[Pages S1393-S1417]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

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

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

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

The ACTING PRESIDENT pro tempore. The Senator from Ohio.
Mr. BROWN. Mr. President, I ask unanimous consent that after my
remarks, the senior Senator from Rhode Island, Mr. Reed, be allowed to
speak.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. BROWN. Mr. President, housing is on the minds of so many Ohioans
these days, as it is on people's minds across the country. My State has
the unfortunate distinction of leading the Nation in the percentage of
property in foreclosure.
Every day, 200 Ohio families lose their homes--200 families every
single day. The strides we have made as a Nation in increasing home
ownership in the last few years will be reversed if we don't act.
The foreclosure crisis is having a tremendous impact on all of Ohio.
No city, no region has been spared. The past few years have seen an
explosion of predatory lending. The State of Ohio was slow to respond,
while the Federal Government--regulators and Congress and the
President--have been even slower to respond. Today, we pay the price.
As late as this summer, President Bush and Secretary Paulson--the
Bush administration--indicated the problem was largely contained and it
would

[[Page S1394]]

play itself out. So long as the problem was largely contained to Ohio,
Michigan, Indiana, Illinois, and the Presiding Officer's State of West
Virginia, the situation was nothing to worry about. But once the
problem spread from Main Street, Cleveland, or Main Street, Dayton, to
Wall Street, the administration suddenly became a bit concerned. Not
overly concerned, mind you. For while it changed its tone a bit, its
words have not been accompanied by much action. The budget submitted by
President Bush shows, for example, no signs of a housing crisis.
Congress appropriated $180 million for housing counseling last
September at the urging of Senator Schumer, Senator Casey of
Pennsylvania, and me, from the Banking Committee, but the President
proposes only about one-third of that for the year ahead and criticizes
the Reid proposal for continuing that funding.

As cities see their crime rates go up and their property tax bases
shrink and more and more homes and families vandalized, with copper and
aluminum being stripped from these homes, the President proposes to cut
the community development block grant by more than 20 percent.
I appreciate Secretary Paulson's efforts to get voluntary action by
lenders and servicers. That is a good thing, but it is not nearly
enough. We have seen a rate of mortgage modifications rise from a
measly 1 percent to a meager 3 percent. And I have to say, I am not
confident how much progress even those numbers represent.
My office just heard from a struggling homeowner in Ohio whose lender
offered to reduce her interest rate from 11 percent to 10 percent. But
after penalties and late fees were added to the principal, her monthly
payment barely budged.
Earlier this week, a couple from Lyndhurst, OH, joined Senators
Klobuchar, Schumer, Durbin, and me in Washington to tell their story.
John and Vicki Glicken went through a rough patch when John lost his
job, but he found a new one, and they are doing their best to make
their payments and stay in their home. They have done everything as
citizens and as homeowners that we would ask, but doing so is going to
be impossible for them so long as they are stuck with a loan that costs
more and more every 6 months.
These families, and millions like them across America, need our help.
Instead, they are facing foreclosure on one side and a filibuster on
the other. That is unconscionable.
The legislation we are being prevented from considering, with the
vote yesterday, when our efforts were blocked, would help hundreds of
thousands of families like the Glickens. It would help the tens of
thousands of communities from Ironton, across the river from West
Virginia, to Steubenville, to Cleveland, to Dayton.
I applaud Majority Leader Reid for trying to act on the legislation
that would provide vital help to communities and families across the
country. Under this bill, which I am proud to cosponsor, housing
agencies would have access to lower cost financing; businesses that are
struggling would get a boost; cities would be helped by an infusion of
community development funds, big cities and smaller cities alike; and
families would be able to restructure their debts and get back on their
feet.
The administration has made a lot of voluntary efforts to date, and
to be sure, every bit helps. But the rate freeze will help only a very
small sliver of people, of borrowers, and banks just aren't being
responsive enough. They say they have no interest in foreclosing on
homes, and that is perhaps true, but they do not seem to have the
capacity to work out loans with people who could afford to make
payments on a reasonable loan long term. I know lenders want to avoid
becoming real estate owners, but they do not have the ability to deal
with problems their lax underwriting standards have created, and they
are obviously not in the business of rebuilding the communities this
crisis has threatened.
That is why I think Senator Harry Reid's legislation is so important.
If we can spend $3 billion a week on the war in Iraq, we can find room
in our budget to spend $4 billion a year to help communities across
America get back on their feet. There are billions, tens of billions of
dollars to rebuild Iraq. Yet President Bush says no to $4 billion to
rebuild our cities.
The administration has argued this constitutes a bailout for lenders
and speculators. In Ohio, we are going to meet these people in the
courthouse, all right, but I assure my colleagues it won't be to record
the title on some sweetheart deal. Anybody who tries to make the
argument that cities, both large and small alike, will use community
development funds to bail out lenders and speculators has no clue what
is going on in communities such as Springfield and Zanesville and
Chillicothe.
As we try to rebuild our communities, we must do everything we can to
keep families in their homes. If lenders and their servicers can't keep
up with the flood of foreclosures they are facing, it is essential we
permit the bankruptcy courts to serve as a backdrop; otherwise, the
problem only gets worse.
Consider this, Mr. President: One of the ratings agencies is now
predicting a 50-percent default rate for subprime loans made in the
fourth quarter of 2006--a 50-percent default rate for securitized
subprime loans. That is not lending, that is putting a bet on black at
the roulette table with somebody else's home. What happens when that
bet goes bad? A family is put out on the street, a neighborhood is
hurt, and a town has one more magnet for trouble.
The banks have trouble too. Nationwide, banks are recovering only
about 60 cents on the dollar for what they are owed when a home goes
into foreclosure. In Ohio, that number is only 35 cents, by one
estimate. When lenders recover only 35 cents on the dollar on a
foreclosure in my State, I don't think they have anything to fear from
an alternative process that may result in avoiding foreclosure. Judges
would only step in when voluntary efforts have failed and when a family
is on the ropes.
That is why the Reid bill's proposal to permit the modification of
the mortgages on primary residences makes so much sense. We know
servicers can't keep up with the flood of bad loans, so we need a
backstop for the 600,000 or so families that may well end up in
bankruptcy. Allowing bankruptcy judges to modify a loan on a primary
residence, just as they can do today on a loan for a vacation home or a
boat or a family farm or a small business, will not just keep a family
in a home, it will keep the bank from a 65-percent loss on that
property.
Two years ago, there were a lot of slick promises made about how
these loans could be refinanced. Today, we know that is just not the
case. So we need to act, and we need to act soon so that 2 years from
now we can focus again on expanding home ownership under reasonable
terms rather than trying to stop the bleeding.
Mr. President, I yield the floor.
The ACTING PRESIDENT pro tempore. The senior Senator from Rhode
Island is recognized.
Mr. REED. Mr. President, let me commend the Senator from Ohio for his
very thoughtful and very persuasive remarks about a crisis that is
gripping almost every family in this country. We are in an
extraordinarily daunting moment in our history, and I was disappointed,
to say the least, when our colleagues on the Republican side blocked
consideration of the Foreclosure Prevention Act of 2008. Every
household in this country is beginning to recognize the specter of
decreasing house prices, and for many it is not just a looming
potential, it is a reality, and it is forcing them to consider very
difficult choices in their own family lives.
We have had a situation over the last 8 years in which the income of
working families has been stagnant, and in contrast, prices for items
that are essential, such as energy and food and health care, have gone
up dramatically. Families across this country have been squeezed by
flat incomes and rising prices. But there was one point of hope and
confidence, a foundation, at least, for their hopes going forward, and
that was the value of their home because it was appreciating. Now that
has reversed dramatically, and there are estimates that if nothing is
done, if the administration continues to block efforts through their
colleagues here in the Senate and the House, we could lose somewhere up
to 30 percent of the value of homes throughout the United

[[Page S1395]]

States, from their peak several years ago to the trough that is
anticipated. That would mean the loss of $4 to $6 trillion in household
wealth--a staggering figure. It is a figure that, from a macroeconomic
standpoint, would have huge ramifications.
But let us step down to the actual effects on a family. What does it
mean? Well, it means your senior in high school who was planning on
going to a prestigious college is not going there. They are going to
find an alternative, maybe a State school or another school, because
you were going to pay for that, partially, by taking some money out of
your house, which was worth so much. If you didn't have adequate health
care, that was the reassurance you had, that if there was a major
health care crisis in your family--a child or your spouse--that at
least you could go in and quickly get some money. Now that has
evaporated. If you are a retiree or about to retire, your plan was
pretty simple: You had a home you were going to sell and you were going
to use the profits to help you fund your retirement.
This housing crisis is affecting working families across the country.
They are now discovering, around the kitchen table, that their plans
are being frustrated. We have to do something.
Yesterday, when this Senate failed to at least consider moving to
legislation like this, I think it is a telling indication of the
detachment from the reality of American lives that the administration
and some of their colleagues here have.
Today, in my home State of Rhode Island, an added complexity,
unemployment, is beginning to creep up. And ``creep'' is probably too
mild a word. It is 5.67 percent, the worst record of unemployment we
have had since the mid-1990s. That is another blow to the working
families in this country.
So we must act. One other startling statistic to me is today it has
been estimated that 10 percent of the households in America are upside
down, not physically but financially. Ten percent of the homes, the
mortgage is greater than the value of the home because of declining
home prices.
Now, what does that mean? Well, not only have you lost your nest egg,
in many cases you now are in a situation of being tempted to just walk
away from the home. Why are you making expensive mortgage payments at
great sacrifice when the home is not worth it?
These are real problems people across the country are facing. It is
no longer a localized problem. It is no longer a certain section of the
country is having a bad time, but the rest of the country is doing
well. Nationwide, for the first time since the Great Depression, we
have seen housing prices decline. That is a phenomenon that has to be
dealt with. Ignoring it or suggesting that we are indifferent to that,
as I think one can assume from the action of yesterday, is, I think,
not only wrong, it is bad policy. It also is bad policy because the
sooner we take proactive action, the more effective we will be in
lessening the consequence of this crisis on working Americans.
We are going to act eventually. This is not going to go away. The
staggering numbers that Senator Brown pointed to, the estimates that
there are so many more interest rate resets and so many more people
will be overwhelmed by these alternative mortgages, these subprime
mortgages, that is not fiction; that is the projection of the financial
analysts. It is going to happen.
We have to move now. If we move now, we move deliberately. We cannot
eliminate some of the pain, but we can certainly lessen it. We also
have to recognize, too, that we can only help those who are prepared to
carry and shoulder the mortgage going forward. But I think if we act,
if we act properly, we cannot only make progress, but we can respond to
what is becoming an overwhelming cry for relief for American families
across this country.
In Rhode Island, for example, we have seen mortgage delinquencies
increase from 6,100 in the third quarter of 2005, to 10,300. Again,
Rhode Island is the smallest State in the Union. We have 1 million
people. So these numbers, when you project them to Ohio, are much
larger. But in my State, we are, unfortunately, seeing unprecedented
foreclosures.
According to the Joint Economic Committee, the number of subprime
foreclosures in Rhode Island will total 5,800 between the third quarter
of 2007 and 2009. We are seeing an acceleration and, in fact, we have
the dubious distinction of having the highest foreclosure rate in New
England. There are other parts of the country that are worse, but we
have that unfortunate distinction.
We are going to see the cost of these foreclosures in Rhode Island
rise to an estimated level of $670 million from the end of 2007 to
2009. Those are huge figures from a small State like mine. In fact,
forecasters are estimating that the foreclosure cost could total nearly
$104 billion nationwide. But one of the things about these numbers that
the numbers are growing--I have been looking closely at this crisis
since last April when I was chairman of the Subcommittee on Securities
and Insurance. We had a subcommittee hearing on securitization of
subprime mortgages and the experts estimated that the subprime crisis
was going to result in $19 billion in losses worldwide; that it was
over because the mortgages were no longer being issued; that we were in
a situation that would be almost self-correcting if we just let the
markets work their will.
Well, that $19 billion in terms of losses to financial institutions
is now being estimated to be as high as $600 billion worldwide, and the
losses keep growing and growing and growing.
Again, I think another strong rationale for immediate action, not
simply letting the market take its course, is we are seeing not only a
deterioration in the financing mechanisms in the mortgage market, but
this liquidity crisis is spreading over to other financing mechanisms.
We have seen financing mechanisms for municipal bonds, for example,
literally shutting down. There was a technique where municipalities and
hospitals would, on a weekly basis, reset the rate for their bonds in
an auction. The auctions have failed. The Port Authority of New York
just a few weeks ago went from an interest rate of 4 percent to 20
percent, the default rate.
I have talked to a hospital in my State. I asked them, among many
other issues, what is happening with respect to their financing. Their
rates are shooting up because their option securities are not working
any longer.
This credit crisis, this liquidity crisis, is spreading from
mortgages to car loans to securitization of credit card receipts to
municipal securities, and it is slowing down the economy.
Now, the President does not think we are going into a recession. But,
frankly, most everybody else does think we are going into recession.
And we have to act, not only to directly respond to this housing
crisis, but also to pull this country back as quickly as we can from
this pending recession.

