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THE PRESIDING OFFICER: THE
SENATE WILL COME TO ORDER.
THE GUEST CHAPLAIN REVEREND
DONNA R. KAFER WILL LEAD THE
SENATE IN PRAYER.
SHE IS THE CHAPLAIN OF THE
ARIZONA STATE LEGISLATURE.
THE CHAPLAIN: LET US PRAY.
DEAR HOLY AND RIGHTEOUS FATHER,
WE COME BEFORE YOU THIS DAY WITH
HUMBLE HEARTS, THOUGHTFUL MINDS
AND A PROFOUND UNDERSTANDING OF
YOUR MAJESTY.
AS THIS SENATE BODY CONVENES
TODAY, I ASK, LORD, THAT YOU
GIVE EACH AND EVERY ONE OUR
SENATORS A UNIQUE SENSE OF THEIR
ROLE IN SHAPING THIS GREAT
NATION.
WE UNDERSTAND THAT THIS MANTLE
OF LEADERSHIP HOLDS A GREAT
MEASURE OF RESPONSIBILITY, SO WE
PETION YOU, FATHER, TO IMPART
YOUR WISDOM, PEACE AND COMFORT
TO EACH ONE OF THEM.
PROVIDE THEM, LORD, WITH CLARITY
OF MIND, VISION FOR THE FUTURE,
AND A RENEWED SENSE OF PURPOSE.
FILL THEIR HEARTS WITH
COMPASSION, DISCERNMENT, FOCUS
AND THE STRENGTH TO MEET THE
COMPLEX TASKS AT HAND.
FATHER, GIVE THEM COMPLETE
HEALTH: MENTALLY, PHYSICALLY,
EMOTIONALLY AND SPIRITUALLY.
EMBRACE THEM WITH YOUR LOVE THAT
THEY MAY KNOW YOUR BOUNDLESS
AFFECTION FOR THEM AND YOUR
IN-DEPTH CONCERN FOR THEIR
WELL-BEING.
WE THANK YOU, GOD, FOR HEARING
OUR PETIONS THIS DAY.
IT IS IN YOUR PRECIOUS NAME WE
PRAY.
AMEN.
THE PRESIDING OFFICER: PLEASE
JOIN ME IN RECITING THE PLEDGE
OF ALLEGIANCE.
I PLEDGE ALLEGIANCE
TO THE FLAG
OF THE UNITED STATES
OF AMERICA,
AND TO THE REPUBLIC
FOR WHICH IT STANDS,
ONE NATION
UNDER GOD,
INDIVISIBLE,
WITH LIBERTY
AND JUSTICE FOR ALL.
THE PRESIDING OFFICER: THE
CLERK WILL READ A COMMUNICATION
TO THE SENATE.
THE CLERK: WASHINGTON, D.C.,
JULY 15, 2010.
UNDER THE PRISIONS OF
RULE 1, PARAGRAPH 3,
OF THE STANDING RULES
OF THE SENATE,
I HEREBY APPOINT THE HONORABLE
KIRSTEN E. GILLIBRAND, A SENATOR
FROM THE STATE OF NEW YORK, TO PERFORM THE DUTIES OF THE
CHAIR.
SIGNED: DANIEL K. OUYE,
PRESIDENT PRO TEMPORE.
THE PRESIDING OFFICER: UNDER THE
PREVIOUS ORDER, THE LEADERSHIP
TIME IS RESERVED.
MR. KYL: MADAM PRESIDENT? THE PRESIDING OF
SENATOR FROM ARIZONA.
MR. KYL: THANK YOU, MADAM PRESIDENT.
IT IS MY HONOR TODAY TO HELP
HOST OUR GUEST CHAPLAIN FROM
ARIZONA, REVEREND DONNA KAFER.
ON BEHALF OF SENATOR McCAIN
AND I, I THANK THE CHAPLAIN AND
ALL THE OTHERS WHO HAVE BEE SO
COURTEOUS TO REVEREND KAFER IN
HER VISIT HERE TO WASHINGTON, D.C.
SHE, I UNDERSTAND FROM OUR
CHAPLAIN, IS THE FIRST
LEGISLATIVE CHAPLAIN TO PROVIDE
THE OPENING PRAYER HERE IN THE
UNITED STATES SENATE AND ONLY
THE SECON WOMAN TO HAVE DONE
THAT, SO THERE ARE MILESTONES
ACHIEVED TODAY, AND
APPRECIATE HER BEING WITH
SHE HAS BEEN THE CHAPLAIN AT THE
ARIZONA STATE LEGISLATURE FOR
OVER TEN YEARS, AND SHE IS --
SHE SERVES THROUGH H OWN
NONPROFIT ORGANIZATION CALLED
LEADERSHIP CHALLENGE OF ARIZONA.
SHE ALSO SERVES AS THE ARIZONA
AREA COORDINATOR OF THE DOLLARS
OF DESTINY NETWORK, WHICH IS A
WOMAN'S PRISON MINISTRY BASED
OUT OF COLORADO SPRINGS, AND SHE
TRAVELS THROUGHOUT THE UNITED
STATES SHARING HER TESTIMONY
WITH INCARCERATED WOMEN,
ENCOURAGING THEM AND SHARING THE
FREEDOM THAT IS OFFERED THROUGH
THE SAVING GRACE OF JESUS CHRIST.
DONNA IS AN ARIZONA NATIVE.
SHE AND HER HUSBAND ROSS, WHO IS
A FIREFIGHTER PARAMEDIC FOR
ALMOST 20 YEARS IN THE PHOENIX
METROPOLITAN AREA HAVE A
DAUGHTER ANDREA ELIZABETH, AND
AS I SAID, IT IS OUR PROUD
OPPORTUNITY TO HELP TO HOST HER
TODAY AND THANK HER FOR OPENING
THE SENATE WITH THAT BEAUTIFUL
PRAYER.
MR. REID: MADAM PRESIDENT? THE PRESIDING OFFICER: THE
MAJORITY LEADER.
MR. REID: EVERY THURSDAY,
SENATOR ENSIGN AND I GREET
PEOPLE FROM NEVADA, AND WE HAD A
LOT OF THEM TODAY AND I WAS LATE
GETTING HERE, SO I'M SORRY I
MISSED THE PRAYER, BUT I WILL
READ THAT PRAYER AND RECOGNIZE
WHAT SENATOR KYL SAID AUT YOU.
SO WE'RE -- WE WELCOME YOU TO
THE UNITED STATES SENATE.
MADAM PRESIDENT, FOLLOWING
LEADER REMARKS, THE SENATE WILL RESUME CONSIDERATION OF THE
CONFERENCE REPORT TO ACCOMPANY
H.R. 4173, WHICH IS THE WALL
STREET REFORM LEGISLATION.
AT ABOUT 11:00 A.M. THIS MORNING, THE SENATE WILL PROCEED
TO A ROLL CALL VOTE ON THE
MOTION TO INVOKE CLOTURE ON THAT
CONFERENCE REPORT.
IF CLOTURE IS INVOKED, WE'D LIKE
TO YIELD BACK SOME OF THE
POSTCLOTURE DEBATE TIME SO WE
MAY COMPLETE ACTION ON THE WALL
STREET REFORM LEGISLATION TODAY.
THERE COULD BE ADDITIONAL ROLL
CALL VOTES THIS AFTERNOON.
FOR THE BENEFIT OF THE SENATORS,
I HAVE SPOKEN TO THE TWO
REPUBLICAN LEADERS AND WE STILL
HAVE SOME HOPE OF BEING ABLE TO
HAVE -- SET UP SOME VOTES ON THE
SMALL BUSINESS JOBS BILL.
I HOPE WE CAN DO THAT.
OTHERWISE, WE'LL HAVE TO PROCEED
TO A CLOTURE VOTE ON THAT
SOMETIME NEXT WEEK.
S. 3588 IS AT THE DESK.
I UNDERSTAND IT'S DUE FOR ITS
COND READING.
THE PRESIDING OFFICER: THE
SENATOR IS CORRECT.
THE CLERK WILL READ THE TITLE OF
THE BILL FOR THE SECOND TIME.
THE CLERK: S. 3588, A BILL TO
LIMIT THE MORATORIUM ON CERTAIN
PERMITTING AND DRILLING
ACTIVITIES ISSUED BY THE
SECRETARY OF THE INTERIOR AND
FOR OTHER PURPOSES.
MR. REID: MADAM PRESIDENT, I
WOULD OBJECT TO ANY FURTHER
PROCEEDINGS WITH RESPECT TO THIS BILL.
THE PRESIDING OFFICER: OBJECTION
IS HEARD.
THE BILL WILL BE PLACED ON THE
CALENDAR.
MR. REID: WOULD THE CHAIR
ANNOUNCE THE BUSINESS OF THE
DAY? THE PRESIDING OFFICER: UNDER THE
PREVIOUS ORDER, THE SENATE WILL
RESUME CONSIDERATION OF THE
CONFERENCE REPORT TO ACCOMPANY
H.R. 4173, WHICH THE CLERK WILL
REPORT.
THE CLERK: CONFERENCE REPORT TO
PROMOTE THE FINANCIAL STABILITY
OF THE UNITED STATES AND SO
FORTH AND FOR OTHER PURPOSES.
THE PRESIDING OFFICER: UNDER THE
PREVIOUS ORDER, THE TIME
11:00 A.M. SHALL BE EQUALLY
DIVIDED AND CONTROLLED BY THE
SENATOR FROM CONNECTICUT,
MR. DODD, AND THE SENATOR FROM
ALABAMA, MR. SHELBY, OR THEIR
DESIGNEES, WITH THE FINAL 20
MINUTES DIVIDED EQUALLY BETWEEN
THE TWO MANAGERS AND THE TWO
LEADERS.
THE PRESIDING OFFICER: THE
SENATOR FROM HAWAII.
MR. AKAKA: MADAM PRESIDENT? THE PRESIDING OFFICER: THE
SENATOR FROM HAWAII.
MR. AKAKA: I WILL MAKE SOME
BRIEF REMARKS.
I ASK UNANIMOUS CONSENT THAT MY
FULL STATEMENT BE INCLUDED IN THE RECORD.
THE PRESIDING OFFICER: WITHOUT
OBJECTION.
MR. AKAKA: MADAM PRESIDENT, I
STRONGLY SUPPORT THE DODD-FRANK
CONFERENCE REPORT.
I COMMEND THE CHAIRMAN FOR ALL
OF HIS WORK TO ADDRESS SO MANY
ISSUES VITALLY IMPORTANT TO
WORKING FAMILS.
I THANK MY FRIEND FROM
CONNECTICUT FOR WORKING CLOSELY
WITH ME TO ENSURE THAT THIS
LEGISLATION WILL EDUCATE,
PROTECT AND EMPOWER CONSUMERS
AND INVESTORS.
AN OFFICE OF FINANCIAL EDUCATION
WITHIN THE CONSUMER FINANCIAL
PROTECTION BUREAU IS CREATED BY
THIS LEGISLATION.
THE OFFICE'S TASK WAS DEVELOPING
AND IMPLEMENTING INITIATIVES TO
EDUCATE AND EMPOWER CONSUMERS.
A STRATEGY TO IMPROVE THE
FINANCIAL LITERACY AMONG
CONSUMERS THAT INCLUDES
MEASURABLE GOALS AND BENCHMARKS
MUST BE DEVELOPED.
THE CONFERENCE REPORT ALSO
ADDRESSES INVESTOR LITERACY.
A FINANCIAL LITERACY STUDY MUST
BE CONDUCTED BY THE SECURITIES
AND EXCHANGE COMMISSION.
THE S.E.C. MUST DEVELOP AN
INVESTMENT FINANCIAL LITERACY
STRATEGY INTENDED TO BRING ABOUT
POSITIVE BEHAVIORAL CHANGE AMONG
INVESTORS.
CONSUMER AND INVESTMENT
PROTECTIONS FOR WORKING FAMILIES
ARE INCLUDED IN THE CONFERENCE
REPORT.
REGULATORS FAILED TO PROTECT
CONSUMERS, AND THAT CONTRIBUTED
SIGNIFICANTLY TO THE FINANCIAL
CRISIS.
THE PROSPECTIVE HOME BUYERS WERE
STEERED INTO MORTGAGE PRODUCTS
THAT HAD RISKS AND COSTS THAT
THEY COULD NOT UNDERSTAND OR AFFORD.
THE CONSUMER FINANCIAL
PROTECTION BUREAU WILL BE
EMPOWERED TO RESTRICT PREDATORY
FINANCIAL PRODUCTS AND UNFAIR
BUSINESS PRACTICES IN ORDER TO
PREVENT UNSCRUPULOUS FINANCIAL
SERVICES PROVIDERS FROM TAKING
ADVANTAGE OF CONSUMERS.
THIS LEGISLATION ALSO INCLUDES
LANDMARK CONSUMER PROTECTIONS
FOR REMITTANCES TRANSACTIONS.
WORKING FAMILIES OFTEN SEND
SUBSTANTIAL PORTIONS OF THEIR
EARNINGS TO FAMILY MEMBERS
LIVING ABROAD.
IN HAWAII, MANY OF MY
CONSTITUENTS REMIT MONEY TO
THEIR FAMILY MEMBERS LIVING IN
THE PHILIPPINES.
CONSUMERS CAN HAVE SERIOUS
PROBLEMS WITH THEIR REMITTANCES
TRANSACTIONS, SUCH AS BEING
OVERCHARGED OR NOT HAVING THE
MONEY REACH THE INTENDED
RECIPIENT.
THE CONFERENCE REPORT MODIFIES
THE ELECTRONIC FUND TRANSFER ACT
TO ESTABLISH CONSUMER
PROTECTIONS FOR REMITTANCES.
IT WILL REQUIRE SIMPLE
DISCLOSURES ABOUT THE COSTS OF
SENDING REMITTANCES TO BE
PROVIDED TO THE CONSUMER PRIOR
TO AND AFTER THE TRANSACTION.
A COMPLAINT AND ERROR RESOLUTION
PROCESS FOR REMITTANCE
TRANSACTIONS WOULD BE
ESTABLISHED.
MADAM PRESIDENT, I TAKE GREAT
PRIDE IN MY CONTRIBUTIONS TO THE
INVESTOR PROTECTION PORTION OF
THE LEGISLATION.
THE INCLUSION OF MY PROPOSAL TO
CREATE AN INVESTOR ADVOCATE WILL
STRENGTHEN THE ABILITY OF THE
S.E.C. TO BETTER REPRESENT THE
INTERESTS OF RETAIL INVESTORS.
THE INVESTOR ADVOCATE'S MISSION
INCLUDES IDENTIFYING AREAS WHERE
INVESTORS WOULD BENEFIT FROM
CHANGES IN COMMISSION POLICIES
AND PROBLEMS THAT INVESTORS HAVE
WITH FINANCIAL SERVICE PROVIDERS
AND INVESTMENT PRODUCTS.
I ALSO WORKED TO INCLUDE IN THE
LEGIATION CLARIFYING AUTHORITY
FOR THE S.E.C. TO EFFECTIVELY
REQUIRE DISCLOSURES PRIOR TO THE
SALE OF FINANCIAL PRODUCTS AND SERVICES.
WORKING FAMILIES RELY ON THEIR
MUTUAL FUND INVESTMENTS AND
OTHER FINANCIAL PRODUCTS TO PAY
FOR THEIR CHILDREN'S EDUCATION,
TO PREPARE FOR RETIREMENT AND BE
BETTER ABLE TO ATTAIN OTHER
FINANCIAL GOALS.
THIS PROVISION WILL ENSURE THAT
WORKING FAMILIES HAVE THE
RELEVANT AND USEFUL INFORMATION
THEY NEED WHEN THEY ARE MAKING
DECISIONS THAT DETERMINE THEIR
FINANCIAL FUTURE.
UNFORTUNATELY, TOO MANY
INVESTORS DO NOT KNOW THE
DIFFERENCE BETWE A BROKER AND
AN INVESTMENT ADVISOR.
EN FEWER ARE LIKELY TO KNOW
THAT THEIR BROKER HAS NO
OBLIGATION TO ACT IN THEIR BEST INTERESTS.
INVESTMENT ADVISORS CURRENTLY
HAVE FIDUCIARY OBLIGATIONS.
HOWEVER, BROKERS MUST ONLY MEET
A SUITABILITY STANDARD THAT
FAILS TO SUFFICIENTLY PROTECT INVESTORS.
IN A COMPLICATED FINANCIAL
MARKETPLACE FOR INVESTORS IN
WHICH REVENUE-SHARING AGREEMENTS
AND COMMISSIONS CAN VARY
SIGNIFICANTLY FOR SIMILAR
PRODUCTS, WE MUST ENJOY THAT ALL
INSTMENT PROFESSIONALS THAT
OFFER PERSONALIZED INVESTMT
ADVICE HAVE A FIDUCIARY DUTY
IMPOSED ON THEM.
IN 2005, I FIRST INTRODUCED
LEGISLATION THAT WOULD HAVE
IMPOSED A FIDUCIARY DUTY ON BROKERS.
AFTER YEARS OF EFFORT, THIS
FINAL INVESTMENT PROTECTION WAS
INCLUDED IN THE CONFERENCE REPORT.
IT WILL ENSURE THAT A FIDUCIARY
DUTY IS IMPOSED ON BROKERS WHEN
GIVING PERSONALIZED INVESTMENT ADVICE.
THIS WILL ENSURE THAT ALL
FINANCIAL PROFESSIONALS, WHETHER
THEY ARE AN INVESTMENT ADVISOR
OR A BROKER, HAVE THE SAME DUTY
TO ACT IN THE BEST INTERESTS OF
THEIR CLIENTS.
MADAM PRESIDENT, TITLE 12, THE
IMPROVING ACCESS TO MAINSTREAM
FINANCIAL INSTITUTIONS ACT, IS
THE MOST IMPORTANT ECONOMIC
EMPOWERMENT PROVISION IN THE BILL.
I APPRECIATE THE WORK DONE BY
SENATOR KOHL FOR ALL OF HIS WORK
ON TITLE 12.
MADAM PRESIDENT I GREW UP IN A
FAMILY THAT DID NOT HAVE A BANK ACCOUNT.
MY PARENTS KEPT THEIR MONEY IN A
BOX, DIVIDED INTO DIFFERENT
SECTIONS SO THAT MONEY COULD BE
SEPARATED BY VARIOUS PURPOSES.
CHURCH DONATIONS WERE KEPT IN
ONE PART.
THERE WAS A PORTION OF THE BOX
RESERVED FOR FOOD EXPENSES.
WHEN THERE WAS NO LONGER ANY
FOOD MONEY, WE DID NOT EAT.
OBVIOUSLY, MONEY IN THE BOX WAS
NOT EARNING INTEREST.
IT WAS NOT SECURE.
I KNOW PERSONALLY THAT THE
CHALLENGES THAT ARE PRESENTED TO
FAMILIES UNABLE TO SAVE OR
BORROW WHEN THEY NEED SMALL
LOANS TO PAY FOR UNEXPECTED
EXPENSES.
UNEXPECTED MEDICAL EXPENSES OR A
CAR REPAIR BILL MAY REQUIRE
SMALL LOANS TO HELP WORKING
FAMILIES OVERCOME THESE
OBSTACLES. MAINSTREAM FINANCIAL
INSTITUTIONS ARE A VITAL
COMPONENT TO ECONOMIC
EMPOWERMENT.
UNBANKED OR UNDERBANKED FAMILIES
NEED ACCESS TO CREATE -- TO
CREDIT UNIONS AND BANKS AND THEY
NEED TO BE ABLE TO BORROW ON
AFFORDABLE TERMS.
BANKS AND CREDIT UNIONS PROVIDE
ALTERNATIVES TO HIGH-COST AND
OFTEN PREDATORY FRINGE FINANCIAL
SERVICE PROVIDERS, SUCH AS CHECK
CASHERS AND PAYDAY LENDERS.
MANY OF THE UNBANKED AND
UNDERBANKED ARE LOW- AND
MODERATE-INCOME FAMILIES THAT
CANNOT AFFORD TO HAVE THEIR
EARNINGS DIMINISHED BY RELIANCE
ON TSE HIGH-COST AND OFTEN
PREDATORY FINANCIAL SERVICES.
UNBANKED FAMILIES ARE UNABLE TO
SAVE SECURELY FOR EDUCATION
EXPENSES.
A DOWN PAYMENT ON A FIRST HOME
OR OTHER FUTURE FINANCIAL NEEDS.
UNDERBANKED CONSUMERS RELY ON
NONTRADITIONAL FORMS OF CREDIT
THAT OFTEN HAVE EXTRAORDINARY
HIGH INTEREST RATES.
REGULAR CHECKING ACCNTS MAY BE
TOO EXPENSIVE FOR SOME CONSUMERS
WHO ARE UNABLE TO MAINTAIN
MINIMUM BALANCES OR AFFORD THE
MONTHLY FEES.
CULTURAL DIFFERENCES AND
LANGUAGE BARRIERS ALSO PRESENT
CHALLENGES THAT CAN HDER THE
ABILITY OF CONSUMERS TO ACCESS
FINANCIAL SERVICES.
TITLE 12 AUTHORIZES PROGRAMS TO
ASSIST LOW- AND MODERATE-INCOME
INDIVIDUALS ESTABLISH BANK OR
CREDIT UNION ACCOUNTS AND
ENCOURAGE GREATER USE OF
MAINSTRE FINANCIAL SERVICE.
I ALSO -- IT ALSO ENCOURAGES
BANKS AND CREDIT UNIONS TO
DEVELOP CONSUMER-FRIENDLY PAYDAY
LOAN ALTERNATIVES.
CONSUMERS WHO APPLY FOR THESE
LOANS WOULD BE PROVIDED WITH
FINANCIAL LITERACY AND
EDUCATIONAL OPPORTUNITY.
IN CONCLUSION, MADAM PRESIDENT,
THIS BILL WILL IMPROVE THE LIVES
OF WORKING FAMILIES IN OUR
COUNTRY BECAUSE IT WILL EDUCATE,
PROTECT, AND EMPOWER CONSUMERS
AND INVESTORS.
THANK YOU, MADAM PRESIDENT.
A SENATOR: MADAM PRESIDENT? THE PRESIDING OFFICER: THE
SENATOR FROM MARYLAND. MR. CARDIN: THANK YOU,
MADAM PRESIDENT.
I TAKE THIS TIME TO URGE MY
COLLEAGUES TO VOTE FOR CLOTURE
ON THE DODD-FRANK WALL STREET
REFORM AND CONSUMER PROTECTION
ACT AND TO VOTE FOR FINAL
PASSAGE.
FIRST, I WANT TO CONGRATULATE
SENATOR DODD FOR THE LEADERSHIP
THAT HE HAS SHOWN IN MARSHALING
THIS LEGISLATION THROUGH SOME
VERY DIFFICULT CHALLENGES HERE
IN THE UNITED STATES CONGRESS.
GETTING IT THROUGH THE SENATE
FLOOR, WORKING OUT THE
DIFFERENCES BETWEEN THE HOUSE
AND SENATE SO THAT WE NOW ARE ON
THE VERGE OF PASSING THE MOST
SIGNIFICANT REFORM IN WALL
STREET IN MANY, MANY YEARS.
THIS BILL CORRECTS A REGULATORY
STRUCTURE THAT TODAY ALLOWS
RECKLESS GAMBLING ON WAL
STREET, THAT CREATES THE
TOO-BIG-TO-FAIL, WHERE
GOVERNMENT BAILOUTS ARE
NECESSARY TO KEEP COMPANIES
AFLOAT BECAUSE THERE'S NO OTHER
OPTIONS AVAILABLE TO OUR REGULATORS.
IT ENDS RECKLESS GUAM BLOING
WALL STREET --
IT ENDS RECKLESS GAMBLING ON
WALL STREET, IT ENDS THE GOVERNMENT BAILOUTS OF
INSTITUTIONS THAT ARE TOO BIG TO FAIL.
IT PROVIDES FOR STRONG CONSUMER
PROTECTION, PROTECTION FOR ALL
FORMS OF -- MANY FORMS OF
LENDING BUT, MOST IMPORTANTLY,
THE RESIDENTIAL MORTGAGE MARKET.
WE SAW IN THIS FINANCIAL CRISIS
THAT EVEN RESPONSIBLE CONSUMERS
SUFFERED AT THE HANDS OF
AGGRESSIVE LENDERS WITH DUBIOUS
INTENTIONS.
THIS LEGISLATION WILL CREATE AN
ECONOMIC -- A CONSUMER BUREAU
THAT WILL END THOSE TYPES OF PRACTICES.
THAT WILL BE ON THE SIDE OF THE
CONSUMER.
THAT'S INDEPENDENT SO THE
CONSUMER IS REPRESENTED IN THE
FINANCIAL STRUCTURE.
I WANT TO HIGHLIGHT SOME
PROVISIONS THAT WERE INCLUDED IN
THIS LEGISLATION THAT I WORKED
ON WITH OUR COLLEAGUES TO GET
INCLUDED IN THE BILL, AND I'M
VERY GRATEFUL FOR SENATOR DODD
AND THE LEADERSHIP ON THE
BANKING COMMITTEE AND THE -- OUR
REPRESENTATIVES IN CONFERENCE
THAT WERE ABLE TO INCLUDE
PROVISIONS THAT I THINK ADD TO
THE IMPORTANCE OF THIS BILL.
THE FIRST PROVISION I WANT TO
TALK ABOUT IS A PROVISION I
WORKED WITH, WITH SENATOR ENZI
AND SENATOR BROWNBACK THAT WILL
MAKE PERMANENT THE FEDERALLY
INSURED DEPOSIT LIMITS FROM
$100,000 TO $250,000.
WE DID THAT RECENTLY IN ORDER TO
ENCOURAGE MORE DEPOSITS, TO HELP
OUR ECONOMY, TO PROVIDE CAPITAL
FOR BUSINESSES.
AND THIS LIMIT INCLUDED IN THIS
BILL IS NOW MADE PERMANENT AT
$250,000.
INSURED DEPOSITS ARE THE
STABILIZING FORCE FOR OUR
NATION'S BANKING SYSTEM FOR THE
PAST 75 YEARS.
IT PROMOTES THE CONFIDENCE,
PUBLIC CONFIDENCE IN OUR BANKING
SYSTEM AND IT PREVENTS BANK
RUNS.
IT'S PARTICULARLY IMPORTANT TO COMMUNITY BANKS.
I KNOW MANY OF US TALK ABOUT
WHAT WE CAN DO TO HELP OUR SMALL
BUSINESSES, HOW CAN WE FREE UP
MORE CREDIT TO GET SMALL
BUSINESSES THE LOANS THEY NEED
IN ORDER TO CREATE THE JOBS THAT
ARE NEEDED FOR OUR ECONOMY. AND WE ALL KNOW THAT COMMUNITY
BANKS ARE THE MOST STABLE SOURCE
OF FUNDS FOR INVESTMENTS IN OUR
COMMUNITY AND SMALL BUSINESSES.
WELL, SMALL -- COMMUNITY BANKS
RELY MORE ON INSURED DEPOSITS
THAN LARGE BANKS.
85% TO 90% OF THE FUNDS THAT
COMMUNITY BANKS HAVE ARE
INCLUDED IN INSURED DEPOSITS.
SO THIS AMENDMENT THAT WILL MAKE
PERMANENT THE $250,000 LIMIT
WILL HELP PROVIDE A MORE STEADY
SOURCE OF FUNDS FOR OUR
COMMUNITY BANKS THAT WILL ALLOW
THEM TO BE ABLE TO INVEST IN OUR COMMUNITY.
ANOTHER PROVISION THAT WAS
INCLUDED IN THIS CONFERENCE
PORT IS ONE THAT I WORKED
WITH, WITH MY COLLEAGUE FROM
MARYLAND, SENATOR MIKULSKI,
DEALING WITH THE ENHANCED
SUPERVISIONS FOR NON-BANK FINANCIAL COMPANIES.
WHAT WE'RE TALKING ABOUT HERE
ARE MUTUAL FUNDS AND THEIR
ADVISORS TO MAKE SURE THEY'RE
NOT INADVERTENTLY SUBJECT TO
UNWORKABLE STANDARDS.
HERE WE'RE TALKING ABOUT
PROMOTING FUNDS NESSARY FOR
VENTURE CAPITAL AND EQUITY
INVESTMENTS IN OUR COMMUNITY TO
MAKE SURE THERE'S A DIFFERENCE
BETWEEN THE TYPE OF ACTIVITIES
OF MUTUAL FUND OPERATORS THAT
RELY PRIMARILY ON RISK
INVESTMENT AND THOSE THAT ARE --
ARE PRIMARILY INVOLVED IN
INSURED DEPOSITS.
AND I APPRECIATE THE COMMITTEE
AND THE CONFERENCE REPORT
CLARIFYING THAT PROVISION THAT
SENATOR MIKULSKI AND I
ENCOURAGED THEM TO DO.
ANOTHER PROVISION I WANT TO TALK
ABOUT VERY BRIEFLY, I WORKED
WITH SENATOR GRASSLEY DEALING
WITH THE WHISTLE-BLOWER
PROTECTIONS WITH THE NATIONALLY
RECOGNIZED STATISTICAL RATING
ORGANIZATION NRSRO'S, AS THEY'RE
KNOWN, BUT I THINK MOST PEOPLE
IN OUR COUNTRY KNOW THEM AS
CREDIT RATING AGENCIES.
THESE ARE THE MOODY'S AND STANDARD & POOR'S.
THERE ARE ABOUT TEN IN OUR
COUNTRY THAT ARE SUPPOSED TO DO
INDEPENDENT CREDIT RATINGS FOR SECURITIES.
AND AS I'M SURE MANY PEOPLE ARE
NOW AWARE, THIS WOULD -- THEY
PLAYED A SIGNIFICANT ROLE IN THE
UNREALISTIC CONFIDENCE IN
SECURITIES DURING OUR RECENT
ECONOMIC DOWNTURN.
WE WANT TO MAKE SURE THAT OUR
CREDIT AGENCIES IN FACT CARRY
OUT THE RESPONSIBILITIES THEY'RE
SUPPOSED TO AS INDEPENDENT
EVALUATORS.
BUT COMPETITION PRESSURE AND
INHERENT CONFLICTS HAVE MADE
THAT UNCERTAIN.
THE WHISTLE-BLOWER PROTECTIONS
THAT ARE EXTENDED IN THIS
LEGISLATION ALLOWS -- ALLOW
EMPLOYEES TO COME FORWARD WITH
INFORMATION WITHOUT FEAR OF
RETRIBUTION BY THEIR EMPLOYER.
IT'S VERY IMPORTANT PROVISION
AND I'M GLAD THAT IT WAS
INCLUDED IN THE FINANCIAL
LEGISLATION.
AND LASTLY, LET ME TALK ABOUT
THE EXTRACTIVE INDUSTRIES
TRANSPARENCY INITIATIVE, AN
AMENDMENT THAT SENATOR LUGAR AND
I WORKED VERY HARD ON THAT'S
INCLUDED IN THE FINAL CONFERENCE
REPORT.
I'VE SPOKEN ON THE FLOOR
PREVIOUSLY ABOUT THIS PROVISION
AND I PARTICULARLY WANT TO THANK
SENATOR LEAHY FOR -- FOR HIS
LEADERSHIP IN THE CONFERENCE ON
THIS ISSUE AND SENATOR DODD FOR
HIS HELP IN GETTING IT INCLUDED
IN THE FINAL CONFERENCE REPORT.
OIL, GAS AND MINING COMPANIES
WILL BE REQUIRED UNDER THIS
LEGISLATION TO DISCLOSE THEIR
PAYMENTS TO GOVERNMENTS FOR
ACCESS TO OIL, GAS OR MINERALS
TO BE LISTED ON THE UNITED
STATES S.E.C., TO BE REGISTERED
WITH THE SECURITIES AND EXCHANGE
COMMISSION.
NOW, MANY OF THESE OIL COMPANIES
OR GAS COMPANIES OR MINERAL
COMPANIES OPERATE IN COUNTRIES
THAT ARE AUTOCRATIC, UNSTABLE OR
BOTH AND THEY HAVE TO PAY
PAYMENTS TO THOSE COUNTRIES IN
ORDER TO BE ABLE TO GET ACCESS
TO THOSE MINERAL RIGHTS.
THIS LEGISLATION, THE AMENDMENT
THAT'S INCLUDED IN THIS BILL,
WILL REQUIRE PUBLIC DISCLOSURE
OF THOSE PAYMENTS.
NOW, WHY IS THAT SO IMPORTANT
AND WHY WAS IT INCLUDED IN THE
FINAL CONFERENCE REPORT?
FIRST, TRANSPARENCY ENCOURAGES
AND PROVIDES FOR MORE STABLE
GOVERNMENTS.
AND WE RELY ON THESE ENERGY
SOURCES OR MINERAL SUPPLIES IN
COUNTIES THAT ARE QUESTIONABLE
AS FAR AS THEIR STABILITY.
IF THIS DISCLOSURE WILL HELP
MAKE THOSE COUNTRIES MOR
STABLE, IT PROVIDES SECURITY FOR
THE UNITED STATES IN THEIR
SUPPLY SOURCE, WHETHER IT'S AN
ENERGY OR MINERAL SUPPLY SOURCE.
SO THIS AMENDMENT THAT'S
INCLUDED IN THE CONFERENCE
REPORT WILL HELP WITH UNITED
STATES ENERGY SECURITY.
SECONDLY, INVESTORS HAVE A RIGHT TO KNOW.
IF YOU'RE GOING TO INVEST IN AN
OIL COMPANY, YOU HAVE A RIGHT TO
KNOW WHERE THEY'RE DOING
BUSINESS, WHERE THEY'RE MAKING
PAYMENTS.
THIS IS I WOULD THINK
INFORMATION THAT MAY AFFECT YOUR
DECISION AS TO WHETHER YOU WANT
TO TAKE THIS RISK IN INVESTING
IN THAT COMPANY.
SO THIS AMENDMENT PROVIDES
GREATER DISCLOSURE FOR INVESTORS
TO BE ABLE TO MAKE INTELLIGENT
DECISIONS AS TO WHETHER TO
INVEST IN AN OIL OR GAS OR
MINERAL COMPANY.
THIRD, AS WE KNOW, WITH THE LACK
OF TRANSPARENCY, THE PAYMENTS
BECOME A SOURCE OF CORRUPTION
FOR GOVERNMENT OFFICIALS IN MANY
OF THESE RESOURCE-WEALTHY COUNTRIES.
IT'S INTERESTING,
MADAM PRESIDENT, IT'S KNOWN AS
THE RESOURCE CURSE, NOT THE
RESOURCE BLESSING, IN MANY
COUNTRIES AROUND THE WORLD.
IT'S INTERESTING THAT SOME OF
OUR MOST WEALTHY MINERAL
COMPANIES ARE THE POOREST
COUNTRIES AS FAR AS THEIR PEOPLE
IN THE WORLD.
THE CITIZENS OF -- OF THESE
COUNTRIES ARE ENTITLED TO HAVE
THE -- THEIR MINERAL WEALTH BE
USED TO ELEVATE THEIR PERSONAL STATUS.
AND BY GIVING THE CITIZENS THE
INFORMATION ABOUT HOW PAYMENTS
ARE MADE TO THEIR COUNTRY, THEY
HAVE A MUCH BETTER CHANCE TO
HOLD THEIR GOVERNMENT OFFICIALS ACCOUNTABLE.
SO, MADAM PRESIDENT, WE NOT ONLY
ARE PROTECTING INVESTORS AND
HELPING IN ENERGY SECURITY, WE'RE HELPING TO ALLEVIATE
POVERTY INTERNATIONALLY BY
ALLOWING THE PEOPLE OF THE
COUNTRY THAT HAVE MINERAL WEALTH
TO HOLD THEIR OFFICIALS
ACCOUNTABLE TO USE THOSE FIEMENT
HELP THE PEOPLE OF -- USE THOSE
PAYMENTS TO HELP THE PEOPLE OF
THAT NATION.
THIS AMENDMENT HAS BEEN ENDORSED
BY THE G-8, BY THE INTERNATIONAL
MONETARY FUND, BY THE WORLD
BANK. AND WITH T PASSAGE OF THIS
CONFERENCE REPORT, THE UNITED
STATES WILL BE THE LEADER
INTERNATIONALLY ON EXTRACTIVE
INDUSTRIES TRANSPARENCY, AND I
THINK THAT'S A PROUD MOMENT NOT ONLY FOR THE UNITED STATES
SENATE BUT FOR OUR NATION.
THIS IS A GOOD BILL FOR MANY
YEARS.
IT'S WELL-ORGANIZED, COMMONSENSE
REGULATORY STRUCTURE TO PROTECT
OUR NATION FROM ANOTHER
FINANCIAL CRISIS WITH STRONG
INVESTOR AND CONSUMER
PROTECTION, PLACING LIMITS ON
INSTITUTIONS DEEMED TOO BIG TO
FAIL, PROTECTING NOT ONLY
INVESTORS AND CONSUMERS BUT ALSO
TAXPAYERS.
I URGE MY COLLEAGUES TO SUPPORT
THE CLOTURE VOTE AND THE PASSAGE.
AND, MADAM PRESIDENT, I WOULD
ASK UNANIMOUS CONSENT THAT MY
FULL REMARKS BE PRINTED IN THE RECORD.
THE PRESIDING OFFICER: WITUT
OBJECTION.
I WOULD YIELD THE FLOOR.
MR. CHAMBLISS: MADAM PRESIDENT?
THE PRESIDING OFFICER: THE
SENATORROMEOIA
CHAMBLISS: MADAM PRESIDENT,
I RISE TODAY IN STRONG
OPPOSITION TO H.R. 4173, AND I THINK IT'S INTERESTING TO NOTE
THAT WE'VE HAD A NUMBER OF
SPEAKERS OF THE PROPONENTS OF
THIS LEGISLATION TO COM
FORWARD, JUST AS MY GOOD FRIEND
FROM MARYLAND JUST DID, AND SAID
THAT WE'RE GOING TO BE THE
LEADER, THE UNITED STATES IS
GOING TO BE THE LEADER IN THE
FINANCIAL WORLD MARKET WITH THESE CHANGES.
WELL, THE FACT OF THE MATTER IS
THAT OTH COUNTRIES THAT HAVE
STRONG FINANCIAL MARKETS HAVE
SAID PUBLICLY JUST THE OPPOSITE.
AND WHAT I'M AFRAID WE'RE
SETTING OURSELVES UP FOR AND
WHAT I TALKED ABOUT A LOT DURING
THE COURSE OF THE DEBATE ON THE
FLOOR RELATIVE TO THIS BILL IS
THAT WHAT WE'RE GOING TO WIND UP
DOING IS WE'RE GOING TO BE
DRIVING JOBS AND BUSINESS
OVERSEAS WITH THIS MASSIVE PIECE
OF LEGISLATION THAT TRULY
DOESN'T ADDRESS THE PROBLEM.
MADAM PRESIDENT, THERE IS
NOTHING IN THESE 2,300 PAGES
THAT DEALS WITH THE PRIMARY
CATALYST OF MARKET INSTABILITY
INUR ECONOMY.
THE BAILOUT BILL OF FANNIE MAE AND FREDDIE MAC.
THIS BILL SIMPLY IGNORES THE
DEVASTATING IMPACT THAT THESE
TWO ENTITIES CONTINUE TO HAVE
NOT ONLY ON OUR CAPITAL MARKETS
BUT ALSO ON OUR NATION'S
DEFICIT.
ALREADY DEMANDING OVER
$145 BILLION IN TAXPAYER
ASSISTANCE AND WITH NO END IN
SIGHT AS TO WHAT IT'S ULTIMATELY
GOING TO COST THE TAXPAYERS OF
THIS COUNTRY.
IN THE NEWLY CREATED CONSUMER
PROTECTION BUREAU IS AN AFFIRMATION THAT THE PROPONENTS
OF THE LEGISLATION HAVE
ACKNOWLEDGED GOVERNMENT FAILURES
WERE A SIGNIFICANT CAUSE OF OUR
ECONOMIC TURMOIL, BUTHEY STILL
BELIEVE THAT BIGGER GOVERNMENT
IS THE SOLUTION GOING FORWARD
AND THAT DESPITE FAILURE AFTER
FAILURE AMONG VARIOUS REGULATORY
AGENCIES THAT A NEW AGENCY IS
THE ANSWER TO THESE SHORTCOMINGS
AND THAT THIS TIME IT'S GOING TO BE DIFFERENT.
INSTEAD OF ADDRESSING THE
PROBLEMS OF THE CONSUMER
PROTECTIONS IN PLACE UNDER OUR
RRENT REGULATORY STRUCTURE,
THIS NEW OVERSIGHT AGENCY IS AN
ADDED LAYER OF BUREAUCRACY WITH
THE AUTHORITY TO EXAMINE AND
FORCE NEW REGULATIONS FOR NOT
ONLY ALL MORTGAGE-RELATED
BUSINESSES BUT ALSO SMALL MOM
AND POP BUSINESSES ON MAIN
STREET, LIKE PAYDAY LENDERS,
CHECK CASHERS AND OTHER
NONFINANCIAL FIRMS.
THESE TYPES OF ENTITIES WERE
CLEARLY NOT THE CAUSE OF THE
ECONOMIC CRISIS, AND YET THEY
WILL NOW BE SUBJECT TO THE SAME
REGULATIONS AS THE LARGE
FINANCIAL INSTITUTIONS ON WALL STREET.
THIS IS SIMPLY ANOTHER EXAMPLE
OF THE MAJORITY PARTY'S
PREFERENCE FOR A
ONE-SIZE-FITS-ALL REGULATORY
STRUCTURE STIFLING ECONOMIC
GROWTH.
HAVING PARTICIPATED IN THE
CONFERENCE COMMITTEE, I
UNFORTUNATELY WITNESSED "1ST AND
10" THE COMPLETE DISREGARD FOR
ADDRESSING THE REAL ISSUES AT
HAND.
AS RANKING MEMBER OF THE
AGRICULTURE COMMITTEE, I HAVE
SPENT A GREAT DEAL OF TIME
UNDERSTANDING THE
OVER-THE-COUNTER DERIVATIVES
MARKET, ITS COMPLEXITIES AND ITS
LEGITIMATE UTILITY.
I HAVE FOUND THAT BOTH
REPUBLICANS AND DEMOCRATS
GENERALLY AGREE ON THE MAJOR
ISSUES RELATING TO DERIVATIVES
REGULATION.
WE ALL GENERALLY AGREE THAT
THERE NEEDS TO BE GREATER
TRANSPARENCY, REGISTRATION, MORE
CLEARING AND COMPLIANCE WITH A
WHOLE HOST OF BUSINESS CONDUCT
AND EFFICIENT MARKET OPERATION
REGULATIONS.
AND THIS IS IMPORTANT BECAUSE IT
IS A 180-DEGREE SHIFT AWAY FROM
CURRENTAW WHERE
OVER-THE-COUNTER SWAPS ARE
ESSENTIALLY UNREGULATED TODAY.
WITHIN THIS GENERAL AGREEMENT
THAT SWAPS NEED TO GO FROM
UNREGULATED TO FULLY REGULATED,
WE HAVE HAD DISAGREEMENTS ABOUT
WHO SHOULD BE REQUIRED TO CLEAR
THEIR TRANSACTIONS AND HOW BEST
TO REQUIRE SWAPS TO BE
TRANSACRAMENTOD AND REPORTED.
AND THESE DISAGREEMENTS ARE
SIGNIFICANT BECAUSEHEY INVOLVE
REAL BURDENS AND DUTIES WHICH
WILL RESULT IN REAL COSTS TO
BUSINESSES AND CONSUMERS.
I WANT TO MAKE SURE OUR NEW
REGULATIONS ARE TARGETED TO
SERVE A USEFUL PURPOSE.
UNFORTUNATELY, THIS LEGISLATION
WILL ENABLE REGULATORS TO IMPOSE
RESTRICTIONS ON BUSINESSES THAT
HAD ABSOLUTELY NOTHING TO DO
WITH CREATING THE FINANCIAL CRISIS.
EVERY INDUSTRY IN THE COUNTRY
USES DERIVATIVES TO MANAGE THEIR
BUSINESS RISKS, AND MANY OF THEM
WILL NOW BE FORCED TO CLEAR
THEIR DERIVATIVE TRANSACTIONS.
THIS SEEMS SIMPLE ENOUGH UNTIL
YOU REALIZE THAT CLEARING DOES
NOT MAKE RISK WITHIN THE
FINANCIAL SYSTEM DISAPPEAR.
RISK IS SIMPLY TRANSFERRED FROM
THE INDIVIDUAL COUNTERPARTIES TO
THE CLEARING HOUSES, A SERVICE
PROVIDED AT CONSIDERABLE EXPENSE
IN THE FORM OF MARGIN POSTED TO
THE CLEARINGHOUSE.
SO THIS BILL WOULD NOT ELIMINATE
RISK, BUT IT SIMPLY TRANSFERS
RISK FROM ONE PLACE TO ANOTHER
AND IMPOSES COSTS ON MARKET
PARTICIPANTS THAT HAD NOTHING TO
DO WITH CREATING T FINANCIAL CRISIS.
I TRULY FEAR THAT CONSUMERS WILL
ULTIMATELY PAY THE PRICE.
