[Congressional Record (Bound Edition), Volume 154 (2008), Part 4]
[Senate]
[Pages 5325-5338]
[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--Continued


                             Cloture Motion

  The PRESIDING OFFICER. Under the previous order, pursuant to rule 
XXII, the clerk will report the motion to invoke cloture.
  The 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 substitute 
     amendment No. 4387 to H.R. 3221.
         Christopher J. Dodd, Harry Reid, Mark L. Pryor, Max 
           Baucus, Charles E. Schumer, Patty Murray, Claire 
           McCaskill, Patrick J. Leahy, Daniel K. Akaka, Ken 
           Salazar, Sherrod Brown, Bryon L. Dorgan, Evan Bayh, 
           Edward M. Kennedy, Jon Tester, John F. Kerry, Bill 
           Nelson.

  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 
amendment No. 4387, offered by the Senator from Connecticut, Mr. Dodd, 
to H.R. 3221, 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. KYL. The following Senators are necessarily absent: the Senator 
from Colorado (Mr. Allard) and the Senator from North Carolina (Mrs. 
Dole).

[[Page 5326]]

  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The yeas and nays resulted--yeas 92, nays 6, as follows:

                      [Rollcall Vote No. 93 Leg.]

                                YEAS--92

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

                                NAYS--6

     Bunning
     Coburn
     DeMint
     Inhofe
     Kyl
     Specter

                             NOT VOTING--2

     Allard
     Dole
  The PRESIDING OFFICER. On this vote, the yeas are 92, the nays are 6. 
Three-fifths of the Senators duly chosen and sworn having voted in the 
affirmative, the motion is agreed to.
  Who seeks recognition?
  Mr. DODD. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. GREGG. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GREGG. I ask unanimous consent to set aside the pending amendment 
so I may offer an amendment.
  Mrs. LINCOLN. I object.
  The PRESIDING OFFICER. Objection is heard.
  Mr. GREGG. Mr. President, I am most surprised to hear my colleagues 
on the other side object to my request to call up an amendment, to have 
it called up and be heard. I thought the Senate was here to do 
business. I think it is reasonable as part of doing that business that 
we should address the largest item in this bill that involves passing a 
cost on to our children, which is the net operating loss proposal.
  Now, the way this net operating loss works is that homebuilders--that 
is who it is directed toward, although anybody can take advantage of 
it; I do not think it is limited to the homebuilders who built all of 
those homes and made these massive amounts of money by offering people 
subprime mortgages which they then took the proceeds from over the last 
4 or 5 years, which subprime mortgages have now caused this Nation to 
go through a massive contraction and which have created one of the 
largest bubbles in the history of Government, in the history of 
commerce. Those folks, having made a huge amount of money--I mean 
massive amounts of money, and, in fact, in the last quarter, they were 
the largest earning sector in our economy--those folks are now asking 
that they get an additional $20 billion bailout, $20 billion bailout by 
allowing them, now that they are losing money, to go back and take a 
tax deduction of their losses against the gains which they had in prior 
years.
  This is as if you said to someone in business, say somebody running a 
small grocery store: OK, if you make money for 4 years, make a lot of 
money, and then you find you cannot compete or you have made some 
business error in your judgment and you lose money for a couple of 
years, we, the Government, are going to come in and give you insurance 
so you never lose money. You are able to go back during the years when 
you made money to recover the taxes you paid and use it today to give 
you profits.
  My goodness, I think Adam Smith would be rolling over in his grave to 
hear this concept of economics. This is Komisar economics where nobody 
can lose, except for the taxpayer in the next generation who has to pay 
this bill. Remember, this $20 billion is going to be paid by somebody 
because it is being spent around here in the operation of the 
Government. And who is going to pay it? Well, it is obviously not going 
to be the homebuilder, the large corporations which ran up these huge 
profits. They are actually going to take that money in, take it in as 
income. No, that is going to be paid for by John and Mary Smith, John 
and Mary Smith working for a living today, or their children because it 
will go on the Federal debt--$20 billion on the Federal debt as a 
result of this little piece of chicanery.
  It is unbelievable that we would claim this was a stimulus to begin 
with. In fact, if we are in an economic slowdown and if that economic 
slowdown is tied to the housing industry, none of these revenues will 
benefit that economic slowdown because they do not come in this year. 
They will be claimed this year, and they will be reimbursed next year. 
I think the estimate is that almost all of these recovery costs, 
recovery of taxes owed and paid as a result of getting this extra loss 
carryback, will occur in the next budget year, 2009. So, as a practical 
matter, it is not going to help in the next 6 months, which is when all 
of the major economists who have discussed this issue say we need some 
stimulus in the economy. No, it is not. It is simply a bonus payment 
from one group of people, the American taxpayers and their children, 
hard-working Americans, to another group of people, the speculative 
housing industry that ran up these huge expansions in the housing 
inventory over the last 3 years and then sold them in the subprime 
market in a way which many people have said in many instances were not 
appropriate, that they took advantage of the borrowers and then took 
those proceeds in as income, paid taxes on them, and now they want 
their taxes back because they are suddenly losing money.
  Well, if you made money for 3 or 4 years--and a lot of money--you 
should not have a bonus given to you during the years when you are not 
making money simply because you happen to be one sector of this economy 
called the housing industry. In fact, just the opposite should happen, 
quite honestly. The market should be allowed to work here relative to 
the large housing manufacturers.
  There is some legitimacy for doing something about homeowners who got 
hit with a subprime mortgage which is resetting at a rate that is 
astronomical on them today and they are willing to pay and could pay 
for and maintain their home if they had a reasonable mortgage rate. 
There is some reason for arguing those folks might and should get some 
support, or at least some assistance so they can stay in their homes, 
they can continue to pay their mortgages.
  But there is no practical commercial argument which justifies taking 
tax dollars from working Americans and paying them to homebuilders 
because homebuilders suddenly start to lose money--after they had great 
years. It is not like this has been a distressed industry over a long 
period of time. This is an industry which has always been cyclical.
  This cycle was a creation of their excess, nothing else. They were 
greedy. They built a lot of homes the market did not need. They sold 
them to people who could not afford them. They sold them with 
instruments which were totally inappropriately structured: the subprime 
mortgages. Then they took all that profit, and they used it. But, 
unfortunately, they had to pay taxes on that profit. So now they want 
their taxes back, and they want the American people to subsidize them 
on it.
  Well, under no color of an open market, of a capitalist system--of 
even a marginally capitalist system; I do not think even France would 
accept this as a concept--should somebody who made a huge amount of 
money, created a speculative bubble, benefit from the taxpayers when 
that bubble bursts.

[[Page 5327]]

  Yes, the people who were harmed inappropriately, the folks who bought 
those subprimes and did not understand the nature of them and maybe 
were misled relative to the nature of them, they justifiably could have 
some support, as long as they are the primary owners of that home and 
it was not bought for speculation and they are able to support a 
reasonable mortgage rate. Maybe there is some way to adjust that.
  But this bill does not do that in this area. This net loss carry-back 
is simply a gift--pure and simply a gift--to one segment of our 
industrial community which participated in a very lucrative few years 
and now is having a hard time, created the problem which we now 
confront, and now wants to be given a gift. Unfortunately, this gift 
has to be paid for, as I said before.
  We are going to run, this year, it looks like, a deficit somewhere of 
around $400 billion to $420 billion. That is the deficit we are going 
to run. That is up from a deficit which was under $200 billion last 
year. That is a huge increase in our deficit.
  Now, who pays a deficit? Who pays for a deficit? Well, our children 
pay for it. All this goes on to our children's backs. They are the ones 
who pay the cost of paying off the debt, which is borrowed in order to 
finance a deficit.
  So why would we want to say to them: OK, future Americans--young 
people coming through school today, going to college, thinking about 
starting a family, thinking about maybe having children and sending 
their kids to college--why would we want to say to them: We are going 
to stick you with a $20 billion bill so we can take care of the large 
housing manufacturers in this country who basically created a major 
disruption in our economy by putting on the market a massive inventory 
of homes we did not need and then using practices which were at the 
margin to draw people into buying those homes through subprime mortgage 
lending?
  Why would we say that to them? How can we possibly, as a government, 
justify doing that to the next generation? But that is what we are 
going to do with this bill. We are putting $20 billion on their backs. 
Where is the money going? It goes into the pocket, primarily--at least 
that is the game plan; it is not specifically written so--it will be 
taken advantage of solely by manufacturers of homes. And I suspect 
there are going to be some other industries which will suffer losses in 
this economy that may take advantage of it. But it was written 
primarily to take advantage of the homebuilder industry, which is 
obviously an honorable industry, but it is also an industry which goes 
through cycles.
  In this cycle, there is no reason we should be stepping up with this 
special gift to that part of our economy when we do not have any money 
to make the gift with, when we have to borrow the money to pay for the 
gift.
  So that is why I have offered this amendment--or tried to offer this 
amendment. Now, it seems to me if everybody is so comfortable with this 
legislation and this idea of a net loss carry-back being extended and 
expanded, they should be willing to vote on this amendment. Is there no 
courage on the other side of the aisle? Are the sponsors of this 
concept afraid to vote and stand up for this bill with this proposal? 
It appears so.
  I am not offering an alternative. I am just saying let's have an up-
or-down vote on whether we should give a $20 billion gift to one 
segment of our commercial society at the expense of the next generation 
that has to pay the debt for this bill. I am just saying, stand up and 
be counted, so to say, as to whether you are for or against this 
amendment.
  So, again, I will renew my request. I ask unanimous consent that the 
pending amendment be set aside and that my amendment relating to net 
loss carry forward, which strikes the provisions of the net loss carry 
forward, be called up.
  The PRESIDING OFFICER. Is there objection?
  Mr. BAUCUS. Mr. President, I object.
  The PRESIDING OFFICER. Objection is heard.
  The Senator from New Hampshire.
  Mr. GREGG. Well, I guess that makes the point. It is too bad. I would 
hope people would ask why. Why can't we have a vote? What is the fear 
out there? Are we so concerned about this segment of our industry that 
we are not willing to vote up or down on whether this type of a $20 
billion event should occur? I hope not. It seems to me it is reasonable 
that the Congress should vote on that. The Senate should vote on that.
  Mr. President, $20 billion is a lot of money. Do you know $20 billion 
would run the State of New Hampshire for 5 years? This is a lot of 
money. This is big-time dollars. Twenty billion dollars is going to 
cost our children a lot because it compounds with interest. You just do 
not borrow it. You borrow it and have to pay interest on it. Of course, 
the interest gets paid to the Chinese or the Indians or the Saudis 
because they are the ones who probably buy the debt.
  So not only do we end up with a $20 billion bill we pass on to our 
kids, but we end up with our kids having to pay interest to the Saudis 
or the Chinese to support that debt. Also, that one segment of our 
society which participated in the robustness and the excitement of 
large economic expansion, and maybe inflated that expansion rather 
dramatically, does not have to bear the burden of their excesses.
  Well, as I said, Adam Smith would be a little stunned to find this is 
the way the market has worked and the Government of the United States--
which is allegedly the Government of a capitalist system--functions. So 
I will probably renew this request later on because it does seem to me, 
since this is by far the single biggest spending item in this bill, or 
tax item in this bill, it should have an up-or-down vote and an open 
debate.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, just a couple comments about the points 
made by the Senator from New Hampshire.
  No. 1, it is not a $20 billion bill. That is not accurate at all. It 
is, first of all, about $6 billion. It is over 10 years. So it is much 
less than what the Senator makes it sound like it is.
  Second, we all know the housing problems that occurred in this 
country--the subprime mortgage problems, as well as other mortgages in 
distress and home buyers in distress. The figure I saw was that about 
10 percent of American homes are underwater, meaning the value of the 
homes for 10 percent of Americans is much less than the mortgage on 
their homes.
  This is a very complicated problem. It requires a complicated 
solution. Senator Dodd is to be commended for the Banking Committee's 
provisions in this housing bill. We in the Finance Committee wrote the 
tax provisions in this bill, and they are designed to help lots of 
different areas, lots of different people, in lots of different ways.
  One is the mortgage revenue bond provisions, which helps States 
finance new mortgages for people, homeowners. Another is the tax credit 
for distressed homes. That helps people. That helps home buyers. That 
is in this legislation.
  Another is to help give a little break to people who do not itemize 
their income tax returns but have property taxes so they can get a 
break on their property taxes. So we provide in this bill that if you 
have property taxes, you get at least a $500 deduction against your 
income taxes if you are single, $1,000 if you are married, irrespective 
of whether you itemize or use the standard deduction. That helps 
people.
  There is a business provision in here to give a break to 
homebuilders. Why? Because homebuilders are going out of business. This 
is not a typical homebuilders' housing cycle we are in now. This is 
atypical.
  A lot of areas in our country are very distressed. A lot of 
homebuilders are distressed, laying off a lot of people. The number of 
construction jobs is down--in the hundreds of thousands. For 
homebuilders' jobs, it is of a similar magnitude. These are people with 
hammers and nails going out building houses who no longer are building 
any houses, and they are laid off.