I think one of the most important lines of approach to dealing with
this problem is bolstering the housing market. That was one of the
major engines that moved our economy for so many years. If we let it
deteriorate, if we just shrug our shoulders and say, eventually, it
will come back, we not only will see a very poor housing market, we
will see a recession. And it will be more severe and more consequential
than it ought to be.
Now, the Federal Reserve has cut interest rates dramatically. We,
very quickly, in a bipartisan fashion, passed a $168 billion stimulus
package that will help. But I do not think it is going to be sufficient
unless we make significant efforts to deal with the housing problems
that are affecting all Americans today.
The administration proposed a Hope Now Plan, a voluntary effort to
deal with foreclosure problems. And, again, as Senator Brown pointed
out today, to date 3 percent of potential foreclosures have been
avoided through this voluntary effort. This is not an effective way to
deal with the huge problems that threaten the economic well-being of
this country and all of the families of America. This administration is
great on slogans but poor on strategy and execution. Just a week after
I was talking to the Under Secretary of the Treasury about the Hope Now
Program, I said: Well, do you have a plan B? This does not seem to be
working.
``No, this will work. We will have the metrics in a few weeks.'' Then
the administration announced another program. I think it is called the
Lifeline

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Program. Well, we need something more than slogans. We are going to
need something more than hopeful wishes that everyone will get along
and coordinate together. We need definite help for the homeowners in
our communities.
Embedded in the legislation that Senator Reid proposed was that
specific kind of help: foreclosure counseling funding, CDBG monies for
communities to deal more comprehensively with the problems caused by
foreclosures, because one of the consequences of foreclosure is it is
not just the individual's home, statistical analysis over many years
points out very clearly that the surrounding homes lose value when
there is a foreclosure on the block. And if those homes are on the
tipping point, guess what. They will tip into foreclosure. I do not
think I have to tell anyone in this Chamber, because we have seen it
before, that once you have this growing sort of malaise in the
community, it spreads block by block by block by block until you have a
community-wide problem of not only foreclosures but of despair.
I am taking, I think unfortunately, an example from Senator Brown's
State. But I read a few weeks ago about a community in the Midwest,
either Ohio or Pennsylvania, and it was an old ethnic community. In
fact, I think the nickname for the community was Slavic Town. There,
the foreclosures have been so extensive that literally gangs are going
in and ripping off the vinyl siding, the plumbing. They are taking out
the copper piping because it has been abandoned, this forlorn
community, in the heartland of this great country.
A tragic case was a retired gentleman who was trying to protect his
property which he had worked for all of his life. He was killed by some
of these marauding gangs. That is here in America. We are just going to
sit back and say: Well, the market will adjust someday. No, I think we
have to do much more.
Unfortunately, because of the policies of this administration, we are
not as well positioned to do what we have to do. Yesterday Chairman
Bernanke was before the Banking Committee. In response to a question by
Senator Dodd, he said: Frankly, we are in a worse position today than 8
years ago to deal with this crisis, the housing crisis. Falling
productivity, falling value of the dollar--yesterday, the dollar hit a
new low against the Euro, and I think today against other currencies.
Surging oil prices--yesterday the price of oil went to $102 a barrel,
which is translated automatically at the gas pump into higher gasoline
prices, higher heating oil prices.
These are huge, huge, huge problems. Because of decisions made by
this administration, we do not have surpluses we had 8 years ago. We
are committed to a conflict in Iraq which costs $190 billion a year.
And even with a change in policy, there will be, unfortunately, not a
dramatic shift in spending in the next several months because it takes
time to disengage and to change policies.
So we are seeing economic vulnerabilities because of, I think, the
policies of this administration. We have forfeited the strength we had
8 years ago to deal with these issues. We understand, too, from looking
across the globe at other countries that if you do not move promptly
and aggressively and deal with problems like this, they do not go away,
they get worse.
In the 1980s, we had a S&L crisis. It took about 2\1/2\ to 3 years
for, first, the Reagan administration, then the George Herbert Walker
Bush administration to deal with it. In those 2\1/2\ years, experts on
either side of the aisle pointed out that the cost of remediation went
up and up and up. I fear that is the same situation we are going to
have today unless we deal promptly and immediately with this housing
situation.
Again, I think the vote yesterday to stop consideration of
legislation to help deal with this crisis was very short-sighted and
unfortunate. Now, as I said before, the legislation we would have
considered, the Foreclosure Prevention Act, of which I am a proud
cosponsor, deals with, in a very pragmatic way, many of the features of
the housing crisis that are of immediate concern: the $200 million
foreclosure counseling, and part of that has to be not only setting up
the counseling but also outreach. We have to do more of that.

It also allows State housing finance agencies to increase their
bonds, raise capital to buy mortgages to essentially take out the
current mortgage holders, renegotiate the terms with the borrower, and
put them in a mortgage plan they can live with and afford. In fact, the
President has called for that, but he is objecting to its inclusion, I
presume, in this legislation. Then there is a change in the Bankruptcy
Code, which has been carefully tailored so as not to roil the financial
markets. It would allow a very limited category of individuals who have
these subprime mortgages to go into bankruptcy court and allow the
bankruptcy judge to set up a new payment plan. The first criterion he
or she would have to look at is the fact that these individuals do, in
fact, qualify for bankruptcy protections, that if there is a
restructuring of their mortgage loan, they can carry out the terms of
that loan.
This is not only giving people a chance who don't have the
wherewithal to take up that opportunity. There is also language in the
bill that sets the lowest rate charged as the prime rate, plus a
premium for risk. So this does not allow a bankruptcy judge to take an
11-percent mortgage and make it a 1-percent mortgage or a zero-percent
mortgage. There is a very narrowly tailored exception. As my colleague,
Senator Brown, pointed out, you can do that with a second home. You
could do that with a farm, if you are in bankruptcy. I don't see why,
in this particular crisis, we cannot extend that same protection to
homeowners who have subprime mortgages and need immediate help. I think
it would accelerate efforts to not only help these individuals in
bankruptcy, but it would send a strong message to the financial
community that unless they get engaged with working out these
foreclosures and mortgages, there is the alternative of bankruptcy
court which, if they think it is so onerous, then they should be even
more incentivized to work with borrowers to ensure foreclosure doesn't
take place and new mortgage terms are negotiated.
An additional element in this legislation is language I suggested as
a way to prevent a reoccurrence in the future of this type of mortgage
problem by giving the borrowers, in a timely way before they close on
the loan, specific information that is essential. The most specific
information is the maximum payment they would pay under the terms of
the mortgage. There is a lot of discussion about people who were
winking at each other across the table, can't afford the mortgage, but
``I will take it if you give it to me.'' Many people honestly walked
in, sat down, and thought they were getting a mortgage of 5 or 6
percent with a payment on a monthly basis of perhaps $1,500 or $2,000.
Tough to afford, but it was within their budget. But lo and behold,
years later or months later, that initial teaser rate became much
higher. That maximum payment should be disclosed. A borrower should be
able to look at the piece of paper and say: At some point in this
mortgage, I will have to be paying $2,500 a month. That is the type of
information people need to know. Frankly, many would say: I can't
afford that.
There is a suggestion I have heard so often in the debate that we
would be rewarding families and homeowners who were trying to take
advantage of a good deal with these subprime mortgages. The impression
I have, from talking to people in Rhode Island, is that for many
families, going back 2 or 3 years, they found themselves saddled with
extraordinary credit card debt at interest rates that could be as high
as 15 to 18 percent. Why? If you have a health care problem, where do
you go? The first response is to put it on the credit card. If you have
to go to an emergency room and you don't have health care insurance, if
you have an unexpected expenditure, the first thing you do is to put it
on the credit card. So many families were stuck with a huge credit card
bill.
Somebody walks in and literally sells them a bill of goods by saying:
You have 18 percent interest rates. I can put you in a mortgage for 2
years at 9 percent. Of course, it goes up a little later. The little
later was not dwelled upon. So for many families, this was not an
irresponsible, irrational act.

[[Page S1397]]

They were buying time, in other words. They were hoping this would be a
bridge to a better future, that they would get a raise at the job so
they wouldn't have to depend on their credit cards and, when the reset
came up, they would be able to refinance. Little did they know that
many of these subprime mortgages were constructed so there was a
prepayment penalty exactly at the time the reset took place. So as you
tried to get out of it, you discovered you would be paying a huge
penalty.
The point I wish to make is we have families who now, for the last
almost decade, have been struggling. They have exhausted all their
options. The last option was their home. Now that option seems to be
evaporating in terms of financial strain and support. What we have to
do is respond. I believe that is the nature of Government, to respond
to the genuine concerns, the genuine expectations of the people we
serve. I defy anyone in this Chamber to go back to their States and
talk not just to low-income families but to every family and say:
Shouldn't we be doing something dramatic, challenging, visionary, and
doing it immediately with respect to housing? The answer would be an
overwhelming yes. We should listen to the people of America.
I yield the floor.
Mr. DORGAN. I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. DORGAN. I ask unanimous consent that the order for the quorum
call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. DORGAN. Mr. President, I wish to follow on the comments offered
by Senator Reed of Rhode Island. This issue of the subprime mortgage
scandal is a big one. It is affecting not just people who are losing
their homes this week or next month; it is affecting all home values
everywhere. We had this unbelievable bubble exist with respect to home
values, but the collapse has been precipitous and has hurt a lot of
people. It is a circumstance where people have discovered the mortgage
interest rate they had not understood fully has been reset, they now
have mortgage payments they can't possibly make, and they are
discovering their home is gone. There is foreclosure on the mortgage.
I wished to talk a little about what has caused all of this. This has
been a trail of greed. When you look at the wreckage of this scandal,
you see two trails--a trail of greed and a trail of tears. A trail of
greed by some mortgage brokers, not all, some mortgage banks, not all,
a good many hedge funds, not all, and speculators. They were all making
a lot of money. This was great while the party continued. Then all of a
sudden it was discovered that none of this made much sense.
Let me describe what was happening and why it didn't make sense. Zoom
Credit. You get up in the morning, brush your teeth and shave and you
have a television set there and watch television in the morning and see
the advertisements. Here is one, a company called Zoom Credit:

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

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

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

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

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

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

[[Page S1398]]

What did that mean? That meant that starting Tuesday, midday, when I
was on the floor with the Indian Health Care Improvement Act--the last
thing we did this week was to pass the Indian Health Care Improvement
Act on Tuesday--and then the minority insisted on two 30-hour periods,
taking us to Friday, so that nothing could get done to try to address
this housing issue, to try to address a very serious issue.
By the way, this is not just affecting the people I have described.
It is not just affecting the people who would sit in that stadium--
120,000 people who are out of a home as of January. It affects every
other home and every other homeowner. The folks around that home--in
the neighborhood, in the community--their home values are impacted by
homes that are now vacant whose upkeep is not guaranteed. There are a
whole lot of folks who are affected by this, and this country's economy
is affected by it in a very dramatic way.
I know the President yesterday said he was surprised when a reporter
talked about projections of $4-a-gallon gasoline. A reporter said: Mr.
President, there are projections of $3.50 or $4-a-gallon gasoline. What
do you think about that? The President said: Well, I have not heard of
those.
We have a lot of problems in this country. Gasoline and oil prices
are one; the subprime mortgage scandal another; unbelievable
speculation, for example, in the energy markets. Let me describe, for a
moment, that issue.
We are doing two things right now that are unbelievably inept and
hurt every American. One, the Department of Energy--at a time when oil
is $102 a barrel, and the price of gasoline is bouncing up, and there
are some people thinking about getting a loan to fill their car with
gas--the Department of Energy is sticking oil underground. We have a
Strategic Petroleum Reserve. It is 97 percent full.
The Department of Energy is taking oil coming off the Gulf of
Mexico--royalty-in-kind payments to the Federal Government--and instead
of putting that oil in the supply to put downward pressure on oil and
gas, 50,000 to 60,000 barrels of oil a day right now are going
underground into our domes to be saved. That is unbelievably inept, in
my judgment. Why on Earth, when oil is $100 a barrel, would you take
oil that belongs to the American people and put it underground? And
they are going to go from 50,000 to 60,000 barrels of oil a day to
125,000 barrels of oil per day in the second half of this year.
I have a piece of legislation to try to shut this down. I am going to
do everything I can to stop it. Oil that is coming into the Federal
Government ought to be in the supply pipeline to put downward pressure
on oil and gas. It is that simple. I do not understand why the American
consumer is being burned at the stake here with gas prices and the
Department of Energy is carrying the wood. What are they thinking
about?
Now, there is another thing that is happening that, in my judgment,
needs a full investigation by this Government. Oil is $100 a barrel,
gas is $3, $3.50 a gallon, going, perhaps, to $4 a gallon. Who knows?
We have had testimony before the Senate Energy Committee by experts who
say there is not one bit of justification for oil being more than $55
or $60 a barrel. The supply/demand fundamentals in no way justify
current prices of oil.
Here is what is happening. Hedge funds are neck deep in the futures
market for oil, speculating on oil futures. Investment banks are neck
deep in the oil futures market. In fact, for the first time, some
investment banks are actually buying oil storage.
Now, why would an investment bank want oil storage? Buy oil, take it
off the market and store it because when prices increase you sell it
and you make money. There is a carnival of greed, in my judgement, in
the oil futures. This is an unbelievable amount of speculation. Nobody
is paying much attention to it. It is not very sexy. I know of very
little reporting on it, even.
But you have two things happening to the American consumers in this
area of gas prices and the cost of energy that are just unbelievable.
One is, we are sticking oil underground when we should not be, to take
oil out of the supply. That is the Federal Government doing that. No.
2, we have unregulated hedge funds--and most hedge fund activity, as
you know, is not subject to regulation--and an unbelievable amount of
speculation by hedge funds, investment banks, and others in oil futures
has driven this price well beyond the justification of the price of
oil, given the supply-and-demand relationship. That is something we
have to deal with. That comes on top of and at the same time we see the
wreckage that comes from this housing scandal--the subprime loan
scandal.
As I said before, some are content to sit around here and thumb their
suspenders and act important and look important and wear their blue
suits but do nothing. Is that why one gets elected? Is that why one
aspires to public service: to do nothing in a time of urgency?
I think this economy faces great peril for a lot of reasons. We have
a trade deficit that is the highest in history. Two billion dollars a
day we import more than we export. We have a budget deficit that is way
out of control, way off track.
The President says: Well, my budget deficit that I propose is $425
billion for this coming year. No, it is not. He has asked to borrow
$700 billion for this coming year--$700 billion. Now, you put that $700
billion with a $700 billion trade deficit and you are talking about
borrowing, in 1 year, almost $1.4 trillion--10 percent of the value of
our economy.
It is unbelievable to me. This country is off track and we have to
fix it. One portion of it is energy. One portion is trade policy. One
portion is fiscal policy. Today I was talking about a subprime loan
scandal that is affecting housing, and housing is an engine in this
country. Housing is a very important economic engine.
That is why we want to pass a stimulus package dealing with housing
to try to at least catch and at least deal with--in a responsible,
appropriate way; not rewarding speculators, but trying to help
homeowners--we want to do that in a way that will begin to shore up and
provide some foundation to an economy that is in trouble.
Mr. President, I have said what I have come to say. I think there is
a lot to do. It is very important for the Senate to take action. I hope
next week will be a better week than this week. We do not need delays.
We do not need stalling. What we need is action. We need bipartisan
action working on pieces of legislation that will improve this
country's economy and reach out to those folks in the trail of tears,
in the wreckage of the subprime loan scandal, to say to them: We want
to see if we can find a way to help you keep your home. Home ownership
is a very important part of American life. The housing industry itself
is a very important engine of opportunity for this county's economy. My
hope is we can do something important in the next week that will
address both of these issues.
I yield the floor.
The ACTING PRESIDENT pro tempore. Who yields time?
The Senator from New Mexico.
Mr. DOMENICI. Mr. President, I understand I have up to a half hour to
speak at this time.
The ACTING PRESIDENT pro tempore. The Senator can speak as long as he
wishes.
Mr. DOMENICI. I thank the Chair.
Mr. President, yesterday I spoke about the work we have done, and the
challenges we still face, with regard to energy policy. I return to the
floor today to complete my remarks.
I concluded yesterday by putting a pricetag on our dependence on
imported oil. Experts estimate that foreign oil will cost us $400
billion just this year. This expense will impact our economy in a
number of ways, including our trade balance. In December 2007, imported
crude oil accounted for 61 percent of the national trade deficit, or an
all-time high of $36 billion. The trade deficit, propelled by high oil
prices, has factored into the decline of the dollar.
Yesterday, Fed Chairman Ben Bernanke testified that the cost of
energy is being passed through and reflected in the increase in prices
of core consumer goods and services. Other experts believe that
increasing energy prices and lower economic growth could lead to a
return of ``stagflation.''
Our dependence on foreign oil also has a negative impact on job
creation in America. The National Defense

