[Congressional Record (Bound Edition), Volume 154 (2008), Part 4]
[SEN]
[Pages 4592-4609]
[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 PRESIDING OFFICER. Under the previous order, the Senate will 
proceed to the motion to reconsider the vote by which cloture was not 
invoked on the motion to proceed to H.R. 3221. The motion to reconsider 
is agreed to, and there will now be 15 minutes of debate equally 
divided prior to a vote on cloture on the motion to proceed to H.R. 
3221, with the majority leader controlling the second half of that 
time.
  The Republican leader.
  Mr. McCONNELL. Mr. President, the majority leader and I have had good 
conversations this morning, and a few moments ago, we reached an 
agreement on how to go forward on the housing bill. That agreement is 
as follows: that Senator Dodd, the chairman of the Banking Committee, 
and Senator Shelby, the ranking member, would come together after we 
invoke cloture on the motion to proceed and come up with a bipartisan 
substitute to be offered as an amendment to the bill upon which we are 
about to invoke cloture to proceed. That would be the underlying bill 
that would enjoy the confidence and support of the two leaders of the 
Banking Committee.
  Most of my conference is very comfortable with that proposal. We 
understand fully there will be amendments after that, but that will at 
least give us an opportunity to get off on a bipartisan footing, 
reminiscent of the good work we were able to do earlier this year not 
only on the foreign intelligence surveillance bill but also on the 
economic stimulus package where we were able to come together and, by 
significant bipartisan majorities, pass the legislation.
  We all know we have problems with housing in this country. Most of us 
believe we need to enact legislation to try to improve this situation. 
Many of these proposals are supported by people on both sides of the 
aisle. So this would give us a chance to begin in a way that is 
comforting to both sides before we open the process to amendments.
  The majority leader has also assured me he has no intention of 
filling up the tree or employing any of the other techniques the 
majority is certainly free to do but which have a way of locking down 
the process on the minority side.
  This has been a very good discussion, leading up to a process by 
which I think we can go forward and hopefully get something important 
for the country--I see my good friend, the leader of the Banking 
Committee, on the floor--get something important for the country 
accomplished in the Senate this week.
  I thank the majority leader for his approach to this issue. I think 
it is entirely appropriate and gives us a good opportunity to move 
forward.
  I yield the floor.
  The PRESIDING OFFICER. The majority leader.
  Mr. REID. Mr. President, the smoke is housing crisis foreclosures. 
The fire is the general economy because the housing crisis has caused 
the economy to be in a state of distress.
  The chairman of the Banking Committee, Senator Dodd, made such an 
outstanding presentation this morning where he talked about almost 
8,000 homes every day--today, tomorrow, and the foreseeable future--
will be foreclosed upon, not the beginning process of foreclosure, but 
the termination of foreclosure. Someone by the name of Jones, Smith--
whatever their name might be--will lose their home, a family home.
  What does that do to the neighborhood? Every time there is a home 
foreclosed upon, it immediately causes the rest of the neighborhood to 
be worth less money. What does it do to the government entity where 
that home is located? The government entity loses the ability to get 
tax money. No one benefits from foreclosures.
  This is a step in the right direction. In Nevada, for example, 1 out 
of every 165 homes was in foreclosure in February. Can you imagine 
that, 1 out of every 165 homes. That is the highest rate in Nevada. We 
are fortunate we have a lot of construction that is not housing related 
that is going to pull us through this situation. It is important that 
we move forward on this legislation.
  The underlying bill is a so-called Democratic bill. This bill, if we 
are able to accomplish something, will be a Senate bill. Democrats and 
Republicans can go home and take credit for doing something to help the 
problem.
  Are we going to be able to resolve all the problems in housing? Of 
course not. But we can make a tremendous step forward, and that is what 
we intend to do.
  I have worked with Senator Shelby from the time we were in the House 
together. We shared office space. His office in the Longworth Building 
was next to mine. I have the highest regard for him. I spoke with him 
this morning. I believe he and the chairman of the committee, Senator 
Dodd, are going to be able to come up with something that I hope I can 
support, but it is going to be bipartisan. They are going to agree on 
this and offer it as the first amendment when we get to this 
legislation. If something goes wrong, if someone is being mischievous 
about that legislation, Senator McConnell and I will meet again.
  The goal is to do something about housing. We are not going to solve 
the problems of Iraq on this bill. We are not going to solve the tax 
policy of this country on this bill. We are not going to solve global 
warming on this housing bill. But we need to do something the American 
people recognize is bipartisan as it relates to housing, and we are 
going to do everything we can.
  I believe the time has come for us to start legislating and stop 
talking about the need to legislate.
  Mr. President, a vote has been called for 2:30. If there is someone 
else who wishes to speak, they certainly have the opportunity for the 
next few minutes.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, I thank the distinguished majority leader 
and

[[Page 4593]]

the Republican leader, as well, for their efforts. I thank Senator 
Shelby, who is not here. We will do our very best over the next number 
of hours to pull together a package that reflects----
  Mr. REID. Will my friend yield?
  Mr. DODD. Yes.
  Mr. REID. One of the points I did not talk about with the 
distinguished leader is that I think it would be appropriate that we, 
after the vote is completed, go into a period for morning business 
until 12 o'clock noon tomorrow to see, if, in fact, we can get the two 
distinguished Senators to come up with a substitute. We need some 
deadline. That is as good as any, unless my friend has a better time 
tomorrow.
  Mr. McCONNELL. Mr. President, I say to the majority leader, that 
makes sense. I am convinced we are all operating on good faith and 
Senator Shelby and Senator Dodd will work hard to come up with a 
proposal they will come forward with.
  Mr. REID. During this afternoon and in the morning, people can talk 
about housing or anything else they want. We will be in a period for 
morning business.
  Mr. DODD. Mr. President, I thank the leaders. That will be our goal 
and job, to begin that process immediately. We will keep the leadership 
informed as it progresses. We all thank the two leaders immensely. I 
thank Senator Reid for his efforts going back months ago. This is a 
problem that is growing by the hour. It demands our attention. This is 
the contagion effect we read about now spreading far beyond the housing 
issue, per se. It is now leaching into all aspects of our economy. It 
has even gone beyond our shores, obviously, to other nations that are 
deeply affected by what happens here economically. This is a moment 
when we have to come together as a body and come up with some 
responsible answers.
  I will say in advance that none of us can say with any certainty that 
which we offer will solve the problem, but I think we bear an 
obligation to try, to do one thing that is more important than any 
specific idea we proposed, and that is help restore the confidence of 
the American people and those directly involved in the financial well-
being of our Nation and that is to restore confidence, which is 
missing; we need to get that confidence back. The very fact our leaders 
have called upon us to pull together is going to be a confidence-
building measure. It will be complemented by what we do, but it begins 
with the offer made by the distinguished majority leader, accepted by 
the Republican leader, that we sit down and try to work this situation 
out.
  I can tell you in advance that the American people will react 
favorably to this effort, and hopefully we will offer a product that 
will complement that effort but beginning with the idea we will work on 
this problem together. That I commend the majority leader for. I thank 
the Republican leader as well.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                             Cloture Motion

  Under the previous order, pursuant to rule XXII, the Chair lays 
before the Senate the pending cloture motion, which the clerk will 
report.
  The assistant legislative clerk read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     hereby move to bring to a close debate on the motion to 
     proceed to Calendar No. 340, H.R. 3221.
         Harry Reid, John D. Rockefeller, IV, Russell D. Feingold, 
           Max Baucus, Charles E. Schumer, Kent Conrad, Patty 
           Murray, Amy Klobuchar, Jeff Bingaman, Richard Durbin, 
           Mark L. Pryor, Carl Levin, Edward M. Kennedy, Patrick 
           J. Leahy, Bernard Sanders, Debbie Stabenow, Byron L. 
           Dorgan.
  The PRESIDING OFFICER. By unanimous consent, the mandatory quorum 
call is waived.
  The question is, Is it the sense of the Senate that debate on the 
motion to proceed to H.R. 3221, an act 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, shall be brought to a close?
  The yeas and nays are mandatory under the rule.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from New York (Mrs. Clinton), 
the Senator from Hawaii (Mr. Inouye), the Senator from New Jersey (Mr. 
Lautenberg), and the Senator from Illinois (Mr. Obama) are necessarily 
absent.
  Mr. KYL. The following Senator is necessarily absent: the Senator 
from Arizona (Mr. McCain).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The yeas and nays resulted--yeas 94, nays 1, as follows:

                      [Rollcall Vote No. 86 Leg.]

                                YEAS--94

     Akaka
     Alexander
     Allard
     Barrasso
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Brown
     Brownback
     Burr
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Coburn
     Cochran
     Coleman
     Collins
     Conrad
     Corker
     Cornyn
     Craig
     Crapo
     DeMint
     Dodd
     Dole
     Domenici
     Dorgan
     Durbin
     Ensign
     Enzi
     Feingold
     Feinstein
     Graham
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Hutchison
     Inhofe
     Isakson
     Johnson
     Kennedy
     Kerry
     Klobuchar
     Kohl
     Kyl
     Landrieu
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     Martinez
     McCaskill
     McConnell
     Menendez
     Mikulski
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Salazar
     Sanders
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Tester
     Thune
     Vitter
     Voinovich
     Warner
     Webb
     Whitehouse
     Wicker
     Wyden

                                NAYS--1

       
     Bunning
       
       
       

                             NOT VOTING--5

     Clinton
     Inouye
     Lautenberg
     McCain
     Obama
  The PRESIDING OFFICER. Upon reconsideration, on this vote the yeas 
are 94, the nays are 1. Three-fifths of the Senators duly chosen and 
sworn having voted in the affirmative, the motion is agreed to.
  Mr. LEVIN. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. CARPER. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER (Mr. Sanders). Without objection, it is so 
ordered.
  Mr. CARPER. Mr. President, we have just concluded a 2-week recess. We 
have come back to the Capitol, rested and prepared to get to work on 
the Nation's business. At the top of the list for most people, at least 
based on what I heard in my State and likely what Senators have heard 
from coast to coast, is the desire for us to get to work on the 
economy. There are other concerns--the war in Iraq, the cost of health 
care, the list goes on--but at the top of the list is the economy, 
harking back to the Clinton campaign in 1992: ``It is the economy, 
stupid.'' It has been for a long time, and it certainly is again today.
  During the time I spent in Delaware, I visited a lot of places, 
including a number of schools. One of the questions a group of young 
people asked me was, what did I like most about my job. There are a 
number of things I enjoy about serving in the Senate. I love helping 
people. We have the opportunity to do that through constituent services 
and other ways every day. That is a source of great satisfaction. I

[[Page 4594]]