[[Page 5328]]

  So this bill--basically, in that one provision with respect to 
homebuilders--kind of evens things out a little bit so homebuilders do 
not have to lay quite so many people off and they can still keep 
building some homes, which helps prevent a further deterioration of the 
value of the homes in a certain area. This is nowhere close to solving 
the problem, but it helps a little bit. That is why this is in this 
legislation.
  So we have several provisions we in the Finance Committee passed out 
to help individuals. This one helps businesses in the business of 
homebuilding and homebuilders employ people, and those are the people 
who have lost their jobs.
  So we are trying to help that sector a little bit so those people who 
build homes--some of them--can get back to work and not be laid off and 
also so some homes that might otherwise not be built might now be built 
to help alleviate the problem.
  Homebuilders are not the cause of the problem. The problem, frankly, 
is worldwide where cash was slushing around, which helped create this 
situation where lenders were very easily lending money. The terms were 
very easy. People were enticed into buying homes. Mortgage brokers, for 
example, were very aggressive in encouraging people to buy homes with 
no downpayments and whatnot.
  But homebuilders--they are not the problem. They are building the 
homes. Now, they are feeling the pain, as a lot of other Americans are, 
and I believe--and I think the Finance Committee believes--this is one 
of several provisions which will help address the housing crisis a 
little bit. That is why I think it should be in this bill, and I very 
much hope the Senate approves the bill if not today, by tomorrow.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Sanders). The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. BROWNBACK. 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. BROWNBACK. Mr. President, I ask unanimous consent to speak as in 
morning business for the utmost urgency of recognizing the University 
of Kansas basketball team's accomplishments last night.
  The PRESIDING OFFICER. Without objection, it is so ordered.


          Recognizing the University of Kansas Basketball Team

  Mr. BROWNBACK. Mr. President, I am delighted my colleagues granted me 
this special privilege to speak as in morning business on something so 
important. This is a bit personal if you are a Kansan. The sport of 
basketball was invented in Kansas by James Naismith in 1891, and last 
night it was perfected by the University of Kansas basketball team.
  I don't know how many people got to watch it. What a fabulous game. I 
was able to be there, which was a great delight. It went into an 
overtime game with less than 3 seconds to play and a three-point shot 
by Mario Chalmers sent it into overtime. It was a classic of college 
basketball. The whole place was in pandemonium. There were great teams 
on both sides--Memphis and KU--playing this game. At the end of the 
day, Kansas came out with a victory. It was a fantastic night.
  I congratulate the NCAA on the Final Four and the tournament. I think 
they do a spectacular job of bringing people together and having a 
great venue. This game was in San Antonio last night, a fantastic 
celebration of amateur athletics. These players are phenomenal in all 
they can do. It is certainly a great day to be a Kansan, a great day to 
be a Jayhawk.
  My law school degree is from the University of Kansas. It is a great 
basketball school, with four national championships, one added last 
night. They have a great tradition of basketball at the school. I think 
we have one of the best mascots in the country, the jayhawk, which most 
people would recognize, being at the University of Kansas, but not 
knowing what it is. It has a civil war legacy in the fight over 
slavery, where Kansas was the State that started the fight on slavery, 
being settled by abolitionists. One of the things the proslavery forces 
were calling Kansas was jayhawkers, in a derisive way, but that then 
became a symbol much for the State and for the University of Kansas. I 
like the heritage of that symbol as well.
  Twenty years ago was the last time we won a basketball championship. 
That one was Danny Manning and ``the miracles.'' He was a guy who went 
on to play very well at the professional level. Danny Manning is now 
coach at the University of Kansas. I can't name anybody else on that 
team, but he was one who carried them forward.
  Last night was a great team effort by a balanced team. I recognize as 
well coach Bill Self. This was his first Final Four, and he wins it. 
Along the way, he beat a rival school in basketball for Kansas. In 
North Carolina, there has been a long connection between North Carolina 
and Kansas. Dean Smith, a long-time coach at North Carolina, was from 
Kansas. Roy Williams, a long-time coach at Kansas, was from North 
Carolina. There were a number of people in Kansas, in my State, who 
were not particularly forgiving of Roy Williams going back to North 
Carolina even though he had given us a number of good years. I think on 
Saturday there was a lot of forgiveness. This was the first match 
between Kansas and North Carolina since he had left Kansas, and we were 
fortunate enough to be successful in that game. It was a great 
tournament overall.
  As a wise sportsman famously said: ``It's never over until it's 
over,'' especially if Mario Chalmers has one more shot to take. 
Sometimes big games are disappointments, but last night was certainly 
not the case, as the Nation was treated to a classic in college 
basketball. From James Naismith, as I mentioned, who invented the game 
in 1891, to the Kansas Jayhawks of 2008 that perfected the game, our 
school has had a great history and a great legacy of basketball. 
Through players like Wilt Chamberlain and Danny Manning, KU now has 13 
Final Four appearances and 3 national championships. It is fantastic 
what they have been able to accomplish.
  Again, congratulations to the University of Kansas men's basketball 
team for a great season, for a thrilling championship game, for writing 
another amazing chapter in the storied history of Jayhawk basketball. 
And what goes along with that rich tradition is a number of different 
chants, but the one that has the most lasting memory with Jayhawkers is 
``Rock Chalk, Jayhawk,'' which we don't get to say on the Senate floor 
very often. Congratulations to a fabulous team and a fabulous effort.
  Mr. President, I yield the floor, and I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. CASEY. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mrs. McCaskill). Without objection, it is so 
ordered.
  Mr. CASEY. Madam President, I rise to speak about a housing matter. I 
have two amendments, but I am only speaking about them today, I will 
not be calling them up. I did want to speak very briefly and very 
generally about both of them.
  There are two very important matters that come before us as parts of 
our debate on housing. The first involves appraisals. We know that one 
of the biggest concerns a lot of people have in attacking the problem 
of subprime mortgages and the aftermath of a lot of bad loans was that 
faulty and sometimes fraudulent appraisals were part of that. The first 
amendment I will speak of today deals with the question of how do we 
get a second independent appraisal for properties that are so-called 
flipped properties.
  When you have a property that may go into foreclosure and then it is 
sold later, sometimes we have instances where property is sold at a 
grossly inflated price that does not reflect the true value, and then 
down the road another purchaser, a homeowner, would

