 
in the economy for businesses, for individuals, for families, and for 
communities. There is a great sense of urgency that we need to have, 
because that is what families feel every single day. I am hopeful that 
when Senator Reid brings the next motion in front of us to be able to 
go to a bill to deal with housing, colleagues will have that same sense 
of urgency and join us in being able to do that.
  Mr. President, I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. If the Senator would withhold her 
request.
  Ms. STABENOW. I will withhold my request for the distinguished 
Senator from New Jersey.
  The ACTING PRESIDENT pro tempore. The Senator from New Jersey may 
proceed.
  Mr. MENENDEZ. Mr. President, I thank my distinguished colleague from 
Michigan for her attribution, and I rise this morning to echo some of 
the comments of my colleague and others who have lamented what the 
Senate did yesterday.
  We have a situation across the landscape of this country in which our 
economy is headed onto the shoals of a recession, with some economists 
believing that we are there already, and the very essence of that 
recession, which hurts American families in real terms, stems from the 
housing crisis that exists in this country. Instead of having responded 
to the storm clouds of the crisis that were on the horizon a year ago--
in the Banking Committee, of which I am privileged to be a member, I 
said we are going to face a tsunami of foreclosures--the administration 
said, oh, no, no, no, that is an overexaggeration. Well, unfortunately, 
we haven't even seen the crest of that tsunami.
  The reality is that as the administration hit the snooze button then, 
instead of responding to the oncoming crisis and limiting its scope, 
yesterday our colleagues on the other side of the aisle did exactly the 
same thing, opposing the majority leader's opportunity to make sure we 
address the housing crisis that exists in this country in a way that 
not only saves American families from having the American dream become 
an American nightmare, but

[[Page 2923]]

also, at the same time, in dealing with the very core underpinnings of 
where this economy is headed--in a negative direction--and turning it 
around. That is what yesterday's vote was all about.
  Everyone except President Bush and some of his colleagues seems to 
understand that we are in some very serious economic situations. I saw 
the President's press conference yesterday. Even as gas prices in some 
parts of the country are already at $3.60 a gallon, when he was told 
what it was going to do when it hits $4 a gallon, he said: What $4 a 
gallon?
  Well, I guess if you never have to pay for gas, you are totally 
disconnected from the realities of average Americans. But, yes, that is 
where we are headed. He doesn't seem to understand we have a serious 
economic situation.
  But let us get real. It isn't largely those of us in this body who 
understand what is going on, it is the American people, across the 
landscape of this country, who are feeling the effects of this downturn 
firsthand. They are the ones receiving foreclosure notices; they are 
the ones struggling to balance their checkbooks; and they are the ones 
reaching out to Congress for help.
  Yesterday the majority leader tried to bring up a bill to help those 
struggling in this economic downturn, and yesterday Republican Members 
of this Chamber blocked that bill, in essence blocking help for those 
American homeowners who are on the verge of losing their home. The 
Foreclosure Prevention Act gets to the heart of our economic crisis--
that is, the housing market.
  As I and others on the Banking Committee have said, the downward 
spiral of the housing market is the reason we are facing such a 
difficult economy. We cannot think we will get the Nation back on track 
without legislation to address the weaknesses in the housing market. 
The bill that Republicans blocked would have done one major thing: Keep 
families in their homes.
  Beyond the economy, this goes to the very heart of our families' 
ability to grow and prosper. Home. Home is where we are brought from 
the hospital when we are born. It is home we come to. Home is where we 
are nurtured as we grow. Home is where we get to celebrate, most of the 
time, our birthdays. Home is where, in fact, we also share moments of 
sorrow. Home is where we often take care of a sick or dying loved one. 
Home is the very essence of the American dream.
  Beyond what it means to us and our families in the context of the 
development of our lives, home is also the single foundation of the 
individual American's economic ability to prosper. It is the single 
biggest asset most Americans will have in their lifetime. It is the 
asset they will use very often to borrow in order to educate their 
child and send them to college. It is the asset they may draw upon if 
they have a significant illness. It is the asset they will rely upon as 
they grow older and seek retirement.
  When it means so much to us as a society, both in the personal 
context of what home is and the values that surround it mean, and when 
it means so much to us individually and collectively as communities and 
as a nation in terms of our economy, it is unthinkable that we could 
not get progress on a bill that saves the very essence of that American 
dream.
  Yet that is what happened yesterday in the Senate. The bill that was 
up provides funding for counseling in order to reach and help families 
at risk of losing their homes. Many American families are sitting 
around the kitchen table looking through their mortgage bills and their 
finances and those bank notices. Many of them have turned to their 
credit cards to float their personal debt.
  They are lost. They do not know where to turn. And these counselors 
who were part of the bill could help offer them real solutions and 
options to help in averting a foreclosure. Does not that make sense? It 
does to me. That is what the bill allows.
  The bill also provided funding to allow communities with high 
foreclosure rates to access an existing program, community development 
block grants. With these funds communities can purchase foreclosed 
properties for rehabilitation, rent, or resale.
  There are some who have said in this debate: Well, you know, those 
borrowers, they are responsible for making their own decisions; it has 
nothing to do with me. Well, for every foreclosed property in a 
neighborhood, those who have their properties adjacent to or nearby 
within that neighborhood have a decrease in value. Having a series of 
foreclosed properties, as we have seen in some parts of the Nation, 
having communities abandoned does not benefit anyone. It decreases 
surrounding home values; it attracts crime and vandalism.
  The bottom line is that foreclosures destabilize neighborhoods.
  The funds in this bill, which the Republicans have not allowed to 
move forward, allow communities to stop the spiral before it starts. 
Does that not make sense?
  The bill's most controversial piece--there are many others, many 
others that I think were pretty universal; that is, that should have 
been supported. But its most controversial piece put in by my friend, 
Senator Durbin, his bankruptcy provision would, in essence, change the 
bankruptcy law to give judges the discretion to modify loan terms for a 
primary residence, in essence, where you call home.
  Right now the law allows for modifying those loan terms for vacation 
homes, something that is not your primary residence. So you can have a 
vacation home, a time share; you can have any other second home under 
existing law. If you have some financial trouble, you can actually get 
the bankruptcy judge to modify those terms. But when it comes to your 
core home, your principal residence, the place where you nurture and 
grow your family, oh, no, you cannot do that.
  Does it make sense that we have greater value for a vacation or 
secondary home and less value for the primary residence of American 
families? That would be the equivalent of something along the line of: 
You can get a modification on Camp David, but you could not get any 
modification at 1600 Pennsylvania Avenue.
  Now, of course, in this particular case, that example does create so 
vividly for people what we are talking about. In either case, the 
President does not have to pay a mortgage on either of those properties 
because they are owned by the American people. But my point is here is 
the primary residence, you cannot get any help. The secondary 
residence, you can get help. It does not make any sense. The thing is, 
most Americans do not have a Camp David, and they are asking for help 
to save their house on Main Street. This makes sense.
  Now, the majority leader and Senator Durbin and others worked out a 
compromise to make sure this provision that was in the bill was even 
more narrowly tailored. More narrowly tailored? How so? Under their 
compromise, the only families who could request a court-ordered change 
to their mortgage are families who would otherwise lose their homes to 
foreclosure.
  But that was not even all. It went on. It went beyond that and it 
said: Only those families who can pass a strict means test, their 
ability to pay in bankruptcy, and therefore can prove they cannot 
afford their current mortgage are eligible. That was not it. They went 
beyond that. They said: Only families who are currently struggling with 
what type of mortgage? Any mortgage? No. Only nontraditional and 
subprime loans, the very essence of the types of mortgages that have 
created the crisis in America that were spun out there in a way, 
attracting people into mortgages without the appropriate credit 
counseling, that they should have never been attracted into anyhow.
  So the universe was further limited, further limited. And 
furthermore, to give the lenders some additional guarantees, if the 
families, after the bankruptcy judge made some decision to make an 
accommodation in that loan, if they sell their home after that mortgage 
modification, any increase in the home value would go back to whom? To 
the lender. So lenders would have a chance to recoup the loss in that 
home value.

[[Page 2924]]