FOR EXAMPLE, THIS LEGISLATION
WOULD FORCE THE FARM CREDIT
SYSTEM INSTITUTIONS TO RUN THEIR
INTEREST RATE SWAPS THROUGH A
CLEARINGHOUSE WHICH WILL RESULT
IN ADDITIONAL COSTS IN THE FORM
OF HIGHER INTEREST RATES TO
THEIR CUSTOMERS WITHOUT DOING
ANYTHING TO LESSEN THE SYSTEMIC RISK.
AND LET ME BE CLEAR AS TO WHO
THIS WILL ULTIMATELY AFFECT, AND
IT IS VERY CLEAR THAT OUR
FARMERS AND RANCHERS, OUR
ELECTRIC COOPERATIVES AND OUR
ETHANOL
FINANCING FROM THESE
INSTITUTIONS WILL BEAR THIS BURDEN.
INSTITUTIONS LIKE COBANK WILL BE
FORCEED TO CLEAR THEIR SWAPS AND
EXECUTE THEM ON A TRADING
FACILITY WHICH WILL IMPOSE
SIGNIFICANT NEW COSTS AND RESULT
IN HIGHER RATES FOR THEIR
CUSTOMER OR, WORSE, DISCOURAGE
THEM FROM MANAGING THEIR RISK,
WHICH WILL AGAIN RESULT IN
HIGHER COSTS FOR THEIR
BORROWERS.
AND WHY?
BECAUSE THIS LEGISLATION BROADLY
APPLIES REGULATION, TREATING ALL
FINANCIAL INSTITUTIONS THE SAME.
COBANK AND GOLDMAN SACHS ARE NOT
THE SAME AND SHOULD NOT BE
REGULATED IN THE SAME MANNER.
COBANK SHOULD HAVE THE OPTION TO
CLEAR THEIR SWAPS, NOT MANDATE
IT TO DO SO.
WHILE T CONFERENCE REPORT
PROVIDES AN EXEMPTION FOR SOME
BUSINESS FROM THIS
DERIVATIVE-CLEARING MANDATE, IT
ALSO IMPOSES NEW MARGIN
REQUIREMENTS ON DERIVATIVE
DEALERS FOR THESE SAME UNCLEAR TRANSACTIONS.
AND WHO WILL LIKELY PAY FOR
THESE NEW MARGIN REQUIREMENTS IN
THE FORM OF HIGHER FEES AGAIN?
IT'S PRETTY CLEAR THAT THE
PUBLIC AND PRIVATE COMPANIES
ACROSS THE NATION THAT HAD
NOTHING TO DO WITH THE FINANCIAL
CRISIS AND THAT ARE SIMPLY
SEEKING TO MINIMIZE RISK WILL
BEAR THIS BURDEN.
THE ENTIRE POINT OF EXEMPTING
SOME OF THEM FROM THE CLEARING
MANDATE WAS TO MAKE SURE THAT
THEY DO NOT BEAR THE BURDEN OF
INCREASED MARGIN COSTS, BUT THIS
LANGUAGE WOULD INDIRECTLY
SUBJECT THESE BUSINESSES TO THE
EXPENSE OF MARGINS IMPOSED ON
THEIR DEALER COUNTERPARTIES,
COUNTERPARTIES THAT WILL BE
FORCED TO RECOUP THIS COST IN
THE FORM OF FEES AND BUSINESSES
WILL BE FORCED TO PASS THEIR
COSTS ON TO CONSUMERS.
AND MADAM CHAIRMAN, I WOULD
ENCOURAGE ALL MEMBERS OF THIS
BODY TO LOOK AT YESTERD'S
"WALL STREET JOURNAL."
THERE IS A FRONT-PAGE STORY ON
DERIVATIVES, AND WHEN WE GET ON
THE FLOOR HERE AND START
DEBATING DERIVATIVES, MOST
PEOPLE'S EYES GLAZE OVER BECAUSE
IT IS COMPLEX AND AN ISSUE THAT
IS VERY DIFFICULT TO UNDERSTAND,
BUT IN THAT ARTICLE, IT EXPLAINS
THE SIMPLICITY THAT -- THAT THE
DERIVATIVES WORLD IMPARTS ITSELF
IN, BECAUSE WHAT THE ARTICLE
TALKS ABOUT IS IT GOES THROUGH A
STAGE OF A FARMER IN NEBRASKA
AND HIS USE OF DERIVATIVES AND
THEN HIS ULTIMATE PURCHASER OF
HIS PRODUCT, THE RANCHER AND HOW
THAT RANCHER USES DERIVATIVES TO
ELIMINATE RISK AND HOPEFULLY
GUARANTEE A PROFIT IN HIS
BUSINESS, AND THEN HOW THE
SLAUGHTER HOUSE TAKES THE
PRODUCT FROM THE LIVTOCK
OPERATOR, THE MARKET OPERATOR
AND USES DERIVATIVES IN THEIR
BUSINESS, AND THEN ULTIMATELY
THE GUY THAT OWNS THE TRUCKING
COMPANY AND HOW HE USES
DERIVATIVES.
AND IT'S VERY CLEAR IN THIS
ARTICLE THAT THESE GUYS' LIFE IS
GOING TO CHANGE FROM A BUSINESS
PERSPECTIVE, AND THEY'RE NOT
GOING TO BE ABLE TO USE
DERIVATIVES IN THE WAY THAT THEY
HAVE USED IT BEFORE.
THEY HAD NOTHING TO DO WITH THE
FINANCIAL CRISIS THAT DEVELOPED
IN THIS COUNTRY, BUT YET THEY'RE
GOING TO BE CREATED ONCE AGAIN
IN THE SAME WAY AS A GOLDMAN
SACHSR OTHER MAJOR SWAPS AND
DERIVATIVES DEALERS.
ALSO RELATED TO DERIVATIVES,
THERE WERE CONSIDERABLE
IMPROVEMENTS MADE TO THE
SO-CALLED SWAP DESK PUSHO
PROVISION, AND I COMMEND THE
CHAIRMAN FOR HIS WORK ON THAT.
BANKS WOULD BE ABLE TO CONTINUE
TO ENGAGEN INTEREST RATE AND
FOREIGN CURRENCY SWAPS, WHICH IS
ESSENTIAL TO THE BUSINESS OF
BANKS.
HOWEVER, I REMAIN CONCERNED THAT
FORCING SWAP DEALER BANKS TO
SPIN-OFF THEIR COMMODITY TRADING
WILL HURT THOSE UTILITIES AND
AIRLINES WISHING TO HEDGE THEIR
ENERGY RISKS IN THE IMMEDIATE FUTURE.
THEY WILL BE FORCED TO ESTABLISH
NEW CREDIT RATINGS AND STANDINGS
WITH THESE AFFILIATES RATHER
THAN TAKE ADVANTAGE OF THEIR
LONG-STANDING RELATIONSHIP WITH
THEIR CURRENT BANK, AND I FAIL
TO UNDERSTAND WHY FORCING THESE
ENTITIES TO SPIN-OFF ANY ASPECT
OF THEIR SWAP BUSINESS IS NECESSARY.
I WHOLEHEARTEDLY SUPPORT EFFORTS
TO MAKE THE SWAPS MARKET MORE TRANSPARENT.
IT NEEDS TO BE.
I BELIEVE THIS WILL BE
ACCOMPLISHED ONCE REGULATORS
HAVE ACCESS TO THE DATA WHICH
HAS TO DATE BEEN COMPLETELY
UNAVAILABLE TO THEM.
THE PUBLIC WILL BENEFIT FROM
KNOWING O IS PARTICIPATING IN
THESE MARKETS, AND WE WILL
FINALLY HAVE THE DATA WE NEED TO
MAKE INFORMED POLICY DECISIONS
RELATED TO DERIVATIVES.
OUR ECONOMY NEEDS MORE
OPPORTUNITIES FOR ALL BUSINESSES
TO GROW AND PROSPER.
TIME AND AGAIN, IT IS THE SMALL
AND MEDIUM-SIZED BUSINESSES THAT
CREATE THE LION'S SHARE OF JOBS
AFTER A MAJOR ECONOMIC
RECESSION, AND WE NEED TO FOSTER
AND INCUBATE THESE SMALL AND
MEDIUM-SIZED BUSINESSES RIGHT
NOW AND NOT HAMPER THEM.
WE NEED TO ENSURE THAT THEY ARE
ABLE TO ACCESS CAPITAL AND
MANAGE THEIR RISK THROUGH THE
AWES OF DERIVATIVES.
RIGHT NOW, THERE ARE A LOT OF
THESE SMALL AND MEDIUM-SIZED
COMPANIES THAT ARE READY TO
EXPAND BUT CANNOT GET ADEQUATE
ACCESS TO CAPITAL BECAUSE
LENDERS ARE SAYING THAT IT'S TOO
RISKY AND REGULATORS WON'T ALLOW
THESE LENDERS TO HELP.
SO, MADAM PRESIDENT, I BELIEVE
THERE IS A NEED TO RESPOND TO
WHAT WENT WRONG IN OUR FINANCIAL
SYSTEM AND I SUPPO DOING SO IN
A RESPONSIBLE WAY THAT WILL
CONTINUE TO ALLOW MAIN STREET
BUSINESSES TO MANAGE THEIR RISK
APPROPRIATELY, HOLD THESE --
HOLD THOSE RESPONSIBLE FOR THIS
MESS ACCOUNTABLE AND NOT CREATE
HUGE NEW GOVERNMENT
BUREAUCRACIES. UNFORTUNATELY, THIS LEGISLATION
FALLS SHORT OF THESE GOALS.
I AM PLEASED THAT THE CHAIRMAN
OF THE BANKING COMMITTEE IS HERE
BECAUSE I DO WANT TO SAY
PUBLICLY -- AND I'VE TOLD HIM
THIS PRIVATELY AND I WILL
CONTINUE TO SAY IT -- THAT HE
HAD A VERY DIFFICULT JOB, AND
WHILE WE DISAGREED ON A LOT OF
MAJOR ISSUES HERE, HE WAS ALWAYS
OPENOR DISCUSSION.
HE ALLOWED PARTICIPATION ON THE
FLOOR AS WELL AS DISCUSSIONS OFF
THE FLOOR, AND FOR THAT, I THANK
HIM.
HE KNOWS THAT I OBVIOUSLY CANNO
VOTE FOR THIS BILL, BUT HE HAS
PROVED HIMSELF TO BE A VERY
VALUED MEMBER OF THE SENATE B
THE WAY HE HAS CONDUCTED HIMSELF
THROUGHOUT THIS WHOLE PROCESS,
AND FOR THAT I THANK HIM.
?uMADAM CHAIRMAN, I YIELD THE
FLOOR.
MR. DODD: BEFORE MY COLLEAGUE
FROM GEORGIA LEAVES, LET ME
THANK HIM AS WELL.
OF COURSE, HOPE ALWAYS SPRINGS
ETERNAL.
THE VOTE HASN'T OCCURRED YET, SO
YOU NEVER KNOW, WE MIGHT GET HIS
VOTE YET IN ALL OF THIS.
BUT LET ME THANK HIM AS WELL.
I DON'T SERVE ON THE AG
COMMITTEE WITH HIM.
SENATOR CHAMBLISS WAS A VERY
VALUED MEMBER OF THIS CONFERENCE
AND OBVIOUSLY DID A LOT OF WORK
IN THE AG COMMITTEE DEALING WITH
THE AREAS OF THE BILL THAT HE
HAS JUST SPENT SEVERAL MINUTES
TALKING ABOUT, AND HE
VERY GOOD POINTS.
I WOULD BE THE LAST PERSON TO
SUGGEST, AS THE CO-AUTHOR OF
THIS BILL, THAT WE HAVE CRAFTED
THE PERFECT PIECE OF
LEGISLATION.
AS HE POINTS OUT, THESE ARE
HIGHLY COMPLICATED AREAS.
ONE OF THE REASONS WE TRIED NOT
TO WRITE A SERIES OF REGULATIONS
FAR BEYOND THE COMPETENCY OF
THOSE OF US IN THIS CHAMBER IS
BECAUSE IT IS COMPLICATED, AND
OBVIOUSLY WE HAVE DELEGATED THE
ULTIMATE RESPONSIBILITY THAT WE
NOW HAVE TO WATCH IN OVERSIGHT
FROM THE REGULATORY COMMUNITY TO
MAKE SURE THEY DO THIS RIGHT.
I POINTED OUT YESTERDAY AND HE
HAS POINTED OUT AGAIN TODAY WHEN
YOU GET INTO A SITUATION LIKE IN
THIS CRISIS, CERTAIN WORDS
BECOME PEJORATIVES AND
DERIVATIVES UNFORTUNATELY HAS
BECOME THAT, AND IT SHOULDN'T.
THESE ARE VERY CRITICAL
COMPONENTS FOR CAPITAL
FORMATION, JOB GROWTH AND WEALTH
CREATION IN OUR COUNTRY.
HEDGING AGAINST RISK IS
ABSOLUTELY ESSENTIAL.
THEY ARE A VITALLY IMPORTANT
ELEMENT IN OUR ECONOMY.
AND IOPE THAT PEOPLE WHEN THEY
HEAR THE WORD DERIVATIVE BEING
SPOKEN OF, THEY DON'T ASSUME
THAT SOMEHOW THIS IS A BAD IDEA.
YOU ALMOST GET THE SENSE THAT
PEOPLE FEEL THAT.
SO I LOOK FORWARD IN THE COMING
WEEKS AND MONTHS AS THE
REGULATORS BEGIN TO WORK WITH
THIS BILL IF, IN FACT, IT
PASSES, TO DO THAT.
A LOT OF THE RECORD THAT HAS
BEEN ESTABLISHED IN ALL OF THIS
AREA IN NO SMALL MEASURE IS
TO THE SENATOR FROM GEORGIA, AND
I THANK
WORK AS WELL.
MR. PRESIDENT -- MADAM
PRESIDENT, I YIELD THE FLOOR.
MR. DODD: MADAM PRESIDENT, I
WOULD NOTE THE ABSENCE OF A
QUORUM AND ASK THAT THE TIME BE
EQUALLY
IF I MAY.
THE PRESIDING
OBJECTION.
THE CLERK WILL CALL THE ROLL.
QUORUM CALL:
QUORUM CALLQUORUM CALL:
QUORUM CALL:
MR. SHELBY: MADAM PRESIDENT?
THE PRESIDING OFFICER: THE
SENATOR FROM ALABAMA.
MR. SHELBY:
CONSENT TH THE QUORUM CALL BE
DISPENSED WITH.
THE PRESIDING OFFICER: WITHOUT
OBJECTION.
MR. SHELBY: MADAM PRESIDENT, I
RISE TODAY TO OFFER SOME REMARKS
ON THE DODD-FRANK REGULATION
CONFERENCE REPORT WHICH IS NOW
BEFORE THE SENATE.
MADAM PRESIDENT, NEARLY TWO
YEARS AGO, THE FINANCIAL CRISIS
EXPOSED MASSIVE DEFICIENCIES IN
THE STRUCTURE AND THE CULTURE OF
OUR FINANCIAL REGULATORY SYSTEM.
YEARS OF TECHNOLOGICAL ADVANCES,
PRODUCT DEVELOPMENT, AND THE
ADVENT OF GLOBAL CAPITAL MARKETS
RENDERED THE SYSTEM ILL-SUITED
TO ACHIEVE ITS MISSION IN THE
MODERN ECONOMY.
MADAM PRESIDENT, DECADES OF
INSULATION FROM ACCOUNTABILITY
DISTRACTED REGULATORS FROM
FOCUSING ON THAT MISSION.
INSTEAD OF ACTING TO PRESERVE
SAFE AND SOUND MARKETS, THE
REGULATORS PRIMARILY BECAME
FOCUSED ON EXPANDING THE SCOPE
OF THEIR BUREAUCRATIC REACH.
AND AFTER THE CRISIS WHICH COST
TRILLIONS OF DOLLARS AND
MILLIONS OF JOBS, IT WAS CLEAR
THAT SIGNIFICANT REFORM WAS NECESSARY.
BUT DESPITE BROAD AGREEMENT ON
THE NEED FOR REFORM, THE
MAJORITY DECIDED IT WOULD RATHER
MOVE FORWARD WITH A PARTISAN
BILL.
THE RESULT IS A 2,300-PAGE LEGISLATIVE NSTER I BELIEVE
BEFORE US THAT EXPANDS THE SCOPE
AND THE POWER OF INEFFECTIVE
BUREAUCRACIES.
IT CREATES VAST NEW
BUREAUCRACIES WITH LITTLE
ACCOUNTABILITY AND SERIOUSLY I
BELIEVE UNDERMINES THE
COMPETITIVENESS OF THE AMERICAN ECONOMY.
UNFORTUNATELY, THE BILL DOES
VERY LITTLE TO MAKE OUR
FINANCIAL SYSTEM SAFER.
THEREFORE, I WILL OPPOSE THE
DODD-FRANK BILL AND URGE MY
COLLEAGUES TO DO THE SAME.
MADAM PRESIDENT, THIS WAS NOT A
PREORDAINED OUTCOME.
IT IS THE DIRECT RESULT OF THE
DECISIONS MADE BY THE OBAMA ADMINISTRATION.
HAD THEY SINCERELY WANTED TO
PRODUCE A BIPARTISAN BILL, I
HAVE NO DOUBT THAT WE COULD HAVE
CRAFTED A STRONG BILL THAT WOULD
HAVE GARNERED 80 OR MORE VOTES
THE SENATE.
IF THE AMERICAN PEOPLE HAVEN'T
NOTICED BY NOW, THAT IS HOW --
NOT HOW THINGS WORK UNDER THE
DEMOCRATIC RULE.
UNFORTUNATELY, MADAM PRESIDENT,
THE PARTISAN MANNER IN WHICH
THIS BIL WAS CONSTRUCTEDS NOT
ITS GREATEST SHORTCOMING.
ONE WOULD HAVE ASSUMED THAT THE
SCOPE OF THE CRISIS, TRILLIONS
OF DOLLARS LOST AND MILLIONS OF
JOBS ELIMINATED WOULD HAVE
COMPELLED THE BANKING COMMITTEE
TO SPEND THE TIME NECESSARY TO
THOROUGHLY EXAMINE THE CRISIS
AND DEVELOP THE BEST POSSIBLE
LEGISLATION IN RESPONSE.
UNFORTUNATELY, MADAM PRESIDENT,
SUCH AN ASSUMPTION WOULD BE
ENTIRELY UNFOUNDED HERE.
THE BANKING COMMITTEE NEVER
PRODUCED A SINGLE REPORT ON OR
CONDUCTED AN INVESTIGATION INTO
ANY ASPECT OF THE FINANCIAL
CRISIS.
IN CONTRAST, DURING THE GREAT
DEPRESSION, THE BANKING
COMMITTEE SET UP AN ENTIRE
SUBCOMMITTEE TO EXAMINE WHAT
REGULATORY REFORMS WERE NEEDED.
THE PECORRA COMMISSION, AS IT
BECAME TO BE KNOWN, INTERVIEWED
UNDER OATH THE BIG ACTORS ON
WALL STREET AND PRODUCED A
MULTIVOLUME REPORT.
UNFORTUNATELY, THIS TIME AROUND,
THE DEMOCRATIC-RUN COMMITTEE
GAVE WALL STREET EXECUTIVES A
PASS, I BELIEVE.
THERE WERE NO INVESTIGATIONS, NO
DEPOSITIONS, AND NO SUBPOENAS.
IN FACT, MADAM PRESIDENT,
CHAIRMAN DODD, MY FRIEND AND
COLLEAGUE, NEVER CALLED ON THE
LIKES OF RUBIN, LLOYD
BLANKENFEIN, OR MOZILLO TO
TESTIFY BEFORE THE BANK
COMMITTEE.
NOT A SINGLE INDIVIDUAL FROM
A.I.G.'S FINANCIAL PRODUCTS DIVISION WAS QUESTIONED BY THE
COMMITTEE OR ITS STAFF.
ALSO CONGRESS DID ESTABLISH THE
FINANCIAL CRISIS INQUIRY
COMMISSION, WE DID HERE, TO DO
THE WORK THE MAJORITY PARTY I
BELIEVE REFUSED TO DO, THE
COMMISSION'S WORK WILL NOT BE
COMPLEED, MADAM PRESIDENT,
UNTIL THE END OF THIS YEAR.
MOST AMAZINGLY, THE BANKING
COMMITTEE DID NOT HOLD EVEN A
SINGLE HEARING ON THE FINAL BILL
BEFORE ITS MARKUP.
THE COMMITTEE NEVER TOOK THE
TIME TO RECEIVE PUBLIC TESTIMONY
OR SURVEY EXPERTS ABOUT THE
LIKELY OUTCOMES THAT THE
LEGISLATION WOULD PRODUCE.
WE KNOW THAT THE MAJORITY HEARD
FROM WALL STREET LOBBYISTS,
GOVERNMENT REGULATORS, AND
LIBERAL ACTIVISTS BUT THEY
CLEARLY DECIDED WHAT THEY DID
NOT WANT THE AMERICAN PEOPLE TO
HAVE A CHANCE TO UNDERSTAND AND
COMMENT ON THEIR BILL, THE BILL
BEFORE US TODAY, BEFORE IT WAS
ENACTED.
THE QUESTION IS WHY.
THE MAJORITY KNOWS THAT THIS
LL, I BELIEVE, IS A JOB KILLER
AND WILL SADDLE AMERICANS WITH
BILLIO OF DOLLARS OF HIDDEN
TAXES AND FEES.
ALLOWING TO PUBLIC TO WEIGH IN
ON THIS BILL WOULD HAVE SPELLED
THE END OF THE DEMOCRATIC
VERSION OF REFORM THAT'S BEFORE
US TODAY.
MADAM PRESIDENT, I BELIEVE WE
OWED MORE TO THOSE WHO LOST
THEIR JOBS, THEIR HOMES, AND
THEIR LIFE SAVINGS.
THIS TRULY I BELIEVE IT WAS A
MISSED OPPORTUNITY.
THE DIFFERENCE, MADAM PRESIDENT,
BETWEEN WHAT WE NEEDED TO DO,
WHAT WE COULD HAVE DONE AND WHAT
THE MAJORITY HAS CHOSEN TO DO IS
CONSIDERABLE AND I WILL SPEAK ON
THIS.
CONGRESS COULD HAVE FOCUSED THIS
LEGISLATION ON FINANCIAL
STABILITY.
IT COULD HAVE UTILIZED THE
FINDINGS OF THE FINANCIAL CRISIS
INQUIRY COMMISSION.
INSTEAD, THE DEMOCRATIC MAJORITY
CHOSE TO ADOPT LEGISLATIVE
LANGUAGE PENNED BY FEDERAL
REGULATORS IN SEARCH OF EXPANDED
SURF.
THEY CHOSE TO LEGISLATE FOR THE
POLITICAL FAVOR OF COMMUNITY
ORGANIZER GROUPS AND LIBERAL
ACTIVISTS SEEKING EXPANSIVE NEW
BUREAUCRACIES THAT THEY COULD
LEVERAGE FOR THEIR OWN POLITICAL ADVANTAGE.
THE RESULT HERE IS AN ACTIVIST
BILL THAT HAS LITTLE TO DO,
MADAM PRESIDENT, WITH THE RECENT
OR ANY CRISIS AND A LOT TO DO
WITH EXPANDING THE GOVERNMENT TO
SATISFY SPECIAL INTERESTSMENT
CONGRESS COULD HAVE WRITTEN A BILL, MADAM PRESIDENT, TO
ADDRESS THE PROBLEM OF
TOO-BIG-TO-FAIL ONCE AND FOR ALL.
IN FACT, THE SHELBY-DODD
AMENDMENT BEGAN TO ADDRESS THIS
PROBLEM RIGHT HERE ON THE FLOOR.
UNFORTUNATELY, THE DEMOCRATS
ONCE AGAIN OVERREACHED I BELIEVE
AT THE 11th HOUR AND
UNDERMINED THE SERIOUSNESS OF
OUR EFFORTS BY EMPHASIZING
SOCIAL ACTIVISM OVER FINANCIAL STABILITY.
DEMOCRATS INSISTED THAT THE
OVERALL FINANCIAL STABILITY
MISSION OF THE FINANCIAL
STABILITY OVERSIGHT COUNCIL I
BELIEVE WAS LESS IMPORTANT THAN
THE POLITICAL NEEDS OF CERTAIN
PREFERRED CONSTITUENCIES.
THIS DANGEROUS MIXING OF SOCIAL
ACTIVISM AND FINANCIAL STABILITY
FOLLOWS THE ECT SAME MODEL,
MADAM PRESIDENT, THAT LED US TO
THE CRISIS IN THE FIRST PLACE;
THAT IS, PRIVATE ENTERPRISE
CO-OPTED THROUGH POLITICAL
MANDATES TO ACHIEVE SOCIAL GOALS.
FANNIE AND FREDDIE PROVED THAT
THIS DEFINITION CAN BE HIGHLY
DESTRUCTIVE.
CONGRESS COULD HAVE WRITTEN,
MADAM PRESIDENT, LEGISLATION TO
ADDRESS KEY ISSUES THAT PLAYED A
ROLE IN THE RECENT CRISIS.
ON GOVERNMENT-SPONSORED
ENTERPRISES, FANNIE AND FREDY,
THE BILL IS SILEN ASIDE FROM A
MERE STUDY.
ON THE TRI-PARTY REPO MARKET,
THE BILL IS SILENT.
ON RUNS IN MONEY MARKETS, THE
BILL IS SILENT.
ON THE RELIANCE OF MARKET
PARTICIPANTS ON SHORT-TERM
COMMERCIAL PAPER FUNDING, THE
BILL IS SILENT.
MADAM PRESIDENT, ON MATURITY
TRANSFORMATIONS THAT ALLOWED THE
SHADOW BANKING SYSTEM TO
EFFECTIVELY CREATE MONEY OUT OF
AAA-RATED SECURITIES, THEREBY
MAKE THE SYSTEM MUCH MORE
VULNERABLE, THE BILL IS SILENT.
ON THE FINANCIAL SYSTEM'S
OVERALL VULNERABILITY TO
LIQUIDITY CRISIS -- CRISES, THE
BILL, AGAIN, IS SILENT.
MADAM PRESIDENT, WE KNOW WITH
CERTAINTY THAT ALL OF THESE
FACTORS, NONE OF WHICH ARE
ADDRESSED IN THE BILL, WERE
INTEGRAL TO THE RECENT FINANCIAL CRISIS.
AND WHILE WE DO NOT WANT TO
WRITE LEGISLATION THAT ONLY
DEALS WITH THE LAST CRISIS, WE
DO WANT TO ENACT A LAW THAT
ADDRESSES WHAT WE KNOW ARE
SYSTEMIC PROBLEMS.
THIS BILL FAILS TO DO SO.
CONGRESS COULD HAVE WRITTEN A
BILL TO STREAMLINE REGULATION
AND ELIMINATE THE GAPS THAT
FIRMS EXPLOIT IN THE RACE TO THE
REGULATORY BODY.
THIS BILL DOES THE OPPOSITE BY
MAKING OUR FINANCIAL REGULATORY
SYSTEM EVEN MORE COMPLEX.
WE WILL STILL HAVE THE FED, THE
FDIC, THE S.E.C., THE CFTC, THE
O.C.C. AND THE REMAINDER OF THE
REGULATORY ALPHABET SOUP.
IN FACT, MOST OF THE EXISTING
REGULATORS THAT SO RECENTLY
FAILED US HAVE BEEN GIVEN
EXPANDED POWER AND SCOPE.
THIS BILL ALSO WILL ADD NEW
LETTERS TO THE ALREADY CONFUSED
SOUP, SUCH AS CFBP AND O.F.R.
IN ADDITION TO INCREASED
REGULATORY COMPLEXITY, THERE
WILL BE NEW SPECIAL ACTIVT
OFFICES WITH EACH REGULATOR FOR
ALMOST EVERY IMAGINABLE SPECIAL
INTEREST.
MADAM PRESIDENT, CONGRESS COULD
HAVE SET UP REASONABLE NEW
RESEARCH CAPABILITIES IN ITS NEW
STABILITY OVERSIGHT COUNCIL TO
COMPLEMENT FINANCIAL RESEARCH
PERFORMED BY THE FINANCIAL
RESERVE AND OTHERS.
INSTEAD, THE DEMOCRATS DECIDED
TO ESTABLISH THE OFFICE OF
FINANCIAL RESEARCH WITH AN
UNCONSTRAINED DIRECTOR AND A
FOCUS ON BROAD INFORMATION
COLLECTING AND PROCESSING.
I BELIEVE THAT THIS OFFICE WILL
ONLY -- NOT ONLY FAIL TO DETECT
SYSTEMIC THREATS AND THE ASSET
PRICE BUBBLES IN THE FUTURE, IT
WILL THREATEN CIVIL LIBERTIES
AND THE PRIVACY OF AMERICANS,
WASTE BILLIONS OF DOLLARS OF
TAXPAYER RESOURCES, AND LULL
MARKETS INTO THE FALSE BELIEF
THAT THE NEW GOVERNMENT POWER
WILL PROTECT THE FINANCIAL
SYSTEM FROM RISKY TRADES.
CONGRESS COULD, MADAM PRESIDENT,
COULD HAVE BEEN TRANSPARENT IN
IDENTIFYING THE BILL'S FISCAL
EFFECTS AND COSTS.
INSTEAD, THE MAJORITY WROTE A
BILL THAT HIJACKS TAXPAYER
RESOURCES BUT HIDES THAT FACT
FROM PUBLIC VIEW.
AND JUST AS THE ADMINISTRATION
REFUSES TO ACKNOWLEDGE TRILLIONS
OF DOLLARS OF CONTINGENT
TAXPAYER LIABILITIES RESIDING
WITH FANNIE AND FREDDIE, THIS
BILL PROVIDES AMERICANS WITH A
TRANSPARENT VIEW OF THE COST OF
THE NEW MULTIBILLION-DOLLAR
CONSUMER PROTECTION BUREAUCRACY.
ACCORDING TO THE REPORT ON THE
BILL OFFERED BY THE MAJORITY,
THE CONSUMER BUREAUCRACY'S
BUDGET IS, AND I QUOTE -- "PAID
FOR BYHE FEDERAL RESERVE
SYSTEM."
MADAM PRESIDENT, MAKE NO
MISTAKE, PAID FOR BY THE HE FED
MEANS PAID FOR ULTIMATELY BY THE TAXPAYERS.
TAXPAYERS WILL BE ON THE HOOK
FOR BILLIONS OF DOLLARS OF
UNCHECKED, UNENCUMBERED AND
UNAPPROPRIATED SPENDING FINANCED
BY THE INFLATIONARY MONEY
PRINTING AUTHORITY OF THE FEDERAL RESERVE WHICH WILL BE
HIDDEN FROM THE AMERICAN PEOPLE
IN THE ARCANE FEDERAL BUDGET.
CONGRESS COULD, MADAM PRESIDENT,
HAVE ALSO USED THIS LEGISLATIVE
OPPORTUNITY TO BEGIN THEROCESS
OF REFORMING THE FAILED MORTGAGE
GIANTS FANNIE AND FREDDIE WHOSE
EVER-GROWING BAILOUTS HAVE NO
UPPER LIMIT.
WHEN IT BECAME CLEAR THIS SYSTEM
WAS NOT THE INTENTION OF THE
DEMOCRATS, REPUBLICANS SOUGHT TO
ADDRESS THE CURRENT AND
WORSENING CONDITIONS OF THE
S.E.'S.
WE ESTABLISHED -- WE SUGGESTED
ESTABLISHING TAXPAYER
PROTECTIONS SUCH AS PORTFOLIO
CAPS ON THE MORTGAGE GIANTS.
WE RECOMMENDED MAKING THE COSTS
OF FANNIE AND FREDDIE BAILOUTS
TRANSPARENT TO THE PUBLIC, THAT
IS TO THE TAXPAYER.
WE OFFERED INITIAL STEPS TOWARD
THE NEVER -- INEVITABLE
UNWINDING OF THESE INSTITUTIONS.
YET, MADAM PRESIDENT, AT ERY
TURN THE DEMOCRATIC MAJORITY
BLOCKED EFFORTS FOR AT LEAST
ESTABLISHING REFORM HERE.
THE DEMOCRATS PREFER APPROACHING
THIS BILL IN REFORMING THE
MORTGAGE GIANTS IS A STAY.
LET ME REPEAT THAT NOTION.
IN ORDER TO ADDRESS A BAILOUT
THAT HAS ALREADY COST AMERICAN
TAXPAYERS ROUGHLY $150 MILLION
TO DATE WITH UNLIMITED FUTURE
TAXPAYER EXPOSURE, THE DEMOCRATS PROPOSED A STUDY.
IT DOES NOT TAKE A STUDY TO
DETERMINE, MADAM PRESIDENT,
THAT $150 BILLION IN UNLIMITED
LOSS EXPOSURE NEEDS TO BE
ADDRESSED IMMEDIATELY, NOW.
CONGRESS COULD HAVE FOCUSED,
MADAM PRESIDENT, ON SECURITIES
MARKET PRACTICES THAT WERE KNOWN
TO HAVE CONTRIBUTED TO SYSTEMIC
RISK IN OUR FINANCIAL SYSTEM.
AGAIN, DEMOCRATS OVERREACHED, I
BELIEVE, ONCE AGAIN.
FOR EXAMPLE, THE BILL GIVES THE SECURITIES AND EXCHANGE
COMMISSION, WHICH HAS FAILED TO
CARRY OUT ITS EXISTING MANDATES,
A NEW SYSTEMIC RISK MANDATE TO
OVERSEE ADVISORS TO HEDGE FUNDS
AND PRIVATE EQUITY FUNDS.
YET, NO ONE CONTENDS THAT
PRIVATE FUNDS WERE A CAUSE OF
THE RECENT CRISIS OR THAT THE
DEMISE OF ANY PRIVATE FUND
DURING THE CRISIS RESULTED IN A
SYSTEMWIDE SHOCK.
CONGRESS COULD HAVE ACTED, MADAM
PRESIDENT, TO CURTAIL WALL
STREET'S SPECULATIVE EXCESSES
AND ENHANCE MAIN STREET ACCESS
TO CREDIT, BUT INSTEAD HERE IN
THIS BILL LARGE FINANCIAL FIRMS
ON WALL STREET SEEM TO HAVE BENEFITED.
JUDGING BY THE BEHAVIOR OF THEIR
STOCK PRICES WHILE THE
LEGISLATION ALMOST SURELY WILL
INCREASE UNCERTAINTIES AND COSTS
FOR MAIN STREET AND AMERICA'S
JOB CREATORS.
MADAM PRESIDENT, THE ACTUAL
PROVISIONS IN THE BILL WILL
BENEFIT BIG WALL STREET
INSTITUTIONS BECAUSE THEY
SUBSTANTIALLY INCREASE THE
AMOUNT AND COSTS OF FINANCIAL REGULATION.
ONLY LARGE FINANCIAL
INSTITUTIONS WILL HAVE THE
RESOURCES TO NAVIGATE ALL OF THE
NEW LAWS AND REGULATIONS THAT
THIS LEGISLATION WILL GENERATE.
AS A RESULT, THIS BILL, I
BELIEVE, DISPROPORTIONATELY WILL
HURT SMALL AND MEDIUM-SIZED
BANKS WHICH HAD NOTHING TO DO
WITH THE CRISIS.
AND MADAM PRESIDENT, WHILE THE
LARGEST FINANCIAL INSTITUTIONS
GET SPECIAL REGULATION UNDER
THIS BILL, THE UNINTENDED RESULT
WILL BE LOWER FUNDING COSTS FOR
THESE FIRMS.
THAT WILL BENEFIT THE BIG BANKS
AND HURT THE SMALL BANKS.
THEREFORE, THIS BILL WILL RESULT
IN HIGHER FEES, LESS CHOICE, AND
FEWER OPPORTUNITIES TO
RESPONSIBLY OBTAIN CREDIT FOR
BLAMELESS CONSUMERS.
MOREOVER, THIS BILL RAISES
TAXES, WHICH ASE ALL KNOW
ULTIMATELY ARE BORNE BY CONSUMERS.
MAKE NO MISTAKE, WHEN WALL
STREET WRITES A CHECK TO PAY
HIGHER TAXES, THE ONES THAT END
UP PAYING THOSE TAXES ARE
AMERICAN CONSUMERS AND WKERS.
MADAM PRESIDENT, CONGRESS COULD
HAVE WRITTEN LEGISLATION FOR
CONSUMER PROTECTION THAT
RESPECTS BOTH AMERICAN CONSUMERS
AND THE NEED FOR SAFETY AND
SOUNDNESS IN OUR FINANCIAL SYSTEM.
INSTEAD, THE DODD-FRANK BILL WAS
BASICALLY CONSTRUCTED BY ARCHITECTS IN THE TREASURY
DEPARTMENT WHO HAVE A CERTAIN
CONDESCENSION, I BELIEVE, FOR
AMERICAN CONSUMERS AND THEIR CHOICES.
THE ULTIMATE GOAL IS TO
SUBSTITUTEHE JUDGMENT OF A
BENEFIT HE HAVE LEAPT BUREAUCRAT
FOR THAT OF THE AMERICAN
CONSUMER, THEREBY CONTROLLING
CONSUMER BEHAVIOR WITHOUT REGARD
FOR THE SAFETY AND SOUNDNESS OF
OUR BANKING SYSTEM.
THE AMERICAN PEOPLE, I BELIEVE,
DAM PRESIDENT, ARE BEING TOLD
NOT TO WORRY, HOWEVER, BECAUSE
IT'S ALL BEING DONE FOR THEIR
OWN GOOD.
AND WHILE A CONSUMER PROTECTION
AGENCY MIGHT SOUND LIKE A GOOD
IDEA, THE WAY IT'S CONSTRUCTED
IN THIS BILL WILL SLOW ECONOMIC
GROWTH AND KILL JOBS, I BELIEVE,
BY IMPOSING MASSIVE NEW
REGULATORY BURDENS ON BUSINESSES
LARGE AND SMALL.
IT WILL STIFLE INNOVATION IN
CONSUMER FINANCIAL PRODUCTS AND
IT WILL REDUCE SMALL BUSINESS ACTIVITY.
IT WILL LEAD TO REDUCED CONSUMER
CREDIT AND HIGHER COSTS FOR
AVAILABLE CREDIT.
LESS CREDIT AT A HIGR PRICE
WILL DAMPEN THE VERY SMALL
BUSINESS ENGINE OF JOB CREATION
THAT OUR ECONOMY DESPERATELY
NEEDS RIGHT NOW.
THAT IS A PRICE I'M NOT WILLING TO PAY.
CONGRESS COULD, MADAM PRESIDENT,
COULD HAVE IMPLEMENTED REFORMS
TO IMPROVE DERIVATIVES MARKET
ACTIVITIES.
INSTEAD, THE BILL'S DERIVATIVE
TITLE SEEMS TO HAVE BEEN
INSPIRED BY THE DESIRE TO BE
PUNITIVE OR TO PROVIDE
SHORT-TERM POLITICAL SUPPORT
DURING AN ELECTION OR BOTH.
INSTEAD OF IMPOSING A RATIONAL
AND EFFECTIVE REGULATORY
FRAMEWORK ON THE O.T.C.
DERIVATIVES MARKET, THE BILL
RUNS ROUGHSHOD OVER THE MAIN
STREET BUSINESSES THAT USE
DERIVATIVES TO PROTECT
THEMSELVES EVERY DAY.
MADAM PRESIDENT, THE DODD-FRANK
BILL WILL INCREASE COMPANIES'
COSTS AND LIMIT THEIR ACCESS TO
RISK-MITIGATING DERIVATIVES
WITHOUT MAKING OUR FINANCIAL
SYSTEM SAFER IN THE PROCESS.
AS A RESULT, THERE WILL BE FEWER
OPPORTUNITIES FOR BUSINESSES TO
GROW, FEWER JOBS FOR THE
UNEMPLOYED AND HIGHER PRICES FOR
CONSUMERS.
CONGRESS COULD, MADAM PRESIDENT,
HAVE WRITTEN A BILL TO PUT AN
END TO OVERRELIANCE ON CREDIT
RATING AGENCIES AND
UNDERRELIANCE ON THEIR OWN DUE DILIGENCE.
INSTEAD, THE DODD-FRANK BILL
SETS UP NEW REGULATIONS AND
LIABILITY PROVISIONS TO GIVE THE
IMPRESSION THAT RATINGS ARE
ACCURATE.
IT THEN TAKES A CONTRADICTORY
DIRECTION AND INSTRUCTS
REGULATORS TO REPLACE REFERENCES
TO RATINGS WITH OTHER STANDARDS
OF CREDITWORTHINES
TO MAKE MATTERS EVEN MORE
CONFUSING, THE BILL ALSO
PROVIDES FOR T ESTABLISHMENT
OF A GOVERNMENT-SPONSORED BODY
THAT WILL SELECT A CREDIT RATING
AGENCY TO PERFORM AN INITIAL
RATING OF SECURITY ISSUE.
I ANTICIPATE THAT THE NET EFFECT
OF THESE CONFLICTING PROVISIONS
WILL BE A REDUTION IN
COMPETITION AMONG CREDIT RATING
AGENCIES AND POTENTIAL
COMPETITORS EITHER WILL BE
DETERRED BY ALL OF THE NEW
REGULATORY REQUIREMENTS OR BE
DESTROYED BY THE LIABILITY
PROVISIONS SET UP IN THE BILL.
THE LACK OF COMPETITION LED TO
POOR QUALITY RATINGS IN THE
RUNUP TO THE CRISIS.
THIS BILL PERPETUATES AND IN
FACT WORSENS THAT PROBLEM.
MADAM PRESIDENT, THE CONGRESS
COULD HAVE EASED REGULATORY
BURDENS ON SMALL AND BEAD
YUM-SIZED BUSINESSES THAT ARE
NOT INTEGRAL TO THE RECENT
CRISIS OR ANY CRISIS.
INSTEAD, MAIN STREET
CORPORATIONS WILL BE SUBJECT TO
A PANOPLY OF NEW CORPORATE GOVERNANCE AND EXECUTIVE
COMPENSATION REQUIREMENTS.
THESE NEW REQUIREMENTS WILL BE
COSTLY AND POTENTIALLY HARMFUL
TO SHAREHOLDERS BECAUSE THEY
EMPOWER SPECIAL INTERESTS AND
ENCOURAGE SHORT-TERM THINKING BY
MANAGERS.
THESE FEATURES WERE INCLUDED
SOLELY FOR THE PURPOSE OF
APIECING UNIONS AND OTHER
SPECIAL INTEREST LOBBYISTS, AND
THERE IS NO DEMONSTRATED LINK
BETWEEN THESE CHANGES AND THE
ENHANCED STABILITY OF OUR
FINANCIAL SYSTEM, OUR IMPROVED INVESTOR PROTECTION.
WE'RE GETTING TOWARD THE END HERE.
CONGRESS COULD HAVE HELD
HEARINGS OR ANALYZED A NUMBER OF
CHANGES THAT THIS BILL MAKES TO
THE SECURITIES LAWS.
INSTEAD, DRAMATIC CHANGES INHE
LAWS WERE WRITTEN WITH LITTLE
DISCUSSION AND NO ANALYSIS.
MADAM PRESIDENT, THROUGHOUT THIS
PROCESS, THERE HAS BEE A LOT OF
TALK ABOUT THE INFLUENCE OF WALL
STREET ON THIS BILL.
TO BE SURE, IN THE EARLY STAGES
OF NEGOTIATIONS, WALL STREET AND
THE BIG BANKS WERE VERY ENGAGED.
I THINK THE AMERICAN PEOPLE
KNOW, HOWEVER, THAT IN THE END,
THE REAL INFLUENCE PEDDLERS ON
THIS BILL WERE NOT WALL STREET
LOBBYISTS BUT RATHER LIBERAL
ACTIVISTS AND WASHINGTON BUREAUCRATS.
WALL STREET AND THE BIG BANKS
JUST HAPPEN TO BE THE INCIDENTAL
BENEFICIARIES OF THEIR SUCCESS.
WHEN CHAIRMAN DODD AND I BEGAN
THIS PROCESS, WE AGREED THAT THE
BUREAUCRATIC STATUS QUO WAS
UNACCEPTABLE AND THAT RADICAL
CHANGES WERE NECESSARY, AND WITH
THAT IN MIND, WE AGREED TO
CONSOLIDATE ALL THE FINANCIAL
REGULATORS AND CONSTRAIN THE FED
TO ITS MONETARY POLICY ROLE.
THIS WAS NOT A RESULT THE BIG
BANKS WANTED.
THE LAST THING A LARGE
REGULATING FINANCIAL INSTITUTION
WANTS IS A NEW REGULATOR.
AFTER ALL, THEY SPENT YEARS AND
MILLIONS OF DOLLARS DEVELOPING A
RELATIONSHIP WITH THEIR CURRENT
REGULATORS.
A MAJOR REGULATORY ORGANIZATION
WOULD HAVE SERIOUSLY UPSET THE
STATUS QUO AND COST THEM A GREAT
DEAL OF MONEY.
NEITHER CHAIRMAN DODD NOR I WERE
PERSUADED, HOWEVER, THAT THE
NECESSARY CHANGE WAS GOING TO COME.