[[Page 5329]]

buy it, and then you have extraordinary inflation, often fraudulent 
inflation of the cost of a property. Our office has worked closely with 
Senator Martinez on this as well. What this amendment does is to make 
it very clear that, in those instances where you have a house flipped 
within 180 days of the date of purchase, there will, in fact, be a 
second independent appraisal done.
  Some of the work on this in the other body has been done by 
Representative Paul Kanjorski. He has worked on these issues for years. 
I commend him for his work in Congress on these and other matters that 
pertain to housing and to the financial questions that arise with 
regard to affordable housing.
  First of all, we want to make sure, in those instances that a second 
independent appraisal is done, it would have to be by a qualified 
appraiser. That would mean the appraiser has to be certified in the 
State or somehow licensed in the State. And second, that the appraisal 
is performed in conformity with uniform standards of professional 
appraisal practice to make sure it is done the right way. We want to 
make sure consumers are given a copy of that appraisal, that it is done 
thoroughly, and that a statement is made by the creditor that any 
appraisal prepared for the mortgage is for the sole use of the creditor 
and that the consumers may choose to have a separate appraisal 
conducted at their own expense.
  There will be heavy penalties imposed for those who violate this. It 
is one way to deal with one of the various problems we encounter when 
it comes to the difficulties so many families are confronting right 
now. The worst thing that can happen to a homeowner who saves money and 
borrows money to fulfill a dream of owning a home is to be presented 
with a situation where they buy a home that has been grossly and 
fraudulently inflated beyond its value and they don't find out about 
that until those who perpetrated the fraud are far away and have 
already made their money. This will hold people in the market 
accountable, as they should be held accountable.
  We will have more time to talk about it later.
  I want to make another point about a separate amendment. In the city 
of Philadelphia, as in many of our major urban areas, housing is a 
terribly difficult challenge for so many people. In the city of 
Philadelphia, we have more than 80,000--as HUD, Housing and Urban 
Development, officials would call them, clients--more than 80,000 
clients in the city of Philadelphia who rely on HUD and the housing 
authority there to provide affordable housing in that city.
  A dispute has arisen about a number of things. We don't have to go 
into the reasons for those disputes, but because of that dispute, now 
there is an agreement that was worked out between HUD and the housing 
authority called the Moving to Work Agreement which has allowed people 
not just to have the benefit of an agreement that provides them with 
the opportunity to live in housing that is safe and affordable, but 
also this agreement has allowed the Philadelphia Housing Authority to 
use the leverage of this agreement to borrow money and to finance other 
housing priorities in the city of Philadelphia.
  Because of that, because of the importance of that agreement, we want 
to make sure the agreement stays in place at least for a year. That is 
what the amendment Senator Specter and I have been working on does. 
That is the reason for it, to give a 1-year extension so that the 
Moving to Work Agreement in the city of Philadelphia, with the U.S. 
Housing and Urban Development agency, stays in place for 1 year so we 
can continue to work out an arrangement between the housing authority 
and HUD.
  Unfortunately, we have not been successful in working for many months 
on this. But I think it is critically important not to allow a 
bureaucratic fight between a housing authority and a Federal agency to 
interfere with important services that are provided to Philadelphians 
who benefit from this; some more than 80,000 Philadelphians.
  Those are the two amendments I wish to speak about. We will have time 
later as we proceed to deal with them more directly. I wished to make 
sure we make both thorough and accurate and independent appraisals a 
priority as well as to make sure that when we are dealing with a local 
housing authority, we do not let a dispute prevent Philadelphians from 
getting the benefit of the services provided in this case by the Moving 
to Work Agreement.
  I yield the floor, and 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. McCONNELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Nelson of Nebraska). Without objection, it 
is so ordered.
  Mr. McCONNELL. I ask unanimous consent that I be allowed to proceed 
as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                     Colombia Free Trade Agreement

  Mr. McCONNELL. Mr. President, today the administration sought to 
strengthen America's ties with an already close ally by moving forward 
with the Colombia Free Trade Agreement. Now it is up to Congress to 
pass this very important piece of legislation.
  The Colombia Free Trade Agreement is more than an act of friendship 
between allies. It would strengthen our security and strengthen our 
economy. It would send a strong and unmistakable signal to our other 
allies in Latin America that the United States stands with those who 
support strong markets and free societies, especially in the face of 
threats.
  Colombia's support for free markets and Democratic reform under 
President Uribe has made it an even stronger ally of the United States 
in recent years, a very sharp contrast to its next-door neighbor, 
Venezuela. We cannot allow election-year politics in the United States 
to make a resurgent Colombia more vulnerable to its anti-America 
neighbor.
  America got a closeup of Venezuela's dictator at the U.N., when he 
likened an American President to the devil and predicted America's 
demise. His anti-Americanism has not softened since that speech, nor 
has the threat Hugo Chavez poses to regional stability. Chavez is a 
corrosive influence in South America. He embraces state sponsors of 
terrorism such as Iran, for example, and he is aggressively courting 
like-minded leaders of other Latin American countries in order to draw 
a line in the sand between himself and his allies and America and its 
allies.
  Now, most Latin American leaders such as President Uribe know allying 
themselves with Chavez is harmful in the long run. Unfortunately, 
Uribe's government has been severely tested by Chavez and his allies. 
Ecuador supports, for example, terrorist proxies in Colombia. Chavez 
has made it quite clear he supports Ecuador's efforts when he recently 
sent troops to the Colombian border.
  Colombia has made tremendous progress. Not long ago, it appeared on 
the verge of collapse. Entire regions of the country were essentially 
ungoverned. Yet President Uribe, to his great credit, has pulled the 
country back from the brink.
  The Colombia Free Trade Agreement is an important acknowledgment of 
the strides Colombia has made. And its passage would send a strong 
signal America is committed to Colombia's continued success and the 
success of our other allies in the region.
  Now, as important, the Colombia Free Trade Agreement would strengthen 
the U.S. economy, our economy, at a time when Americans are searching 
for some economic good news. Some seem to think our economy can somehow 
grow without the trading partners. These people who are arguing that 
nonsense also say we are best served if we trade only with ourselves. 
How absurd is that? In fact, the opposite is true. America needs 
trading partners to buy the goods we are making in our country. This is 
especially true when there is an imbalance in market access. The

[[Page 5330]]

imbalance between the United States and Colombia is startling indeed.
  Today, more than 90 percent of Colombian exports to the United States 
enter our country duty free. So they are getting 90 percent of their 
imports into our country duty free, even as American exporters face 
steep barriers to selling American-made goods to Colombia.
  Democrats and Republicans agree it was important for Colombian 
exporters to enjoy the benefits of increased access to our markets. Why 
would we not want to give American products made by American workers 
the same opportunity we are giving Colombians already in our market?
  The current situation is totally unfair. Virtually all U.S. farm 
goods are slammed with tariffs on their way down to Colombia, while 
virtually all Colombian farm goods coming here enter the United States 
without any tariffs at all.
  The beneficiary of this arrangement is abundantly clear, and it is 
not U.S. workers or the economy they support. We hear a lot of rhetoric 
about the need for fair trade. Permitting equal access to Colombian 
markets is the very essence of fair trade. That is what this free-trade 
agreement would do.
  Looking at my own State, for example, more than one-sixth of all 
manufacturing jobs in my State rely on exports. Kentucky exports about 
$15 billion in manufacturing goods every single year, including $67 
million in exports to Colombia last year--a figure that is all but 
certain to go up after this free-trade agreement is ratified.
  In these economic times, we should be expanding overseas markets for 
American-made products and American-grown goods. Now, some have argued 
labor conditions in Colombia are reason not to support the Colombian 
Free Trade Agreement. That is a total red herring. How does maintaining 
high tariffs on goods of the United States shipped to Colombia reduce 
violence against union jobs down there?
  How does rejecting an ally that has helped reduce homicides against 
union members by 79 percent improve trade union safety? What nonsense 
these arguments are. I mean even the Washington Post, no bastion of 
conservatism, has called the issue completely bogus.
  Today the L.A. Times, again not a bastion of conservatism, said the 
same thing, noting pressure from human rights groups and labor 
organizations has prompted Colombia to already do what the Democrats in 
Congress have urged, which is to improve the country's dismal labor 
record.
  If Senators truly wish to help Colombia's union members, they need to 
vote for this agreement, reward Colombia for its improvements in this 
area, and encourage Colombia to draw even closer to the United States.
  I would close by noting this free-trade agreement comes nearly a 
year, a year after an agreement was struck between the U.S. Trade 
Representative, the House Democratic leadership, and the House Ways and 
Means Committee on a plan to move forward with all the free-trade 
agreements this Congress.
  The deal stated: In return for USTR negotiating unprecedented new 
labor and environmental standards, House Democrats would proceed with 
free-trade agreements for Peru, Panama, Korea, and Colombia. The USTR 
did its part. Yet the Democratic Congress has not lived up to its end 
of the bargain. So far only the Peru agreement has been passed.
  We should reject an isolationism that limits economic growth and 
stunts job creation here at home. We should support this important 
Latin American ally. The time is long past for Congress to do what it 
promised and move forward on America's trade agenda.
  Congress must reaffirm its commitment to an invigorated Colombia and, 
in the process, help our own economy at a difficult economic moment.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BUNNING. 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. BUNNING. Mr. President, what is the pending business before the 
Senate?
  The PRESIDING OFFICER. The pending business is the Sanders amendment.
  Mr. BUNNING. Mr. President, I ask unanimous consent that the 
amendment be set aside so I may speak on the bill itself for 15 
minutes.
  The PRESIDING OFFICER. The Senator may speak on the bill without 
setting aside the amendment.
  Mr. BUNNING. I thank the Chair.
  Mr. President, this is an unusually bad bill, and I have opposed it 
from the very start. The course it has followed almost guarantees that 
it will be filled with the worst kind of gimmickry, and it is. The 
Senate may be the most deliberative body in the world, but this bill is 
anything but the product of deliberation. It is a jumble of disjointed 
ideas, unlikely to solve the crisis at hand, and it is unpopular. It 
turns out that the American people do not like the idea of bailing out 
banks and their neighbors who gambled on home prices. The voters 
understand what is going on in Washington better than we do.
  What is more, several of the complicated tax provisions in this bill 
never benefited from a full review by the Senate Finance Committee. 
Normally, this is a critical part of the Senate's deliberation.
  One example of a provision that could use more review is the new 
deduction for State property taxes. While it may be well intended, this 
new provision will complicate life for millions of American homeowners 
who will have to calculate their taxes twice to find out which method 
results in a lower tax. This complicates tax filings, and any Senator 
who has said the Tax Code is too complicated should be ashamed to vote 
for this provision.
  Because the Senate has not had any serious review of this provision, 
colleagues also may not know that this provision also allocates more of 
the Nation's tax burdens to residents of States that impose an income 
tax, such as Kentucky.
  The State with the highest income taxes faces the biggest relative 
tax increase, and this is illustrated in the chart that supporters of 
this provision hastily distributed to us. For example, the chart shows 
that 59 percent of Texan homeowners but only 23 percent of Maryland 
residents will benefit.
  The chairman of the Senate Finance Committee, on which I serve, is 
not even managing this bill, even though tax provisions account for 
about two-thirds of its cost. That is kind of hard to explain to the 
average Senator on the Finance Committee.
  Another provision that deserves far more scrutiny is the $4 billion 
in community development block grants that will be allocated to the 
States and local governments to buy foreclosed properties. To begin 
with, this current program is very poorly managed. The Wall Street 
Journal called it among the worst run programs in Washington, and there 
is a lot of competition for that title. The White House called the 
program ineffective just 2 months ago, and when the HUD inspector 
general testified before Congress in 2006, he explained that his agency 
had recently indicted 159 individuals and recovered $120 million of 
misappropriated funds. GAO also has criticized the targeting of grant 
recipients, which is a polite way of saying that the money is going to 
those with political connections and influence in local governments. 
Adding money to this program is risky at best.
  Let's have no illusions. This extraordinarily unwise grant of 
taxpayers' money is really just a bailout for banks in disguise. It 
goes to States, but the ultimate beneficiary will be banks that made 
risky loans.
  Instead of selling foreclosed properties on the open market, these 
banks will have the luxury of selling to local officials with whom they 
may already have a relationship. These officials will be buying 
properties not with their own funds but with OPM--OPM stands for 
``other people's money''--and in this case, the OPM comes from you and 
me, the American taxpayers, and the