  Now, let me say, there is going to come a point in time that lenders 
understand that as values continue to go down and down and down, when 
they foreclose on a piece of property, they are not even going to get 
that which they, in fact, loaned against.
  Is it not far better to be able to sustain a family in their home and 
to help that value reestablish itself over time and grow and be able to 
make the lender more whole than to put that family out on the street? 
Lenders will come to that conclusion at some point.
  So these provisions, each time more and more and more narrower, so we 
were talking only of a universe of those people who were being hurt, 
had no financial ability to pay the mortgages that they should have 
never gotten into, that was offered by the industry to lure them in, 
lower interest rates, and then reject afterwards, and with the ability 
to recoup any value going back to the lender, all conditions that do 
not exist on a secondary residence.
  None of the things I talked about are part of the law as it relates 
to a secondary residence; they are all about only this limited prime 
universe, and, of course, anyone who got a conventional mortgage, 
anyone who did not get a subprime mortgage or a nontraditional 
mortgage, they were totally, under the existing law, going to continue 
to be under the existing law. So we had a narrow universe.
  This provision that was in the bill blocked by Republicans was not 
added to harm the banking industry, was not added to hurt mortgage 
brokers, it was added to help homeowners save their home. This 
provision is only one of the ways we can help a significant number of 
homeowners without costing the taxpayers a dime.
  It would help more than 600,000 families in bad loans keep their 
homes across the landscape of the country. It would help over 14,000 
families in my home State of New Jersey avoid foreclosure. That would 
be a savings of almost $5 million in home values. But if we do not do 
anything, if we sit back, we risk losing much more. In New Jersey over 
the next 2 years, we expect more than 57,000 homes to be lost to 
foreclosure. That means 57,000 families who will have to hand over 
their keys to their home, 57,000 families who will be forced to say 
goodbye to the place where they were nurtured and comforted, the place 
they lived with the good and bad, the place they came home to every 
night, the place they call home.
  In the words of families who know what it feels like to lose a home, 
they will feel like they will have lost everything. But this is not 
even about those homeowners. Foreclosed properties have a ripple effect 
on surrounding homes and the community at large.
  In New Jersey, these 57,000 foreclosed homes could cost a $10,000 
decrease in the home prices of over 2 million surrounding homes. And, 
overall, that loss would be about $19.6 billion in home values. That is 
just in my home State.
  The fact is, no one is immune from the ripple effect of this housing 
crisis. The potential loss to families and communities in New Jersey 
and across the Nation is far too great for us to sit this one out. I, 
personally, cannot stand by while Members of the Chamber play games 
with my home State and with the American dream of millions of people 
across the landscape of this country.
  Collectively, we have much too much to lose. I do not know if other 
Members of this Chamber do not watch the news, or they do not get the 
same memos, but foreclosures are going to happen nationwide if we do 
not do something. Analysts anticipate that 2 million American families 
will lose their homes over the next 2 years, and 40 million of their 
neighbors will see their home values decline due to projected 
foreclosures.
  When those neighbors see their home values decline as a result, their 
ability to borrow against their home for their kid's college education, 
to have the buffer in case of a major illness in their family or 
themselves, their ability to do all those things will be affected.
  It is not time to play games and use delay tactics. The more we 
delay, the more homes we risk losing. Approximately 20,000 families 
lose their homes every week. Every week, 20,000 families see the 
American dream slip away. These families are struggling. They are 
trying to pay their mortgages, but they cannot. Most of them cannot 
sell or refinance. Many of them have found, in fact, the value of their 
properties is less than the mortgage amount. They need other options, 
and they are looking to the Federal Government and those who lured 
them, the lenders, as the first place for help.
  The fact is that help simply is not there. Loan servicers could 
modify the loans themselves. They do not have to wait for a bankruptcy 
judge, would not have to wait for the Congress to act. Under existing 
laws, the loan officers could modify loans to make them more affordable 
and simply are not doing so in sufficient numbers.
  A report by Moody's found that loan servicers have only modified 3.5 
percent of mortgages that increased to higher rates. These are 
opportunities to keep people in their home, and instead of dealing with 
the higher rates, maybe adjust those rates in a way where they would 
still get a borrower who can continue to pay, wait for the value of 
that home to build up. But they would not make as much as in the loan 
they lured these individuals into. A report by the Center for 
Responsible Lending estimates that the administration's plan that has 
been put out there as the solution to this problem, to streamline 
modifications, is only going to help about 3 percent of homeowners, 3 
percent.
  As a member of the Banking Committee, I asked the Secretary of the 
Treasury, Secretary Paulson, when he was before us about 2 weeks ago, 
and yesterday Chairman Bernanke, the Chairman of the Federal Reserve: 
Are we willing to say 97 percent of the projected 2 million homes that 
are going to be lost in America, that is a market correction?
  Are we willing to accept that 97 percent of those 2 million homes 
that will go in foreclosure, that is acceptable as a societal value? 
You hear a lot about family values here. Well, I do not know of any 
greater family value than the place we call home and a place to call 
home.
  Are we willing to say we will, in our overall economy, accept a 97-
percent foreclosure rate as it relates to the nature of our economy and 
where it is headed, an economy that is stagnant in terms of growth but 
rising in terms of consumer costs, on gas--notwithstanding the 
President's lack of knowledge of it--on energy costs as a whole, on 
rising food prices, and lowering home values? Are we willing to say 
that?
  Are we willing to say to 97 percent of 2 million families: Well, that 
is a market correction. Yet we heard the rush to get the Federal 
Reserve to respond to Wall Street and the concerns of shareholders. How 
about homeowners? How about homeowners? That is simply not good enough.
  Thousands of New Jersey families have already gone into foreclosure. 
Tens of thousands more are behind on their mortgage payments. How many 
more are we going to watch have their American dream turn into the 
American nightmare so many are facing. Let me put a face on these 
statistics: Charmain Perryman, a resident of Nunellen, NJ, she came 
home last fall to an eviction notice taped to her front door. Perryman, 
like so many others, had an adjustable rate mortgage that had reset not 
once but twice, rising from 7.5 percent to 11 percent. She was on the 
verge of losing her home. Luckily her story has a happy ending. A 
community development organization, similar to those we want to help 
through community development block grant opportunities, is buying her 
home from the bank and working out a payment schedule so she will be 
able to stay in her home and make responsible payments.
  But there are too many families across the landscape of New Jersey 
and the country that are not realizing that opportunity. That 
foreclosure notice taped to their door will soon be replaced by a 
padlock on their door.
  The Foreclosure Prevention Act, of which I am a proud cosponsor, 
offers real solutions for the American family,

[[Page 2925]]

neighborhoods, and the entire economy. It would help stop the bleeding 
in the foreclosure crisis.
  I ask Members in the Chamber to think about these families when, 
hopefully, they have an opportunity to vote again. What happened 
yesterday was embarrassing. I know some camouflage is being offered 
that, well, we were not going to be allowed to offer certain types of 
amendments. The reality is, as the majority leader made clear, all 
relevant amendments would be allowed. Families who are struggling, at 
the end of their rope, 20,000 families a week losing their homes, don't 
want to hear about some amendments that ultimately had nothing to do 
with the very essence of the housing crisis as the reason they are 
getting put out of their homes. All we are saying is, come to the 
table. Offer relevant amendments. Let's have a real discussion about 
how to help families avoid foreclosure. With 20,000 families losing 
their homes every week, 10 million on the near horizon; with an economy 
that is bleeding dramatically and that could go, if we do not stem the 
hemorrhaging, into a deep recession that would have long-term 
consequences for us as a Nation, both as individuals, families, 
communities, and collectively, it is not something with which we can 
afford to play procedural games.
  I look forward to next week having a new opportunity, fresher minds' 
reflection, and an understanding of the grave consequences before us, 
and an opportunity to rescue--not to do a Government bailout but to 
rescue--the opportunity of the American dream being snatched away by 
the American nightmare.
  I yield the floor.
  The PRESIDING OFFICER (Ms. Stabenow). The Senator from Louisiana.


                         Damage From Hurricanes

  Ms. LANDRIEU. Madam President, I want to follow up on the remarks of 
my colleague from New Jersey who has been an extraordinary leader in so 
many ways, particularly on the housing issue. I thank him and associate 
myself with many of his remarks.
  I rise to speak about the housing situation and to try to bring some 
comparisons between the difficulties around the country and, in some 
places, downright despair because of the foreclosure situation and 
pending bankruptcies. I also want to remind my colleagues that there is 
still a tremendous need on the Gulf Coast relative to the housing 
crisis and ask my colleagues not to lose sight of the difficulties that 
we are still having in Texas, Louisiana, Mississippi, and Florida.
  I know it is 2008. The storms of Katrina and Rita and Wilma are long 
gone in some people's memories but not in ours. These storms in many 
ways were just like yesterday, not just the hurricanes but the levees 
that broke and caused unmitigated disaster and despair.
  I thought it would be helpful to first examine communities with the 
highest foreclosure rates, and with the Senator from Michigan in the 
chair, the first area I want to speak about is in Michigan--Detroit, 
Livonia, and Dearborn, which I am sure she is familiar with--which 
happens to be the metropolitan area that has the highest percentage of 
foreclosures. This chart shows you the top 10 communities in the Nation 
and the numbers of homeowners facing bankruptcy or foreclosure. The 
number of homes is both striking and startling. If you think about 
foreclosure, the damage is not just done to the family losing their 
home or the individual but to the neighborhood as a whole. If it is so 
concentrated, as it seems to be in some particular counties, it has 
dramatic economic effects on the whole community. That is why 
Democrats--and I know some on the other side are sensitive to this--are 
trying to fashion a package that recognizes that while we don't want to 
bail out improper behavior, we most certainly don't want to bail out 
illegal behavior, we absolutely need a housing bill that recognizes 
that foreclosure does not just involve a single family, but it impacts 
an entire community, particularly in Michigan where some of this is 
probably associated with the downturn in manufacturing jobs. People are 
not only losing their jobs but losing their homes.
  While the causes of our loss were very different, it wasn't due to an 
economic downturn. It wasn't really due to subprime lending practices. 
Our problems were due to the levees collapsing when they should have 
held and the ensuing floods that wiped out hundreds of thousands of 
homes, which I will get to in a minute. But for purposes of my brief 
remarks this morning, these are the top 10 areas facing foreclosure 
problems in the United States, in Michigan, California, and Nevada.
  You have heard people say this crisis is limited to places within 
about seven States. But for comparison, I would like to show the 
counties and parishes in the Gulf Coast that have the highest rates of 
housing loss due to the floods. This is an extraordinary comparison. If 
I could ask the staff to hold up the other chart next to this one so 
people may see.
  We are talking about the mortgage crisis, 4.9 percent in Michigan and 
4.9 percent in Stockton, CA. Next to it is the actual numbers. So 
41,273 households in the Detroit area are in some part of the 
foreclosure process; down in Miami, FL, 2.7 percent. That doesn't sound 
like a big percentage, but it is 25,000 families. That is a lot of 
families.
  But let me show you on the Gulf Coast what has happened to us over 
the last 2 years. In St. Bernard Parish--this is major and severe 
damage. This is the percentage of homes that were unlivable, 78.4 
percent; in Cameron Parish, which is a small parish in the Southwest, 
71.8 percent; in Hancock County, MS, 69.8 percent; in Plaquemines 
Parish, LA, 57.5 percent; Orleans Parish, 55.9 percent; Harrison 
County, MS, 34 percent; Jackson County, MS, 34 percent; St. Tammany 
Parish, 25 percent; Jefferson Parish, 19 percent; and Vermilion Parish, 
13 percent. There are no other percentages like this anywhere in the 
country.
  My point is that while I am glad address the foreclosure crisis for 
the country and am proud to help other regions--and I most certainly 
understand the disaster associated with foreclosures, particularly if 
they are not really of your making. You took out the right kind of 
loan, you put your money down, but you lost your job or your child got 
into an accident, and because you don't have health insurance, you have 
to file for bankruptcy, and people are taking your home. And that is 
the last thing people should be doing. We should be helping pay medical 
bills and getting people jobs and not taking their homes. I am not here 
to bail out reckless behavior. But I most certainly think Congress 
should step up and help middle-class families struggling to keep their 
homes. But for comparison's sake, I want people to get their eyes on 
what we are still going through on the Gulf Coast.
  We have parishes where 78 percent of the homes are unlivable and 
people are struggling to keep these homes. What the Federal Government 
has done has been substantial, but it is not adequate and not enough. 
While we have sent Community Development Block Grant funding down to 
many of these families, some of them still haven't seen a penny. Some 
of them had to deduct their insurance from that. We still don't have 
tax relief for individuals who took a casualty loss deduction and are 
now being taxed on their Community Development Block Grants. So people, 
in addition to not receiving their full complement, not getting their 
full insurance money, are now being pushed to a higher tax bracket 
because this Congress has failed yet to give them tax relief that they 
desperately need.
  So as we put this housing relief package together for the Nation, 
let's think about what can be done in Mississippi, Florida, Texas, and 
Louisiana, where, in some places, 50 percent of families or more have 
lost their homes. Some people are back. Some people are struggling. But 
you might have a neighborhood, let's say, in St. Bernard--I was there 
last week--where there is one home that is fixed and inhabited. Every 
other home on that block is vacant. Think about that. This person is 
happy to be back in their house. But when you ask them what