[[Page S1399]]

Council Foundation concluded that imported oil deprives the U.S.
economy of more than 2.2 million jobs per year. Choosing to import oil
to meet our energy needs exports more than our money--it also exports
jobs. Choosing to produce energy here at home would keep those jobs
within our borders, and help countless Americans earn a good living.
The National Defense Council Foundation also identified several more
``hidden costs'' of oil imports, including oil-related defense
expenditures, lost economic activity, reduced domestic investment, lost
Government revenues, and the cost of periodic supply disruptions.
Together, these total $825 billion per year, nearly four times the
amount that America spent directly on acquisition of foreign oil in
2005.
The money we export for oil flows directly into the economies of
foreign nations around the world. Oil-producing nations spend these
revenues on national defense, education, health care, social programs,
infrastructure, financial instruments, and to bolster their own energy
security. As these nations use American dollars to pay for investments
in their own futures, we are forced to spend money we do not have, and
forgo our own priorities.
The fact that many of the major oil-exporting nations are
undemocratic only makes matters worse. We import much of our oil from
Canada and Mexico. Unfortunately, beyond North America, most of our oil
comes from countries such as Saudi Arabia, Venezuela, Nigeria, Iraq,
and Algeria. Worldwide, the top oil exporting nations also include
Russia and Iran.
Many regimes in oil-rich nations are unstable and unfriendly. Anti-
Americanism is prevalent throughout the Middle East. The same Saudi
lands that are used to produce 10 million barrels of oil per day also
provide a staging ground for the advancement of radical Islam. While
the State Department has listed Iran as a sponsor of terrorism since
1984, oil revenues allow that regime to weather heightened sanctions.
Our reliance on foreign oil continues at our own peril. We pay huge
sums for oil, but even this premium cannot guarantee the availability
of supplies. A recent study identified 24 significant oil supply
disruptions between 1950 and 2003. These lasted an average of 6 months,
and reduced the world's supply of oil by up to 12 percent. Recent
events around the world reveal that our supply of oil is still
incredibly vulnerable to disruption.
In Nigeria, conflict over oil wealth reduced that nation's daily
output by 25 percent last year. Dozens of workers have been kidnapped
there, nearly leading Shell to suspend all of its operations in the
Niger Delta region. In Iraq, more than 460 attacks on oil pipelines,
facilities, and personnel have occurred in the past 4 years.
Not all supply disruptions will be caused by natural events or
manmade strife, because much of the world's oil is controlled by
irrational, often unpredictable leaders. Venezuelan President Hugo
Chavez recently threatened to stop sending his country's oil to America
because of a British court ruling. The simple truth is this: in a world
without spare production capacity, every major production loss, no
matter where it occurs, can boost oil prices--and even short-term
increases heighten the long-term costs to our Nation.
Many foreign leaders are using oil as a diplomatic weapon, and
establishing diplomatic ties with growing energy consumers. Such
relationships legitimize the regimes in power and allow them to secure
regional influence. We have seen the Putin regime use its vast
resources as leverage throughout Eastern Europe. But perhaps the best
example of this type of petro-influence can be seen in Venezuela. The
Chavez regime peddled influence by distributing nearly $5 million in
financial assistance per day last year to nations throughout Latin
America. Venezuela also used revenue from its oil sales to subsidize
bus tickets for Londoners and home heating oil for Americans.
Nearly all of us, and nearly all of our constituents, can agree that
America's dependence on foreign oil must end. Before I discuss some
solutions to the problems I have outlined, I will provide historical
context for them.
Attempting to bolster America's energy security is not new to
Washington. In 1973, my first year in Congress, President Nixon gave a
major address on energy. He proposed a very aggressive initiative,
called `Project Independence', stating:

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

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

[[Page S1400]]

most promising resources. Our Nation holds 62 percent of the world's
oil shale deposits. This equals nearly five times the proven
conventional oil reserves of Saudi Arabia. Just imagine the
possibilities if we unleash American ingenuity to access these
resources.
Another provision in that bill imposed new fees for domestic oil and
gas permits, which will increase the cost of business and ultimately
heighten the cost of energy for American consumers. As we have seen our
domestic production level off over the past several years, it is
irresponsible to adopt policies that accelerate this trend. Yesterday,
the House Democrats chose the unwise path of raising taxes on our
domestic energy producers by $18 billion. Additionally, some in the
majority seek to make it more difficult for our military to purchase
unconventional fuels from our allies in Canada. On top of that, some in
the majority still seek to undo lease agreements that American
companies have to produce energy in the Gulf of Mexico. This makes no
sense.
These backward policies prevent us from building on the success of
recent energy bills. Legislative efforts to open a small section of the
Arctic Coastal Plain have now been thwarted for over 25 years. Much of
our Outer Continental Shelf also remains closed for energy leasing.
Combined, these areas contain more than 100 billion barrels of oil and
450 trillion cubic feet of natural gas.
Using old fears about energy production, and ignoring new concerns
about energy prices, policymakers are locking up our energy potential.
It is clear that this approach has failed, and that we need to find a
new way to reach smart consensus on energy policy.
For too long, the debate on energy has been dominated by extreme
ideologies. Discourse has deviated into an ``either/or'' approach,
where participants are accused of being beholden to either ``big oil''
or ``environmental extremism.'' In an almost equally divided Senate,
and at a time when party control is split between the legislative and
executive branches, there is no better time to bridge this divide.
We must take action on an aggressive agenda of both new and old
energy ideas. Some of these proposals have been labeled as Republican
ideas, and others have been labeled as Democratic ideas. We must
recognize that reasonable policies to reduce our dependence on foreign
oil are American ideas, not partisan agendas. We must affirm that these
policies are worth pursuing, because additional steps can and should be
taken to reduce the amount of energy this nation imports.
A strong energy policy will rely upon three types of initiatives:
those that increase the responsible production of domestic energy;
those that accelerate the research, development, and deployment of
renewable and alternative sources of energy; and those that
significantly enhance our Nation's ability to conserve energy. There is
broad agreement that two of these three areas are critical to America's
energy security. I see them outlined in the measures introduced in
Congress, and they are built upon in the energy proposals of those
running for President.
In modern politics, most people would be satisfied with two out of
three. But when we miss a critical piece of the puzzle--the one that
matters most in the near-term, and would have the greatest immediate
impact--then we can safely say, as I do now, that our efforts will fall
short of the goal.
I speak, of course, of the continuing disagreements over domestic
production. We must, without delay, produce more energy at home.
American energy, produced by our workers, must be used to power our
homes, businesses, and vehicles.
Increasing domestic production will not be a stand-alone solution.
But with proven reserves of more than 21 billion barrels of oil, and
undiscovered reserves of more than 100 billion barrels, it is simply
unacceptable that America fail to meet a greater share of our own needs
with domestic energy resources.
The good news is that we have the resources, the technology, and the
support of most Americans. The bad news is that so far we have been
unable to muster the political will--we cannot even build consensus to
inventory these areas and gain an accurate assessment of our Nation's
energy reserves. To have a fair and informed debate, we must know the
extent of our resources. And then we must tap them with the ingenuity,
skill, and technology at our disposal.
We must listen to the people of Alaska and open the Arctic Coastal
Plain to responsible leasing for the exploration and production of oil
and natural gas. ANWR is an emotional subject for many folks, so let's
stick to the facts. First, to the critics who say that oil from ANWR
will take 10 years to come on-line--you are probably right. But to use
this as an argument against development is like refusing to save for
your retirement because you are not retiring next year. It will take
time and patience to develop the resources of Alaska's North Slope.
From experience, we know that starting this process a decade ago would
have ensured greater domestic oil production when we needed it most.
In 1995, Congress did pass legislation to open a small portion of
the Coastal Plain to oil and gas leasing. But President Clinton vetoed
the legislation, and more than a decade later, an estimated 10.4
billion barrels of oil continue to sit under our own soil. The week of
that veto, the average price of crude oil was $19 per barrel. This
week, the price has risen to about $102 per barrel. I would say that
conditions have changed enough to warrant a fresh debate on this topic.
Congress must also open more of the Outer Continental Shelf, as we
did in the Gulf of Mexico in 2006. Last year, an amendment that would
have allowed leasing off the coast of Virginia was defeated on a near
party-line vote. That vote was a step in the wrong direction. Offshore
America holds tremendous energy potential, and it is essential that the
American energy industry have greater access to explore and produce in
this area.
Continuing to restrict the OCS will sacrifice billions of dollars
that could be used to develop our Nation's future energy supplies.
Opening it would augment our supply of traditional fuels--and dollars
that now go overseas to acquire oil could remain within our own economy
and could be used to develop alternative sources of energy. The
conventional fuels of the 20th century can be used to pioneer those of
the 21st century, but we must first find the courage to put ourselves
on such a forward-looking and pragmatic path.
Equally important to increased domestic production will be measures
to expedite the on-shore permitting process. A good example of why is
Alaska's natural gas pipeline. Permitting and activities related to
permitting that project may add more than 5 years to its timeline. This
is just one example, but it is representative of an increasingly
burdensome process. Permitting must be streamlined, not only to prevent
energy producers from investing abroad, but also for the sake of
growing our energy production.
As I have indicated, our Nation has a great quantity of oil locked
up off of our coasts, beneath our permafrost, and within our shale.
These areas can provide a stable supply of energy as we transition to
alternative fuels. But oil is not the only resource that can be
developed at home and depended upon to meet our energy needs. We are
also fortunate to have vast reserves of coal: some 270 billion
recoverable tons, which would last for 240 years at the current rate of
consumption. That coal can be turned into fuels that help meet our
transportation, manufacturing, and electric power needs.
Because of the emissions that result when coal is converted to
energy, we will need cleaner methods to ensure the protection of our
environment. To me, this is an opportunity. Our Nation has a proud
heritage of innovation, and there is no reason to believe this strong
record will not continue in the future. As our most abundant and
affordable fossil resource, we cannot simply cross coal off the list.
Any serious effort to strengthen our energy security must include coal.
One of our best prospects is to advance the development of coal-to-
liquid fuels. As an alternative to oil, coal-to-liquid fuels have many
merits: it will reduce emissions of sulfur dioxide, nitrous oxide,
particulate matter, and other pollutants when compared to conventional
fuels. Coal-to-liquid fuels have been commercially demonstrated in
other countries, can be moved through existing pipelines, and can be

[[Page S1401]]

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

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

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

[[Page S1402]]

We support the so-called net operating loss carryback provision to help
firms that suffered operating losses lower their tax burdens.
Last, Republicans support protecting families who are applying for
new loans. People deserve to know and understand what they are signing
before they sign it. Anyone who ever bought a house and confronted the
stack of small-type paperwork written in legalese knows what I mean. I
used to be a lawyer, and I have been presented with those stacks of
documents. They are so overwhelming that, unless you have a half day to
spend, you are never going to read them. Even as a lawyer, I will tell
you they are not the easiest things to understand.
Our proposal will require a plain English explanation of key loan
conditions. Borrowers will see in big type any teaser or introductory
rate, their payment, and when it expires. They need to know they are
agreeing to an adjustable rate and what that rate will be and how much
a new payment will be. I doubt that Willie Clay was ever told his
mortgage rate could go up over 12 percent. That is unconscionable. I
don't think they ought to be allowed to raise adjustable rates beyond
what they disclose in the initial disclosures to the borrowers. They
need to be notified of any prepayment penalty, and they will be
reminded there is no guarantee they can refinance their loan before the
introductory rate expires. These are the very things Willie and
thousands of borrowers did not understand when they agreed to their
loans. Hopefully, this will protect future families who want to share
in the American dream.

In contrast to the Democrats' plan, Republicans will avoid making
home ownership more expensive, especially for low-income families
through harmful bankruptcy changes that increase the cost of borrowing
or encourage costly litigation.
If my colleagues on the other side succeed in using bankruptcy to
write down all the mortgages and essentially destroy the basic terms of
the contract, guess what will happen. What will happen is that nobody
will get a loan at a reasonable rate anymore. Any rates that are
offered to homeowners will have to have a risk premium built in,
probably 1.5 percent or more. Each quarter of a percent will mean
500,000 families cannot get a loan. So that would mean that if this
proposal coming from the other side is implemented, some 6.5 million,
at least, families will be denied the opportunity to get a home loan
because of the risk built in by a congressionally mandated cram-down of
the interest rate terms, breaking the terms of the contracts which have
been signed.
Republicans will also oppose plowing billions of dollars into big
Government programs that do not help our neediest families now. We will
oppose adding more dollars to programs that are still flush with funds
they were given in December. We want a responsible, effective, and
fiscally conservative package that can be adopted without wreaking
havoc on our economy, without destroying our budget, yet helping the
people who most need help.
Right now, we are threatened by the position of the majority leader
of being shut out from offering any amendments. We want to move
forward. We want to move forward on a responsible plan that allows the
Republicans to decide what amendments they will offer. We are not going
to be told by the majority leader that he is the one who decides what
amendments we offer. Where has that ever worked in this Senate, telling
a block of Senators, minority Senators, 49 of us, that we cannot offer
an amendment unless we get the approval of the majority leader? There
is a body on the other side of the Capitol that may be able to do that,
but the strength of this body is we do not get crammed down on the
amendments we can offer.
I have talked with a number of my colleagues on the other side of the
aisle, and they agree that our proposals make sense. We just want to
have votes on the proposals we think are effective, fiscally
conservative, and will not endanger the homeowners whom we seek to
help.
If we can work together--and I believe there is plenty of opportunity
for a bipartisan compromise--on housing proposals we will help families
like Willie Clay's and neighborhoods such as Ruskin Heights in Kansas
City to get through this crisis. I urge my colleagues to support the
home proposals we will be offering when we are given an opportunity to
offer those amendments.
Mr. President, I ask unanimous consent to have printed in the Record
the article to which I referred from the Kansas City Star.
There being no objection, the material was ordered to be printed in
the Record, as follows:

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

American Dreams Built on a Shaky Foundation of Subprime Loans

By Paul Wenske

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

what went wrong?