[[Page 5331]]

millions of unborn Americans whom we are saddling with even more debt.
  Another provision that could benefit from more thoughtful 
deliberation is the $100 million spending on counseling. Yes, 
counseling is a good idea before a homeowner signs a loan they can't 
afford. But afterward, the real problem is financial. It is too late 
for counseling.
  We also don't know all that much about the nonprofit groups that will 
get the money. Are some of these groups funded mostly by credit card 
companies? Are they? If so, will they have a clear conflict of 
interest? Maybe they will actually advise people to abandon their home, 
to foreclose, in order to pay credit card debt. That would make the 
foreclosure situation worse, not better. One thing is certain: no 
amount of counseling is going to put money that they do not have into 
homeowners' pockets.
  Now, I have an amendment that I have tried to get a vote on that 
would do so--put money into homeowners' pockets--and that is why I 
think it is appropriate to redirect these public funds toward helping 
homeowners with the cost of refinancing. If we are going to give away 
$4.1 billion--I will say it one more time--if we are going to give away 
$4.1 billion in this bill, let's give it back to the taxpayers and do 
so in a way that encourages homeowners to restructure their mortgages 
and keep them out of bankruptcy and foreclosure. My amendment would do 
this. It would use the $4 billion in funding this bill uses to bail out 
banks and give it back to taxpayers while simplifying the Tax Code as 
well.
  The Joint Committee on Taxation says that this amendment would be 
revenue-neutral over 10 years. It is entirely paid for within the four 
corners of this legislation.
  This change in the tax law that my amendment contains is strongly 
supported by the Mortgage Bankers Association because it would get to 
the heart of the housing crisis. Let me try to explain.
  Often, when people are searching for a home, they are more concerned 
about qualifying for financing than getting the best possible terms on 
that loan. Millions of homeowners have taken out an adjustable rate 
mortgage that has a low interest rate for a short period of time, often 
2 or 3 years. These loans adjust to a much higher rate after the 
initial period. The assumption of many homeowners has been that they 
can refinance later in a conventional fixed mortgage loan for 30 years. 
But the Tax Code creates an obstacle to this.
  According to Bank of America research, published in the Wall Street 
Journal, more than $510 billion worth of adjustable mortgages, 
including prime and subprime loans, will reach the end of their fixed 
rate period before December of this year. For the holders of these 
loans, the options are stark: Refinance or default. It is unlikely that 
many of them can long afford the high interest rates on these mortgages 
after the fixed rate period expires.
  Unfortunately, our tax law has this exactly backward. It encourages 
homeowners to spend lavishly on first-time financing, but it exacts a 
penalty when homeowners find they are living beyond their means and 
need to refinance. My amendment would have changed all this. It would 
allow homeowners to currently deduct the mortgage interest points that 
lenders typically charge in connection with a home mortgage refinance. 
For example, under my amendment, if a homeowner has a $200,000 
adjustable rate mortgage and refinances into a 30-year fixed mortgage, 
paying 1 percent in points, the homeowner would have a $2,000 tax 
deduction for home mortgage interest paid. That is under my amendment. 
Under present law, the homeowner would only be allowed to deduct $66. 
There is no good reason to allow the deduction for home purchase 
mortgages and to deny it for those who need it to refinance.
  My amendment would remove a significant financial obstacle to 
refinancing that would allow struggling borrowers to keep their homes. 
It would help Americans to get out of first mortgages that they have 
entered into without being able to shop for the best possible mortgage. 
Unlike some of the other provisions in this bill, it truly would help 
prevent foreclosures for many who are about to have their homes 
foreclosed.
  Mr. President, I yield the floor, and I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                                  Iraq

  Mr. DORGAN. Mr. President, today has been a fairly significant day 
here in the Congress. General Petraeus and Ambassador Crocker have 
flown back to the United States from the country of Iraq, and they have 
reported to both the Armed Services Committee and also the Foreign 
Affairs Committee. I have not had a chance to listen to their 
testimony--I don't serve on either of those committees--but I know the 
news will carry the testimony, and I am sure I will see portions of it 
and will certainly read their testimony tomorrow morning, but I wanted 
to make this point.
  While General Petraeus and Ambassador Crocker have come here today 
and I am sure have talked about the progress that results from the 
surge--although there has been a substantial amount of violence, and 
tragically, I believe 11 U.S. soldiers have lost their lives in Iraq 
just in the last few days--I think there is no question that the extra 
soldiers, the additional 30,000 or 40,000 soldiers they took to Baghdad 
and to the streets of Iraq, dampened down the violence some. Yet there 
is so much discussion about Iraq and so little discussion about 
something else that matters a great deal to our lives.
  This is the 2,400th day since 9/11, and 2,400 days later, Osama bin 
Laden is still at large, the same Osama bin Laden who boasted the day 
after 9/11--a day when thousands of innocent Americans were killed--
Osama bin Laden boasted about having engineered the murders of these 
Americans. Two thousand four hundred days later, he is not only at 
large, but he is reconstituting the leadership and the al-Qaida force, 
including building training camps to train additional terrorists.
  Now, Mr. President, are some moments in history where I just remember 
where I was. I remember where I was as a very young boy when John F. 
Kennedy died. I remember the day. I remember the day astronauts walked 
on the moon. And I remember 9/11 very clearly. And it occurred to me on 
9/11 that surely our country bring those who were responsible to 
account. When thousands of Americans were murdered and al-Qaida and its 
leader, Osama bin Laden, boasted about having engineered that murder, 
it occurred to me that Osama bin Laden is not long for this world, or 
at least Osama bin Laden will certainly be brought to justice and get 
his due rewards for murdering so many Americans. Yet, 2,400 days later, 
that has not happened. Now, one might ask the question: Why? And does 
it have to do with the detour into Iraq?
  I want to point out that in July of last year, the last time a 
National Intelligence Estimate was given to us by all of the combined 
intelligence services in our Government, here is what they said:

       Al-Qaida is and will remain the most serious terrorist 
     threat to the homeland.

  Let me read that again. That is the assessment of our National 
Intelligence Estimate in our country, the official assessment.

       Al-Qaida is and will remain the most serious terrorist 
     threat to the homeland. We assess the group has protected or 
     regenerated key elements of its homeland attack capability, 
     including a safe haven in the Pakistan Federally Administered 
     Tribal Areas, operational lieutenants, and its top 
     leadership.

  Al-Qaida is the most serious threat to us, No. 1. No. 2, it has 
regrouped and regenerated key elements of its attack capability. No. 3, 
it is in a safe haven in Pakistan.
  Now, who would have guessed that 2,400 days after our country was 
attacked, an attack that Osama bin

[[Page 5332]]

Laden boasted about having engineered, that there would be 1 square 
inch of ground on this planet that would be called a safe haven for 
someone who murdered over 3,000 Americans? Who would have believed that 
to be the case? Not me. Almost certainly I would have thought he would 
have been brought to justice.
  Here is an October 3 story from last year by Griff Witte of the 
Washington Post. It quotes top military officials in Pakistan talking 
about al-Qaida.

       ``They've had a chance to regroup and reorganize,'' said a 
     Western military official in Pakistan. ``They're well 
     equipped. They're clearly getting training from somewhere. 
     And they're using more advanced tactics.''

  This is from CIA Director Hayden, a week ago, on ``Meet the Press'':

       It is very clear to us that al-Qaida has been able, over 
     the past 18 months or so, to establish a safe haven along the 
     Afghanistan-Pakistan border area that they have not enjoyed 
     before; that they are bringing operatives into that region 
     for training.