UNFORTUNATY, THAT PROVISION OF
REFORM AGAIN DENIES THE
BUREAUCRATS AND THE LIBERAL LEFT
BEGIN TO EXERCISE THEIR
INFLUENCE OVER THE BILL.
WHEN IT BECAME APPARENT THAT I
WAS NOT WILLING TO EMBRACE THE
LEFT'S EXPANSIVE CONSUMER
BUREAUACY, IT ALSO BECAME
APPARENT THAT ACTUAL REGULATORY
REFORM WAS NOT WHAT THE MAJORITY
WAS SEEKING.
ALL OTHER SERIOUS REFORM WAS
SCUTTLED BY THE DEMOCRATS IN
DEFENSE OF THE NEW CONSUMER BUREAUCRACY.
THAT WAS THE POINT AT WHICH
CHAIRMAN DODD AND I BEGAN TO
SEEK A NEW NEGOTIATION --
NEGOTIATING PARTNER, ULTIMATELY
TO NO AVAIL.
AS THE FED AND OTHER REGULATORS
BEGAN TO REGAIN THEIR FOOTHOLD
WITH THE DEMOCRATS AND THE
ADMINISTRATION LEFT
COOLIDATED, IT SUPPORTED
AROUND AN EXPANSIVE NEW BUREAUCRACY.
ALL THE DEMOCRATS WILL SUCCEED
IN DOING WITH THE HP OF
REPUBLICANS IS TO GIVE THE
FAILED BUREAUCRACIES MORE POWER,
MORE MONEY AND A PAT ON THE BACK
WITH THE HOPE THAT THEY WILL DO
A BETTER JOB NEXT TIME.
THIS IS NOT REAL REFORM, MADAM PRESIDENT.
THAT IS JUST MORE OF THE SAME.
WE HAD AN OPPORTUNITY TO LEAD
THE WORLD BY CREATING A MODERN,
EFFICIENT AND COMPETITIVE
REGULATORY STRUCTURE THAT WILL
SERVE OUR ECONOMY FOR YEARS TO
COME.
INSTEAD, I BELIEVE WE SQUANDERED
THAT OPPORTUNITY BY BARELY
EXPANDING AN OBSOLETE,
INEFFICIENT AND UNCOMPETITIVE SYSTEM.
TO MAKE IT EVEN WORSE, THEY HAVE
ADDED TO THE BUREAUCRATIC MORASS
SEVERAL MORE UNRESTRAINED AND
UNACCOUNTABLE AGENCIES.
IT BECAME APPARENT EARLY ON TO
ME THAT THE ADMINISTRATION, THE
DEMOCRAT MAJORITY ARE NOT REALLY
INTERESTED IN REGULATORY REFORM.
ALL THEY WERE REALLY TRYING TO
DO IS EXPLOIT THE CRISIS IN
ORDER TO EXPAND GOVERNMENT
FURTHER AND AWARD SPECIAL
INTERESTS.
THE DODD-FRANK BILL WILL NOT
ENHANCE SYSTEMIC STABILITY.
IT WILL NOT PREVENT FUTURE
BAILOUTS OF POLITICALLY FAVORED
INSTITUTIONS AND GROUPS BY THE GOVERNMENT.
THE BILL SERVES TO EXPAND THE
BERYL BUREAUCRACY AND
GOVERNMENT-CONTROLLED PRIVATE
SECTOR.
IT WILL IMPOSE LARGE
THE TAXPAYERS AND BUSINESSES.
COLLEAGUES TO REJECT THIS BILL.
I NOTE THE ABSENCE OF A QUORUM.
THE
WILL CALL THE ROLL.
MR. DODD: MADAM PRESIDENT? THE PRESIDING OFFICER: THE
SENATOR FROM CON
MR. DODD: WELL, MADAM PRESIDENT,
LET ME THANK MY COLLEAGUE FROM ALABAMA ONCE AGAIN.
I SAY THIS WITH RESPECT, BUT I
ALMOST FEEL LIKE I'M LISTENING
TO THE SAME SPEECH I HEARD BACK
IN NOVEMBER WN I OFFERED THE
ORIGINAL PROPOSAL OF THIS BILL. I'M WONDERING WHETHER OR NOT WE
HAVE BEEN IN THE SAME CHAMBER,
IN THE SAME CITY OVER THE LAST
SEVERAL YEARS.
I'M NOT
BETWEEN NOW AND 11:00 A.M. WHEN
WE'LL VOTE ON THE CLOTURE MOTION.
I WON'T GO THROUGH THE LONG LIST
HERE, PAGE AFTER PAGE AFTER PAGE
OF AMENDMENTS THAT WERE ADOPTED
AS PART OF THIS BILL OFFERED BY
MY GOOD FRIENDS ON THE MINORITY SIDE.
80 HEARINGS HELD OVER TWO YEARS.
COUNTLESS EFFORTS TO REACH OUT
AND BRING PEOPLE IN.
YOU CAN MAKE A LOT OF
ACCUSATIONS I SUPPOSE ABOUT THE
BILL, BUT THIS WAS A VERY INCLUSIVE PROCESS.
HALF THE AMENDMENTS THAT WERE
ADOPTED ON THE FLOOR OF THIS CHAMBER DURING THE CONSIDERATION
OF THE FOUR WEEKS WERE ONES
OFFERED BY THE MINORITY WERE
ACCEPTED AND BIPARTISAN
AMENDMENTS.
THERE WAS NEVER AN ALTERNATIVE OFFERED.
THERE WAS NEVER A SUBSTITUTE
OFFERED.
IT WAS REALLY A QUESTION OF
WHETHER PEOPLE WANTED TO AMEND
THIS LEGISLATION WE HAD BEFORE
US.
IT IS NOT A PERFECT BILL.
I WILL BE THE FIRST TO ADMIT THAT.
WE DON'T KNOW ULTIMATELY HOW
WELL THE IDEAS WE HAVE
INCORPORATED HERE WILL ACHIEVE
THE RESULTS WE ALL DESIRE.
IT WILL TAKE THE NEXT ECONOMIC
CRIS, AS CERTAINLY IT WILL
COME, TO DETERMINE WHETHER OR
NOT THE PROVISIONS
WILL ACTUALLY PROVIDE THIS
GENERATION OR THE NEXT
GENERATION OF REGULATORS WITH
THE TOOLS NECESSARY TO MINIMIZE
THE EFFECTS OF THAT CRISIS WHEN
IT HAPPENS, BUT WE BELIEVE WE
HAVE DONE THE BEST WE COULD
UNDER THE CIRCUMSTANCES TO SEE
TO IT WE NEVER HAVE ANOTHER
BAILOUT OF A MAJOR FINANCIAL
INSTITUTION AT TAXPAYER EXPENSE.
IN FACT, IT WAS THE SHELBY-DODD
AMENDMENT ADOPTED IN THIS
CHAMBER AS THE SECOND AMENDMENT
TO BE CONSIDERED THAT ACTUALLY
COMPLETED THE PROCESS OF SEEING
TO IT THAT THERE WOULD BE EITHER
BANKRUPTCY OR RESOLUTION OF
FINANCIAL INSTITUTIONS THAT GOT
THEMSELVES INTO SO MUCH TROUBLE
THEY PUT THE ENTIRE
RISK.
WE HAVE SET UP A
COUNCIL TO MAKE SURE WE COULD
OBSERVE WHAT WAS OCCURRING, NOT
ONLY HERE AT HOME BUT AROUND THE
GLOBE, MATTERS SUCH AS GREECE OR
SPAIN THAT COULD PUT OUR ECONOMY
AT RISK.
SO IT ISN'T JUST ONE SET OF
EYES, BUT HAVING THOSE
RESPONSIBLE FOR SEEING TO IT
THAT OUR ECONOMY REMAINS SAFE
AND SOUND, HAVE THE OPPORTUNITY
TO PROVIDE THE EARLY WARNING
YOU DIDN'T NEED A COMMISSION TO
FIND OUT WHAT WAS GOING ON.
YOU HAD MORTGAGES THAT WERE
BEING SOLD IN THIS COUNTRY TO
PEOPLE THAT COULDN'T AFFORD
THEM, MARKETING IN A WAY THAT
WOULD GUARANTEE FAILURE,
SECURITIZING THEM S YOU COULD
BE PAID
IN A SENSE.
I DON'T NEED TO
HAVE HOURS OF HEARINGS TO FIND
OUT WHAT WAS THE CAUSE OF IT.
IT'S HOW TO PUT A SYSTEM IN
PLACE TO MINIMIZE THE KIND OF
FUTURE RISKS OUR NATION WOULD
FACE T. WASN'T JUST TO DEAL WITH
THOSE WHO CREATED THE PROBLEM
BUT RATHER TO LOOK AHEAD, NOT IN
A PUNITIVE WAY BUT TO TRY AND
SET UP AN ARCHITECTURE AND
STRUCTURE THAT WOULD ALLOW TO US
GET TO THAT POINT WHERE WE COULD
BE CONFIDENT THAT WE WERE
ADDRESSING THESE ISSUES.
THIRDLY, OF COURSE, WE TRIED TO
DEAL WITH THE EXOTIC INSTRUMENTS
THAT HAD CAUSED SO MUCH OF
DIFFICULTY.
THE DERIVATIVES MARKET WAS A
$90 BILLION MARKET AND IT
MUSHROOMED IN LESS THAN A DECADE
TO $600 TRILLION, PUTTING OUR
NATION
OF TRANSPARENCY AND
ACCOUNTABILITY TO DETERMINE WHAT
WAS OCCURRING IN THOSE
WE CONSIDERED IT A
THAT WE MIGHT WANT TO HAVE
TRANSPARENCY AND ACCOUNTABILITY
I
CONSIDERING WHAT OUR COUNTRY HAS BEEN THROUGH.
AND ALSO WE PROVIDED A CONSUMER
PROTECTION BUREAU.
WHAT A RADICAL
IDEA THAT PEOPLE WHO --
WHAT A
THE IDEA THAT PEOPLE WHO BUY
MORTGAGES, HAVE A STUDENT LOAN,
A CREDIT CARD, A CAR LOAN, THEY
MIGHT HAVE SOME
CITY THATATCHES OUT FOR THEM,
FOR THEIR JOBS, THEIR HOMES,
THEIR RETIREMENT ACCOUNTS LOST.
AND SO WHILE THIS BUREAU IS IN
PLACE IN THIS BILL, THE IDEA WAS
AT LEAST TO SEE TO IT THAT
PEOPLE WHEN THEY HAVE THE
PROBLEMS TY'VE BEEN THROUGH OR
ARE GOING THROUGH, SOMEONE IS
WATCHING OUT FOR
WE HAVE A CONSUMER PRODUCT
SAFE COMMISSION, WHEN YOU BUY
A FAULTY PRODUCT, WHAT HAPPENS
WHEN SOMEONE ABUSES OR TAKES
ADVANTAGE, AS HAPPENED SO MANY
CASES IN FINANCIAL AREAS THAT
PEOPLE HAVE A CHANCE TO HAVE A
REDRESS OF THEIR GRIEVANCE OR TO
AT LEAST IN THE OUTSET HAVE AN
OPPORTUNITY TO ADDRESS THAT
BEFORE IT BECOMES A BROADER
PROBLEM.
MR. PRESIDENT, AGAIN, WVE
DEBATED THIS --
MADAM PRESIDENT, AGAIN, WE'VE
DEBATED THIS AND WE SPENT FOUR
WEEKS ON THE FLOOR OF THIS
CHAMBER.
AMENDMENTS WERE OFFERED.
NER ONCE -- I GET ON ONE
OCCASION DID WE HAVE A SUPER
MAJORITY VOTE.
THERE WAS ONLY ONE TABLING
MOTION THAT I KNOW OF.
I DID EVERYTHING I COULD TO MAKE
IT AS
POSSIBLE.
AND THE FACT THAT I
PEOPLE DON'T LIKE THE BILL.
IT S
AGAIN IT'S BECOME SORT OF A
MINDLESS PARTISAN ARGUMENT
RATHER THAN TALKING ABOUT WHAT
WE NEED TO BE DOING.
THIS IS NOT THE END OF ALL OF
IT, OBVIOUSLY.
OVERSIGHT WILL BE REQUIRED,
CONSULTATION IN THE COMING WEEKS
AND MONTHS AND Y THIS WORK WELL.
BUT, MADAM PRESIDENT, I CAN'T
IMAGINE ANOTHER PROCESS THAT HAS
BEEN AS INCLUSIVE.
MY COLLEAGUES WILL RECALL GOING
ON TEN MONTHS, ALMOST A YEAR AGO
THAT I INVITED BOTH DEMOCRATS
AND REPUBLICANS ON THE BANKING
COMMITTEE TO ASSUME
RE
SECTIONS OF THIS BILL WHICH THEY
DID DO, BY THE WAY, AND MADE A
SIGNIFICANT CONTRIBUTION TO THE PRODUCT.
AND SO WHILE I EXPECT THOSE WHO
WANT TO VOTE AGAINST THE BILL,
THAT'S THEIR RIGHT TO DO SO.
FIND SOME ARGUMENTS BASED ON THE
MERITS RATHER THAN
WHETHER OR NOT THIS WAS A
PROCESS THAT WAS INCLUSIVE OR
ALLOWED PEOPLE THE OPPORTUNITY
TO BE HEARD.
NOW, AGAIN, WE HAVE THE RIGHT TO BE HEARD.
YOU DON'T HAVE A RIGHT TO
NECESSARILY HAVE YOUR IDEAS
BECOME THE LAW OF THE LAND.
THAT'S WHAT A BODY LIKE THIS IS FOR.
AND SO THIS IS A MAJOR
UNDERTAKING, ONE THAT IS
HISTORIC IN ITS PROPORTIONS,
THAT IS AN ATTEMPT TO SET IN
PLACE THE STRUCTURE THAT WOULD
ALLOW US TO MINIMIZE THE
PROBLEMS IN THE FUTURE.
I CAN'T
CAN'T LEGISLATE WISDOM.
I CAN'T LEGISLATE PASSION OR
COMPETENCY.
WHAT WE CAN DO IS CREATE THE
TOOLS AND THE ARCHITECTURE THAT
ALLOW GOOD PEOPLE TO DO
JOB ON BEHALF OF THE AMERICAN
PUBLIC.
AND THEATSD WHAT A BILL LIKE
THIS --
AND THAT'S WHAT A BILL LIKE THIS
IS DESIGNED TO DO.
I REGRET I CANNOT GIVE YOU YOUR
JOB BACK, PUT RETIREMENT MOMENTS
BACK IN YOUR ACCOUNT.
WHAT I CAN DO IS SEE TO IT THAT
WE NEVER, EVER THROUGH WHAT THIS NATION HAS
BEEN THROUGH.
AND THAT'S WHAT THIS EFFORT HAS
BEEN ABOUT OVER THE LAST
YEARS, TO TRY AND CREATE THAT
STRUCTURE, THAT ARCHITECTURE
IT WILL BE INCUMBENT NOW ON THE
THAT FOLLOW TO NOMINATE GOOD
PEOPLE TO HEAD UP
OPERATIONS, TO ATTRACT GOOD
PUBLIC SERVANTS WHO WILL FILL
THE JOBS IN THESE VARIOUS
REGULATORY BODIES TO SEE TO IT
THAT THEY DO THE JOB WE ALL WANT
THEM TO DO.
AGAIN, I CAN'T LEGISLATE THAT.
I CAN MERELY CREATE THE
OPPORTUNITY FOR THAT KIND OF
PROTECTION TO OCCUR, TO
MODERNIZE OUR FINANCIAL SYSTEM,
TO LEAD THE WORLD, IF WE CAN, IN
HARMONIZING R
HAVE THE KIND OF SOVEREIGN
SHOPPING THAT HAS GONE ON WITH
REGULATORY BODIES, WHERE MAJOR
FINANCIAL INSTITUTIONS SHOP
AROUND THE WORLD AS TO THE
NATION OF LEAST RESISTANCE OR
THE REGULATOR OF LEAST
RESISTANCE TO SEE TO IT WE HAVE
TH UNANIMITY AND AT LEAST THE
HARMONIZATION OF RULES THAT WILL
ALLOW US TO HAVE A MORE ORDERLY
SYSTEM IN OUR GLOBE, BECAUSE AS
WE'VE ALL PAINFULLY LEARNED,
MATTERS THAT CAN OCCUR THOUSANDS
OF MILES AWAY CAN AFFECT THE
ECONOMY IN OUR OWN COUNTRY.
SO FOR ALL OF THOSE REASONS,
MADAM PRESIDENT, I THANK MY COLLEAGUES FOR THEIR EFFORTS
OVER THE LAST TWO YEARS.
I THANK THE LEADERSHIP FOR
PROVIDING THE OPPORTUNITY
TIME FOR TO US DO THIS IN THIS CHAMBER.
I THANK MY COLLEAGUE IN THE
HOUSE, BARNEY FRANK, AND HIS
COLLEAGUES FOR THE WORK THEY
ENGAGED IN IN ORDER TO PRODUCE A
BILL THERE.
THE TWO WEEKS WE SPENT, SOME 70
HOURS OF DEBATING THE CONFERENCE
REPORT, AGAIN, WHERE MORE
AMENDMENTS WERE ADOPTED, AGAIN,
OFFERED BY MY COLLEAGUES,
REPUBLICANS AND DEMOCRATS, TO
MAKE THIS AS GOOD A BILL AS WE
COULD IN ALL OF THIS.
SO WITH THAT, MADAM PRESIDENT,
AGAIN, I'LL RESERVE SOME
COMMENTS FOR LATER BUT AS WE
APPROACH THIS VOTE IN THE NEXT
FEW MINUTES, I URGE MY
COLLEAGUES TO INVOKE CLOTURE, TO
ALLOW US TO THEN HAVE AN
UP-OR-DOWN VOTE ON THIS BILL, TO
DO WHAT WE CAN TO RESTORE SOME
TRUST AND CONFIDENCE AND
OPTIMISM IN THE AMERICAN PEOPLE
THAT IN THE MIDST OF THE WORST
ECONOMIC CRISIS OF THE LIFETIME
OF MOST AMERICANS, THIS
INSTITUTION, THE UNITED STATES UNITED STATES
SENATE, ROSE TO THE OCCASION AND
CRAFTED A BILL AND A PROPOSAL TO
ADDRESS THE FINANCIAL SERVICE
STRUCTUROF OUR NATION TO GIVE
US ONCE AGAIN THAT HOPE THAT WE
CAN SEE WEALTH CREATED, JOBS
PRODUCED AND AN ECONOMY THAT
WILL OFFER OPPORTUNITIES FOR THE
NEXT GENERATION OF AMERICANS.
I URGE MY COLLEAGUES TO SUPPORT
THAT
THEM TO SUPPORT THE BILL WHEN
THE VOTE OCCURS LATER TODAY.
AND I YIELD THE FLOOR.
MADAM PRESIDENT?
THE PRESIDING OFFICER: THE
REPUBLICAN LEADER.
MR. McCONNELL: LATER TODAY
WE'LL HAVE A DECISIVE VOTE ON
THE FINANCIAL REGULATORY BILL
THAT DOES NOTHING TO REFORM THE
GOVERNMENT-SPONSORED ENTERPRISES
THAT MANY PEOPLE BELIEVE TO HAVE
BEEN AT THE ROOT OF THE
FINANCIAL CRISIS THIS BILL GREW
OUT OF.
A BILL THAT WAS MEANT TO REIN IN
WALL STREET BUT WHICH IS NOW
SUPPORTED BY SOME OF WALL
STREET'S BIGGEST BANKS AND
OPPOSED BY SMALL COMMUNITY BANKS IN MY STATE.
A BILL THAT'S MEANT TO HELP THE
ECONOMY BUT WHICH I WIDELY
EXPECTED TO STIFLE GROWTH AND
KILL MORE JOBS IN THE MIDDLE OF
A DEEP RECESSION.
AND A BILL THAT, ACCORDING TO
THE PAPERS, A VAST MAJORITY OF
AMERICANS SIMPLY DON'T THINK
WILL WORK.
AS IT TURNS OUT, THE AMERICAN
PEOPLE DON'T SEEM TO LIKE THIS
GOVERNMENT-DRIVEN SOLUTION TO
THE FINANCIAL CRISIS ANY MORE
THAN THEY LIKE THE DEMOCRATS'
GOVERNMENT-DRIVEN SOLUTION TO
THE NATION'S HEALTH CARE CRISIS.
THEY DON'T THINK THIS BILL WILL
SOLVE THE PROBLEMS IN THE
FINANCIAL SECTOR ANY MORE THAN
THEY THINK THE HEALTH CARE BILL
WILL LEAD TO LOWER COSTS OR
BETTER CARE.
ONE SURVEY THIS WEEK INDICATES
THAT 7 IN 10 DEMOCRATS HAVE
LITTLE CONFIDENCE THE PROPOSALS
IN THIS BILL WILL AVERT OR
LESSEN THE IMPACT OF ANOTHER
FINANCIAL CATASTROPHE, THAT
NEARLY 70% OF THEM DOUBT IT WILL
MAKE THEIR SAVINGS MORE SECURE.
IT'S EASY TO SEE W.
THE "WL STREET JOURNAL" CALLS
THIS BILL'S 2,300 PAGES THE
BIGGEST WAVE OF NEW FEDERAL
FINANCIAL RULE MAKING IN THREE
GENERATIONS.
THE CHAIRMAN OF THE BANKI
COMMITTEE HAS FAMOUSLY SAID LAST
MONTH THAT WE WON'T KNOW
THOUSAND BILL WORKS UNTIL -- HOW
THIS BILL WORKS UNTIL IT'S IN PLACE.
BUT HERE ARE SOME INITIAL
INDICATORS ABOUT ITS SCOPE.
ACCORDING TO A STUDY BY THE U.S.
CHAMBER OF COMMERCE ON THE NEW
BUREAUCRATIC LANDSCAPE UNDER
THIS BILL, 70 -- 70 -- NEW
FEDERAL REGULATIONS THROUGH THE
NEW BUREAU OF CONSUMER FINANCIAL
PROTECTION.
54 NEW FEDERAL REGULATORS --
REGULATIONS THROUGH THE U.S.
COMMODITIES FUTURES TRADING
COMMISSION.
11 NEW FEDERAL REGULATIONS
THROUGH THE FEDERAL DEPOSIT
INSURANCE CORPORATION.
30 NEW FEDERAL REGULATIONS
THROUGH THE FEDERAL RESERVE.
205 NEW REGULATIONS THROUGH THE SECURITIES AND EXCHANGE
COMMISSION.
AND THOSE ARE JUST SOME OF THEM.
ALL TOLD, THIS BILL WOULD IMPOS
533 NEW REGULATIONS ON
INDIVIDUALS AND SMALL
BUSINESSES, REGULATIONS THAT
WILL INEVITABLY LEAD TO THE KIND
OF CONFUSION AND UNCERTAINTY
THAT WILL MAKE IT EVEN HARDER
FOR STRUGGLING BUSINESSES TO DIG
THEMSELVES OUT OF THE RECESSION.
UNCERTAINTY THAT WILL DETER
LENDING AND FREEZE UP CREDIT.
AS LENDERS WAIT TO SEE HOW
THEY'LL BE AFFECTEDY THE NEW REGULATIONS.
AND IT'S JUST THIS KIND OF
UNCERTAINTY THAT BUSINESSES CITE
TIME AND TIME AGAIN AS ONE OF
THE GREATEST CHALLENGES TO OUR
ECONOMIC RECOVERY.
SO HERE'S A BILL THAT FAILS TO
ADDRESS THE ROOT CAUSES OF THE
KIND OF CRISIS IT MEANT TO
PREVENT, THAT CREATES A VAST,
NEW, UNACCOUNTABLE BUREAUCRACY
THAT, IF PAST EXPERIENCE IS ANY
GUIDE, WILL LEAD TO COUNTLESS
BURDENSOME UNINTENDED
CONSEQUENCES FOR INDIVIDUALS AND SMALL BUSINESSES.
A BILL THAT CONSTRICTS CREDIT
AND STIFLES GROWTH IN THE MIDDLE
OF THE WORST ECONOMIC PERIOD IN
MEMORY.
AND PERHAPS MOST DISTRESSING OF
ALL, A BILL THAT PUNISHES
FARMERS, FLORISTS, DOCTORS,
RETAILERS, AND COUNTLESS OTHERS
ACROSS THE COUNTRY AND FAR, FAR
AWAY FROM WALL STREET WHO HAD ABSOLUTELY NOTHING TO DO WITH
THE PANIC OF 2008.
IN OTHER WORDS, ONCE AGAIN THE
ADMINISTRATION AND ITS DEMOCRATIC ALLIES IN CONGRESS
HAVE TAKEN A CRISIS AND USED IT
RATHER THAN SOLVING IT.
W ELSE DO YOU EXPLAIN THE FACT
THAT A BILL THAT WAS MEANT TO
ADDRESS THE EXCESSES ON WALL
STREET IS EXPECTED TO HIT
INDIVIDUALS AND INDUSTRIES THAT
HAD NOTHING TO DO WITH THE
CRIS IT WAS MEANT TO PREVENT?
DID ANYBODY THINK THAT THIS BILL
WAS FIRST -- WHEN IT WAS FIRST
PROPOSED, THAT IT WOULD END UP
HITTING STOREFRONT CHECK
CASHERS, CITY GOVERNMENTS, SMALL
MANUFACTURERS, HOME BUYERS,
CREDIT BUREAUS, AND FARMERS IN
PLACES LIKE KANSAS AND KENTUCKY?
THIS IS PRECISELY THE KIND OF
THING AMERICANS ARE TIRED OF --
A GOVERNMENT SIMPLY OUT OF CONTROL.
ONLY IN WASHINGTON WOULD YOU
CREATE A COMMISSION AIMED AT
LOOKING INTO THE CAUSES OF A
CRIS AND THEN PUT TOGETHER AND
PASS A 2,300-PAGE BILL IN
RESPONSE TO THAT CRISIS BEFORE
THE COMMISSION EVEN HAS A CHANCE
TO REPORT ITS FINDINGS AND ISSUE
RECOMMENDATIONS.
THE WHITE HOUSE WILL CALL THIS A
VICTORY BUT AS CREDIT TIGHTENS,
REGULATIONS MULTIPLY, AND JOB
CREATION SLOWS EVEN FURTHER AS A
RESULT OF THIS BILL, THEY'LL
HAVE A HARD TIME CONVINCING THE
AMERICAN PEOPLE THAT THIS IS A
VICTORY FOR THEM.
OBVIOUSLY, I WILL BE OPPOSING
THIS BILL AND I WOULD ENCOURAGE
MY COLLEAGUES TO OPPOSE IT AS
WELL.
MADAM PRESIDENT, I YIE
MR. DODD: NOTE THE ABSENCE OF A
QUORUM AND ASK THAT IT BE
EQUALLY CHARGED TO BOTH THE PRESIDING OFFICER: THE CLERK
WILL CALL THE ROLL.
QUORUM CALL:
THE PRESIDING OFFICER: THE MAJORITY LEADER.
MR. RE
CONSENT THE CALL OF THE QUORUM
BE TERMINATED.
THE PRESIDING OFFICER: WITHOUT OBJECTION.
MR. REID: MADAM PRESIDENT, THE
EARTHQUAKE THAT HIT -- HASN'T
HIT ANYWHERE AS HARD AS IT HIT
NEVADA.
AS SOON AS THE BIG BANKS WENT
DOWN, FORECLOSURE SIGNS WENT UP.
HOW DID THIS HAPPEN?
LET'S PUT IT THIS WAY.
WHEN YOU GO TO ANY -- PARDON ME.
WHEN YOU GO TO ANY OF THE GREAT
CASINOS ACRS NEVADA AND PUT
YOUR CHIPS ON THE TABLE, YOU'RE
GAMBLING WITH YOUR OWN MONEY.
YOU WIN, YOU WIN, AND IF YOU
LOSE, YOU LOSE.
BUT WALL STREET RIGGED THE GAME.
THEY PUT OUR MONEY ON THE TABLE.
WHEN THEY WON, THEY WON BIG.
THE JACKPOTS THEY TOOK HOME WERE
IN THE BILLIONS.
BUT WHEN THEY LOST -- AND BOY
DID THEY LOSE BIG -- THEY CAME
CRYING TO THE TAXPAYERS FOR HELP.
THE WINNINGS WERE THEIRS TO
ENJOY, BUT THE LOSSES WERE ALL
OF OURS, TO SHARE AND TO
SHOULDER.
THAT'S THE WAY THE MARKET WORKED.
IT WORKED FOR A FEW FORTUNATE
ONES IN THE BIG FIRMS AND WORKED
AGAINST EVERYONE ELSE.
SO WHEN I SAY THAT'S HOW THE
MARKET WORKED, WHAT I REALLY
MEAN IS THAT IT DIDN'T WORK AT ALL.
IT WAS BADLY BROKEN AND NEARLY
BANKRUPT US.
IT COST EHT MILLION WORKERS
THEIR JOBS, MILLIONS OF
THEIR SAVINGS AND MILLIONS OF FAMILIES THEIR HOMES.
IT SHATTERED OUR FAITH IN OUR
FINANCIAL SYSTEM.
BUT THERE IS ANOTHER PROBLEM.
WE HAVE BEEN TALKING ABOUT THIS
RIGGED SYSTEM, THIS RAW DEAL IN
THE PAST TENSE, BUT IT'S NOT
THANK OF THE PAST.
IT'S VERY MUCH IN THE PRESENT.
THE RULES THAT ALLOWED NEVADA'S
ECONOMY TO COLLAPSE ARE STILL
THE SAME RULES OF THE ROAD TODAY.
THAT MEANS EVERY NEW DAY WE
DON'T ACT, WE RUN THE RISK OF IT
HAPPENING ALL OVER AGAIN.
THAT'S A GAMBLE, MADAM
PRESIDENT, I'M NOT WILLING TO
TAKE.
THE BILL BEFORE US MAKES SURE WE
DON'T HAVE TO TAKE THAT GAMBLE.
THE FIRST QUESTION WAS HOW DID
THIS HAPPEN?
THE NEXT QUESTION IS WHAT ARE WE
GOING TO DO ABOUT IT?
NUMBER ONE, WE'RE SAYING TO
THOSE WHO GAINED -- SORRY, MADAM
PRESIDENT.
MR. REID: FIRST WE'RE SAYING TO
THOSE WHO GAMED THE SYSTEM THE
GAME'S OVER.
WE'RE CRACKING DOWN ON THOSE WHO
GAMBLE AWAY WHAT SO MANY HAVE
AND TWO, WE'RE SAYING TO THE
FAMILIES AND
AGAIN WILL WE BE ASKED TO BAIL
OUT A BIG BANK WHEN THE BANK
LOSES ITS RISKY BETS.
SO LET ME SAY THAT AGAIN BECAUSE
IT'S ONE OF THE MOST IMPORTANT
PARTS OF THIS BILL, NO MORE
BAILOUTS, BECAUSE NO BANK IS TOO
BIG TO FAIL.
WE'RE GOING TO GE CONSUMERS
AND INVESTORS THE STRONGEST
PROTECTIONS THEY HAVE EVER HAD
AGAINST ABUSIVE BANKS, MORTGAGE
COMPANIES, CREDIT CARD
COMPANIES, AND CREDIT RATING
AGENCIES.
WE'RE GOING TO BRING DERIVATIVE
MARKETS THAT OPERATE IN THE
DARKNESS OUT IN THE LIGHT.
WE'RE GOING TO HOLD WALL STREET
ACCOUNTABLE BECAUSE WE KNOW
WE'RE ACCOUNTABLE TO THE
AMERICAN PEOPLE.
THIS IS ABOUT OUR ABILITY TO
TRUST OUR FINANCIAL SYSTEM.
IT'S ABOUT GIVING FAMILIES THE
PEACE OF MIND THEY DESERVE, THE
PEACE OF MIND THAT COMES WITH
THE KNOWLEDGE THEY WILL BE ABLE
TO KEEP THEIR HES AND THEIR
SAVINGS WILL BE SAVED.
WE NEED THE FREE MARKET TO
THRIVE AND GROW AND SUCCEED.
WE ACKNOWLEDGE THAT.
BUT THERE ALSO HAVE TO BE SOME
RULES, NOT TO STIFLE IT BUT TO
SAFEGUARD US, RULES SO THAT WHEN
THESE FIRMS FAIL, THEY DON'T
BRING US DOWN WITH THEM.
WHEN THIS EARTHQUAK HIT, THERE
WASN'T NEARLY ENOUGH OVERSIGHT,
TRAINERS OR ACCOUNTABILITY TO
SHIELD US FROM THE FALLOUT.
THIS LAW WILL CHANGE THAT.
IT WILL STRENGTHEN ALL THREE.
WE'RE REALLY AT THE FINISH LINE
THIS MORNING, BUT GETTING HERE
HASN'T BEEN EASY.
WALL STREET DOESN'TIKE THIS BILL.
OF COURSE IT DOE'T.
WHY WOULD THEY WANT US TO CHANGE
THE SYSTEM THEY RIGGED, THE
SYSTEM THAT MADE THEM ALL RICH?
THEIR CRONIES IN WASHINGTON
DON'T LIKE IT EITHER.
THE TOP REPUBLICAN IN THE HOUSE
VERY PUBLICLY SAID THE PLIGHT OF
MILLIONS WASOF -- WAS AS SMALL AND
INSIGNIFICANT AS AN ANT.
FORECLOSURES, HOMES UNDER WATER,
JOBS LOST.
THE HEAD OF THE REPUBLICAN PARTY
ASKED US TO SIMPLY TRUST WALL
STREETO LOOK AFTER ITSELF.
WE ALL KNOW THIS CRISIS IS
ENORMOUS AND WE ALL KNOW THAT
WALL STREET ISN'T GOING TO
REFORM ITSELF.
RATHER THAN STANDING UP FOR THE
TAXPAYERS, THOSE WHO ARE ABOUT
TO VOTE NO ARE STANDING WITH THE
SAME BANKERS WHO GAMBLED AWAY
OUR JOBS AND OUR HOMES AND OUR
ECONOMIC SECURITY IN THE FIRST PLACE.
JUST LIKE THEIR WALL STREET
FRIENDS, IT SEEMS OUR OPPONENTS
CARE MORE ABOUT MAKING
SHORT-TERM GAINS THAN THEY DO
ABOUT WHAT'S RIGHT FOR THE
ECONOMY IN THE LONG RUN.
I THINK THAT'S A MISTAKE AND I
THINK IT'S A SHAME.
MADAM PRESIDENT, THIS ISN'T
ABOUT DOLLARS AND CENTS ONLY.
IT'SBOUT FAIRNESS, IT'S ABOUT
JUSTICE, IT'S ABOUT MAKING SURE
THAT THERE'S NOT A NEXT TIME.
IT'S ABOUT JOBS, IT'S ABOUT
RESCUING OUR ECONOMY.
I KNOW WALL STREET REFORM IS
COMPLICATED.
THERE AREN'T MANY PEOPLE WHO
KN ALL THE INS AND OUTS OF
DERIVATIVE TRADING, CREDIT
DEFAULT SWAPS OR MORTGAGE-BACKED
SECURITIES, BUT THE PRINCIPLE
BEFORE US IS REALLY QUITE SIMPLE.
IT'S NOT COMPLICATED AT ALL.
YOU EITHER BELIEVE THAT WE NEED
TO STRENGTHEN THE OVERSIGHT OF
WALL STREET OR YOU DON'T.
YOU EITHER BELIEVE THAT WE NEED TO STRENGTHEN PROTECTIONS FOR
CONSUMERS OR YOU DON'T.
OUR CHOICE TODAY IS BETWEEN
LEARNING FROM THE MISTAKES IN
THE PAST AND DANGEROUSLY LETTING
THEM HAPPEN ALL OVER AGAIN.
WILL REPORT THE MOTION TO INVOKE CLOTURE.
BY UNANIMOUS CONSENT, THE
MANDATORY QUORUM CALL HAS BEEN
WAIVED.
THCLERK: WE THE UNDERSIGNED
SENATORS IN ACCORDANCE WITH
PROVISIONS OF RULE 22 OFHE
STANDING RULES OF THE SENATE
HEREBY MOVE TO BRING TO A CLOSE
THE DEBATE ON THE CONFERENCE
REPORT TO ACCOMPANY H.R. 4173, THE WALL STREET REFORM AND
CONSUMER PROTECTION ACT, SIGNED
BY 17 SENAT
THE PRESIDING OFFICER: BY
UNANIMOUS CONSE
QUORUM CALL HAS BEEN WAIVED.
THE QUESTION IS IS I THE SENSE
OF THE SENATE THAT DEBATE ON THE
CONFERENCE REPORT TO ACCOMPANY
H.R. 4173, THE RESTORING
AMERICAN FINANCIAL STABILITY ACT
OF 2010, SHALL BE BROUGHT TO A CLOSE?
THE YEAS AND NAYS ARE MANDATORY
UNDER THE RULE.
THE CLERK WILL
VOTE:
THE PRESIDING OFFICER: ARE
THERE ANY SENATORS IN THE
CHAMBER WISHING TO VOTE OR CHANGE THEIR VOTE?
ON THIS -- IF NONE, ON THIS
VOTE, THE DWRAIS ARE 60, THE
NAYS ARE 38.
THREE-FIFTHS OF THE SENATORS
DULY CHOSEN AND SWORN HAVING
VOTE
MOTION IS AGREED TO.
MR. GREGG: ARE WE READY FOR
THE POINT OF ORDER?
MR. DODD: MADAM PRESIDENT, THE
WILL THE SENATE BE IN ORDER.
THE PRESIDING OFFICER: THE
SENATE WILL BE IN ORDER.
MR. DODD: I AM ABOUT TO
PROPOSE A UNANIMOUS CONSENT
REQUEST. THE PRESIDING OFFICER: WILL
THE SENATOR SUSPEND.
MR. DODD: -- THAT HAS BEEN
AGREED TO BETWEEN THE RESPECTIVE LEADERS.
MADAM PRESIDENT, I ASK UNANIMOUS
CONSENT THAT THE POSTCLOTURE
TIME BE CONSIDERED EXPIRED AT
2:00 P.M., WITH THE TIME UNTIL
THEN EQUALLY DIVIDED AND
NTROLLED BETWEEN SENATORS DODD
AND SHELBY OR THEIR DESIGNEES.
DURING THAT PERIOD IF AND WHEN A
BUDGET POINT OF ORDER IS RAISED
AGAINST THE CONFERENCE REPORT,
THAT AN APPLICABLE WAIVER OF THE
POINT OF ORDER BE CONSIDERED MADE.
THAT AT 2:00 P.M., THE SENATE
PROCEED TO VOTE ON THE MOTION TO
WAIVE THE APPLICABLE BUDGET
POINT OF ORDER, THAT IF THE
WAIVE CERTIFICATE SUCCESSFUL YOU
WITHOUT FURTHER INTERVENING
TION OR DEBATE, THE SENATE
VOTE ON ADONGS OF THE CONFERENCE
REPORT.
THE PRESIDING OFFICER: IS
THERE AN OBJECTION?
WITHOUT OBJECTION, SO ORDERED.
MR. DODD: MADAM PRESIDENT, I
YIELD THE FLOOR.
GRIGG GREG MADAM PRESIDENT, AT
THIS POINT I AM GOING TO MAKE A
POINT OF ORDER THAT THE SENATOR
FROM CONNECTICUT ALLUDED TO.
WE HAVE RULES AROUND HERE THAT
WE'VE SET UP TO DISCIPLINE
OURSELVES ON SPENDING.
UNFORTUNATELY, WE CONSISTENTLY
IGNORE AND WAIVE THEM.
THAT'S ONE OF THE REASONS WHY
WE'VE A $13 TRILLION DEBT.
THAT'S WHY WE'VE GOT -- ONE OF
THE REASONS WHY WE'RE GOING TO
HAVE A $1.4 TRILLION DEFICIT
THIS YEAR ALONE.
THIS BILL VIOLATES THOSE RULES.
THIS BILL VIOLATES ONE OF THE
SECTIONS OF THOSE RULES WHICH
STHAIS IN ANY TEN-YEAR PERIOD
YOU SHALL NOT HAVE MORE THAN A
$5 BILLION EFFECT ON THE
DEFICIT.
-- IN A NEGATIVE WAY, WHICH YOU
NEED TO OTHERWISE PAY FOR WHAT YOU'RE DOING.
THEREFORE, THIS BILL DOES
VIOLATE OUR BUDGET ACT, AND IF
WE'RE GOING TO HAVE ANY FISCAL
DISCIPLINE AROUND HERE -- AND WE
HEAR A LOT OF PEOPLE TALKING
ABOUT HOW WE'RE GOING TO HAVE
FISCAL DISCIPLINE AROUND HERE --
WE SHOULD BE LIVING BY THE RULES
TWOAF ASSERT FISCAL -- BY THE
RULES WE HAVE TO ASSERT FISCAL DISCIPLINE.
THEREFORE, I MAKE A POINT OF
ORDER THAT THE BILL VIOLATES
SECTION 31 OF THE BUDGET ACT.
MR. DODD: THE SENATE IS NOT IN
ORDER.
--
THE PRESIDING OFFICER: THE
CHAMBER WILL BE IN ORDER.
MR. DODD: MADAM PRESIDENT,
PURSUANT TO SECTION 904 OF THE
CONGRESSIONAL BUDGET ACT OF 1974
AND THE WAIVER PROVISIONS OF
APPLICABLE BUDGET RESOLUTIONS, I
MOVE TO WAIVE ALL APPLICABLE
ACTIONS OF BUDGET ACT RESOLUTIONS FOR THE PURPOSES OF
THE PENDING CONFERENCE ROMPLET I
ASK FOR THE Y
THAT. THE PRESIDING OFFICER: IS
THERE A SUFFICIENT SECOND?
THERE APPEARS TO BE.
MR.
WILL OCCUR SOMEWHERE AROUND 2:00 P.M.?
THE PRESIDING OFFICER: THE SENATOR IS CORRECT.
THE SENATOR FROM TEXAS.
MRS. HUT
PRESIDENT, DID THE DISTINGUISHED
CHAIRMAN NEED TO ADD ANYTHING MORE?
MR. DODD: I'LL RESPOND TO MY
GOOD FRIEND AND COLLEAGUE FROM
NEW HAMPSHIRE IN DUE TIME.
BUT -- LET ME JUST SAY, BY THE
WAY, I SEE THAT MY COLLEAGUE
FROM TEXAS IS SEEKING RECOGNITION.
I WANT TO PUBLICLY THANK HER.
SHE MADE A SUBSTANTIAL
CONTRIBUTION TO THIS BILL ON
SEVERAL AMENDMENTS THAT WERE
ADOPTED DURING THE SENATE DEBATE
ON THE FLOOR.
AND I WANT TO THANK HER FOR THEM.
THEY WERE -- THEY WERE -- THEY
ADDED TO THE VALUE OF THE
LEGISLATION.
AND SO I'M NOT SURE WHAT HER
COMMENTS ARE GOING TO BE RIGHT
NOW, BUT I WANT TO THANK HER FOR
THOSE CONTRIBUTIONS.
THE PRESIDING OFFICER: WILL
THE GENTLELADY SUSPEND.
WILL THE SENATE PLEASE BE THE
--WILL THE SENATE PLEASE BE IN
ORDER.
MRS. HUTCHISON: I APPRECIATE
THE COMMENTS OF THE CHAIRMAN
BECAUSE I WAS GOING TO MENTION
THAT HE ACCOMMODATED MANY OF THE
AMENDMENTS THAT I HAD,
RTICULARLY AS IT CONCERNS
COMMUNITY BANKS.
THAT WAS A HUGE CONCERN IN THE
ORIGINAL DRAFT OF THE BILL, AND
I THANK THE CHAIRN FOR
ACCOMMODATING THOSE CONCERNS,
AND I THINK IT DID MAKE IT A
BETTER BILL.
I WANT TO GO BACK TO THE
AFTERMATH OF THE FINANCIAL
CRISIS WHERE CONGRESS WAS TASKED
WITH A GREAT RESPONSIBILITY OF
MODERNIZING OUR FINANCIAL
REGULATORY STRUCTURE SO THAT WE
WOULD HAVE PROPER OVERSIGHT OF
TODAY'S BANKING SYSTEM AND
FINANCIAL MARKETS.
WE WERE CALLED TO FILL IN GAPS
IN REGULATION WHICH ALLOWED
AMERICAN HOME BUYERS TO SIMPLY
SIGN ON A DOTTED LINE TO
PURCHASE A HOUSE THAT WAS, IN
MANY INSTANCES, BEYOND THEIR
MEANS.
TO LET COMPANIES HIDE TRILLIONS
OF DOLLARS IN ASSETS FROM
REGULATORS, AND ULTIMATELY LED
OUR GOVERNMENT TO USE HUNDREDS
OF BILLIONS OF TAXPAYER DOLLARS
TO BAIL OUT FINANCIAL
INSTITUTIONS, FANNIE MAE,
FREDDIE MAC, G.M., CHRYSLER AND
A.I.G.
THUS, FOR FINANCIALLY REGULATORY
REFORM TO SUCCEED, WE NEEDED TO
ENHANCE OUR MORTGAGE
UNDERWRITING STANDARDS, BRING
GREATER TRANSPARENCY TO OUR
DERITIVES MARKETS, AND ONCE
AND FOR ALL END TOO BIG TO FAIL.