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

[[Page S1403]]

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

wall street connection

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

subprime implosion

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

WHAT'S A SUBPRIME LOAN?

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

METHODOLOGY FOR THE DATA ANALYSIS/MAPS

The home-loan data used for this analysis comes from the
Home Mortgage Disclosure Act database, which is compiled by
the Federal Financial Institutions Examination Council. The
data include millions of records from all home-loan
applications, but for the purposes of this study, much of the
information was not considered. The only records that were
analyzed were for loans in Kansas or Missouri that were used
to purchase a one- to four-family home, which means homes
that were not apartment buildings. Refinancing loans, home-
improvement loans and loans not secured by a first lien were
not considered. Only records from 2004 through 2006 were
analyzed because prior to 2004 the Federal Financial
Institution Examination Council did not have an indicator for
subprime loans. A subprime loan is any loan with an interest
rate 3 or more percentage points higher than the Federal
Treasury yield on securities, according to the Federal
Financial Institutions Examination Council. The home-mortgage
data were joined to the map based on census tract numbers and
state and county identifiers. The maps accompanying this
story were assembled using census tract shape files obtained
from the Missouri Spatial Data Information Service and the
Kansas Geospatial Community Commons.

Mr. BOND. Mr. President, I yield the floor and suggest the absence of
a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.

[[Page S1404]]

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

We put money in the budget this year because it was a priority for
our majority, adding $200 million to help people on the front end, so
they could work their way out of this. That is very important. Also, we
allow State housing agencies to issue $10 billion more in refinancing
bonds so State and local communities can help refinance homes. That is
incredibly important, and something that has been widely supported on
both sides of the aisle.
We also have said that community development block grant money should
be able to be used to purchase and rehab foreclosed properties, again,
to help communities. We have to stop this. We have to stop this where
it is. I think we can help create some certainty in the markets by
helping families right now and creating also some confidence in the
markets going forward. That can be done by using the CDBG dollars for
communities to refinance and help families stay in their homes.
Also, in a balanced approach, we have addressed what is happening on
the

[[Page S1405]]

business side for home builders. We agreed to include in our original
package in the Senate--with the help of our distinguished Presiding
Officer on the Finance Committee, one of our top leaders on the Finance
Committee--a tax issue, net operating loss, to allow home builders to
go back a couple of years to a better time and address some of their
issues so there is not the pressure to sell their inventory, the unsold
homes at the moment, and allow them a little breathing time. We have
included that in this provision as well to support the industry itself.
This is a very balanced package that took the input of the leadership
on the Banking Committee and the Finance Committee which looked at
proposals that were bipartisan--by the President, by a number of
people--that had brought forward something that will help. We don't
pretend it is a magic bullet. I wish there were one; I don't think
there is. But it is a very reasonable approach that has been put
forward.
So here we are. We have this situation where colleagues now on the
other side of the aisle, the leader on the other side of the aisle,
comes forward with a package and says, this is what we want to do; we
need to be able to pass these measures. Yet he has blocked us from even
getting to the housing issue, to the bill itself. He has blocked us
from getting there.
I have to say, this reminds me of one other issue that is very
related, and certainly is critical for me in Michigan, that has also
been blocked time and time again, and which was a part of our original
stimulus package we did in the Senate, of which I am very proud. I
think it was a very good proposal, and I was proud of the work we did.
In that proposal, we did something else that is very important right
now for middle-class workers and families. We extended unemployment
compensation benefits for families. It is viewed as one of the top two
ways to stimulate the economy.
If you are unemployed, you are going to take every dollar that comes
in the door to pay the mortgage, to keep the lights on, the heat on,
pay for food, and do the things you need to do for your family. We know
it is stimulative. We also know, from a moral standpoint, it is the
right thing to do to help families. That has been blocked as well. I
see them related because we now have people who have been unemployed
for longer periods of time than they ever wanted to be and who are in
these situations. Maybe to keep going they did a home equity loan, and
now that is not working and they find themselves in a situation of
foreclosure. One of the ways we can help on housing is to give people
some stability in their income.
I heard colleagues, when we debated this on the other side of the
aisle, saying, well, it is encouraging people not to work. I would love
to have the President or the Secretary of the Treasury or colleagues
come, if they have not talked to folks in their own State, to Michigan
and talk to folks who want desperately to work, and are working at very
minimal wage jobs right now to try to keep going.
Nationally, we know there are 7.7 million unemployed people today who
are competing for 4 million jobs, which is why I say the best long-term
stimulus is a good-paying job. I am glad our budget is going to focus
on jobs, but the reality is we want to help stabilize families right
now because there are hundreds of thousands of people--millions,
actually--in a situation where extending unemployment benefits for 13
weeks, and an additional 13 weeks for high unemployment areas, is
exactly what needs to happen. I hope we are going to address that as
part of what we are doing here as well.
In 2002, there was an extension of unemployment benefits, and the
national unemployment rate is roughly the same right now. It was 5
percent then, and it is nationally 4.9 now. We hear from the Bureau of
Labor Statistics and from Goldman Sachs that by the beginning of next
year the national rate is going to be 6\1/2\ percent--6\1/2\ percent
nationally. I am in a unique situation because I will take that. Our
rate right now is 7.6 percent in Michigan, so I would take 6\1/2\
percent. The reality is we are seeing a dramatic rise in unemployment,
and more and more families are going to find themselves in a situation
of not being able to pay the mortgage, not being able to do what they
need to do for their families.
I think this is a fundamental issue for families--for middle-class
families. We are talking about people who work and who find themselves
in a situation, because of a multitude of issues--where the job is not
there anymore--where they need help to continue to keep their family
together, and keeping their house is incredibly important. I have
72,000 people in Michigan who are scheduled to lose their unemployment
benefits by June. I have over 10,000 people a month who are losing
their unemployment benefits, and we don't have the jobs for them. This
is incredibly serious.
So I am, one more time, asking my Republican colleagues not to block
that when it comes to the floor. It is a very important part of the
economic picture for people, and it is time for us to get about the
business of fixing the economy, of supporting efforts that are going on
in the economy for businesses, for individuals, for families, and for
communities. There is a great sense of urgency that we need to have,
because that is what families feel every single day. I am hopeful that
when Senator Reid brings the next motion in front of us to be able to
go to a bill to deal with housing, colleagues will have that same sense
of urgency and join us in being able to do that.
Mr. President, I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. If the Senator would withhold her
request.
Ms. STABENOW. I will withhold my request for the distinguished
Senator from New Jersey.
The ACTING PRESIDENT pro tempore. The Senator from New Jersey may
proceed.
Mr. MENENDEZ. Mr. President, I thank my distinguished colleague from
Michigan for her attribution, and I rise this morning to echo some of
the comments of my colleague and others who have lamented what the
Senate did yesterday.
We have a situation across the landscape of this country in which our
economy is headed onto the shoals of a recession, with some economists
believing that we are there already, and the very essence of that
recession, which hurts American families in real terms, stems from the
housing crisis that exists in this country. Instead of having responded
to the storm clouds of the crisis that were on the horizon a year ago--
in the Banking Committee, of which I am privileged to be a member, I
said we are going to face a tsunami of foreclosures--the administration
said, oh, no, no, no, that is an overexaggeration. Well, unfortunately,
we haven't even seen the crest of that tsunami.
The reality is that as the administration hit the snooze button then,
instead of responding to the oncoming crisis and limiting its scope,
yesterday our colleagues on the other side of the aisle did exactly the
same thing, opposing the majority leader's opportunity to make sure we
address the housing crisis that exists in this country in a way that
not only saves American families from having the American dream become
an American nightmare, but also, at the same time, in dealing with the
very core underpinnings of where this economy is headed--in a negative
direction--and turning it around. That is what yesterday's vote was all
about.
Everyone except President Bush and some of his colleagues seems to
understand that we are in some very serious economic situations. I saw
the President's press conference yesterday. Even as gas prices in some
parts of the country are already at $3.60 a gallon, when he was told
what it was going to do when it hits $4 a gallon, he said: What $4 a
gallon?
Well, I guess if you never have to pay for gas, you are totally
disconnected from the realities of average Americans. But, yes, that is
where we are headed. He doesn't seem to understand we have a serious
economic situation.
But let us get real. It isn't largely those of us in this body who
understand what is going on, it is the American people, across the
landscape of this country, who are feeling the effects of this downturn
firsthand. They are the ones receiving foreclosure notices; they are
the ones struggling to balance their checkbooks; and they are the ones
reaching out to Congress for help.
Yesterday the majority leader tried to bring up a bill to help those
struggling in this economic downturn, and

[[Page S1406]]

yesterday Republican Members of this Chamber blocked that bill, in
essence blocking help for those American homeowners who are on the
verge of losing their home. The Foreclosure Prevention Act gets to the
heart of our economic crisis--that is, the housing market.
As I and others on the Banking Committee have said, the downward
spiral of the housing market is the reason we are facing such a
difficult economy. We cannot think we will get the Nation back on track
without legislation to address the weaknesses in the housing market.
The bill that Republicans blocked would have done one major thing: Keep
families in their homes.
Beyond the economy, this goes to the very heart of our families'
ability to grow and prosper. Home. Home is where we are brought from
the hospital when we are born. It is home we come to. Home is where we
are nurtured as we grow. Home is where we get to celebrate, most of the
time, our birthdays. Home is where, in fact, we also share moments of
sorrow. Home is where we often take care of a sick or dying loved one.
Home is the very essence of the American dream.
Beyond what it means to us and our families in the context of the
development of our lives, home is also the single foundation of the
individual American's economic ability to prosper. It is the single
biggest asset most Americans will have in their lifetime. It is the
asset they will use very often to borrow in order to educate their
child and send them to college. It is the asset they may draw upon if
they have a significant illness. It is the asset they will rely upon as
they grow older and seek retirement.
When it means so much to us as a society, both in the personal
context of what home is and the values that surround it mean, and when
it means so much to us individually and collectively as communities and
as a nation in terms of our economy, it is unthinkable that we could
not get progress on a bill that saves the very essence of that American
dream.
Yet that is what happened yesterday in the Senate. The bill that was
up provides funding for counseling in order to reach and help families
at risk of losing their homes. Many American families are sitting
around the kitchen table looking through their mortgage bills and their
finances and those bank notices. Many of them have turned to their
credit cards to float their personal debt.
They are lost. They do not know where to turn. And these counselors
who were part of the bill could help offer them real solutions and
options to help in averting a foreclosure. Does not that make sense? It
does to me. That is what the bill allows.
The bill also provided funding to allow communities with high
foreclosure rates to access an existing program, community development
block grants. With these funds communities can purchase foreclosed
properties for rehabilitation, rent, or resale.
There are some who have said in this debate: Well, you know, those
borrowers, they are responsible for making their own decisions; it has
nothing to do with me. Well, for every foreclosed property in a
neighborhood, those who have their properties adjacent to or nearby
within that neighborhood have a decrease in value. Having a series of
foreclosed properties, as we have seen in some parts of the Nation,
having communities abandoned does not benefit anyone. It decreases
surrounding home values; it attracts crime and vandalism.
The bottom line is that foreclosures destabilize neighborhoods.
The funds in this bill, which the Republicans have not allowed to
move forward, allow communities to stop the spiral before it starts.
Does that not make sense?
The bill's most controversial piece--there are many others, many
others that I think were pretty universal; that is, that should have
been supported. But its most controversial piece put in by my friend,
Senator Durbin, his bankruptcy provision would, in essence, change the
bankruptcy law to give judges the discretion to modify loan terms for a
primary residence, in essence, where you call home.
Right now the law allows for modifying those loan terms for vacation
homes, something that is not your primary residence. So you can have a
vacation home, a time share; you can have any other second home under
existing law. If you have some financial trouble, you can actually get
the bankruptcy judge to modify those terms. But when it comes to your
core home, your principal residence, the place where you nurture and
grow your family, oh, no, you cannot do that.
Does it make sense that we have greater value for a vacation or
secondary home and less value for the primary residence of American
families? That would be the equivalent of something along the line of:
You can get a modification on Camp David, but you could not get any
modification at 1600 Pennsylvania Avenue.
Now, of course, in this particular case, that example does create so
vividly for people what we are talking about. In either case, the
President does not have to pay a mortgage on either of those properties
because they are owned by the American people. But my point is here is
the primary residence, you cannot get any help. The secondary
residence, you can get help. It does not make any sense. The thing is,
most Americans do not have a Camp David, and they are asking for help
to save their house on Main Street. This makes sense.
Now, the majority leader and Senator Durbin and others worked out a
compromise to make sure this provision that was in the bill was even
more narrowly tailored. More narrowly tailored? How so? Under their
compromise, the only families who could request a court-ordered change
to their mortgage are families who would otherwise lose their homes to
foreclosure.
But that was not even all. It went on. It went beyond that and it
said: Only those families who can pass a strict means test, their
ability to pay in bankruptcy, and therefore can prove they cannot
afford their current mortgage are eligible. That was not it. They went
beyond that. They said: Only families who are currently struggling with
what type of mortgage? Any mortgage? No. Only nontraditional and
subprime loans, the very essence of the types of mortgages that have
created the crisis in America that were spun out there in a way,
attracting people into mortgages without the appropriate credit
counseling, that they should have never been attracted into anyhow.
So the universe was further limited, further limited. And
furthermore, to give the lenders some additional guarantees, if the
families, after the bankruptcy judge made some decision to make an
accommodation in that loan, if they sell their home after that mortgage
modification, any increase in the home value would go back to whom? To
the lender. So lenders would have a chance to recoup the loss in that
home value.
Now, let me say, there is going to come a point in time that lenders
understand that as values continue to go down and down and down, when
they foreclose on a piece of property, they are not even going to get
that which they, in fact, loaned against.
Is it not far better to be able to sustain a family in their home and
to help that value reestablish itself over time and grow and be able to
make the lender more whole than to put that family out on the street?
Lenders will come to that conclusion at some point.
So these provisions, each time more and more and more narrower, so we
were talking only of a universe of those people who were being hurt,
had no financial ability to pay the mortgages that they should have
never gotten into, that was offered by the industry to lure them in,
lower interest rates, and then reject afterwards, and with the ability
to recoup any value going back to the lender, all conditions that do
not exist on a secondary residence.
None of the things I talked about are part of the law as it relates
to a secondary residence; they are all about only this limited prime
universe, and, of course, anyone who got a conventional mortgage,
anyone who did not get a subprime mortgage or a nontraditional
mortgage, they were totally, under the existing law, going to continue
to be under the existing law. So we had a narrow universe.
This provision that was in the bill blocked by Republicans was not
added to harm the banking industry, was not added to hurt mortgage
brokers, it was added to help homeowners save their home. This
provision is only one of the ways we can help a significant number

[[Page S1407]]

of homeowners without costing the taxpayers a dime.
It would help more than 600,000 families in bad loans keep their
homes across the landscape of the country. It would help over 14,000
families in my home State of New Jersey avoid foreclosure. That would
be a savings of almost $5 million in home values. But if we do not do
anything, if we sit back, we risk losing much more. In New Jersey over
the next 2 years, we expect more than 57,000 homes to be lost to
foreclosure. That means 57,000 families who will have to hand over
their keys to their home, 57,000 families who will be forced to say
goodbye to the place where they were nurtured and comforted, the place
they lived with the good and bad, the place they came home to every
night, the place they call home.