  Now, I have flown over that Afghan-Pakistan area. I have been in an 
airplane at 20,000 feet and looked down. I understand there is no 
boundary. You don't know where Afghan ends and Pakistan begins. I 
understand it is a tough area, tribally controlled areas. But what I 
don't understand is how, 2,400 days later, we are told by our top 
intelligence officials that the greatest threat to our homeland here in 
America is al-Qaida and its leadership--the greatest threat to our 
homeland is al-Qaida and its leadership--and they are in a safe haven, 
quote-unquote. There shouldn't be 1 acre of ground on this planet that 
is safe for those who murdered Americans on 9/11.
  So what happened? What has caused this to happen? Well, this country 
took a detour. President Bush told the American people and Secretary of 
State Colin Powell in a presentation to the world and the United 
Nations told us about the alleged threat posed by the country of Iraq. 
He made the case for a military attack against the country of Iraq. 
They made the case that Saddam Hussein was a bad guy. They got no 
argument about that. Saddam Hussein was in many ways a brutal dictator. 
There were football-field-size graves that were unearthed in Iraq with 
thousands of people who had been murdered by Saddam Hussein. So there 
is no argument about Saddam Hussein.
  The fact is, there are a number of bad leaders in this world. That 
doesn't mean we go invade their country.
  After 9/11 the case was made that Iraq was a threat to the United 
States of America. They said Iraq was trying to get yellowcake from 
Niger and build a nuclear capabilities; Iraq was buying aluminum tubes 
for the purpose of reconstituting its nuclear capabilities; Iraq has 
mobile chemical weapons laboratories to produce weapons of mass 
destruction, which threatened this country.
  That is all pretty ominous. Colin Powell, at the request of President 
Bush, showed all the evidence to the world. Then, of course, in the 
years since discovered that evidence was false. The yellowcake from 
Niger was from a forged document. Yet it purported to tell the world 
that Saddam Hussein was trying to reconstitute his nuclear capability 
by buying yellowcake from Niger--a forged document. No one has ever 
described to us where that forgery came from.
  The aluminum tubes, Condoleezza Rice, Stephen Hadley, and others sat 
idly by while in their offices they received reports from other parts 
of our Government saying those aluminum tubes were not for a 
reconstitution of nuclear capability. That information was withheld 
from Congress and the American people.
  Mobile chemical weapons laboratories? That came from a man named 
Curveball; a man named Curveball. Curveball was an informant who was 
being held by the Germans. Curveball used to be a taxicab driver in 
Baghdad, largely considered a drunk and a fabricator by the German 
authorities. This country, this administration, this President, and 
this Secretary of State used Curveball as an example and a source--a 
single source, mind you--to describe mobile chemical weapons 
laboratories that existed in Iraq and therefore threatened this 
country.
  It turns out it was not true. It turns out that thin thread, one 
person held by German authorities--again, considered to be a drunk and 
a fabricator, a former taxicab driver from Baghdad--was cited as a 
source, just an unidentified source to the entire world, to support the 
contention that what Saddam Hussein was doing in Iraq threatened this 
country.
  So the President, Condoleezza Rice, Colin Powell, Stephen Hadley, and 
especially, of course, the neocons--Vice President Cheney, Douglas 
Feith--all of them. They all got what they wanted. This country went 
into a detour, and the detour was right into the middle of Iraq. It was 
going to be a very simple operation, last only a very short amount of 
time. The fact is, we have been there now fighting in Iraq longer than 
the Second World War lasted, and we have reports today by the top 
general in Iraq, General Petraeus, a U.S. general, and by the U.S. 
Ambassador, Ambassador Crocker--both good Americans--who come to us to 
describe progress, progress in Iraq.
  I don't know how progress is being measured. I hope we have a lot of 
progress. I hope we have enough progress so we can begin withdrawing 
American troops from Iraq.
  But the fact is, Saddam Hussein is dead. He was executed. The Iraqi 
people had the ability to write a new constitution and then vote for 
it. They had the ability to vote for a new government, which they have. 
And they had the ability to receive two-thirds of a trillion dollars 
from the American taxpayers, which we have spent in Iraq and a smaller 
amount in Afghanistan. We have spent $16 billion of that training 
military and police capability for able-bodied Iraqis. Four hundred 
thousand able-bodied Iraqis have been trained for military and police 
work.
  The question remains now, in my judgment, if 400,000 Iraqis who have 
been trained by using $16 billion of our money, and been trained by our 
people, if they don't have the will to provide the security in the 
country of Iraq that is their country, not ours, then we can't stay 
there 2 years or 4 years or 20 years or 100 years, as some have 
suggested. We must begin to bring troops home and say to the Iraqis: 
This is your country, not ours. This is your responsibility, not ours. 
You have a new government. We spent the money to train able-bodied 
Iraqis. Now you have to have the will to take back your country.
  My point about Iraq, however, is that we will not only have been 
detoured in terms of two-thirds of a trillion dollars-plus, we have 
been detoured here and bogged down in a long-term civil strife in Iraq 
that has been deadly for this country and deadly for the Iraqis at a 
time in which the greatest threat to America and greatest continuing 
threat to our homeland comes from al-Qaida. Don't take that from me. 
Take that from the top military experts in our Government.
  If that in fact is the top threat to our homeland, why, 2,400 days 
after 9/11, is Osama bin Laden in a safe haven? Why is there a safe 
haven anywhere on Earth for Osama bin Laden? That ought to be the 
question that is asked today. That ought to be the question that is 
answered for the American people.
  I think all of us understand that the terrorist threat exists. It 
remains, and likely will remain for some time, but we didn't eliminate 
the terrorist threat and didn't address the terrorist threat by sending 
soldiers to Iraq. The purpose of sending soldiers to Iraq was to 
respond to what we now know to have been largely untrue, the threat 
that Iraq represented a threat to our country. But we do know now, as a 
result of our National Intelligence Estimate, that Osama bin Laden is a 
threat to our country. We knew that on 9/11. We knew that on the day he 
killed 3,000-plus innocent Americans. Everybody knows that. You don't 
need some intoxicated former taxicab driver from Baghdad to tell us 
that. We know Osama bin Laden is a threat. We now know that 6 years 
after he engineered the 9/11 attack that our intelligence estimate says 
he or his al-Qaida organization is the most serious terrorist threat to 
our homeland.
  Were there any hearings today on Capitol Hill asking questions of the

[[Page 5333]]

people who are supposed to be doing this, What kind of progress are you 
making? Are you really going after him? Is this job No. 1? Or is all 
the spotlight on the same spot, that is Iraq, while Osama bin Laden 
over here in northern Pakistan is rebuilding training camps, recruiting 
new terrorists, and reconstituting his al-Qaida leadership to once 
again remain the most serious threat to this country's homeland?
  My only point is there is nothing Republican or Democrat or 
conservative or liberal about any of this. This is all about common 
sense. What is the greatest threat to this country? The National 
Intelligence Estimate says it is the al-Qaida leadership. So what are 
we doing about that? Is there any progress?
  Were there any hearings today asking whether there is progress? Were 
there any hearings asking whether we are bringing Osama bin Laden to 
justice, calling in officials who ought to be working on this? It seems 
to me, after 2,400 days the American people have a right to expect some 
answers.
  Again, I think it is good that we have hearings today. We will no 
doubt read about the hearings, the testimony of General Petraeus who, 
by all accounts, is a wonderful American soldier. I met Ambassador 
Crocker when he was Ambassador in Afghanistan. He is a good American 
diplomat. We will no doubt hear a lot of discussion about what they 
said today.
  All the talk today is about Iraq. That is a very important subject. 
But I assume what will not be discussed today is anything about the 
most serious terrorist threat to our homeland, and that is the person 
and the leadership and the organization that engineered the attack that 
murdered thousands of innocent Americans on 9/11. I hope those hearings 
are held soon. I hope this administration gives us a report from time 
to time on what we can expect.
  Will there be another 2,400 days? Another national intelligence 
report telling us that the person who engineered the 9/11 attack is in 
a safe or secure--by the way, that word has been used as well--safe 
haven or secure haven? There ought not be anyplace safe or secure on 
this Earth for those who engineered the 9/11 attack, but it certainly 
has been safe and secure for 2,400 days.
  My hope is we will not be on the floor of this Senate talking about 
another 2,400 days. We should be focusing on bringing to justice those 
who perpetrated the 9/11 attack. That goal, in my judgment, has taken a 
back seat to the detour that took us to Iraq all these many years, and 
I hope that will change soon.
  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. DORGAN. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, in just another couple of minutes, there 
is an amendment I believe has been filed to the underlying housing 
bill. I want to make a comment on it. It is an amendment that would 
extend the renewable energy tax credits. It is a very important 
amendment. I wish we would extend the renewable energy tax credits for 
a lengthy period of time. I am not sure if that amendment will be 
considered germane. If it is, we need to pass it. But I want to make 
this point.
  This country has a history now going back to 1992 with respect to 
renewable energy for wind energy through the production tax credit and 
things we put in place to encourage renewable energy. We have a history 
of kind of a pathetic and anemic response to all this.
  Let me describe what we did with oil. Once we decided we wanted to 
encourage people to look for oil and gas, we were at it. In 1916, 
Congress put in place deep, aggressive tax credits and incentives for 
people to go drill for oil and gas. So for almost 100 years our 
country's policies have been for going out to drill for oil and gas. 
God bless you, we are going to give you some big tax breaks. We want 
you to do that. That has been America's policy: find more oil and gas.
  In 1992, the Congress put in place a provision that said: Now we want 
to encourage renewable energy. With oil we put in place permanent, 
robust tax incentives that have lasted almost a century. What did we do 
with renewables? When it came to renewable energy, it was kind of a 
pathetic, lackluster response. It was temporary and short term. We 
would extend it a little bit here and then we let it expire. We have 
extended it five times, and let it expire three times. What a pathetic 
response.
  What this country has an obligation to do with respect to wind and 
solar energy and the basic renewables is to say to this country and 
developers: Look, here is where America is headed. For the next decade, 
here is where we are going, and you can count on it because this is 
America's policy. We ought to do that.
  We are doing 1 year, 2 years, or 3 years at a time, but the 
production tax credit ought to be extended for 10 years. We should say 
here is where we are headed, and you can count on it. We are not going 
to want to be 2 years, 5 years, or 10 years from now 70 percent 
dependent on the Saudis and Kuwaitis and Iraqis and Venezuelans for our 
oil. That makes no sense. Yet the only way we are going to get out of 
this box is to say we are going to begin providing renewable energy in 
a very aggressive way. But we don't do that with the incentives we put 
in place. We just start and stop, stutter-start, stop, and every time 
we stop for a year, the whole investment cycle blows off. It goes to 
zero. So you have all kinds of projects on the shelf that sit there and 
never get deployed.
  In solar, for example, we are way behind in solar because you can't 
do solar and put a tax incentive in for 1 year. You can't do that. It 
takes a number of years to get a solar project up and running. You can, 
if you get a short-term wind turbine up perhaps. You can have a shorter 
time line on that. But even with that, it seems to me that for wind or 
solar or any number of these renewable technologies, this country has a 
responsibility to get serious about becoming less dependent on Saudi 
Arabia and Kuwait and Iraq and all those countries.
  The Lord did something really interesting: He put oil over there 
under the soil and put all the demand over here, with the blessings of 
a country that expanded and produced a great economy. You know we put 
little straws in this Earth every day and we suck oil out. We suck 84 
to 85 million barrels of oil a day out of this Earth, and we use one-
fourth of it here in the United States, 21 million barrels a day, and 
60 percent of it comes from off our shores. If you don't think that is 
a dangerous dependency, then there is something wrong. I think that is 
dangerous and we have to fix it. How do you fix it? You make a 
commitment to renewable energy. My colleague from the State of 
Washington was on the floor, Senator Cantwell, who has dedicated a lot 
of her time and effort to this subject, and I commend her for it.
  You know, you have to focus around here on so many things. Senator 
Cantwell has focused substantially on these issues. I wished to work 
with her. I want whatever she is proposing to succeed. We are working 
together in the Energy Committee. I am also the chairman of the Water 
and Energy Appropriations Subcommittee.
  We need to do a lot. But, most importantly, we need to get this 
Congress on the side of policy that this country can be proud to say: 
We are going to make a commitment for the next decade, here is where we 
are headed in America. We are in support of renewable energy. You can 
count on us because we are going to put policies in place that will 
tell you we are in support of it.
  We cannot keep doing what we have been doing. It is unfair, unfair to 
this country. So my hope is that when we consider this amendment, that 
we can approve it. But my hope is we will go much further this year. 
The minimum we should do on the production tax credit is a 5-year 
commitment--minimum.
  I have a bill that says we ought to provide the PTC for 10 years. You 
know, it is one thing to talk about these things, it is another thing 
to be