[[Page 2926]]

was the value of that house before the storm, it used to be $450,000. 
Today that is a very interesting question. What is the value of a 
three-bedroom brick home on a block where every other home is empty? 
That is how badly people want to live in their neighborhoods and 
communities. These are not communities necessarily below sea level. 
Some of these places I describe are above sea level.
  If the Senate continues to consider the Foreclosure Prevention Act, I 
have some specific suggestions as to how we can make the bill more 
relevant for families struggling on the Gulf Coast. First, we need tax 
relief for Road Home grant recipients. We need it for the people who 
have lost their homes. We also need to craft the legislation so that 
families can use the bonds allocated in the bill to purchase or 
refinance a home that was destroyed in the 2005 hurricanes. Also, the 
Community Development Block grant funding formula in the legislation 
should account for communities that have lost significant numbers of 
homes in the 2005 hurricanes. Finally, the bill provides a unique 
opportunity for us to increase home ownership in hurricane-impacted 
areas.
  I wish the Presiding Officer the best in helping one of her 
communities. But please don't forget us. I don't have Alabama numbers, 
but the hurricane did hit Alabama. We do have those numbers on another 
chart. But for those of us on the Gulf Coast, this is critical. And, 
yes, another hurricane season is starting this spring. Let's get some 
help to these people and fashion a bill that we can pass that will 
bring real relief to American homeowners everywhere.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. Madam President, I thank my colleague for raising some 
of those issues. Our area was hardest hit in one area I visited not 
long ago, and just now we are seeing houses come back. It has been sad. 
I think that it has taken this long to move, going on 3 years, and you 
wonder why we couldn't make that happen earlier. A lot of money has 
been spent on interim housing and other things, that had it been spent 
in a way that goes directly to housing, to building new housing in safe 
areas and raised up so we wouldn't have a risk in the future, we would 
have been a lot better off. I know it is hard because I have been there 
and I have seen how hard it is to move the process in a faster way. I 
hope in the future we will learn to do it better.
  I thank my colleague for raising it.


                                 Budget

  Madam President, all of us realize our country faces a fiscal crisis. 
Unless we take action, we are going to see dramatic damage to our 
economy in the years to come. With the retirement of the baby boomers, 
our current spending levels on Social Security, Medicare, and Medicaid 
in particular are simply unsustainable.
  Absent reform, the Social Security trust fund is expected to be 
exhausted by 2041, the Medicare Part A trust fund will be exhausted in 
2019--only 11 years from now--and the cost of these Federal programs 
will actually exceed the current budget. The resulting deficits will be 
so large that many predict the Government will not be able to borrow 
its way out of the problem. So we do need to take some steps now.
  Some may think these grim predictions, these projections are not 
accurate. Maybe things are not as bad as some are projecting. But I do 
not think anybody can doubt we are moving to a period of time when our 
ability to fund the entitlement programs, plus our general 
expenditures, will be beyond our capacity--really beyond our capacity. 
It becomes more difficult each year we delay in getting there.
  Next week we will be marking up, in the Budget Committee, this year's 
budget. I have served on the Budget Committee for a number of years. 
Last year, we had a budget, and it was a bit discouraging. We have had 
discouraging budgets for some years, frankly.
  I want to make some remarks to clarify what I think is a problem. 
Some would say it is partisan, but I think we might as well talk about 
it because, prior to the last election, our Democratic colleagues 
vigorously attacked the Republicans for not fixing our fiscal 
situation. They said: You are in the majority. There was, in truth, 
much merit to those criticisms. I do not think the Republican majority 
did a very good job, and people were not happy about it. It was a 
factor in the last election.
  In fact, in the last election, 2006, when my Democratic colleagues 
were promising to do better--and they achieved a majority in both 
Houses of Congress--the polling data showed the Democratic Members of 
Congress were believed to be better able than Republicans to confront 
this deficit problem we were facing. So it was a factor, I think, in 
the last election.
  I note that over the last several years substantial progress was made 
about the deficit. We do not need to be too negative here. The deficit 
fell from $413 billion in 2004 to $162 billion last year. That is more 
than half--well more than half--that we reduced it. I, frankly, was 
very hopeful that if we could continue to contain the growth in 
spending we would see that deficit continue to fall.
  But two things have happened that, frankly, make this a difficult 
year. First, the Congress voted for a $170 billion stimulus package to 
send everybody checks and other things--$170 billion. Last year, our 
deficit was just $162 billion. This year we added on top of all of our 
spending another $170 billion.
  Since we were already in deficit, where did we get the money to pay 
the $170 billion? Nobody disputes it: Every single dollar of the $170 
billion proposed is paid for by more debt. It is borrowed. It is going 
to be a debt we will carry and our grandchildren will carry, frankly. 
And we will pay interest on it. So this year's budget is going to look 
bad, and it is going to be difficult because we have another $170 
billion, and that is more than the deficit of all of last year.
  Secondly, we still have very considerable expenses related to the war 
on terrorism. That hurts. But that was included in last year's deficit.
  The next thing--that is troubling for us all--is the economic 
slowdown. We tax the American people pretty heavily--frankly, more than 
I like to see them taxed. We tax upper income people with even higher 
marginal tax rates than we tax lower income people.
  When the economy is doing well--and somebody should do a better study 
about this, I think, than has been done to date--when the economy is 
doing well, upper income people tend to do very well. So their 
business--maybe they own 10 or 12 of this or that outlets in some city. 
The economy is booming. The CEO, the owner, makes $300,000 a year, and 
he pays that 35-percent marginal income tax rate to the Federal 
Government.
  Now, if the economy slows down, instead of making $300,000, he makes 
$100,000. It looks like a lot of money, but it certainly will not 
benefit the U.S. Treasury nearly as much because the marginal rate on 
$100,000 will be lower than 35 percent. And he will only be paying on 
$100,000.
  So I say, we have created a tax system that has tied itself to a 
growing economy, and we are not in a growing economy this year. It 
looks like the economy is going to slow down, and it is troubling. So 
we cannot project the same level of revenue to the U.S. Government that 
we had the last several years, which had been surging. It was 13 
percent, 11 percent, 10 percent the last 3 years in growth. So we are 
facing a difficult issue.
  My Democratic colleagues, during this past election, promised to cut 
spending and do better than those who had been in power. My very fine 
colleague Senator Conrad--who I think, if he had more support among his 
majority colleagues, would be able to do more than he is doing--said 
these things last year. This is the chairman of the Budget Committee:

       So for those of us who are concerned about spending, sign 
     me up.

  On ``60 Minutes'':

       We need to be tough on spending.
       I think most of it is going to have to be on the spending 
     side of the equation, given the magnitude of the baby boom 
     generation.

[[Page 2927]]

       I think we should sharply inhibit the growth of spending.