In the words of families who know what it feels like to lose a home,
they will feel like they will have lost everything. But this is not
even about those homeowners. Foreclosed properties have a ripple effect
on surrounding homes and the community at large.
In New Jersey, these 57,000 foreclosed homes could cost a $10,000
decrease in the home prices of over 2 million surrounding homes. And,
overall, that loss would be about $19.6 billion in home values. That is
just in my home State.
The fact is, no one is immune from the ripple effect of this housing
crisis. The potential loss to families and communities in New Jersey
and across the Nation is far too great for us to sit this one out. I,
personally, cannot stand by while Members of the Chamber play games
with my home State and with the American dream of millions of people
across the landscape of this country.
Collectively, we have much too much to lose. I do not know if other
Members of this Chamber do not watch the news, or they do not get the
same memos, but foreclosures are going to happen nationwide if we do
not do something. Analysts anticipate that 2 million American families
will lose their homes over the next 2 years, and 40 million of their
neighbors will see their home values decline due to projected
foreclosures.
When those neighbors see their home values decline as a result, their
ability to borrow against their home for their kid's college education,
to have the buffer in case of a major illness in their family or
themselves, their ability to do all those things will be affected.
It is not time to play games and use delay tactics. The more we
delay, the more homes we risk losing. Approximately 20,000 families
lose their homes every week. Every week, 20,000 families see the
American dream slip away. These families are struggling. They are
trying to pay their mortgages, but they cannot. Most of them cannot
sell or refinance. Many of them have found, in fact, the value of their
properties is less than the mortgage amount. They need other options,
and they are looking to the Federal Government and those who lured
them, the lenders, as the first place for help.
The fact is that help simply is not there. Loan servicers could
modify the loans themselves. They do not have to wait for a bankruptcy
judge, would not have to wait for the Congress to act. Under existing
laws, the loan officers could modify loans to make them more affordable
and simply are not doing so in sufficient numbers.
A report by Moody's found that loan servicers have only modified 3.5
percent of mortgages that increased to higher rates. These are
opportunities to keep people in their home, and instead of dealing with
the higher rates, maybe adjust those rates in a way where they would
still get a borrower who can continue to pay, wait for the value of
that home to build up. But they would not make as much as in the loan
they lured these individuals into. A report by the Center for
Responsible Lending estimates that the administration's plan that has
been put out there as the solution to this problem, to streamline
modifications, is only going to help about 3 percent of homeowners, 3
percent.
As a member of the Banking Committee, I asked the Secretary of the
Treasury, Secretary Paulson, when he was before us about 2 weeks ago,
and yesterday Chairman Bernanke, the Chairman of the Federal Reserve:
Are we willing to say 97 percent of the projected 2 million homes that
are going to be lost in America, that is a market correction?
Are we willing to accept that 97 percent of those 2 million homes
that will go in foreclosure, that is acceptable as a societal value?
You hear a lot about family values here. Well, I do not know of any
greater family value than the place we call home and a place to call
home.
Are we willing to say we will, in our overall economy, accept a 97-
percent foreclosure rate as it relates to the nature of our economy and
where it is headed, an economy that is stagnant in terms of growth but
rising in terms of consumer costs, on gas--notwithstanding the
President's lack of knowledge of it--on energy costs as a whole, on
rising food prices, and lowering home values? Are we willing to say
that?
Are we willing to say to 97 percent of 2 million families: Well, that
is a market correction. Yet we heard the rush to get the Federal
Reserve to respond to Wall Street and the concerns of shareholders. How
about homeowners? How about homeowners? That is simply not good enough.

Thousands of New Jersey families have already gone into foreclosure.
Tens of thousands more are behind on their mortgage payments. How many
more are we going to watch have their American dream turn into the
American nightmare so many are facing. Let me put a face on these
statistics: Charmain Perryman, a resident of Nunellen, NJ, she came
home last fall to an eviction notice taped to her front door. Perryman,
like so many others, had an adjustable rate mortgage that had reset not
once but twice, rising from 7.5 percent to 11 percent. She was on the
verge of losing her home. Luckily her story has a happy ending. A
community development organization, similar to those we want to help
through community development block grant opportunities, is buying her
home from the bank and working out a payment schedule so she will be
able to stay in her home and make responsible payments.
But there are too many families across the landscape of New Jersey
and the country that are not realizing that opportunity. That
foreclosure notice taped to their door will soon be replaced by a
padlock on their door.
The Foreclosure Prevention Act, of which I am a proud cosponsor,
offers real solutions for the American family, neighborhoods, and the
entire economy. It would help stop the bleeding in the foreclosure
crisis.
I ask Members in the Chamber to think about these families when,
hopefully, they have an opportunity to vote again. What happened
yesterday was embarrassing. I know some camouflage is being offered
that, well, we were not going to be allowed to offer certain types of
amendments. The reality is, as the majority leader made clear, all
relevant amendments would be allowed. Families who are struggling, at
the end of their rope, 20,000 families a week losing their homes, don't
want to hear about some amendments that ultimately had nothing to do
with the very essence of the housing crisis as the reason they are
getting put out of their homes. All we are saying is, come to the
table. Offer relevant amendments. Let's have a real discussion about
how to help families avoid foreclosure. With 20,000 families losing
their homes every week, 10 million on the near horizon; with an economy
that is bleeding dramatically and that could go, if we do not stem the
hemorrhaging, into a deep recession that would have long-term
consequences for us as a Nation, both as individuals, families,
communities, and collectively, it is not something with which we can
afford to play procedural games.
I look forward to next week having a new opportunity, fresher minds'
reflection, and an understanding of the grave consequences before us,
and an opportunity to rescue--not to do a Government bailout but to
rescue--the opportunity of the American dream being snatched away by
the American nightmare.
I yield the floor.
The PRESIDING OFFICER (Ms. Stabenow). The Senator from Louisiana.

Damage From Hurricanes

Ms. LANDRIEU. Madam President, I want to follow up on the remarks of
my colleague from New Jersey who has been an extraordinary leader in so

[[Page S1408]]

many ways, particularly on the housing issue. I thank him and associate
myself with many of his remarks.
I rise to speak about the housing situation and to try to bring some
comparisons between the difficulties around the country and, in some
places, downright despair because of the foreclosure situation and
pending bankruptcies. I also want to remind my colleagues that there is
still a tremendous need on the Gulf Coast relative to the housing
crisis and ask my colleagues not to lose sight of the difficulties that
we are still having in Texas, Louisiana, Mississippi, and Florida.
I know it is 2008. The storms of Katrina and Rita and Wilma are long
gone in some people's memories but not in ours. These storms in many
ways were just like yesterday, not just the hurricanes but the levees
that broke and caused unmitigated disaster and despair.
I thought it would be helpful to first examine communities with the
highest foreclosure rates, and with the Senator from Michigan in the
chair, the first area I want to speak about is in Michigan--Detroit,
Livonia, and Dearborn, which I am sure she is familiar with--which
happens to be the metropolitan area that has the highest percentage of
foreclosures. This chart shows you the top 10 communities in the Nation
and the numbers of homeowners facing bankruptcy or foreclosure. The
number of homes is both striking and startling. If you think about
foreclosure, the damage is not just done to the family losing their
home or the individual but to the neighborhood as a whole. If it is so
concentrated, as it seems to be in some particular counties, it has
dramatic economic effects on the whole community. That is why
Democrats--and I know some on the other side are sensitive to this--are
trying to fashion a package that recognizes that while we don't want to
bail out improper behavior, we most certainly don't want to bail out
illegal behavior, we absolutely need a housing bill that recognizes
that foreclosure does not just involve a single family, but it impacts
an entire community, particularly in Michigan where some of this is
probably associated with the downturn in manufacturing jobs. People are
not only losing their jobs but losing their homes.
While the causes of our loss were very different, it wasn't due to an
economic downturn. It wasn't really due to subprime lending practices.
Our problems were due to the levees collapsing when they should have
held and the ensuing floods that wiped out hundreds of thousands of
homes, which I will get to in a minute. But for purposes of my brief
remarks this morning, these are the top 10 areas facing foreclosure
problems in the United States, in Michigan, California, and Nevada.
You have heard people say this crisis is limited to places within
about seven States. But for comparison, I would like to show the
counties and parishes in the Gulf Coast that have the highest rates of
housing loss due to the floods. This is an extraordinary comparison. If
I could ask the staff to hold up the other chart next to this one so
people may see.
We are talking about the mortgage crisis, 4.9 percent in Michigan and
4.9 percent in Stockton, CA. Next to it is the actual numbers. So
41,273 households in the Detroit area are in some part of the
foreclosure process; down in Miami, FL, 2.7 percent. That doesn't sound
like a big percentage, but it is 25,000 families. That is a lot of
families.
But let me show you on the Gulf Coast what has happened to us over
the last 2 years. In St. Bernard Parish--this is major and severe
damage. This is the percentage of homes that were unlivable,
78.4 percent; in Cameron Parish, which is a small parish in the
Southwest, 71.8 percent; in Hancock County, MS, 69.8 percent; in
Plaquemines Parish, LA, 57.5 percent; Orleans Parish, 55.9 percent;
Harrison County, MS, 34 percent; Jackson County, MS, 34 percent; St.
Tammany Parish, 25 percent; Jefferson Parish, 19 percent; and Vermilion
Parish, 13 percent. There are no other percentages like this anywhere
in the country.

My point is that while I am glad address the foreclosure crisis for
the country and am proud to help other regions--and I most certainly
understand the disaster associated with foreclosures, particularly if
they are not really of your making. You took out the right kind of
loan, you put your money down, but you lost your job or your child got
into an accident, and because you don't have health insurance, you have
to file for bankruptcy, and people are taking your home. And that is
the last thing people should be doing. We should be helping pay medical
bills and getting people jobs and not taking their homes. I am not here
to bail out reckless behavior. But I most certainly think Congress
should step up and help middle-class families struggling to keep their
homes. But for comparison's sake, I want people to get their eyes on
what we are still going through on the Gulf Coast.
We have parishes where 78 percent of the homes are unlivable and
people are struggling to keep these homes. What the Federal Government
has done has been substantial, but it is not adequate and not enough.
While we have sent Community Development Block Grant funding down to
many of these families, some of them still haven't seen a penny. Some
of them had to deduct their insurance from that. We still don't have
tax relief for individuals who took a casualty loss deduction and are
now being taxed on their Community Development Block Grants. So people,
in addition to not receiving their full complement, not getting their
full insurance money, are now being pushed to a higher tax bracket
because this Congress has failed yet to give them tax relief that they
desperately need.
So as we put this housing relief package together for the Nation,
let's think about what can be done in Mississippi, Florida, Texas, and
Louisiana, where, in some places, 50 percent of families or more have
lost their homes. Some people are back. Some people are struggling. But
you might have a neighborhood, let's say, in St. Bernard--I was there
last week--where there is one home that is fixed and inhabited. Every
other home on that block is vacant. Think about that. This person is
happy to be back in their house. But when you ask them what was the
value of that house before the storm, it used to be $450,000. Today
that is a very interesting question. What is the value of a three-
bedroom brick home on a block where every other home is empty? That is
how badly people want to live in their neighborhoods and communities.
These are not communities necessarily below sea level. Some of these
places I describe are above sea level.
If the Senate continues to consider the Foreclosure Prevention Act, I
have some specific suggestions as to how we can make the bill more
relevant for families struggling on the Gulf Coast. First, we need tax
relief for Road Home grant recipients. We need it for the people who
have lost their homes. We also need to craft the legislation so that
families can use the bonds allocated in the bill to purchase or
refinance a home that was destroyed in the 2005 hurricanes. Also, the
Community Development Block grant funding formula in the legislation
should account for communities that have lost significant numbers of
homes in the 2005 hurricanes. Finally, the bill provides a unique
opportunity for us to increase home ownership in hurricane-impacted
areas.
I wish the Presiding Officer the best in helping one of her
communities. But please don't forget us. I don't have Alabama numbers,
but the hurricane did hit Alabama. We do have those numbers on another
chart. But for those of us on the Gulf Coast, this is critical. And,
yes, another hurricane season is starting this spring. Let's get some
help to these people and fashion a bill that we can pass that will
bring real relief to American homeowners everywhere.
I yield the floor.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. Madam President, I thank my colleague for raising some
of those issues. Our area was hardest hit in one area I visited not
long ago, and just now we are seeing houses come back. It has been sad.
I think that it has taken this long to move, going on 3 years, and you
wonder why we couldn't make that happen earlier. A lot of money has
been spent on interim housing and other things, that had it been spent
in a way that goes directly to housing, to building new housing in safe
areas and raised up so we wouldn't have a risk in the future, we would

[[Page S1409]]

have been a lot better off. I know it is hard because I have been there
and I have seen how hard it is to move the process in a faster way. I
hope in the future we will learn to do it better.

I thank my colleague for raising it.