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serious and enact public policies that demonstrate to the country and 
the world you are serious. We have not done that on renewable energy. 
It is time, long past time we do it. I hope perhaps we will support 
with the first step tomorrow.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GRASSLEY. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent to speak as in 
morning business for such time as I might consume but probably in the 
neighborhood of 8 or 9 minutes for anybody else who might be wanting to 
speak.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                     Colombia Free Trade Agreement

  Mr. GRASSLEY. Today, President Bush submitted the Colombia Trade 
Promotion Trade Agreement Implementing Act to Congress. This bill, as 
the title implies, would implement our pending trade agreement with 
Colombia, which the administration and Colombia signed in November 
2006.
  This is an important agreement that deserves our support. Some of the 
economic reasons for supporting this trade agreement are that the 
economic rationale is obvious. In my view, the economic rationale is 
undeniable. That is because Colombia is a beneficiary of two of our 
unilateral trade preference programs: The Andean Trade Preference Act, 
and the Generalized System of Preferences.
  Now, all this means is Colombia already gets duty-free access to U.S. 
markets for the vast majority of its goods. Now, meanwhile, less than 3 
percent of our exports to Colombia, and not a single U.S. agricultural 
export, receives duty-free treatment from Colombia. Our exporters face 
Colombian tariffs as high as 35 percent for nonagricultural goods and 
even much higher tariffs for agricultural goods.
  The Colombian trade agreement would thus eliminate this disparity or, 
as we like to say so often, level the playing field for American 
exporters, thus giving American workers the same access to Colombian 
markets that their workers get to the U.S. markets; in other words, 
being fair, leveling the playing field.
  Now, the U.S. International Trade Commission has found that leveling 
the playing field will increase our exports to Colombia by $1.1 billion 
per year. That is as a result of eliminating the duty on goods. That 
means real benefits for American farmers, for American manufacturers, 
for American service suppliers.
  One of the chief benefits is it will help keep good-paying jobs in 
the United States. So I would ask my colleagues and the American people 
to think about this whole proposition about the Colombian Free Trade 
Agreement this way: Either we maintain the status quo or we create new 
opportunities for American exporters.
  At its heart, that is what this debate is all about. Last year, 
exports accounted for more than 40 percent of our total economic 
growth. We should be doing everything we can do to grow our exports 
even further. That is what we did last December when the Senate voted 
by this wide margin of 77 to 18 in favor of a free-trade agreement with 
Peru.
  The Colombian trade agreement is very much like this Peru agreement, 
and the Colombian market is bigger than the Peru agreement. If it makes 
sense to approve the Peru agreement, it makes even more sense to 
approve the agreement with the country of Colombia.
  Economic considerations are not the only reason to support the 
Colombian agreement. I say this because too often we measure trade 
entirely in economic terms. But there are a lot of ways to measure 
trade other than in dollars and cents. Because in this instance and in 
so many instances, trade agreements are about an important national 
security priority.
  There is one very specific reason for doing this with Colombia. 
Because as my Senate colleagues know, Colombia is a strong Democratic 
ally in a very dangerous neighborhood. For many years, it has been 
under assault from the FARC, a group of narcoterrorists fighting to 
overthrow the democratically elected Government in Colombia. It is 
increasingly under pressure, as Colombia is, from Venezuela's President 
Hugo Chavez. You have seen a lot of this in the news in the last month.
  President Chavez of Venezuela is using oil wealth to divide Latin 
America. He is trying to lure allies to his Socialist vision and, most 
importantly, to promote his anti-U.S. agenda. He is fiercely opposed in 
this process to anything that Colombia's President Uribe does in 
cooperating with the United States or even having a friendship with the 
United States.
  There have been troubling reports that President Chavez may be 
working with the FARC. Last month, he tried to create a diplomatic 
crisis over a border incident that did not even involve Venezuela. He 
took the side of the FARC against the Colombian Government. At a 
challenging time such as this, the United States has a responsibility 
to provide strong, principled leadership. Our agreeing to the Colombian 
Free Trade Agreement is one way of showing strong, principled 
leadership in support of a friend in South America.
  We must stand by our allies. We must help to promote economic 
stability, security and, most importantly, the rule of law, whether it 
is in trade or nontrade areas. President Uribe has made it clear that 
one of the most important steps we can take in this regard is then to 
help him, through our implementation of the Colombian Trade Agreement 
that levels the playing field for America, for America's manufacturers, 
service providers, so we can get our products into Colombia on the same 
basis as Colombian farmers or manufacturers or whatever have been able 
to get their products into this country without duty.
  Our leaders in Latin America are watching us in this process. They 
see our approach to Colombia as a proxy for the overall attitude toward 
Latin America. If Congress rejects this trade agreement, or if we were 
to refuse to vote on it, our allies in Latin America might well 
conclude that the word of the United States is no good. That will not 
help Latin America, and it surely is not good for our country.
  I know some of my colleagues have concerns about this agreement. One 
of those concerns is the issue of violence by Colombia or within 
Colombia against labor leaders. Anti-union violence has been a serious 
problem in Colombia for years.
  If the Colombian Government were ignoring this issue, that might be 
reason to oppose this agreement. But Colombia and President Uribe are 
not ignoring the issue. To the contrary, Colombia has made massive 
strides in its fight against anti-union violence. Moreover, I have yet 
to hear a convincing reason why voting down the Colombian agreement or 
refusing to vote on it will help to reduce violence against labor 
leaders.
  If we want to help Colombia reduce violence, and if we want to assist 
in the demobilization process, we should be doing what we can to 
enhance economic growth and create new opportunities for a legitimate 
economy. One way we can advance that objective is to vote to implement 
the Colombian trade agreement.
  Now, the one other concern I have heard is the administration should 
have waited to submit the agreement until it reached a procedural 
agreement with the congressional leadership. The fact is, we have been 
waiting for Congress to take up this issue for over 10 months. On May 
10 of last year, there was a great, grand deal made about our 
bipartisan compromise on trade that would pave the way for the 
continuation of pending trade agreements, including the Colombian 
agreement, including Peru, which has been passed, and including Panama, 
which still is on the agenda.
  Now, since May 10 of last year, there has been no action on Colombia. 
This inaction violates the compact between

[[Page 5335]]

the legislative and executive branches of our Federal Government on 
trade. The administration negotiated the Colombian trade agreement 
under the Bipartisan Trade Promotion Authorization of 2002.
  Under the trade promotion authority procedures, the administration 
has an obligation to consult with Congress during the course of the 
negotiation and to conclude an agreement that meets the negotiation 
objectives specified in that statute, the Bipartisan Trade Promotion 
Authority Act of 2002.
  Now, the administration has done all those things required by that 
act. The administration even went further by reopening the agreement to 
implement the enhanced labor and environmental provisions that were 
demanded by the new Democratic majority after the elections of 2006, 
which was their right to do.
  These agreements then on labor and the environment were part of the 
May 10 bipartisan trade deal. Colombia has agreed to accept those 
provisions. But the trade promotion authority places a firm 
responsibility on Congress as well, the responsibility to process a 
trade agreement for an up-or-down vote once it has been concluded.
  Congress has had over 10 months to engage the administration and 
commence that process. In that time, we have not even had a hearing on 
the Colombian trade agreement. So the time for that process ran out.
  Now, this is the position the administration is in. In order to 
preserve sufficient time under the trade promotion authority to assure 
a final vote this year, the President has now submitted the agreement 
and implementing legislation to this Congress. But that does not mean 
Congress must vote tomorrow.
  Today's action by the President starts the 90-day legislative clock 
in the House and Senate under that Bipartisan Trade Promotion Authority 
Agreement of 2002.
  So there remains plenty of time to work together on a bipartisan 
basis to reach consensus. For example, I am engaging in intense 
discussion with the chairman of the Finance Committee, Senator Baucus 
of Montana, on a consensus bill to reauthorize our trade adjustment 
assistance programs. We will certainly continue that effort. Trade 
adjustment assistance is the top priority of Senator Baucus on the 
trade agenda this year. I have agreed to work with him to advance his 
priority that I also have an interest in advancing. But my priority is 
implementation of the Colombian trade agreement. I expect to see a vote 
on that as well. I think Congress can address both priorities. I think 
Congress can meet both responsibilities. I think Congress can 
accomplish them in a bipartisan way.
  It is time to stop playing politics with our Nation's vital economic 
and foreign policy interests. It is time to level the playing field 
between the United States and Colombia on free trade. That level 
playing field is going to benefit the United States. It is not going to 
benefit Colombia much more, although it will benefit them some. 
American workers deserve a fair opportunity to sell our products and 
services abroad. Colombia deserves recognition for the tremendous 
progress it has made over the past few years. It is time for Congress 
to demonstrate leadership and to meet our responsibility in the 
economic and foreign policy areas.
  The United States-Colombia trade promotion agreement deserves an up-
or-down vote this year. This debate will continue. I hope that before 
the end it becomes more of a dialog than a debate because I think 
dialog is what foreign trade is all about.
  This issue is too important. The stakes are too high. We must find a 
way forward, and we need to find it together. I think we will.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Menendez). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DODD. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DODD. Mr. President, I thought I might take a couple of minutes 
toward the close of the day and share with my colleagues where we stand 
on the matter of the housing proposal we have been on since the middle 
of last week. I wish to again thank Majority Leader Reid. Without his 
leadership, we would not be here. We would not be in a position to 
actually do some things that are critically important to work our way 
out of this mess our country is in when it comes to the foreclosure 
crisis, the problems Americans are facing, not to mention the contagion 
effects that are moving this issue beyond housing into other aspects of 
our economy. It was Majority Leader Reid who reached out to the 
Republican leader, suggesting we try to get together, Democrats and 
Republicans, on a compromise proposal to move to and then deal with 
other issues where we could, where there was some consensus, to then be 
able to meet with the other body to see if we couldn't resolve 
outstanding questions dealing with the issue of housing and 
foreclosure.
  As I have said over and over for the last week since Senator Shelby 
and I spent that 24 hours we were given--not a great deal of time, 
considering the number of issues involved in this question--to come 
back with a package that represented Democrats' and Republicans' common 
points on this question, there were a lot of issues Democrats wanted, 
that I wanted, there were issues Republicans wanted that the other side 
was not willing to agree to, and that was the charge we were to avoid, 
to come back with a package on matters we could agree on, which is not 
always easy in a Senate that is divided 51 to 49, where the margins are 
narrow and the differences are significant. But nonetheless, we did 
that.
  This package includes positive provisions. One, we are going to get 
an FHA modernization bill. That has been kicking around for a long 
time. We took those loan limits from, I think it is $362,000 up to 
$550,000. There were some 19 States that would have been excluded from 
the FHA program or at least parts of States that would have been 
excluded, such as California, my own State of Connecticut, candidly, 
Massachusetts, New Jersey, many States, New York. There are pockets in 
these States where even the average cost of a home is higher. So the 
loan limits went up. FHA modernization does other good as well, an 
important point.
  The issue of counseling, last year we appropriated $42 million 
nationwide for counseling services to deal with the housing crisis--
hardly enough to deal with the demands people had on counseling. 
Senator Bond and I offered an amendment last year and got $180 million 
for counseling services which we thought contributed, and it did, to 
assisting groups across the country, nonprofits to work with those 
facing foreclosure or in highly distressed mortgages to work out those 
differences.
  I would have liked to have added $200 million more to the counseling 
program. That is a proposal Senator Murray, who cares deeply about this 
issue, Senator Schumer, who cares about the issue, and others wanted to 
bring up. When we sat down to negotiate that issue, there was little or 
no appetite for any additional money in the counseling area. So we 
compromised between the 200 and zero and came up with $100 million. I 
would have liked more. But again, we were directed and asked by the 
leadership to try to develop a set of consensus ideas. Again, there may 
be other amendments--there was on this--to add additional funds to it.
  We provided money for community development block grants to assist 
communities that have a lot of distressed properties or foreclosed 
properties. I have made the case over and over what this can do to a 
community and neighborhood. When you have a single foreclosed property, 
the value of every other home in that neighborhood or the surrounding 
area can decline in value immediately. What you don't need is more 
supply out there. Right now we are overloaded with supply. It is one of 
the reasons why the market is not doing as much in correcting this 
problem, because of the oversupply of housing. So when we do what we 
can to