know it is to the Presiding Officer and others of our colleagues. Among 
the other things that bring me great joy is from time to time we are 
able to take folks who have different views on a particular issue and 
actually pull them together to work as one, to develop consensus around 
issues.
  We need to develop a consensus on a path forward with respect to the 
housing situation, the meltdown we have seen, especially with subprime 
mortgages and the threat that meltdown poses to binding together, 
tightening up and bringing to a halt the flow of money through our 
economy, through the banking system.
  I am encouraged by the vote we just had where 94 Senators voted to 
proceed to the housing bill. Our Democratic leadership has pulled back 
and said: We will not try to push forward with five or six actually 
very constructive elements in an earlier version of our proposal but 
provide time for Senator Dodd and Senator Shelby to work with others on 
the Banking Committee and other colleagues who are not on the committee 
to put together a broader consensus that builds on the package we voted 
not to proceed to 2 weeks ago. We can do those but more as well.
  Let me express my hope that the elements of the package Senators Dodd 
and Shelby bring back to us include the ability for housing authorities 
to issue revenue bonds, the proceeds of which could be used to help 
folks refinance their mortgages, people in danger of losing their 
homes. I am not interested in rewarding bad behavior, in rewarding 
investors or bankers who made bad decisions or, frankly, individual 
borrowers who made decisions that were inappropriate or wrong, where 
they misrepresented their financial standing. I don't think we want to 
reward bad behavior. But there are a lot of people in danger. We have 
some 8,000 people who will have their homes foreclosed on today, 
tomorrow, the next day, and the next. That is a clear signal to me we 
need to do something.
  We can do some things that will make a difference without breaking 
the Treasury. Let me mention a couple elements of what I hope will be 
in the housing package that we might bring back to the floor. One of 
those is FHA modernization. Some people recall 75 years ago the Federal 
Housing Administration was established.
  People wonder where the 30-year fixed rate mortgage came from. It 
came from FHA. A lot of people own a home today because their loan was 
guaranteed by the FHA. My first home loan was guaranteed by the VA for 
the house I bought when I came back from Southeast Asia at the end of 
the Vietnam war. Not even 10 years ago, but 5, 10 years ago, almost 20 
percent of the people in this country got a mortgage that was 
guaranteed by the FHA. As recently as last year, that number is down to 
5 percent. The FHA oftentimes has helped to insure mortgages of people 
who have a questionable credit rating, people who were maybe a first-
time home buyer for whom a lot of banks were reluctant to provide a 
mortgage without the guarantee that maybe an FHA or a VA would offer. 
But FHA-guaranteed mortgages dropped from almost 20 percent of all 
mortgages a half dozen or more years ago, down to about 5 percent 
today.
  The drop between 20 percent or whatever it is down to 5 percent 
reflects the number of people who used to go to FHA for help, who today 
or in recent months and years have instead taken advantage of these 
adjustable rate mortgages that have low teaser introductory rates that 
reset after a couple years, that have a clause in them that makes it 
difficult, if not impossible, or at least very expensive, to refinance 
the mortgage. Those people are stuck. There are a couple of million of 
them who have been stuck with adjustable rate mortgages, high teaser 
rates that are going up, and finding it difficult to get out of that 
situation. For those folks who have been in that situation, maybe 
people with somewhat marginal credit, people who are first-time home 
buyers, I don't want them to look for adjustable rate mortgages for 
salvation. I want them to see the FHA as relevant in their lives.
  What we need to do is bring the FHA into the 21st century to make it 
relevant to today's borrowers' needs.
  Senators Dodd and Shelby have been working with Representatives Frank 
and Baucus on legislation we passed in the Senate. The House has passed 
FHA modernization legislation. I think they are close to consensus. My 
hope is we can find consensus. And when we take up later this week, 
hopefully, a bipartisan housing recovery bill, a centerpiece of that 
will be FHA modernization. We ought to do that. It is something we all 
agree on, Democrats and Republicans, the President, and, frankly, a lot 
of people around the country, borrowers and lenders too.
  The second piece that ought to be in this package will be the 
authorization that we would provide for housing authorities throughout 
the country to issue mortgage revenue bonds, tax exempt revenue bonds, 
the proceeds of which could be not only used for first-time home 
buyers, not just for multifamily housing, affordable housing, but also 
could be used to provide moneys to help people refinance their 
mortgage, people in some jeopardy. The administration supports that 
idea. Secretary Paulson testified before our committee in favor of that 
idea. It is part of the Democratic package that we sought to bring to 
the floor 2 weeks ago. It ought to be part of the consensus package 
that we will take up later this week.
  There are any number of other good ideas that hopefully will be part 
of the package. Senator Jack Reed from Rhode Island has a very good 
idea that seems to be acceptable on a lot of fronts, to provide for 
greater transparency for borrowers as people go to the credit markets 
to look for mortgages, to make sure they know what they are getting and 
get a good deal, a fair deal.
  Senator Martinez and Senator Feinstein have a proposal. I believe it 
is one that deals with the appraisals, to make sure the appraisals that 
back up the homes that are being bought or sold are actually real and 
not just an appraisal put together, pulled out of thin air because 
somebody drove by a house and slapped a value on it by looking at it 
through a windshield.
  I think Senator Martinez has another good idea with respect to 
licensing mortgage brokers. It may not be perfect and is something that 
can be worked on further, but something along those lines should be 
part of this package.
  Senator Isakson has an idea and is actually something I think was 
done maybe when President Ford was President. Senator Isakson's idea is 
if you have a home--let's say all 100 desks in the Senate Chamber are 
all homes. There is one for each Senator. Maybe this home right here is 
in foreclosure, and it is blighting the value of this home and that 
home and those homes all around it. The folks in this neighborhood 
would love to have somebody come and live in this home, somebody who is 
going to take care of that property and maintain that property but also 
help to maintain the value of the other properties.
  What Senator Isakson does is provide a tax credit--I think he is 
saying $5,000 per year--for somebody who comes in and not just buys 
that home but lives in that home as the owner and the occupier. To the 
extent they do that, they get a $5,000 tax credit. He suggested we do 
that over 3 years, which would mean $15,000 for 3 years. That could be 
pretty expensive. I have suggested to him we try to find a way to bring 
down the cost of his proposal. My hope is we can do that and include 
that in the final bill we come up with.
  Another idea that has merit is to increase somewhat the appropriation 
for community development block grants and to say to State and local 
governments they can use some of the proceeds from this money to take a 
home that is in foreclosure and do something to prepare it to be sold 
and to restore the value of that home and to restore the vitality of 
the neighborhood in which it is now decaying.
  In short, there is no shortage of good ideas. Some of them are 
authored by Democrats and offered by Democrats, and in some cases they 
are authored and offered by our Republican colleagues. In some cases 
they are ideas that enjoy bipartisan support. At the

[[Page 4595]]

end of the day, together they fashion a pretty good package that will 
help make a real difference, and a difference in not a couple years but 
literally in a couple of months.
  The last thing I would say is, one of the more controversial 
provisions in the package that came to us actually last month from our 
Democratic leaders is a provision dealing with bankruptcy and would 
extend to bankruptcy judges the ability to go in and not only adjust 
interest rates on mortgages for homes that are in foreclosure or about 
to go into foreclosure but also to adjust the amount of the mortgage 
itself.
  That has caused a lot of concern about the chilling effect it may 
have on interest rates for primary homes in the future. I give Senator 
Durbin credit. He has tried to amend his earlier proposal to address 
the concerns--the legitimate concerns--that have been raised. I think 
he has acted in good faith. I know Senator Specter has a little 
different proposal on this approach. I think Senator Dodd has been 
working along with Representative Frank over in the House on kind of a 
variation of an earlier idea suggested, I think, by the head of the 
Office of Thrift Supervision--the folks who supervise the savings and 
loan industry--to try to make sure we address the issue of a homeowner 
whose home is not in foreclosure but whose mortgage is underwater.
  I will give you an example. You have a home that has been bought for 
$200,000. Today the home is worth $160,000, and the person who owns the 
home is thinking about literally walking away from their mortgage, 
walking away from their home. You can do that today for about $1,000, I 
am told, working through a company that will help you walk away from 
your home mortgage. The person who walks away becomes a renter, and the 
obligation they have to continue to have to pay the mortgage goes away. 
You end up with a home that is in foreclosure. The banks do not want to 
be stuck with those properties. The folks in the neighborhood of the 
home being foreclosed on do not want that to happen in their 
neighborhood.
  I think Senator Dodd and Representative Frank have a very 
constructive idea--not a perfect idea but a good idea--that can go 
forth. It requires some sacrifice on the part of the lenders. It 
requires some sacrifice and give on the part of the borrowers. But it 
also leaves them a home in the end, at least, where they still have a 
little bit of equity and a good reason not to walk away from their 
home, triggering a foreclosure.
  The last thing I will mention--this is an idea that is not new, but 
we have been hearing testimony about this for a couple years--we have 
three major Government-sponsored enterprises, not counting Ginne Mae, 
but three major Government-sponsored enterprises whose job it is to 
help raise money and to provide liquidity and safety for the housing 
market in this country. One is Fannie Mae, another is Freddie Mac, and 
the third is a little bit different kind of an animal called Federal 
home loan banks. There are about 12 of those throughout our country.
  The way we buy homes has changed a whole lot over the years. When I 
bought my first home in Delaware, I went to a bank. They agreed to make 
the mortgage. I borrowed the money. I think it was about $40,000. They 
borrowed the money and they held my mortgage. They held my mortgage, 
and every month they would send me a statement, and I would send them a 
check to make my payment. They held the mortgage for years and years 
and years.
  It does not work that way anymore. Today you go to your local thrift 
or bank, and they make a mortgage to help a person buy a home, and the 
bank may decide to hold the mortgage. They may decide to service the 
mortgage. But in most cases, they don't. In a lot of cases they turn 
around and they sell the mortgage to Fannie Mae or Freddie Mac. Fannie 
Mae and Freddie Mac are huge financial institutions. They package these 
home mortgages together from all kinds of financial institutions that 
originally made the mortgages from across the country, and they put 
them together into investments called mortgage-backed securities, and 
those mortgage-backed securities are sold to investors all over this 
country and all over the world.
  The problem with the mortgage-backed securities is when you have a 
drop in home values, you have a problem with homeowners, borrowers not 
making their mortgage payments. When you have a problem with the 
underlying homes that make up these mortgage-backed securities going 
into foreclosure and mortgage payments not being collected, the value 
of those mortgage-backed securities drops. The companies, the investors 
who are holding those mortgage-backed securities are getting into 
trouble, and we have a situation where liquidity in our banking system 
begins to dry up.
  When the liquidity in the banking system dries up, two things can 
help start a recession. One of those is that when people think we are 
going into a recession, it can be a self-fulfilling prophecy because 
people stop spending money. They stop spending money and, lo and 
behold, we have a recession. Another way we have recessions is that the 
banking system stops working. They stop making loans. Liquidity is sort 
of like the blood in our veins. The liquidity goes away in our 
financial systems and our economy. That is part of what we face today.
  The two entities that do the most in terms of trying to make sure we 
continue to have liquidity in our banking system are Fannie Mae and 
Freddie Mac when they buy these mortgages from banks that have made 
mortgages to individual borrowers. Then they package these mortgages. 
Sometimes they sell them around the world. Sometimes they hold those 
mortgage-backed securities in their own portfolio. In some cases, the 
folks at Fannie Mae or Freddie Mac, I guess, actually hold individual 
mortgages for a while. They do some of that as well.
  The problem with Fannie Mae and Freddie Mac is, they have run into 
trouble in the last couple years because they do not have a very strong 
regulator. They do not have a strong, independent regulator. We have 
held many hearings for a couple years trying to figure out how we 
provide a strong, independent regulator and at the same time make sure 
Fannie Mae and Freddie Mac do not repeat the sins and mistakes of their 
past few years. How do we do that in a way and at the same time create 
an affordable housing fund much as we have with the Federal home loan 
banks?
  My hope is--if not in this package that is, hopefully, going to 
emerge from these discussions in the next day or two--in the next week 
or two, maybe month or so, the Banking Committee can move together and 
report out a consensus package on regulatory reform to provide a 
strong, independent regulator for Fannie Mae, Freddie Mac, and the 
Federal home loan banks. That would be another good thing for our 
country and for those of us who want to buy homes and sell homes.
  Let me close with this: Going back to the beginning of the year, as 
our economy started to slip into what may be a recession--and we will 
find out in another quarter or so if it really has been a recession--as 
we began to slip, the Federal Reserve, actually starting last fall, 
began to use its monetary powers, first of all, to lower the Federal 
funds rate--the rate at which banks charge one another for lending 
money between themselves at the end of every day--they started lowering 
the Federal funds rate rather dramatically--in fact, more dramatically 
than I have ever seen in my life.
  The Federal Reserve has made it possible to encourage more banks, 
more financial institutions, regular financial institutions, and even 
investment banks to come to the discount window to borrow money to meet 
their problems. The Federal Reserve has gone so far as to even help 
make possible for JPMorgan Chase to come in and take over Bear Stearns 
so it would not collapse into bankruptcy and trigger maybe an even 
worse situation.
  While the shareholders of Bear Stearns have taken a shellacking--I 
think they ended up getting about $2 per share for their stock; Bear 
Stearns'

[[Page 4596]]

stock had been valued at over $100 not long ago--the shareholders took 
a loss, but at least it did not cause sort of a domino effect in a 
failure of our financial system. The Federal Reserve has been involved 
in that.
  The Federal Reserve has been willing to take from financial 
institutions their mortgage-backed securities and replace them with 
Treasury securities to put some liquidity back into the banking system. 
The Federal Reserve has been terrific. It has been very helpful in 
terms of putting liquidity back into the system but also raising the 
confidence of consumers, the confidence of our constituents, and us 
too. So that is one that has happened.
  The second thing we have done, Congress and the President working 
together, is we have agreed, about 2 months ago, upon a stimulus 
package. Is the stimulus package one I would have written or maybe the 
Presiding Officer would have written? Probably not. But on balance, it 
does more good than bad, and we expect to see a boost in our gross 
domestic product in the second half of this year of maybe 1, 1.5 
percentage points. That is going to be a nice lift to the economy as we 
struggle to either shorten a recession or to abridge one altogether.
  The third piece that is still waiting to be done--after the Federal 
Reserve has acted in the variety of ways I just described--after the 
effect of this stimulus package begins to kick in, the third thing that 
needs to be done is we need to take up and develop and pass and send to 
the President a consensus housing recovery package.
  The elements I have described already enjoy support, in most cases, 
from Democrats and Republicans, including the administration. A lot of 
the ideas have merit. My hope is we will have, in the next day or two, 
the opportunity to debate those individual proposals. For folks who 
want to amend them, in some cases strike them, in other cases to add 
new provisions, terrific. That is the way this system is supposed to 
work. That is the way this place is supposed to work.
  My hope is in a very short while we will be gathered on this floor 
offering amendments to the package that Senator Dodd and Senator Shelby 
and our staffs are going to be working on to get things going, to get 
things done. The people of my State did not send me here to just talk 
about our problems. They sent me here to do something about them. We 
have a great opportunity to take the next step, I say the third in a 
trilogy of steps, that will help get our economy out of a ditch and 
hopefully head in the right direction.
  The best thing that can happen is we can demonstrate to people in 
this country that Democrats and Republicans, in an election year, can 
set aside our political differences and figure out the right thing to 
do to help stabilize the housing situation and put us on the road to 
recovery. That is going to lift the spirits of a lot of people and give 
our friends in the media a different kind of story to report--not the 
story they report day after day after day, a drumbeat of all the things 
going wrong in this county, but to start reporting some things that are 
going right in this country. As those more positive, uplifting, 
inspirational stories begin to appear, recessions have a way of turning 
into recoveries. That is exactly what we need right about now.
  Mr. President, with that, I do not see anyone else waiting to speak 
on the floor, so I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. SCHUMER. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SCHUMER. Mr. President, a few minutes ago I attended a little 
press briefing with Senators Reid, McConnell, Dodd, Shelby, and other 
members of both leadership and the Banking Committee. It was a very 
good meeting because, at the meeting, Senators Reid and McConnell 
empowered Senators Dodd and Shelby to get together and try to come up 
with a compromise housing package. That is the best news we have had in 
this housing crisis in weeks and weeks. The eyes of America are looking 
at the Senate and saying: What are you going to do about the housing 
crisis?
  Since we last adjourned, we have had a near meltdown on Wall Street. 
Since we last adjourned, new numbers have come out that show thousands 
more are losing their homes weekly. Since we adjourned, we have seen 
buying power is down for the average person and housing values are 
down.
  For most people, housing is their piece of the rock.
  That is their largest asset. When they are worried about their home, 
they are worried about everything. When the middle-class consumer gets 
worried, the economy catches cold, and that is what has happened.
  Yet for weeks and weeks the Senate has been paralyzed in terms of 
doing things about housing. We were very quick--the Fed--to go rescue 
Wall Street, and they were looking down the abyss. I don't think they 
had any choice. I was supportive of that. But I am not supportive of a 
bifurcated policy that says when a major financial company gets in 
trouble, we rush to their aid, but when John and Jane Smith homeowners 
have trouble, we say: You learn. You are a moral hazard. If we help 
you, then everyone else will not repay their mortgages. First, the 
argument is unfair. John and Jane are probably more blameless than many 
of those who undercapitalized Bear Stearns and played it right at the 
edge. Second, this moral hazard argument makes no sense. The statistics 
show that when a homeowner owns his or her home, when a family owns 
their home, they do everything to repay that mortgage. They don't go on 
vacation. They don't buy the new suit of clothes for the kid who is 
starting school. They cut back on what they eat. That nice Friday night 
out at the local restaurant which the family looks forward to goes, all 
so they can pay their mortgage. So this moral hazard argument that if 
we help people who are blameless makes no sense.
  Let me tell my colleagues about a typical person who has suffered 
foreclosure. I met many of them. I actually sat down and talked to some 
of them from New York. So that my colleagues can understand, these 
great thinkers up in their ivory towers, the conservative think tanks, 
who are saying: You better learn your lesson, don't even know what is 
going on. Let me tell my colleagues about Frank Ruggiero. He is a 
retired subway motorman. He lives in Ozone Park, Queens. His income 
is--I should say was, because Frank passed away a month ago, but that 
doesn't have anything to do with the story. Frank had a good pension. 
His union, TWU, provided him a good pension of $28,000. His Social 
Security was $11,000, and he had a nice little house in Ozone Park, a 
working-class neighborhood in Queens, New York City, that was worth--he 
had paid 16 years of a 30-year mortgage. He hadn't missed a payment, as 
most homeowners have not. They pay whenever they can.
  Frank got diabetes. His health care plan would not pay for the 
treatment the doctor said he needed, and he was desperate. So Frank saw 
an ad in the newspaper and it said: ``Get quick cash. Refinance your 
home.'' He called up the number and a mortgage broker came over. This 
mortgage broker is unregulated. He didn't come from a bank. He was an 
independent operator. That is where most of the trouble was, from these 
unregulated mortgage brokers. We are not dealing with that in this 
bill, but we should in a future bill. A bill I have introduced would 
deal with this issue. Anyway, he asked the mortgage broker: Could I get 
$50,000? He said: Yes. And Frank asked the right question. He said: How 
much will my mortgage go to? The mortgage broker said: It will go from 
$1,100 a month to $1,200 in January. Well, Frank thought, I can afford 
that, so he signs the mortgage deal.
  Let me say three things about what happened to Frank. Frank is 
typical--typical. His mortgage did go up to $1,200 a month the next 
January, but the following January, it went up to $3,900 a month. 
Frank's income was