THE CONFERENCE REPORT BEFORE US
TOOK STEPS TOWARDS THESE GOALS.
IT POTS IN MEASURE -- IT PUTS IN --
IT FALLS SHORT OF FULLING
ADDRESSING FUTURE BAILOUTS BY
FAILING TO MAKE CHANGES TO THE BANKRUPTCY CODE.
I BELIEVE WE'VE ALSO IN THIS
BILL MADE STRIDES TO STRENGTHEN
MORTGAGE UNDERWRITING STANDARDS.
I'M CONCERN THAT A NEWLY
FORMED CONSUMER PROTECTION
BUREAU WILL TAKE THE LEAD RATHER
THAN OUR BANKING INSTITUTIONS,
AND THIS IS ONE OF THE BIGGEST
CONCERNS THAT I HAVE WITH THE
BILL.
I'M PLEASED THAT THE CONFERENCE
REPORT INCLUDES NUMEROUS
MEASURES FOR WHICH I FOUGHT, AND
I DO WANT TO THANK CHAIRMAN DODD
FOR HIS WILLINGNESS TO WORK WITH
ME AND HIS CONSTRUCTIVE APPROACH
TO MAKING CHANGES TO THE BILL.
INCLUDING A MORE LEVEL PLAYING
FIELD FOR COMMUNITY BANKS ACROSS
OUR COUNTRY TO COMPETE THROUGH
THE AMENDMENT TO BRING PARITY TO
FDIC INSURANCE ASSESSMENTS.
MY AMENDMENT ALONG WITH SENATOR
KLOBUCHAR TO ALLOW
STATE-CHARTERED BANKS AND SMALL-
AND MEDIUM-SIZED BANK HOLDING
COMPANIES TO RETAIN FEDERAL
SUPERVISORY SUPERVISION SO THAT
OUR MONETARY POLICY REFLECTS THE
ECONOMIC CONDITIONS THROUGHOUT
OUR COUNT, NOT JUST ON WALL
STREET.
RELIEF FOR SMALL- AND
MEDIUM-SIZED PUBLIC COMPANIES
FROM THE BURDEN OF RULE 404-B OF SARBANES-OXLEY.
ASSURANCE THAT THE VOLCKER RULES
PROPRIETARY TRADING RESTRICTIONS
WILL NOT EXTEND TO
AFFILIATES OF INSURANCE
COMPANIES WITH DEPOSITORY INSTITUTIONS.
THESE ARE POSITIVE CHANGES FOR
WHICH THE GIVE THE CHAIRMAN
GREAT CREDIT.
HOWEVER, THESE POSITIVE CHANGES
ARE GREATLY OUTWEIGHED BY THE
MISPLACED PRIORITIES TO CREATE
NEW LAYERS OF BUREAUCRACY WHILE
FAILING TO ADDRESS THE ROOT
CAUSES OF THE FINANCIAL CRISIS.
FANNIE MAE AND FREDDIE MAC.
ADDITIONALLY, THERE ARE A SERIES
OF PROVISIONS THAT ARE TROUBLING
TO ME.
NUMBER ONE IS THIS CONSUMER
PROTECTION BUREAU.
IT IS USING THE FAULTS OF WALL
STREET BANKS AND EXECUTIVES TO
CREATE A CUMBERSOME NEW
BUREAUCRACY WHICH WILL IMPOSE
JOB-KILLING REGULATIONS AT THE
EXPENSE OF MAIN STREET, SMALL
BUSINESSES, AND FAMILIES.
THE CONSUMERS FINANCIAL
PROTECTION BUREAU WITH ENDLESS
AUTHORITY OVER ALL IF A SETS OF
OUR ECONOMY IS NOT THE ANSWER.
I AM PARTICULARLY CONCERNED
ABOUT THE EFFECT THIS BUREAU
WILL HAVE ON WELL-REGULATED,
SAFE, SOUND COMMUNITY BANKS.
THE BANKS LARGELY AVOIDED THE
SUBPRIME MARKET AND THEY DIDN'T
ENGAGE IN THE RISKY SPECULATIVE
TRADES THAT CONTRIBUTED TO THE
FINANCIAL MELTDOWN.
HOVER, THESE COMMUNITY BANKS
ARE GOING TO HAVE 27 NEW OR
EXPANDED TYPES OF REGULATION
AFTER THIS BILL IS PASSED.
THE CONSUMER BUREAU COULD
ULTIMATELY DETERMINE WHAT
PRODUCTS COMMUNITY BANKS CAN
OFFERINGS ON WHAT TERMS THEY CAN
OFFER THESE PRODUS AND UNDER
WHAT SETTINGS AND CIRCUMSTANCES.
OVERALL, THE CONSUMER BUREAU
WILL RESULT IN FEWER PRODUCTS
AND SERVICES FOR AMERICAN
FAMILIES AND SMALL BUSINESSES
.THE TEXAS BANKERS ASSOCIATION
TELLS ME THE CONSUMER AGENCY --
THE CONSUMER BUREAU RULES COULD
RESULT IN THE END OF FREE
CHECKING ACCOUNTS, HIGHER FEES
ON ALL CONSUMER SERVICES AND
LESS OPPORTUNITY TO NEGOTIATOR
ON LOANS.
THAT'S ACCORDING TO THE TEXAS
BANKERS ASSOCIATION.
IT'S NOT THE BIG BANKS ON WALL
STREET VOICING CONCERNS AND
OPPOSITION TO THIS BILL.
THE OPPOSITION IS COMING FROM
COMMUNITY BANKERS IN TEXAS WHO
ARE WORRIED THAT THEY WILL BE
UNDULY PENALIZED FOR FAULTS THEY
DID NOT COMMIT.
SMALL BUSINESSES ARE ALSO
AGAINST THIS NEW CONSUMER BUREAU.
THE U.S. CHAMBER OF COMMERCE AND
THE NATIONAL FEDERATION OF
INDEPENDENT BUSINESS IS VERY
CONCERNED ABOUT THIS BILL.
WE NEED COMMUNITY BANKS TO
CONTINUE EXTENDING CREDIT TO
WORTHY FAMILIES LOOKING FOR A
HOME AND TO SMALL BUSINESSES TO
INVEST IN AND CREATE JOBS.
I COSPONSORED AN AMENDMENT
DURING SENATE CONSIDERION TO
ENSURE THAT SAFETY AND SOUNDNESS
REGULATORS WOULD HAVE A SAY IN
THE RULES AND REGULATIONS
IMPOSED ON THEIR INSTITUTIONS.
THAT AMENDMENT WAS REJECTED
LEAVING COMMUNITY BANKS SUBJECT
TO THE THIS NEW BUREAU'S
UNLIMITED AND UNCHECKED
RULE-MAKING AUTHORITY.
I'M ALSO CONCERNED WITH THE
TREATMENT OF DERIVATIVES IN THIS
LEGISLATION.
I AM ALSO CONCERNED ABOUT THE
LACK OF TRANSPARENCY THAT WAS
NEEDED AND HAS BEEN EXCHANGED
FOR A REGULATION THAT I DO NOT
THINK IS GOING TO PROPERLY
REGULATE DERIVATIVES.
MADAM PRESIDENT, I HAVE A
FURTHER STATEMENT, BUT I'M GOING
TO PUT IT IN THE RECORD BECAUSE
I THINK THAT WE NEED TO FULLY
LOOK AT SOME OF THE CONCERNS IN
THIS BILL, WITH THE HOPE THAT
WHEN IT PASSES, WHICH IT WILL --
I CANNOT SUPPORT IT, BUT IT WILL
PASS -- BUT THESE CAUTIONS
SHOULD BE LOOKED AT GOING
FORWARD TO PERHAPS WHEN THE
PROBLEMS COME TO LIGHT LATER WE
COULD, I HOPE, MAKE SOME CHANGES
TO THE LAW GOING FORWARD THAT
WILL BETTER ACCOMMODATE THE
NEEDS OF CONSUMERS AND SMALL
BUSINESSES AND COMMUNITY BANKS
IN OUR COUNTRY.
I DO WANT TO END BY SAYING THAT
THERE ARE GOOD PARTS OF THIS
BILL.
AND I THINK THE CHAIRMAN
DESERVES A LOT OF CREDIT FOR
PUSHING THIS FINANCIAL REFORM,
KNOWING THAT WE NEEDED TO DO IT.
I DON'T THINK IT FULLY MEETS THE
TEST OF DOING WHAT WE SHOULD BE
DOING, BUT I DO THINK THAT IT IS
A FIRST STEP, AND I THINK THE
CHAIRMAN IS TO BE COMMENDED FOR
HIS LEADERSHIP.
I THANK YOU, MADAM PRESIDENT,
AND I YIELD THE FLOOR AND I ASK
THAT MY FULL STATEMENT BE
SUBMITTED FOR THE PRESIDING OFFICER: WITHOUT
OBJECTION.
MR. DODD: AND, MADAM
PRESIDENT, LET ME AGAIN --
THE PRESIDING OFFICER: THE SNOER FROM CONNECTICUT.
MR. DODD: MY FRIEND AND
COLLEAGUE FROM TEXAS SERVES ON
THE BANKING COMMITTEE AS WELL
AND HAS BEEN A GOOD MEMBER, AND
AGAIN I THANK HER AND SENATOR KLOBUCHAR.
THERE WERE A SERIES OF
AMENDMENTS THAT SENATOR
HUTCHISON WAS INVOLVED IN, AND
AS I SAID A MOMENT AGO, ADDED
VALUE TO THIS BIVMENT SO I THANK
HER FOR IT.
I MENONED YESTERDAY WHILE A
RELATIVELY JUNIOR MEMBER OF THE
BANKING COMMITTEE, THERE WAS NO
MEMBER OF THIS CHAMBER, MADAM
PRESIDENT, THAT ADDED AS MUCH TO
THIS BILL AS THE SENATOR FROM
VIRGINIA DID.
AND I CAN'T -- THERE ARE NOT
WORDS OR TIME FOR ME TO
ADEQUATELY EXPRESS MY GRATITUDE
TO HIM FOR HIS INVOLVEMENT,
LITERALLY ON ALMOST AN HOURLY
BASIS WAS INVOLVED, ALONG WITH
SENATOR CORKER OF TENTON.
THEY LITERALLY SPENT HOURS ON
THEIR OWN MEETING AND TALNG
WITH OTHER PEOPLE ABOUT HOW TO
FASHION TWO OF THE MOST CRITICAL
TITLES OF THIS BILL.
AND SO LET ME JUST EXPRESS MY
GRATITUDE ONCE AGAIN TO SENATOR
MARK WARNER OF VIRGINIA AND
THANK HIM IMMENSELY FOR HIS
CONTRIBUTION.
DID YOU A GREAT JOB.
MR. WARNER: MADAM PRESIDENT? THE PRESIDING OFFICER: THE
SENATOR SPR VIRGINIA.
MR. WARNER: I WANT TO THANK
THE CHAIR FOR THOSE KIND REMARKS
AND YOU SAID THERE'S NOT TIME OR
WORDS, BUT IF YOU'D LIKE TO TAKE
SOME MORE TIME OR WORDS TO
THANK, I WOULD BE HAPPY TO --
LET ME AGAIN THANK THE CHAIR AND
SAY IT'S A GOOD FEELING THAT ALL
OF US HAVE LABORED ON THIS.
THE MEMBERS, THE STAFF THAT IS
THAT IT'S COMING TO A SUCCESSFUL
CONCLUSION.
AND THAT THE DODD-FRANK WALL
STREET REFORM, THE CONSUMER
PROTECTION ACT IS GOING TO LAW.
AND I THINK IT WILL STAND, AS
THOSE EQUALLY CONTROVERSIAL
PIECES OF LEGISLATION IN THE
1930'S, IT STOOD THE TEST OF
TIME FOR DECADES, I THINK THIS
BILL WILL STAND THE TEST OF TIME
FOR DECADES AS WELL IN TERMS OF
CREATING A NEW SET OF RULES OF
THE ROAD FOR NOT JUST AMERICA'S
FINANCIAL SECTOR, BUT IN A SENSE
THE WORLD'S FINANCIAL SECTOR FOR
DECADES TO COME.
AND WHILE NOT PERFECT -- AND NO
PIECE OF LEGISLATION IS -- ONE
OF THE THINGS THAT GIVES ME SOME CONFIDENCE THAT THE RIGHT
BALANCE HAS BEEN STRUCK IS THAT
THIS BILL HAS BEEN CRITICIZED BY
BOTH THE LEFT AND THE RIGHT.
SOME ON THE LEFT, SOME ON THE
DEMOCRATIC SIDE SAY THE BILL HAS
NOT GONE FAR ENOUGH IN PUTTING
MORE REQUIREMENTS AND
RESTRICTIONS ON OUR FINANCIAL INSTITUTIONS.
SOME OF MY COLLEAGUES ON THE
REPUBLICAN SIDE, ON THE RIGHT,
HAVE SAID THIS BILL GOES TOO
FAR.
THE FACT THAT IT IS GETTING
PERHAPS THAT LEFT AND RIGHT
CRITICISM PUTS US MAYBE IN THAT
JUST RIGHT IN THE MIDDLE
SECTION, WHICH WAS THE
APPROPRIATE BALANCE WE'VE TRIED
TO STRIKE SINCE THE CHAIRMAN
STARTED THIS EFFORT WELL OVER
TWO YEARS AGO.
I THINK IT'S IMPORTANT AT TIMES
THAT WE REMEMBER WHY WE'RE HERE
TODAY.
TWO YEARS AGO THE MARKETS WERE
IN CHAOS.
PRESIDENT BUSH AND SECRETARY
PAULSON HAD CREATED TARP, $700
BILLION UNPRECEDENTED BAILOUT TO
SHORE UP OUR FINANCIAL SYSTEM.
PRESIDENT OBAMA WAS IN CRISI
MODE WITH OUR ECONOMY STILL IN
FREE FALL FROM DAY ONE.
THE DOW WAS AT 6500, AND THERE
WAS A LOT OF TALK OF
NATIONALIZING BANKS.
WELL, CLOSE TO A YEAR AND A HALF
TO TWO YEARS LATER, WE HAVE SEEN
STIMULUS AND STRESS TESTS.
WE'VE SEEN A DOW THAT NOW HAS
TOUCHED 11000.
AND WHILE THE ECONOMY IS NOT
CREATING JOBS AT THE RATE ANY OF
US WOULD LIKE TO SEE, THE TALK
OF FINANCIAL ARMAGEDDON OR
COMPLETE COLLAPSE HAS DISAPPEARED.
I THINK WE WENT INTO THIS
PROCESS WITH THREE GOALS.
FIRST, THE TAXPAYERS MUST NEVER
AGAIN HEAR THAT A COMPANY IS TOO
BIG TO FAIL.
SECOND, THAT WE HAD TO FIX OUR
REGULATORY SYSTEM TO MAKE SURE
THAT THE HUGE GAPS THAT EXISTED,
THAT ALLOWED SYSTEMIC REGULATORY
ARBITRAGE COULD NO LONGER TAKE PLACE.
AND FINALLY, CONSUMERS AND
INVESTORS HAD TO HAVE CONFIDENCE
THAT OUR MARKETS WERE FAIR, TRANSPARENT, AND THAT THERE
WOULD BE A COP ON THE BEAT TO
MAKE SURE THAT SOME OF THE
EXCESSES THAT TOOK PLACE IN
2005, 2006, 2007 WHERE FOLKS
WERE BEING PUT INTO HOMES THEY
COULD NEVER AFFORD TO PAY FOR OR
FINANCIAL INSTRUMENTS THAT WERE
BEIN CREATED UNDER THE GUISE OF
LOWERING THE COST OF RISK THAT
WERE MORE CREATED FOR FEES WOULD
NO LONGE COME AGAIN ON WEARY
INVESTORS, OR HOMEOWNERS THAT
GOT THEMSELVES INTO THE PROBLEM.
I THINK ONE OF THE MOST
INTERESTING CRITIQUES SOME HAVE
IS WE HAVE NOT ADDRESSED TOO BIG
TO FAIL.
CANDIDLY WITH THE UNITED STATES
MOVING ON THE REST OF THIS
LEGISLATION AND THE REST OF THE
WORLD WAITING, WE HEAR FROM OUR
EUROPEAN COLLEUES THAT THE
FRAMEWORK WE SET UP, ACTUALLY
THEY HOPE TO EMULATE.
WE CREATED A NEW REGULATORY
STRUCTURE SO THAT THE REGULATORS
COULD GET OUT OF THEIR SILOS,
DEPOSITORY INSTITUTIONS ON ONE
SIDE, SECURITY INSTITUTIONS ON
ANOTHER, DERIVATIVES TRADING ON
A THIRD, AND MAKE SURE THAT WE
HAD A FULL SYSTEMIC RISK
COUNCIL, THAT WE MEASURED BE
RISK WHEREVER IT EXISTED
REGARDLESS OF THE CHAER OF THE ORGANIZATION.
WHILE SOME SAID WE OUGHT TO GO
AHEAD AND LIMIT THE ASSET SIZE
OF SIMILAR INSTITUTIONS JUST ON
SIZE ALONE, I THINK THE CHAIRMAN
WISELY DECIDED THAT AS WE WENT
THROUGH A YEAR AND A HALF OF
HEARINGS, WHAT OFTEN
PRECIPITATED THE GREATEST RISKS
TO OUR SYSTEM WAS NOT SIZE
ALONE -- AMERICA HAS ONLY GOT 4
OF THE 50 LARGEST BANKS IN THE
WORLD -- BUT IT WAS THE
INTERCONNECTEDNESS, THEIR
LEVERAGE, THE FAILURE TO HAVE
APPROPRIATE RISK MANAGEMENT
PLANS IN PLACE.
THIS NEW SYSTEMIC RISK COUNCIL
IS SPECIFICALLY CHARGED WITH
MAKING SURE OUR LARGE, MORE
COMPLEX INSTITUTIONS HAVE MORE
STRINGENT CAPITAL REQUIREMENTS,
LEVERAGE RATIOS, LIQUIDITY
REQUIREMENTS, AND RISK
MANAGEMENT TOOLS.
WE'D EVEN CREATED TWO WHOLE NEW
CATEGORIES THAT WHILE NOT FULLY
TESTED, BOTH OF THESE CATEGORIES
ACTUALLY CAME FROM COLLEAGUES ON
THE OTHER SIDE OF THE AISLE,
COULD BE IMPORTANT NEW STEPS TO
PRESENT -- PREVENT THESE LARGE
INSTITUTIONS FROM FAILING.
ONE IS CONONTINGENT DEPTH THAT
LARGE INSTITUTIONS WOULD HAVE TO
HAVE THAT IF THEY GET THEMSELVES
EVEN CLOSE TO TROUBLE, THAT DEBT
WOULD CONVERT INTO EQUITY,
CONSEQUENTLY DILUTING EXISTING
SHAREHOLDERS AND MANAGEMENT AND
KEEPING PRESSURE ON THE PWAOD TO
MAKE SURE THAT -- ON THE BOARD
TO MAKE SURE THAT MANAGEMENT
WOULDN'T TAKE THAT RISK.
FINALLY, A TOOL THAT, AGAIN, I
THINK IF IMPLEMENTED CORRECTLY,
WILL BE TREMENDOUSLY POWERFUL.
AND THAT IS TO ENSURE THAT ALL
OF THESE LARGE, COMPLEX
INSTITUTIONS PROVIDE A PLAN
ABOUT HOW THEY WILL BE ABLE TO
UNWIND IN AN ORDERLY FASHION
THROUGH TRADITIONAL BANKRUPTCY
PROVISIONS, AND OUR GOAL IS TO
ALWAYS HAVE BANKRUPTCY BE THE
APPROPRIATE RESPONSE, AND IF
THAT LIQUIDATION PLAN OR IF THAT
DEBT PLAN IS NOT BLESSED BY THE
COUNCIL OF REGULATORS, THE
COUNCIL OF REGULATORS CAN
DISMEMBER, BREAK UP OR P OTHER
RESTRICTIONS ON THESE LARGE INSTITUTIONS.
SENATOR DODD MADE, I THINK, THE
DECISION TO TASK MY GOOD FRIEND,
SENATOR CORKER FROM TENNESSEE,
AND I WITH THIS ISSUE IF THOSE
PROCESSES STILL DON'T WORK, HOW
DO YOU MAKE SURE YOU'VE GOT A LIQUIDATION PROCESS.
AND OUR GOAL WAS TWO.
ONE, TAXPAYERS SHOULD NEVER BE
ABLE TO HAVE TO BEAR THE RISK.
AND, TWO, THAT IF AN ENTITY GOES
INTO LIQUIDATION, IT WILL NOT
COME OUT.
LIQUIDATION OR RESOLUTION IS NOT
AN ATTEMPT TO STAND UP AN INSTITUTION.
BUT WE WANTED TO MAKE CLEAR TO
SHAREHOLDERS, TO MANAGEMENT, IF
YOU GO INTO RESOLUTION, YOU'RE
TOAST, AS MY COLLEAGUE, SENATOR
CORKER, OFTEN SAID.
WE THINK WE HAVE REACHED THAT
GOAL, AND I'M PROUD,
PARTICULARLY TITLES 1 AND 2 OF
THIS BILL.
ACTUALLY WHEN CHAIRMAN DODD AND
SENATOR SHELBY PUT SOME
AMENDMENTS TO IT, WERE ENDORSED
BY 95 OF OUR COLLEAGUES, THE
BROADEST BIPARTISAN SECTION OF
THIS LEGISLATION.
THIS BILL ADDRESSES A NUMBER OF
OTHE VITAL AREAS AS WELL.
IT ALLOWS A SINGLE DEPOSITORY
PLACE TO GET THE APPROPRIATE
DAY-TO-DAY INFORMATION ON OUR
FINANCIAL INSTITUTIONS, BUT
STILL DIDN'T EXIST UNTIL WE
CREATED THE FINANCI SERVICES
OVERSIGHT COUNCIL.
AND THE ABILITY TO GET ON A
DAILY BASIS THE LEVEL OF
INTERCONNECTEDNESS OF A FUTURE A.I.G.
IT PUTS IN PLACE A CONSUMER
PROTECTION BUREAU TO MAKE SURE,
FOR EXAMPLE, THAT MORTGAGES ARE
REGULATED IN A WAY THAT
CONSUMERS CAN UNDERSTAND
REGARDLESS OF THE CHARTER OF THE ORGANIZATION.
WE OFTEN FOUND BANKS HAD A
FAIRLY GOOD ABILITY TO REGULATE
SOME OF THEIR MORTGES WHEREAS
MORTGAGE LENDERS AND OTHERS WHO
WERE UNREGULATED HAD NO SUCH
RESTRICTIONS.
NOW WE'VE GOT AN EVEN PLAYING FIELD.
IT FINALLY PUTS SOME PLACE --
THERE IS STILL SOME DEBATE ON
THIS ISSUE -- AN APPROPRIATE
PROCESS TO REGULATE DERIVATIVES
AND BRING THESE CRITICAL BUT
POTENTIALLY DANGEROUS
INSTRUMENTS OUT OF THE SHADOWS,
AND THE VAST MAJORITY OF THESE
INSTRUMENTS NOW WILL BE TRADED
IN A MORE TRANSPARENT WAY ON EXCHANGES.
THERE'S MORE TO BE DONE.
DOMESTIC AND INTERNATIONAL
IMPLEMENTATION IS VITALLY
IMPORTANT.
AS I MENTIONED AT THE OUTSET,
THE UNITED STATES -- AND THIS IS
ONE OF THE THINGS THAT IS KIND
OF REMARKABLE WHEN I HEAR FROM
SOME OF MY COLLEAGUES THAT WE
TPHAOUF TOO QUICKLY OR THIS --
WE MOVE TOO QUICKLY OR THIS BILL
DOES TOO MUCH -- THE REST OF THE
WORLD HAS BEEN WAITING ON
AMERICA TO ACT TO SET THE
TEMPLATE FOR BROAD-BASED
FINANCIAL REFORM.
NOW THAT WE HAVE ACTED, I THINK
PARTICULARLY EUROPE AND ASIA
WILL FOLLOW OUR STEPS.
BUT MAKING SURE WE DO THIS IN AN
APPROPRIATE INTERNATIONAL
IMPLEMENTATION IS TERRIBLY
IMPORTANT, BUT ALSO MAKING SURE
WE'VE GOT THE REGULATORY
APPROACH ACROSS THE WORLD
CORRECT SO THERE IS NOT
INTERNATIONAL BELIEF TO
ARBITRAGE WITH THESE LARGE
INSTITUTIONS. I KNOW SOME OF MY COLLEAGUES ON
THE OTHER SIDE OF THE AISLE HAVE
ALSO RAISED THE QUESTION THAT
THIS BILL DIDN'T FULLY ADDRESS
THE QUESTION OF THE G.S.E.'S.
THEY'RE RIGHT.
I THINK IT WAS THE RIGHT AND
CONSCIOUS DECISION OF THE CHAIR
AND OTHERS THAT TO DISRUPT AN
ALREADY STILL FRAGILE HOUSING
MARKET AT THIS MOMENT IN TIME IN
A PIECE OF LEGISLATION THAT HAS
ALREADY BEEN ACCUSED BY SOME AS
BEING TOO BROAD AND COVERING TOO
MANY ITEMS WAS NOT THE APPROPRIATE CHOICE.
WE WL HAVE TO COME BACK AND
DEAL WITH G.S.E.'S.
WE'VE GOT TO MAKE SURE THAT AS
WE DEAL WITH G.S.E.'S,
INTERNATIONAL IMPLEMENTATION,
THAT WE STAY VIGILANT.
HAVE GIVEN THE REGULATORS THE TOOLS.
HOW THEY USE THESE TOOLS WILL BE
UP TO US IN CONGRESS TO MAKE
SURE THEY'RE IMPLEMENTED
CORRECTLY WITH APPROPRIATE
OVERSIGHT.
NOW, I AM CERTAINLY DISAPPOINTED
THIS BILL DIDN'T PASS WITH
BROADER BIPARTISAN LEGISLATION,
BUT I WILL -- WE ONLY GOT HERE
BECAUSE THERE WAS BIPARTISAN SUPPORT.
AND I WANT TO CLOSE WITH
ACKNOWLEDGING, AGAIN, THE
CHAIRMAN WAS VERY KIND IN HIS
REMARKS, BUT I CAN'T THINK IN MY
SHORT TENURE HERE IN THE UNITED
STATES SENATE OF ANY SENATOR
THAT'S WORKED HARDER ON A PIECE
OF LEGISLATION, THAT'S BEEN MORE
RELENTLESS, THAT'S HAD MORE
TWISTS AND TURNS, THAT'S HAD
MORE, "WE'RE THERE, OH MY GOSH,
BUT WE MAY NOT BE THERE," THAT'S
PROBABLY HAD MORE 10:00, 2:00 IN
THE MORNING, 4:00 IN THE MORNING
I BELIEVE AT ONE POINT,
TELEPHONE CALLS, MEETING WITH
OTHER MEMBERS, AS THE SENATOR
FROM TEXAS MENTIONED EARLIER,
EVEN THOUGH THE SENATOR FROM
TEXAS COULDN'T SUPPORT THE
OVERALL BILL, OUR CHAIRMAN HAS
WORKED WITH ALL MEMBERS
REGARDLESS OF PARTY TO TRY TO
ACCOMMODATE THEIR INTERESTS.
I COMMEND THE SENATOR FROM TEXAS
FOR POINTING OUT THE FACT THAT,
FOR EXAMPLE, COMMUNITY-BASED AND
INDEPENDENT BANKS COME OUT OF
THE THIS LEGISLATION AS ONE OF
THE REAL WINNERS IN TERMS OF
THEIR ABILITY TO HAVE A MORE
FAIR COMPETITION WITH A LARGER INSTITUTION.
I WANT TO COMMEND THE CHAIRMAN.
I WANT TO COMMEND ALL MY
COLLEAGUES ON BOTH SIDES OF THE
AISLE, EVEN THOSE WHO PERHAPS
COULDN'T VOTE FOR THE FAL
PRODUCT BUT WERE PART OF
BUILDING THE PRODUCT, AND THAT
THEIR IDEAS WERE IMPLEMENTED.
I THINK THIS PIECE OF
LEGISLATION WILL, WHEN WE THINK
ABOUT THE GLASS-STEAGALLS, ABOUT
THE BILLS THAT KETD THE FDIC,
THE BILLS IN THE MOMENT OF
CRISIS CREATED THE FINANCIAL
FRAMEWORK FOR 20th CENTURY
AMERICAN CAPITALISM, THAT WHAT
THIS BILL HAS DONE, AND THERE
WILL BE WORK DONE TO IMPROVE, TO
FULLY IMPLEMENT IT, BUT WHAT
THIS BILL HAS DONE IS SET
FRAMEWORK FOR 21st CENTURY
AMERICAN CAPITALISM, IN A
CERTAIN WAY THE FRAMEWORK FOR
21st CENTURY CAPITALISM ACROSS
THE WORLD IN A WAY AMERICA CAN
REMAIN THE CENTER FOR FINANCIAL
MARKETS BUT AT T SAME TIME
MAKE SURE THE CONSUMERS AND THE
INVESTING PUBLIC IS MADE SAFE IN
THIS NEW AND INVESTING WORLD.
WITH THAT, MADAM CHAIRMAN, I
YIELD THE FLOOR. THE PRESIDING OFFICER: THE
SENATOR FROM ARIZONA.
MR. KYL: THANK YOU.
I TOO WOULD LIKE TO SPEAK TO THE
CONFERENCE REPORT ON THE
FINANCIAL REGULATORY REFORM
WHICH WE WILL VOTE ON HERE IN A
COUPLE OF HOURS.
I THINK WE ALL AGREE THAT THE
PURPOSE OF THE FINANCIAL REGULAR
REFORM -- REGULATORY REFORM
SHOULD HAVE BEEN THE IMPETUS TO
TACKLE THE PROBLEM.
REIN IN TWO GOVERNMENT SPONSORED
ENTERPRISES, THE G.S.E.'S,
FANNIE MAE AND FREDD MAC.
BUT DESPITE ITS SIZE AND THE
HYPE BEHIND IT, THE BILL BEFORE
US FAILS IN THOSE TWO KEY RESPECTS.
MOREOVER, EVEN THOUGH MAIN
STREET DID NOT CAUSE THE
PROBLEM, THE BILL IS SO
PERVASIVE IN ITS REGULATORY
REACH THAT, IT CREATES NEW
BURDENS FOR MAIN STREET
BUSINESSES.
I'M NOT SURE THAT'S WHAT THE
BILL'S SUPPORTERS WANT OR ITS
AUTHORS INTEND, BUT THAT WILL BE THE RESULT.
FOR EXAMPLE, A JULY 14 "WALL
STREET JOURNAL" NEWS ARTICLE
ENTITLED FINANCIAL OVERHAUL
CASTS LONG SHADOWS ON THE PLAINS
EXPLAINS HOW NEW DERIVATIVES
RULES WILL HARM AMERICA'S
LIVESTOCK FARMERS.
THERE ARE OTHER PROBLEMS WITH THE BILL.
THE BIGGEST NEW PROBLEM THAT IT
CAUSES IS THE HARM TO THE
AVAILABILITY OF CREDIT,
SOMETHING THAT OUR COLLEAGUE,
SENATOR GREGG FROM NEW HAMPSHIRE
HAS TALKED A LOT ABOUT.
IT IMPLEMENTS ONE-SIZE-FITS-ALL
CAPITAL STANDARDS AND USES
FLAWEDUNDING MECHANISMS.
IT PERPETUATES BAILOUTS AND
BURDENS NEW BUSINESSES WITH
REGULATIONS WHICH I'LL SPEAK ABOUT IN A MOMENT.
LET ME JUST ADDRESS A FEW OF
THESE PROBLEMS IN MORE DETAIL.
FIRST, THE COSTS AND OFFSETS OF
THE BILL.
SECOND, THE FAILURE TO ADDRESS
THE G.S.E.'S, FANNIE MAE AND
FREDDIE MAC.
AND THIRD, THE JOB-KILLING
CONSUMER PROTECTION BUREAU THAT
WILL REDE AVAILABLE CREDIT FOR
AMERICAN BUSINESSES AND, THUS,
REDUCE JOB CREATION.
FIRST, THE COST AND OFFSETS.
THE CONGRESSIONAL BUDGET OFFICE
HAS PUT THE TEN-YEAR COST OF THE
CONFERENCE REPORT BILL AT
APPROXIMATELY $19 BILLION.
THAT'S THE COST OF THIS ALLEGED
NEW REFORM.
NOW, DEMOCRATS INITIALLY TRIED
TO FUND THIS OBLIGATION WITH A
NEW TAX IMPOSED ON LARGE
FINANCIAL INSTITUTIONS.
AND THAT COULDN'T BE SUSTAINED.
THEY DECIDE ON A NEW FUNDING
MECHANISM THAT AS NATIONAL
REVIEW RECENTLY EDITORIALIZED,
WERE A CORPORATION TO TRY IT,
WOULD GET ITS ACCOUNTANT SENT TO
PRISON FOR FRAUD.
HERE'S HOW IT WORKS.
THE BILL WOULD NOW CANCEL THE
TROUBLED ASSET RELIEF PROGRAM,
OR TARP, A FEW MONTHS EARLY.
THUS, SAVING THEORETICALLY THE
GOVERNMENT AROUND $11 BILLION,
EVEN THOUGH IT'S HIGHLY UNLIKELY
THAT THAT MONEY WOULD EVER HAVE
BEEN USED TO MAKE ADDITIONAL
TARP LOANS.
THAT $11 BILLION WOULD BE USED
TO PARTIALLY OFFSET THE COST OF
THE BILL.
REMEMBER, THAT'S MONEY THAT HAS
TO BE BORE HEOD.
IN RE -- BORROWED.
INSTEAD OF BORROWING $11 BILLION
FEWER DOLLARS, WE'RE GOING TO
PRETEND WE HAVE THAT MONEY AND
WE'RE GOING TO SAVE IT BY NOT
SPENDING IT ON TARP SO WE'LL
SPEND IT ON THIS LEGISLATION.
IT IS A DOUBLE COUNTING THAT
NATIONAL REVIEW IS RIGHT, IT
WOULD PUT PRIVATE BUSINESS
C.E.O. OR C.F.O. IN JAIL IF HE
TRIED TO DO AN ACCOUNTING TRICK
LIKE THAT.
THE TARP LAW, MOREOVER, STATES
ANY MONEY RESCINDED FROM TARP
SHALL NOT BE FOR BUDGET
ENFORCEMENT THE CONFERENCE
REPORT NEVERTHELESS USES THIS
ALLEGED SAVINGS TO PAY FOR THE
FINANCIAL REFORM PROVISIONS,
THEREBY VIOLATING THEETTER AN
SPIRIT OF THE TARP LAW.
AND, AS I SAID, FINALLY MAKING
THESE FUNDS TO PAY FOR SOMETHING
ELSE RATHER THAN RESCINDING THEM
PUSHING OUR NATION DEEPER INTO
DEBT.
SO, MADAM PRESIDENT, WITH REGARD
TO THE COST OF THE
BILL, $19 BILLION AND THE
OFFSET, MUCH OF WHICH IS NOT A
TRUE OFFSET, BUT SIMPLE DOUBLE-A
ACCOUNTING WITH MONEY THAT WE
DON'T OWN OR HAVE ANYWAY IS A
BAD WAY TO DO BUSINESS
ESPECIALLY IN SOMETHING THAT IS
CALLED A FINANCIAL REFORM BILL.
I GUESS, FORTUNATELY, WE'VE
CHANGED THE NAME TO REFLECT THE
AUTHORS OF THE BILL.
IT IS NO LONGER THE FINANCIAL
REFORM B
DODD-FRANK BILL.
I APPRECIATE THE NAME OF MY GOOD
FRIEND FROM THE SENATOR FROM
CONNECTICUT.
TT ISN'T FINANCIAL REFORM WHEN
YOU TAKE MONEY YOU DON'T HAVE
AND SPEND IT FOR SOMETHINGHAT
YOU'RE NOT LEGALLY OBLIGATED TO
SPEND IT FOR.
PROBLEM NUMBER TWO, FANNIE AND
FREDDIE.
IF IT DOESN'T REFORM TWO O THE
BIGGEST PROBLEMS, FANNIE MAE AND
FREDDIE MAC.
THEY WERE A MAJOR CAUSE OF THE
FINANCIAL CRISIS.
IT'S NOT FOR LACK OF TRYING ON
THE REPUBLICANS' PART.
OUR DEMOCRATIC FRIENDS SAY WE'LL
DO THAT LATER.
MAYBE NEXT YEAR.
I SUGGEST THAT'S HIGHLY IMPROBABLE.
THE WAY THAT THINGS WORK AROUND
HERE, WHEN YOU DO A
COMPREHENSIVE BILL LIKE THIS,
THERE ARE A LOT OF TRADEOFFS.
THERE ARE A LOT OF DIFFERENT
INTERESTS INVOLVED.
AND IF YOU CAN'T INCLUDE ALL OF
THE ELEMENTS IN ONE BILL, IT'S
VERY DIFFICULT TO FIND THE
POLITICAL WILL TO TACKLE THE
BIGGEST PROBLEM OF ALL, FANNIE
AND FREDDIE NEXT YEAR, WITHOUT
THE LEVERAGE OF THE OTHER
PROVISIONS OF THE BILL TO DEAL WITH.
THE BEHAVIOR OF THESE TWO
INSTITUTIONS, ESE G.E.'S THAT
HAVE COME TO EPITOMIZE TOO BIG
TO FAIL, HAS SURGED THROUGH THE
ENTIRE BANKING SECTOR AND OUR
ONOMY AS A WHOLE AND HAS
TURNED OUT TO BE ONE OF THE MOST
EXPENSIVE AFTEREFFECTS OF THE
FINANCIAL CRISIS.
FOR YEARS FANNIE AND FREDDIE
MADE MORTGAGES AVAILABLE TO TOO
MANY PEOPLE WHO COULD NOT REALLY
AFFORD THEM.
SMALLER COMPANIES WERE CRUSHED
WHILE THE TWO G.S.E.'S AND
SHAREHOLDERS REAPED ENORMOUS
PROFITS WITH THE GOVERNMENT'S
GUARANTEE TO PURCHASE MILLIONS
OF DOLLARS WORTH OF BAD
MORTGAGES INCLUDING THOSE MADE
TO RISKY SO-CALLED SUBPRIME BORROWERS.
IT WAS A TEXTBOOK EXAMPLE OF
MORALE HAZARD.
I WAS REMINDED GRIEFG IN
HEARING -- DRIVING IN HEARING AN
ADD ON THE RADIO WHICH SAID THAT
THROUGH FANNIE MAE YOU COULD GET
A MORTGAGE FOR 105% OF THE VALUE
OF YOUR HOME.
NOW, THAT MEANS IMMEDIATELY
YOU'RE SO-CALLED UNDERWATER.
THAT MEANS TO SAY THAT YOU OWE
MORE THAN YOUR HOME IS WORTH.
WHY ARE WE IMMEDIATELY MAKE THE
SAME MISTAKE WITH FANNIE MAE
THAT GOT US INTO THE PROBLEM IN
THE FIRST PLACE WHERE THE
MORTGAGES EXCEEDED THE VALUE OF
THE HOME?
I DON'T UNDERSTAND IT.
THE EASY CREDIT THAT WAS
PROVIDED BEFORE IS WHAT HELPED
TO FUEL THE RISING HOME PRICES
THAT CREATED THE INFLATED
HOUSING BUBBLE.
ESPECIALLY IN THE SUBPRIME
MORTGAGE MARKET.
AS PRICE ROSE, SO TOO DID THE
DEMAND FOR EVEN LARGER MORTGAGES
AND SO FANNIE AND FREDDIE LOOKED
FOR WAYS TO MAKE EVEN MORE
CREDIT AVAILABLE TO BAROERS.
BUT, -- BAR ROWERS.
WHEN THE MARKET COLLAPSED.
THE TWO G.S.E.'S WERE LEFT WITH
BILLIONS OF DOLLARS OF BAD DEBT.
BY 2008 THE
NEARLY $5 TRILLION IN MORTGAGES
AND MORTGAGE-BACKED SECURITIES.
THEY WERE OVERLEVERAGED, BUT,
UNFORTUNATELY, DEEMED TOO BIG TO FAIL.
SO WHAT DO WE HAVE TODAY?
FANNIE AND FREDDIE HOLD A
COMBINED $8.1 TRILLION O OUTSTANDING DEBT.
THINK OF THAT.
$8.1 TRILLION IN TOTE -- IN
TOTAL TAXPAYERS H
LOST $45 BILLION, BAILING THEM
OUT.
AND WHEN SECRETARY OF THE
TREASURY GEITHNER LIFTED BAILOUT
CAP, IT PUT THE TAXPAYERS ON THE
HOOK FOR THE REMAINDER OF THESE
LOSSES AT THESE TWO INSTITUTIONS.
SO LET'S BE CLEAR.
EVERY DAY THAT FANNIE AND
FREDDIE REMAIN IN THEIR CURRENT
FORM IS THE DAY THAT U.S.
TAXPAYERS ARE SUBSIDIZING THE
FAILED POLICIEOF THE PAST AND
I THINK IT'S VERY DOUBTFUL THAT
WE'RE GOING TO GET MEANINGFUL
REFORM WITH FANNIE AND FREDDIE
WHEN IT COULDN'T BE DONE IN THE
BILL THAT IS SUPPOSED TO DEAL
WITH ALL OF THE UNDERLYING
PROBLEMS THAT CREATED THE
RECESSION WE'RE IN NOW.
THE THIRD PROBLEM, HARMING SMALL
BUSINESS THROUGH CONSUMER
PROTECTION.
IT REALLY HARMS FAR MORE THAN
SMALL BUSINESS.
IT HARMS EVERYONE WHO IS TRYING
TO GET CREDIT.
AS SENATOR GREGG HAS SAID MANY
TIMES ON THIS FLOOR, PERHAPS THE
BIGGEST PROBLEM WITH THIS
LEGISLATION IS THE FACT IT WILL
MAKE CREDIT MUCH MORE EXPENSIVE
FOR EVERYONE.
LET'S START WITH SMALL BUSINESSES.
IN MY HOME STATE OF ARIZONA AND
ACROSS THE COUNTRY, THESE ARE
THE ENTITIES THAT HIRE --
THEY'RE SUPPOSED TO BE THE FIRST
ONE THAT HIRE WHEN YOU COME OUT
OF RECESSION.
THE WAY TO DO THAT IS THROUGH CREDIT.
THEY'RE AWARE OF THE BUREAUCRACY
THAT MASQUERADES -- ALL OF US
SUPPORT THE CONCEPT OF CONSUMER
PROTECTION, SO LET'S DON'T GET
OFF AND A TANGENT OF BEING FOR
OR AGAINST CONSUMER PROTECTION.
WE ALL SUPPORT THAT.
THE QUESTION IS HOW YOU DO IT?
SAFEGUARDS CAN BE STRENGTHENED
WITHOUT CREATING A REGULORY
BUREAUCRACY WITH THE POWERS THAT
EXIST IN THIS BILL AND ALL OF
THE UNTOWARD RAMIFICATNS THAT
RESULT.
UNFORTUNATELY THE CONFERENCE
REPORT MAINTAINS WITH VERY
LITTLE CHANGE THE FLAWED
CONSUMER PROTECTION FINANCIAL
PROTECTION BUREAU FROM THE BILL
THAT WAS PASSED IN THE SENATE,
THE SO-CALLED CFPB.
IT IS HOUSED IN AND FUNDED BY
THE FEDERAL RESERVE.
BUT THEORETICALLY WOULD OPERATE
AS AN INDEPENDENT AGENCY WITH AN
ENORMOUS BUDGET AND WITH RULE
WRITING ABILITY THAT WILL CREATE
INDEPENDENCE FROM THE FED.
THE CFPB COULD REDUCE CREDIT
ACCESS FOR SMALL BUSINESSES AND
THEREBY JEOPARDIZE AMERICA'S
ECONOMIC RECOVERY.
WITHOUT AVAILABLE CREDIT,
COMPANIES DIDN'T GROW AND
CONSEQUENTLY WILL NOT HIRE
ADDITIONAL AMERICAN WORKERS.
OBVIOUSLY THAT'S NOT WHAT THE
BILL'S AUTHORS INTENDED.
BUT IT IS THE INEVITABLE RESULT.
THE NEW BUREAU WILL HAVE A SAY
IN ALMOST EVERY ASPECT OF
AMERICAN BUSINESS.
IN AN ATTEMPT TO ENSURE -- AND
I'M -- QUOTING -- "TO ENSURE THE
NONDISCRIMINATORY ACCESS TO
CREDIT FOR INDIVIDUALS AND
COMMUNITIES" END OF QUOTE, THE
WORDING IN THE LAW, THE NEW
BUREAU WILL HAVE NEW LATITUDE TO
IMPOSE ITS WILL WITH FEW CHECKS
AND BALANCES ON AMERICAN
PROVIDERS, ALL OF WHICH WILL
RESULT IN MORE EXPENSE, MORE
REGULATION, HIGHER COSTS FOR
CONSUMERS AND LESS AVAILABLITY
OF CREDIT.