[[Page 5336]]

clean up housing, to get it back on the market and hopefully get people 
into that housing, it not only benefits the people who get to purchase 
a home, but it also does a lot to increase the value of the surrounding 
homes, not to mention, of course, stabilizing a declining property tax 
base, which supports police, fire, social services, all the other 
issues that are adversely affected when you have a foreclosed property 
or properties in your neighborhood or community. So that was a major 
achievement in this bill.
  I would have liked some additional funds for community development 
block grants. It is a very good program. It works very well. To target 
these resources into that area is something we can applaud in this 
legislation.
  We also have offered some tax credits for people who move into 
foreclosed properties. It is a 2-year deal. It involves about $3,500 a 
year in tax credits. The idea is to get this property back on the tax 
rolls, to get people into the property so, again, you stabilize 
neighborhoods before you end up with further declining values and 
erosion in these areas, blight, all the other problems that happen.
  How big a problem can that be? Let me tell you how big that can be. I 
have one community in my State that I have talked about where there are 
6,000 foreclosures in a city of 100,000 people. Let me tell you what 
that looks like in a city. Imagine if you end up with 6,000 boarded-up 
properties in a city of 100,000 people or less. Obviously, the value of 
every other home in that city is going to be adversely affected. So 
while people said: I don't think you ought to be providing a tax credit 
to get owner-occupied people into these homes, well, you can make a 
case for that, but I think we all benefit if we can get someone into 
that property, clean it up. That is taxes coming into the community. 
The value of surrounding homes I think are benefited from it. So again, 
I think that is a good provision. It was offered here. It has to be 
foreclosed property. You have to live in the house for a period of 
time. It doesn't invite speculation or involve new properties. It is 
foreclosed properties.
  We also had a number of provisions to deal with veterans. Again, I 
thank Senator John Kerry, Senator Dan Akaka of Hawaii, Senator Coleman, 
among others, Senator Sanders of Vermont. All had ideas on how we could 
assist our men and women in uniform who are facing not only the 
difficulty of being in the military service today, potentially serving 
in Afghanistan and Iraq, but also facing potential foreclosures. We 
have done a lot in this bill to make sure they are not going to be 
adversely affected.
  It may not seem like much or a lot of people, but the fact that we 
could do something to help mayors and local governments with foreclosed 
properties, as well as providing some way for people to get into these 
homes, is a positive step, not to mention the FHA modernization, the 
mortgage revenue bonds, $1.6 billion, not exactly a small amount of 
money, designed specifically to get people into fixed rate affordable 
mortgages that they can work out. That is going to be a tremendous 
asset to people.
  There are some related matters we probably have to deal with in the 
Tax Code so it could be even more potent, but it is a major 
accomplishment in this bill that is something we can applaud again and 
celebrate as being very helpful. In fact, this is the $10 billion in 
mortgage revenue bond authority included in this proposal.
  There are other provisions in the bill. Frankly, there are some that 
go too far. I am the first to admit it. But I was asked to try to put 
something together. In doing so, I wished to have a provision in here 
that I cared deeply about and that is the home preservation idea, where 
we could forestall the ability of people. In the ultimate situation, 
where you provide money to mayors to clean up, why not stop foreclosure 
in the first place. I have talked about it since January. There is, I 
think, sort of a growing constituency that understands this and has 
offered some ideas on how to be supportive. But I couldn't get my own 
idea in this bill as the negotiator. I tried to convince my good friend 
from Alabama and others this was a provision I thought we ought to have 
in this bill.
  He has some very legitimate questions about it. A good set of 
hearings probably will accomplish it. This Thursday, we are going to 
have a hearing on this idea and other ideas in the Banking Committee 
and a hearing the following week as well because we would like to have 
a couple hearings on it. My hope is that at the conclusion, we can have 
a markup and, along with some other provisions the Presiding Officer is 
aware of, as a member of the committee, we can bring back as a package, 
hopefully, in a bipartisan way, that we can move through this Chamber 
that will contribute some answers to this economic crisis that has as 
its center the foreclosure crisis.
  My own provision is not part of this package as much as I wanted it 
and argued for it. But I couldn't get it included at all. So there are 
things I would have liked to have had in this bill that are not here.
  There are some things in this bill that I think go too far. I will be 
the first to admit it. But I have learned over the years that if you 
wait for the perfect, you don't get much. In this body with 100 
Members, with very different views on a lot of these matters, you do 
your best. Particularly when you are divided 51 to 49, it is hard to 
develop that kind of consensus. But that is what it is, and that is how 
you get legislation passed. You begin to have to move on it. That is 
why I am urging my colleagues and I am grateful for the vote on 
cloture. I don't like to cut off debate for anyone on matters where 
certain amendments may not then survive a postcloture motion. But we 
need to come to some closure on this.
  I would say to the Presiding Officer as well that there are about 15 
or 20 amendments that are going to be worked out, I think, that various 
people have offered in addition to what is in the core provisions here 
that we are working hard on, the adjoining staff, to try to accommodate 
where we can. So in addition to the core provisions, there are other 
ideas that have come forward that we hope to have included in this 
final product that we can produce, hopefully, by tomorrow.
  But we are pretty much done with the debate. We have debated this a 
lot. People know or can find out whether their amendments are germane 
or survive postcloture or would avoid an objection being filed against 
them. If that is the case and they want to come over and let Senator 
Shelby and me talk about them and listen to people's ideas, it is still 
possible some additional ideas can be included.
  I have been told there are some people who are just going to object 
to anything that comes up. I would wish that would not be the case, but 
that is a right Members have. They have the right to object to anything 
because it takes unanimous consent to bring up these matters. If you do 
not get the consent, it does not come up. So I know the Democratic 
leader, working with the Republican leader, is trying to convince those 
Members who have blanket objections to anything to remove those 
objections and to allow some of these ideas to come up to be considered 
as part of this package.
  We then have to go through the process of meeting with the other 
body. Congressman Barney Frank, the chairman of the Financial Services 
Committee of the House, is working on a similar package or related 
package. I am never going to get there to work out some differences, 
some of the different ideas that may become a part of this legislation, 
if I do not leave here. We cannot solve this problem by talking to 
ourselves. We are going to have to sit down and talk with people who 
have different points of view on this if we are going to come up with 
some common answers.
  So that is sort of the status of play here at 6:30 this evening. 
There is no reason why we need to exhaust 30 hours. There is a lot of 
other work to be done in this body on other matters. This is not the 
only issue that is before this Congress.
  So my hope would be that tomorrow morning, for those who have 
additional

[[Page 5337]]