[[Page 4597]]

$39,000. A quick calculation will show that $3,900 a month is more than 
Frank could pay. If he didn't spend one nickel for food, clothing, 
health care, and everything went to the mortgage, he still wouldn't 
have enough.
  Why? Was Frank defrauded? No. On page 37 of this 50-page mortgage 
document, it did say the mortgage would go up, but it didn't say so in 
a language you or I would understand, only that certain things would 
happen after this, that, and the other. I think if you read it--and I 
read it--it was deliberately disguised. So there was no fraud. There 
should have been, but our laws for mortgage brokers don't say it is 
fraudulent to sell somebody a mortgage that is beyond what they can 
pay.
  The second point: Of the $50,000 Frank was supposed to get, guess how 
much he got. He got $5,700. You say: $5,700, how could that be? Because 
in that disguised mortgage document, it said the broker would get a 
commission. What it didn't say is the broker's commission from a 
mortgage company, also unregulated, also not a bank--the higher the 
interest rate the agent got Frank to sign for, the greater the 
commission. If it was a no-document loan, which this was no documents--
another story for another day, and I will be back on the floor this 
week, if we are able to debate this bill, and talk about all these 
things because I have studied this issue and I have been working on it 
for a long time. It was a no-doc loan, an absurd concept; how investors 
bought no-doc loans is again something we have to look at. But he got 
an additional commission for that.
  Then there was a prepayment penalty. If somehow Frank would prepay 
this ludicrous mortgage, there would be a big penalty to prepay. When 
should that ever happen? Those should be outlawed.
  So this guy got $22,000, the mortgage company got points of $11,000, 
way beyond what any bank would charge or would be allowed to charge. 
Between the appraiser, the lawyer, and everyone who came with the 
package, they all took their piece and Frank got $5,700, all because of 
the structure of the mortgage company. You say: Well, what about the 
mortgage broker? He is probably off in the sunset on his yacht with all 
the $22,000 he made from duping the Franks of the world. Where is the 
mortgage company? It is bankrupt. Frank is stuck.
  The third point: Frank was a prime borrower. He had a FICO score 
somewhere around 700. He had paid his mortgage payment religiously for 
16 years. He had never missed a credit card bill. Frank was one of 
those old-fashioned people who believed you pay your bills, so he was a 
prime borrower. Sixty percent of those who have subprime mortgages in 
or about to go into foreclosure are prime borrowers. They pay their 
loans. They are not trying to gyp anybody. It is a disgrace. The sad 
fact is if Frank hadn't answered that ad but had walked into a local 
bank, because they are regulated, they would have said to Frank: You 
need $50,000? Fine. We will sign you a new 30-year fixed-rate mortgage 
and that will cost you $1,500 or $1,600 a month instead of $1,100. That 
would have been a stretch for the Ruggiero family, but they would have 
made it. They would have signed it and he would have gotten his money 
and his treatment.
  What are we saying, that Frank should be punished for what he did? I 
ask some of those ideologues from the think tanks and even from the 
other side of the aisle: What did Frank do wrong? What did Frank do 
wrong? What harsh lesson are we going to impose on the Franks of the 
world, and what will anyone else have to learn from them? So the moral 
hazard argument makes no sense.
  We have to do something. Now, what this bill contains is something 
Senator Brown and Senator Casey and myself and, with Senator Murray's 
help, have been working on for a long time, where somebody on the 
ground today could go to Frank, if Frank were alive, but to people 
similar to Frank, and they could help him rewrite a new mortgage that 
he could repay and he wouldn't lose his home. Now, after 6 months of 
the administration opposing and opposing and opposing, Senators Brown 
and Casey and I, again with Senator Murray's help, were able to get 
$180 million into the omnibus budget bill at the end of last year. 
Guess how much of that has been used. Mr. President, $160 million 
already, after about 6 weeks, 7 weeks since it passed. We need more. To 
me, the most important part of this bill, with a lot of good 
provisions, is the money for the mortgage counselors. Not because it is 
a great, heroic thing to do, not because it dramatically restructures 
our economy--these things are needed--but because it saves people's 
homes. It saves the Franks of the world, their little piece of the 
rock, which they struggled so hard and long to own and to keep. So we 
proposed another $200 million. To be honest, we need $500 million. To 
compromise with the other side--they hate all Government spending, some 
of them--we have said $200 million.
  Then, when the mortgage counselor came around, you would still need 
money to refinance the mortgage. That is why there are provisions for 
mortgage revenue bonds in the proposal. There is also a proposal for 
CDBG money. That seems to raise the ire of some: Government money. 
Well, let me say what the CDBG money will do. The houses that are 
already foreclosed upon and are vacant are cancers on neighborhoods. 
Let's say you are a homeowner anywhere within a tenth of a mile of a 
home that has suffered foreclosure; a vacant home in your neighborhood 
brings the home values down 1 percent, each vacant home. So a totally 
innocent person suffers. No moral hazard here. You could have paid your 
mortgage off and you are hurting because there are foreclosures. What 
this provision will do is allow the State, the local governments, to 
buy up that foreclosed home, fix it up, and sell it. Isn't that a good 
thing or are we again going to stay in our ideological ivory tower and 
say: That is the Government spending money. Of course it is the 
Government spending money. We spend money for soldiers. That is an 
external cost. Foreclosed homes are also an external cost. So this is a 
good package.
  The final provision is a bankruptcy provision which I support and I 
hope will stay in the bill. I know it is controversial. But Senator 
Durbin has wisely modified it. The argument against it is it would 
raise interest rates because people would build in the cost of the 
lower repayment once somebody was in bankruptcy into the original cost 
of the mortgage. So what Senator Durbin did in an effort to compromise 
is actually say it will only apply to existing mortgages, not forward-
looking ones, not ones that are going to be signed tomorrow. So it 
can't affect future mortgages. So these are five good provisions.
  Now, I wish to say to Senator McConnell and Senator Shelby, and I 
think I speak for just about every one of us on this side of the aisle: 
We welcome additions. We welcome discussions. Senator Johnny Isakson, 
of Georgia, has a provision about tax credits for first-time homebuyers 
that might encourage the housing market to get going again. I think it 
is a good provision. I praised him while we were on break. Senator 
Isakson should get to offer his amendment.
  There are many other amendments. Senator Carper worked diligently to 
see that FHA reform comes forward. Senators Dodd and Shelby are close. 
The only disagreement, as I understand it, is over what the limits 
should be. The administration and some of us, including Senator Dodd, 
support $740,000 approximately, and Shelby says $400,000. I cannot 
believe we cannot work that out. I say to Senator Shelby that in places 
such as Long Island, where the average home costs about $450,000, we 
don't even cover half of the homes right now. It was always intended 
that about 80 percent of the homes be covered--not just the very 
wealthy but middle class and down. Hopefully, they can come to a 
compromise on that.
  Anyway, this is good news. I know what happened. Two weeks ago, when 
we proposed the same thing, we were blocked. I talked to some of my 
colleagues on the other side of the aisle who wanted to put a bill 
together. They said there were some who said

[[Page 4598]]

the only debate we should have on this is to reduce the estate tax or 
make permanent the Bush tax cuts. With all due respect, neither of 
those has anything to do with solving the housing crisis, whatever your 
view is.
  Then something happened. We had a meltdown on Wall Street and all 
these new housing figures I mentioned during the 2 weeks we were away. 
I am glad to see that the minority leader and others have now seen, 
hopefully, the price for inaction, the price for a narrow ideological 
commitment--no Government, as our economy goes down the drain.
  I am hopeful, and I pray that the negotiations that are going forward 
right now between the Chair and ranking member of the Banking Committee 
will bear fruit. Let us hope we can spend the rest of this week far 
more productively than we spent the last week here in session. Let's 
hope we can debate housing. Let us hope we can help the Franks of the 
world, who have done nothing wrong and need help. When we help the 
Frank Ruggieros of the world, we help our economy gradually get better.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. ISAKSON. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ISAKSON. Mr. President, I am delighted to come to the floor today 
to praise the Senate for the most recent action in approving the motion 
to proceed on the issue of the day in America, and that is the housing 
crisis, the mortgage crisis, and what has been happening to our 
homeowners, mortgage companies, and our communities.
  I pay particular attention and thanks to Harry Reid of Nevada, the 
majority leader; Mitch McConnell of Kentucky, the minority leader; 
Chuck Schumer; Lamar Alexander; John Ensign; Chris Dodd; Richard 
Shelby; and a host of Members who came together, and instead of 
agreeing to disagree, agreed to agree and set a platform from which 
this Senate, in only the way the Senate can do it, can deliberate the 
most pressing issue of the day.
  I thank them for incorporating and including me in those discussions, 
and I want to share one of the things I shared with them and what I 
think should be a key part of any solution we offer on behalf of the 
housing market and the mortgage crisis.
  One of the good things about getting older--and I am 63--is that you 
have had a lot of experience, hopefully all of it good, but it is not 
all good. I was in the real estate business for 33 years before I came 
to the Senate, and I was in it in 1974 when we went through one of the 
worst housing recessions ever. I was also in it, thank goodness, in 
1975 when a Democratic Congress and a Republican President, Gerald 
Ford, brought forward a tax credit bill to stimulate the housing 
market.
  In 1975, we had a similar problem. We had gone through a period of 
easy credit and lousy underwriting, except it wasn't on the mortgage 
side, it was on the construction loan side. At banks around the 
country, if a guy came into the bank and had a pickup truck and a 
hammer, he qualified as a builder, and he went out and bought a lot and 
started building spec houses. Banks made the loans and even advanced 
some of the development costs. Some A and D lenders would loan 100 
percent of the cost of the acquisition and 20 percent of the 
development--crazy underwriting. It led to a plethora of new houses 
being built but no buyers for these houses. The United States found 
itself in the position of having a 3-year supply of standing new 
inventory on the market and no buyers.
  What happened? Values started declining, grass started growing, and 
vandalism started taking hold on the vacant houses. It was a horrible 
situation. The President and Congress came together and said: Why don't 
we stimulate the market to absorb these houses, get the buyers back 
into buying houses. We passed a $2,000 tax credit to any family who 
bought and occupied as their principal residence a single-family new 
house that had been built, not a resale or any other house, but a 
single-family new house that had been built and standing in inventory.
  We passed that $2,000 credit which, to give some idea of perspective, 
was about 8 percent of the value of an average house at that particular 
time in the marketplace. What happened is overnight, buyers sitting on 
the sidelines came out. They bought the standing houses that had been 
vacant and unseen for months. Housing values stabilized and began to go 
up, the economy turned around, and we went out of a recession, into 
prosperity, absorbed the inventory, and we did not bail anybody out. We 
just motivated homebuyers to do what they do best, and that is buy the 
designated houses which were the problem.
  Two months ago, I introduced a similar bill based exactly on that 
experience, except instead of $2,000, it was a $15,000 tax credit 
earned over 3 successive years, the first 3 years after the purchase, 
of any one of a category of three types of houses:
  Category No. 1, a new house built unsold, vacant, and permitted prior 
to September of last year. Any builder in America who permitted a house 
before September of last year did so when times were good. There was no 
looming indication we were going to get into the problem we are in now. 
They got caught like a lot of these homeowners and junk mortgages got 
caught, subprime mortgages.
  Second, a house that qualifies is a house that has been foreclosed 
upon, the foreclosure has been adjudicated, and it is owned by the 
lender or the lender's designated agent. That is a standing vacant 
house foreclosed on and up for resale.
  The third category is any house in foreclosure pending adjudication. 
That means it is being advertised, a foreclosure notice has been 
posted, and the house will be foreclosed on but has not yet.
  Any one of those three types of houses, which is where the growing 
inventory is, will be eligible for the buyer to earn a $15,000 tax 
credit allocated over the first 3 years in which they occupy the home. 
If it is a speculator in foreclosure, it does not qualify. If it is a 
speculator who is trying to buy, they don't get the tax credit. This is 
to stimulate houses being bought that are in trouble, owner occupied by 
principals who bought those houses, and it qualifies for people who 
will buy those houses, refinance them, pay off the loan, and live in 
them as their residence.
  What is going to happen, if the Congress is able to come together and 
pass a tax credit proposal such as that, is we will instantly stimulate 
the housing market and the marketplace, and the consumers will begin 
absorbing the standing inventory that is in foreclosure or pending 
foreclosure or is new and has been sitting since September of last 
year. That is precisely where the problem is. That is precisely what 
needs to be absorbed.
  There are a few people who said: What about people who have been 
making their payments and are not in trouble; why don't you get the 
credit for buying their house if they want to sell it? That is not 
where the problem is, No. 1. No. 2, they are suffering from all these 
vacant houses being out there as well because housing values are 
declining, appraised values are declining, equities are shrinking, and 
equity lines of credit are drying up. We need a focused, targeted 
absorption vehicle to see to it that the buying public solves our 
problem for us. That is the right way to do it.
  One other feature of the proposal is the tax credit will only be 
available and able to be earned on a purchase of a designated property 
made between April 1, 2008, and March 31, 2009--a 1-year window of 
opportunity. That creates the urgency of the situation, it motivates 
people to get into the marketplace or lose that opportunity, and it 
will be a significant catalyst to the marketplace, solving a 
significant problem for the United States of America.
  I encourage my colleagues on the Banking Committee. I appreciate 
their consideration of this proposal and this