THE CFPB EXPOSES COMPANIES TO
COSTLY COMPLIANCE AND EXTENSIVE
ENFORCEMENT PROCEEDINGS
INCLUDING POTENTIALLY FRIVOLOUS
LAWSUITS BY ELIMINATING NATIONAL
PREEMPTION AND OTHER MEANS.
THE POTENTIAL COSTS OF THIS
BUREAU DO NOT JUSTIFY THE
PURPORTED BENEFITS.
CONSUMER PROTECTION COULD HAVE
BEEN ACCOMPLISHED IN MUCH LESS
INTRUSIVE AND FAIR WAYS.
WE WANT TO SHIELD THE CONSUMERS
FROM ABUSES AND EXPLOITATION OF
THIS IS OBVIOUSLY NOT THE RIGHT
WAY TO DO IT.
WE SHOULD ASK OURSELVES ONE
QUESTION: WHY IS IT THAT THE
C.E.O. OF SOME OF THE LARGEST
COMPANIE ON WALL STREET, SOME
OF THE LARGEST FINANCIAL
INSTITUTIONS ACTUALLY FAVOR THIS BILL?
IT'S NO SKIN OFF THEIR BACK.
THEY'VE GOT THE MONEY AND
EY'VE GOT THE RESOURCES AND
THE PERSONNEL TO DEAL WITH ITS
COMPLEXITY AND TO PUT THE MONEY
UPFRONT AND THEN CHARGE THE
CONSUME ERTS ON DOWN THE --
CONSUMERS ON DOWN THE LINE.
IT WOULD ENTRENCH THEIR
FRIVOLOUS STATUS AND WOULD
INSTITUTIONALIZE THE IDEA THAT
CERTAIN BIG FINANCIAL FIRMS
DESERVE PREFERENTIAL TREATMENT BY FEDERAL REGULATORS.
SO FOR ALL OF THE REASONS I
DISCUSSED, AS WELL AS OTHERS,
AND DESPITE MY STRONG DESIRE TO
ENACT PRUDENT FINANCIAL REFORPS,
I THINK THIS LKS IS
I CAN'T SUPPORT IT AND I
COLLEAGUES TO VOTE AGAINST
MR. DODD: MR. PRESIDENT?
THE PRESIDING OFFICER: THE
SENATOR FROM CONNECTICUT.
MR. DODD: I RECOGNIZE MY FRIEND
AND COLLEAGUE FROM DELAWARE.
MR. KAUFMAN: I HAVE NINE
UNANIMOUS CONSENT FOR COMMITTEES
TO MEET IN THE SENATE.
I ASK UNANIMOUS CONSENT THESE
REQUESTS BE AGREED TO AND THESE
REQUESTS BE PRINTED IN THE RECORD.
THE PRESIDING OFFICER: WITHOUT
OBJECTION.
MR. KAUFMAN: I RISE TO SPEAK ON
THE DODD-FRANK BILL.
I -- I MUST START BY EXPRESSING
MY AWE, SHOCK AND AWE, AWE AT
WHAT CHAIRMAN DODD HAS BEEN ABLE
TO DO DURING THIS SESSION OF THE
CONGRESS.
I'VE -- I'VE BEEN AROUND THIS
PLACE SINCE 1973, AND I CANNOT
THINK -- GENUINELY CANNOT THINK
OF AN EXAMPLE WHERE AN
INDIVIDUAL SENATOR EVER
PARTICIPATED IN PASSING THREE
BILLS IN ONE CONGRESS OF THE
MAGNITUDE OF THE HEALTH CARE
BILL, THE CREDIT CARD REFORM
BILL, AND NOW THE DODD-FRANK
BILL.
I MEAN, IT IS -- IT IS -- IF
THERE IS A LEGISLATIVE HALL OF
FAME, THERE'S A SPOT FOR CHRIS
DODD IN THAT HALL OF FAME.
AND I'M GOING TO SPEAK ON
SOMETHING TODAY ABOUT AREAS
WHERE I DON'T AGREE WITH THIS
BILL.
ANYONE WHO FOLLOWED MY SPEECHES
ON THE FLOOR WOULD RECOGNIZE
THAT I HAVE A DIFFERENCE OF
OPINION ON A NUMBER OF ISSUES.
HOWEVER, I WANT TO MAKE IT CLEAR
FROM THE BEGINNINGS AND I'LL
RAISE IT AGAIN IN MY SPEECH, THE
EXTENT THIS BILL DOESN'T REACH
WHAT I WANT IT TO REACH, THE
RESPONSIBILITY LIES ON MY
FRIENDS, AND I TRULY MEAN MY
FRIENDS AND COLLEAGUES ON THE
OTHER SIDE OF THE AISLE.
TIME AND AGAIN, VOTE AFTER VOTE
THEY VOTE AS A -- AS A BLOCK TO
BLOCK MEANINGFUL REFORM ON MANY ISSUES.
WHEN YOU JUST TALK ABOUT
BROWN-KAUFMAN AMENDMENT, TO
BREAKUP THE BANKS, WE CAN TALK
ABOUT THE MANEUVERS THAT WERE
DONE ON THE SENATOR BROWNBACK
BILL SO THAT WE NEVER GOT A VOTE
ON LEVIN-MERKLEY.
SO AS IIVE THIS SPEECH TODAY,
THE REASON WE DIDN'T GET THE
THINGS THAT I WANTED IN THIS
BILL IS BECAUSE 41 REPUBLICANS
TIME AND TIME AND TIME AGAIN
WHEN THERE WAS A VOTE UP, IT
COULD HAVE CHANGED THE WAY WE DO
THINGS, IT COULD HAVE INSTITUTED
THE KIND OF REFORMS THAT I WANT
IN THIS BILL, THEY VOTED AGAINST
IT.
AND SENATOR DODD, CHAIRMAN DODD,
WAS LEFT WITH THE THING OF HOW
DO WE GET THE VOTES TOGETHER TO
PASS THE BILL?
IT'S ESSENTIAL THAT WE PASS A
BILL AND A GOOD BILL AND WE DID
AND I'M VOTING FOR IT.
BUT IT COULD HAVE BEEN, IN MY
OPINION, A BETTER BILL IF
SEVEL VOTES HAD GONE THE OTHER
WAY.
MADAM PRESIDENT, AFTER MONTHS OF
CAREFUL CONSIDERATION, LANDMARK
FINANCIAL REFORM LEGISLATION
MOVES TOWARD FINAL PASSAGE.
WHILE THIS BILL IS A VAST
IMPROVEMENT OVER THE EXISTING
REGULATORY STRUCTURE, I BELIEVE
IT SHOULD GO FURTHER WITH
RESPECT TO ADDRESS THE PROBLEM
OF TOO BIG TO FAIL.
ANYONE WHO HEARD MY SPEECHES ON
THE FLOOR WOULD UNDERSTAND MY
POSITION ON THAT.
I MADE IT ABUNDANTLY CLEAR.
I WILL SUPPORT THE CONFERENCE
REPORT.
I DO SO WITH SIGNIFICANT
RESERVATIONS ABOUT A MISSED
OPPORTUNITY TO ENACT NEEDED
STRUCTURAL REFORMS THAT COULD
BETTER PREVENT ANOTHER FINANCIAL CRIS.
AS I SAID BEFORE, ULTIMATELY,
GIVEN THE MAKEUP OF THE SENATE
AND REQUIREMENT FOR 60 VOTES AND
THE INTRANSIGENCE ON THE OTHER
SIDE OF THE AISLE, THIS IS THE
BEST BILL THAT COULD PASS.
FOR THOSE TT WISH THE BILL WAS
STRONGER, LET THERE BE NO
CONFUSION ABOUT WHERE THE BLAME LIES.
IT IS BECAUSE ALMOST EVERY
SENATOR ON PT OTHER SIDE OF
THE -- AND THE OTHER SIDE OF THE
AISLE DID ALL THEY COULD TO
DELAY, OPPOSE WALL STREET REFORM.
THE BILL COMES OUT OF CONFERENCE
INCLUDES SOME EXTREMELY
IMPORTANT REFORMS.
IT ESTABLISHES AN INDEPENDENT
CONSUMER FINANCIAL PROTECTION
BUREAU WITH STRONG AND
AUTONOMOUS RULE-MAKING AUTHORITY
AND THE ABILITY TO ENFORCE THOSE
RUSE FOR LARGE BANKS AND
NONBANKING ENTITY LIKE PAY DAY
LENDERS AND MORTGAGE FINANCE COMPANIES.
IN ADDITION IT REQUIRES
ELECTRONIC TRADING AND NRLIZE --
CENTRALIZED CLEARING OF
DERIVATIVES CONTRACTS AN ROBUST
AND COLLATERAL AND MARGIN
REQUIREMENTS.
THE BILL'S INCLUSION O THE
CANGORSKI WILL -- THAT IMPOSE A
GRAVE THREAT ON FINANCIAL
STABILITY.
I WAS PLEASED THAT THE BILL
INCLUDES A PROVISION I HELPED TO
DEVELOPMENT TO GIVE REGULATORS
ENHANCED TOOLS AND THE POWERS TO
PURSUE FINANCIAL FRAUD.
THROUGH THE COLLINS PROVISION,
THE BILL ALSO ESTABLISHES
MINIMUM LEVERAGE AND RISK-BASED
CAPITAL REQUIREMENTS FOR BANK
HOLDING COMPANIES AND
SYSTEMICALLY RISKY NONBANK
INSTITUTIONS THAT ARE AT LEAST
AS STRINGENT AS THOSE THAT APPLY
TO ENSURE DEPOSITRY INSTITUTION.
AN IMPORTANT REFORM IN THIS
BILL.
AND LATER THE FAILURE OF PAST
INTERNATIONAL CAPITAL ACCORDS,
THIS REQUIREMENT WILL SET A
MUCH-NEEDED FLOOR ON HOW LOW
CAPITAL CAN DROP IN THE UPCOMLG
BAZELL NEGOTIATIONS ON CAPITAL
REQUIREMENTS.
IT WILL ALSO ENSURE THAT THE
CAPITAL BANKS IS NOT ADULTERATED
WITH DEBT THAT MASQUERADES AS
EQUITY CAPITAL.
THAT BEING SAID, I BELIEVE THE
BILL SUFFERS FROM TWO MAJOR
PROBLEMS.
FIRST, THE BILL DELEGATES TOO
MUCH AUTHORITY TO REGULATORS.
I HAVE SPOKEN ABOUT THAT TIME
AND TIME AGAIN ON THE FLOOR.
I HAVE BEEN AROUND THE SENATE
FOR 37 YEARS.
AS I SAID ON THE SENATE FLOOR ON
FEBRUARY 4 THIS YEAR AND IN
SEVERAL SPEECHES SINCE THEN, I
KNOW THAT MANY TIMES AND MANY,
MANY, MANY TIMES LAWS ARE NOT
WRITTEN WITH HARD AND CLEAR
LINES.
LAWS ARE A PRODUCT OF
LEGISLATIVE COMPROMISE, AND I'VE
DLEAFD IN A SPEECH, WHICH OFTEN
MEANS THEY ARE VAGUE AND
AMBIOUS.
WE OFTEN JUSTIFY OUR VAGUENESS
BY SAYING THE REGULATORS TO WHOM
WE GRANT STATUTORY AUTHORITY ARE
IN A BETTER POSITION THAN WE ARE
TO WRITE THE RULES AND THEN TO
APPLY THOSE REGULATORY RULES ON
A CASE-BY-CASE METHOD.
AS I'VE SAID, THIS WAS NOT ONE
OF THOSE TIMES, IN MY OPINION.
IT WAS A TIME FOR CONGRESS TO
DRAW HARD LINES THAT COUL GET
DIRECTLY AT THE PROBLEMS THAT
AFFECT WALL STREET AND OUR
LARGERLARGELARGEST BANKS.
DESPITE REPEATED URGINGS,
CONGRESS LARGELY HAS DECIDED
INSTEAD TO PUNT DECISION TO
REGULATORS, STARTING WITH A
MOUNTAIN OF RULE MAKING
SUBSIDIES.
THE LAW FIRM DAVIS-POLK HAS
ESTIMATED THAT THE S.E.C. ALONE
MUST UNDERTAKE CLOSE TO 100 RULE
MAKINGS AND MORE THAN A DOZEN
STUDIES.
INDEED, CONGRESS HASO CHOKED
THE AGENCIES WITH RULE MAKING
STUDIES THAT THE TOTAL BURDEN
THREATENS THE VERY ABILITY OF
THE AGENCIES TO ACCOMPLISH THEIR
ONGOING EVERYDAY MISSION.
I, FOR ONE, URGE THE AGENCIESO
CAREFULLY TRIAGE THESE REQUIRED
RULE MAKING STUDIES, ESTABLISH A
HIERARCHY FOR PRIORITIES, AND
ENSURE THAT THE AGENCIES DO NOT
SHIFT ALL RESOURCES TO NEW RULES
MEANT TO ADDRESS OLD PROBLEMS TO
SUCH A DEGREE THEY FAIL TO STAY
ON TOP OF THE CURRENT AND
GROWING PROBLEMS IN OUR MARKETS.
I'LL HAVE MUCH MORE TO SAY ON
THIS IN A FUTURE SPEECH.
SECOND, THE LEGISLATION DOES NOT
GO FAR ENOUGH IN ADDRESSING THE FUNDAMENTAL PROBLEM OF TOO BIG
TO FAIL.
INSTEADF ERECTING ENDURING
STATUTORY WALL, AS WE DID IN THE
19 30'S, THE BILL INVESTS THE
SAME REGULATORS WHO FAILED TO
PREVENT THE FINANCIAL CRISIS
WITH ADDITIOL DISCRETION AND
RELIES UPON A RESOLUTION REGIME
TO SUCCESSFULLY UNWIND COMPLEX
AND INCONNECTED MEGABANKS
ENGAGED AROUND THE GLOBE.
AGAIN, ANYONE WHO'S HEARD MY
SPEECHES KNOWS I'M DISAPPOINTED
THAT KEY REFORM PROVISIONS ARE
SPOFF PROVISIONS AND WERE
SCALED BACK IN CONFERENCE.
THE BILL MAINLY PLACES FAITH IN
TRUST.
AFTER DECADES OF DEREGULATION
AND INDUSTRY SELF-REGULATION, IT
IS INCUMBENT UPON THE REGULATORS
NOW TO REASSERT THEMSELVES AND
ESTABLISH RULE MAKING AND
SUPERVISELY FRAMEWORKS THAT NOT
ONLY CORRECT THE GLARING
MISTAKES OF THE PAST -- I MEAN
THEY'RE GLARING MISTAKES OF THE
PAST -- BUT ALSO ANTICIPATE
FUTURE PROBLEMS, PARTICULARLY
RISKS TO FINANCIAL STABILITY.
UNFORTUNATELY, THE EARLY
INDICATIONS WE'RE SEEING OUT OF
THE G-20 AND THE SO-CALLED ABOUT
A SELL 3 DISCUSSIONS ARE NOT
ENCOURAGING.
THEY'RE VERY DISCOURAGING.
AS CRITICAL REFORMS ARE ALREADY
BEING WATERED DOWN AND PUSHED
BACK IN PART BECAUSE SOME
FOREIGN REGULATORS REFUSE TO
HEED THE RISK POSED BY THE
MEGABANKS.
THE LEGISLATION ALL PUTS IN
PLACE AUTHORITY TO DEAL WITH
THOSE INSTITUTIONS WHEN THEY
INEVITABLY GET INTO TROUBLE.
WHILE SUCH AUTHORITY IS
ABSOLUTELY NECESSARY, IT IS NOT
SUFFICIENT.
THAT IS BECAUSE NO MATTER HOW
WELL CONGRESS CRAFTS A
RESOLUTION MECHANISM, THERE CAN
NEVER BE AN ORDERLY WINDDOWN OF
A $2 TRILLION FINANCIAL
INSTITUTION THAT HAS HUNDREDS OF
BILLIONS OF DOLLARS IN
OFF-BALANCE SHEET ASSETS,
RELIERS HEAVILY ON WHOLESALE
FUND SOMETHING MORE THAN A
TOEHOLD IN MORE THAN 100
COUNTRIES AROUND THE WORLD.
AFRICA, SINCE FINANCIAL CRISES
ARE MACRO EVENTS THAT WILL
AFFECT MEGABANKS SIMULTANEOUSLY,
RESOLUTION OF THESE INSTITUTIONS
WILL BE ENORMOUSLY EXPENSIVE.
AND UNTIL THERE'S AN
INTERNATIONAL AGREEMENT ON
RESOLUTION AUTHORITY, IT IS
PROBABLY UNWORKABLE.
GIVEN THE HISTORY OF FINANCIAL
REGULATORY FAILURES AND THE
ENORMOUS BURDEN OF RULE MAKINGS
AND STUDIES, CONGRESS HAS A
RIEWCIAL -- A CRUCIAL, A CRUCIAL
OVERSIGHT RESPONSIBILITY ON THIS
LEGISLATION.
CONGRESS MUST FIRST ENSURE THAT
THE REGULATORS HAVE ENOUGH STAFF
AND RESOURCES AT THEIR DISPOSAL
TO FOLLOW THROUGH ON THEIR
SERIOUS OBLIGATIONS.
THERE ARE MANY,MEN, MANY, MANY.
CONGRESS MUST MONITOR THE
REGULATORY PHASE OF THIS BILL'S
IMPLEMENTATION CLOSELY TO ENSURE
THAT THE REGULATORS DON'T RETURN
TO BUSINESS AS USUAL WHEN THE
EXPERIENCE OF THE MOST RECENT
CRISES FADES INTO MEMORY.
HOW QUICK WE FORTH.
TIME AND TIME AGAIN ON THE FLOOR
I HEARD PEOPLE SPEAK AS IF THERE
WAS NO BIG FINANCIAL CRISIS.
I GOT A BANK IN MY HOMETOWN
THAT'S GOING TO HAVE A PROBLEM
WITH THIS LEGISLATION.
SO WE SHOULD LET ALL THE BANKS
FREE TO DO WHATEVER THEY WANT TO DO.
I MEAN, WE HAD A CRISIS HERE
THAT PRACTICALLY DESTROYED THE
COUNTRY, PRACTICALLY DESTROYED
THE WORLD, AND PEOPLE ARE
BRINGING UP ANECDOTAL EVIDENCE
TO GIV THESE BANKS MORE
RESPONSIBILITY AND NOTO AFTER
THE ROOT CAUSE OF THIS THING.
FOR EXAMPLE, IN ADDITION TO
GRANTING GREAT DISCRETION TO
REGULATORS ON HOW THEY INTERPRET
THE BAN ON PROPRIETARY TRADING
OF BANKS, THE SCALED-BACK
VOLCKER RULE CONTAINS A LOOPHOLE
THAT ALLOWS BANKS TO OWN,
CONTROL, MANAGE HEDGE FUNDS AND
PRIVATE EQUITY FUNDS UNDER
CERTAIN CONDITIONS.
MOST NOTEABLY, IT INCLUDES A DE
MINIMIS EXCEPTION THAT PERMITS
BANKS TO INVEST UP TO 3% OF
TIER-ONE CAPITAL IN HEDGE FUNDS
AND PRIVATE EQUITY FUNDS SO LONG
AS THEIR INVESTMENTS DON'T
CONSTITUTE MORE THAN 3%
OWNERSHIP IN INDIVIDUAL FUNDS.
LET'S TALK ABOUT THAT FOR A MINUTE.
THE IMPACT OF A SUPPOSEDLY SMALL
3% DE MINIMIS EXCEPTION HAS THE
POTENTIAL TO BE MASSIVE.
FOR EXAMPLE, A $2 TRILLION BANK
THAT HAS A $14 U7B BILLION IN
TIER-ONE CAPITAL WOULD BE ABLE
TO INVEST $3 BILLION INTO HEDGE FUNDS.
SINCE THAT $3 BILLION BET COULD
ONLY CONSTITUTE 3% OF OWNERSHIP,
IT WOULD NEED TO BE INALONG SIDE
OF THESE $97 BILLION OF FUNDS
FROFUNDSFROM OUTSIDE INVESTORS.
THE BANK WOULD BE ABLE TO MANAGE
$100 BILLION IN HEDGE FUND
ASSETS, A MASSIVE AMOUNT.
WHAT'S MOSHINGS THE $100 BILLION
IN ASSETS COULD BE LEVERAGED
SEVERAL TIMES OVER THROUGH THE
USE OF BORROWED FUNDS AND
DERIVATIVES AND OVERALL
EXPOSURES THAT COULD EXCEED $1 TRILLION.
GIVEN THE AMBIGUITY OF THE
LEGISLATIVE LANGUAGE, SOME
COMMENTATORS HAVE INDICATED THE
MEGABANKS COULD PROVIDE PRIME
BROKAGE LOANS TO HEDGE FUNDS
THEY OWN AND RUN.
FORTUNATELY, THE BILL DOES PLACE
COSTS ON BANKS' DE MINIMIS
INVESTMENTS. SPECIFICALLY, THE LEGISLATION
REQUIRES 100% CAPITAL CHARGE ON
THESE PROPRIETARY INVESTMENTS
MAKING THEM EXPENSIVE FOR BANKS
TO HOLD.
WHILE THIS MAY BE A HELPFUL
DETERRENT, I AM CONCERNED IT
WILL NOT BE ENOUGH OF, ONE,
PARTICULARLY WHEN CONSIDERED HOW
RISKY AN ACTIVITY IT IS TO
ENGAGE IN HEDGE FUND AND PRIVATE EQUITY FUNDS.
THESE ARE RISKY INVESTMENTS IN
BANKS THAT HAVE MAJOR INSURANCE
THROUGH THE FDIC BECAUSE THEY
CAN ALLOW TO INVEST IN THESE
BANKS EVEN THOUGH THEY'RE
FDIC-INSURED.
THE OVERREACHING PROBLEM IS WHAT
BANKS WILL CONTINUE TO BE ABLE
TO OFFER AND RUN, IMPARTIALLY
OWN RISKY INVESTMENT FUNDS.
EVEN THOUGH THE SCALED-BACK
VOLCKER RULE INDICATES A
NO-BAIL-OUT PROVISION, I HAVE
CONCERNS ABOUT THE CREDIBILITY
THAT HAVE.
UNDER ANY CIRCUMSTANCE, THE
FAILURE AFTER MASSIVE HEDGE FUND
RUN BY A MEGABANK WOULD POSE
SERIOUS REPUTATIONAL AND
FINANCIAL RISKS TO THAT
INSTITUTION.
JUST LOOK AT WHAT HAPPENED WHEN
THE STRUCTURED INVESTMENT
VEHICLES OR S.I.V.'S OF CITIBANK
AND OTHER BANKS BEGAN TO FALTER.
BECAUSE THE REPUTATIONAL
CONSEQUENCES OF LIQUIDATING
THESE FUNDS AND ALLOWING THEM TO
DWOALT, THEY WERE BAILED OUT BY
THE MEGABANKS THAT SPAWNED THEM
EVEN THOUGH THE S.I. v. WERE
--
THE STRENGTH OF THE CORE PART OF
THE VOLCKER RULE WILL DEPEND
GREATLY ON THE INTERPRETATION OF
THE RERLGTS.
THE REGULATORS ARE ALLOWED TO
MODIFY THIS RULE.
THEY WILL BE THE ARBITER OF
WHETHER BROAD STATUTORY
EXCEPTIONS FOR MARKET MAKING OR
RISK-MITIGATING HEDGING OR
PURCHASES OR SALES OF SECURITIES
ON BEHALF
ALLOWED TO SWALLOW THE PUNITIVE
PROLIX.
I THEREFORE URGE THE REGULATORS
TO CONSTRUE NARROWLY THESE
ACTIVITIEACTIVITIES THAACTIVITIES THAACTIVITIES THAT CONSTITUTE THAT
THE RULE HAS TEETH IN T IT WOULD
PROHIBIT BANKS AND SWAP DEALERS
FROM RECEIVING ASSISTANCE FROM
THE FEDERAL RESERVE OR FDIC.
BY SLINGS FORCING MEGABANKS TO
SPIN OFF THEIR SWAP DEALERS INTO
SEPARATE COMPANIES, THIS SECTION
WOULD HAVE HELPED RESTORE THE
WALL BETWEEN THE
GOVERNMENT-GUARANTEED PART OF
THE FINANCIAL SYSTEM AND THOSE
FINANCIAL ENTITIES THAT REMAIN
FREE TO TAKE ON GREATER RISK.
AS I STATED TIME AND TIME AGAIN,
ONE OF THE BASIC CONSIDERATIONS
THAT I THOUGHT WAS IMPORTANT IN
THE BILL T WOULD ALSO FORCE
DERIVATIVES DEALERS TO BE
ADEQUATELY CAPITALIZED.
WHILE THE FINAL BILL INCLUDES
THE LINCOLN PROVISION, IT LIMITS
ITS APPLICATION TO DERIVATIVES
THAT REFERENCE ASSETS THAT ARE
PERMISSIBLE TO BANKS TO HOLD.
SINCE THAT EXCEPTION COVERS
INTEREST RATE, FOREIGN EXCHANGE
AND OTHER SWAPS, IT ULTIMATELY
EXCEPTS CLOSE TO 90% OF THE
OVER-THE-COUNTER DERIVATIVES
MARKET.
REGULATORS MUST THEREFORE REDUCE
COUNTERPARTY EXPOSURES BY
REQUIRING THE VAST MAJORITY OF
DERIVATIVES CONTRACTS TO BE
CLEARED AND CALIBRATED CAREFULLY
THE AMOUNT OF CAPITAL THAT BANK
DERIVATIVE DEALERS MUST MAINTAIN.
ONLY THEN -- ONLY THEN CAN WE BE
SURE WE NEVER AGAIN FACE A
MELTDOWN CAUSED BY EXCESSIVELY
LEVERAGED DERIVATIVE EXPOSURE
THAT MO REGULATOR HELPS TO KEEP
IN CHEFNLG THE FINANCIAL REFORM
BILL PLACES ENORMOUS
RESPONSIBILITY AND DISCRETION IN
TH HANDS OF REGULATORS.
ITS ULTIMATE SUCCESS OR FAILURE
WILL DEPEND ON THE ACTIONS AND
THE FOLLOW-THROUGH OF THOSE
REGULATORS FOR MANY YEARS TO COME.
REMEMBER ONE OF MY MAIN CONCERNS
IS THAT IF WE ELECT ANOTHER
PRESIDENT THAT BELIEVES WE
SHOULD NOT HAVE REGULATORS OR
REGULATION, THEN THEY WOULD HAVE
THE ABILITY TO GO BACK AND DO
EXACTLY WHAT THEY DID AND IN MY
OPINION CAUSE THE MELTDOWN.
IT IS ESTIMATED THAT VARIOUS
FEDERAL AGENCIES WILL BE CHARGED
WITH WRITING RULE MAKINGS AND
DOZENS OF STUDIES.
MANY OF THE SAME REGULATORS WHO
FAILED IN THE RUN-UP TO THE LAST
CRIS WILL BE GIVEN THE TASK OF
SAFEGUARDING OUR FINANCIAL STABILITY.
LIKE MANY OTHERS, I AM CONCERNED
WHETHER THEY HAVE THE CAPACITY
AND THE WHEREWITHAL TO SUCCEED.
I REPEAT AGAIN, CONGRESS HAS AN
IMPORTANT ROLE TO PLAY IN
OVERSEEING THE ENORMOUS
REGULATORY PROCESS THAT WILL
ENSUE FOLLOWING THE BILL'S
ENACTMENT.
THE AMERICAN PEOPLE FOR THAT
MATTER MUST STAY FOCUSED ON
THESESSUES.
JUST HELP TO ENSURE THAT
CONGRESS INDEED WILL FULFILL ITS
OVERSIGHT DUTY AND ITS DUTY TO
INTERVENE IF THE REGULATORS
FAIL.
LIKEWISE, THOUGH I'LL BE LEAVING
THE SENATE IN NOVEMBER, I WILL
BE WAIFING CLOSELY TO SEE HOW
THE REGULATORS FOLLOW THROUGH ON
THE ENORMOUS RESPONSIBILITY THEY
ARE BEING HANDED.
LET US NOT FORGET WHY REFORMS
SO NECESSARY AND IMPORTANT.
AFTER YEARS OF WALL STREET
MALFEASANCE AND THE SYSTEMIC
DISMANTLING OF OUR REGULATORY
STRUCTURE, OUR FINANCIAL SYSTEM
WENT INTO CARDIAC ARREST AND OUR
ECONOMY NEARLY FELL INTO THE
ABYSS.
WALL STREET, WHICH HAD GROWN OUT
OF CONTROL ON LEVERAGE AND
FINANCIAL GIMMICKRY, BLEW UP.
MORE THAN 8 MILLION JOBS WERE WIPED OUT.
MILLIONS MORSE HAVE LOST THEIR
HOMES.
WE SPENT TRILLIONS OF DOLLARS OF
MONETARY EASING AND EMERGENCY
MEASURES TO AVERT THE WHOLESALE
FAILURE OF MANY OF OUR MEGABANKS.
NOT SURPRISINGLY, WE CONTINUE TO
FEEL THE AFTERSHOCKS OF THE
WORST FINANCIAL CRISIS SINCE THE
GREAT DEPRESSION.
EVERY SINGLE THING YOU LOOK AT, ALMOST WITHOUT EXCEPTION, WHEN
YOU READ OUR NEWSPAPERS IS
RELATED TO OUR PRESENT ECONOMIC
SITUATION.
CAUSED BY LACK OF REGULATORY
ACTION ON WALL STREET.
THE BANKS ARE NOT LENDING -- IT
WAS IN THE PAPER TODAY --
CORPORATIONS ARE NOT LENDING,
FED CHAIRMAN BERNANKE SAID JUST
DAYS AGO TO URGE BANKS TO DO
MORE FOR SMALL BUSINESSES.
CUSTOMERS AND COMPANIES ALIKE
REMAIN SHAKEN AND DESPITE
STIMULUS MEASURES, THE ECONOMIC
RECOVERY HAS BEEN SLOW AND TENTATIVE.
MANY OPPONENTS OF WALL STREET
REFORM WOULD LIKE TO MAKE THE DUBIOUS CLAIM THAT THE RECOVERY
IS BEING HELD BACK BY
UNCERTAINTY ABOUT FUTURE
REGULATION AND TAXES.
CAN YOU BELIEVE THAT?
IN REALITY, IT'S BEING HELD BACK
BY THE FINANCIAL SHOCK AND THE
FACT THAT WE'RE STILL IN A
PERIOD OF FINANCIAL INSTABILITY
AND UNDERGOING AN EXCRUCIATING
PROCESS OF DELEVERAGING.
IT'S ALSO BEING CAUSED BY THE
FACT THAT AMERICANS ARE LOSING
FAITH IN THE CREDIBILITY OF OUR
MARKETS, AND WHO WOULDN'T AFTER
WHAT'S HAPPENED?
EVEN NO NOW IT'S UNCLEAR WHETHER
A EUROPEAN BANKING CRISIS BASED
ON THEIR HOLDINGS OF SOVEREIGN
DEBT WILL CONTINUE TO IMPEDE THE RECOVE.
AND I THINK IT'S BEEN AN
IMPORTANT FACTOR IN OUR PRESENT
PICK UP -- HOPEFULLY PICKUP, AND
NOT A DOUBLE DIP.
IT IS THEREFORE IMPERATIVE THAT
WE BUILD A FINANCIAL SYSTEM ON A
FIRMER FOUNDATION.
THE AMERICAN ECONOMY CANNOT
SUCCEED -- CANNOT SUCCEED --
UNLESS WE RESTORE AND MAINTAIN
FINANCIAL STABILITY, NOT ONLY
RESTORE AND MAINTAIN FINANCIAL
STABILITY BUT MAINTAIN THE
CREDIBILITY OF OUR FINANCIAL SYSTEM.
WE SIMPLY C
-- WE CANNOT AFFORD ANOTHER
FINANCIAL CRIS IN THE AMERICAN ECONOMY.
GETTING FINANCIAL REGULATION
RIGHT AND MAINTAINING IT FOR
YEARS TO COME SHOULD BE ONE OF
THIS NATION'S HIGHEST PRIORITIES
BECAUSE THE PRICE OF FAILURE IS
FAR TOO HIGH.
MADAM PRES
A QUORUM.
MR. DODD: MADAM PRESIDENT?
LET ME -- THE PRESIDING OFFICER: THE
SENATOR FROM CONNECTICUT.
MR. DODD: I WANT TO BRIEFLY
THANK MY COLLEAGUE FROM DELAWARE.
HE HIGHLIGHTS THE DIFFICULTY
OBVIOUSLY IN PASSING
LEGISLATION.
THERE ARE THOSE WHO THINK THIS
BILL GOES TOO FAR, THOSE WHO
THINK IT DOESN'T GO FAR ENOUGH.
YOU DON'T WRITE A BILL ON YOUR OWN.
THERE ARE 100 OF US IN THIS
CHAMBER, 435 IN THE OTHER.
THERE ARE STAKEHOLDERS, AN
ADMINISTRATION, ALL SORTS OF
PEOPLE YOU DEAL WITH ON THESE MATTERS.
WHAT YOU TRY AND DO IS THEN
FASHION TOGETHER AGAIN THE BEST
PROPOSAL YOU CAN THAT MOVES US
FORWARD AND ADDRESSES THE
UNDERLYING CAUSES, AS WE'VE
TRIED TO WITH THIS BL.
BUT I APPRECIATE HIS POINTS
RAISED DURING THE DEBATE AND
DISCUSSION AND TRIED TO
ACCOMMODATE WHERE WE COULD IN
FASHIONING A PIECE OF
LEGISLATION.
IT'S ALWAYS A DIFFICULT PROCESS.
THERE'S -- YOU DON'T GET TO
WRITE YOUR OWN BILLS HERE.
YOU CAN WRITE YOUR OWN BILLS AND INTRODUCE THEM.
BUT ULTIMATELY TO BECOME LAW, IT
REQUIRES COOPERATION.
WE HAVE THAT COOPERATION, I
APPRECIATE VERY MUCH AND
APPRECIATE HIS INVOLVEMENT.
MR. KAUFMAN: I TEACH A COURSE
IN THE CONGRESS.
I SAY THIS IN ALL SINCERITY,
HUDINI COULD HAVE GOTTEN THROUGH THIS PROCESS.
WHEN YOU LOOK AT IT, HUGH DUE NI
COULDN'T THE HAVE GOTTEN --
HUDINI COULDN'T HAVE GOTTEN
THROUGH THIS PROCESS WITH A BILL.
I TRY TO SPEAK HIGHLY OF MY
COLLEAGUES BECAUSE I REALLY DO
LIKE EVERY ONE OF MY COLLEAGUES
ON THE OTHER SIDE.
THAT IS NOT HYPERBOLE.
WHEN YOU START OUT WITH 41
SENATORS BOUND AND DETERMINED TO
SLOW DOWN, DELAY, STOP AND
BLOCK, IT MAKES THE JOB THAT
YOU'VE DONE EVEN MORE
INCREDIBLE.
BECAUSE I THINK, AS YOU SAID, IT
ISN'T JUST GETTING -- AND THEN
YOU'VE GOT TO GET 60 VOTES ON
ANYTHING OF SUBSTANCE.
THEN YOU'VE GOT TO GO OVER TO
THE HOUSE SIDE.
AND GOD BLESS OUR FRIENDS ON THE HOUSE SIDE.
I MEAN, HOW THEY -- WHEN I TALK
TO THEM, THEY JUST LOOK OVER
HERE AND THEY CAN'T BELIEVE WE
EVER GET ANYTHING DONE.
I THINK THAT GETTING THIS DONE,
GETTING THIS THROUGH THE SENATE,
DEALING WITH ALL THE
STAKEHOLDERS, DEALING WITH THE
ADMINISTRATION, DEALING WITH THE
FOLKS ON THE HOUSE SIDE, AND
WITH ALL DUE RESPECT, DOING IT
THREE TIMES IN O CONGRESS,
DEFINITELY A HALL OF FAME PERMANCE.
MR. DODD: I THANK MY COLLEAGUE
VERY MUCH.
LET ME ALSO JUST SAY, WHILE MY
COLLEAGUE FROM DELAWARE TALKED
ABOU 41.
THERE ARE A NUMBER OF
REPUBLICANS WHO PLAYED A VERY
CRITICAL AND SUPPORTIVE ROLE IN
THIS BILL.
I DON'T WANT THE RECORD TO
PERSIST IN SUGGESTING THAT WAS
THE CASE.
EVEN PEOPLE WHO ENDED UP NOT
VOTING FOR THE BILL, AT LEAST
HAVEN'T SO FAR, ADDED
SUBSTANTIALLY TO THE VALUE OF
THIS BILL ON THE OTHER SIDE.
I'M NOT -- IN SOME CASES THEY
MAY NOT WANT TO ACKNOWLEDGE
THAT, BUT THEY DID.
OF COURSE IN THE CASE OF OUR TWO
COLLEAGUES FROM MAINE AND OUR COLLEAGUE FROM MASSACHUSETTS
HAVE TAKEN AN AWFUL LOT OF ABUSE
IN THE LAST NUMBER OF WEEKS
BECAUSE THEY WORKED WITH US ON
THE BILL, MADE SIGNIFICANT CONTRIBUTIONS.
AND WHILE THEY DON'T AGREE WITH
EVERY DOTTED "I" AND CROSSED "T"
LIKE I DON'T ON THIS BILL
DECIDED THE COUNTRY WOULD BE
BETTER OFF WITH THIS LEGISLATION
THAN NOT.
I WOULDN'T WANT THE RECORD TO BE
UNCORRECTED WHEN IT COMES TO A
NUMBER OF PEOPLE, INCLUDING
THOSE THREE IN PARTICULAR, WHOM
I PRESUME CONTINUE TO TAKE ABUSE
FROM OTHERS BECAUSE THEY DIDN'T
TOE THE PARTY LINE.
THEY HAVE ACTED AS UNITED STATES
SENATORS, WHICH IS OUR FIRST
RESPONSIBILITY EUFRPLT KNOW WHAT
THAT FEELS -- I KNOW WHAT THAT
FEELS LIKE.
I WAS THE ONLY ONE ON THIS SIDE
TO VOTE WITH REPUBLICANS ON THE
OTHER ON SUBSTANTIVE MATTERS,
NOMINATIONS AND OTHERS.
IT'S A LONELY MOMENT, I CAN TELL
YOU, WHEN IT HAPPENS.
IT'S PAINFUL.
YOU GET THOSE LONG LOOKS FROM
YOUR COLLEAGUES.
IT'S UNCOMFORTABLE, TO PUT IT MILDLY.
IT'S SOME OF THE PROUDEST
MOMENTS YOU HAVE ON THIS EARTH
HERE WHEN YOU TAKE THOSE
DECISIONS AND DO SO FOR THE
RIGHT REASONS.
WHILE I'M DEEPLY GRATEFUL FOR MY
DEMOCRATIC COLLEAGUES, MANY OF
THOSE WHO HAD CONCERNS ABOUT THE
BILL LIKE MY FRIEND FROM
DELAWARE DID AND HAVE HELPED GET
THOSE THERE.
I SUPPOSE THERE IS A CASE OF
PRODIGAL SON, PRODIGAL DAUGHTER
WHO DECIDED TO STAND UP AND HELP
US GET A BILL DONE HERE.
EVERYONE WHO HAS BEEN SUPPORTIVE
AND HELPFUL DESERVES CREDIT FOR
IT.
BUT THOSE WHO WERE WILLING TO
TAKE AN AWFUL LOT OF ABUSE IN
THE THE PROCESS OF DOING SO I
THINK DESERVES COMMENDATION.
I DIDN'T WANT TO LET THAT NUMBER
STAND -- 41 -- WERE.
MR. KAUFMAN: MADAM PSIDENT?
THE PRESIDING OFFICER: THE SENATOR FROM DELAWARE.
MR. KAUFMAN: I TOTALLY AGREE
WITH YOU.
I THINK -- I JUST -- AND SO IT'S OVERSIMPLE.
I KNOW YOU GOT LOTS
FROM THE OTHER SIDE.
I KNOW HOW DIFFICULT IT ITO BE
THE PERSON STANDING THERE WHEN
EVERYONE IN YOUR CAUCUS WANTS TO
VOTE THE OTHER WAY.
BUT WHAT IS AMAZING TO ME IS
WHAT PASSED IS WHAT THE THREE OF
THEM SIGNED ON TO, OR OTHERS
WOULD SIGN ON TO.
THE IDEA THAT YOU CAME WITH A
BILL, I THINK EVERY ONE OF MY
CONCERNS I RAISED TODAY, IF WE
HAD GOTTEN HELP FROM THE OTHER
SIDE MIGHT HAVE GONE THE OTHER
WAY BUT THEY WERE NOT GOING TO
GO THE OTHER WAY WITH THE GROUP
WE HAD.
I COULDN'T AGREE WITH YOU MORE.
IT'S EASY TO STAND UP IN OUR
CAUCUS AND BE FOR THIS BILL.
I THINK WHAT THEY DID WAS TRULY
COURAGEOUS.
BUT I ALSO THINK THAT ON EVERY
MAJOR ISSUE, TO HAVE TO FIGURE
OUT HOW YOU GET 60 VOTES IS A
SPECIAL, SPECIAL, DIFFICULT PROBLEM.
IT'S SORT OF LIKE, YOU KNOW,
IT'S NOT LIKE A SWAN DIVE, IT'S
NOT LIKE, AS THEY DO IN THE
OLYMPICS, TRIPLE-SOMERSAULT IN
THE PIKE POSITION.
I THINK PUTTING ALL THOSE THINGS
TOGETHER, IT'S THE DIFFICULT OF
GETTING A BILL WHEN YOU NEED TO
GET 60 VOTES ON EVERY SIDE, AND
THERE'S A CONSTANT PRESSURE ON
THE OTHER SIDE
OTHER
LATER DEBATE AND DISCUSSION -- I
KNOW THERE'S A LOT OF TALK ABOUT
CHANGING THE RULES OF THE UNITED
STATES SENATE BECAUSE OF THE
FRUSTRATION MEMBERS FEEL.
I WILL MAKE, IN M WANING HOURS
HERE AS STRONG A PLEA AS I
CANNOT TO SUCCOMB TO THE
TEMPTATION TO CHANGE THIS INSTITUTION BECAUSE OF THE
CURRENT FRUSTRATIONS PEOPLE FEEL.
THERE'S A REASON THIS
INSTITUTION EXISTS AND HAS THE
RULES IT DOES.
ALL OF US ONE DAY ARE IN THE
MINORITY OR THE MAJORITY.
THE FACT THAT SOME MAY HAVE USED
TH RULES, AS HAS HAPPENED HERE,
WITHOUT QUESTION, OUGHT NOT TO
BE A SUGGESTION FOR
FUNDAMENTALLY CHANGING THEM.
THERE ARE WAYS TO DEAL WITH THE PROBLEM.
HE'S NO LONGER WITH US, MY SEAT
MATE RIGHT HERE, ROBERT C. BYRD,
BUT HE WOULD SPEAK FOR HOURS ON
END ABOUT THE IMPORTANCE OF NOT
LETTING THE VAGARIES OF THE
INSTITUTION.
MRS. SHAHEEN: MADAM PRESIDENT?
THE PRESIDING OFFICER: THE
SENATOR FROM NEW HAMPSHIRE.
MRS. SHAHEEN: I'M PLEASED TO
JOIN MY COLLEAGUE FROM
CONNECTICUT, SENATOR CHRIS DODD,
AND BE HERE ON THE FLOOR THIS
MORNING -- ACTUALLY IT'S THIS
AFTERNOON, TO TALABOUT THE
FINANCIAL REGATORY REFORM BILL
THAT IS PENDING BEFORE US AND
SHOULD NOTE BEFORE I BEGIN MY
REMARK
SENATOR DODD FOR HIS LEADERSHIP
AND HARD WORK IN GETTING THIS
BILL TO THE FLOOR SO THAT WE CAN
HOPEFULLY PASS IT THIS
AFTERNOON.
IT'S IMPORTANT BECAUSE OF WHAT'S
HAPPENED IN THIS COUNTRY AND
WHAT'S HAPPENED IN MY STATE OF NEW HAMPSHIRE.
OVER THE PAST TWO YEARS PEOPLE
IN NEW HAMPSHIRE AND ACROSS THE
COUNTRY HAVE SUFFERED THE
CONSEQUENCES OF WALLTREET'S GAMBLES.
AND WHILE WE'RE SEEING OUR
ECONOMY IN NEW HAMPSHIRE BEGIN
TO REBOUND, WHICH IS THANKS IN
NO SMALL PART TO THE JOB
CREATION THAT WAS SPURRED BY THE
RECOVERY ACT, IT IS CRITICAL
THAT WE ACT TO PREVENT WALL
STREET'S RISKY, RECKLESS
BEHAVIOR FROM EVER AGAIN
BRINGING OUR ECONOMY TO ITS KNEES.
WE NEED TO PUT IN PLACE REFORMS
TO STOP WALL STREET FIRMS FROM
GROWING SO BIG AND SO
INTERCONNECTED THAT THEY CAN
THREATEN OUR ENTIRE ECONOMY.
WE NEED TO PROTECT CONSUMERS
FROM ABUSIVE PRACTICES AND
EMPOWER THEM TO MAKE SOUND
FINANCIAL DECISIONS FOR THEIR
FAMILIES.