ideas who want to come over, for those who are waiting to see if we can 
get some answers, that we do that. I am prepared to spend the time to 
try to work things out where we can and to say to those where we cannot 
work it out: I am sorry, I cannot accommodate every Member who has an 
idea on this bill. Beyond that, we need to come to closure and move on. 
My hope would be we would not have to wait until 9 p.m. tomorrow night 
to arrive at that point.
  I am more than happy to yield back time under the 30 hours, as I am 
confident Senator Shelby would be, but we do not want to do that 
without giving our colleagues an opportunity to be heard on these 
matters.
  So I will urge colleagues in the morning, if they would come over and 
bring their ideas or at least if they have amendments to bring them up. 
We can vote on some of these. Some may carry, some may not, but allow 
us to move forward and have a final vote on this package and then go 
back to work in the committee to bring out these additional ideas we 
have been talking about, as well as to get to a conference with the 
other body to try to resolve what is in this bill and what they will 
offer themselves.
  With that, Mr. President, I ask unanimous consent to add Senators 
Kohl and Carper as cosponsors to amendment No. 4489, as submitted by 
Senator McCaskill.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MARTINEZ. Mr. President, I would like to commend the hard work of 
Chairman Dodd and Ranking Member Shelby for putting together a 
bipartisan package of housing provisions.
  If we have learned anything from the current economic situation, it 
is the need for improved oversight of the lending industry. There is a 
need to restore investor and consumer confidence in the housing market. 
Although this bill goes a long way to helping families and communities 
deal with issues related to foreclosure, there's still a critical 
component missing--regulatory reform of government-sponsored 
enterprises.
  I would like to take a moment to remind my colleagues what 
precipitated the need for Congress to consider GSE regulatory reform.
  In May 2006, OFHEO published a special report detailing egregious 
management and accounting scandals that highlighted a corporate culture 
of greed and corruption. I would like to read a few excerpts from the 
summary of that report:
  Fannie Mae senior management promoted an image of the Enterprise as 
one of the lowest-risk financial institutions in the world and as 
``best in class'' in terms of risk management, financial reporting, 
internal control, and corporate governance. The findings in the report 
show that risks at Fannie Mae were greatly understated and that the 
image was false.
  During the period covered by the report--1998 to mid-2004--Fannie Mae 
reported extremely smooth profit growth and hit announced targets for 
earnings per share precisely each quarter. Those achievements were 
illusions deliberately and systematically created by the Enterprise's 
senior management with the aid of inappropriate accounting and improper 
earnings management. A large number of Fannie Mae's accounting policies 
and practices did not comply with Generally Accepted Accounting 
Principles, GAAP.
  The Enterprise also had serious problems of internal control, 
financial reporting, and corporate governance. Those errors resulted in 
Fannie Mae overstating reported income and capital by a currently 
estimated $10.6 billion. By deliberately and intentionally manipulating 
accounting to hit earnings targets, senior management maximized the 
bonuses and other executive compensation they received, at the expense 
of shareholders.
  Earnings management made a significant contribution to the 
compensation of Fannie Mae chairman and CEO Franklin Raines, which 
totaled over $90 million from 1998 through 2003. Of that total, over 
$52 million was directly tied to achieving earnings per share targets. 
Fannie Mae consistently took a significant amount of interest rate risk 
and, when interest rates fell in 2002, incurred billions of dollars in 
economic losses.
  The Enterprise also had huge operational and reputational risk 
exposures.
  Fannie Mae's Board of Directors contributed to those problems by 
failing to be sufficiently informed and to act independently of its 
chairman, Franklin Raines, and other senior executives; by failing to 
exercise the requisite oversight over the Enterprise's operations; and 
by failing to discover or ensure the correction of a wide variety of 
unsafe and unsound practices.
  The board's failures continued in the wake of revelations of 
accounting problems and improper earnings management at Freddie Mac and 
other high profile firms, the initiation of OFHEO's special examination 
and credible allegations of improper earnings management made by an 
employee of the Enterprise's Office of the Controller.
  Senior management did not make investments in accounting systems, 
computer systems, other infrastructure, and staffing needed to support 
a sound internal control system, proper accounting and GAAP-consistent 
financial reporting. Those failures came at a time when Fannie Mae 
faced many operational challenges related to its rapid growth and 
changing accounting and legal requirements. Fannie Mae senior 
management sought to interfere with OFHEO's special examination by 
directing the Enterprise's lobbyist to use their ties to Congressional 
staff to generate a congressional request for the inspector general of 
the Department of Housing and Urban development, HUD, to investigate 
OFHEO's conduct of that examination; and insert into an appropriations 
bill language that would reduce the agency's appropriations until the 
Director of OFHEO was replaced.
  While I will concede that the Enterprises have made great strides in 
cleaning up their acts, Congress must enact regulatory reform to ensure 
that such deliberate and egregious practices can never happen again. 
This legislation achieves that objective and it is high time we take 
action to pass it.
  If we really want to assist our fragile markets, we cannot forego the 
opportunity to include meaningful and comprehensive GSE reform in this 
housing package. I have spent the past five years advocating for GSE 
reform, first as Secretary of HUD and now here in the Senate. There has 
been a great deal of talk about reforming GSEs, but we haven't closed 
the deal.
  The junior Senator from Delaware and I are offering this amendment 
because we believe the housing legislation before us represents the 
best opportunity for Congress to pass GSE reform.
  There has been a great deal of uncertainty lately in the housing 
market, and as one of the most reliable resources for homeowners, we 
cannot afford to let the future of GSEs like Fannie Mae and Freddie Mac 
to remain equally as uncertain.
  The combined obligations of Fannie Mae, Freddie Mac, and the Federal 
Home Loan Banks exceed $6 trillion. The Fed's bailout of Bear Sterns 
last month would look like a drop in the bucket compared to what would 
happen if one of these institutions were to fail. This is a risk we 
simply can't afford to take without giving the U.S. taxpayer every 
opportunity to ensure safety and soundness--a world-class regulator 
gives us that.
  Last year, the House passed a bipartisan GSE reform bill, and our 
amendment mirrors that legislation. This amendment is broadly supported 
by those within the financial sector as well as the Treasury Department 
and OFHEO. It contains the essential components necessary for 
overhauling GSE oversight and for providing stability and strength to 
our housing finance system.
  And given Congress's recent action raising conforming loan limits and 
OFHEO's decision to lower Fannie and Freddie's capital requirements, 
GSE reform is more critical than ever. We passed an economic stimulus 
package that increased the maximum size of a mortgage that Fannie and 
Freddie can purchase this year to almost $730,000 in high-cost areas, 
and recently OFHEO

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lowered their capital surplus requirements from 30 to 20 percent.
  While I agree that these were necessary steps given the current 
market conditions, I am very concerned about the additional risk Fannie 
and Freddie will assume given these changes.
  I am committed to ensuring the long-term sustainability of the GSEs 
and regulatory reform is critical to that effort. In terms of current 
regulation, OFHEO has done a great job with the tools at its disposal, 
but the problem is the regulator needs greater powers--like those of 
other Federal banking regulators. We need a world-class regulator to 
ensure the GSEs continue to operate in a safe and sound manner and that 
they remain focused on their affordable housing mission.
  One of the most important elements of this proposal is the creation 
of a new regulator that is both politically independent and funded 
outside of the appropriations process. In order for this regulator to 
be credible, they cannot be subject to the annual budget machinations 
of a committee or the political influence inherent in Washington.
  Part of its broad responsibility would be to ensure a more coherent 
regulatory framework, better enforcement, and a more consistent and 
aggressive effort on affordable housing. The regulator would have the 
ability to monitor the agency's portfolios--and direct the enterprises 
to acquire or sell any asset in order to maintain risk consistent with 
their missions. The regulator would also have the ability to set both 
minimum and risk-based capital levels for the GSEs--in other words, the 
amount of capital an enterprise would be required to hold would be 
directly related to the amount of risk they have undertaken.
  The regulator would posses enhanced enforcement powers and be able to 
provide prompt corrective action, including the authority to set and 
enforce prudential management and internal control standards. It would 
also have the ability to put a GSE into receivership, and exercise a 
role in the authority over safety, soundness and mission. Finally, it 
would have a say in new product review and approval.
  I know many of my colleagues have concerns that this legislation does 
not go far enough in its regulation of the enterprises or that the 
inclusion of an affordable housing fund is nothing more than a 
``political slush fund.'' Funds would be allocated to and distributed 
by the states, rather than the GSEs, under a formula to be developed by 
HUD.
  The most important component of reform legislation is the 
establishment of a stronger, more credible regulator--which is greatly 
needed. Homeowners are frustrated and consumers are worried about what 
lies ahead for our housing market.
  We have an opportunity to inject some much-needed confidence into a 
sagging portion of our economy, and I believe it would be irresponsible 
to further delay addressing this important issue. Ensuring the 
soundness of Fannie and Freddie will give market participants the 
confidence they need to continue investing in mortgage products. That 
confidence is critical for the proper functioning of our financial 
markets. In the same bipartisan spirit that helped us come to an 
agreement on the housing bill, I would urge my colleagues to follow the 
same course of action in passing this necessary bill.
  Ms. SNOWE. Mr. President, I am not only deeply concerned that 
increasing foreclosures threaten the dream of home ownership, but it is 
also critical to understand that the housing crisis that the Senate is 
currently grappling with affects every corner of this country, 
including both small and large States.
  Therefore, I have introduced an amendment that would ensure that 
States with low populations receive their fair share of the increase in 
mortgage revenue bond allocations provided for within the Dodd-Shelby 
substitute amendment.
  Under current law, there is a small State floor that sets a minimum 
level of allocations of mortgage revenue bonds that any one State will 
receive. These bonds provide State housing finance agencies, like the 
Maine Housing Authority, that provided $134.4 million of loans to 
first-time homebuyers in 2006, a financing source for low-cost loans to 
first-time homebuyers.
  It is imperative that we understand the magnitude of mortgage 
difficulties facing our Nation. By 2009, more than a trillion dollars 
of mortgages originated during the subprime lending boom will reset to 
higher interest rates. Currently, according to the Mortgage Bankers 
Association, 43 percent of subprime ARMs are already in foreclosure. 
This exceptionally high number is expected to skyrocket over the next 
year once the next wave of ARM loans reset and borrowers' mortgage 
payments increase by 30 to 50 percent. In December, the Center for 
Responsible Lending predicted that 2.2 million families with subprime 
loans will lose their homes to foreclosure.
  High foreclosure rates harm communities, create blighted areas, and 
stunt local and national economic potential. Consequently, it is in the 
best interest of all of the parties involved in the subprime crisis 
that Congress act to preserve home ownership, and minimize 
foreclosures.
  Appropriately, the housing stimulus legislation currently before the 
Senate extends for 2008 the availability of these low-cost mortgages to 
refinancings in addition to first-time homebuyers. This proposal, based 
from legislation, S. 2517, introduced by Senator Smith, and of which, I 
have joined as a cosponsor, will help provide a low-cost refinancing 
alternative to those struggling to meet their payment obligations as 
their subprime loans begin to reset. It only makes sense to offer such 
an alternative to foreclosures.
  Additionally, the proposal increases the authorization level of the 
tax-exempt mortgage revenue bonds by $10 billion for 2008. But, 
however, the proposal failed to apply the floor provided for under the 
current authorization levels to the increase for this year. My 
amendment addresses this inequity by providing an additional $930 
million of authorization that ensures that more populous States will 
receive no less than what they are receiving under the Dodd-Shelby 
compromise while at the same time increases the allocation for smaller 
States to levels that they should receive if the floor were applied to 
the $10 billion authorization increase. So no State will be worse off 
by my amendment while making sure that smaller States are treated 
fairly.
  According to the Mortgage Bankers Association, Maine, with a 
population of only 1.3 million, has a foreclosure rate of 2.4 percent 
while the national average is 2 percent. As you can see, Maine's 
foreclosure rate is well above the national average and goes to show 
that homeowners are struggling in small States as well as large States, 
and my amendment simply addresses the current housing crisis in a way 
that is fair to all States, both large and small.
  Mr. President, I am committed to this issue, and urge my colleagues 
to join me in supporting this critical amendment that is a matter of 
equity and fairness.

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