Budget

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

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

On ``60 Minutes'':

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

Well, those were some promises that were made last year. They have
also promised and made a big to-do about the tax gap.
Now, the debate over the tax gap was simply this: Well, we don't want
to promote in our first budget--last year, that was the first
Democratic budget--a tax increase, so what we will do is we will use
the same current tax rates, and what we will do is collect more and get
those people who are cheating. We had reports from the IRS that said
that was not going to work. We had experienced Senators, such as
Senator Grassley, former chairman of the Finance Committee, who said:
That is not going to work. Senator Gregg, former chairman of the Budget
Committee, and now ranking Republican on that committee, said: It is
not going to work.
Oh, but they used that argument. When the budget was passed, this
extra income they projected would be received into the Treasury as a
result of enhanced enforcement by the IRS, that that was going to help
them, allow them to spend more money and not increase the debt. OK.
That was the debate we had last year when we passed a budget: a
commitment they would raise more money by collecting from those who are
not paying as much as they are supposed to pay. It did not happen. I
will talk about that in a minute.
But I want to say this: A budget is a defining document for a
political party. It is organized 51-49 with a Democratic majority here.
We passed a Budget Act a number of years ago--because we could not pass
budgets because of filibusters--to eliminate the filibusters during
budget debates. You can pass a budget with a majority vote. So the
majority party, as the Republicans could do in the past, was able to
pass a budget without support from the other party. Anybody who is in a
majority in the Senate ought to be able to pass a budget. It also is a
document that says something about the priorities and the direction
that the majority wants to see the country go: how they are going to
get there. It is a very important, defining document.
Senator Gregg, last year, was very eloquent. He is such an
experienced and wise Senator, who watches this carefully. He has
studied these issues carefully. He predicted their budget was not going
to add up last year when we passed that budget. But they insisted that
it would work, as it was passed, and history now can tell us what
happened. Looking back, it is clear--even in a period of good economic
growth last year--the promises that were made were not kept. They told
us they would cut the existing spending or reduce the

[[Page S1410]]

rate of increase in spending. Yet last year the majority attempted to
add $23 billion to President Bush's discretionary spending request,
which already reflected a $60 billion increase.
So President Bush's budget had a $60 billion increase in
discretionary spending. This excludes Social Security, Medicare, and
the military--or the war supplementals. It excludes those entitlement
programs. He proposed $60 billion in increases. Our colleagues passed a
budget in the Senate that was a $23 billion increase above that.
Contrary to cutting spending, I would suggest my colleagues did not
fulfill their promises, but actually proposed a budget that increased
spending 50 percent more almost--40 percent-plus more than President
Bush proposed. Over a 5-year period, that budget would have hiked
nondefense discretionary spending by $205 billion. But we did have
somewhat of a battle last year, and as the great omnibus bill came
through at the end of the year--that monstrosity--President Bush
threatened a veto, and he forced a cut in spending. Republicans in the
Congress backed him up on that veto threat, and that was achieved at
the end.
It appeared that we had a spending program that was more akin to
President Bush's $60 billion increase than to an $83 billion increase
as proposed by my Democratic colleagues. But it wasn't all that good,
frankly, because, as has been the case for decades, there are other
options to get around the budget--gimmicks and devices. By abusing the
emergency spending designation last year, the majority party was able
to spend an additional $24 billion anyway, by calling it an emergency.
If we have a budget and we agree to commit to that budget and
legislation is proposed that goes above that budget, it is subject to a
point of order, and you have to have 60 votes at least before you can
spend it. But if you can get enough votes, if you can get 60 votes, you
can just declare something an emergency, and you can put the money in
the emergency spending with 60 votes, and it doesn't count against the
budget because you have declared it an emergency. So that is on top of
the deficit budget we have.
Also, there were great promises that any new spending programs would
be offset. This is the pay-go rule. How do you offset a new spending
program? You can cut spending somewhere else or you can increase taxes.
That is the only way to do it under pay-go. But our colleagues have
often--this pay-go rule that had been so much ballyhooed here by our
colleagues--they either ignored it or gimmicked the pay-go rules last
year. Such gimmickry resulted in $143 billion in deficit spending.
For example, let's look at the SCHIP reauthorization. I hope my
colleagues will just think about this. I take no pleasure in this. I
have seen Republicans do this too. But this is really a blatant
example. The bill we passed last year increased funding for SCHIP, the
insurance for children, increased spending over 5 years by $35 billion.
But in fiscal year 2013, that spending level was decreased by 85
percent. Now, I ask my colleagues: Why? Why would we dramatically
increase funding for the SCHIP program and then in an outyear--2013--
slash it by 85 percent? The reason is they score the cost of it over 5
years. So for 4 years we would have a dramatic increase, and in the
fifth year they make a dramatic 85-percent reduction. The question is,
Why was that done? So it would fit within the score, the 5-year score.
But what is really going to happen? Does anybody in this Senate think
that in 2013 we are going to cut the children's insurance program by 85
percent? Of course not. This is a gimmick. It was a gimmick to make it
fit within the budget, to appear not to be in violation of the pay-go
rule when, in fact, we know we couldn't possibly reduce that program by
85 percent.
Not only does the pay-go rule fail to control spending, it will put
us on an almost guaranteed path to large tax increases. Under the
Democratic budget that passed last year, any existing tax cut, any
existing lower tax rate that expires sometime in the future would be
allowed to expire--for our colleagues, to continue those current levels
of taxes, to continue them at a lower rate is considered a tax cut. So
to extend the dividend cuts, extend the capital gains cuts, extend the
lower rates for lower income workers, it amounts to, under their
definition, a tax cut. It takes 60 votes under this pay-go rule to pass
a tax cut. President Clinton said he opposes these tax cuts that
President Bush passed, and I think that represents the majority view of
my colleagues, so we are looking at a period of time that we could see
additional increases in taxes, and to keep them at the current rate,
they will score it as a tax cut. We will either pay for it under this
definition by reducing spending or increasing taxes somewhere else. We
are not going to reduce spending because we have already seen the
majority party has proposed a budget that spends more than President
Bush proposed, and he proposed an increase in spending.
It is sort of a perverse little deal. Under this pay-go rule, my
colleagues assume that spending will go up each year, so that doesn't
have to be offset. It goes up at a certain rate, but they say if you
extend the current tax rates, that is a tax cut. It provides an
incentive and an advancement of spending and a detriment to tax
reductions.
Now, with regard to the tax gap, it would be pretty humorous,
frankly, if it weren't so serious. Their proposals on this tax gap,
this idea that they are going to raise more taxes by having the IRS
increase collections, was one of the wildest political chimeras this
Senate has seen in quite a number of years. As I have indicated, senior
Senators such as Senator Grassley and Senator Gregg pointed out how it
was not going to work, and they cited the IRS and other things that
showed it, but we passed it anyway. We scored the budget on the
assumption the money would come in. It was going to raise $300 billion
over 5 years, just in enhanced collections. So we assumed we were going
to enhance tax collections by $300 billion over the next 5 years last
year when we passed this Democratic budget. But we see now, from the
best estimates we have for the effort of closing the tax gap, it is not
going to raise $300 billion, it will raise $200 million over 5 years,
$40 million a year--hardly enough to impact the overall deficit
situation we are in at all. The House has recently passed legislation
that actually is going to widen the tax gap, unfortunately.
Our colleagues promised to enact middle-class tax relief, but that
has not been done. There has been no action to extend the marriage
penalty relief we have today, the $1,000-per-child tax credit we have,
the 10-percent tax break credit--the 10-percent tax bracket for low-
income workers, or any kind of estate tax reform. So we have had that
talk, but we haven't passed it, and we are heading to the point where
we are going to have a pay-go problem to even extend these current
rates, and they are going to score that as a tax cut and demand to know
where we are going to get the money from. The capital gains reduction
that virtually every economist agrees results in increased revenues to
the Government from capital gains taxes will expire in 2010. The 10-
percent tax bracket--the low 10-percent tax bracket that didn't
previously exist but was created as a result of President Bush's tax
cuts would expire, and it would go back to 15 percent for lower income
individuals. Setting a dividend rate at 15 percent will end; it will go
back to the marginal rate for many people of over 30 percent. Does
anybody think that is going to help the stock market to increase--
double--the rate for dividend taxes you have to pay? So the best scores
we have are that we are heading toward a $900 billion tax increase that
will impact directly--and everybody indirectly--116 million taxpayers.

What about entitlements? The majority party talked about doing
something about entitlements. I think Senator Conrad truly believes we
should do something about it. He has worked hard at it, but he has
never gotten the support on his side of the aisle to ever make a dent
in it. We have to think about entitlement spending.
At this point in time, entitlement spending--Social Security,
Medicare, Medicaid--exceeds half of our budget, half of what we spend.
That number is growing. Some have it up to 100 percent of the current
budget level in a number of decades unless something were to change. At
least President Bush consistently has offered programs to improve and
contain the growth in

[[Page S1411]]

these programs. He talked about Social Security reform, and the door
was slammed shut. My colleagues wouldn't even discuss it. He has talked
about Medicare and Medicaid. Nobody would talk about that last year. It
was absolutely not a part of last year's budget.
So I think this is irresponsible. If we are heading on a glidepath
that takes us to trillions and trillions of dollars in debt, driven
overwhelmingly by the 6, 7, 8 percent increases annually in Medicare
and Medicaid, why can't we begin to reduce that growth rate and bring
it more close to the inflation rate of 2, 3 percent, maybe 4 percent, 5
percent increases each year?
Finally, I thought one of the most effective critiques of the
Republican majority leadership in 2006 and the years before was we
weren't passing our appropriations bills on time. They had too much
pork in them. Stuff was put in them in the dead of night, and we didn't
have a chance to read it and do anything about it. That was the valid
criticism of the Republican majority.
What happened this past year after our colleagues won the majority,
claiming they were going to do better? Did they do better? Well, we
have 12 appropriations bills each year. We should enact each one of
them individually. They should be brought up on the floor one-by-one.
There should be an opportunity to offer amendments, and they should be
voted up or down, right? No, that is not the way it goes. This past
year, we had the largest omnibus bill in 20 years. The majority sent
us, near Christmas, a 1,600-page omnibus package that combined into one
bill 11 of the 12 appropriations bills, and then it hit this floor;
there was no time to read it. We didn't know what kind of pork or
policy had been added to it. We were challenged to vote for it or not.
It was $555 billion. That is worse than we have had in terms of an
omnibus package in 20 years.
Frankly, the majority leader, Senator Reid, has indicated that he may
not even bring up the appropriations bills or we may have another great
omnibus bill this year, but after the election. Well, the election is
in November. The fiscal year starts October 1. It is our responsibility
to have the appropriations bills passed before the beginning of the
fiscal year, October 1.
It is as if he is throwing in the towel before we even get there.
Frankly, as an aside, I truly believe we would do much better if we
went to a 2-year budget and 2-year appropriations, as over half of the
States have. That would help us in this process because this happens
every year, and it is getting worse, it seems, every year.
We will soon have the new budget resolution. It will hit the
committee next week. I am a member of the committee. It was a failed
and unhealthy budget last year that was moved forward by our Democratic
colleagues. I am afraid this one will not be much better.
I noticed that the Democratic Presidential candidates are offering a
lot of new proposals. Senator Obama, who now leads, has offered 158 of
them that would cost at least $312 billion in new annual spending, or
$1.4 trillion over 5 years, as we tend to score those things. That
doesn't include all of his proposals that are out there.
Madam President, I will conclude by telling the American people and
my colleagues that next week we will begin a defining process. Next
week, the majority party will offer a budget. Because of the budget
rules, with 51 votes, they will be able to pass this budget. So because
the Democratic majority has 51 votes, they can pass the budget they
want. But we need to examine it because it will tell us and America
what their priorities are, what their commitment is, how willing they
are to sacrifice and make sure we have fiscal responsibility in this
country.
Based on last year's budget, I am afraid it is not going to be any
better. Based on the fact that Senator Reid says he doesn't expect we
will finish the appropriations process until after the November
elections, I don't sense any commitment to do better than the
Republicans did when they had the majority. Certainly, this year, their
performance was worse. This past year, it was worse, and it doesn't
look as if it will be better in the future.
I thank the Chair for this opportunity to share my concerns. I hope
we can be frank about these matters because the majority party knows it
has a very serious responsibility when it submits a budget. We knew it
when we had the majority. I sat on the Budget Committee. Senator Conrad
and his colleagues know they have that responsibility. They also know
they have the votes to pass this. Therefore, there can be no excuses.
There is nowhere to hide. Are you going to do anything about
entitlements? Are you going to guarantee tax cuts? Are you going to
submit a budget that projects lower spending or one that is filled with
gimmicks to hide even more spending increases? It is a big deal. We
will be talking about this for some weeks. I hope our colleagues will
focus on this.
The PRESIDING OFFICER. The Senator from Utah is recognized.

FISA Modernization Legislation

Mr. HATCH. Madam President, during a debate about strategy on how to
defeat al-Qaida, goal No. 1 should be figuring out their plans. What
are their tactics and targets? How do we do this? We use our
technological advantages to get this information. That is what the FISA
modernization bill allows us to do.
The Congress has been working on FISA modernization since April
2007--over 300 days ago. But I guess 300 days is not enough time for a
bill of this magnitude, right? But wait, the Constitution of the United
States has written in only about 115 days, and that included travel
time on horseback for the Founding Fathers. So the entire Constitution
of the United States was written in one-third of the time we have spent
on FISA modernization.
Congress has plenty of time and has had plenty of time to debate this
issue. Given that the executive strategy in this instance is paramount,
the next President's decision, whoever that may be, will be critical.
Like many people, I have watched many of the Presidential debates. One
thing amazes me: Out of at least 32 debates and forums, the candidates
have yet to receive one question on FISA, the most important piece of
legislation certainly in the last number of years and certainly in this
Congress. There has not been not one question on the Foreign
Intelligence Surveillance Act and what we are trying to do here. So we
are continuing to talk about the most important bill in the entire
110th Congress, which is apparently not important enough to come up
during over 50 hours of discussion with our next Commander in Chief.
I did hear an interesting comment during the most recent debate. A
decision to utilize military strikes to kill al-Qaida in Pakistan was
seemingly supported. That is the irony of this situation. It is OK if
we kill terrorists overseas with missiles, but we cannot listen to the
phone calls of new terrorists without demonstrating ``probable
cause.'' We have to ask what probable cause is and why it exists at
all. That will tell us to whom it belongs. Probable cause is a check on
Government power rooted in the due process guaranteed by the
Constitution. Who may claim such due process protection under the
Constitution of the United States? U.S. citizens, not foreign citizens
overseas.

We are constantly hearing from the leadership in Congress about the
need to ``bring people together.'' Yet, at every turn, they seem to be
willing to set aside bipartisanship in favor of the preferred
policies--in favor of preferred policies of extreme political
organizations. If Democrats really want to change the tone in
Washington, they are going to have to, at some point, say no to the
more radical elements of their base.
With the current stalemate on FISA modernization legislation, we have
seen both political parties blaming each other for the delay. We have
heard notions that we are not in danger due to the lapse of the Protect
America Act. While our opinions on this issue will remain in bitter
disagreement, the solution to these problems is quite easy. In fact, it
should take about 15 minutes to solve this problem. Here is the answer,
and it is just four words: Let the House vote. That is it. It doesn't
take a genius to come up with a solution. All of the disputes will go
away, and the bipartisan majority of the House will approve the bill if
given a chance to do so. Is this a novel concept? The House of
Representatives has been voting on bills since 1789--over 219 years
ago. Will we ever be in a situation as complicated as this again, where
the solution to every problem is allowing our elected officials to
vote?