[[Page 4599]]

concept. I hope that when the bill comes to the floor either in the 
base bill or in the amendment process, we can address a past solution 
that worked and add it to a contemporary problem that was identical to 
what the problem was in 1974 and 1975.
  I end where I began. I thank my Democratic friends and my Republican 
friends who came together and decided to make something work rather 
than figure out how we can just be against one another. Senator Schumer 
has been a catalyst in this effort, Senator Ensign, Senator Alexander, 
Senator Reid, obviously, Senator Dodd, and Senator Shelby. I pay 
tribute to Senator Tom Carper who talked with me over weeks about the 
proposal I just discussed and finding some way to bring it to the floor 
of the Senate and get it out there so we can address the problems that 
exist in Delaware, Missouri, Georgia, Nevada, and in all the 50 States 
over the United States of America.
  I am privileged to be the author of the amendment. I will be proud to 
be part of a team that does not want to take credit but wants to get 
something done, put together a bipartisan bill that addresses the most 
contemporary problem today in the United States of America, and that is 
the housing crisis.
  I yield the floor and 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. INHOFE. Madam President, I ask unanimous consent the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. INHOFE. Madam President, I ask for the regular order. Are we in 
morning business?
  The PRESIDING OFFICER. The Senate is considering a motion to proceed 
to the housing bill.
  Mr. INHOFE. I ask unanimous consent that I be recognized for up to 20 
minutes as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                                 Africa

  Mr. INHOFE. Madam President, on February 6 of 2007, the 
administration announced their intention to create a new unified 
command, the United States African Command, or AFRICOM. The U.S.-Africa 
command is a partnership between military and civilian communities that 
will focus on existing programs such as the training of peacekeeping 
forces that enable African nations and regional organizations to 
improve security on the continent. The National Security Adviser, 
Stephen Hadley, said:

       AFRICOM is a command that would be established for Africa . 
     . . It would be a partnership, really, between military and 
     civilians, and its principal focus would be to continue some 
     of the activities that we are already doing to try and train 
     peacekeeping forces so that countries in Africa and regional 
     organizations in Africa can take more of a role in dealing 
     with the conflicts and the problems on the continent.

  It is ironic that we have these COMs, these commands all over the 
world. Yet Africa is divided into three commands: the Pacific Command, 
the European Command, and the Central Command. Africa has now become, 
in my opinion, the most significant continent that we need to pay more 
attention to.
  I think I am uniquely qualified to talk about this. Two days ago, I 
made my 97th African country visit. The last country we were in this 
last week--there were some five countries--was Ethiopia, a very 
significant part of it.
  I also started my efforts in Africa long before we had a lot of 
military interest in Africa. Mine was more of a mission type of thing. 
I became very familiar with all of Africa. I now have had an 
opportunity to sit down and visit personally and develop intimate 
relations with the Presidents of some 28 African nations, their 
Parliaments and many of the leaders there.
  As a matter of fact, I was in Ethiopia 7 years ago, when we came upon 
a little girl. She had nothing. The little girl was an orphan. She was 
3 days old. She wasn't healthy--didn't look like she would live at all. 
They put her into an orphanage, where they did the very best with what 
they had. Like so many orphanages, she was actually put in a bucket. 
They had this cute little girl in there, feeding her intravenously 
through her scalp at the time.
  Anyway, there is a long story that goes with that, but the short 
version is my wife and I have been married 48 years and have 20 kids 
and grandkids and one of our daughters, Molly Rapert, had only boys. 
She wanted a little girl so she adopted this girl. This is my adopted 
African granddaughter.
  It is kind of funny. She was found abandoned as an orphan in Addis 
Abba, in Ethiopia. Yet this little girl has turned into quite a genius. 
In fact, 3 weeks ago at the National Prayer Breakfast I was in charge 
of the African dinner. I say to the Presiding Officer, this little 
granddaughter of mine was the speaker that night--7 years old. I have 
more than a passing interest in Africa. It is a family interest too.
  During my time on the continent, I have seen the significant and 
strategic place in the world that Africa holds because of the sheer 
size of Africa. People don't realize, if we go from Mauritania to 
Ethiopia, east to west, it takes 7 hours flying. If you go from north 
to south, from Cape Town up to Algeria, it is 9 hours. It is a huge 
continent.
  The rest of the world is now realizing its importance. I think our 
timing is very good. It is only a year ago that we embarked upon this 
idea that we were going to be holding up Africa and supporting it. A 
lot of people don't realize the significance of Africa, that Africa is 
the area where, as the squeeze takes place in the Middle East on 
terrorism, a lot of it goes down through the Horn of Africa, through 
Djibouti and that area, and spreads out throughout Africa.
  Other countries are realizing how important it is. They are doing 
something about it. The new French President, Sarkozy, said during a 
recent trip to South Africa that Africa should have at least one 
permanent seat in the U.N. Security Council and that France would no 
longer accept major world affairs being discussed without a leading 
African country being involved.
  There are many countries, such as China, expanding influence in 
Africa. I can tell you that, as you go through Africa, anything that is 
new and shiny--a bridge, a colosseum, anything such as that that is 
given to them by China. China is trying to get a foothold there.
  China has the same problem in its dependency on outside sources for 
oil as we do. They are beating us to some of these areas in Africa. 
Huge reserves are being developed in Africa. All that is very 
significant.
  Currently, over 700 Chinese state companies conduct business in 
Africa, making China the continent's third largest trading partner. The 
United States and France are first and second.
  I have also seen, in my many travels to Africa, the great strength 
and perseverance in the African people, in their fight to overcome 
great obstacles such as HIV/AIDS, malaria, poverty, wars. In order to 
achieve security and stability, we have to work to eliminate the root 
causes of poverty and poor governance. Fighting terrorism in the region 
has become critical. Examples of terrorism we remember--it was not too 
long ago the bombings of our embassies in Tanzania and in Kenya and 
more recently the bombings in Morocco and Algeria. African countries 
have become more vulnerable as al-Qaida has infiltrated into the Horn 
of Africa.
  As the surge is working--yesterday after leaving Africa, I went to 
the European command and looked at the progress we are making. We were, 
yesterday afternoon, in Iraq. Good things are happening there. The 
surge is clearly working. As the surge works, what happens is, as I 
described, a lot of the terrorist activities go down into the most 
convenient place and the most vulnerable and that is the continent of 
Africa.
  It has been reported terrorist networks in Somalia and Eritrea work 
together, increasing their capability. If you go into northern Uganda--
this is something very few people know about. Everyone knows about the 
problems in the Sudan and many of the other areas

[[Page 4600]]

of Africa. But how many people know the children's Army being developed 
by a man named Joseph Kony. The LRA, the Lord's Resistance Army, for 30 
years now they have been taking kids out of villages, little 11-, 12-, 
13-, 14-year-old kids, teaching them to be soldiers. Once they learn to 
be soldiers, they have them take an automatic weapon and go back to 
their villages and murder their family. If they don't do this, they 
maim them, they cut their ears and lips off. This has been going on for 
a long time. These horrible things are going on, and a lot of that is 
because we, the free world, have not given our attention to Africa that 
we should have a long time ago. We see the conflicts in Kenya taking 
place right now, the young democracy that has unfortunately exploded 
into tribal conflict. More than 1,000 people after the December 
election were killed. Last month, there were 500 European Union troops 
who were sent to protect Chad's capital from being taken over by the 
rebels; 3,700 EU troops are presently protecting thousands of refugees 
along Chad's border with Sudan as well as the neighboring Central 
African Republic. In February, the United Nations ordered its regional 
force to withdraw to Ethiopia after the Eritrean Government cut their 
field supplies.
  Let's keep in mind it was Eritrea, when we had the problem in 
Somalia, that went down and sided with the terrorists. It was, of 
course, Ethiopia that joined us, as well as other countries such as 
Uganda and Burundi.
  The United States has a long history offering support, helping 
establish security on the African Continent. Thomas Jefferson was the 
first President to send American troops to the coast of Africa to ward 
off the Barbary pirates plaguing the Mediterranean and threatening the 
security of Europe and the new colonies. This is kind of funny. That 
was Thomas Jefferson. Today the same thing is happening in the Sea of 
Guinea. They have new discoveries of oil so there is pirating going on, 
and we are over there trying to help the surrounding countries defend 
themselves. This command is going to go a long ways toward doing that.
  We continue to support African nations in the area for security and 
stability and health and education initiatives. In 2003, the United 
States helped to bring stability to Liberia. In Djibouti, the Combined 
Joint Task Force for the Horn of Africa has been involved in 
developmental activities, including building schools and digging wells. 
I have had occasion to be in Eritrea several times. It is probably the 
least known country in Africa. It is becoming better known because of 
all the atrocities that are taking place there. The administration 
recently pledged $15 billion through the President's emergency plan for 
AIDS relief and significantly is contributing to the fight on AIDS.
  People complain: Why are we spending money to help Africans on HIV/
AIDS? That is their problem. They are dealing with their problems 
themselves.
  I had occasion last week to be with the First Lady of Zambia. The 
First Ladies all throughout Africa are the ones who are doing the most 
to combat HIV/AIDS. The First Lady of Zambia has put together a group 
of First Ladies who are significantly having an impact. President 
Gbagbo's wife Simone in Cote d'Ivoire is very actively attacking the 
problem there. Janet Museveni in Uganda has been honored in the United 
States for her work on HIV/AIDS. Most recently, the one I think is 
really doing the best job is the wife of the Prime Minister of 
Ethiopia. Prime Minister Zenawi's wife Azeb is heading up a group that 
is having great positive impact on HIV/AIDS. So they are helping 
themselves.
  The United States is partnering with African countries in effective 
programs such as IMET. I am on the Armed Services Committee, and it is 
one of the strongest programs we have to develop close relations with 
other countries. It is a military program where we invite the officers 
to come over and get trained with our officers. Once they are trained 
with our officers, that develops a bond that stays there from then on. 
If we don't do it, other countries such as China are willing to.
  We have dramatically improved our train-and-equip sections so that we 
can help commanders in the field train and equip other countries. 
Primarily, my concern is in Africa, and that is happening. Those 
programs are proving to be vital resources by aiding developing 
countries in the professionalism of their militaries.
  Africa is an avenue that the United States can use to aid Africa as 
it continues to grow into a secure democratic continent with a growing 
economy. Africa's challenges, its growing strategic significance, and 
the potential impact of failing states and ungoverned areas on U.S. 
security will require increased emphasis on interagency cooperation.
  Currently, the African Continent is divided between three commands. 
You have the Pacific Command, the Central Command, and the European 
Command. The division of responsibilities has caused problems in 
coordinating activities and creating seams between commands, especially 
in key areas of instability or of conflict. One seam creating 
difficulty lies between Sudan--under the CENTCOM, or the Central 
Command--and Chad, immediately adjoining it, and the Central African 
Republic. The last one is under the European Command. They are right 
next to each other but under two different commands. Bureaucratically, 
it is a nightmare; you can't coordinate activities.
  The recent conflict in Chad and the continuing conflict in Sudan 
emphasize the need for the United States to respond to these conflicts 
and to be unified. As AFRICOM becomes operational, these divided 
responsibilities will no longer exist. It is set up to be operational 
by October of this year.
  We have a great guy who is going to be commanding general. He has 
already been confirmed, GEN William ``Kip'' Ward. Kip Ward's military 
service includes tours all over the world but with a real emphasis and 
interest in Africa. He was confirmed by the Senate in September. 
General Ward has expressed a vision of hope for Africa and for the role 
the United States plays in that vision. General Ward believes in the 
need to address crisis situations before they arise and to address them 
at the microlevel, at the perspective of the individual victim, which 
is critical in bringing about solutions. AFRICOM's aim will be a 
preventative approach on the local level, giving hope in times of 
adversity and a way forward for the future in both security and 
development. General Ward is the right guy for the job. He has stressed 
that the purpose of the command is to enable African solutions to 
African challenges, to support African leadership rather than usurping 
or suppressing African leadership and sovereignty. This is very 
important.
  It was the right military decision for us in the United States to 
become interested in helping Africans develop five African commands. 
These would be north, south, east, west, and central. Only two of the 
locations have been determined right now. But we make it very clear to 
Africa, we are not doing this. We are not the ones who are putting the 
brigades in there. We are helping them to put their own brigades there 
so they can take care of their own problems.
  In Somalia, African countries such as Ethiopia, Burundi, and Uganda 
have sent in troops to help stabilize the government there. We couldn't 
have done that without the support of Africans. The African Union 
troops have recently arrived in the Comoros Islands near Madagascar to 
help its military regain control of an island where a renegade leader 
has declared himself President. The development of the African standby 
brigades is a good example of how we are helping them to help 
themselves.
  So AFRICOM is expected to become fully operational the first of 
October 2008. It is going to be at least temporarily located in 
Stuttgart, Germany. My personal preference would be to have it 
someplace in Africa. Right now, there is some resistance to that, so we 
will keep it in Stuttgart for the time being.
  In fiscal year 2008, Congress appropriated $75 million to the 
command, and in fiscal year 2009, the President