  Well, those were some promises that were made last year. They have 
also promised and made a big to-do about the tax gap.
  Now, the debate over the tax gap was simply this: Well, we don't want 
to promote in our first budget--last year, that was the first 
Democratic budget--a tax increase, so what we will do is we will use 
the same current tax rates, and what we will do is collect more and get 
those people who are cheating. We had reports from the IRS that said 
that was not going to work. We had experienced Senators, such as 
Senator Grassley, former chairman of the Finance Committee, who said: 
That is not going to work. Senator Gregg, former chairman of the Budget 
Committee, and now ranking Republican on that committee, said: It is 
not going to work.
  Oh, but they used that argument. When the budget was passed, this 
extra income they projected would be received into the Treasury as a 
result of enhanced enforcement by the IRS, that that was going to help 
them, allow them to spend more money and not increase the debt. OK. 
That was the debate we had last year when we passed a budget: a 
commitment they would raise more money by collecting from those who are 
not paying as much as they are supposed to pay. It did not happen. I 
will talk about that in a minute.
  But I want to say this: A budget is a defining document for a 
political party. It is organized 51-49 with a Democratic majority here. 
We passed a Budget Act a number of years ago--because we could not pass 
budgets because of filibusters--to eliminate the filibusters during 
budget debates. You can pass a budget with a majority vote. So the 
majority party, as the Republicans could do in the past, was able to 
pass a budget without support from the other party. Anybody who is in a 
majority in the Senate ought to be able to pass a budget. It also is a 
document that says something about the priorities and the direction 
that the majority wants to see the country go: how they are going to 
get there. It is a very important, defining document.
  Senator Gregg, last year, was very eloquent. He is such an 
experienced and wise Senator, who watches this carefully. He has 
studied these issues carefully. He predicted their budget was not going 
to add up last year when we passed that budget. But they insisted that 
it would work, as it was passed, and history now can tell us what 
happened. Looking back, it is clear--even in a period of good economic 
growth last year--the promises that were made were not kept. They told 
us they would cut the existing spending or reduce the rate of increase 
in spending. Yet last year the majority attempted to add $23 billion to 
President Bush's discretionary spending request, which already 
reflected a $60 billion increase.
  So President Bush's budget had a $60 billion increase in 
discretionary spending. This excludes Social Security, Medicare, and 
the military--or the war supplementals. It excludes those entitlement 
programs. He proposed $60 billion in increases. Our colleagues passed a 
budget in the Senate that was a $23 billion increase above that.
  Contrary to cutting spending, I would suggest my colleagues did not 
fulfill their promises, but actually proposed a budget that increased 
spending 50 percent more almost--40 percent-plus more than President 
Bush proposed. Over a 5-year period, that budget would have hiked 
nondefense discretionary spending by $205 billion. But we did have 
somewhat of a battle last year, and as the great omnibus bill came 
through at the end of the year--that monstrosity--President Bush 
threatened a veto, and he forced a cut in spending. Republicans in the 
Congress backed him up on that veto threat, and that was achieved at 
the end.
  It appeared that we had a spending program that was more akin to 
President Bush's $60 billion increase than to an $83 billion increase 
as proposed by my Democratic colleagues. But it wasn't all that good, 
frankly, because, as has been the case for decades, there are other 
options to get around the budget--gimmicks and devices. By abusing the 
emergency spending designation last year, the majority party was able 
to spend an additional $24 billion anyway, by calling it an emergency.
  If we have a budget and we agree to commit to that budget and 
legislation is proposed that goes above that budget, it is subject to a 
point of order, and you have to have 60 votes at least before you can 
spend it. But if you can get enough votes, if you can get 60 votes, you 
can just declare something an emergency, and you can put the money in 
the emergency spending with 60 votes, and it doesn't count against the 
budget because you have declared it an emergency. So that is on top of 
the deficit budget we have.
  Also, there were great promises that any new spending programs would 
be offset. This is the pay-go rule. How do you offset a new spending 
program? You can cut spending somewhere else or you can increase taxes. 
That is the only way to do it under pay-go. But our colleagues have 
often--this pay-go rule that had been so much ballyhooed here by our 
colleagues--they either ignored it or gimmicked the pay-go rules last 
year. Such gimmickry resulted in $143 billion in deficit spending.
  For example, let's look at the SCHIP reauthorization. I hope my 
colleagues will just think about this. I take no pleasure in this. I 
have seen Republicans do this too. But this is really a blatant 
example. The bill we passed last year increased funding for SCHIP, the 
insurance for children, increased spending over 5 years by $35 billion. 
But in fiscal year 2013, that spending level was decreased by 85 
percent. Now, I ask my colleagues: Why? Why would we dramatically 
increase funding for the SCHIP program and then in an outyear--2013--
slash it by 85 percent? The reason is they score the cost of it over 5 
years. So for 4 years we would have a dramatic increase, and in the 
fifth year they make a dramatic 85-percent reduction. The question is, 
Why was that done? So it would fit within the score, the 5-year score. 
But what is really going to happen? Does anybody in this Senate think 
that in 2013 we are going to cut the children's insurance program by 85 
percent? Of course not. This is a gimmick. It was a gimmick to make it 
fit within the budget, to appear not to be in violation of the pay-go 
rule when, in fact, we know we couldn't possibly reduce that program by 
85 percent.
  Not only does the pay-go rule fail to control spending, it will put 
us on an almost guaranteed path to large tax increases. Under the 
Democratic budget that passed last year, any existing tax cut, any 
existing lower tax rate that expires sometime in the future would be 
allowed to expire--for our colleagues, to continue those current levels 
of taxes, to continue them at a lower rate is considered a tax cut. So 
to extend the dividend cuts, extend the capital gains cuts, extend the 
lower rates for lower income workers, it amounts to, under their 
definition, a tax cut. It takes 60 votes under this pay-go rule to pass 
a tax cut. President Clinton said he opposes these tax cuts that 
President Bush passed, and I think that represents the majority view of 
my colleagues, so we are looking at a period of time that we could see 
additional increases in taxes, and to keep them at the current rate, 
they will score it as a tax cut. We will either pay for it under this 
definition by reducing spending or increasing taxes somewhere else. We 
are not going to reduce spending because we have already seen the 
majority party has proposed a budget that spends more than President 
Bush proposed, and he proposed an increase in spending.
  It is sort of a perverse little deal. Under this pay-go rule, my 
colleagues assume that spending will go up each year, so that doesn't 
have to be offset. It goes up at a certain rate, but they say if you 
extend the current tax rates, that is a tax cut. It provides an 
incentive and an advancement of spending and a detriment to tax 
reductions.
  Now, with regard to the tax gap, it would be pretty humorous, 
frankly, if it weren't so serious. Their proposals on this tax gap, 
this idea that they are going to raise more taxes by having the

[[Page 2928]]

IRS increase collections, was one of the wildest political chimeras 
this Senate has seen in quite a number of years. As I have indicated, 
senior Senators such as Senator Grassley and Senator Gregg pointed out 
how it was not going to work, and they cited the IRS and other things 
that showed it, but we passed it anyway. We scored the budget on the 
assumption the money would come in. It was going to raise $300 billion 
over 5 years, just in enhanced collections. So we assumed we were going 
to enhance tax collections by $300 billion over the next 5 years last 
year when we passed this Democratic budget. But we see now, from the 
best estimates we have for the effort of closing the tax gap, it is not 
going to raise $300 billion, it will raise $200 million over 5 years, 
$40 million a year--hardly enough to impact the overall deficit 
situation we are in at all. The House has recently passed legislation 
that actually is going to widen the tax gap, unfortunately.
  Our colleagues promised to enact middle-class tax relief, but that 
has not been done. There has been no action to extend the marriage 
penalty relief we have today, the $1,000-per-child tax credit we have, 
the 10-percent tax break credit--the 10-percent tax bracket for low-
income workers, or any kind of estate tax reform. So we have had that 
talk, but we haven't passed it, and we are heading to the point where 
we are going to have a pay-go problem to even extend these current 
rates, and they are going to score that as a tax cut and demand to know 
where we are going to get the money from. The capital gains reduction 
that virtually every economist agrees results in increased revenues to 
the Government from capital gains taxes will expire in 2010. The 10-
percent tax bracket--the low 10-percent tax bracket that didn't 
previously exist but was created as a result of President Bush's tax 
cuts would expire, and it would go back to 15 percent for lower income 
individuals. Setting a dividend rate at 15 percent will end; it will go 
back to the marginal rate for many people of over 30 percent. Does 
anybody think that is going to help the stock market to increase--
double--the rate for dividend taxes you have to pay? So the best scores 
we have are that we are heading toward a $900 billion tax increase that 
will impact directly--and everybody indirectly--116 million taxpayers.
  What about entitlements? The majority party talked about doing 
something about entitlements. I think Senator Conrad truly believes we 
should do something about it. He has worked hard at it, but he has 
never gotten the support on his side of the aisle to ever make a dent 
in it. We have to think about entitlement spending.
  At this point in time, entitlement spending--Social Security, 
Medicare, Medicaid--exceeds half of our budget, half of what we spend. 
That number is growing. Some have it up to 100 percent of the current 
budget level in a number of decades unless something were to change. At 
least President Bush consistently has offered programs to improve and 
contain the growth in these programs. He talked about Social Security 
reform, and the door was slammed shut. My colleagues wouldn't even 
discuss it. He has talked about Medicare and Medicaid. Nobody would 
talk about that last year. It was absolutely not a part of last year's 
budget.
  So I think this is irresponsible. If we are heading on a glidepath 
that takes us to trillions and trillions of dollars in debt, driven 
overwhelmingly by the 6, 7, 8 percent increases annually in Medicare 
and Medicaid, why can't we begin to reduce that growth rate and bring 
it more close to the inflation rate of 2, 3 percent, maybe 4 percent, 5 
percent increases each year?
  Finally, I thought one of the most effective critiques of the 
Republican majority leadership in 2006 and the years before was we 
weren't passing our appropriations bills on time. They had too much 
pork in them. Stuff was put in them in the dead of night, and we didn't 
have a chance to read it and do anything about it. That was the valid 
criticism of the Republican majority.
  What happened this past year after our colleagues won the majority, 
claiming they were going to do better? Did they do better? Well, we 
have 12 appropriations bills each year. We should enact each one of 
them individually. They should be brought up on the floor one-by-one. 
There should be an opportunity to offer amendments, and they should be 
voted up or down, right? No, that is not the way it goes. This past 
year, we had the largest omnibus bill in 20 years. The majority sent 
us, near Christmas, a 1,600-page omnibus package that combined into one 
bill 11 of the 12 appropriations bills, and then it hit this floor; 
there was no time to read it. We didn't know what kind of pork or 
policy had been added to it. We were challenged to vote for it or not. 
It was $555 billion. That is worse than we have had in terms of an 
omnibus package in 20 years.
  Frankly, the majority leader, Senator Reid, has indicated that he may 
not even bring up the appropriations bills or we may have another great 
omnibus bill this year, but after the election. Well, the election is 
in November. The fiscal year starts October 1. It is our responsibility 
to have the appropriations bills passed before the beginning of the 
fiscal year, October 1.
  It is as if he is throwing in the towel before we even get there. 
Frankly, as an aside, I truly believe we would do much better if we 
went to a 2-year budget and 2-year appropriations, as over half of the 
States have. That would help us in this process because this happens 
every year, and it is getting worse, it seems, every year.
  We will soon have the new budget resolution. It will hit the 
committee next week. I am a member of the committee. It was a failed 
and unhealthy budget last year that was moved forward by our Democratic 
colleagues. I am afraid this one will not be much better.
  I noticed that the Democratic Presidential candidates are offering a 
lot of new proposals. Senator Obama, who now leads, has offered 158 of 
them that would cost at least $312 billion in new annual spending, or 
$1.4 trillion over 5 years, as we tend to score those things. That 
doesn't include all of his proposals that are out there.
  Madam President, I will conclude by telling the American people and 
my colleagues that next week we will begin a defining process. Next 
week, the majority party will offer a budget. Because of the budget 
rules, with 51 votes, they will be able to pass this budget. So because 
the Democratic majority has 51 votes, they can pass the budget they 
want. But we need to examine it because it will tell us and America 
what their priorities are, what their commitment is, how willing they 
are to sacrifice and make sure we have fiscal responsibility in this 
country.
  Based on last year's budget, I am afraid it is not going to be any 
better. Based on the fact that Senator Reid says he doesn't expect we 
will finish the appropriations process until after the November 
elections, I don't sense any commitment to do better than the 
Republicans did when they had the majority. Certainly, this year, their 
performance was worse. This past year, it was worse, and it doesn't 
look as if it will be better in the future.
  I thank the Chair for this opportunity to share my concerns. I hope 
we can be frank about these matters because the majority party knows it 
has a very serious responsibility when it submits a budget. We knew it 
when we had the majority. I sat on the Budget Committee. Senator Conrad 
and his colleagues know they have that responsibility. They also know 
they have the votes to pass this. Therefore, there can be no excuses. 
There is nowhere to hide. Are you going to do anything about 
entitlements? Are you going to guarantee tax cuts? Are you going to 
submit a budget that projects lower spending or one that is filled with 
gimmicks to hide even more spending increases? It is a big deal. We 
will be talking about this for some weeks. I hope our colleagues will 
focus on this.
  The PRESIDING OFFICER. The Senator from Utah is recognized.