WE NEED MORE TRANSPARENCY IN
REGULATION IN THE NOW SHADOWY
MARKETS WITH WALL STREET
EXECUTIVES AND INVESTMENT BANKS
HAVE MADE GAMBLES.
AND THOSE SHADOWY MARKETS, THE
WALL STREET FIRMS GOT ALL THE UP
SIDE AND AMERICAN FAMILIES GOT
ALL THE DOWN SIDE.
WE NEED TO DO EVERYTHING WE CAN
TO ENSURE THAT A FINANCIAL
CRISIS LIKE THE ONE WE
EXPERIENCED IN LATE 2008 NEVER
HAPPEN
AND WE NEED TO ENSURE THAT
TAXPAYERS WILL NOT BE ASKED TO
BAIL OUT WALL STREET.
IN SHORT, WE NEED TO PASS THE
STRONG WALL STREET REFORM BILL
THAT IS BEFORE US TODAY.
NOW, I THINK IT'S ALSO IMPORTANT
TO NOTE THAT WHILE THIS BILL
REQUIRES WALL STREET BANKS TO BE
HELD MORE ACCOUNTABLE, IT DOES
NOT UNFAIRLY BDEN COMMUNITY
BANKS.
COMMUNITY BANKS DIDN'T CAUSE THE
FINANCIAL CRISIS, AND THEY
SHOULDN'T HAVE TO PAY FOR WALL
STREET'S RECKLESS BEHAVIOR.
THAT'S PARTICULARLY IMPORTANT TO
US IN NEW HAMPSHIRE WHERE
COMMUNITY BANKS MAKE A HUGE
DIFFERENCE FOR OUR CITIES AND TOWNS.
THAT'S WHY I JOIN WITH SENATOR
SNOWE ON HER AMENDMENT TO
ELIMINATE THE UNNECESSARY,
BURDENSOME REQUIREMENT THAT
COMMUNITY BANKS AND CREDIT
UNIONS COLLECT AND REPORT ON
VARIOUS DATA ABOUT THEIR DEPOSITORS.
I ALSO SPONSORED ANOTHER
BIPARTISAN AMENDMENT, ONE TO
MAKE LARGE, RISKIER BANKS PAY
THEIR FAIR SHARE OF FDIC
PREMIUMS AND LOWER ASSESSMENTS
FOR COMMUNITY BANKS.
COMMUNITY BANK LENDING REALLY IS
THE LIFEBLOOD OF NEW HAMPSHIRE'S
ECONOMY.
EVERY DOLLAR COMMUNITY BANKS
HAVE TO PAY FOR WALL STREET'S
MISTAKES IS A DOLLAR THAT COULD
BE GOING TO EXTEN CREDIT T
SMALL BUSINESSES AND TO HOME AND
CONSUMER LOANS TO FAMILIES.
I ALSO JOIN SENATOR COLLINS ON
HER AMENDMENT TO REQUIRE WALL
STREET BANKS TO FOLLOW THE SAME
CAPITAL AND RISK STANDARDS THAT
SMALL DEPOSITORY BANKS MUST
FOLLOW.
THIS ASSESSMENT WILL LET THE
RISKY BANKS, BANKS LIKE BEAR
STEARNS AND LEHMAN BROTHERS,
FOLLOW THE SAME STANDARDS THAT
ALREADY APPLY TO SMALL DEPOSITORY BANKS.
THIS BILL REQUIRES THE BIG WALL
STREET BANKS TO HAVE ADEQUATE
CAPITAL TO PREVENT TAXPAYERS
FROM HAVING TO BAIL THEM OUT
AGAIN.
SO, I'M VERY PLEASED THAT THOSE
BIPARTISAN AMENDMENTS WHICH
STRENGTHENED THEILL BY
PROTECTING COMMUNITY BANKS HAVE
BEEN ADOPTED, AND I THINK IT
SPEAKS TO THE CONVERSATION THAT
YOU WERE HAVING, SENATOR DODD,
WITH SENATOR KAUFMAN EARLIER
THAT, THIS IS A BILL THAT HAS
GOTTEN BROAD SUPPORT IN THIS
BODY AND A LOT OF INPUT, AND
THAT'S MADE IT BETTER.
MADAM PRESIDENT, I'M GLAD WE'VE
BEEN ABLE TO WORK IN THIS
BIPARTISAN MANNER TO CRAFT A
STRONG BILL THAT RAINES IN THE
WRECK -- THAT REINS IN THE
RECKLESS WALL STREET CONDUCT
THAT GOT US TO THE BRINK OF FINANCIAL DISASTER.
IT KEEPS COMMUNITY BANKS STRONG
AND PROTECTS TAXPAYERS.
AND I LOOK FORWARD TO VOTING
TO THIS BILL. THE PRESIDING OFFICER: THE
SENATOR FROM CONNECTICUT.
MR. DODD: MADAM PRESIDENT,
OUR COLLEAGUE FROM NEW
HAMPSHIRE.
I SEE OUR OTHER COLLEAGUE FROM
NEW HAMPSHIRE WELL.
IT'S BEEN A NEW HAMPSHIRE MOMENT.
BUT LET ME THANK SENATOR SHAHEEN
AND OUR COLLEAGUE FROM MAINE,
SENATOR SNOWE, FOR WORKING AS
THEY DID ON THE COMMUNITY BANK
ISSUES, AND WAS PLEASED, AS I
NOTED YESTERDAY, THE INDEPENDENT
COMMUNITY BANKERS ASSOCIATION,
WHILE NOT ENDORSING THE ENTIRE
BILL, BUT SPECIFICALLY ON THEIR
ISSUES INVOLVING COMMUNITY
BANKS, EXPRESSED STRONG SUPPORT
FOR THIS BILL.
AND HOW MUCH STRONGER THESE
BANKS ARE TODAY AS A RESULT OF
OUR EFFORTS ON THIS BILL, THAT
WOULD BE THE CASE IF WE WERE TO
DEFEAT THIS LEGISLATION.
THEIR ABILITY TO COMPETE WITH
THESE LARGER BANKS HAS BEEN
ENHANCED TREMENDOUSLY BY WHAT
WE'VE DONE IN THE BILL.
IF THESE PROVISIONS WERE NOT
ADOPTED THEY WOULD BE BACK IN
THE SITUATION WHERE THERE WOULD
BE SIGNIFICANT DISADVANTAGES FOR
THEM UNDER THE CURRENT LAW.
I AM VERY GRATEFUL TO SENATOR
SHAHEEN AND SENATOR SNOWE,
OBVIOUSLY, AND OTHERS WHO
SUPPORTED YOUR EFFORTS TO
STRENGTHEN THE ROLE OF OUR
COMMUNITY BANKS ANDLAY SUCH A
CRITICAL ROLE.
AS YOU POINT OUT, WE'RE NEVER A
SOURCE OF ENDING THE PROBLEMS OF
THE RESIDENTIAL
MR. GREGG: MADAM PRESIDENT?
THE PRESIDING OFFICER: THE
SENATOR FROM NEW HAMPSHIRE.
MR. GREGG: LET ME BEGIN BY
FIRST THANKING THE SENATOR FROM
CONNECTICUT AND CONGRATULATING HIM.
HE'S BEEN PRETTY EFFECTIVE HERE
IN THIS LAST YEAR IN THE SENATE,
GOTTEN A LOT OF STUFF DONE AND
LOT OF STUFF THROUGH.
AND I HAVEN'T AGREED WITH IT
ALL, BY THE WAY.
BUT MOST OF ALL ALWAYS FAIR AND
BALANCED, OWLS WITH A GOOD SENSE
OF HUMOR, ALWAYS LISTENING TO
THOSE HE MAY NOT AGREE WITH
ENTIRELY AND ALLOW US TO
PARTICIPATE AT THE TABLE IN
DISCUSSION AND AT THE VERY
BEGINNING OF THE PROCESS IN A
VERY SUBSTANVE WAY.
I THANK HIM FOR HIS COURTESY.
I THANK HIM FOR THE WAY HE RUNS
THE COMMITTEE AND THE WAY HE RAN
THE "HELP" COMMITTEE WHEN YOU
SUCCEEDED TO THAT -- WHEN HE
SUCCEEDED TO THAT LEADERSHIP IN
THE UNFORTUNATE PASSING OF
SENATOR KENNEDY.
I HAVE RESERVATIONS ABOUT THIS
BILL.
THEY ARE MORE THAN RESERVATIONS.
I FEEL THE BILL DOESN'T START
OUT WHERE WE NEED TO GO.
WHEN WE STARTED OUT IN THIS
EFFORT OUR PURPOSE WAS, IN MY
OPINION, TWO FOLD.
FIRST, WE WANTED TO MAKE SURE WE
DID EVERYTHING WE COULD TO BUILD
INTO THE SYSTEM OF REGULATORY
ATMOSPHERE AND THE MARKETPLACE,
THE BREAKS AND THE ABILITY TO
AVOID ANOTHER SYSTEMIC MELTDOWN
OF THE TYPE THAT WE HAD IN LATE
2008, WHICH WAS A TRAUMATIC
EVENT.
NOBODY SHOULD UNDERESTIMATE HOW
SIGNIFICANT THE EVENTS OF LATE
2008 WERE.
IF ACTION HAD NOT BEEN TAKEN
UNDER THE TARP PROPOSAL AND
UNDER THE LEADERSHIP OF
PRESIDENT BUSH, SECRETARY
PAULSON AND THEN PRESIDENT
OBAMA, SECRETARY GEITHNER, THIS
COUNTR WOULD HAVE GONE INTO A
MUCH MORE SEVERE ECONOMIC
SITUATION.
PROBABLY A DEPRESSION.
SECRETARY PAULSON ONCE ESTIMATED
THAT THE UNEMPLOYMENT RATE WOULD
HAVE GONE TO 25%.
THE SIMPLE FACT IS
BANKING SYSTEM WOULD HAVE
PROBABLY IMPLODED -- MOST LIKELY
IMPLODED AND CERTAINLY MAIN
STREET AMERICA WOULD HAVE BEEN
PUT IN DIRE STRAITS.
BUT ACTION WAS TAKEN.
IT WAS DIFFICULT ACTION.??
WE'RE STILL HEARING THE
RAMIFICATIONS OF IT, BUT IT WAS
THE RIGHT ACTION AND IT HAS LED
TO A STABLIZATION OF THE
FINANCIAL INDUSTRY.
BUT WE NEVER WANT TO HAVE TO SEE THAT HAPPEN AGAIN.
WE NEVER WANT TO GO THR
TYPE OF TRAUMA AGAIN AS A NATION
WHERE OUR ENTIRE FINANCIAL
COMMUNITY IS TEETERING.
SO THE PURPOSE OF THIS BILL
SHOULD BE TO PUT IN PLACE A
SERIES OF INITIATIVES WHICH WILL
HOPEFULLY MUTE THAT TYPE OF A
POTENTIAL FOR ANOTHER EVENT OF
SYSTEMIC MELTDOW
THE SECOND PURPOSE OF THIS BILL,
AND IT'S AN EQUALLY IMPORTANT
PURPOSE IS THAT WE NOT DO
SOMETHING THAT HARMS ONE OF OUR
FEW MEEK STRENGTHS AND -- UNIQUE
STRENGTHS AND CHARACTERS AS A
NATION, WHERE IF YOU'RE AN
ENTREPRENEUR AND HAVE AN IDEA
AND WILLING TO TAKE A RISK AND
CREATE JOBS, YOU CAN GET CREDIT
AN CAPITAL REASONABLY EASILY
COMPARED TO THE REST OF THE WORLD.
AND THAT HAS BEEN THE -- THE
ENGINE OF THE ECONOMIC
PROSPERITY OF OURATION, THE
AVAILABLITY OF CREDIT A
CAPITAL REASONABLY PRICED AND
REASONABLY AVAILABLE TO
ENTREPRENEURS IN OUR NATION.
THOSE SHOULD HAVE BEEN OUR TWO
GOALS.
IF YOU MATCH THIS BILL TO THOSE
GOALS, DOES IT MEET THE TEST OF
MEETING THOSE GOALS?
UNFORTUNATELY I DON'T THINK IT DOES.
THERE ARE SOME VERY POSITIVE
THINGS IN THE BILL.
THE RESOLUTION AUTHORI IS A
GOOD PRODUCT IN THIS BILL AND IT
WILL, IN MY OPINION, I KNOW
THERE'S A LOT OF DISCUSSION OF
THIS, BUT I BELIEVE IT WILL
PRETTY MUCH BRING AN END TO THE
CONCEPT OF TOO BIG TO FAIL.
IF AN INSTITUTION GETS
OVERLEVERAGED TO A POINT WHERE
IT'S NO LONGER SUSTAINABLE AND
IT'S A SYSTEMIC RIS
INSTITUTION, IT IS GOING TO
COLLAPSED, THE STOCKHOLDERS WILL
BE WIPED OUT, THE UNSECURED
BONDHOLDERS WILL BE WIPED OUT
AND THE INSTITUTION WILL BE
RESOLVED UNDER THIS BILL.
AND THAT'S POSITIVE.
BECAUSE WE DO NOT WANT TO SEND
TO THE MARKETS A SIGNAL THAT THE
AMERICAN TAXPAYER'S GOING TO
STAND BEHIND INSTITUTIONS WHICH
ARE SIMPLY LARGE.
THAT PERVERTS CAPITAL IN THE
MARKETS, IT PERVERTS FLOW O
ECONOMIC ACTIVITY IN THE MARKETS
WHEN PEOPLE THINK THAT THERE IS
THAT SORT OF GUARANTEE STANDING
BEHIND CERTAIN INSTITUTIONS IN
THE GOVERNMENT.
I THINK THAT PROGRESS WAS MADE
ON THIS RESOLUTION.
UNFORTUNATELY, THE NUMBER -- THE
OTHER AREAS TO DO SOMETHING
REALLY CONSTRUCTIVE WAS NOT
ACCOMPLISHED.
IN FACT, IN MY OPINION, THERE
WILL BE RESULTS FROM THIS BILL
WHICH WILL CAUSE US TO SEE A
NEGATIVE EFFECT FROM THIS BILL.
THE MOST NEGATIVE EFFECT THAT I
THIN
LIE IN TWO AREAS.
FIRST, IS IN THE AREA OF
FORMATION OF CREDIT.
IT'S VERY OBVIOUS THAT UNDER
THIS BILL THERE IS GOING TO BE A
VERY SIGNIFICANT CONTRACTION AND
CREDIT IN THIS COUNTRY AS WE
HEAD INTO THE NEXT YR, TWO
YEARS, MAYBE EVEN THREE YEARS.
NOW WE'RE IN A TOUGH FISCAL TIME
RIGHT NOW.
WE'RE -- IT'S VERY DIFFICULT
STILL ON MAIN STREET AMERICA TO GET CREDIT.
THE ECONOMY IS SW.
WE SHOULD NOT BE PASSING A BILL
WHICH IS GOING TO SIGNIFICANTLY
DAMPEN DOWN CREDIT, BUT IT WILL.
THIS BILL WILL AND IT WILL FOR
THREE REASONS.
FIRST, THE DERIVATES LANGUAG
IN THIS BILL IS NOT WELL THOUGHTOUT.
IT JUST ISN'T.
AND -- MOST PEOPLE DON'T
UNDERSTAND WHAT DERIVATIVES ARE.
LET'S DESCRIBE THEM AS THE
GREASE THAT GETS CREDIT GROWING
IN THIS COUNTRY.
IT'S BASICALLY INSURANCE
PRODUCTS THAT ALLOW PEOPLE TO DO
BUSINESS AND MAKE SURE THAT THEY
CAN INSURE OVER THE RISKS THAT
THEY HAVE IN BUSINESS.
AND THIS BILL CREATES A NEW
REGIME FOR HOW WE HANDLE
DERIVATIVES IN THIS COUNTRY.
THE REGIME IT CREATES RATHER
THAN MAKING DERIVATIVES MORE
TRANSPARENT AND SOUNDER, WHICH
IS WHAT OUR GOAL SHOULD HAVE
BEEN, WHICH COULD HAVE BEEN DONE
VERY EASILY BY GIVING -- MAKING
SURE THAT MOST DERIVATIVES WERE
ON OVER THE -- OVER-THE-COUNTER
EXCHANGES AND WENT THROUGH
CLEARING HOUSES, I MEAN, AND HAD
ADEQUATE MARGIN BETWEEN THEM,
ADEQUATE LIQUIDITY BIND THEM AND
REPORTED IMMEDIATELY TO THE
REGULATORY AGENCIES TO WHAT THEY
WERE DOING.
DIDN'T INVOLVE A LOT OF
COMPLICATION, JUST INVOLVED THE
CHANGING OF THE RULES OF THE
ROAD.
INSTEAD OF DOING THAT, WE
CHANGED THE ENTIRE PROCESS.
IN CHANGING THE ENTIRE PROCESS,
WE ARE BASICALLY GOING TO
CONTRACT SIGNIFICANTLY THE
AVAILABLITY OF THESE PRODUCTS TO
BASICALLY FUND AND TO BE THE
ENGINE OR THE -- THE GREASE OR
THE -- THE LUBRICANT FOR THE
ABILITY OF A LOT OF AMERICAN
BUSINESS TO DO BUSINESS.
END USERS IN THIS COUNTRY WHO
USE DERIVATIVES ARE GOING TO
FIND IT VERY HARD TO HAVE AN
EXEMPTION.
THEY'RE BASICALLY GOING TO HAVE
TO PUT UP CAPITAL, THEY'RE GOING
TO HAVE TO PUT UP MARGIN,
SOMETHING THEY DON'T DO TODAY ON
COMMERCIAL DERIVATIVE PRODUCTS
AND THAT'S GOING TO CAUSE THEM
TO CONTRACT THEIR BUSINESS OR
THEY'RE GOING TO HAVE TO GO OVERSEAS.
BELIEVE ME, THERE'S A VIBRANT
MARKET IN DERIVATIVES OVERSEAS
AN THEY'LL GO TO LONDON AND THIS
BUSINESS WILL END UP OFFSHORE.
AND THEN YOU HAVE A PUSH TO PUT
EVERYTHING ON AN EXCHANGE.
THERE ARE A LOT OF DERIVATIVES
THAT OBVIOUSLY SHOULD GO THROUGH
CLEARING HOUSES BUT ARE TOO
CUSTOMIZED TO GO ON EXCHANGES
AND YOU'RE GOING TO END UP
INEVITABLY WITH A CONTRACTION IN
THE DERIVATIVES MARKET AS A
RESULT OF THAT.
AND THEN YOU HAVE THE SWAP DESK
INITIATIVE WHICH WAS A PUNITIVE??
EXERCISE IN MY OPINION, IT'S
GOING TO ACCOMPLISH VIRTUALLY
NOTHING IN THE AREA OF MAKING
THE SYSTEM SOUNDER OR MORE STABLE.
BUT WHAT IT WILL DO IS MOVE A
LARGE SECTION OF DERIVATIVE
ACTIVITY, ESPECIALLY THE CDS
MARKETS OFFSHORE.
THEY WILL NOT BE DONE HERE ANY
LONGER, BANKS, FINANCIAL HOUSES
WHICH HAVE
THESE INSTRUMENTS ARE NOT GOING
TO PUT UP THE CAPITAL TO WRITE
THEM BECAUSE THEY DON'T GET A
RETURN THAT MAKES IT WORTH IT TO
THEM.
AND I GUARANTEE YOU THAT WE ARE
GOING TO SEE A MASSIVE
CONTRACTION, IN A NUMBER OF DERIVATIVE MARKETS AS A RESULT
OF THE SWAP DESK INITIATIVE
WHICH WAS MORE OF A POLITICAL
INITIATIVE THAN SUBSTANTIVE INITIATIVE.
IT IS COUNTERPRODUCTIVE.
AND WHAT IT'S GOING TO DO IS
MOVE OVERSEAS A LOT OF PRODUCT
THAT WE DO HERE AND IT IS GOING
TO MAKE IT HARDER FOR AMERICA TO
BE COMPETITIVE AND FOR FINANCIAL
SERVICE INDUSTRIES TO BE
COMPETITIVE HERE IN THE UNITED STATES.
THAT WILL CAUSE A CONTRACTION IN
MY OPINION.
THE ESTIMATES
ESTIMATES ARE AS HIGH AS
THREE-QUARTERS OF A TRILLION
DOLLARS.
ON T TOP OF THAT YOU HAVE THE
ISSUE OF THE NEW CAPITAL RULES
IN THIS BILL.
NOW, IT REALLY ISN'T
CONSTRUCTIVE FOR THE CONGRESS TO
SET ARBITRARY CAPITAL RULES.
THAT SHOULD BE LEFT TO THE
REGULATORS.
BUT THIS BILL PRETTY MUCH DOES
THAT.
AS A RESULT A LOT OF THE
MIDDLE-SIZED BANKS, NOT THE
LARGER BANKS, BUT THE MIDDLE-SIZED BANKS WILL FINE
THAT THEY'RE UNDER TREMENDOUS
PRESSURE AS THE TIER ONE CAPITAL
HAS TO BE RESTRUCTURED.
AND THIS IS NOT A GOOD IDEA.
IT IS JU
AS A PRACTICAL MATTER YOU'RE
GOING TO CAUSE A CONTRACTION IN
THE MARKET OF CAPITAL, OF CREDIT
AS BANKS GROW THEIR CAPITAL,
THEY'RE GOING TO HAVE TO
CONTRACT CREDIT.
WHEN A BANK -- WHEN A BANK HAS
TO GET MONEY BACK IN ORDER TO
BUILD ITS CAPITAL POSITION UP,
IT DOESN'T GO TO ITS BAD LOANS.
THE BAD LOANS AREN'T PERFORMING.
IT GOES TO ITS GOOD LOANS.
AND IT DOESN'T LEND TO THEM OR
IT SAYS WE'RE GOING TO DRAW DOWN
YOUR LINE OF CREDIT.
GET CAPITAL IN.
AND THAT'S WHAT WILL HAPPEN.
WE'LL SEE CAPITAL ARE CONTRACT THERE.
ON TOP OF
VOLCKER RULE, IN CONCEPT, IT'S A
GOOD IDEA.
SHOULD NEVER BE ALLOWED -- YOU
SHOULD NOTAVE BANKS USING
INSURED DEPOSITS TO DO PROPRIETY ACTIVITY.
STRAINING OUT WHAT THIS VOLCKER
RULE MEANS WIL TAKE A WHILE, IT
WILL TAKE A YEAR OR TWO YEARS
BEFORE ANYBODY CAN SORT IT OUT
AND WHAT IT REALLY MEANS AND FOR
THE REGULATION THAT'S COME DOWN
TO DEFINE IT.
YOU WILL HAVE PERIOD OF
UNCERTAINTY AND THIS LEADS TO
LESS CREDIT AVAILABLE AND THIS
IS A SITUATION WHERE THE
INTERNATIONAL BANKS WERE THE
WINNERS AND THE DOMESTIC BANKS
ARE THE LOSERS BECAUSE THE
INTERNATIONAL BANKS ARE GOING TO
BE ABLE TO GO AND DO THE SAME
BUSINESS, THE PROPRIETY TRADING
IN LONDON OR IF THEY'RE BASED IN
SINGAPORE IN THEY'RE BASED IN
SINGAPORE, OR TOKYO IF THEY'RE
BASED IN TOKYO, BUT THE AMERICAN
BANKS WITH WHICH THEY COMPETE
WITH ARE NOT GOING TO BE ABLE TO
DO IT.
AS A PRACTICAL MATTER THAT'S
WHAT THIS BILL DOES.
WE WILL END UP WITH A TENTATIVENESS IN THE MARKETS AS
TO WHAT THEY'RE SUPPOSED TO BE
DOING AND WHAT THEY CAN DO IN
THE AREA RELATIVE TO THE VOLCKER
RULE AND THIS IS GOING CREATE
FURTHER CREDIT CONTRACTION.
MY GUESS IS WHEN YOU ADD IT ALL
TOGETHER THIS BILL WILL LEAD TO
A CREDIT CONTRACTI
PROBABLY $1 TRILLION OR MORE IN OUR -- IN OUR ECONOMY.
WHAT DOES THAT TRANSLATE
IT TRANSLATES INTO FEWER JOBS,
LESSER ECONOMIC ACTIVITY AND IT
DIDN'T HAVE TO HAPPEN THIS WAY.
I MEAN, THIS COULD HAVE BEEN
DONEN A WAY THAT WOULD HAVE
BEEN CLEARER, WHERE THE CLARITY
WOULD HAVE BEEN GREATER AND
WHERE YOU WOULD NOT HAVE HAD TO
TAKE ARBITRARY ACTION WHICH IS
MORE POLITICAL THAN SUBSTANTIVE
TO ADDRESS THE PROBLEMS OF OUR
INDUSTRY WHICH DID EXIST AND
SHOULD HAVE BEEN ADDRESSED.
ANOTHER AREA OF CONCERN IS THIS CONSUMERGENCY.
CONSUMER PROTECTION IS CRITICAL.
WE ALL AGREE TO THAT.
WHAT WE PROPOSE ON OUR SIDE OF
THE AISLE WAS THAT YOU LINK
CONSUMERROTECTION AND SAFETY
AND SOUNDLESS AT THE SAME --
SOUNDNESS AT THE SAME LEVEL OF
RESPONSIBILITY AND IN THE SAME
LEVEL OF AUTHORITY WITHIN THE
ENTIRE BANK REGULATORY SYSTEM.
SO THAT THE PRUDENTIAL -- THE
REGULATOR WHEN THEY REGULATE A
BANK AND CHECK IT FOR SOUNDNESS
THEY HAVE THE SAME STANDARD OF
IMPORTANCE PLACED ON MAKING SURE
THAT THE CONSUMER IS PROTECTED
IN THE WAY THAT THAT BANK DEALS
WITH THE CONSUMERS.
THAT'S THE WAY IT SHOULD BE
DONE.
WHAT THIS BILL DID, LINKED THE
TWO, BECAUSE THE REGULATOR THAT
REGULATES THE BANK FOR SAFETY
AND SOUNDNESS IS THE LOGICAL
REGULATOR TO REGULATE THE BANK
TO MAKE SURE THEY'RE COMPLYING
WITH CSUMERS' NEEDS.
WHAT THIS BILL DOES IS SETS UP A
BRAND-NEW AGENCY, WHICH IT CALLS
CONSUMER PROTECTION, WHICH WON'T
BE AT ALL IN MY OPINION.
IT WILL BE THE AGENCY FOR
POLITICAL CORRECTNESS OR
CORRECTING SOCIALLY POLITICAL
JUSTICE, ISSUES OF POLITICAL JUSTICE THAT SOMEBODY'S
CONCERNED ABOUT.
AND IT
EVERYBODY ELSE.
IT DOESN'T ANSWER TO ANYONE
EXCEPT ON A VERY LIMITED AND
NARROW WAY TO THE SYSTEMIC RISK
COUNSELLE.
IT IS A -- COUNCIL.
IT IS A SINGLE PERSON WITH A
AN $850 MILLION -- MILLION
DOLLARNOVERSIGHTED REVENUE
STREAM, NO APPROPRIATIONS,
BASICALLY THE PERSON JUST GETS
THE MONEY AND CAN GO OFF AND DO
WHATEVER THEY WANT.
WELL, THERE'S NO RELATIONSHIP
BETWEEN THIS PERSON AND THE
PRUDENTIAL REGULATOR, SO WHAT
YOU'RE GOING TO HAVE HERE IS AN
INDIVIDUAL WHO MAY GET ON
CAUSE OF SOCIAL JUSTICE THAT
SAYS, X, Y, Z GROUP ISN'T
GETTING ENOUGH LOANS AND THEY
SAY, ALL RIGHT, YOU HAVE TO SEND
X, Y, Z'S GROUP MORE LOAN.
YOU MIGHT HAVE THE LOCAL
REGULATOR SAYING TO THE LOCAL
BANKS, REGIONAL BANKS, YOU CAN'T
LEND TO X, Y, Z GROUP BECAUSE WE
KNOW THEY'RE NOT GOING TO PAY
YOU BACK OR THEY'RE NOT GOING TO
PAY BACK AT A RATE THAT'S
REASONABLE.
AND SO YOU'RE GOING TO HAVE THIS
INHERENT CONFLICT.
WHAT'S GOING TO BE THE RESULT OF
THAT?
WELL,HE BANKS WILL PROBABLY
HAVE TO LEND TOHE X, Y, Z
GROUP, WHICH MEANS THE PEOPLE
WHO ARE BORE HEOING FROM THAT
BANK AND WILL PAY THEIR BANKS
BACK WILL HAVE TO PAY MORE
BECAUSE THE BANK HAS TO MAKE UP
FOR THE LOST OF REVENUES.
AS A RESULT THE COST OF CREDIT
WILL GO UP, ESPECIALLY FOR
INDIVIDUALS WHO ARE RESPONSIBLE
IN PAYING DOWN THEIR DEBTS AND
PAYING FOR THEIR CREDIT, PAYING
BACK THEIR LOANS AND YOU WILL
END UP WITH LAYER YES AND
LAYERS -- LAYERS AN
LAYERS OF CON FLINGTING
REGULATION, -- CONFLICTING
REGULATION, WHICH WILL COST THE
BANK SIGNIFICANT UNNECESSARY MONEY.
WHO WILL PAY FOR THAT?
YOU PAY FOR IT.
THE CONSUMER PAYSOR IT.
CLEARLY IT PASSES THROUGH.
THIS IS ONE OF THE GOLDBERG
IDEAS THAT COME OUT OF A
GOVERNMENT ENTITY.
THEY SAY, YOU KNOW, THE
GOVERNMENT PRODUCES A -- A CAMEL
WHEN IT IS SUPPOSED TO BE
PRODUCING A HORSE.
THERE'S JUST -- JUS A
DISCONNECT BETWEEN THE REALITY
OF WHAT YOU'RE SUPPOSED TO BE
DOING IN THE AREA OF PRODUCING
EFFECTIVE REGULATION RELATIVE TO
PROTECTING CONSUMERS AND WHAT
THIS BILL FINALLY ENDS UP DOING
AND WHAT I SUSPECT -- AND I
WON'T BE HERE TO OVERSEE IT OR
PARTICIPATE IN IT -- NOBODY GETS
TO OVERSEE IT.
IT IS NOT RESPONSIBLE TO THE
BANKING COMMITTEE OF THE SENATE
OR THE BANKING COMMITTEE OF THE HOUSE.
IT'S NOT RESPONSIBLE TO T FED.
TH
THE TERM CZAR IS THROWN AROUND A
LOT, BUT THIS PERSON IS THE TRUE
CZAR IN THE AREA OF ACTIVITY.
I SUSPECT THAT WE SEE THIS
AGENCY BECOME A CONTROVERSIAL
AGENCY WITH A VERY POLITICAL
SOCIAL JUSTICE TYPE OF AGENDA
NOT AN AGENDA AIMED AT PRIMARILY
PROTECTING CONSUMERS.
SO THAT'S A BIG PROBLEM WITH
THIS BILL.
THERE ARE A LOT OF OTHER ISSUES
WITH THIS BILL.
AT THE MARGIN, THE ISSUE OF HOW
WE RESTRUCTURE THE REGULATORY
REGIMES IS OF SOME CONCERN.
THE WHOLE QUESTION OF HOW
STOCKHOLDERS' RIGHTS IS IN THIS
BILL AND PROBABLY NOT RELEVANT
TO THE BANKING ISSUE SO MUCH,
WHICH COULD HAVE BEEN IMPROVED ON.
AND THE BILL OVERALL COULD HAVE
BEEN A MUCH BETTER PRODUCT, BUT
THE PRIMARY CONCERN THAT I HAVE
GOES BACK TO THIS ISSUE OF WHAT
WAVES THE ORIGINAL PURPOSE DSHES
WHAT WAS THE ORIGINAL PURPOSE?
TO PROTECT SYSTEMIC RISK IN THE
OUT YEAR AND MAKE SURE WE TO
INHAVE A STRONG AND VIBRANT
CREDIT MARKET FOR AMERICANS WHO
WANT TO TAKE
JOBS.
AND TWO MAJOR ISSUES WERE TOTALLY IGNORED IN THE BILL
WHICH WOULD ADDRESS THAT QUESTION.
WHAT DROVE THE EVENT OF THIS MELTDOWN?
WHAT CAUSED THIS FINANCIAL DOWNTURN?
IT WAS THE REAL ESTATE MARKET
AND THE WAY IT WAS BEING LENT
INTO.
AND TWO THINGS WERE THE BASIC
ENGINES OF THAT PROBLEM THAT
WERE GOVERNMENT-CONTROLLED.
ONE -- THERE WERE A LOT OF
THINGS WHICH WERE THE ENGINES,
THAT CAUSED T BUT THE TWO WHICH
WERE GOVERNMENT-CONTROLLED WAS,
ONE, UNDERWRITING STANDARDS,
BASICALLY WE DIVORCED
UNDERWRITING STANDARDS FROM THE
ISSUE OF WHETHER OR NOT A PERSON GOT A LOAN.
SO LOANS WERE BEING MADE ON
ASSETS WHICH
COST OF THE LOAN.
IT WAS PRESUMED THE ASSET WAS
GOING TO APPRECIATE, A HOME WAS
GOING TO ALWAYS APPRECIATE IN
THESE COMMUNITIES AND THEREFORE
THEY COULD LEND 100% OF THE
VALUTHAT HAVE HOME OR 105% OF
THE VALUE THAT HAVE LOAN AND
STRIL A SAFE LOAN.
THAT WAS A FOOLISH ASSUMPTION TO
SAY THE
AND, SECONDLY, WE DIDN'T LOOK AT
WHETHER OR NOT THE PERSON COULD
PA THE LOAN BACK.
WHEN THESE LOANS WERE MADE AT
ZERO INTEREST FOR A YEAR OR TWO
YEARS, BUT THEN THEY RESET A A
VERY UNREASONABLE INTEREST RATE
AND NOBODY LOOKATED AT WHETHER
THE PERSON COULD PAY THEM BACK.
THESE LOANS WERE NOT BEING MADE
FOR THE PURPOSE OF RECOVERING
THE LOAN.
THE SUBPRIME LOANS WERE -- AND
ALL LOANS WERE BEING MADE
BECAUSE THERE WERE FEES ON THE LOANS.
THE PEOPLE MAKING THE LOANS WERE
GETTING THE FEES.
THERE WAS A WHOLE COTTAGE
INDUSTRY ACTUALLY DOWN IN MIAMI
OF PEOPLE WHO JUST HAD
OUT OF PRISON WHO HAD FIGURED
THIS OUT WHILE THEY WERE IN
PRISON AND THEY DEVELOPED AN
ENTIRE COTTAGE I
FORMER PRISONERS ACTUALLY
GETTING BACK INTO T LOAN
BUSINESS AND MAKING THE FEES.
AND WHAT REALLY AGGRAVATED IT --
FIRST WAS THE UNDERWRITING
STANDARDS -- WAS THE FACT THAT
THE LOANS GOT SECURITIZED.
THEY GOT PICKED UP BY FANNIE MAE
AND FREDDIE MAC WITH THE
UNDERSTANDING THAT FANNIE MAE
AND FREDDIE MAC WOULD ENSURE
THESE LOANS SO THAT IF YOU
BOUGHT ONE OF THESE LOANS,
SECURITIZED LOANS, FANNIE MAE
AND FREDDIE MAC WOULD BE
STANDING BEHIND IT.
EVEN THOUGH THE LOANS WERE NOT
VIABLE.
WELL, THIS BILL IGNORES BOTH OF
THOSE ISSUES.
IT THATS A VERY MARGINAL
LANGUAGE ON THE ISSUE OF UNDERWRITING P.
DOESN'T GET US BACK TO STANDARDS
THAT WOULD PROTECT US FROM
OVERAGGRESSIVE --
PEOPLE SAY CANADA DIDN'T HAVE A
PROBLEM, AUSTRALIA DIDN'T HAVE A PROBLEM. WHY?
BECAUSE THEY REQUIRE PEOPLE TO
PUT "MAD MONEY" AND THEY REQUIRE
THAT PEOPLE WHO ARE BORROWING
ACTUALLY PAY THE MONEY BACK.
SEEMS LIKE A FAIRLY REASONABLE
THING TO REQUIREMENT BUT THIS
BILL IGNORES IT.
SECONDLY, THIS BILL DOES NOTHING
ABOUT FANNIE AR FREDDIE.
NOTHING.
I MEAN, YOU TALK ABOUT IGNORING
THE ELEPHANT IN THE ROOM, THIS
IS THE WHOLE HERD OF ELEPHANTS
IN THE ROOM.
THE AMERICAN TAXPAYER TODAY IS
ON THE HOOK FOR SOMETHING LIKE
$500 BILLION TO $1 TRILLION --
THE ESTIMATES VAR
SOME PEOPLE STEY SAY IT IS EVEN
HIGHER THAN THAT.
THE AMERICAN TAXPAYER FOR BAD
LOANS, SECUR SECURITIZED BY FREDDIE
AND FANNIE THIS BILL DOES NOTHING.
THAT'S THE BIG OF THE PROBLEM
WE'VE.
NOT ONLY THE BIGGEST PROBLEMS
WE'VE, ONE OF THE PRIMARY
DRIVERS OF THE FINANCIAL
MELTDOWN, BUT IT IS THE BIGGEST
PROBLEM WE'VE GOING TOWARD.
AND THE ADMINISTRATION SAYS, OH,
WE'LL DO THAT NEXT YEAR.
IF YOU'RE GOING TO DO A
FINANCIAL REFORM BILL WITHOUT
DOING FREDDIE AND FANNIE, YOU
AREN'T DOING A FINANCIAL REFORM BILL AT ALL.
AND I WOULD APPLY THE SAME TO
THE ISSUE OF UNDERWRITING.
SO IN MY OPINION, THIS BILL HAS
SOME PLUSES.
AND I KNOW IT WAS WORKED VERY
HARD AND I ADMIRE THE EFFORTS OF
THE SENATOR FROM CONNECTICUT --
AND ACTUALLY THE CHAIRMAN IN THE
HOUSE, SENATOR FRANK --
CONGRESSMAN FRANK FROM
MASSACHUSETTS.
BUT THE NEGATIVES OF THIS BILL,
UNFORTUNATELY, ARE TOO
SIGNIFICANT TO IGNORE,
ESPECIALLY IN THE AREA OF THE
SHORT-TERM CREDIT CONTRACTION
THAT'S GOING TO OCCUR, THE
POORLY SUCTURED DERIVATIVES
LANGUAGE, THE CONSUMER
PROTECTION AGENCY, WHICH I THINK
IS GOING TO END UP BEING
COUNTERPRODUCTIVE TO CONSUMERS,
AND THE FAILURE TO TANK THE
FREDDIE MAC -- THE FREDDIE AND
MAN KNEE ISSUE AND THE -- THE
FREDDIE AND FANNIE ISSUE AND THE
FAILURE TO DO A STRONGER
UNDERWRITING STANDARD.
I REMAIN OPPOSED TO THIS BILL.
I UNDERSTAND IT IS GOING TO PASS
AND I HOPE THAT SOME OF NIGH
CONCERNS DON'T COME TO FRUITION,
BECAUSE IF THEY DO,
UNFORTUNATELY, THIS ECONOMY GOING TO BE SLOWED AND OUR
NATION WILL BE LESS VIABLE
ECONOMICALLY.
BUT I'M AFRAID THEY WILL COME TO FRUITION.
MR. PRESIDENT, I YIELD THE
FLOOR.
A SENATOR: MR. PRESIDENT?
THE PRESIDING OFFICER: IS NOT
FRR CONNECTICUT IS RECOGNIZED.
MR. DODD: MR. PRESIDE
JUST VERY BRIEFLY -
SEE MY OTHER COLLEAGUES HERE, INCLUDING SENATOR SPECTER AND
SENATOR CONRAD WHO WAN
HEARD -- BUT I WOULDN'T WANT M FRIEND FROM NEW HAMPSHIRE
BECAUSE WE'LL BOTH BE WALKING
OUT OTHIS CHAMBER IN ABOUT
FIVE MONTHS TOGETHER, AND LET ME
THANK HIM FOR HIS WORK.
GOING BACK 20-SOME-ODD MONTHS
AGO WHEN WE WERE INVOLVED IN THE
CRITICAL WEEKS, DAYS IN
SEPTEMBER AND OCTOBER.
JUDD GREGG WAS INVALUABLE IN
PUTTING TOGETHER A MOMENT HERE
THAT WHILE NOT TERRIBLY POPULAR
I THINK SAVED OUR ECONOMY AND
THE COUNTRY.
AND I WON'T ADDRESS ALL HIS
CONCERNS HERE.
WE'VE A DIFFERENT POINT OF VIEW
ON THE ISSUES HE'S RAISED.
THEY'RE NOT ILLEGITIMATE ISSUES.
HE HAS A DIFFERENT POINT OF VIEW
AND I RESPECT HIM FOR THAT.
I THANK HIM FOR HIS WORK ON THE BILL.
HE MADE A SIGNIFICANT
CONTRIBUTION TO THE EFFORT, AND
I THANK HIM FOR IT.
I SEE MY COLLEAGUE FROM PENNSYLVANIA HERE.
I YIELD THE FLOOR.
MR. SPECTER: MR. PRESIDENT? THE PRESIDING OFFICER: THE
SENATOR FROM PENNSYLVANIA IS
RECOGNIZED.
MR. SPECTER: AT THE OUTSET, I
WISH TO ASCERTAIN WITH PRECISION
THAT I HAVE 20 MINUTES THAT HAD
BEEN ARRANGED WITH THE FLOOR
MODERATORS.
BUT I'D LOOK FOR 30 BUT ASK
CONSENT THAT I MAY SPEAK FOR UP
TO 20 MINUTES NOW.
THE PRESIDING OFFICER: IS THERE OBJECTION?
DODMR. DODD: DODD
I HAD A SHEET OF PAPER IN FRONT
OF ME, MR. PRESIDENT.
I DON'T HAVE IT IN FRONT OF ME
NOW -- THE ORDER OF THOSE WHO SOHT TIME.
I JUST WANT TO BE CAREFUL AS MY
COLLEAGUE FROM PENNSYLVAA WILL
UNDERSTAND THAT WE'RE GOING TO
VOTE AT 2:00.
I WANT TO MAKE SURE THAT WE HAVE
THE -- THAT I CAN ACCOMMODATE COLLEAGUES.
DOES THE 20 MINUTES --
THE PRESIDING OFFICER: 23
MINUTES RESPECT TO THE MAJORITY.
MR. DODD:
AND I KNOW SENATOR CONRAD, THE
CHAIRMAN OF THE BUDGET
COMMITTEE, IN FACT HAS TO BE
HEARD AND IT'S VERY CRITICAL TO
ME THAT HE BE HEARD ON THE
BUDGET POINT OF ORDER.
SO I'M GOING TO
--
COULD YOU MAKE IT A LITTLE LESS
THAN 20?
MR. SPECTER: I REALLY CAN'T.
I HAD STARTED AT 30 AND 20 IS
TOUGH.
HOW EARLY MIGHT I RETURN FOR MY
30 MINUTES?
MR. DODD: AFTER 2:00.
MR. SPECTE
MR. DODD: ANY POINT AFTER THE --
MR. SPECTER: I ASK UNANIMOUS
CONSENT THAT I MAY HAVE THE 30
MINUTES WHEN THE TWO VOTES WHICH
WERE SCHEDULED FOR 2:00
CONCLUDE? MR. DODD: CERTAINLY.
I DON'T HAVE ANY OBJECTION TO
THAT AT
TAKE SOME TIME AT THIS JUNCTURE,
IF YOU WISH.
MR. SPECTER: WELL, I'LL DO ALL
AT ONCE.
I DON'T WANT TO TRUNCATE IT.
BUT MY -- I ASK UNANIMOUS
CONSENT THAT I MAY HAVE THE
FLOOR FOR 30 MINUTES AT THE
CONCLUSION OF THE TWO VOTES
SCHEDULED FOR 2:00.
THE PRESIDING OFFICER: IS
THERE OBJECTION?
MR. DODD: LET ME JUST AGAIN --
LET ME OBSERVE THE RIGHT TO
OFNLT I SEE THAT THE MINORITY
WANTS TO CHECK ON SUCH A Q I
HAVE NO OBJECTIONYSELF, BUT
OBVIOUSLY THAT'S A MATTER THAT
IN FAIRNESS TO THE MINORITY WE
WANT TO LET THEM KNOW OF SUCH A
HERE WE'RE EATING UP TIME RIGHT
NOW.
I SEE MY FRID FROM NORTH
DAKOTA HERE AS WELL.
I'M DEEPLY GRATEFUL
CHAIRMAN OF THE BUDGET COMMITTEE
FOR -- ARE Y ALL RIGHT WITH THAT?
GO AHEAD WITH THAT REQUEST.
I'M TOLD IT'S OKAY.
THE PRESIDING OFFICER: WITHOUT
OBJECTION, SO ORDERED. MR. SPECTER: THANK YOU.
I THANK THE CHAIR AIRINGS AND MY
COLLEAGUE FROM
MR. DODD: I THANK MY COLLEAGUE
PENNSYLVANIA AND THE UNKNOWN
PERSONS IN THE CLOAKROOM.
THE RECORD WILL RECORD THEY
ACKNOWLEDGE YOUR REQUEST.