[[Page 4601]]

has requested $389 million. I know this sounds like a lot of money, but 
I can't think of anyplace where we can actually save money more than by 
helping the Africans build up themselves and bring their allegiance in 
to us. We have to support AFRICOM with adequate funding to enable the 
command to be fully equipped to face the challenges they have only in 
Africa.
  I already introduced a resolution that is S. Res. 480. I am joined by 
about 12 or 14 Members. I invite my friends from both sides of the 
aisle who have a heart for Africa and believe in what we are doing to 
join in this resolution. The resolution encourages the Department of 
Defense and the State Department and USAID to work cooperatively with 
our African friends to bring hope to the continent. So often, when you 
try to put together a program such as train and equip, the State 
Department seems to think that the Department of Defense is taking away 
some of its power. It becomes a turf battle. We don't want that to 
happen. It looks as if it will not happen in this case. The resolution 
emphasizes that AFRICOM is expected to support, not shape, U.S. foreign 
policy in Africa so that we would be working together.
  Finally, I encourage my friends in Africa to work together with 
AFRICOM to find solutions to issues facing Africans today. Under 
General Ward's leadership, I believe AFRICOM can provide that hope to 
the people, and I believe that is going to happen.
  I was in a Stuttgart meeting, the first official meeting of a Member 
of Congress with the new African Command or the new AFRICOM. I became 
convinced, looking around the table at all the people, this is the 
first time you see many of the bureaucracies sitting around the same 
table. This didn't happen before because it was not a unified command. 
This unified command will allow that to happen.
  There is no place in the world that needs more attention by us right 
now. When you talk about the war on terror, the next area we will have 
to concentrate on is Africa. By taking these steps now, Africans will 
be prepared to handle their own problems and not have us do it for 
them.
  I am very pleased with the successes we have had. We have been 
talking about a new African Command now for about 10 years. Finally, it 
will become a reality this year.
  We need to encourage a lot of people to start participating, maybe to 
the same level I am participating with the country of Africa. It is a 
beautiful thing that is happening right now. I believe we are going to 
make great progress as a result of the African Command.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Ohio.


                       Honoring Our Armed Forces

                  Staff Sergeant Keith ``Matt'' Maupin

  Mr. BROWN. Madam President, this weekend the Department of Defense 
confirmed the death of SSG Keith ``Matt'' Maupin, an American patriot 
from Batavia, OH, near Cincinnati, who bravely served our Nation in 
Iraq. Sergeant Maupin had been listed as missing and captured for 
nearly 4 years. He went missing on April 9, 2004, after his fuel 
convoy, the 724th Transportation Company, was ambushed just west of 
Baghdad. Since that tragic day, Sergeant Maupin's mother and father, 
his family, have worked tirelessly to locate their son. My prayers are 
with them, those who have endured years of gut-wrenching uncertainty 
and unfathomable heartache. We owe this family a tremendous debt of 
gratitude, not only for their extreme sacrifice but for their 
determination to prevent other parents from experiencing an information 
vacuum when their deployed son or daughter goes missing.
  There are three other soldiers currently missing and captured in 
Iraq. The nightmare is not over for their families. On their behalf and 
in honor of Sergeant Maupin, our Nation must find those soldiers. Time 
must be perceived as the enemy. There can be no pause in the search, no 
ebb in the sense of urgency.
  Upon finally hearing news of their son a few days ago, Sergeant 
Maupin's father said:

       Matt is coming home. He's completed his mission.

  His words echo those of a grateful nation.
  Madam President, for months and months almost every newspaper in the 
country has been filled with stories of the tremendous toll the housing 
crisis has taken on communities across our Nation. My State set an 
unenviable record for foreclosures last year--more than 83,000, 
according to Ohio's Supreme Court. That is more than 200 every day of 
the week--Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, and 
Sunday. Every week 1,500 families lose their homes. Almost 4 percent of 
all home loans in Ohio are in foreclosure, the highest rate in the 
Nation. The end is nowhere in sight.
  In Ohio, there are another 120,000 home loans that are delinquent. 
Nationally, one rating agency is now predicting a 50-percent default 
rate for subprime loans made in the fourth quarter of 2006, many of 
which will reset in the fourth quarter of this year. Think about that. 
One of every two subprime loans made in the fall of 2006 will go bad. 
That is not lending, that is gambling with someone else's home.
  In the face of this crisis, the Bush administration has largely taken 
the view that prosperity is around the corner; the Government need not 
do anything; voluntary efforts and market forces will be enough. Last 
summer and earlier in the year, the Bush administration was still 
arguing that the problem was contained. So long as the problem was 
contained to places such as Ohio and Michigan, to Nevada and 
California, the administration was content to do almost nothing. But 
what a difference an address makes. When the problems moved from 
America's Main Streets to Wall Street, the administration sprung into 
action. In a single weekend, the executive branch jumped to rescue the 
investment bank Bear Sterns from bankruptcy. If the Government can leap 
into action to prevent the bankruptcy of a single bank, how can we turn 
our backs on the tens of thousands of Ohio families and the millions of 
American families who need our help?
  Congress must act in the face of this crisis. Majority Leader Reid 
tried a month ago to bring legislation before the Senate that would 
take several steps to help homeowners faced with foreclosures in the 
communities in which they live. We are trying again today. We seem to 
be able to afford to spend $3 billion in 1 week, every week, 52 weeks a 
year, in Iraq, but the President hasn't been able to find $4 billion in 
1 year to help the towns and cities across the country that are being 
gutted by foreclosures. We are able, it seems, from Chairman Bernanke, 
to spend $30 billion buying a basket of mortgages from Bear Sterns that 
JPMorgan wouldn't touch with a 10-foot pole. Why can't we help cities 
rebuild?
  The needs of communities are critical because this crisis has an 
impact far beyond just the people who lose their homes, as big as those 
numbers might be. Whenever a home goes into foreclosure, the value of 
neighboring properties is reduced. In many areas, local vandals move in 
quickly to strip the copper pipe and the aluminum siding from a home. 
Crime goes up just when property tax revenues in these cities are 
plunging and the resources of a city and town are stretched to the 
limit.
  Senator Reid's bill would include some $4 billion in funding for the 
Community Development Block Grant Program, so communities that have 
been the hardest hit could renovate or rebuild or even in some cases 
raze these properties.
  The bill would provide an additional $10 billion to housing finance 
agencies to be used to refinance mortgages, to help first-time home 
buyers, and to create more multifamily rental housing.
  The majority leader's legislation would also provide $200 million on 
supporting the efforts of nonprofit agencies across the country to 
counsel homeowners on how to work with a lender to stave off 
foreclosure.
  We have great neighborhood counseling organizations in Columbus and

[[Page 4602]]

in Toledo and in Dayton and in Cincinnati and all over my State.
  This is no easy task. Once upon a time, you took out a loan with your 
local bank to buy a home. If I borrowed money from a local bank, the 
banker had just as much interest in my paying down my loan, my staying 
up to date on my loan, he had just as much interest as I did in making 
sure I paid my mortgage. You knew the people at the bank. They knew 
you. You had that kind of relationship.
  Today, especially for subprime loans, that is seldom the case. So 
help in navigating the mortgage maze is essential. That is why those 
neighborhood counseling organizations are so important.
  The majority leader's bill would also improve disclosure of the terms 
of a mortgage. In the last year--the last 14, 15 months since I came to 
the Senate--I have held about 95 roundtables in 60 of Ohio's counties 
talking to people about what issues matter to them the most in their 
communities. I heard from one Ohioan after another, from Marietta to 
Lima, from Bryan to Chillicothe, from Zanesville to Youngstown. I have 
heard from one Ohioan after another who never understood the real risks 
and dangers of the mortgages that were sold.
  Senator Reid's bill also provides bankruptcy judges the ability to 
modify the mortgage on a primary residence in the same way that a judge 
can today with a vacation home or investment property or even a boat.
  We know lenders and their servicers cannot keep up with the flood of 
foreclosures they are facing. Much has been made of the number of loans 
that have been changed as a result of voluntary efforts. I do not 
discount those efforts at all. But tacking late fees and penalties on 
the back end of a loan does not do much to help a family make their 
monthly payment.
  One woman who called me reported a loan modification that reduced the 
interest rate on her loan from 11 percent to 10 percent. With the late 
fees and penalties folded in, her monthly payment barely budged.
  Modifications like these are simply not going to help. It is 
essential that we permit the bankruptcy courts to serve as their 
backstop.
  My Republican colleagues apparently think it is OK for a bankruptcy 
judge to modify the mortgage on a multimillion-dollar vacation home, 
but it is not OK to provide the same relief to a family facing 
bankruptcy in their $100,000 home.
  When lenders are only recovering 35 cents on the dollar in my State--
it is a little higher nationally; only 35 cents in my State on the 
dollar--on a foreclosed property, I do not think they have anything to 
fear from an alternative process supervised by the bankruptcy courts 
that may result in avoiding foreclosure.
  The bankruptcy provisions are a significant change in our law, to be 
sure. But they are a responsible reaction to some extraordinarily 
irresponsible underwriting.
  I understand the importance of protecting contract rights. But think 
for a minute about the contracts that are in question. The vast 
majority of subprime loans went to refinance homes. They were designed 
to do three things--to generate fees, strip out equity, and quickly 
become unaffordable.
  Do we really want to take the position that these contracts should be 
beyond the reach of a bankruptcy judge? I think not.
  We have much work to do in dealing with this foreclosure issue. Every 
day we delay more than 200 people--more than twice the membership of 
this body--lose their home in my State. They deserve more from us.
  I yield the floor.
  Mr. CORNYN. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. CORNYN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Salazar). Without objection, it is so 
ordered.
  Mr. CORNYN. Mr. President, we know Senators Dodd and Shelby are 
working on, hopefully, a bipartisan piece of legislation that will come 
to the floor this week that will help Congress do what needs to be done 
and, hopefully, what will actually work to try to relieve some of the 
crisis caused by the subprime lending credit crunch and the slowdown in 
the housing industry.
  We have all acknowledged this slowdown we have seen in our economy 
over the last few months, and we have resolved to work together to try 
to give the American people the confidence that if there is something 
we can do, we will try to do it in a way that actually works and 
relieves the problem in a bipartisan way. I think, frankly, that is met 
with some measure of relief by people across the country.
  I think we got off to a pretty good start when Speaker Pelosi and 
Republican leader John Boehner and Hank Paulson, the Secretary of the 
Treasury, came up with a stimulus package that passed with strong 
bipartisan majorities.
  I think as much as anything it demonstrated that we are capable of 
acting together in a bipartisan way rather than just engaging in 
gridlock and finger pointing. I hope we will continue along that trend 
as we consider the legislation that Senator Shelby and Senator Dodd are 
working on.
  To me, one of the best parts about the stimulus package we passed was 
the small business bonus depreciation provisions which gave small 
businesses that invested in new equipment an opportunity to write that 
off on an accelerated basis. It provided a great incentive for them to 
purchase that new equipment and hopefully allow them to continue to 
create jobs.
  It is no secret about 70 percent of the jobs created in America are 
created by small businesses. We ought to do everything in our power to 
try to help them continue to generate jobs for hard-working Americans.
  A little earlier today, I had a colleague come up to me and say, 
basically: We have to do something to deal with this crisis. Of course, 
I added: Well, I hope we do something. But more than that, I hope we do 
something good or something that will actually work and certainly not 
something that will actually make things worse.
  Like the medical profession, we ought to consider in the Senate 
taking a Hippocratic oath of our own that first we do no harm because, 
frankly, on the earlier stimulus package, where we believed it was 
necessary to act to give the public confidence--that we could on a 
bipartisan basis--basically we ended up spending about $150 billion to 
do so.
  I think extraordinary measures were called for, but it was with more 
than a little trepidation that I voted for that bill which added to the 
debt, particularly when we are not doing a good job of dealing with the 
deficit in other areas and unfunded liabilities of the Federal 
Government, particularly when it comes to entitlement spending. But for 
the same reason I voted for tax cuts in 2003--which I think helped 
contribute to about 50 months of consecutive job growth in this 
country, and about 9 million new jobs--I think sometimes extraordinary 
measures are called for to help stimulate the economy.
  But I do think the very best stimulus package we could possibly pass 
would be to lighten the tax load on small businesses and American 
taxpayers. It works. We know when people can work hard and keep more of 
what they earn, then it generates not only more income from them and a 
greater incentive to work hard, it also, ironically, generates more 
revenue for the Federal Treasury because more people are working, more 
people are paying taxes, and, thus, it helps us deal with the deficit 
in a way that is constructive by putting people to work.
  But at the end of the day, I think what we need to do this week is to 
make an immediate, palpable difference in the lives of families with 
distressed mortgages. The housing market ought to be our focus and 
helping people with distressed mortgages not have to unload those 
through foreclosure and perhaps lose everything they have invested. 
That is why I would like to