[[Page S1412]]

Back on December 17, on this very floor, I asked one of my Democratic
colleagues if he agreed with me that should the FISA bill pass, it
would be one of the best examples of bipartisanship in the whole 110th
Congress and maybe in the history of this body. He agreed with this
notion. Months later, this worthy goal came to fruition in the Senate.
As we all know, the Senate approved a FISA modernization bill by a
bipartisan supermajority vote, a veto-proof margin. Senators from both
sides of the aisle engaged in lengthy and informative debate and came
together to pass a bill that met the goals of modernizing FISA.
This rare demonstration of unity came to a crashing halt on February
14. Rather than allow a bipartisan majority of the House to vote on and
pass this bill, the House leadership refused to allow a vote on this
bill. The House spent its last legislative day, before their weeklong
recess period, debating and voting on a contempt resolution to further
a partisan fishing expedition that has led to no credible evidence of
wrongdoing. House Democrats had been sitting on these resolutions since
July, for over 201 days. Yet they determined that they were so
important that they superseded the needs of our intelligence community
and the needs of protecting the American public.
So a bipartisan majority of the House was ready and eager to vote on
this bill and was prohibited from voting on this bill. While numerous
lawmakers stated they would stay in Washington--including me--for as
long as it took to get this bill passed, the leadership from the House
forced them to go on vacation. So they were prohibited from voting on a
bipartisan bill to protect our country but were mandated to take a
recess period.
You want to stay and vote on this bill? Too bad. We would rather you
take some time off. Go back to your districts and take a break. Don't
worry about our intelligence community. They have all the tools they
need. That is what the House Members heard. These Representatives did
not need to be patronized; they needed to be given a chance to vote.
The Attorney General, the chief law enforcement official of the
United States, and the Director of National Intelligence, the person
who is responsible for our intelligence in this country, say that the
lapse of the Protect America Act caused us to miss information. These
officials have more institutional knowledge on this topic than anyone
in either body, and they dispute the notions that ``the intelligence
community has everything it needs.'' With all due respect to all of us
who serve as politicians, I am going to trust in the expertise of the
Attorney General and DNI over the assurances of politicians in an
election year.
So why doesn't the House leadership allow a vote on this bill? Could
it be because they know it will pass, which it would? But we cannot
have that. Heaven forbid, democracy would be free to run its course.
So rather than vote on this bill, we are hearing that the House
leadership wants to conference this bill. Conferences are about
resolving disagreements between the Chambers. But remember, a
bipartisan majority from both Chambers has no disagreements on this
bill. There are no disagreements to resolve between the majority of the
Senate and the House. So a conference is entirely inappropriate in this
situation.
I have also heard an argument that the House needs more time to
review the immunity provision--the immunity that would protect these
companies that patriotically cooperated with us in collecting the
information that protected American citizens, which are now being sued
in 40 different lawsuits for hundreds of billions of dollars. I want to
make sure everybody is perfectly aware that the immunity provision has
been publicly available and unaltered for 133 days. It has not been
hidden. It has been available to everybody in Congress. It has been
available to the world on the Web site of the Senate Intelligence
Committee. It only takes about 3 minutes to read it. It should not take
133 days to analyze it, while putting our American public at risk.
I am also amazed at the false descriptions floating around about the
terrorist surveillance program, TSP, which is the program the President
described on December 17, 2005, during a radio address. We have all
heard the terms: the warrantless wiretapping, domestic spying, or
eavesdropping bill. The list goes on. Let's look at what the President
actually said during his radio address on December 17, 2005:

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

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

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

That is one of the few formal cases out of the FISA Court.
Given the staggering amount of misinformation in the public, how many
people have incorrectly stated that the Government can listen to all of
their phone calls, read all of their e-mails, spy on American families
overseas, even spy on our own military members overseas? How many of
these false representations have been made by my colleagues and by
others?
These accusations are completely false and are meant to incite fear
of nonpolitical intelligence analysts who serve regardless of whom the
President is. Isn't that the real fear mongering? Terrorists killed
3,000 Americans on September 11 and killed hundreds of other people in
Madrid, London, Bali, and Kenya. They have sworn to kill more. They
have said that ``the streets of America shall run red with blood,
casualties will be too many to count, and the next wave of attacks may
come at any moment.''
These terrorists recently called for the President of the United
States to

[[Page S1413]]

be ``received not with roses and applause, but with bombs and booby
traps'' during a recent Presidential trip overseas. So they wish death
on all Americans and they threaten the assassination of the President
of the United States. Yet if we acknowledge their threats, if we try to
prepare for these attacks, we are accused of the politics of fear. But
there is no problem when numerous individuals completely misrepresent
how our Government protects our country. Nobody is calling these
tactics ``fear mongering,'' so is it perfectly acceptable to question
the integrity of thousands of Americans who have taken an oath to
defend the Constitution of the United States and who have dedicated
their lives to preventing our great Nation from suffering these
terrorist attacks?
I am sorry to break it to people, but our intelligence analysts have
more important things to do than look at someone's eBay transactions
and listen to phone calls from the Jones family on their family
vacation in Italy. I guess I shouldn't be surprised by these conspiracy
theories, given the vocal lunacy expounded by those who think the
September 11 attacks were an ``inside job.''
The FISA modernization bill should be the best example of how
meaningful legislation becomes enacted. This bill passed by a veto-
proof majority in the Senate. It came out of the Senate Select
Committee on Intelligence, on which I serve, 13 to 2. It was
bipartisan. It is supported by the intelligence community, and it has
the support of the executive branch. Isn't this about as good as it
gets? When a bill has support from all these elements, there is no
excuse for it being held up.
The House leadership has indicated it intends to unveil a
``compromise'' FISA bill. Apparently, House Democrats are using an
unconventional definition of the word ``compromise.'' What would they
call the Senate bill? We went through months of hearings in the Senate
Select Committee on Intelligence asking about pros and cons, asked
thousand of questions, met with the top people in all fields, were read
into the program, went out to the National Security Agency to look at
these programs. What do they call the Senate bill?
No one, not the administration or anyone in the Senate, got
everything they wanted with the Senate bill. It is a compromise. Is it
everything I want? No. Are there things in there I wish we did not put
in there? Yes. But it is a compromise, and I voted for it.
All sides had to make concessions before a final solution was reached
13 to 2 in the committee and it was bipartisan, 68 to 29 in the
Senate--bipartisan. That is precisely what the compromise is all about.
I simply do not follow the logic of rejecting a bipartisan result,
which is what we already have, in favor of a more partisan solution and
calling it a ``compromise.'' I can only assume that when House
Democrats say ``compromise,'' they mean something else--capitulation.
I don't intend to capitulate on this issue. I hope the
Representatives in the House who share my view will weigh in with the
House leadership and other Democrats who have been holding this up to
the detriment of the citizens of the United States of America. I have
been to this floor countless times to discuss FISA modernization, and I
will continue to do so. I will continue to fight for this cause because
it is the right thing to do and especially since so many in both
parties have come together to support the Senate bill and would support
it in the House if the chance was given.
Madam President, we are still in the month of February. We should be
doing our work here in the Senate. We should be working toward
legitimate, bipartisan agreements on the issues that matter most to
Americans.
That is what our constituents sent us here to do. Of course, in an
election year, particularly a Presidential election year, we
unfortunately slide into a silly season where very little gets done.
Instead of listening to each other and trying to come up with
commonsense solutions, there is a temptation to use the Senate as an
arena to make one's opponents look bad.
Usually the flowers of that silly season do not bloom until the
summer. We are still in the month of February! We need to be getting
the work of the American people done. We are in a time of legitimate
economic distress.
There are very different ideas about how to deal with this economic
slowdown. There is nothing wrong with this difference of opinion. The
majority seems to think that the principal way to deal with an economic
challenge is to spend money. To be clearer, they think that the answer
is to spend taxpayer money. And make no mistake, if there is not enough
taxpayer money to go around, the solution to an economic slowdown for
the majority is to raise taxes. Conservatives have a slightly different
understanding of what it takes to get the economy running again.
When the companies that Americans work for are loathe to invest, it
hurts employees. When they don't invest, these companies do not create
jobs. And when the economy is weak, it makes it more difficult for an
entrepreneurial American to take the risks necessary and obtain the
credit to start new businesses that will employ the people in his
community.
So conservatives think we should do more to encourage business
investment and capital formation. Both sides want to do what they can
to get the economy humming. And both sides think there are different
ways to accomplish this. Sounds like an opportunity for compromise to
me!
But I think that some of my colleagues are more interested in an
issue than a solution. We should not elevate politics above solutions.
Congress needs to come together. Conservatives believe that their
policies will work effectively to help the economy and the families
that depend on good jobs and economic growth. We are not asking much.
We are simply asking that our ideas be taken seriously. And we should
be. Even in the most liberal of States, Members of this body have many
conservative constituents. Is it really too much to ask that those
ideas be given an opportunity for debate on the Senate floor? It
shouldn't be.
I am not sure, however, that the majority is interested in that
debate. Twice this week, Senate minority voted to proceed to bills
offered by the majority leader and my colleague from Wisconsin, Senator
Feingold. Yet after voting to proceed to those bills, we were accused
of blocking debate on the bills we helped to bring to the floor. That
really is a classic.
The majority casts 21 votes against proceeding to a bill the majority
leader himself wanted to proceed to debate. The minority casts the
votes to allow that debate. And then the minority stands accused of
delay.
A similar pattern has occurred with this housing bill. The majority
rushed a bill to the floor. They bypassed the relevant committees. They
bypassed the regular order.
In their haste, they made a small mistake with the legislation. Well,
maybe it was not that small. The majority intended to spend $2 billion
on counseling for distressed homeowners. They accidentally made this a
$200 billion program; $200 billion.
I understand that this is a mistake. But it is a mistake born of a
cavalier approach to legislating. We could have had a consensus bill.
Instead, the majority never consulted with the minority as this bill
was being put together. In our view, we have a much better plan. It
includes titles that would address taxes, capital markets, housing, and
tort reform. We would keep taxes low.
We would extend the 2001 and 2003 tax cuts, preventing a looming tax
hike, and making sure that working families do not get socked with
thousands of dollars in extra taxes when these tax cuts expire in 2010.
We would increase the value of homes and prevent an unfair tax on
their sale. We would help to keep jobs at home by encouraging job
creation.
We would help prevent foreclosures by providing credit stability.
We would maintain the value and security of neighborhoods by
encouraging the speedy sale and renovation of foreclosed homes.
And we would protect small businesses from the threat of excessive
and frivolous lawsuits.
And let me tell you, when I talk to businesses, businesses that are
subject to incessant litigation, tort reform is at the top of the list
of things we have to do. It hurts companies large and small, and we
need to do something about it.

[[Page S1414]]

I think if we had been invited to the table to discuss this bill, had
been a party to the negotiation, or even been allowed to offer
amendments, we could have worked something out on this bill.
We could have found common ground. I know that is what the American
people want. We have been hearing a lot about common ground these days.
Whenever I turn on the television, I hear someone telling us about
the need to change our ways in Washington. I hear about the need to
bring people together. Well, we certainly have our opportunities.
But I feel that they are being missed. We do not have to be consumed
by partisanship. In 2005 and 2006, Congress accomplished a number of
serious policy reforms. We passed bankruptcy reform, class action
reform, energy and highway bills, CAFTA and other trade bills, and the
most significant reforms of pension laws in 30 years.
And those bills only became law because of debate, negotiation, and
compromise. Through amendments, the regular order, and serious debate,
the Senate was able to pass consensus legislation. And today? It is not
quite the same.
Take it or leave it is not the stuff of statesmanship. It is the
stuff of the sandlot. Leadership demands a willingness to listen to
both sides. It requires compromise and openness to other ideas. The
American people have made their position clear. They are tired of
business as usual.
In the coming months, I hope to work with the majority on the issues
of importance to the American people. The last week has not been very
promising. Nonetheless, my hope is that Congress will be able to
accomplish important reforms for the American people even in this
election year.
Madam President, I suggest the absence of a quorum.
The PRESIDING OFFICER (Mrs. McCaskill). The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. DOMENICI. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DOMENICI. Madam President, I have spoken twice on energy, once
today and once yesterday.
I have come to add a few more thoughts to my previous remarks on
energy. I spoke yesterday of the recent Energy bills that Congress has
passed, and the growing costs of our dependence on foreign oil. This
morning, I urged my colleagues to reach agreement on a comprehensive
energy policy that uses our own resources to meet our energy needs.
Of all the issues we have to consider in this Congress, some may
wonder why I have focused on energy three times in the past 2 days. The
answer is simple: it is February 29. Oil is going for nearly $102 per
barrel, and gas prices are up 20 cents in the past 2 weeks alone. The
start of the summer driving season is still 3 months away, but
consumers are already being squeezed by near-record energy prices. More
than that, this should be a story we talk about in both good and bad
times, because our dependence is growing great and it is not matched by
our policy.
We must rethink our policies to match the modern challenges we face.
As I have indicated, our Nation has a great quantity of oil locked up
off of our coasts, beneath our permafrost, and within our shale. These
areas can provide a stable supply of energy as we transition to
alternative fuels. But oil is not the only resource that can be
developed at home and depended upon to meet our energy needs. We are
also fortunate to have vast reserves of coal: some 270 billion
recoverable tons, which would last for 240 years at the current rate of
consumption. That coal can be turned into fuels that help meet our
transportation, manufacturing, and electric power needs.
Because of the emissions that result when coal is converted to
energy, we will need cleaner methods to ensure the protection of our
environment. To me, this is an opportunity. Our Nation has a proud
heritage of innovation, and there is no reason to believe this strong
record will not continue in the future. As our most abundant and
affordable fossil resource, we cannot simply cross coal off the list.
Any serious effort to strengthen our energy security must include coal.
One of our best prospects is to advance the development of coal-to-
liquid fuels. As an alternative to oil, coal-to-liquid fuels have many
merits: it will reduce emissions of sulfur dioxide, nitrous oxide,
particulate matter, and other pollutants when compared to conventional
fuels. Coal-to-liquid fuels have been commercially demonstrated in
other countries, can be moved through existing pipelines, and can be
used in existing vehicles. Commercialization of this resource will
create investment in rural communities, thousands of good-paying jobs,
and cheaper energy for American consumers. Despite this potential, two
amendments to advance this type of fuel were defeated on party-line
votes in the most recent energy debate.
Future generations of automobiles will be powered by the advanced
battery. The Government must redouble its efforts to ensure the
research, development, and deployment of these technologies. Reliable
and rechargeable batteries will be critical to the success of hybrid
vehicles, which hold tremendous promise for reducing the amount of oil
consumed in the transportation sector.
The policies I have spoken of these past 2 days are just a few of the
options available to us. We should also increase the number of flex-
fuel vehicles on the road, and the number of stations that offer
blended fuels. We should offer incentives to existing refineries, and
encourage the expedited construction of new ones, to reduce the amount
of gasoline we import. We continue to lament that while our refinery
capacity has improved at existing sites, we have not built a new
refinery in 30 years. Again, these are just a sampling of the policy
options available to the Congress as we seek to chart a more
responsible path forward.
As a member of the Senate Energy Committee for nearly 30 years, and
its chair or ranking member for much of the past decade, I obviously
have strong views on the energy policies that will best serve our
Nation. But I also recognize that we must work together to find common
ground. We did this in the past on energy policy, and we can do it
again.
The costs of our dependence on foreign oil are enormous and
increasing. The consequences of removing money from our economy, and
sending it to often-volatile oil-producing nations, are becoming clear.
Few positives will ever be drawn from this arrangement.
When we import oil, we export our jobs and we export our wealth. We
strengthen regimes that are intent on undermining our interests,
opposed to the spread of democracy, and unwilling to extend some of the
most basic freedoms to their own people. When we import oil, we
threaten our national security and our economic strength. As we look
ahead, we must remember that for today and the foreseeable future, we
need oil. We should put our American energy resources to use.
This is my final year in the Senate. It is a privilege and an honor
to serve the people of New Mexico and this country. But it is not just
the end of my time in the Senate that approaches; the time to reduce
our growing dependence on foreign oil is also upon us.
It is my sincere hope that we will use this year and the future to
work together on policies that will move us toward our energy security
goals. This will require us to set aside our differences and make
difficult decisions. It will require us to come to the table with open
minds and positive intentions. In an era defined by its bitter
partisanship, this will not be easy. But given the stakes—our
national security, our economic strength, and our standing in the
world—that is exactly what we must do.
The PRESIDING OFFICER. The majority leader.
Mr. REID. Madam President, before my distinguished friend leaves the
floor, let me say publicly what I have said privately to my friend, the
distinguished senior Senator from New Mexico. He has been a great
Senator. He and I have worked together on issues that only we know
about because of the sensitive nature of what we did, dealing with the
nuclear stockpile we have.