I SEE THE CHAIRMAN OF THE BUDGET
COMMITTEE. MR.
THE PRESIDING OFFICER: THE
SENATOR FROM NORTH DAKOTA IS RECOGN
MR. CONRAD: I HAVE COME TO THE
FLOOR TO DISCUSS THE BUDGET
POINT OF ORDER THAT HAS BEEN
RAISED AGAINST THE FINANCIAL
REFORM CONFERENCE REPORT.
I'LL BE VOTING TO WAIVE THIS
POINT OF ORDER.
AS BUDGET COMMITTEE CHAIRMAN, I
DON'T TAKE THIS STEP
IN FACT, THE POINT OF ORDER THAT
HAS BEEN OFFERED IS A NIERD I
CREATED IN
IT'S SOMETHING I FEEL STRONGLY
ABOUT AS A GENERAL MATTER.
BUT ITS APPLICABILITY HERE, I
THINK, IS REALLY -- FALLS IN THE
FACE OF THE IMPORTANCE OF THE
LEGISLATION THAT WE NEED TO
CONSIDER.
THE LEGISLATION BEFORE US IS
CRITICAL TO OUR ECONOMIC STRENGTH.
I THINK WE ALL UNDERSTAND THAT
FINANCIAL REFORM IS LONG OVERDUE.
IT'S BEEN ALMOST TWO YEARS SINCE
THE FINANCIAL SECTOR COLLAPSE
BROUGHT OUR ECONOMY TO THE BRINK
OF GLOBAL FINANCIAL COLLAPSE.
AND I WAS IN THE ROOM.
SENATOR DODD WAS IN THE ROOM
WHEN WE WERE INFORMED BY THE
CHAIRMAN OF THE FEDERAL RESERVE
AND THE SECRETARY OF THE
TREASURY IN THE PREVIOUS
ADMINISTRATION THAT IF WE FAILED
TO ACT AT THAT DIRE MOMENT, THAT
WE COULD FACE A GLOBAL FINANCIAL
COLLAPSE.
THAT'S HOW SERIOUS IT WAS.
NOW THAT THE ECONOMY HAS
STABLIZED, IT'S EASY TO FORGET
THE CRISIS THAT SWEPT THROUGH
THE FINANCIAL MARKETS AND THREW
US INTO THE WORST DOWNTURN SINCE
THE GREAT DEPRESSION.
IN FACT, WHAT RISKED A SECOND
GREAT DEPRESSION.
BUT WE CAN'T AFFORD TO FORGET.
WE NEED TO REMBER THAT THE
PROBLEMS ON WALL STREET AND IN
OUR FINANCIAL SECTOR HAVE A
DIRECT IMPACT ON MAIN STREET AND
THE LIVES OF EVERY AMERICAN.
WE NEED TO ENSURE THAT TAXPAYERS
ARE NEVER AGAIN ASKED TO BAIL
OUT WALL STREET.
THIS FINANCIAL REFORM
LEGISLATION WILL PREVENT ANOTHER
FINANCIAL SECTOR COLLAPSE.
OR AT LEA
I DON'T THINK ANY OF US N SAY
THAT THIS WILL PREVENT ANY
FUTURE COLLAPSE.
BUT IT I
TO HELPING US PREVENT ANOTHER
COLLAP.
IT WILL ALLOW THE GOVERNMENT TO
SHUT DOWN FIRMS THAT THREATEN TO
CRATER OUR ECONOMY AND ENSURE
THAT THE FINANCIAL INDUSTRY --
NOT TAXPAYERS -- ARE ON THE LOOK --
ARE ON HOOK FOR ANY COSTS.
IT WILL REIN IN RICKEY
DERIVATIVES AND OTHER PRACTICES
THAT UNDERMINE SOME OF OUR
LARGEST FINANCIAL INSTITUTIONS.
IT WILL HELP LEVEL THE PLAYING
FIELD FOR SMALLER BANKS AND
CREDIT UNIONS BY CRACKING DOWN
ON THE RISKY PRACTICES OF WALL
STREET AND NONBANK FINANCIAL
INSTITUTIONS THAT CAUSED THE
FINANCIAL
I'M GRATEFUL TO SENATOR DODD,
THE BANKING COMMITTEE, AND
MEMBERS OF THE CONFERENCE FOR
WORKING WITH ME TO MAKE CERTAIN
THAT THE FINAL BILL RECOGNIZES
THE SPECIAL CIRCUMSTANCES OF
COMMUNITY BANKS AND CREDIT
UNIONS IN RURAL STATES LIKE
MINE.
IN PARTICULAR, I APPRECIATE THE
LENDING LIMIT
THIS WAS VERY IMPORTANT TO
FARMING COMMUNITIES ACROSS THE COUNTRY.
THE FINAL BILL ALSO PROVIDES
ADDED FLEXIBILITY FOR RURAL
LENDERS IN THE NEW MORTGAGE
STANDARDS AS WELL AS PROVISIONS
TO IMPROVE INTERCHANGE REFORM FOR SMALLER FINANCIAL
INSTITUTIONS.
I AM PLEASED THE COMMITTEE
INCLUDED A RISK-FOCUSED DEPOSIT
INSURANCE FUND ASSESSMENT
FORMULA AND MODIFIED RISK
RETENTION REQUI
HIGH-QUALITY LOANS.
AND ESPECIALLY WANT TO THANK
SENATOR DODD FOR HIS
EXTRAORDINARY LEADERSHIP.
WHAT A FINAL YEAR IN THE UNITED
STATES SENATE.
WHAT A REMARKABLE LEGACY HE IS LEAVING.
I THINK THE ANNALS OF THE UNITED
STATES SENATE WILL SHOW VERY FEW
SENATORS HAVE HAD A RECORD OF
ACCOMPLISHMENT THAT MATCHES WHAT
SENATOR DODD WILL HAVE DONE IN
THIS YEAR.
WITH RESPECT TO THE BUDGET POINT
OF ORDER THAT'S BEEN RAISED
AGAINST THE CONFERENCE REPORT,
LET ME JUST MAKE A COUPLE OF
GENERAL POINTS.
FIRST, THIS BUDGET VIOLATION IS
NOT SIGNIFICANT ENOUGH TO MERIT
DERAILING THIS IMPORTANT
LEGISLATION.
SECOND, WE MUST BEAR IN MIND THE
RISKS OF FAILING TO ACT.
IF WE FAIL TO PROTECT AGAINST A
FUTURE COLLAPSE AND CREATE AN
ORDERLY PROCESS FOR DEALING WITH
GIANT INSOLVENT FINANCIAL
INSTITUTIONS, IT IS INEVITABLE
THAT TAXPAYERS WILL AGAIN AT
SOME FUTURE POINT BE ASKED TO
BAIL
AND PREVENT FINANCIAL COLLAPSE.
IF ONE MEASURES ON SCALE THE
DIFFERENCE
TECHNICAL VIOLATION IN THIS
BUDGET POINT OF O
WHAT WOULD
LEGISLATION FAILS, IT CAN'T EVEN
BE COMPARED.
I MEAN, IT IS A GNAT ELEPHANT.
SO
LET'S KEEP THINGS IN MIND HERE.
SECOND, WE MUST BEAR IN MIND THE
RISK OF FAILING TO
THAT WOULD BURDEN TAXPAYERS IN A
WAY FAR BEYOND ANYTHING WE SEE
WITH THIS BUDGET POINT OF ORDER.
NONE OF US WANTS THAT.
THIS BILL IS AN INSURANCE POLICY
AGAINST AN
TAXPAYER BAILOUT.
NOW, THE POINT OF ORDER THAT'S
BEEN RAISED IS THE LONG-TERM DEFICIT POINT OF ORDER, A POINT
OF ORDER THAT I ESTABLISHED IN
THE BUDGET RESOLUTION OF 2008.
THIS POINT OF ORDER PROHIBITS
LEGISLATION THAT WORSENS THE
DEFICIT BY MORE THAN $5 BILLION
IN ANY OF THE FOUR TEN-YEAR
PERIODS FOLLOWING 2019.
C.B.O. HAS DETERMINED THAT AT
LEAST IN ONE OF THOSE FOUR
TEN-YEAR PERIODS, THE CONFERENCE
REPORT WOULD EXCEED THIS
THRESHOLD.
BUT THIS IS REALLY JUST A TIMING
ISSUE CAUSED BY THE NEW
BIPARTIS
CREATED BY THE BILL.
THIS IS THE NEW AUTHORITY
TO THE GOVERNMENT TO WIND DOWN
FAILG FINANCIAL FIRMS.
UNDER THE RESOLUTION AUTHORITY,
IF A FINANCIAL FIRM IS ABOUT TO
COLLAPSE, THE GOVERNMENT WILL
USE THE FIRM'S ASSETS TO WIND IT
DOWN AND PUT IT OUT OF BUSINESS.
IF THE FIRM'S
INSUFFICIENT, THE
WILL TEMPORARILY BORROW FUNDS
FROM THE TREASURY.
THE FINANCIAL INDUSTRY WILL THEN
REIMBURSE THE GOVERNMENT
TAXPAYERS FOR 100% OF THE COST.
AGAIN, 100% OF THE MONEY WILL BE
PAID BACK BY THE BANKS, SO THE
NET IMPACT ON THE DEFICIT IS ZERO.
AND OVERALL, THE
BILLION OVER THE FIRST TEN
YEARS, ACCORDING TO THE
CONGRESSIONAL BUDGET OFFICE.
SO, WHILE TECHNICALLY THIS
BUDGET POINT OF ORDER LIES IF
YOU PIERCE THE VEIL AND LOOK
WHAT REALLY HAPPENS, THIS BILL
REDUCES THE DEFICIT, ACCORDING
TO THE CONGRESSIONAL BUDGET
OFFICE, WHICH IS
SCOREKEEPER HERE IN THE UNITED
STATES
BECAUSE THERE IS A LAG TIME FOR
THE GOVERNMENT TO COLLECT THIS
MONEY FROM THE FINANCIAL
INDUSTRY, C.B.O. SCORES THE BILL
AS INCREASING THE DEFICIT IN
SOME OF THE LATER DECADES.
BUT ALL OF THAT
PAID BACK IN ENSUING YEARS.
THAT'S WHAT MATTERS MOST IN THIS CASE.
SO, ALTHOUGH THIS BILL DOES
TECHNICALLY VIOLATE THE
LONG-TERM DEFICIT POINT OF
ORDER, IT IS INSIGNIFICANT.
THE FACT IS THIS BILL REDUCES
THE DEFICIT, ACCORDING TO THE
CONGRESSIONAL BUDGET OFFICE.
SO I URGE MY COLLEAGUES TO WAIVE
THE POINT OF ORDER, TO SUPPORT
PASSAGE OF THIS FINANCIAL REFORM
LEGISLATION, WHICH IS CLEARLY A
SIGNIFICANT STEP IN THE RIGHT
DIRECTION IN PREVENTING THE KIND
OF RISK TO OUR NATION'S ECONOMY
THAT IS SO APPARENT WITH THE
CURRENT STRUCTURE.
MR. PRESIDENT, I YIELD THE
FLOOR.
AND AGAIN I WANT TO THANK THE
CHAIRMAN FOR HIS REALLY
EXTRAORDINARY WORK NOT ONLY ON
THIS BILL, BUT THROUGHOUT THE YEAR.
I THINK ALL OF US KNOW,
THROUGHOUT HIS
I THANK THE CHAIR AND YIELD THE FLOOR.
MR. DODD: MR. PRESIDENT?
THE PRESIDING OFFICER: THE
SENATOR FROM CONNECTICUT IS RECOGNIZED.
MR. DODD: BEFORE MY FRIEND,
THE CHAIRMAN OF THE BUDGET
COMMITTEE, LEAVES, LET ME THANK
HIM IMMENSELY FOR HIS ANALYSIS
OF THIS ISSUE.
IT IS NOT ONLY REPAYING 100%,
BUT WITH INTEREST.
THERE'S AN INTEREST REQUIREMENT
THAT IF WE BORROW FROM THE
TAXPAYERS IN ORDER TO WIND DOWN
SUBSTANTIALLY RISKY FIRMS, THEN
NOT ONLY DO YOU GET PAID BACK,
BUT THE INTEREST ON THE COST OF
THAT MONEY IS ALSO PART OF THE
DEAL.
SO IT'S 100% PLUS COMING BACK TO
THE TREASURY.
BUT HIS ANALYSIS AND THAT OF HIS
COMMITTEE -- AND THERE'S NO ONE
WHO IS MORE DISCIPLINED OR
GUARDED ABOUT THE BUDGETARY
PROCESS OVER THE YEARS WE'VE
SERVED TOGETHER.
SO I APPRECIATE HIS ANALYSIS OF
THIS PARTICULAR POINT OF THE LONG-TERM DEFICIT.
AND I COMMEND HIM FOR INCLUDING
THE PROVISIONS YOU HAVE AND
TRYING TO BUILD IN SOME
DISCIPLINE TO THE PROCESS OF HOW
WE EXPEND TAXPAYERS MONEYS,
COLLECT TAXES IN THE FIRST PLACE
TO PAY FOR THE NEEDED
EXPENDITURES OF OUR GOVERNMENT.
SO I THANK HIM FOR THAT.
I THANK HIM FOR HIS GENERAL
COMMENTS AS WELL ABOUT THE BILL
AND HIS SUPPORT AND ALSO ABOUT
TH SUBSTANTIVE CONTRIBUTIONS,
MR. PRESIDENT, THAT THE SENATOR
FROM NORTH DAKOTA HAS MADE.
BECAUSE ONE OF THE THINGS WE'VE
TRIED TO BE VERY CAREFUL
ABOUT -- JON TTER FROM MONTANA
WHO SITS ON THE COMMIEE WITH
ME HAS BEEN ACTIVE IN SEEING TO
IT THAT RURAL AMERICA IS GOING
TO BE WELL SERVED BY THIS LEGISLATION.
AND THERE ARE DIFFERENCES.
IT'S NOT ALL WALL STREET, NEW
YORK AND MAJOR FINANCIAL
CENTERS.
THE IMPORTANCE OF THE
AVAILABILITY OF CREDIT IN RURAL
COMMUNITIES IS CRITICAL, AS MY
COLLEAGUE FROM NORTH DAKOTA HAS
INFORMED ME OVER THE YEARS WE'VE SERVED TOGETHER.
THAT ABILITY OF A LOCAL FARMER
TO BORROW THAT MONEY IN THE
SPRING TO BE ABLE TO PAY BACK IN
THE FALL, AT HARVEST TIME, HAS
BEEN ABSOLUTELY ESSENTIAL AND
KNOWING HOW DIFFICULT IT'S BEEN
THROUGHOUT COUNTRY TO GET CREDIT
IS ESSENTIAL.
HIS CONTRIBUTIONS TO THE
LEGISLATION TO MAKE SURE THAT
WHAOE DID HERE WAS GOING TO --
WHAT WE DID HERE WAS GOING TO
ENHANCE THE CAPABILITY OF RURAL
AMERICA TO NOT ONLY COME OUT OF
THIS CRISIS WE'RE IN BUT TO
PROSPER IN THE YEARS AHEAD.
BEYOND THE CONSIDERATION AND THE POINTS OF
ORDER BEFORE US, I THANK HIM FOR
HIS CONTRIBUTION TO THE
SUBSTANCE OF THE BILL WHICH HAS
MADE IT A FAR BETTER BILL TO BEGIN WITH.
SO I THANK YOU.
MR. PRESIDENT, I SEE MY
COLLEAGUE FROM OREGON WHO'S HERE.
I BELIEVE HE'S GOING TO SEEK
RECOGNITION AS WELL, SO I'LL
YIELD THE FLOOR.
MR. MERKLEY: THANK YOU VERY
MUCH, MR. PRESIDENT.
THE PRESIDING OFFICER: THE
SENATOR FROM OREGON IS RECOGNIZED.
MR. MERKLEY: THA MR. PRESIDENT.
I THANK CHAIRMAN DODD FOR
YIELDING TO ME AND FOR HIS
LEADERSHIP ON FINANCIAL REFORM.
I ASK UNANIMOUS CONSENT THAT THE
STATEMENT THAT I DELIVER TO THE
DESK, WHICH IS A COLLOQUY
BETWEEN SENATOR LEVIN AND ME
REGARDING THE VOLCKER RULE
PROVISION THAT WE AUTHORED WITH
THE HELP OF THE BANKING
COMMITTEE AND TREASUR
DEPARTMENT BE INSERTED IN THE RECORD.
THE PRESIDING OFFICER: WITHOUT OBJECTION.
MR. MEREY: THANK YOU VERY MUCH.
I YIELD THE
MR. DODD: I SAID IT YESTERDAY,
BUT I'LL SAY IT TODAY.
I THANK SENATOR MERKLEY.
WE HAVE ABOUT, I GUESS THERE ARE
FOUR NEW MEMBERS OF THE SENATE
SERVING ON THE BANKING
COMMITTEE: SENATOR MERKLEY,
SENATOR WARNER, SENATOR TESTER,
AND SENATOR BENNET ARE ALL NEW
MEMBERS OF THE UNITED STATES
SENATE FROM THEIR RESPECTIVE
STATES OF MONTANA AND COLORADO
AND OREGON AND VIRGINIA.
TO BE THROWN IN TO WHAT HAS BEEN
THE LARGEST UNDERTAKING OF THE
BANKING COMMITTEE CERTAINLY IN
MY THREE DECADES HERE AND MANY
ARGUE GOING BACK ALMOST 100
YEARS WAS CERTAINLY AN AWFUL LOT
TO ASK.
I'VE ALREADY POINTED OUT THE
CONTRIBUTION THAT SENATOR WARNER
HAS MADE TO THIS BILL.
BUT I MUST SAY AS WELL, SENATOR
BENNET OF COLORADO HAS BEEN
INVALUABLE IN HIS CONTRIBUTION.
SENATOR TESTER, I JUST MENTIONED
A MOMENT AGO, FOR HIS
CONTRIBUTION ON TALKING ABOUT
RURAL AMERICA AND THE IMPORTANCE
OF THOSE ISSUES.
AND OBVIOUSLY, BUT SENATOR
MERKLEY AS A MEMBER OF THE
COMMITTEE, MATTERS THAT WE
INCLUDED HERE DEALING MORE
PARTICULARLY WITH THE MORTGAGING
REFORMS, UNDERWRITING STANDARDS
AND THE PROTECTIONS PEOPLE HAVE
TO GO THROUGH.
AND CREDIT CARDS.
WE PASSED THE CREDIT CARD BILL
AND IT WAS SENATOR JEFF MERKLEY
IN OREGON WHO PLAYED A CRITICAL
ROLE IN THAT WHOLE DEBATE AS
WELL.
NOT TO MENTION OF COURSE WORKING
WITH CARL LEVIN, ONE OF THE MORE
SENIOR MEMBERS HERE, HAVING
SERVED FOR MANY YEARS IN THE
UNITED STATES SENATE BUT THE
MERKLEY-LEVIN, LEVIN-MERKLEY
PROVISIONS OF THIS BILL HAVE ADDED SUBSTANTIAL CONTRIBUTIONS
TO THIS EFFORT.
SO I THANK HIM AS WELL FOR HIS CONTRIBUTION.
IN THE ABSENCE, I SEE MY
COLLEAGUE AS WELL FROM NORTH
DAKOTA WHO'S HERE.
I DON'T KNOW IF HE WANTS TO BE
HEARD ON THE BILL.
DO YOU SEEK RECOGNITION?
THEN I NOTE THE ABSENCE OF A
QUORUM TO BE EQUALLY
AGAINST BOTH SIDES. THE PRESIDING OFFICER: WITHOUT
OBJECTN, SO ORDERED.
THE CLERK WILL CALL THE ROLL.
QUORUM CALL: THE PRESIDING OFFICER: THE
SE RECOGNIZED.
MR. DODD: I ASK CONSENT THE
CALL OF THE QUORUM BE RESCINDED. THE PRESIDING OFFICER: WITHOUT
OBJECTION, SO ORDERED.
MR. DODD: MR. PRESIDENT, I'M
GOING TO ASK CONSENT THAT SOME
COMMENTS OF MINE
POINT OF ORDER THAT'S BEEN
RAISED BE INCLUDED IN THE RECORD.
I'M NOT GOING TO GO THROUGH IT
ALL.
WE LISTENED TO SENATOR CONRAD,
CHAIRMAN OF THE
COMMITTEE, ADDRESS THE BUDGET
POINT OF ORDER, URGE MY
COLLEAGUES TO WAIVE THE POINT OF ORDER.
WE CAME UP WITH AN ALTERNATIVE
TO OFFSET IT IN THE CONFERENCE
COMMITTEE.
MUCH OF THE INSTENCE -- AND I
THANKED THEM FOR THE
INSISTENCE -- OF SENATOR BROWN
OF MASSACHUSETTS LOOKING FOR A
BETTER OFFSET THAN THE ONES ORIGINALLY IN THE CONFERENCE
REPORT.
I KNOW MY COLLEAGUES FROM MAINE
AS WELL HAD RESERVATIONS ABOUT
WHAT WE ORIGINALLY INCLUDED.
THE OFFSET HERE ENDS THE TARP
PROGRAM, WHICH I PREME MOST
PEOPLE WOULD WELCOME WITH OPEN
ARMS, SAVING US $11 BILLION BY
TERMINATING IT EARLY, AS WELL AS
COMPLYING WITH THE REQUEST BY
THE CHAIRPERSON OF THE FEDERAL
DEPOSIT INSURANCE
SHEILA BAIR, TO PROVIDE FOR
ADDITIONAL ASSESSMENTS TO MEET
THE OBLIGATIONS OF THE FDIC AND
THE INSURANCE FUND.
BOTH OF THOSE ITEMS PROVIDE THE
NECESSARY OFFSETS FOR THE COST
OF THIS BILL.
THAT'S A VERY ABBREVIATED
EXPLANATION OF WHAT'S IN THE LEGISLATION.
BUT I WOULD LIKE TO ASK CONSENT
THAT THESE FULL COMMES, MR. PRESIDENT, BE INCLUDED IN
THE RECORD TO EXPLAIN ALL OF
THAT FOR THE PURPOSES OF THE
RECORD AND AGAIN URGE MY
COLLEAGUES TO VOTE TO WAIVE THE
BUDGET POINT OF ORDER.
OF COURSE I URGE THEM AS WELL TO
SUPPORT THE LEGISLATION WHEN
THAT VOTE OCCURS.
SO I'LL ASK THESE REMARKS BE
INCLUDED IN THE RECORD.
WITH THAT, I SEE MY COLLEAGUE
FROM -- WE'RE WAITING FOR OUR
KPHRAOEG FROM NEBRASKA -- OUR
COLLEAGUE FROM NEBRASKA TO COME
IN TO BE HEARD, SENATOR JOHANNS.
AND THEN SENATOR DORGAN TO BE
HEARD, WHICH WILL PRETTY MUCH
END THE DEBATE.
I'LL TAKE A MOMENT TO CONCLUDE
AND THEN THE VOTES SHALL OCCUR
AROUND 2:00.
MR. PRESIDENT, EVEN THOUGH TIME
MAY BE EXPIRED, OR WHATEVER, I
WANT TO ASK CONSENT THAT AT
LEAST 10 MINUTES BE RESERVED FOR
THE MINORITY TO BEEARD ON THIS BILL.
THE PRESIDING OFFICER: WITHOUT OBJECTION, SO ORDERED.
MR. DODD: THANK YOU.
MR. DORGAN: MR. PRESIDENT? THE PRESIDING OFFICER:HE
SENATOR FROM NORTH DAKOTA IS
RECOGNIZED.
MR. DORGAN: MR. PRESIDENT, I'M
GOING TO VOTE FOR THIS LEGISLATION.
IT IS A CONFERENCE REPORT ON
FINANCIAL REFORM.
AND BEFORE I DESCRIBE WHY I
THINK IT'S ESSENTIAL TO VOTE IN
FAVOR OF THIS, LET ME COMPLIMENT SENATOR DODD.
WE'VE HAD SOME DIFFERENCES HERE
AND THERE ON SOME ISSUES, BUT
THAT'S NOT UNUSUAL.
I THINK WHAT IS UNUSUAL THAT A
PIECE OF LEGISLATION THIS
COMPLICATED, THIS CONSEQUENTIAL
AND THIS LARGE GETS TO THIS
POINT SO WE WILL HAVE A FINAL
VOTE AND IT WILL GO TO THE
PRESIDENT FOR SIGNATURE.
AND IT'S GOING TO MAKE A DIFFERENCE.
IT'S NOT ALL THAT I WOULD WANT.
I WOULD HAVE WRITTEN SOME OF IT DIFFERENTLY.
I'M TALKING ABOUT FOR -- I'LL
TALK FOR MOMENT ABOUT SOME OF
THESE PIECES.
BUT THERE ARE PROVISIONS IN THIS
LEGISLATION THAT WILL PREVENT
THAT WHICH HAPPENED THAT ALMOST
CAUSED THIS COUNTRY TO HAVE A COMPLETE ECONOMIC COLLAPSE.
THAT'S THE PURPOSE OF WRITING
THIS LEGISLATION.
THIS LEGISLATION ON FINANCIAL
REFORM ESTABLISHES A NEW
INDEPENDENT BUREAU THAT WILL BE
HOUSED AT THE FEDERAL RESERVE
BOARD, BUT NOT REPORTING TO THE
FEDERAL RESERVE BOARD.
DEDICATED TO PROTECTING
CONSUMERS FROM FINANCIAL
PRODUCTS AND PRACTICES.
IT PUTS IN PLACE SYSTEMS TO
ENSURE TT TAXPAYER FUNDS WILL
NOT BE USED FOR WALL STREET
BAILOUTS IN THE FUTURE.
IT CREATES AN ADVANCED WARNING
SYSTEM, LOOKING OUT FOR TROUBLED
INSTITUTIONS TO MAKE SURE THAT
WE UNDERSTAND WHO THEY ARE AND
WHERE THEY ARE WHOSE COULD
THREATEN OUR FINANCIAL.
BY HEDGE FUND OWNERSHIP AND BANKS.
SO, I MEAN, THERE ARE A NUMBER
OF THINGS HERE THAT I THINK ARE
VERY IMPORTANT.
LET ME MAKE A POINT THAT THIS IS
A STARTING VOTE.
THIS VOTE THIS AFTERNOON IS A
STARTING POINT, NOT AN POINT.
AND I MAKE THE POINT BY SHOWING
THE -- THE HEADLINES THAT EXIST
IN THE NEWSPAPERS THESE DAYS
ABOUT THE FACT THAT THERE WILL
BE SUBSTANTIAL AMOUNTS OF WORK
DONE TO TRY TO CURB ACTIVITS
EVEN IN THE EXECUTIVE BRANCH
WITH RESPECT TO RULES AND
REGULATIONS WHICH ARE NOW
ESSENTIAL.
THE PRESIDING OFFICER: THE TIME
FOR THE MAJORITY HAS EXPIRED.
MR. DORGAN: MR. PRESIDENT, LET
ME ASK THE SENATOR FROM
CONNECTICUT. MY UNDERSTANDING IS THE
REPUBLICANS HAVE 10 MINUTES.
I BEGAN THE PROCESS BECAUSE THE
REPUBLICAN SENATOR WAS NOT HERE
TO CLAIM THAT.
I'LL BE HAPPY TO CEASE AT THIS
POINT IF HE WISHES TO TAKE HIS
10 MINUTES AND THEN COMPLETELY
STATEMENT OR I COULD COMPLETE MY
STATEMENT AND I THINK I'VE
SPOKEN THREE OR FOUR MINUTES.
MR. DODD: HOW MUCH MORE TIME
WOULD YOU NEED?
MR. DORGAN: PROBABLY SEVEN MORE
MR. DODD: WHY DON'T YOU DO THE
SEVEN MORE MINUTES THAT WAY IT
FOLLOWS MORE NATURALLY THAT WAY.
THE PRESIDING OFFICER: WITHOUT
OBJECTION, SO ORDERED.
MR. DORGAN: APPRECIATE THE
COURTESY OF THE SENATOR FROM NEBRASKA.
LET ME JUST SAY WE ALL
UNDERSTAND HOW WE GOT TO THIS
POINT AND WHY THIS LEGISLATION
IS TRYING TO
EVER HAPPENING AGAIN.
I'VE SHOWN THIS ON THE FLOOR
MANY TIMES.
CALLED ZOOM CREDIT, ADVERTISING
MORTGAGES.
AND, YOU KNOW, WE
PROVISION, THIS NEAR COLLAPSE OF
THE ECONOMY WITH COMPANIES
ADVERTISING THIS, CREDIT
APPROVAL IS JUST SECONDS AWAY.
GET ON THE FAST-TRACK AT ZOOM CREDIT.
AT THE SPEED OF LIGHT, ZOOM
CREDIT WILL PREAPPROVE YOU FOR A
CAR LOAN, HOME LOAN OR CREDIT
CARD.
EVEN IF YOUR CREDIT'S IN THE
TANK.
ZOOM CREDIT'S LIKE MONEY IN THE
BANK.
WE SPECIALIZE IN CREDIT REPAIR
AND DEBT CONSOLIDATION.
BANKRUPTCY, SLOW CREDIT, NO
CREDIT? WHO CARES.
YOUR
IN TROUBLE.
YOU KNOW WHAT, TODAY ON THE
INTERNET THIS EXISTS.
NOTHING'S CHANGED.
SPEEDY BAD CREDIT LOANS.
YOU WANT A LOAN BECAUSE YOU'VE
GOT BAD CREDIT, WANT TO GET A
LOAN, GO TO THE INTERNET TO THIS SITE.
I'M NOT ADVERTISING FOR THEM.
CLEARLY IT'S A BUNCH OF SHILOCKS
RUNNING THIS OPERATION.
BAD CREDIT, NO CREDIT, NO
PROBLEM.
NO DOUBLE-A'
WANT UNBELIEVABLE.
THAT'S ON THE INTERNET TODAY.
THIS IS ON INTERNET TODAY AND IT
DESCRIBES WHY WE HAVE TO PASS
THIS LEGISLATION AND WHAT WE'RE
TRYING TO DO TO PROTECT THE
AMERICAN CONSUMER AND WHY
REGULATIONS THAT COME FROM THIS
ARE SO IMPORTANT.
EASYLOANFORYOU.
INSTANT APPROVAL, REGARDLESS OF
APPROVAL IS GUARANTEED.
YOU KNOW, THIS SORT OF NONSENSE,
THAT'S NOT BUSINESS.
THAT'S NOT GOOD BUSINESS.
IT'S NOT A SENSIBLE WAY TO DO THINGS.
BUT IT'S WHAT NEARLY BANKRUPTED
THIS COUNTRY.
NOW, "THE WALL STREET JOURNAL," JULY 14.
LET ME READ THE FIRST SENTENCE,
"S RETURN LY DAVIS, 66 YEARS
OLD, RETIRED PHONE COMPANY
ADMINISTRATOR LIVES IN BOOK
LYNN, NEW YORK, MORE
THAN $33,000 IN DEBT, EARN
EARNS $2,400 A MONTH, FILED FOR
BANKRUPTCY LAST MONTH.
SHORTLY BEFORE THAT SHE RIPPED
OPEN AN ENVELOP FROM CAPITAL
ONE FINANCIAL CORPORATION WHICH
PITCHED HER A CREDIT CARD EVEN
THOUGH IT SUED HER FOUR YEARS
AGO TO RECOVER $4,400 SHE OWED
ON A DIFFERENT CREDIT CARD FROM
THE SAME BANK.
SHE SAYS -- QUOTE -- "AT SOME
POINT -- SHE'S QUOTING THE
LETTER FROM THIS CAPITAL ONE.
"AT SOME POINT WE LOST YOU AS A
CUSTOMER AND WE'D LIKE TO GET
YOU BACK."
MRS. DAVIS SAID SHE WAS STUNNED.
EVEN I WOULDN'T GIVE ME A CREDIT
CARD AT THIS POINT.
IT'S STILL GOING ON.
IT'S WHY PASSING THIS CONFERENCE
REPORT IS SO ESSENTIAL.
NOW, WOULD I HAVE WRITTEN IT DIFFERENTLY?
YES, I WOULD HAVE RESTORED PART
OF GLASS-STEAGALL.
10 YEARS AGO THAT WAS TAKEN APART.
THOSE PROTECTIONS WERE PUT IN
PLACE AFTER THE LAST GREAT
PROTECTION AND IT PROTECTED THIS
COUNTRY FOR 80 YEARS OR SO.
SHOULD HAVE BEEN PUT BACK TOGETHER.
I WOULD HAVE LIKED TO HAVE DONE THAT.
I WOULD BANNED NAKED CREDIT
DEFAULT SWAPS, I WOULD HAVE DONE
THAT.
I WOULD HAVE IMPOSED MORE
AGGRESSIVE CURVES ON PROPRIETY BANKING.
THE IF YOU HAVE TO BE
UNDERWRITTEN, YOU OUGHT NOT HAVE
A CASINO IN YOUR LOBBY, JUST AS
WELL HAVE A CRAPS TABLE IF
YOU'RE INVESTING IN PROPRIETY
TRADING IN NAKED DEFAULT SWAPS.
I WOULD HAVE DONE SOME THINGS
DIFFERENTLY.
HAVING SAID THAT, WHAT WAS DONE
IN THIS LEGISLATION IS A VERY
SUBSTANTIAL BEGINNING.
BUT IT IS NOT AN ENDING.
NUMBER TWO,
NUMBER ONE.
NUMBER TWO, THE REGULATORY
AGENCIES NOW HAVE TO DO A LOT OF
WORK TO MAKE THIS BILL WORK --
TO MAKE THIS BILL EFFECTIVE.
TO STOP WHAT HAPPENED FROM EVER
HAPPENING AGAIN.
AND, FINALLY, I BELIEVE THERE
WILL BE ADDITIONAL NEED TO
LEGISLATE IN THE FUTURE TO
ADDRESS SOME OF THE THINGS THAT
I MENTIONED.
HAVING SAID ALL OF THAT, I
BELIEVE THE WORK THAT WAS DONE
TO GET TO THIS POINT IN A
CHAMBER THAT'S VERY DIFFICULT
FOR US TO ACCOMPLISH ANYTHING
IN, I THINK THIS IS A SUCCESS.
AND I, AGAIN, COMMEND MY
COLLEAGUE, PARTICULARLY SENATOR
DODD FROM CONNECTICUT, AND OTHER
COLLEAGUES WHO WORKED ON THIS
LEGISLATION IN A THOUGHTFUL WAY
TO TRY TO DECIDE HOW CAN WE STOP
THIS SORT OF THING?
THIS WAS -- AND WE ALL
UNDERSTOOD IT.
WE HEARD THESE
RADIO AND TELEVISION.
MASSIVE LOANS AND THEN THEY
SECURITIZE THEM, THEY'D TRADE
THE SECURITIES BACK UP AND
DERIVATIVES AND CREDIT DEFAULT SWAPS.
EVERYBODY WAS MAKING MONEY ON
ALL SIDES OF IT,UT THEY WERE
BUILDING A HOUSE OF CARDS THAT
CAME DOWN AND NEARLY COLLAPSED
THIS COUNTRY'S ENTIRE ECONOMY.
A LOT OF
THE PRICE FOR IT.
THEY GOT UP THIS MORNING WITHOUT
A JOB, MILLIONS AND MILLIONS OF
THEM AND THEY CAN'T FIND WORK.
THEY'RE THE VICTIMS OF THE
CESSPOOL OF GREED THAT WE'VE
WATCHED FOR FAR TOO LONG.
THIS LEGISLATION HAS GREAT MERIT
IN ADVANCING SOLUTIONS TO THESE
ISSUES, AND THAT'S WHY I'M GOING
0 VOTE YES.
IS IT -- TO VOTE YES.
IS IT PERFECT? NO.
IS IT AN END POINT? NO.
IT'S THE START POINT ON A
PROCESS THAT IS VERY IMPORTANT.
I HOPE THAT IN THE MONTHS AHEAD
THOSE CHARGED WITH CREATING THE
REGULATORY ENVIRONMENT TO FIX
THIS -- TO IMPLEMENT THIS
LEGISLATION WILL GET IT RIGHT.
BECAUSE THEY HAVE THE
OPPORTUNITY THE WAY THIS IS
WRITTEN TO GET THIS RIGHT IF
THEY'RE SMART AN EFFECTIVE AND
REALLY -- AND EFFECTIVE AND WANT
TO PROTECT THIS COUNTRY'S ECONOMY.
THANKS T
VOTE AS YES.
MR. PREDENT, I YIELD THE FLOOR.
A SENATOR: MR. PRESIDENT?
THE PRESIDING OFFICER: THE SENATOR FROM CONNECTICUT'S
RECOGNIZED
MR. DODD: VERY BRIEFLY BEFORE --
BEFORE WE RECOGNIZE SENATOR JOHANNS.
I WANT TO THANK MY COLLEAGUE
FROM NORTH DAKOTA.
HE'S BEEN AN OUTSPOKEN ADVOCATES
ON BEHALF OF WORKING FAMILIES
AND FOR PEOPLE DURING THE TIME
THAT WE WORKED TOGETHER AND HE
HAS EXPRESSED CONSISTENTLY IN
THIS PROCESS ARE THE ONES THAT I
APPRECIATE VERY MUCH.
WE DID HAVE A COUPLE OF
DISAGREEMENTS ABOUT A
PROCEEDING, BUT, AS HE POINTS
OUT, THAT IS THE NORMAL PROCESS
OF DOING BUSINESS, BUT DONE WITH
A GREAT DEGREE OF CIVILITY
DURING OUR DEBATES AND
CONSIDERATIONS HERE.
I'M DEEPLY GREAT FULL FOR HIS
CONTRIBUTIONS AND THOSE OF --
GRATEFUL FOR HIS CONTRIBUTIONS
AND THOSE OF
BENEFITED FROM THEM AND I THANK
MY FRIEND.
A SENATOR: MR. PRESIDENT?
THE PRESIDING OFFICER: THE
SENATOR FROM NEBRASKA'S
RECOGNIZED.
MR. JOHANNS: MR. PRESIDENT, I ASK UNANIMOUS CONSENT TO SPEAK
10 MINUTES AS IF IN MORNING
BUSINESS.
THE PRESIDING OFFICER: WITHOUT
OBJECTION, IT IS SO ORDERED.
MR. JOHANNS: MR. PRESIDENT, I
RI TODAY TO DISCUSS A BILL
THAT I HAVE INTRODUCED BECAUSE I
SEE A VERY UNFAIR BATTLE
UNFOLDING RIGHT IN FRONT OF US.
YOU SEE, MR. PRESIDENT, THE
BATTLE I FORESEE HERE IS THIS,
IN ONE CORNER WE HAVE THE
ENORMOUS RESOURCES OF THE FEDERAL GOVERNMENT.
IN THE OTHER CORNER, CITIES AND
STATES WITH VERY LIMITED
RESOURCES, ESPECIALLY IN THESE
ECONOMIC TIMES.
BUT WITH A GOOD-FAITH DESIRE TO
PROTECT THEIR COMMUNITIES.
MR. PRESIDENT, WHAT I'M SPEAKING
OF TODAY AND WHAT MY LEGISLATION
GOES TO IS THE FEDERAL
GOVERNMENT'S USE OF LITIGATION
TO INSERT ITSELF INTO STATE AND
POTENTIALLY LOCAL IMMIGRATION
LAWS.
NOW, MR. PRESIDENT, I RISE TODAY
WITH A GREAT DEAL OF KNOWLEDGE
ABOUT THIS.
AS A FORMER MAYOR AND COUNTY
COMMISSIONER, CITY COUNCIL
MEMBER AND GOVERNOR, I KNOW WHAT
IT'S LIKE WHEN THE FEDERAL
GOVERNMENT SWOOPS IN AND BRINGS
ITS POWER TBEAR ON AN ISSUE.
I'VE SEEN IT FROM BOTH SIDES.
HAVING ALSO SERVED AS A MEMBER
OF THE PRESIDENT'S CABINET.
I KNOW THAT WHEN THE RESOURCES
OF THE FEDERAL GOVERNMENT ARE
USED TO WEIGH IN WITH
LITIGATION, IT'S CRUSHING.
THE ADMINISTRATION CAN SEND IN A
TEAM OF LAWYERS AND OVERWHELM --
ABSOLUTELY OVERWHELM THE
RESOURCES OF A COMMUNITY OR A
STATE.
LITIGATION BRINGS WITH IT A HUGE
FINANCIAL BURDEN FOR CITIES AND STATES.
IN FACT, LITIGATION CAN AND DOES
HAVE A CHILLING EFFECT ON THE
LOCAL DECISION-MAKING PROCESS
EVEN IF LOCAL LEADERS BELIEVE
THAT THEIR ACTION IN GOOD FAITH
IS APPROPRIATE AND NECESSARY.
AND I BELIEVE THAT'S THE EXACT
REACTION THAT THIS
ADMINISTRATION IS HOPING TO
CAUSE AMONG COMMUNITIES AND
STATES ACROSS THIS NATION WHO
ARE CONSIDERING ACTION ON
IMMIGRATION ISSUES.
IN THIS CASE I BELIEVE
LITIGATION IS BEING USED TO SEND
A WARNING TO OTHER COMMUNITIES,
TO OTHER STATES THAT MIGHT BE
CONSIDERING TAKING ACTION IN
THIS ARENA.
THE ADMINISTRATION'S CLAIM THAT
THE FEDERAL GOVERNMENT HAS SOLE
AUTHORITY TO ENFORCE IMMIGRATION
LAWS BECAUSE OF THE SUPREMACY
CLAUSE OF THE CONSTITUTION IS,
IN FACT, INCONSISTENT WITH THE
PRESIDENT'S OWN INTERL
POLICIES.
JUST LAST YEAR PRESIDENT OBAMA
AUTHORED A MEMO, SENT IT OUT TO
ALL FEDERAL DEPARTMENTS AND
AGENCIES REQUIRING SERIOUS AND
CAREFUL CONSIDERATION WHEN USING
FEDERAL PREEMPTION OF STATE
LAWS.
IN THIS MEMO DATED MAY 20, 2009,
WITH THE SUBJECT, "PREEMPTION,"
THE PRESIDENT STATING AND I'M
QUOTING, "THE PURPOSE OF THIS
MEMORANDUM IS TO STATE THE
GENERAL POLICY OF MY
ADMINISTRATION THAT PREEMPTION
OF STATE LAW BY EXECUTIVE
DEPARTMENTS AND AGENCIES SHOULD
BE TAKEN ONLY WITH FULL
CONSIDERATION OF LEGITIMATE
PREROGATIVES OF THE STATES AND
WITH SUFFICIENT LEGAL BASIS FOR
PREEMPTION.
WELL, THAT SEEMS CLEAR.
THE MEMO WENT ON FURTHER TO SAY
EXECUTIVE DEPARTMENTS AND
AGENCIES SHOULD BE MINDFUL THAT
IN OUR FEDERAL SYSTEM, THE
CITIZENS OF THE SEVERAL STATES
HAVE THE DISTINCTIVE
CIRCUMSTANCES AND VALUES IN THAT
IN MANY INSTANCE IT'S IS
APPROPRIATE FOR THEM TO APPLY TO
THEMSELVES RULES AND PNCIPLES
THAT REFLECT THOSE CIRCUMSTANCES
AND VALUES.
AND THEN, FINALLY, THE PRESIDENT
GOES ON TO SAY THIS, "IT IS ONE
OF THE HAPPY INCIDENTS OF THE
FERAL SYSTEM THAT A SINGLE
COURAGEOUS STATE MAY, IF ITS
CITIZENS CHOOSE, SERVE AS A
LABORATORY AND TRY NOVEL, SOCIAL
AND EXPERIMENTAL EXPERIMENTS
WITHOUT RISK TO THE REST OF THE
COUNTRY.
MR. PRESIDENT, I ASK UNANIMOUS
CONSENT THAT A COPY OF THIS MEMO
BE INSERTED?
THE RECORD. THE PRESIDING OFFICER: WITHOUT
OBCTION, SO ORDERED.
MR. JOHANNS: SO IF THE USE FOR
FEDERAL POWER TO PREEMPT A STATE
REQUIRES SUCH AN EXTREMELY HIGH
THRESHOLD, HOW CAN ONE RECONCILE
THAT WITH THE ADMINISTRATION'S
DECISION TO FILE A LAWSUIT?
MY BILL SENDS A MESSAGE TO THE
ADMINISTRATION THAT IT CANNOT
USE THE CRUSHING FORCE AND
THREAT AND REALITY OF LITIGATION
TO INTIMIDATE LOCAL OFFICIALS OR
TO SCARE THEM INTO INACTION.
IT WOULD ALLOW A STATE OR
MUNICIPAL GOVERNMENT THE
ABILITY, THE RIGHT TO RECOVER
ATTORNEYS' FEES AND OTHER COURT
COSTS ASSOCIATED WITH DEFENDING
A FEDERAL CHALLENGE OF THEIR
IMMIGRATION LAWS.
IN OTHER WORDS, MR. PRESIDENT,
THIS STRAIGHTFORWARD LEGISLATION
JUST SIMPLY LEVELS T PLAYING
FIELD BETWEEN THE HUGE POWER OF
THE FEDERAL GOVERNMENT IN ONE
CORNER, AS I SAID, AND THE RIGHT
OF LOCAL COMMUNITIES AND STATES
TO PASS LAWS TO PROTECT THEIR
CITIZENS.