[[Page 4603]]

see the provisions from something called the SAFE Act become law.
  The SAFE Act would expedite the delivery of the full $180 million 
appropriated for foreclosure counseling just last December. And to help 
stabilize the housing market itself, the SAFE Act includes a $15,000 
tax credit over 3 years. This has been proposed by our colleague from 
Georgia, Senator Isakson. I believe Senator Stabenow on the other side 
of the aisle has something similar. But basically what it would do is 
provide a tax credit that would give people an incentive to buy 
existing inventory of new housing or housing that was currently in 
foreclosure proceedings.
  Obviously, our housing market has a big impact on employment, and it 
has a ripple effect on the economy generally. I think this $15,000 tax 
credit over 3 years would provide a powerful incentive for people who 
are in the market to purchase a single family home in foreclosure or a 
new home from existing inventory which now in many cases just sits 
vacant.
  This would make it more affordable for families looking to start 
buying a home and will provide an incentive for people to reenter the 
market in the coming year.
  Finally, to make sure these same problems are avoided in the future, 
we need to focus on increasing transparency and information for 
prospective borrowers.
  I agree with Senator McCain who said we should not be about bailing 
out unscrupulous lenders who made bad loans or people who made the 
mistake of borrowing money they could not pay back, perhaps betting on 
the continuous bubble in housing prices in the housing market. But what 
we do owe the American taxpayer, the American consumer, is transparency 
and information which will allow them to consider--for example, when 
they buy an adjustable rate mortgage--and understand what they are 
getting into. That means letting borrowers know the full details of any 
new introductory rate and payment and what their new adjustable rate 
will be and how much they can expect their payments to be.
  We must ensure consumers fully understand their mortgages and that 
they have a completely free and well-informed choice when it comes to 
their loans. That is the only way I believe we can hope to avoid future 
problems in the housing and banking industries in the future, beyond 
making sure that underwriters don't intentionally loan money to people 
they know can't pay it back. But those have to be resolved on a 
transaction-by-transaction basis, perhaps by the courts.
  The Senate should make sure that any proposal does not produce 
insurmountable challenges to prospective and current homeowners. Too 
often, the work we do in the Senate has the effect of unforeseen and 
unintended consequences. Here again, we should do no harm, and I think 
we should be careful not to cause problems while we are trying to fix 
problems.
  For that reason, I would be hesitant to support any proposal that 
increases the size of the Government's budget at the expense of the 
family budget. I could not support proposals that actually make home 
ownership more expensive, encourage costly litigation, or expand 
Washington programs.
  The Senate should not be making home ownership more expensive for 
working families. That is what I believe, for example, the bankruptcy 
provision would do, which would allow bankruptcy judges to actually 
cram down reduced interest rates, thus devaluing that particular 
financial instrument, which would actually in the long run have the 
unintended consequence of raising interest rates and the cost of 
mortgages. I think every Member of this body can agree the last thing 
the Senate should be doing is making things harder on families and 
making it more difficult for small businesses to grow and create jobs 
here at home.
  When this Senate passed the economic stimulus package, it affirmed 
the basic principle that economic growth is best served through 
taxpayers and people who are earning the money being able to keep more 
of it. It would be incomprehensible to me to now turn around and pursue 
a mortgage plan that would take that money away through bigger 
Government programs or higher costs for homes or mortgages.
  Let me say that in my home State of Texas, we continue to enjoy 
strong job creation. Although there has been a downturn in the housing 
markets, by and large, we are running in a countercyclical fashion to 
much of the rest of the Nation. Our unemployment rate is at a 30-year 
low, and over the past year, Texas has led the Nation in job creation. 
We have accomplished this by some things that are pretty obvious, but I 
think they are worth noting; things such as low taxes, commonsense 
regulation, and an economy based to a large extent on free trade. All 
of these factors give businesses the tools to grow and families the 
stability to live. Not coincident, naturally, it allows or encourages 
job creators and businesses to move to our State, thus creating in the 
last--well, since 2000 about 3 million people have moved to Texas. I 
think people tend to vote with their feet where they find opportunity, 
and I think this formula of lower taxes, less regulation, the right to 
work without having to join a labor union--you can if you want, but you 
shouldn't be forced to do so just to get a job--those, in addition to 
commonsense tort reform and some medical liability reform, which has 
reduced the cost of medical liability insurance some 17 percent, have 
encouraged a lot of physicians to move to our State and has created a 
lot more access to good quality health care. So from my standpoint, we 
kind of know what works, what helps encourage the economy, what helps 
stimulate the economy, and what provides the incentives for American 
workers to work hard and businesses to be attracted to a particular 
State or location.
  I urge all of my colleagues to join me in supporting well-reasoned 
and proven measures such as these, while rejecting other proposals that 
would increase onerous regulation, drive up housing and loan costs, and 
build a barrier between more families and home ownership. We have 
worked well in the past when we have worked together, and I hope this 
week will be yet another example of good work we can accomplish when we 
put partisan politics aside to work out solutions in a way that 
addresses the real problems that face the American people.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Tennessee is recognized.
  Mr. ALEXANDER. Mr. President, I noticed the Senator from Texas was 
talking about all of those people recently moving to Texas. There was a 
point in our history in this country when half of Tennessee moved to 
Texas. In fact, almost every Texan you find has a Tennessee ancestor, 
whether it is Davy Crockett or Sam Houston or some other person.
  I wish to follow up on the remarks of the Senator from Texas and his 
focus on the family budget and his focus on the way this Senate is 
working. Senator McConnell, our Republican leader, has said often that 
in the Senate that process is often substance.
  When I was Governor of Tennessee, I didn't understand that very well 
because the job of a governor is to see an urgent need, develop a 
strategy for meeting the need, and then persuading half the people you 
are right. So I left the process to somebody else and probably didn't 
show as much respect for the process as I should have. When I was a 
university president, I was humbled a great deal and learned a little 
bit more about process. Now that I am in the Senate, I understand even 
more that the Republican leader is a very wise man when he says process 
is often substance.
  So first I wish to comment on the process we saw this afternoon when 
the majority leader, Harry Reid, a Democrat, and the Republican leader, 
Mitch McConnell, stood together with others of us and said we are going 
to work together and try to produce a housing bill. That was a very 
important event to say we'll come together and try to produce a housing 
bill that helps stabilize home values for American families and helps 
restart our economy. All

[[Page 4604]]

it was, was process. Out of this messy situation we have here in the 
Senate, where 100 of us have a right to actually bring the Senate to a 
halt, we had the two leaders form a consensus about process and assign 
two of our more respected Members, the Senator from Connecticut, 
Senator Dodd, and Senator Shelby, the Senator from Alabama, the job of 
coming back to us tomorrow and giving us the next step. The leaders did 
this because the Senate recognizes we have a housing problem in this 
country. It is one that by and large may have to correct itself because 
of the huge free market we have, but there are steps we can take in the 
U.S. Government to help stabilize home values. That would be good for 
the family budget. It would help to restart the economy. It would be 
good for the country.
  I commend Senator Reid and Senator McConnell for their steps and 
think they are on the right course. I say that as I see the Senator 
from Colorado, who has done so much in this body to help us keep our 
eye on the ball and do what the American people expect us to do. The 
American people don't expect us not to have differences of opinions; of 
course we have differences of opinions. That is why issues are here. If 
they could be easily solved, they would have been solved at the county 
commission or at the State government level. But these issues have been 
kicked up to the national level and they are hard, tough issues, and we 
are expected to have differences of opinion. We have Democrats on that 
side and Republicans on this side because we have different principles 
that we emphasize sometimes. Usually they are the same principles, but 
they are often in conflict and we have to work those out. So in the 
Senate, we are going to have a big, strong, rousing debate about 
housing. No one should misunderstand that. But what the leaders have 
said is what the leaders ought to say in the Senate, which is that we 
see a real problem here with housing in the United States of America. 
We see families who are worried. We see home values that are at risk. 
We believe there are some steps we can agree on that would be good for 
the country, are within our budget and that would help stabilize home 
values and restart the economy. These are steps that will help the 
family budget, and the leaders have said that is what we are going to 
do.
  Of all of the things people say to me in Tennessee when we talk about 
issues, they basically say: Why don't you guys--or something less 
flattering--why don't you Senators stop the petty partisan bickering. 
Or, in my words, stop the kindergarten politics and go to work on big 
issues affecting our country and try to get a result. That is what the 
Senator from Colorado spends a lot of his time here in the Senate 
trying to do. I try to do that. Most of us try to do that. We are all 
here, I think, to get some result, and the leaders have given us an 
opportunity to try to get one here on housing.
  There are some good precedents for this. When people see us debating, 
they shouldn't think there is something wrong with that. We have big 
principled debates here. What they don't like is the kindergarten 
politics when we are here to stick our fingers in each other's eyes. 
The American people can smell that a mile away, and they hate it. They 
don't like it.
  But kindergarten politics is not what we used on the America COMPETES 
Act last year. Senator Reid and Senator McConnell cosponsored it 
because so many of us supported the idea. It wasn't so easy to pass. It 
was $34 billion of authorization to try to help us keep our jobs from 
going overseas by keeping our brain power advantage here. We had no 
limits on the debate. Everybody who wanted to offered an amendment and 
then we passed the legislation. The COMPETES Act is now in place, and 
we are working on funding it. It is helping low-income kids who 
couldn't afford advanced placement tests have them. It is helping 
universities train more math and science and physics teachers. It has 
put us on a path to double funding for the physical sciences in the 
Office of Science and in the National Science Foundation. These are all 
things we must do as a country if we want to keep our standard of 
living. So the Senate did that together.
  At the end of last year, we brought up an energy bill. Senator 
Salazar and I worked together on many energy ideas, but this was an 
especially important one. The Oak Ridge National Laboratory in the 
State of Tennessee has said to me repeatedly: The single most important 
thing you could do to reduce our dependence on foreign oil and to stop 
sending dollars overseas to some people who are trying to kill us is to 
reduce the consumption of oil by passing a fuel efficiency standard so 
we can increase the average mile per gallon of all cars and trucks. We 
did that. Now, the Senate had an argument about whether to have 20 
billion more dollars of taxes, and some of us voted that down. But we 
didn't stop there and go home, take our football and leave the floor; 
we came to a result, and we did the most important thing we could do to 
try to reduce our dependence on foreign oil. And reducing our 
dependence on foreign oil, by the way, is the real way to stabilize and 
begin to bring down the price of a gallon of gas. So the Senate did 
that together.
  Then at the beginning of this year, the President and the House of 
Representatives got together to propose an economic stimulus package. 
In fairly record time we approved provisions that will help 2.7 million 
Tennesseans receive $600 or $1,200--or in some cases $1,800, if they 
have a couple of kids--of their own money for the most part, back, so 
they can spend it. This stimulus package will provide $50 billion in 
aid for businesses. In some of our smaller counties there are hundreds 
of small businesses which can take advantage of keeping a little bit 
more of their own money and maybe add jobs. And that stimulus is coming 
in time to help.
  We hear on the news today that consumer confidence is a problem. 
Well, the rebate checks and the small business deductions are about to 
go into effect, and that was something the Senate did together. We had 
principled disagreements, but we came to a result.
  One other example of working together is concerning the foreign 
intelligence surveillance bill. I mentioned a little earlier a very 
wise man, Samuel Huntington, once said that most of our conflicts are 
about principles with which we all agree. We agree, all of us, the 
Senator from Colorado and the Senator from Tennessee and every 
American, that the principle of liberty is important, and so is the 
principle of security. Well, those two principles came in conflict when 
we began to debate the rules for overhearing a conversation from an al-
Qaida terrorist in the Middle East calling into the United States. For 
6 months we debated that, but the Senate came to a result concerning 
liberty versus security. No one watching the Senate should think there 
wasn't a debate here. There was a vigorous, impassioned debate. It was 
the kind of debate we ought to be having, but it wasn't about 
kindergarten politics, it was about liberty versus security. Then the 
Senate came to a result.
  So on competitiveness, on energy efficiency, on economic stimulus, 
and on intelligence surveillance the Senate came to a result. What 
Senator Reid and Senator McConnell said today is that we are going to 
try to do the same thing on housing.
  Now, the second thing I wish to say is that there are several things 
going on within our financial situation today, and there are several 
solutions, so let's sort them out.
  First, Secretary Paulson and others have suggested a badly needed 
fresh look at our financial institutions and how they are regulated. 
That will take a while and isn't easy to do. It is very complex, and it 
ought to take a while to discuss. In this country of ours, we produce 
about 30 percent of all of the wealth in the world every year. We do it 
in this great big free market with many different parts to it. So any 
time we begin to change things about the regulations, we need to be 
careful about what we do.
  What we are talking about now in the Senate--and what the leaders 
announced today--is not down the road