                     FISA Modernization Legislation

  Mr. HATCH. Madam President, during a debate about strategy on how to 
defeat al-Qaida, goal No. 1 should be figuring out their plans. What 
are their tactics and targets? How do we do this? We use our 
technological advantages to get this information. That is what the

[[Page 2929]]

FISA modernization bill allows us to do.
  The Congress has been working on FISA modernization since April 
2007--over 300 days ago. But I guess 300 days is not enough time for a 
bill of this magnitude, right? But wait, the Constitution of the United 
States has written in only about 115 days, and that included travel 
time on horseback for the Founding Fathers. So the entire Constitution 
of the United States was written in one-third of the time we have spent 
on FISA modernization.
  Congress has plenty of time and has had plenty of time to debate this 
issue. Given that the executive strategy in this instance is paramount, 
the next President's decision, whoever that may be, will be critical. 
Like many people, I have watched many of the Presidential debates. One 
thing amazes me: Out of at least 32 debates and forums, the candidates 
have yet to receive one question on FISA, the most important piece of 
legislation certainly in the last number of years and certainly in this 
Congress. There has not been not one question on the Foreign 
Intelligence Surveillance Act and what we are trying to do here. So we 
are continuing to talk about the most important bill in the entire 
110th Congress, which is apparently not important enough to come up 
during over 50 hours of discussion with our next Commander in Chief.
  I did hear an interesting comment during the most recent debate. A 
decision to utilize military strikes to kill al-Qaida in Pakistan was 
seemingly supported. That is the irony of this situation. It is OK if 
we kill terrorists overseas with missiles, but we cannot listen to the 
phone calls of new terrorists without demonstrating ``probable cause.'' 
We have to ask what probable cause is and why it exists at all. That 
will tell us to whom it belongs. Probable cause is a check on 
Government power rooted in the due process guaranteed by the 
Constitution. Who may claim such due process protection under the 
Constitution of the United States? U.S. citizens, not foreign citizens 
overseas.
  We are constantly hearing from the leadership in Congress about the 
need to ``bring people together.'' Yet, at every turn, they seem to be 
willing to set aside bipartisanship in favor of the preferred 
policies--in favor of preferred policies of extreme political 
organizations. If Democrats really want to change the tone in 
Washington, they are going to have to, at some point, say no to the 
more radical elements of their base.
  With the current stalemate on FISA modernization legislation, we have 
seen both political parties blaming each other for the delay. We have 
heard notions that we are not in danger due to the lapse of the Protect 
America Act. While our opinions on this issue will remain in bitter 
disagreement, the solution to these problems is quite easy. In fact, it 
should take about 15 minutes to solve this problem. Here is the answer, 
and it is just four words: Let the House vote. That is it. It doesn't 
take a genius to come up with a solution. All of the disputes will go 
away, and the bipartisan majority of the House will approve the bill if 
given a chance to do so. Is this a novel concept? The House of 
Representatives has been voting on bills since 1789--over 219 years 
ago. Will we ever be in a situation as complicated as this again, where 
the solution to every problem is allowing our elected officials to 
vote?
  Back on December 17, on this very floor, I asked one of my Democratic 
colleagues if he agreed with me that should the FISA bill pass, it 
would be one of the best examples of bipartisanship in the whole 110th 
Congress and maybe in the history of this body. He agreed with this 
notion. Months later, this worthy goal came to fruition in the Senate.
  As we all know, the Senate approved a FISA modernization bill by a 
bipartisan supermajority vote, a veto-proof margin. Senators from both 
sides of the aisle engaged in lengthy and informative debate and came 
together to pass a bill that met the goals of modernizing FISA.
  This rare demonstration of unity came to a crashing halt on February 
14. Rather than allow a bipartisan majority of the House to vote on and 
pass this bill, the House leadership refused to allow a vote on this 
bill. The House spent its last legislative day, before their weeklong 
recess period, debating and voting on a contempt resolution to further 
a partisan fishing expedition that has led to no credible evidence of 
wrongdoing. House Democrats had been sitting on these resolutions since 
July, for over 201 days. Yet they determined that they were so 
important that they superseded the needs of our intelligence community 
and the needs of protecting the American public.
  So a bipartisan majority of the House was ready and eager to vote on 
this bill and was prohibited from voting on this bill. While numerous 
lawmakers stated they would stay in Washington--including me--for as 
long as it took to get this bill passed, the leadership from the House 
forced them to go on vacation. So they were prohibited from voting on a 
bipartisan bill to protect our country but were mandated to take a 
recess period.
  You want to stay and vote on this bill? Too bad. We would rather you 
take some time off. Go back to your districts and take a break. Don't 
worry about our intelligence community. They have all the tools they 
need. That is what the House Members heard. These Representatives did 
not need to be patronized; they needed to be given a chance to vote.
  The Attorney General, the chief law enforcement official of the 
United States, and the Director of National Intelligence, the person 
who is responsible for our intelligence in this country, say that the 
lapse of the Protect America Act caused us to miss information. These 
officials have more institutional knowledge on this topic than anyone 
in either body, and they dispute the notions that ``the intelligence 
community has everything it needs.'' With all due respect to all of us 
who serve as politicians, I am going to trust in the expertise of the 
Attorney General and DNI over the assurances of politicians in an 
election year.
  So why doesn't the House leadership allow a vote on this bill? Could 
it be because they know it will pass, which it would? But we cannot 
have that. Heaven forbid, democracy would be free to run its course.
  So rather than vote on this bill, we are hearing that the House 
leadership wants to conference this bill. Conferences are about 
resolving disagreements between the Chambers. But remember, a 
bipartisan majority from both Chambers has no disagreements on this 
bill. There are no disagreements to resolve between the majority of the 
Senate and the House. So a conference is entirely inappropriate in this 
situation.
  I have also heard an argument that the House needs more time to 
review the immunity provision--the immunity that would protect these 
companies that patriotically cooperated with us in collecting the 
information that protected American citizens, which are now being sued 
in 40 different lawsuits for hundreds of billions of dollars. I want to 
make sure everybody is perfectly aware that the immunity provision has 
been publicly available and unaltered for 133 days. It has not been 
hidden. It has been available to everybody in Congress. It has been 
available to the world on the Web site of the Senate Intelligence 
Committee. It only takes about 3 minutes to read it. It should not take 
133 days to analyze it, while putting our American public at risk.
  I am also amazed at the false descriptions floating around about the 
terrorist surveillance program, TSP, which is the program the President 
described on December 17, 2005, during a radio address. We have all 
heard the terms: the warrantless wiretapping, domestic spying, or 
eavesdropping bill. The list goes on. Let's look at what the President 
actually said during his radio address on December 17, 2005:

       In the weeks following the terrorist attacks on our Nation, 
     I authorized the National Security Agency, consistent with 
     U.S. law and the Constitution, to intercept the international 
     communications of people with known links to al-Qaida and 
     related terrorist organizations. Before we intercept these 
     communications, the Government must have information that 
     establishes a clear link to these terrorist networks.