[[Page S1415]]

As the chairman and ranking member of the Energy and Water
Subcommittee on Appropriations, we worked for years as chairman, as
ranking member, however the majority in the Senate was, and I think we
have done a good job so that our nuclear stockpile is safe and
reliable. I hope those who follow us recognize how sensitive and
important this is.
We also worked on other issues with our great national laboratories,
two of which are located in New Mexico. I think the Senator and I have
done some good work to protect basic science which so much of it comes
from these laboratories, and, of course, Livermore in California. We
have done some of the great experimental work at the Nevada test site.
I personally look forward to working with this wonderful Senator for
the next 10 months, but also we will miss him a lot. I hope we are able
to pick up another vote, and we will have one soon, on allowing this
country to go to more alternative energy. We missed by one the ability
to do that. There was some concern about what some of the offsets were.
So I hope my friend, with all the persuasive powers he has among my
colleagues on the other side of the aisle, will work to see what we can
do to come up with that vote. Even though I am not a big fan of coal, I
understand the long-time work this man has done in trying to develop
some other way of lessening our dependence on foreign oil.
In short, I express my friendship and appreciation to the Senator
from New Mexico. I look forward to the next 10 months and hopefully in
the next few weeks of working something out so we can get long-term tax
credits for renewable energy which will work in New Mexico and Nevada.
We have great natural resources which are not being used because of
the inability of the financial world to invest because they need the
incentives for long-term tax credits to do that.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Before we leave, Madam President, I say to the
distinguished majority leader that I appreciate his kind, generous
remarks.
Mr. REID. Madam President, I would say this: They were not generous
enough. This man deserves far more than that. I hope someday, in the
next few months, someone asks me in detail, because there should be a
historical account of this man's service in the Senate. I want to tell
them things that only he and I know that should be known to the public.
He is a real dedicated public servant.
Anyway, that is enough of that, but there will be more I will say
about Senator Domenici at a later time.
Mr. DOMENICI. Madam President, I also want to make a comment
regarding something the leader said when he was discussing my speech he
heard.
I want to say to the Senator, you caught the end of 2 days of
speaking on energy, and you heard: coal. I want you to know I had
spoken of many other sources of energy before that. But I thought in
recapping what we own, you must include coal in that. That is why you
heard it there, not to give it special emphasis beyond which it is
entitled.
Mr. REID. I would briefly say, Madam President, I, with Senator
Domenici, have been involved in producing huge amounts of money for
research into clean coal.
Mr. DOMENICI. Right.
Mr. REID. I think we should continue that research. Right now I am
totally unsatisfied as to where we are with clean coal technology. But
we should spend more money because we have great resources, and maybe
someday we can work it out so it will work.
Mr. DOMENICI. I thank the Senator.

FISA

Mr. REID. Democrats and Republicans are united in our resolve to
fight terrorism. Democrats, no less than Republicans, want to provide
our intelligence professionals with the tools they need while
protecting the privacy of law-abiding Americans.
Both the House and the Senate have passed bills to strengthen the
1978 FISA law, the Foreign Intelligence Surveillance Act. The House
passed its bill in November. We passed our bill a couple of weeks ago.
Since Senate passage, the chairmen of the Senate and House Judiciary
and Intelligence Committees have been working very hard to resolve
differences between the two bills. Democratic staff have been meeting
and exchanging ideas and proposed language. But, I am sorry to say, the
Republicans have instructed their staffs not to participate in those
negotiations. Yesterday, the President held yet another of his
increasingly belligerent news conferences demanding the House of
Representatives pass the Senate's FISA bill. He does not want to
negotiate, he does want any negotiation between the House and the
Senate. He has decreed such. He simply wants the House to bend to his
will and pass the bill he prefers without changing a single word.
The President said there is a majority in the House that will pass
the Senate bill. That may or may not be true. But what we do know for a
fact is there was a majority in the House for the bill they passed last
November. That is why we need negotiations. We would much prefer it be
negotiated on a bipartisan basis, not just being done with Democrats.
A new FISA law that passed with broad bipartisan support of both
Houses would be good. A new FISA law that passed with broad bipartisan
support in both Houses would provide greater certainty to the
intelligence community and make us a stronger nation.
There are some hopeful signs that we can do this. It may be possible.
Yesterday, House and Senate Members finally from both sides of the
aisle had a productive meeting with the general counsel to the Director
of National Intelligence.
I urge President Bush to engage in a more constructive manner in this
effort to pass a new FISA bill to allow and encourage bipartisan
negotiations. As we move forward, there is no reason not to extend the
PATRIOT Act to ensure there are no gaps in our intelligence-gathering
capabilities.
Even Admiral McConnell, the Director of National Intelligence, has
testified that such an extension would be valuable. But the President
threatens to veto an extension and my Republican colleagues continue
inexplicably to oppose it. The President asked us to extend it. He is
the reason we have not extended it. I urge the President to withdraw
his opposition.
I will now ask unanimous consent to take up and pass S. 2664, a bill
that would extend the PATRIOT Act for 30 days, and make the extension
effective as of February 15 to ensure there are no adverse legal
consequences from the President's decision to let the law expire.

Unanimous Consent Request--S. 2664

I ask unanimous consent that the Senate proceed to the consideration
of Calendar No. 583, S. 2664, which is a 30-day extension of the
Protect America Act; further, that the bill be read a third time and
passed, and the motion to reconsider be laid on the table and there be
no intervening action or debate.
The PRESIDING OFFICER. Is there objection?
Mr. DOMENICI. I object.
The PRESIDING OFFICER. Objection is heard.
Mr. REID. Madam President, while Democrats and Republicans joined
last month to pass the economic stimulus package, we agreed that it was
an important first step in addressing our country's economic challenge,
but we agreed it was only a first step, that we must do more to help
America.
All Americans are struggling. We must do more to help Americans
struggling to make ends meet. Yesterday Democrats tried to take that
next step. We brought to the floor a genuine effort to help families
and neighborhoods weather the growing housing crisis. But Republicans
in the Senate blocked our legislation to help struggling American
families, as they have done time and again on other important
legislation.
Why did they choose obstruction over American families at risk to
lose their homes? Senator Alexander, my friend from Tennessee, and a
few others, said here on the floor that all Republicans wanted was an
opportunity to offer amendments.
Anyone following this debate would know my Republican colleague was
given some very bad information or that his or their staffs watched
none of the floor debate on this issue.

[[Page S1416]]

I have said numerous times, both publicly and privately, that both
sides want to offer amendments; that is, Democrats and Republicans, and
both sides should have that opportunity. I have said that privately to
the Republican leader, and publicly here on the floor, and in many
press events.
I told, in fact, Senator McConnell more than a week ago that we
intended to allow both Democrats and Republicans to offer amendments. I
have made that commitment on this issue several times on the floor. My
words are available for anyone to review in the Congressional Record.
There is only one reason why Republicans were not able to offer
amendments. They refused to let us move procedurally to the legislative
posture where amendments could be offered. We have here before us the
Republican filibuster chart. You will note that we keep changing the
numbers because they keep coming; 72 Republican filibusters, 72.
Last year, in less than 1 year, the Republican minority broke all
records for a 2-year Congress in the number of filibusters. And we have
another on the housing stimulus package.
The Republicans' decision to deny the ability to even take up this
bill deprived both sides of the opportunities to offer a single
amendment. As I said yesterday, why would you stop us from going to the
bill? I have said: You can offer amendments. Then, if you do not like
what happens, you still have 49; it only takes 41 of you to stop us
from doing anything.
Why would you stop us? They are stopping us because they want to slow
things down. That is the whole purpose. They do not want this minority
to allow us to do something. I guess the direction is coming directly
from Bush and Cheney.
My colleagues can talk all they want about amendments, but the record
betrays the rhetoric. Yesterday's Republican press conference was
before that vote. The Republicans held a press conference saying what
it is that should be done with the housing problems.
Now, listen to this: As reported in the New York Times and other
places, here is their solution, according to a public press conference
they held before the vote yesterday to stop us from going forward.
Here is what they want to do: tort reform. That is going to really
help the housing crisis, tort reform. The other thing they want to do
is lower taxes. That is so Bush-Cheney that we look and we find that is
why we are in the trouble we are today. When the President took office,
there was a surplus over the next 10 years of $7 trillion. That is
gone. As indicated by Nobel Prize winning economist Stiglitz yesterday,
the war has and will cost us $3 trillion.
Instead of standing on the side of struggling families and at-risk
homeowners, Republicans in the Senate once again chose the side of Bush
and Cheney, big banks, and big business. Republicans want us to
continue to help those who contributed to the foreclosure debacle in
the first place. Yesterday's prevention of us going forward to
legislate was a victory for the people who are causing all the trouble
to begin with. Who were the losers? Middle-class Americans, people
trying to stay in their homes. The Republican alternative housing plan
is almost laughable.
The Presiding Officer is a lawyer. She has been to court a few times
to prosecute people, knows what is going on on the civil side. Their
solution to the housing crisis is tort reform? How can they say that
with a straight face?
That is not me. Read about it. It is in today's press. And more tax
cuts. Neither has anything to do with the housing crisis. The
Republican housing plan consists of tired programs from a dusty Bush-
Cheney playbook. Tort reform and Bush tax policy, neither have anything
to do with housing. The housing plan Democrats proposed offers real
solutions to the crisis that families and neighborhoods are facing all
across the country.
Today I had another conversation with the chairman of the Banking
Committee, one of the more senior Members of this body. I said: Senator
Dodd, if your counterpart, Dick Shelby, wants to work out anything on
this housing stimulus crisis, let's work it out. If there are
amendments they want to offer, let's take a look at the amendments. My
people want to offer amendments. They want to offer amendments. Let's
offer some amendments. But tort reform? Cutting taxes?
The housing plan Democrats propose offers real solutions to the
crisis families and neighborhoods are facing all across America--
Missouri, Nevada, New Mexico, all over. Our plan helps families keep
their homes by increasing preforeclosure counseling funds. Our plan
expands refinancing opportunities for homeowners stuck in bad loans.
Our program provides funds to help the highest need communities
purchase and rehabilitate foreclosed properties. This is a proposal the
President talked about in his State of the Union message and on which
he is now blocking us. We tried to get this in our previous stimulus
package, something the President talked about in his State of the Union
Address. No. I guess from the speech back to the White House someone
talked him out of it.
Our legislation helps families avoid foreclosure in the future by
improving loan disclosures and transparency during the original loan
and refinancing process. Jack Reed of Rhode Island sponsored that
provision. Our legislation amends the Bankruptcy Code to allow home
loans on primary residences to be modified, only in certain
circumstances with very strict guidelines.
If the Republicans and the President don't like that provision, offer
an amendment to take it out. I have said that publicly. If you don't
like it, offer an amendment to take it out. Maybe you will get some
Democrats to join with you. I think that is a pretty good bet. But, no.
So I say to my Republican colleagues who talk about their desire to
help, talk is so cheap. The American public deserves better than tort
reform and extending Bush economic policies to handle the foreclosure
crisis now facing our country. Republicans have been able to hold on to
the status quo and block us from moving America forward because of our
razor-thin majority. For 10 months last year, it was 50 to 49 because
Tim Johnson was sick. He is back. He is at 100 percent. So the majority
now is 51 to 49. But that is still pretty narrow. The Republicans have
been doing everything they can to maintain the status quo.
In addition to blocking our housing plan, we have had 71 other things
that they have blocked. Tax incentives for alternative energy,
something as simple as allowing Medicare to negotiate for lower priced
drugs, they stopped us from doing that. A better economic stimulus
bill, for example, to provide for the extension of unemployment
benefits, they stopped us on that. And time after time, they have
stopped us from moving forward on changing what is going on in Iraq. A
razor-thin majority has allowed Republicans to block legislation with
little effort because, remember, we need 60 to get anything done.
But I say to my Republican friends through the Chair to my friend,
one of the more senior Members of the Senate, my friend from New
Mexico, enjoy it while you can. The American people are seeing what is
going on. They are seeing how you are maintaining the status quo. Enjoy
it while you can because our majority, come November, is going to grow.
So continue to block because it is not going to be there forever. It is
not going to be there very long. Neighborhoods and families struggling
mightily through the housing crisis can't wait until then.
I urge my Republican colleagues to join us and reconsider, support a
housing plan that actually addresses housing--not tort reform, not
lowering taxes--and eases the suffering of millions of American
families.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. REID. I ask unanimous consent that the order for the quorum call
be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. Madam President, my friend is always looking out for me,
and there is other work I have to do. I can't do it unless he is here,
so I appreciate that very much.
Mr. DOMENICI. I have to stay here until it is done.
Mr. REID. He has to stay here until it is done. It will be real
quick.

[[Page S1417]]

I withdraw the pending motion.
The PRESIDING OFFICER. The motion is withdrawn.

____________________