[[Page 4605]]

but instead is today and tomorrow. What can we do today and tomorrow to 
help the family budget? What can we do to stabilize home values, which 
we hope will help to restart the economy? There are a lot of good ideas 
out there. There are some that we in the Senate may be able to agree on 
fairly quickly.
  The last thing I want to try to do is to do the work of Senator Dodd 
and Senator Shelby for them. They have a big task. Their assignment 
from the leaders is to take a day, so they and their staffs will be 
working most of the night to see if there are a few things that most of 
us can agree on that can form the basis of what the Senate plans to do 
on housing. Then, as I understand it, we will begin to have votes, 
hopefully, on issues related to housing. My guess is that if there are 
important and controversial issues, in most cases it will require 60 
votes. In other words, we will have a bipartisan core that Senator Dodd 
and Senator Shelby will propose, and then we will have a series of 
votes to try to improve the bill.
  Senators will have some differences of opinions about what improves 
it and what doesn't. For example, one thing that I think doesn't 
improve it--and many on this side don't think it improves it--is the 
idea of letting bankruptcy judges rewrite home mortgages for homes in 
foreclosure. It sounds good, and it might help a few people. Here is 
what else it would do: It would raise the risk for all of those who buy 
home mortgages in the future. If the risk is higher, the interest rate 
is higher. If the interest rate is higher, what does that mean for the 
family budget? It means higher monthly mortgage payments. The 
Congressional Budget Office says there could be higher interest rates. 
The Mortgage Bankers Association said there will be higher interest 
rates. They suggest that in the State of Tennessee it might be about 
$120, on the average, a month. I don't think it helps the housing slump 
if we pass legislation that has the effect of raising most home 
mortgages by $120 a month. That is a big raise for most people. So I 
think that is a bad idea. My guess is that this bankruptcy provision 
will be offered on the floor, we will debate it, and I hope we defeat 
it. At least we will be here on the Senate floor debating it and 
offering our reasons for and against it.
  If it comes up in that form, it reminds me of junk bonds--something 
that was cooked up in the late 1970s and early 1980s. They called them 
that because they were higher risk bonds. When they were placed into 
the marketplace, investors said: We will buy them, but we are going to 
require more of an interest rate return.
  There came to be other problems with these high-yield junk bonds, but 
the other problems are not what I am talking about. I am talking about 
the simple equation that if we introduce more risks into mortgages, 
then when people buy the mortgages they are going to require a higher 
interest rate. If there is a higher interest rate, that is a higher 
monthly mortgage payment for families in Tennessee, where the estimate 
is approximately $120 more a month. That is not an idea I hope is in 
the final result.
  One idea that might be in the final result that has substantial 
Democratic and Republican support is providing $10 billion in new bond 
authority for loan refinancing. Senator Bond has that provision in his 
legislation, for example. That would provide tax-exempt bond authority 
which could be used to refinance subprime loans, to provide mortgages 
for first-time home buyers and for multifamily rental housing. That 
would mean if you have a subprime loan and suddenly your adjusted rate 
jumped up to a level you cannot afford--and that is going to happen 
with a lot more mortgages in the next few months--then the State 
housing agency could make a deal with you to refinance that loan. In 
effect, this refinancing would pay off the old loan, and you would have 
a new one at a lower interest rate that you are comfortable with. Most 
of the money gets paid back, the house is not in foreclosure, and there 
is more stability in the market. This is an idea I could personally 
vote for, and I know it has support on both sides of the aisle.
  Another idea that has come from the Republican side but has attracted 
some interest on the Democratic side is the proposal of the Senator 
from Georgia, Mr. Isakson. He may be the junior Senator from Georgia, 
but he is no spring chicken. He had been in the real estate business 
for a long time before he came here to the Senate. He has been around 
long enough to have seen the housing slump in the 1970s. So he said: 
Let's not just invent some idea that might help; let's look back in our 
history a little bit and see if there was ever anything that worked in 
a similar circumstance that we could use to help preserve home values 
today. He pointed this out to us and introduced legislation, which I 
and others are cosponsors of, that would create a $5,000-a-year tax 
credit for three years for home buyers of homes that are new or in or 
near foreclosure. This tax credit would only apply for a limited period 
of time. Senator Bond included this provision in his housing 
legislation as well. Some work would have to be done to make sure this 
wasn't just for speculators. But the idea is a pretty simple one: Let's 
create some more home buyers through this incentive because that is 
good for homeowners. It is not just good for the person who has the 
foreclosed home but for everybody else whose house is not foreclosed, 
because if we stabilize the housing market by providing an influx of 
new home buyers, that will help preserve home values for everybody else 
in the market. And that will bring more confidence to the economy. I 
think that is a very good idea. It costs some money--about $10 billion 
to $14 billion over five years--in the form that it was originally 
introduced. Maybe it could be done at a little less of a cost.
  One thing we know is that a similar tax credit was tried before in 
the 1970s. Senator Isakson says that at that time we had a 3-year 
inventory of unsold homes, and that tax credit--at a lower figure then 
because the dollars were a little less then--helped reduce the 
inventory of unsold homes from 3 years to 1 year. That is an idea 
worthy of consideration.
  There is a lot of talk on both sides of the aisle about counseling 
for people buying homes. I have bought and sold some homes. I am 
trained to be a lawyer and I have been in Government. I would not think 
of buying or selling a home without a lawyer's help. I am not sure I 
could understand all of the forms I signed the most recent time I 
bought a home. We can do much better than that. The basic information 
ought to be up front so that people can understand, first, how long 
their mortgage lasts, what the interest rate is during the whole time, 
and what the monthly cost is. Those are the basic things. Then there 
are some other things that could also be clarified. Full disclosure--
the Senator from Texas talked about that earlier--and loan counseling 
are ideas that the Senate can help with.
  Senator Martinez, a former Secretary of the Department of Housing and 
Urban Development, was a part of the press conference the Republican 
leader called this morning to discuss several Republican ideas that we 
have and which we hope are considered in this debate. Senator Martinez 
has proposals about FHA loans, which are the loans that first-time home 
buyers often have, and for how to deal with Fannie Mae and Freddie 
Mac--the agencies that buy mortgages.
  There is a lot we can do in the Senate to help preserve home buying, 
and the way to find out what we can do is to do exactly what the 
Democratic leader and the Republican leader have given us the 
opportunity to do.
  Finally, I would like to say this, as I said in the beginning of my 
remarks. No one should believe, because the Democratic and Republican 
leaders and the rest of us standing behind them put us into a process 
to try to achieve a result, that it will be easy. No one should believe 
that there won't be a debate, or that there is any guarantee of 
success. Senator Dodd and Senator Shelby said that failure is not an 
option. I believe that, too, but we are going to have to discuss it to 
get there. It may take a few days. We are dealing with a big economy. 
So process may be a result, process may be substance, but either

[[Page 4606]]

way, this is the beginning of the process toward a result.
  Also, at least from my point of view, I would not want anyone to 
think that I believe the Government by itself can solve this problem. 
We sometimes forget--particularly at a time when we have an economic 
slowdown, as we do today--what a fortunate country we are and what a 
strong economy we have. I mentioned earlier that year-in and year-out, 
this economy in the United States produces 30 percent of all of the 
wealth in the world, measured by GDP, for just 5 percent of the people 
of the world. And we will do it again this year, as we did last year 
and as we will do again next year. Five percent of us Americans live 
here, and we will produce this year about 30 percent of the wealth in 
the world, according to the International Monetary Fund. Now we are in 
a little bit of a slowdown. It is important to understand that we are 
being honest about that. It is a slowdown, and it is a housing slump, 
and we have a problem.
  We also have a big, strong economy--we have the biggest, strongest 
economy and the freest market, and our fundamental approach in 
Government ought to be to make sure that it stays that way.
  So, for me and for many on this side of the aisle--and maybe others 
on the other side too--there are fundamental long-term propositions to 
really balance the family budget. We can do this by having low taxes, 
having less Government, having 2-year budgets so we could have more 
time to conduct oversight and review regulations, which means less 
regulation.
  The way to have a strong economy is to have the right labor-
management relations. In Tennessee, for example, when we were 
recruiting automobile plants, it meant the right-to-work law was very 
important to us as a State. We also need to have a first-class 
education system for all Americans, and that means dealing with 
disagreeable subjects like paying teachers more for teaching well or 
giving low-income kids more choices of good schools like the wealthy 
have. We need to also stop runaway lawsuits so that doctors don't move 
out of rural areas and so pregnant women don't have to drive 60 miles 
to Memphis to see a doctor for prenatal health care. That drives up 
health care costs. We also have to work together to find a way for 
every American to have health insurance. This is a long list, but if we 
really want economic strength, that is what it takes.
  I learned this in a small way as a Governor of the third poorest 
State in the 1980s. My goal was to raise family income. I kept working 
for ways to do that. We already had low taxes and we had a right-to-
work law. Our good location helped. We had to get rid of the usury 
limit, and we had to improve the schools. Then I found that we needed 
four-lane highways.
  So there are many parts to a strong economy. These temporary measures 
we are taking, hopefully, in the next few days will help, I hope, 
preserve home values by stabilizing housing and restarting the economy.
  I see no reason why we cannot create more transparency and counseling 
and make it possible for more mortgages to be refinanced and give tax 
credits to home buyers to create more homeowners. We can do that, but 
these are short-term measures. Then we can have other principled 
debates in the Senate about whether we are going to have lower taxes 
and whether we are going to have less Government and whether we are 
going to have fewer runaway lawsuits. And discussions on whether we are 
going to be willing to pay teachers more for teaching well or whether 
we will have a research and development tax credit so our companies 
won't go overseas or whether we are going to create opportunities for 
skilled researchers and workers to come into the United States so that 
we can in-source some of the brainpower that creates all this wealth we 
have enjoyed for so long.
  I am glad to have the opportunity to come to the floor to 
congratulate Senators Reid and McConnell. They have done what leaders 
ought to do. They have put the Senate in a position to do what we 
should do, and that is to stand on our principles, offer our best 
ideas, work in good faith across party lines, and try to get a result 
and help the American people. The American people like to see the 
Senate acting that way. I am glad to have been a part of the Senate 
that acted that way on the America COMPETES Act, on the fuel efficiency 
standards, on economic stimulus, and on the foreign intelligence 
surveillance bill we passed recently. I am glad to be a part of the 
Senate that is preparing to act on housing slump.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. MENENDEZ. Mr. President, a month ago I came to the floor to speak 
on behalf of America's homeowners. Since then, tens of thousands of 
families have lost their homes. Since then, we have been watching home 
prices fall, we have been watching foreclosure rates skyrocket, and we 
have been watching tens of thousands of Americans lose their jobs.
  In my home State of 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 the keys to their home, 57,000 families who 
will be forced to say goodbye to the place where they were nurtured and 
comforted, a place where they lived during good and bad times, places 
they came home to every night, a place they celebrated birthdays and 
wept over losses.
  In the words of families, we know what it feels like to lose their 
home. They will feel as if they have lost everything.
  Nationwide, the number of foreclosures that is going to happen if we 
don't act is unfathomable. Two million American families are in line to 
lose their homes over the next 2 years, and everyone stands to lose 
from foreclosures. Lenders report losing tens of thousands of dollars 
on each foreclosure. Neighbors see the value of their own homes drop. 
When we see that 63,000 Americans lost their jobs a month ago, when we 
see weak earnings reports from businesses, wild swings in the stock 
market, and the collapse of a major firm on Wall Street, we can see 
this housing crisis is truly shaking the entire economy to its core. It 
clearly has a major ripple effect.
  We all know at the heart of this economic downturn is the housing 
crisis. So the question is: How long are we going to watch before we 
realize it is time to take action?
  I marvel when a year ago this past March I said at a Senate Banking 
Committee hearing that we are going to have a tsunami of foreclosures 
and the Bush administration said: Oh, no, that is an overdramatization. 
I said then: I hope you are right and I am wrong. The reality is, we 
have not even seen the crest of that tsunami take place.
  Not only did they say it was not real, but they refused to act in any 
meaningful way. But when it was clear that a major investment bank on 
Wall Street was in trouble, the Bush administration rushed to the scene 
like firefighters responding to a five-alarm blaze with $30 billion put 
up to ensure that JP Morgan Chase could buy Bear Stearns.
  Regardless--and we will be reviewing both the propriety and the way 
and the standards that were used to pursue that, whether that is the 
appropriate standard, the way Bear Stearns ultimately was priced--a 
full year into the subprime mortgage crisis, they have done nothing but 
hit the snooze button on the alarm as millions of Americans have 
watched their dream of home ownership go up in smoke.
  It is time we react with the same urgency and seriousness, no matter 
if the people who are in financial trouble are occupying a suburban 
home in Madison or a rowhouse in Newark or Camden.
  I hope today finally there is a glimmer of hope for homeowners who 
have been left to fight this battle alone. It is clear that Members on 
both sides of the aisle have gotten the message that it is time to act. 
And it is clear what our goal has to be: helping families keep their 
homes and in doing so helping our economy, which affects all of us.
  I am pleased that we have made what seems to be an important 
breakthrough in the Chamber. I have the utmost faith in Chairman Dodd 
and