[[Page 2930]]


  I don't see anything in this statement about domestic spying. I 
thought the definition of the word domestic was pretty clear. If the 
program intercepted communications in which at least one party was 
overseas, not to mention a member of al-Qaida, then it seems fairly 
obvious that the calls were not domestic.
  Look at this chart. Is this such a hard concept to grasp? The last 
time I flew overseas, I didn't fly on a domestic flight, I flew on an 
international flight. And there is a big difference between domestic 
calls and international calls. My last phone bill showed a big 
difference between the price of the two. Is it a domestic call when a 
foreign terrorist calls someone in our country or someone in our 
country involved in terrorism calls a terrorist in a foreign country?
  ``Domestic spying'' may sound catchy and mysterious, but it is a 
completely inaccurate way to describe the terrorist surveillance 
program or the FISA modernization bill. Why don't we describe them as 
we should: international spying. Isn't that a more accurate 
description? I guess accurate descriptions take a back seat to terms 
which incite fear and distrust in our Government.
  What about ``warrantless wiretapping,'' doesn't this sound like a bad 
thing? Perhaps we should read the fourth amendment to the Constitution. 
Notice that not all searches require a warrant. Every member of the 
public who is up in the galleries watching us today went through a 
warrantless search to get into this building. Every time an American 
comes into the United States at the border, they go through a highly 
intrusive warrantless search. Every time an American gets on a plane, 
they go through a warrantless search. Every time an American goes to 
see a rally or speech from the President of the United States, thus 
exercising their first amendment rights, they go through a warrantless 
search. And there is good reason for it.
  Remember, foreign citizens overseas receive no protection from the 
fourth amendment. So ``warrantless wiretapping'' in this instance is 
perfectly constitutional. In addition, look at what the Foreign 
Intelligence Surveillance Court, the highest court to look into this 
issue, previously said. This is 310 F3rd 717, FISA Court of Review in 
2002. It is called In re: Sealed Case:

       The Truong court, as did all the other courts to have 
     decided the issue, held that the President did have inherent 
     authority to conduct warrantless searches to obtain foreign 
     intelligence information. . . .We take for granted that the 
     President does have that authority and, assuming that is so, 
     FISA could not encroach on the President's constitutional 
     power.

  That is one of the few formal cases out of the FISA Court.
  Given the staggering amount of misinformation in the public, how many 
people have incorrectly stated that the Government can listen to all of 
their phone calls, read all of their e-mails, spy on American families 
overseas, even spy on our own military members overseas? How many of 
these false representations have been made by my colleagues and by 
others?
  These accusations are completely false and are meant to incite fear 
of nonpolitical intelligence analysts who serve regardless of whom the 
President is. Isn't that the real fear mongering? Terrorists killed 
3,000 Americans on September 11 and killed hundreds of other people in 
Madrid, London, Bali, and Kenya. They have sworn to kill more. They 
have said that ``the streets of America shall run red with blood, 
casualties will be too many to count, and the next wave of attacks may 
come at any moment.''
  These terrorists recently called for the President of the United 
States to be ``received not with roses and applause, but with bombs and 
booby traps'' during a recent Presidential trip overseas. So they wish 
death on all Americans and they threaten the assassination of the 
President of the United States. Yet if we acknowledge their threats, if 
we try to prepare for these attacks, we are accused of the politics of 
fear. But there is no problem when numerous individuals completely 
misrepresent how our Government protects our country. Nobody is calling 
these tactics ``fear mongering,'' so is it perfectly acceptable to 
question the integrity of thousands of Americans who have taken an oath 
to defend the Constitution of the United States and who have dedicated 
their lives to preventing our great Nation from suffering these 
terrorist attacks?
  I am sorry to break it to people, but our intelligence analysts have 
more important things to do than look at someone's eBay transactions 
and listen to phone calls from the Jones family on their family 
vacation in Italy. I guess I shouldn't be surprised by these conspiracy 
theories, given the vocal lunacy expounded by those who think the 
September 11 attacks were an ``inside job.''
  The FISA modernization bill should be the best example of how 
meaningful legislation becomes enacted. This bill passed by a veto-
proof majority in the Senate. It came out of the Senate Select 
Committee on Intelligence, on which I serve, 13 to 2. It was 
bipartisan. It is supported by the intelligence community, and it has 
the support of the executive branch. Isn't this about as good as it 
gets? When a bill has support from all these elements, there is no 
excuse for it being held up.
  The House leadership has indicated it intends to unveil a 
``compromise'' FISA bill. Apparently, House Democrats are using an 
unconventional definition of the word ``compromise.'' What would they 
call the Senate bill? We went through months of hearings in the Senate 
Select Committee on Intelligence asking about pros and cons, asked 
thousand of questions, met with the top people in all fields, were read 
into the program, went out to the National Security Agency to look at 
these programs. What do they call the Senate bill?
  No one, not the administration or anyone in the Senate, got 
everything they wanted with the Senate bill. It is a compromise. Is it 
everything I want? No. Are there things in there I wish we did not put 
in there? Yes. But it is a compromise, and I voted for it.
  All sides had to make concessions before a final solution was reached 
13 to 2 in the committee and it was bipartisan, 68 to 29 in the 
Senate--bipartisan. That is precisely what the compromise is all about. 
I simply do not follow the logic of rejecting a bipartisan result, 
which is what we already have, in favor of a more partisan solution and 
calling it a ``compromise.'' I can only assume that when House 
Democrats say ``compromise,'' they mean something else--capitulation.
  I don't intend to capitulate on this issue. I hope the 
Representatives in the House who share my view will weigh in with the 
House leadership and other Democrats who have been holding this up to 
the detriment of the citizens of the United States of America. I have 
been to this floor countless times to discuss FISA modernization, and I 
will continue to do so. I will continue to fight for this cause because 
it is the right thing to do and especially since so many in both 
parties have come together to support the Senate bill and would support 
it in the House if the chance was given.
  Madam President, we are still in the month of February. We should be 
doing our work here in the Senate. We should be working toward 
legitimate, bipartisan agreements on the issues that matter most to 
Americans.
  That is what our constituents sent us here to do. Of course, in an 
election year, particularly a Presidential election year, we 
unfortunately slide into a silly season where very little gets done.
  Instead of listening to each other and trying to come up with 
commonsense solutions, there is a temptation to use the Senate as an 
arena to make one's opponents look bad.
  Usually the flowers of that silly season do not bloom until the 
summer. We are still in the month of February! We need to be getting 
the work of the American people done. We are in a time of legitimate 
economic distress.
  There are very different ideas about how to deal with this economic 
slowdown. There is nothing wrong with this difference of opinion. The 
majority seems to think that the principal way to deal with an economic 
challenge is to spend money. To be clearer, they think that the answer 
is to spend taxpayer money. And make no mistake, if

[[Page 2931]]

there is not enough taxpayer money to go around, the solution to an 
economic slowdown for the majority is to raise taxes. Conservatives 
have a slightly different understanding of what it takes to get the 
economy running again.
  When the companies that Americans work for are loathe to invest, it 
hurts employees. When they don't invest, these companies do not create 
jobs. And when the economy is weak, it makes it more difficult for an 
entrepreneurial American to take the risks necessary and obtain the 
credit to start new businesses that will employ the people in his 
community.
  So conservatives think we should do more to encourage business 
investment and capital formation. Both sides want to do what they can 
to get the economy humming. And both sides think there are different 
ways to accomplish this. Sounds like an opportunity for compromise to 
me!
  But I think that some of my colleagues are more interested in an 
issue than a solution. We should not elevate politics above solutions. 
Congress needs to come together. Conservatives believe that their 
policies will work effectively to help the economy and the families 
that depend on good jobs and economic growth. We are not asking much.
  We are simply asking that our ideas be taken seriously. And we should 
be. Even in the most liberal of States, Members of this body have many 
conservative constituents. Is it really too much to ask that those 
ideas be given an opportunity for debate on the Senate floor? It 
shouldn't be.
  I am not sure, however, that the majority is interested in that 
debate. Twice this week, Senate minority voted to proceed to bills 
offered by the majority leader and my colleague from Wisconsin, Senator 
Feingold. Yet after voting to proceed to those bills, we were accused 
of blocking debate on the bills we helped to bring to the floor. That 
really is a classic.
  The majority casts 21 votes against proceeding to a bill the majority 
leader himself wanted to proceed to debate. The minority casts the 
votes to allow that debate. And then the minority stands accused of 
delay.
  A similar pattern has occurred with this housing bill. The majority 
rushed a bill to the floor. They bypassed the relevant committees. They 
bypassed the regular order.
  In their haste, they made a small mistake with the legislation. Well, 
maybe it was not that small. The majority intended to spend $2 billion 
on counseling for distressed homeowners. They accidentally made this a 
$200 billion program; $200 billion.
  I understand that this is a mistake. But it is a mistake born of a 
cavalier approach to legislating. We could have had a consensus bill.
  Instead, the majority never consulted with the minority as this bill 
was being put together. In our view, we have a much better plan. It 
includes titles that would address taxes, capital markets, housing, and 
tort reform. We would keep taxes low.
  We would extend the 2001 and 2003 tax cuts, preventing a looming tax 
hike, and making sure that working families do not get socked with 
thousands of dollars in extra taxes when these tax cuts expire in 2010.
  We would increase the value of homes and prevent an unfair tax on 
their sale. We would help to keep jobs at home by encouraging job 
creation.
  We would help prevent foreclosures by providing credit stability.
  We would maintain the value and security of neighborhoods by 
encouraging the speedy sale and renovation of foreclosed homes.
  And we would protect small businesses from the threat of excessive 
and frivolous lawsuits.
  And let me tell you, when I talk to businesses, businesses that are 
subject to incessant litigation, tort reform is at the top of the list 
of things we have to do. It hurts companies large and small, and we 
need to do something about it.
  I think if we had been invited to the table to discuss this bill, had 
been a party to the negotiation, or even been allowed to offer 
amendments, we could have worked something out on this bill.
  We could have found common ground. I know that is what the American 
people want. We have been hearing a lot about common ground these days.
  Whenever I turn on the television, I hear someone telling us about 
the need to change our ways in Washington. I hear about the need to 
bring people together. Well, we certainly have our opportunities.
  But I feel that they are being missed. We do not have to be consumed 
by partisanship. In 2005 and 2006, Congress accomplished a number of 
serious policy reforms. We passed bankruptcy reform, class action 
reform, energy and highway bills, CAFTA and other trade bills, and the 
most significant reforms of pension laws in 30 years.
  And those bills only became law because of debate, negotiation, and 
compromise. Through amendments, the regular order, and serious debate, 
the Senate was able to pass consensus legislation. And today? It is not 
quite the same.
  Take it or leave it is not the stuff of statesmanship. It is the 
stuff of the sandlot. Leadership demands a willingness to listen to 
both sides. It requires compromise and openness to other ideas. The 
American people have made their position clear. They are tired of 
business as usual.
  In the coming months, I hope to work with the majority on the issues 
of importance to the American people. The last week has not been very 
promising. Nonetheless, my hope is that Congress will be able to 
accomplish important reforms for the American people even in this 
election year.
  Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mrs. McCaskill). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DOMENICI. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOMENICI. Madam President, I have spoken twice on energy, once 
today and once yesterday.
  I have come to add a few more thoughts to my previous remarks on 
energy. I spoke yesterday of the recent Energy bills that Congress has 
passed, and the growing costs of our dependence on foreign oil. This 
morning, I urged my colleagues to reach agreement on a comprehensive 
energy policy that uses our own resources to meet our energy needs.
  Of all the issues we have to consider in this Congress, some may 
wonder why I have focused on energy three times in the past 2 days. The 
answer is simple: it is February 29. Oil is going for nearly $102 per 
barrel, and gas prices are up 20 cents in the past 2 weeks alone. The 
start of the summer driving season is still 3 months away, but 
consumers are already being squeezed by near-record energy prices. More 
than that, this should be a story we talk about in both good and bad 
times, because our dependence is growing great and it is not matched by 
our policy.
  We must rethink our policies to match the modern challenges we face. 
As I have indicated, our Nation has a great quantity of oil locked up 
off of our coasts, beneath our permafrost, and within our shale. These 
areas can provide a stable supply of energy as we transition to 
alternative fuels. But oil is not the only resource that can be 
developed at home and depended upon to meet our energy needs. We are 
also fortunate to have vast reserves of coal: some 270 billion 
recoverable tons, which would last for 240 years at the current rate of 
consumption. That coal can be turned into fuels that help meet our 
transportation, manufacturing, and electric power needs.
  Because of the emissions that result when coal is converted to 
energy, we will need cleaner methods to ensure the protection of our 
environment. To me, this is an opportunity. Our Nation has a proud 
heritage of innovation, and there is no reason to believe this strong 
record will not continue in the future. As our most abundant and 
affordable fossil resource, we cannot simply cross coal off the list. 
Any serious