[[Page 4607]]

Ranking Member Shelby that they understand the urgency at hand, that 
they will do their best to put forward a workable solution we can all 
support, and I certainly hope it is one I can support as well.
  I strongly support Majority Leader Reid's bill as it is. I understand 
the nature of compromise and negotiation, so I know it will change, but 
I hope that bipartisanship will not mean we will stray far from 
providing the direct assistance that homeowners need--to stop 
foreclosures.
  Here are a few key steps the final bill has to take. First, we need 
to provide funding for counseling in order to reach families at risk of 
losing their homes. Many American families--I saw it during the recess 
when we were working back in our States--many American families are 
sitting around their kitchen tables looking through their mortgage 
bills, their finances, and, yes, their bank notices, and they don't 
know where to turn. They don't know exactly what to do. It is not as if 
they have a pot of money sitting in the bank. They do not. They are 
trying to keep it together, keep their families together, keep their 
hopes and dreams and aspirations together. These counselors could offer 
them real solutions and options to avoid receiving that foreclosure 
notice or, even worse, foreclosure itself.
  The Reid bill puts forward $200 million to make sure counseling 
reaches those who need it the most, and I think that is incredibly 
important.
  Secondly, we need to provide funding to allow communities with high 
foreclosure rates to access community development block grants. 
Communities can use these funds to purchase foreclosed properties for 
rehabilitation, rent, or resale. Having a foreclosed home sit abandoned 
in a community does not benefit anyone. This is one of the key points I 
always make when I talk about this issue because a lot of people say 
that is not about me. I got the right mortgage; I am paying for it; 
this is about some people who made the wrong choices, and I don't want 
to pay for their wrong choices.
  The problem with that is, first of all--and I will talk about it in a 
moment--people were led to choices where maybe they did not have 
financial literacy, maybe they didn't have the wherewithal to fully 
understand the nature of what they, in many cases, were being misled 
into--a mortgage product in which they should never have been.
  Even looking at it in that respect, the bottom line is it affects us 
all. Why? Because a foreclosed home that sits abandoned in a community 
does not benefit anyone. It decreases surrounding home values and it 
can attract crime and vandalism. The bottom line is that foreclosures 
destabilize neighborhoods. The funds in this bill allow communities to 
stop that death spiral before it starts.
  Some argue that stepping in to help our communities recover from the 
housing crisis would somehow be a blow to the concept of personal 
responsibility because some homeowners, as I said, made bad choices in 
signing up for subprime mortgages.
  First of all, let me say, don't get me wrong, personal responsibility 
is important, and that is why we need greater support for homeowner 
education, for foreclosure counseling, and financial literacy so anyone 
thinking about buying a home will be able to understand the terms of 
their mortgage, even the fine print, and have the tools to protect 
themselves.
  What I have a problem with, as I listen to so many in the Chamber, is 
it seems that personal responsibility is always talked about as it 
relates to the consumer. Personal responsibility is not just important 
for homeowners, however. Every participant in the life of a loan needs 
to step up and take real responsibility and action.
  What got us to where we are today? In my mind, unbridled free market 
extremes, excesses without appropriate regulation or without the 
attention of regulators has brought us to where we are.
  I believe in the free market, but when it is unbridled, this is what 
happens. Every broker, lender, realtor, every appraiser, regulator, 
credit rating agency, and investing firm needs to make changes if we 
have any hope of quieting the storm and not reliving it. The time for 
blame games is over. The time for action has come.
  Third, I hope this body looks carefully at a provision that can help 
more than 600,000 families stuck in bad loans keep their homes. I know 
some of my colleagues are very concerned about this provision which 
would give judges in bankruptcy proceedings the discretion to modify 
loan terms. But the fact is, this provision is very narrowly tailored, 
it is a one-time limited fix, and in the end it is a win-win not only 
for borrowers but lenders alike. This provision alone would help over 
14,000 families in my State of New Jersey avoid foreclosure. That would 
be a savings of about $5 billion in home values alone. My good friend 
Senator Durbin has done an excellent job at hammering out a compromise, 
and I hope my colleagues will give it careful consideration.
  It is interesting, under the existing bankruptcy law, if you happen 
to have the good fortune of having a second home, a vacation home, a 
leisure home, guess what. The bankruptcy judge can go ahead and change 
your financial obligations on that home, but the very essence of the 
American dream, which is the home in which you live, to raise your 
family, to go through good and bad times, no, that cannot be 
renegotiated. What an interesting set of values. For a leisure home, we 
can go ahead and a bankruptcy judge can change the terms, but for those 
who were sucked into a subprime mortgage who should never have been in 
those types of mortgages and for which the regulation was not there to 
ensure there was transparency and ensure there was oversight, oh, no, 
we cannot touch that. In a place that talks so much about values, I 
don't understand that set of values.
  As we in the Congress debate how best to help homeowners, how best to 
end the housing crisis and how best to get this economy back on track, 
we have to see the bigger picture. There is a lot at stake. No matter 
who you are, no matter whether we have a subprime mortgage, no matter 
whether we are making our obligations meet or whether we are finding 
ourselves in distress, we are all in this together. When the house next 
to ours gets boarded up, it affects the value of our property, too, and 
how safe we feel walking around our neighborhood at night. When that 
value goes down, it reduces the equity we have in our home upon which 
we can borrow to put our kids through college, to take care of an 
uncovered medical bill or emergency, or even for the resources we will 
have for our retirement. No one is immune.
  So this sense of personal responsibility, yes, but understand that we 
all have a stake. When a neighbor of ours has to declare bankruptcy and 
is forever saddled with debt they cannot pay, they shop less at our 
stores, purchase fewer of the services our community offers, and, 
obviously, the more foreclosures we see in a neighborhood, property 
values decline. When those property values decline, rateable bases go 
down--and that is the way municipalities ultimately receive their 
resources which means, what? Either taxes have to go up to cover 
existing services of police, firefighters, education, whatever, or we 
cut the services. We are all in this together.
  When a nonprofit organization in Jersey City is close to finishing 
the building of its new arts center so it can give kids an opportunity 
to do something productive after school and stay away from gangs and 
they cannot get the last bit of money they need because of this credit 
crunch and housing crisis, it affects us all.
  Dr. Martin Luther King reminded us that ``we are all tied in a single 
garment of destiny'' and that ``we cannot walk alone.'' This is a 
crisis we are all in together as a nation. And there is no reason we 
can't all work together to end it. It is in America's interest to do 
so, and I hope the Senate, which has shown a moment of a possibility of 
what can be done, seizes that moment on behalf of our fellow citizens 
but also on behalf of our collective interest, on behalf of our 
economy, and, in doing so, on behalf of our Nation.

[[Page 4608]]

  Mr. President, with that, I yield the floor.
  The PRESIDING OFFICER (Mr. Menendez). The Senator from Florida.
  Mr. NELSON of Florida. Mr. President, I ask unanimous consent to 
speak as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           The Right to Vote

  Mr. NELSON of Florida. Mr. President, I wish to speak to an issue 
that is all too familiar to my State of Florida but has now taken on 
such importance that it is a subject that is all too familiar to the 
entire country, joined by our sister State, Michigan; it is an issue 
that is sacred to our democracy. It is the issue of the right to vote 
and to have that vote counted as it was intended.
  A year ago, the Florida legislature passed a bill to move Florida's 
Presidential primary to an early date on the national election 
calendar. Their thinking was to give our large and diverse State, which 
is a microcosm of the entire country, more of a say in the selection of 
Presidential nominees. This violated the two national parties' rules, 
and the threat was made that if Florida moved ahead, both the 
Republican National Committee and the Democratic National Committee 
would take away half of Florida's delegates. The Florida legislature, 
despite that, changed the date of Florida's election by law, moving it 
1 week earlier than the imposed deadline by the two national parties.
  The Florida legislature is controlled by the Republican Party, and 
the Democrats in the legislature, through their Democratic leader in 
the Florida House as well as the Florida Senate, offered an amendment 
to put the date of the Florida primary back to February 5 so it did not 
violate the two national party rules. That amendment was defeated. The 
bill went on to final passage.
  In addition to the January 29 date for the Presidential primary, it 
was primarily a bill about election machines and accountability. So on 
final passage it was clearly going to be a near unanimous vote. 
Therefore, the Florida legislature passed and the Republican Governor 
signed into law the new election date.
  I repeat that story because people who want to penalize Florida often 
miss the fact that it was not Florida Democrats who changed the date. 
Well, we all know what happened after that. Both national parties 
decided to punish Florida because those parties' rules reserved the 
early Presidential contest to a handful of other States.
  The Republican National Committee, pursuant to their rules, took away 
half of Florida's delegation. The Democratic National Committee decided 
to extract an extra pound of flesh and took away all of the delegates 
of Florida's delegation.
  For 8 months now, I have been immersed in a fight to get the chairman 
of my party to end the stalemate and to seek Florida's delegates and to 
honor the January 29 primary vote because on that date we had a 
historic turnout. Some 3.6 million citizens headed to the polls and 
cast ballots in Florida's Democratic and Republican Presidential 
primaries.
  For me, it is pretty simple. It is a case of fundamental rights 
versus party rules. So when there could not be a compromise worked out 
last August, September, and into October, I sued my own party in 
Federal district court. In December, the Federal judge ruled against my 
motion, and at that late date it was too late to appeal.
  I have continued to push for my party to find a way to seat a 
delegation from Florida, while giving Floridians a meaningful voice in 
the selection of their party's nominee. This fight has been based on 
the principle that, in America, every citizen has an equal right to 
vote, it is based on a premise that Floridians are entitled to have 
their votes count as intended, and it is based on a belief that we all 
deserve a say in picking our Presidential nominees.
  More recently, I, along with others, asked the national Democratic 
Party to look into paying for a mail-in revote. The party declined. The 
State party proposed it, few people could agree on the specifics, and 
certainly the candidates themselves couldn't agree on the specifics. 
Now we are at a point where reaching a solution is critical. And so 
when we were last in session, about 2\1/2\ weeks ago, I asked the two 
Democratic candidates, who happened to be on the floor that day when we 
had the session that lasted most of the night, to consider a proposal 
whereby they would go back to the original rules of the Democratic 
Party and seat the delegation with half its vote but still based on the 
January 29 results. This is allowed by the Democratic rules, as it was 
done by the GOP.
  If nothing else, all this brouhaha we now find ourselves in for this 
election has certainly provided further evidence our system is broken. 
Yet as to our right to vote and to have that vote count, there can be 
no debate. The goal is simple. The principle is very simple: It is one 
person, one vote.
  Last fall, I filed legislation in the Senate to require that no vote 
be cast for Federal office on a touch-screen voting machine starting in 
the next Presidential election 4 years from now. I also joined the 
senior Senator from Michigan, Senator Levin, to propose a system of six 
rotating interregional primaries, from March to June, in each 
Presidential election year. Very soon, I am filing a broader based 
election reform bill, and this new legislation will abolish the 
electoral college.
  It will be a proposed constitutional amendment and will, therefore, 
give citizens direct election of their President by the popular vote. 
We have seen in the history of this country a few times when one 
candidate gets the most votes, but it is the other candidate that wins 
because of the archaic electoral college process provided in the 
Constitution. In this new package, it will have the six rotating 
interregional primaries that will give both large States and small 
States a fair say in the nomination process.
  This legislation will establish early voting in each State to make it 
easier for the voter to vote, instead of going on 1 day. It will 
eliminate machines that don't produce a voting paper trail, so if you 
have to recount, you don't have just a piece of software, you have the 
actual paper trail in order to be able to do the recount in an accurate 
way.
  This package will allow every qualified voter in every State to cast 
an absentee ballot on demand. In some States, you can't cast an 
absentee ballot unless you fill out some affidavit that says you are 
not going to be in your city on the day of the election, or that you 
are sick and you can't get to the election. We ought to make it easy 
for the voter to vote.
  The package will also give grants to States that develop mail-in 
balloting and grants for pilot studies to study secure Internet voting.
  We have had too many of these questions arise in my State of Florida 
over the years, and perhaps this is why Floridians are so sensitive 
about this. So I am reaching out to my colleagues. I respectfully ask 
each of the Senators to make suggestions to make this a better bill. 
Let's remember it was more than 230 years ago that our Founding Fathers 
declared all men are created equal, but the country still had to wait 
another 87 years before President Lincoln signed a proclamation freeing 
the slaves. It took another 57 years before women in America were 
allowed to vote.
  In 1872, Susan B. Anthony was arrested for voting. After that, she 
delivered a speech on women's right to vote. ``The ballot,'' she said, 
``is the only means of securing the blessings of liberty provided by 
this government.'' Let me repeat those profound words. ``The ballot,'' 
Susan B. Anthony said, ``is the only means of securing the blessings of 
liberty provided by this government.'' Even still, it took another 93 
years before our Nation belatedly enacted a law guaranteeing every U.S. 
citizen an equal right to vote--the Voting Rights Act of 1965.
  This country cannot afford to wait another 93 years before we fix the 
flaws we still see in our election system. The blessings of liberty 
cannot wait. With what we have seen thus far in this election cycle, 
the time for election reform is now.
  I yield the floor, and I suggest the absence of a quorum.

[[Page 4609]]

  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. NELSON of Florida. Mr. President, I ask unanimous consent the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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