[[Page 2932]]

effort to strengthen our energy security must include coal.
  One of our best prospects is to advance the development of coal-to-
liquid fuels. As an alternative to oil, coal-to-liquid fuels have many 
merits: it will reduce emissions of sulfur dioxide, nitrous oxide, 
particulate matter, and other pollutants when compared to conventional 
fuels. Coal-to-liquid fuels have been commercially demonstrated in 
other countries, can be moved through existing pipelines, and can be 
used in existing vehicles. Commercialization of this resource will 
create investment in rural communities, thousands of good-paying jobs, 
and cheaper energy for American consumers. Despite this potential, two 
amendments to advance this type of fuel were defeated on party-line 
votes in the most recent energy debate.
  Future generations of automobiles will be powered by the advanced 
battery. The Government must redouble its efforts to ensure the 
research, development, and deployment of these technologies. Reliable 
and rechargeable batteries will be critical to the success of hybrid 
vehicles, which hold tremendous promise for reducing the amount of oil 
consumed in the transportation sector.
  The policies I have spoken of these past 2 days are just a few of the 
options available to us. We should also increase the number of flex-
fuel vehicles on the road, and the number of stations that offer 
blended fuels. We should offer incentives to existing refineries, and 
encourage the expedited construction of new ones, to reduce the amount 
of gasoline we import. We continue to lament that while our refinery 
capacity has improved at existing sites, we have not built a new 
refinery in 30 years. Again, these are just a sampling of the policy 
options available to the Congress as we seek to chart a more 
responsible path forward.
  As a member of the Senate Energy Committee for nearly 30 years, and 
its chair or ranking member for much of the past decade, I obviously 
have strong views on the energy policies that will best serve our 
Nation. But I also recognize that we must work together to find common 
ground. We did this in the past on energy policy, and we can do it 
again.
  The costs of our dependence on foreign oil are enormous and 
increasing. The consequences of removing money from our economy, and 
sending it to often-volatile oil-producing nations, are becoming clear. 
Few positives will ever be drawn from this arrangement.
  When we import oil, we export our jobs and we export our wealth. We 
strengthen regimes that are intent on undermining our interests, 
opposed to the spread of democracy, and unwilling to extend some of the 
most basic freedoms to their own people. When we import oil, we 
threaten our national security and our economic strength. As we look 
ahead, we must remember that for today and the foreseeable future, we 
need oil. We should put our American energy resources to use.
  This is my final year in the Senate. It is a privilege and an honor 
to serve the people of New Mexico and this country. But it is not just 
the end of my time in the Senate that approaches; the time to reduce 
our growing dependence on foreign oil is also upon us.
  It is my sincere hope that we will use this year and the future to 
work together on policies that will move us toward our energy security 
goals. This will require us to set aside our differences and make 
difficult decisions. It will require us to come to the table with open 
minds and positive intentions. In an era defined by its bitter 
partisanship, this will not be easy. But given the stakes—our 
national security, our economic strength, and our standing in the 
world—that is exactly what we must do.
  The PRESIDING OFFICER. The majority leader.
  Mr. REID. Madam President, before my distinguished friend leaves the 
floor, let me say publicly what I have said privately to my friend, the 
distinguished senior Senator from New Mexico. He has been a great 
Senator. He and I have worked together on issues that only we know 
about because of the sensitive nature of what we did, dealing with the 
nuclear stockpile we have.
  As the chairman and ranking member of the Energy and Water 
Subcommittee on Appropriations, we worked for years as chairman, as 
ranking member, however the majority in the Senate was, and I think we 
have done a good job so that our nuclear stockpile is safe and 
reliable. I hope those who follow us recognize how sensitive and 
important this is.
  We also worked on other issues with our great national laboratories, 
two of which are located in New Mexico. I think the Senator and I have 
done some good work to protect basic science which so much of it comes 
from these laboratories, and, of course, Livermore in California. We 
have done some of the great experimental work at the Nevada test site.
  I personally look forward to working with this wonderful Senator for 
the next 10 months, but also we will miss him a lot. I hope we are able 
to pick up another vote, and we will have one soon, on allowing this 
country to go to more alternative energy. We missed by one the ability 
to do that. There was some concern about what some of the offsets were.
  So I hope my friend, with all the persuasive powers he has among my 
colleagues on the other side of the aisle, will work to see what we can 
do to come up with that vote. Even though I am not a big fan of coal, I 
understand the long-time work this man has done in trying to develop 
some other way of lessening our dependence on foreign oil.
  In short, I express my friendship and appreciation to the Senator 
from New Mexico. I look forward to the next 10 months and hopefully in 
the next few weeks of working something out so we can get long-term tax 
credits for renewable energy which will work in New Mexico and Nevada.
  We have great natural resources which are not being used because of 
the inability of the financial world to invest because they need the 
incentives for long-term tax credits to do that.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Before we leave, Madam President, I say to the 
distinguished majority leader that I appreciate his kind, generous 
remarks.
  Mr. REID. Madam President, I would say this: They were not generous 
enough. This man deserves far more than that. I hope someday, in the 
next few months, someone asks me in detail, because there should be a 
historical account of this man's service in the Senate. I want to tell 
them things that only he and I know that should be known to the public. 
He is a real dedicated public servant.
  Anyway, that is enough of that, but there will be more I will say 
about Senator Domenici at a later time.
  Mr. DOMENICI. Madam President, I also want to make a comment 
regarding something the leader said when he was discussing my speech he 
heard.
  I want to say to the Senator, you caught the end of 2 days of 
speaking on energy, and you heard: coal. I want you to know I had 
spoken of many other sources of energy before that. But I thought in 
recapping what we own, you must include coal in that. That is why you 
heard it there, not to give it special emphasis beyond which it is 
entitled.
  Mr. REID. I would briefly say, Madam President, I, with Senator 
Domenici, have been involved in producing huge amounts of money for 
research into clean coal.
  Mr. DOMENICI. Right.
  Mr. REID. I think we should continue that research. Right now I am 
totally unsatisfied as to where we are with clean coal technology. But 
we should spend more money because we have great resources, and maybe 
someday we can work it out so it will work.
  Mr. DOMENICI. I thank the Senator.


                                  FISA

  Mr. REID. Democrats and Republicans are united in our resolve to 
fight terrorism. Democrats, no less than Republicans, want to provide 
our intelligence professionals with the tools they need while 
protecting the privacy of law-abiding Americans.
  Both the House and the Senate have passed bills to strengthen the 
1978

[[Page 2933]]

FISA law, the Foreign Intelligence Surveillance Act. The House passed 
its bill in November. We passed our bill a couple of weeks ago.
  Since Senate passage, the chairmen of the Senate and House Judiciary 
and Intelligence Committees have been working very hard to resolve 
differences between the two bills. Democratic staff have been meeting 
and exchanging ideas and proposed language. But, I am sorry to say, the 
Republicans have instructed their staffs not to participate in those 
negotiations. Yesterday, the President held yet another of his 
increasingly belligerent news conferences demanding the House of 
Representatives pass the Senate's FISA bill. He does not want to 
negotiate, he does want any negotiation between the House and the 
Senate. He has decreed such. He simply wants the House to bend to his 
will and pass the bill he prefers without changing a single word.
  The President said there is a majority in the House that will pass 
the Senate bill. That may or may not be true. But what we do know for a 
fact is there was a majority in the House for the bill they passed last 
November. That is why we need negotiations. We would much prefer it be 
negotiated on a bipartisan basis, not just being done with Democrats.
  A new FISA law that passed with broad bipartisan support of both 
Houses would be good. A new FISA law that passed with broad bipartisan 
support in both Houses would provide greater certainty to the 
intelligence community and make us a stronger nation.
  There are some hopeful signs that we can do this. It may be possible. 
Yesterday, House and Senate Members finally from both sides of the 
aisle had a productive meeting with the general counsel to the Director 
of National Intelligence.
  I urge President Bush to engage in a more constructive manner in this 
effort to pass a new FISA bill to allow and encourage bipartisan 
negotiations. As we move forward, there is no reason not to extend the 
PATRIOT Act to ensure there are no gaps in our intelligence-gathering 
capabilities.
  Even Admiral McConnell, the Director of National Intelligence, has 
testified that such an extension would be valuable. But the President 
threatens to veto an extension and my Republican colleagues continue 
inexplicably to oppose it. The President asked us to extend it. He is 
the reason we have not extended it. I urge the President to withdraw 
his opposition.
  I will now ask unanimous consent to take up and pass S. 2664, a bill 
that would extend the PATRIOT Act for 30 days, and make the extension 
effective as of February 15 to ensure there are no adverse legal 
consequences from the President's decision to let the law expire.


                   Unanimous Consent Request--S. 2664

  I ask unanimous consent that the Senate proceed to the consideration 
of Calendar No. 583, S. 2664, which is a 30-day extension of the 
Protect America Act; further, that the bill be read a third time and 
passed, and the motion to reconsider be laid on the table and there be 
no intervening action or debate.
  The PRESIDING OFFICER. Is there objection?
  Mr. DOMENICI. I object.
  The PRESIDING OFFICER. Objection is heard.
  Mr. REID. Madam President, while Democrats and Republicans joined 
last month to pass the economic stimulus package, we agreed that it was 
an important first step in addressing our country's economic challenge, 
but we agreed it was only a first step, that we must do more to help 
America.
  All Americans are struggling. We must do more to help Americans 
struggling to make ends meet. Yesterday Democrats tried to take that 
next step. We brought to the floor a genuine effort to help families 
and neighborhoods weather the growing housing crisis. But Republicans 
in the Senate blocked our legislation to help struggling American 
families, as they have done time and again on other important 
legislation.
  Why did they choose obstruction over American families at risk to 
lose their homes? Senator Alexander, my friend from Tennessee, and a 
few others, said here on the floor that all Republicans wanted was an 
opportunity to offer amendments.
  Anyone following this debate would know my Republican colleague was 
given some very bad information or that his or their staffs watched 
none of the floor debate on this issue.
  I have said numerous times, both publicly and privately, that both 
sides want to offer amendments; that is, Democrats and Republicans, and 
both sides should have that opportunity. I have said that privately to 
the Republican leader, and publicly here on the floor, and in many 
press events.
  I told, in fact, Senator McConnell more than a week ago that we 
intended to allow both Democrats and Republicans to offer amendments. I 
have made that commitment on this issue several times on the floor. My 
words are available for anyone to review in the Congressional Record.
  There is only one reason why Republicans were not able to offer 
amendments. They refused to let us move procedurally to the legislative 
posture where amendments could be offered. We have here before us the 
Republican filibuster chart. You will note that we keep changing the 
numbers because they keep coming; 72 Republican filibusters, 72.
  Last year, in less than 1 year, the Republican minority broke all 
records for a 2-year Congress in the number of filibusters. And we have 
another on the housing stimulus package.
  The Republicans' decision to deny the ability to even take up this 
bill deprived both sides of the opportunities to offer a single 
amendment. As I said yesterday, why would you stop us from going to the 
bill? I have said: You can offer amendments. Then, if you do not like 
what happens, you still have 49; it only takes 41 of you to stop us 
from doing anything.
  Why would you stop us? They are stopping us because they want to slow 
things down. That is the whole purpose. They do not want this minority 
to allow us to do something. I guess the direction is coming directly 
from Bush and Cheney.
  My colleagues can talk all they want about amendments, but the record 
betrays the rhetoric. Yesterday's Republican press conference was 
before that vote. The Republicans held a press conference saying what 
it is that should be done with the housing problems.
  Now, listen to this: As reported in the New York Times and other 
places, here is their solution, according to a public press conference 
they held before the vote yesterday to stop us from going forward.
  Here is what they want to do: tort reform. That is going to really 
help the housing crisis, tort reform. The other thing they want to do 
is lower taxes. That is so Bush-Cheney that we look and we find that is 
why we are in the trouble we are today. When the President took office, 
there was a surplus over the next 10 years of $7 trillion. That is 
gone. As indicated by Nobel Prize winning economist Stiglitz yesterday, 
the war has and will cost us $3 trillion.
  Instead of standing on the side of struggling families and at-risk 
homeowners, Republicans in the Senate once again chose the side of Bush 
and Cheney, big banks, and big business. Republicans want us to 
continue to help those who contributed to the foreclosure debacle in 
the first place. Yesterday's prevention of us going forward to 
legislate was a victory for the people who are causing all the trouble 
to begin with. Who were the losers? Middle-class Americans, people 
trying to stay in their homes. The Republican alternative housing plan 
is almost laughable.
  The Presiding Officer is a lawyer. She has been to court a few times 
to prosecute people, knows what is going on on the civil side. Their 
solution to the housing crisis is tort reform? How can they say that 
with a straight face?
  That is not me. Read about it. It is in today's press. And more tax 
cuts. Neither has anything to do with the housing crisis. The 
Republican housing plan consists of tired programs from a dusty Bush-
Cheney playbook. Tort reform and Bush tax policy, neither have anything 
to do with housing. The housing

[[Page 2934]]

plan Democrats proposed offers real solutions to the crisis that 
families and neighborhoods are facing all across the country.
  Today I had another conversation with the chairman of the Banking 
Committee, one of the more senior Members of this body. I said: Senator 
Dodd, if your counterpart, Dick Shelby, wants to work out anything on 
this housing stimulus crisis, let's work it out. If there are 
amendments they want to offer, let's take a look at the amendments. My 
people want to offer amendments. They want to offer amendments. Let's 
offer some amendments. But tort reform? Cutting taxes?
  The housing plan Democrats propose offers real solutions to the 
crisis families and neighborhoods are facing all across America--
Missouri, Nevada, New Mexico, all over. Our plan helps families keep 
their homes by increasing preforeclosure counseling funds. Our plan 
expands refinancing opportunities for homeowners stuck in bad loans. 
Our program provides funds to help the highest need communities 
purchase and rehabilitate foreclosed properties. This is a proposal the 
President talked about in his State of the Union message and on which 
he is now blocking us. We tried to get this in our previous stimulus 
package, something the President talked about in his State of the Union 
Address. No. I guess from the speech back to the White House someone 
talked him out of it.
  Our legislation helps families avoid foreclosure in the future by 
improving loan disclosures and transparency during the original loan 
and refinancing process. Jack Reed of Rhode Island sponsored that 
provision. Our legislation amends the Bankruptcy Code to allow home 
loans on primary residences to be modified, only in certain 
circumstances with very strict guidelines.
  If the Republicans and the President don't like that provision, offer 
an amendment to take it out. I have said that publicly. If you don't 
like it, offer an amendment to take it out. Maybe you will get some 
Democrats to join with you. I think that is a pretty good bet. But, no.
  So I say to my Republican colleagues who talk about their desire to 
help, talk is so cheap. The American public deserves better than tort 
reform and extending Bush economic policies to handle the foreclosure 
crisis now facing our country. Republicans have been able to hold on to 
the status quo and block us from moving America forward because of our 
razor-thin majority. For 10 months last year, it was 50 to 49 because 
Tim Johnson was sick. He is back. He is at 100 percent. So the majority 
now is 51 to 49. But that is still pretty narrow. The Republicans have 
been doing everything they can to maintain the status quo.
  In addition to blocking our housing plan, we have had 71 other things 
that they have blocked. Tax incentives for alternative energy, 
something as simple as allowing Medicare to negotiate for lower priced 
drugs, they stopped us from doing that. A better economic stimulus 
bill, for example, to provide for the extension of unemployment 
benefits, they stopped us on that. And time after time, they have 
stopped us from moving forward on changing what is going on in Iraq. A 
razor-thin majority has allowed Republicans to block legislation with 
little effort because, remember, we need 60 to get anything done.
  But I say to my Republican friends through the Chair to my friend, 
one of the more senior Members of the Senate, my friend from New 
Mexico, enjoy it while you can. The American people are seeing what is 
going on. They are seeing how you are maintaining the status quo. Enjoy 
it while you can because our majority, come November, is going to grow. 
So continue to block because it is not going to be there forever. It is 
not going to be there very long. Neighborhoods and families struggling 
mightily through the housing crisis can't wait until then.
  I urge my Republican colleagues to join us and reconsider, support a 
housing plan that actually addresses housing--not tort reform, not 
lowering taxes--and eases the suffering of millions of American 
families.
  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. REID. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Madam President, my friend is always looking out for me, 
and there is other work I have to do. I can't do it unless he is here, 
so I appreciate that very much.
  Mr. DOMENICI. I have to stay here until it is done.
  Mr. REID. He has to stay here until it is done. It will be real 
quick.
  I withdraw the pending motion.
  The PRESIDING OFFICER. The motion is withdrawn.

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