IT CARRIES A SIMPLE MESSAGE TO
ANY ADMINISTRATION:
IF YOU FILE A LAWSUIT IN LIEU,
CITIES AND STATES WON'T FACE
DEPLETED RESOURCES AS A RESULT.
MY BILL ENSURES THAT WHEN THE
FEDERAL GOVERNMENT TAKES O
COMMUNITIES IN PORT, THE REASONS
ARE PURE.
AND BASED IN LAW, OR ELSE THE
IMPACT ON OUR COMMUNITIES WILL
BE NEUTRALIZED.
THE ADMINISTRATION SHOULD FOCUS
TIME AND RESOURCES ON WHAT
REALLY IS THE CRUX OF THIS
ISSUE, AND THAT IS SECURING OUR
BORDERS, AND DOING THE JOB IN
ENFORCING EXISTING IMMIGRATION
LAWS AND NOT USING LITIGATION AS
A TOOL TO SEND A MESSAGE.
I ENCOURAGE MY COLLEAGUES TO
SIGN ON AND COSPONSOR THIS
COMMONSENSE MEASURE AND LEVEL
THE PLAYING FIELD FOR
COMMUNITIES WHEN THEY ARE FORCED
TO DEFEND THEMSELVES AGAINST THE
ENORMOUS, NEARLY UNLIMITED POWER
OF THE FEDERAL GOVERNMENT.
MR. PRESIDENT, THANK YOU.
I YIELD THE FLOOR.
I SUGGEST THE ABSENCE OF A
QUORUM. OH, I YIELD THE FLOOR.
THE PRESIDING OFFICER:
THE SENATOR WITHHOLD?
THE SENATOR FROM MICHIGAN IS RECOGNIZED.
MR. LEVIN: IF THERE IS NO ONE
ON THE MINORITY SIDE WAITING TO
SPEAK, I WOULD ASK UNANIMOUS
CONSENT THAT I BE ALLOWED TO
SPEAK FOR FOUR MINUTES. THE PRESIDING OFFICER: WITHOUT
OBJECTION, SO ORDERED.
MR. LEVIN: MR. PRESIDENT, FOR
TOO LONG, TOO MANY FIRMS ON WALL
STREET HAVE HA REIGN TO
PROFIT, TO PROSPER FROM THEIR
RISKY BETS WHEN THEY PAN OUT,
AND TO HAVE THE TAXPAYERS COVER
TH
OUT.
FOR TOO LONG THERE HAS BEEN NO
COP ON THE BEAT ON WALL STREET.
THAT MUST END, AND WE CAN END IT
TODAY BYASSING THE DODD-FRANK
BILL.
THE LEGISLATION BEFORE US WILL
REBUILD THE FIREWALL BETWEEN THE
WORST HIGH-RISK EXCESSES OF WALL
STREET AND THE JOBS AND HOMES
AND FIEWSMS OF ORDINARY
AMERICANS -- AND FUTURES OF
ORDINARY AMERICANS.
THE PERMANENT SUBCOMMITTEE ON
INVESTIGATIONS WHICH I CHAIR
SPENT 18 MONTHS AND HELD FOUR
HEARINGS INVESTIGATING THE
CAUSES OF THE FINANCIAL CRISIS.
THE BILL THAT SENATOR DODD AND
SO MANY OTHERS HAVE CRAFT WILLED
DO MUCH TO REIN IN THE PROBLEMS
THAT WE IDENTIFY IN OUR FOUR
HEARINGS AND DURING OUR
INVESTIGATION, AND I GREATLY
APPRECIATE THE RECOGNITION OF
THE ROLE OF OUR WORK ON THE
SUBCOMMITTEE IN SENATOR DODD'S
REMARKS LAST NIGHT.
THIS BILL WILL PREVENT MORTGAGE
LENDERS LIKE WASHINGTON MUTUAL,
THE SUBJECT OF OUR FIRST
HEING, FROM MAKING LIAR LOANS
TO BORROWERS WHO CAN'T REPAY,
FROM PAYING THEIR SALESPEOPLE
MORE FOR SELLING LOANS WITH
HIGHER INTEREST RATES AND FROM
UNLOADING ALL THE RISK FROM
THEIR RECKLESS LOANS ONTO THE
REST OF THE FINANCIAL SYSTEM.
THIS BILL WILL DISSOLVE THE
OFFICE OF THRIFT SUPERVISION,
WHICH LOOKED THE OTHER WAY,
DESPITE ABUNDANT EVIDENCE OF
WASHINGTON MUTUA MUTUAL'S ACTION.
THIOUR
THIRD HEARING SHOWED THAT
INVESTORS WERE MISLED.
THE RATINGS WERE PAID FOR BY THE
VERY SAME COMPANIES THAT
PRODUCED THE PRODUCTS BEING
RATED.
WHICH IS A CLEAR CONFLICT OF
INTEREST.
THE BILL BEFORE US WILL REIN IN
THE ABUSIVE PRACTICES OF
INVESTMENT BANKS LIKE GOLDM
SAMPLES THE SUBJECT OF OUR FOURTH HEARING.
IT WILL SHARPLY LIMIT THEIR
RISKY PROPRIETARY TRADING.
IT WILL STOP THE EGREGIOUS
CONFCTS OF INTEREST THAT
RESULT WHEN THESE FIRMS PACKAGE
AND SELL INVESTMENT PRODUCTS,
OFTEN CONTAING JUNK THAT THEY
WANT TO DISPOSE OF, AND THEN
MAKE A BUNDLE BETTING AGAINST
THOSE VERY SAME P
NOW, MR. PRESIDENT, THOSE WHO
CLAIM THAT THIS BILL FAILS TO
REIN IN WALL STREET CANNOT
EXPLAIN THE MASSIVE AMOUNTS OF
EFFORT AND MONEY THAT WALL
STREET HAS SPENT TO DEFEAT THIS
BILL.
IF WALL STREET LIKES THIS BILL,
IT SURE HAS A FUNNY WAY OF
SHOWING IT.
THE EVIDENCE FROM OUR
INVESTIGATION AND FROM SO MANY
OTHER SOURCES IS CLEAR:
WE MUST PUT A COP BACK ON THE
BEAT ON WALL STREET SO THAT THE
JOBS, HOMES, AND FUTURES OF
AMERICANS ARE NOT AGAIN
DESTROYED BY EXCESSIVE GREED.
I COMMEND SENATOR DODD AND HIS
STAFF AND ALL THOSE WHO HAVE
BROUGHT US TO THIS HISTORIC
MOMENT, AND MORE THAN ANYTHING
ELSE, MR. PRESIDENT, IT IS THE
POWER OF SENATOR DODD'S
ARGUMENTS AND THE DEEP RESPECT
FOR HIM AMO
THIS BODY THAT HAVE BROUGHT US
TO THE FINISH LINE.
I
THE ABSENCE OF A QUORUM.
MR. DODD: BEFORE
QUORUM, MR. PRESIDENT, LET ME
RECOGNIZE MY GREAT FRIEND.
THE PRESIDING OFFICER: THE SENATOR CONNECTICUT IS
RECOGNIZED.
MR. DODD: SWERVE WE SERVED A LONG
TIME, MR. PRESIDENT.
I POINTED OUT YESTERDAY, I'M NOT
SURE MY COLLEAGUE WAS HERE BUT
POINTED OUT THAT THE HEARINGS
THAT YOU HELD JUST PRIOR -- AND
I'M SURE PEOPLE THINK WE
ORCHESTRATE ALL OF THESE THINGS.
WE LOOK FAR ORGANIZED THAN WE
USUALLY ARE AROUND HERE.
THE FACT OF THE MATTER IS THE
SENATOR FROM MICHIGAN WENT OFF
AND HAD PLANNED FOR MONTHS IN
FACT THE AMOUNT OF WORK THAT HE
AND HIS STAFF DID FOR MONTHS IN
PREPARATION FOR THOSE HEARINGS
THAT I THINK THREW A TREMENDOUS
AMOUNT OF LIGHT AND CLARITY SO
THE AVERAGE CITIZEN OF THIS
COUNTRY COULD ACTUALLY SEE --
NOT JUST READ BUT SEE SOMETHING
OWE CUMPLEGHT AND DURING THOSE
TWO DAYS WHEN THE EXPOSURE OF
WHAT HAD OCCURRED WAS SO VIVID
AND SO CLEAR AND THEN FRANKLY IT
WAS A MATTER OF DAYS AFTER THAT
WE WERE ON THE FLOOR CONSIDERING
THE LEGISLATION.
AS I
PEOPLE THAT THAT WAS A HIGHLY
ORGANIZED SET OF EVENTS.
IT WAS PURELY COINCIDENTAL THE
WAY IT OCCURRED.
AND AGAIN THOSE HEARINGS THAT
OCCURRED PUBLICLY INVOLVED WEEKS
ANDONTHS OF PREPARATION BEFORE
THEY WERE ACTUALLY CONDUCTED.
SO TO MY FRIEND FROM MICHIGAN, I
THANK YOU FOR YOUR WORK AND YOUR
CONTRIBUTION TOHIS BILL, NOT
JUST THE HEARINGS.
BUT THEN WORKING TO INCLUDE THE
PROVISIONS THAT ARE PART OF THIS
LEGISLATION.
YOU HAVE MADE IT, AGAIN, A VERY
VALUABLE CONTRIBUTION AND
HIGHLIGHT ADD VERY IMPORTANT
POINT AND IT WAS FASCINATING TO
ME, BY THE WAY, IN JUST THE
NUMBER OF FORMER CHIEF EXECUTIVE
OFFICERS FROM MAJOR FINANCIAL
FIRMS IN THE COUNTRY WHO
STRONGLY ENDORSED WHAT YOU WERE DOING.
THIS WAS NOT MERELY A SUGGESTION
COMING FROM CONSUMER GROUPS OR
LABOR ORGANIZATIONS OR OTHERS
THAT ONE MIGHT ASSOCIATE WITH YOUR IDEA.
BUT PPLE WHO LITERALLY HAD
SPENT THEIR CAREERS IN THE
FINANCIAL SERVICES SECTOR WERE
STRONGLY IS RECOMMENDING THE
CONTRIBUTIONS YOU MADE TO THE
BILL.
I DON'T THINK THA SAI THAT WAS SAI
OFTEN ENOUGH, THE SIGNIFICANT
CONTRIBUTION OF THOSE WHO
UNDERSTAND, WHO WORKED, HAD
EARNED LIVELIHOODS IN THIS
DESCRIRKS WHO DUSTRY, WHO HAD WATCHED AN
SO I THANK MY FRIEND FROM MICHIGAN.
MR. LEVIN: I THANK MY REALLY
DEAR FRIEND FROM CONNECTICUT.
HE'S MADE SUCH AN EXTRAORDINARY
CONTRIBUTION NOT JUST TO THIS
BILL BUT TO THE SENATE OVER THE
YEARS.
I CAN'T SAY ENOUGH ABOUT HIM.
HIS EXTRAORDINARY INTEGRITY AND
PAGES BRINGS TO THESE SUBJECTS.
SENATOR MERKLEY ON, IS IN THE
LEAD THERE AND WAS ABSOLUTELY A
GREAT PARTNER LEADING ON THAT.
BUT I JUST WANT TO ESPECIALLY
THANK THE SENATOR FROM
CONNECTICUT FOR HIS PASSION AND
FOR HIS -- AND I WAS VERY
SERIOUS ABOUT THE RESPECT WITH
WHICH YOU ARE MEDDLE THIS BODY.
-- WITH WHICH YOU ARE HELD IN
THIS BODY.
AND WITHOUT THAT FEELING, THE
CAUSE THAT YOU ESPOUSE
BE WHERE
MR.
UP TS
HE
COLLEAGUE FROM DELAWARE HERE NOW
ARRIVING ON THE FLOOR.
I THOUGHT MAYBE WE WERE -- HE'S
MAKING HIS WAY TO HIS PERCH.
ARE YOU GOING TO -- YOU LEAVING
THE FLOOR.
ALL RIGHT.
THAT'S A LONG WAY TO GET OUT THE
DOOR HERE.
WELL, LET ME -- LET ME -- A
COUPLE OF THINGS, MR. PRESIDENT.
FIRST OF ALL, I YESTERDAY
INCLUDED THE NAMES OF THE SENATE
BANKING COMMITTEE STAFF, WHO
MADE SUCH A DIFFERENCE IN THIS BILL.
AND I'LL NOT GOING TO GO BACK
OVER ALL THEIR NAMES.
THEY'RE ARRAYED HERE.
A COUPLE SIGNATURE NEXT TO ME ON
THE FLOOR.
A COU IN THE BACK.
ONE ARRIVED HERE WITH ME AND
THEN LEFT THE SENATE SERVICE AND
WEFNTS OFF AND DID THINGS IN HIS
LIFE AND AT MY REQUEST TO COME
BE PART OF THIS EFFORT.
SO I THANK
IF I START DOWN THE LIST, I'M
GOING TO MISS SOMEONE HERE.
BUT I THANK ALL OF THE MEMBERS
FOR THEIR TREMENDOUS WORK THAT
THEY'VE CONTRIBUTED TO THIS.
AND TO HARRY REID, THE MAJORITY LEADER.
AGAIN, I KNOW I'VE TALKED ABOUT
HIM ON A COUPLE OF OCCASIONS.
BUT IF YOU D'T HAVE SOMEONE TO
HELP BRING THIS ALL TOGETHER, IT
DOESN'T HAPPEN.
AND IN FACT I SEE MY COLLEAGUE
FROM THE STATE OF WASHINGTON.
I'M FILLING IN TIME FOR THE NEXT
TWO MINUTES.
I WANT TO SAY THANK YOU TO HER.
JUST ADVOCATE WITH GREAT
PASSION ON THESE ISSUES, BROUGHT
A GREAT DEAL OF KNOWLEDGE,
SOMEONE WHO SPENT A CAREER
HERSELF IN THE AREA OF FINANCIAL
SERVICES, AND UNDERSTANDS THIS
BEYOND JUST THE INTELLECTUAL AND
THEORETICAL STANDPOINT, BUT
LIVED IT, SAW THE SUCCESSES OF
IT AND THE FAILURES OF IT.
AND SO BRINGS A GREAT WEALTH OF
INFORMATION AND ABILITY.
SO I YIELD TO
MS. CANTWELL: I THANK MY
COLLEAGUE --
THE PRESIDING OFFICER: THE
SENATOR FROM WASHINGTON STATE.
MS. CANTWELL: I THANK THE
CHAIR FOR YIELDING TIME.
I WANT TO THANK THE CHAIR FOR
HIS DILL JENLS IN THE
DERIVATIVES MARKET.
THIS LEGISLATION WILL BE THE
FIRST TIME -- THE FIRST TIME --
THE OVER-THE-COUNTER DERIVATIVE
MARKET IN THIS COUNTRY WILL BE
REGULATED.
THE FACT THAT CONGRESS MADE A
MISTAKE AND SAID, HANDS OFF TO
DERIVATIVES IN 2000 AND THEN A
$200 MILLION MARKET IMPLODED TO
A $600 TRILLION DARK MARKET --
THE CHAIRMAN HAS NOW MADE SURE
THAT FOR THE FIRST TIME
OVER-THE-COUNTER DERIVATIVES
WILL BE REGULATED.
THAT MEANS FOR THE FIRST TIME OVER-THE-COUNTER DERIVATIVES
WILL HAVE TO BE EXCHANGE TRADED,
WHICMEANS THERE WILL BE TRANSPARENCY.
IT'S THE FIRST TIME
OVER-THE-COUNTER DERIVATIVES
WILL HAVE TO BE CLEARED, WHICH
MEANS A THIRD PARTY WILL HAVE TO
VALIDATE WHETHER THERE IS REAL
MONEY BEHIND THESE TRANSACTIONS.
AND IT IS THE FIRST TIME THE
CFTC WILL BE ALLOWED TO SAY THAT
THEY CAN HAVE -- THAT THEY WILL
BE ABLE TO ENFORCE AGGREGATE
POSITION LIMITS ACROSS ALL
EXCHANGES, WHICH MEANS YOU CAN'T
HIDE THIS DARK MART DERIVATIVE
MONEY ON SOME EXCHANGE THAT
ISN'T PROPERLY REGULATED OR TRY
TO MAKE THE MARKET ACROSSLL EXCHANGES.
AND IT IS THE FIRST TIME THAT
THINGS LIKE THE LONDON LOOPHOLE
WILL BE CLOSED SO THAT YOU CAN'T
HAVE MARKETS AND EXCHANGES THAT
AREN'T REGULATED.
SO TO THE AMERICAN PEOPLE TO
KNOW THAT SOMETHING AS ONEROUS
AS CREDIT DEFAULT SWAPS BROUGHT
DOWN OUR ECONOMY THAT NOW FOR
THE FIRST TIME WE WILL HAVE
REGULATION OF THESE
OVER-THE-COUNT DERIVATIVES, I
THANK THE CHAIRMAN FOR HIS
EFFORTS IN THAT EAMPLET $600
TRILLION MARKET SOMETHING LIKE
12 TIMES G.D.P. IS A DANGER TO
OUR ECONOMY IF IT IS NOT
REGULATED.
THANK GOD WE'RE GOING TO BE
REGULATING IT FOR THE FIRST TIME.
AND I WOULD ENCOURAGE ALL MY
COLLEAGUES ON THE OTHER SIDE OF
THE AISLE, WHO AT ONE POINT IN
TIME SAID THESE ARE TOO
COMPLICATED TO UNDERSTAND,
UNDERSTAND THEY BROUGHT DOWN OUR
ECONOMY AND UNDERSTAND THAT
WE'RE GOING TO FOR THE FIRST
TIME REGULATE OVER-THE-COUNTER DERIVATIVES.
I THANK THE CHAIR FOR HIS
LEADERSHIP.
MR. DODD: I THANK THE SENATOR
FROM WASHINGTON FOR HER CONTRIBUTION.
WE'VE ARRIVED AT THAT MOMENT.
AS I UNDERSTAND IT, LET ME MAKE
A PARLIAMENTARY INQUIRY INQUIRY.
THERE ARE TWO VOTES, AS I
UNDERSTAND IT.
ONE IS ON THE WAIVER OF THE
BUDGET POINT OF ORDER.
AND THE SECOND VOTE WILL OCCUR
ON THE FINAL PASSAGE OF THE
CO
IS THAT CORRECT?
THE PRESIDING OFFICER: THE
SENATOR IS CORRECT.
MR. DODD: HAVE THE YEAS AND
YS BEEN ORDERED ON THE WAIVER
OF THE POINT OF ORDER? THE PRESIDING OFFICER: THEY
HAVE.
MR. DODD: AND ARE THE YEAS AND
NAYS ORDERED ON THE FINAL
PASSAGE OF THE BILL?
THE PRESIDING OFFICER: THEY
HAVE NOT.
MR. DODD: I'D ASK THE YEAS AND
NAYS ON THE NINAL PASSAGE OF THE
CONFERENCE REPORT. THE PRESIDING OFFICER: IS
THERE A SUFFICIENT SECOND?
THERE APPEARS TO BE.
THERE IS.
SO ORDERED.
MR. DODD: JUST IN CONCLUSION
HERE, AGAIN, MY THANKS -- I WANT
TO THA THE FLOOR STAFF AS WELL
RNNGS BOTH THE MINORITY AND
THE MAJORITY SIDE.
WE'VE SPENT A LOST TIME HERE
TOGETHER OVER THE LAST Y
I'M DEEPLY GRATEFUL TO THEM FOR
THE ORDERLY WAY IN WHICH THEY
CONDUCTED BUSINESS AND HOW FAIR
AND DISCIPLINED THEY ARE ABOUT
MAKING SURE THE FLOOR OF THE
SENATE RUNS SO WELL.
I THANK HIM IMMANSLY FOR THEIR
WORK.
AND I URGE MY COLLEAGUES TO
WAIVE THE POINT OF ORDER AND TO
SUPPORT THIS HISTORIC LANDMARK
PIECE OF LEGISLATION THAT WE
HOPE WILL SET OUR COUNTRY ON A
COURSE OF FINANCIAL STABILITY
AND SUCCESS IN THE GENERATIONS
TO COME.
I YIELD THE FLOOR.
THE PRESIDING OFFICER: THE
QUESTION IS ON THE MOTION TO
WAIVE.
THE YEAS AND NAYS HAVE BEEN ORDERED.
TH
VOTE:
THE PRESIDING OFFICER: ARE THERE
ANY SENATORS IN THE CHAMBER
WISHING TO VOTER TO CHANGE THEIR VOTE?
IF NOT, --
THE PRESIDING OFFICER: ARE ANY
SENATORS WISHING TO VOTE OR TO
CHANGE THEIR VOTES?
IF NOT, ON THIS VOTE THE YEAS
ARE 60, THE NAYS ARE 39.
THREE-FIFTHS OF THE SENATORS
DULY
VOTED IN THE AFFIRMATIVE, THE
MOTION IS AGREED TO.
MR. REID: MR. PRESIDENT? THE PRESIDING OFFICER: THE
MAJORITY LEADER'S RECOGNIZED.
MR. REID: MR. PRESIDENT, I'VE
BEEN CONFERRING OFF AND ON
THROUGHOUT THE DAY WITH THE REPUBLICAN LEADER.
THERE WILL BE NO MORE VOTES
TODAY.
WE HAVE A FINAL PASSAGE.
I'M NOT USED TO THESE SIMPLE
MAJORITY VOTES.
WE'LL FINISH -- AND THAT WILL BE
THE LAST VOTE TODAY.
WE'RE GOING TO SWEAR IN THE NEW
SENATOR FROM WEST VIRGINIA AT
2:15 ON TUESDAY.
AND IMMEDIATELY AFTER THAT, AS
SOON AS THAT'S OVER AT 2:30
WE'LL HAVE A VOTE ON EXTENDING
UNEMPLOYMENT BENEFITS.
AND THE REPUBLICAN LEADER AND I
ARE WORKING ON A WAY TO MOVE
FORWARD ON SMALL BUSINESS.
I THINK WE HAVE A PRETTY GOOD
PATH OF WHAT WE'RE GOING TO DO
ON THAT.
AFTER WE FINISH THAT, IT'S MY
INTENTION TO MOVE TO THE
SUPPLEMENTAL APPROPRIATION BILL.
IT APPEARS WE'RE GOING TO HAVE A
CLOTURE VOTE ON THAT.
BUT I THINK WE CAN WORK OUT THE
TIME ON THAT SO IT DOESN'T TAK
AN INORDINATE AMOUNT OF TIME.
I CONFERRED WITH THE REPUBLICAN
LEADER AT THE BEGINNING OF THIS
WORK PERIOD ON MONDAY.
WE HAVE A LIST OF THINGS THAT WE
NEED TO ACCOMPLISH BEFORE WE
LEAVE HERE.
AS EVERYONE KNOWS HERE, WE'RE
GOING TO BE HERE FOUR OR FIVE WEEKS.
THE TWO LEADERS, DEMOCRAT AND
REPUBLICAN, WERE BETTING ON FOUR
WEEKS RATHER THAN FIVE WEEKS,
BUT WE'LL NEED A LITTLE
COOPERATION TO GET THAT DONE.
ANYTHING?
THE PRESIDING OFFICER: THE
QUESTION IS ON THE ADOPTION OF
THE CONFERENCE REPORT.
THE YEAS AND NAYS HAVING ORDERED.
THE CLERK WILL CALL THE ROLL.
VOTE:
THE PRESIDING OFFICER: ANY
SENATORS WISHING TO VOTE OR TO
CHANGE THEIR VOTE?
IF NOT, THE YEAS ARE 60, THE
NAYS ARE 39.
THE CONFERENCE REPORT IS AGREED TO.
MR
LAY THAT ON THE TABLE,
MR. PRESIDENT.
THE PRESIDING OFFICER: WITHOUT
OBJECTION, SO ORDERED MR. DODD:
MR. PRESIDENT, I NOTE THE
ABSENCE OF A QUORUM.
EXCUSE ME, I RESERVE THAT.
THE PRESIDING OFFICER: THE
SENATOR FROM PENNSYLVANIA IS
RECOGNIZED.
THE SENATOR FROM PENNSYLVANIA IS
RECOGNIZED FOR 30 MINUTES.
MR. SPECTER: I THANK THE CHAIR.
MR. PRESIDENT, I
THE PRESIDING OFFICER: ORDER IN
THE SENATE, PLEASE.
ORDER IN THE SENATE. THE PRESIDING OFFICER: ORDER IN
THE SENATE, PLEASE.
WILL THE STAFF TAKE THEIR
CONVERSATIONS OUT OF THE SENATE.
THANK YOU.
THE SENATOR FROM PEN
RECOGNIZED.
MR. SPECTER: I THANK THE CHAIR.
MR. PRESIDENT, I HAVE SOUGHT
RECOGNITION TO STATEY POSITION
ON THE NOMINATION OF SOLICITOR
GENERAL ELENA KAGANO BE
ASSOCIATE JUSTICE OF THE SUPREME
COURT OF THE UNITED STATES AND
TO COMMENT ABOUT THE APPROPRIATE
ROLE OF THE SENATE, WHAT IS
HAPPING TO THE DOCTRINE OF
SEPARATION OF POWERS, AND HOW
INSTITUTIONALLY THE SENATE MIGHT
ASSERT ITSELF TO STOP THE
EROSION OF POWERS FROM THIS BODY
TO THE COURT AND FROM THE
CONGRESS TO THE EXECUTIVE
BRANCH.
I AM SUPPORTING MISS KAGAN
BECAUSE OF HER INTELLECT, HER
PROFESSIONAL BACKGROUND, HER
ACADEMIC BACKGROUND AND BECAUSE
I THINK SHE WILL BE AN EFFECTIVE
BALANCE IN THE IDEOLOGICAL
BATTLE WHICH IS BEING WAGED IN
THE CONFERENCE ROOM OF THE
SUPREME COURT.
THE IDEOLOGICAL BALANCE WHICH IS
SO SORELY NEEDED AT THE -- AT
THE PRESENT TIME.
THE HESITANCY I HAVE HAD AS I
HAVE EXPRESSED IT IN THE
HEARINGS HAS BEEN ON THE FAILURE
OF MISS KAGAN TO RESPOND WITH
SUBSTANTIVE ANSWERS SO THAT
SENATORS WOULD HAVE A REALISTIC
IDEA AS TO WHERE SHE STOOD PHILOSOPHICALLY ON SOME OF THE
VERY IMPORTANT QUESTIONS OF THE DAY.
NOT HOW SHE WOULD DECIDE CASES
BUT WHAT STANDARDS SHE WILL --
WOULD APPLY, IF CONFIRMED, AND
I'LL BE VERY SPECIFIC ABOUT THAT.
IT HAS BEEN ESPECIALLY
TROUBLESOME BECAUSE MISS KAGAN
HAS BEEN OUTSPOKEN IN THE PAST
ABOUT THE IMPORTANCE OF HAVING
SUBSTANTIVE ANSWERS IN
NOMINATION PROCEEDINGS.
SHE WROTE A NOW-FAMOUS ARTICLE FOR
THE UNIVERSITY OF CHICAGO LAW
REVIEW CRITICIZING SUPREME COURT
PROCEEDINGS ON NOMINATIONS BY
SAYING THAT THEY WERE VACUOUS
AND AA FARCE.
AND BY NAME CRITICIZED JUSTICE
TH BADER GINSBURG AND JUSTICE
STEVEN PRY YARR FOR -- BREYER
FOR NOT ANSWERING QUESTIONS.
AND IN EFFECT CRITICIZED THE
SENATE AND SENATORS FOR NOT
ASKING AND PRESSING QUESTIONSO
FIND OUT WHERE NOMINEES STOOD.
THERE WAS A SIMILAR ARTICLE
WRITTEN BY THEN A YOUNG LAWYER
IN PHOENIX, ARIZONA, NAMED BILL
REHNQUIST BACK IN 1958 FOR THE
HARVARD LAW RECORD.
WHERE HE CRITICIZED THE
CONFIRMATION PROCEEDING OF
SUPREME COURT JUSTICE WHITTAKER
SAYING THAT THE SENATE DID NOT
ASK QUESTIONS ABOUT THE
IMPORTANT, SUBSTANTIVE MATTERS.
DURING THE CONFIRMATION OF CHIEF
JUSTICE REHNQUIST, I ASKED HIM A
SERI OF QUESTIONS WHICH HE
DECLINED TO ANSWER, CITED HIS
OWN WORDS, AND THEN HE ANSWERED
A FEW, REALLY NOT VERY
IMPORTANT, JUST ABOUT ENOUGH TO
BE CONFIRMED, WHICH HAS BEEN MY
CONCLUSION GENERALLY, HAVING
BEEN A PARTY NOW TO 13
CONFIRMATION HEARINGS.
NOMINEES JUST ABOUT AS MANY
QUESTIONS AS THEY THINK THEY
HAVE TO.
WHEN JUSTICE SCALIA CAME UP FOR
CONFIRMATION IN 1986, HE
ANSWERED VIRTUALLY NOTHING.
WHEN THE QUESTION CAME UP ABOUT
MARBURY v. MADISON, HE SAID,
WELL, CAN'T ANSWER THAT
QUESTION.
MIGHT COME BEFORE THE COURT.
MAY THE RECORD SHOW THE LOOK OF
AMAZEMENT ON THE FACE OF THE
DISTINGUISHED SENATOR FROM
MINNESOTA, WHO IS PRESIDING.
I WAS FRANKLY AMAZED BY IT
MYSELF.
BUT THE TENOR OF THE TIMES,
FOLLOWING THE VERY CONTENTIOUS
NOMINATION PROCEEDING OF CHIEF
JUSTICE REHNQUIST AND OTHERS,
JUSTICE SCALIA WAS CONFIRMED
HANDILY, 98-0.
I'VE SEEN HIM SOCIALLY AT
EVENTS, ONE A COUPLE OF WEEKS
AGO, AND COMMENTED TO A GROUP
STANDING WITH HIM THAT PRISONERS
OF WAR GIVE THEIR NAME, RANK,
AND SERIAL NUMBER, BUT IN THE
SCALIA NOMINEE NOMINATION
PROCEEDING, HEOULD ONLY GIVE
HIS NAME AND RANK, JUST ABOUT
AMOUNTED TO THAT.
FOLLOWING THE HEARING ON JUSTICE
SCALIA, SENATOR DECONCINI AND I
WERE FORMULATING A RESOLUTION
WHICH WOULD ESTABLISH STANDARDS
THAT SENATORS WOULD INSIST ON OR
COULD INSIST ON FOR SOME
GUIDANCE TO TRY TO GET MORE
FORTHCOMING ANSWERS.
THEN WE HAD THE CONFIRMATION
HEARING OF JUDGE ROBERT BORK,
WHO ANSWERED QUESTIONS.
JUDGE BORK DID SO IN A CONTEXT
OF HAVING VERY EXTENSIVE LEGAL
WRITINGS.
A VERY FAMOUS LAW REVIEW ARTICLE
IN THE UNIVERSITY OF INDIANA,
1971, ON "ORIGINAL INTENT."
AND IN THE CONTEXT OF THAT
ARTICLE, BOOKS, MANY SPEECHES,
LAW REVIEW ARTICLES, I THINK IT
IS REALISTIC TO SAY THAT JUDGE
BORK HAD NO ALTERNATIVE BUT TO
ANSWER QUESTIONS.
SINCE THE BORK HRINGS, THE
PATTERN HAS EVOLVED WHERE
NOMINEES DO NOT GIVE SUBSTANTIVE ANSWERS.
IT IS A WELL-KNOWN FACT OF
CONFIRMATION LIFE THAT THERE ARE
MURDER BOARDS.
THAT'S WHAT THEY CALL THEM WHEN
THE NOMINEE GOES DOWN TO THE
WHITE HOUSE AND THEY HAVE --
HAVE PRACTICE -- HAVE PRACTICE
SESSIONS.
AND SINCE THAT TIME, IT HAS BEEN
PURE -- PURE PREPARED PAB LUM.
THAT'S WHAT WE GET IN THESE
HEARINGS.
SO THERE HAD BEEN REASON TO
EXPECT MORE FROM MS. KAGAN.
WE DIDN'T GET IT.
I'D EXPRESSED AT THE HEARINGS
THE CONCERN AS TO HOW WE COULD
GET ANSWERS ON SUBSTANTIVE ISSUES.
AND WAS THERE ANY WAY TO FIND
THAT OUT SHORT OF VOTING "NO"
AND REJECTING A NOMINEE.
I DECIDED THAT IT WOULD NOT BE
SENSIBLE TO VOTE "NO" TO ISSUE A
PROTEST VOTE IN THE CONTEXT OF
WHAT HAS REGRETTABLY BECOME THE
STANDARD MS. KAGAN WAS FOLLOWING
THE ACCEPTED PRACTICE.
WHY NOT, IN THE FACE OF THAT
STRONG ADVICE FROM THE WHITE
HOUSE AND THE SUCCESS OF ALL OF
THE NOMINEES WHO HAVE
STONEWALLED AND BEEN CONFIRMED.
I HAVE SINCE DISCUSSED WITH A
NUMBER OF MY COLLEAGUES THE
PROSPECT OF REVERTING TO WHAT
SENATOR DECONCINI AND I HAD
THOUGHT ABOUT IN EARLY 1987 TO
TRY TO ESTABLISH SOME STANDARDS,
NOT THAT SENATORS WOULD BE BOUND
TO FOLLOW THEM -- WE HAVE OUR
STATURE UNDER THE CONSTITUTION
TO ASK QUESTIONS AS WE CHOOSE;
WE CAN'T COMPEL ANSWERS; PERHAPS
THEY WOULDN'T BE FOLLOWED.
BUT IT COULD OBVIATE ONE LINE OF
EXCUSE THAT NOMINEES HAVE GIVEN:
WELL, THEY BETTER NOT BE TOO
SPECIFIC OR THEY MAY BREACH THE
STANDARDS OF ETHICS, IF THE
SENATE WERE TO ESTABLISH
STANDARDS AS TO WHAT WE WERE
LOOKING FOR FOR CONFIRMATION, IT
IS OUR CONSTITUTIONAL ROLE,
THERE MIETD BE SOME BENEFIT.
-- MIGHT BE SOME BIVMENT IN
LOOKING FURTHER TO TRY TO MAKE A
DETERMINATION ON THE KAGAN
NOMINATION, THERE WERE TWO OF
HER RESPONSES WHICH I FOUND
IMPRESSIVE.
ONE WAS HER COMMENT ABOUT --
COMMENTS ABOUT JUSTICE THURGOOD
MARSHALL, WHO SHE HAD CLERKED
FOR, WHO WAS A ROLE MODEL,
EXTENSIVE TESTIMONY ABOUT HER
ADMIRATION F THE WAY HE
DECIDED CASES.
AND I INFERRED FROM THAT LOOKING
AS WELL I COULD TO FIND HER
PHILOSOPHY, IDEOLOGY WHERE SHE
WOULD SND, SHE WOULD BE
PROTECTIVE OF CIVIL RIGHTS,
PROTECTIVE OF CONSTITUTIONAL
RIGHTS, INDIVIDUAL RIGHTS, AND
RESPECTFUL OF RIGHTS OF THE
CONGRESS.
THE SECOND LINE OF ANSWERS WHICH
SHE GE, WHICH I THOUGHT -- AND
I DO THINK IS VERY, VERY
IMPORTANT -- IS HER VERY
POSITIVE ATTITUDE ABOUT
TELEVISING THE SUPREME COURT.
AND I WILL COME TO THAT IN A FEW
MINUTES, BECAUSE THERE IS AN
URGENT NEED TO FIND SOME LINE TO
HAVE SOME INFLUENCE ON THE COURT
AS TO THEIR FOLLOWING PRECEDENT
ON STARE DECIS, AS TO THEIR
RESPECTING THE CONSTITUTIONAL
ROLE OF THE CONGRESS IN
FACT-FINDING.
THEY HAVE JUDICIAL INDEPENDENCE,
AND THAT IS THE BULWARK OF THE REPUBLIC.
THE RULE OF LAW IS WHAT MAKES
THE UNITED STATES FAMOUS.
THE STABILITY OF OUR GOVERNMENT.
AND THAT IS VERY HIGHLY PRIZED.
A LONG HISTORY OF THIS COUNTRY.
IT HAS BEEN THE COURTS WHICH
HAVE PROTECTED CIVIL RIGHTS.
IT WAS THE SUPREME COURT, AS WE
ALL KNOW, IN BROWN v. BOARD OF
EDUCATION WHERE THE COURT DID
WHAT THE CONGRESS DID NOT HAVE
THE POLITICAL COURAGE TO DO, NOR
DID THE PRESIDENT HAVE THE
POLITICAL COURAGE TO DO, TO
INTEGRATE THE SCHOOLS IN AMERICA.
THE BEST EXAMPLE BUT ONLY ONE
EXAMPLE AS TO WHERE THE COURTS
HAVE STOOD UP AS A BULWARK TO DO
WHAT THE ELECTED BRANCHES HAVE
NOT HAD THE POLITICAL COURAGE TO
DO.
AND NOW ON TO -- ON TO THE
SPECIFICS AS TO THE CONCERNS ON
THE SUBSTANTIVE QUESTIONS WHICH
MS. KAGAN DID NOT GIVE A
SUBSTANTIVE ANSWER.
I PRESSED HER HARD ON THE
SEPARATION OF POWERS.
WE ALL KNOW OF THE THREE
BRANCHES OF GOVERNMENT.
CONGRESS WAS ARTICLE 1, THOUGHT
BY THE FRAMERS TO BE THE MOST
IMPORTANT, THE EXECUTIVE,
PRESIDENT, NUMBER TWO; AND THE
COURT, NUMBER THREE.
I THINK IF THE CONSTITUTION WERE
TO BE REWRITTEN TODAY, THE
NUMBERS WOULD BE CHANGED.
THE COURT WOULD BE NUMBER ONE
AND THE OTHER BRANCHES WOULD BE
A DISTANT SECOND AND THIRD.
BUT, AGAIN, THE EXECUTIVE WOULD
BE AHEAD OF THE LEGISLATIVE
BRANCH BECAUSE OF THE WAY THE
COURT HAS INTERPRETED THE LAW.
COMING TO THE FIRST LINE OF
LEGISLATIVE RESPONSIBILITY IS
FACT-FINDING ON WHICH WE MAKE A
DETERMINATION OF WHAT OUGHT TO
BE ENACTED BY WAY OF PUBLIC
POLICY.
THE SUPREME COURT OF THE UNITED
STATES HAS CHANGED THE RULES OF
THE GAME.
FOR A LONG TIME IT WAS A
RATIONAL BASIS TEST TO DECIDE
WHETHER THE RECORD WAS
SUFFICIENT FOR THE LEGISLATION
WHICH WAS ENACTED.
THAT WAS THE STANDARD
ILLUSTRATIVELY IN THE WORKS
SE, JUSTICE HARLAN IN 1868.
AND THEN IN 1997 IN A CASE
CAPTIONED CITY OF BOURNE, THE SUPREME COURT OF THE UNITED
STATES APTED ADOPTED A NEW STANDARD.
WAS THE EVIDENCE PROPORTIONATE
AND CONGRUENT, A TEST OF
PROPORTIONATE AND CONGRUENT.
AND THAT TEST, WITH ITS
FLUIDITY, HAS BEEN THE BASIS FOR
THE SUPREME COURT LEGISLATING,
TAKING OVER FROM THE CONGRS.
NOW IT IS THE SUPREME COURT
WHICH DECIDES THE SUFFICIENCY OF
THE RECORD ON A TEST WHICH IS
NOT DISCERNIBLE WITH ANY
SPECIFICITY.
JUSTICE SCALIA HAS CALLED THE
TEST A FLABBY TEST, WHICH IS
USED FOR JUDICIAL LEGISLATION.
THAT WAS THE FACT IN THE CASE OF
UNITED STATES v. MORRISON,
WHICH TESTED THE
CONSTITUTIONALITY OF LEGISLATION
TO PROTECT WOMEN AGAINST
VIOLENCE.
AND THERE WAS IN THE HEARINGS
LEADING TO THAT IMPORTANT
LEGISLATION A MOUNTAIN OF
EVIDENCE AS DESCRIBED BY JUSTICE
SOUTER IN DISSENT.
BUT YET THE COURT OVERTURNED
THAT IMPORTANT STATUTE TO
PROTECT WOMEN AGAINST VIOLENCE,
CITING THE CONGRESS'S -- QUOTE
-- "METHODS OF REASONING" --
CLOSE QUOTE.
A LITTLE HARD TO UNDERSTAND WHAT
THAT -- WHAT THAT MEANS.
WE'RE NOT PERFECT AROUND HERE.
A LOT OF FAILURES IN THIS BODY,
ESPECIALLY NOW, EVEN SOME
FAILURES ACROSS THE ROTUNDA IN
THE HOUSE OF REPRESENTATIVES.
BUT WHO CAN CHALLENGE THE
MESSAGES ODDS OF REASONING?
AND -- BUT WHO CAN CHALLENGE THE
METHOD OF REASONING?
AND WHAT MIRACULOUS OCCURRENCES
THERE WHEN SOMEBODY LEAVES THE HEARING ROOM OF THE SUPREME
COURT, WALKS ACROSS CONSTITUTION
AVENUE, ACROSS THE GREEN FROM
THIS CHAMBER, AND SUDDENLY ARE
IN A POSITION TO HAVE SOME
SUPERIOR REASONING?
BUT THAT -- THAT LEGISLATION
WENT DOWN, AS S DOES SO MUCH LEGISLATION.
ANOTHER ILLUSTRATION IS IN
CITIZENS UNITED, WHERE
100,000-PAGE RECORD WAS
MASSACHUSETTSED, DETAILING THE
-- WAS AMASSED DETAILING THE
PROBLEMS OF WHAT GOES ON IN
POLITICS AND WHAT THE CORRUPTING
INFLUENCE IS.
AND AS A RESULT THE
MCCAIN-FEINGOLD LAW WAS PASSED
AND IN CITIZENS UNEWTSED, A
CRITICAL SECTION WAS DECLARED
UNCONSTITUTIONAL.
SO THERE YOU HAVE A TREMENDOUS
SHIFT IN POWER FROM THE CONGRESS
OF THE UNITED STATES TO THE
COURTS, TO THE SUPREME COURT.
AND WHAT WE LEGISLATE ON OUR
TRADITIONAL STANDARDS --
WE'VE THE INSTITUTIONAL
EXPERTISE, AND I AM GOING TO
COME TO THAT IN SOME GREATER
DETAIL IN A FEW MOMENTS
ANALYZING THE POSITIO WHICH
HAVE BEEN TAKEN BY CHIEF JUSTICE
ROBERTS AND JUSTICE ALITO.
BUT FIRST AN ANALYSIS OF A
DECISIVE SHIFT FROM THE POWER OF
THE CONGRESS OF THE UNITED
STATES TO THE EXECUTIVE BRANCH,
TO THE PRESIDENT.
AND HERE AGAIN I'LL BE SPECIFIC.
IN WHAT IS ARGUABLY THE MOST
DRAMATIC, HISTORIC CONFRONTATION
BETWEEN CONGRESS AND THE
PRESIDENT IS THE FOREIGN
INTELLIGENCE SURVEILLANCE ACT,
WHICH ESTABLISHES THE EXCLUSIVE
WAY TO INVADE PRIVACY AND GET A
WIRETAP CONTRASTED WITH THE
TERRORIST SURVEILLANCE PROGRAM,
INITIATED BY PRESIDENT BUSH FOR
WARRANTLESS WIRETAPPING.
IT WAS FRIDAY IN JULY OF 2005, I
CHAIRED THE JUDICIARY COMMITTEE.
WE WERE IN THE FINAL DAY ON THE REAUTHORIZATION OF THE PATRIOT
ACT.
AND THAT MORNING "THE NEW YORK
TIMES" BROKE THE INFORMATION
ABOUT THIS SECRET PROGRAM OF
WARRANTLESS WIRETAPPING.
AND, AS IT WAS EXPRESSED ON THE
FLOOR THAT DAY, SENATORS WHO HAD
BEEN PREPARED TO VOTE TO
REAUTHORIZE THE PATRIOT ACT DECLINED TO DO SO.
THERE WAS EXTENDED PROCEEDINGS,
WHICH IS NOT RELEVANT TO THE
SPECIFIC POINT I'M MACING NOW.
BUT BACK TO THE POINT:
A FEDERAL JUDGE IN DETROIT
DECLARED THE TERRORIST
SURVEILLANCE PROGRAM
UNCONSTITUTIONAL.
THE CASE WENT ON APPEAL TO THE
COURT OF APPEALS FOR THE SIXTH
CIRCUIT, WHICH DECLINED TO HEAR
IT ON A 2-1 DECISION, AND THE
PETION FOR THE SUPREME COURT
TO TAKE THE CASE WAS DENIED; NO
REASON GIVEN.
THE DOCTRINE OF STANDING IS A
VERY FLEXIBLE DOCTRINE WHICH I
THINK IN A PRACTICAL SENSE,
ALTHOUGH AN INELEGANTLY STATED,
ACCURATELY STATED IS THE WAY THE
COURT CONDUCTS A CASE IF THEY
DON'T WANT TO FIND A STANDING,
AVOID A JUDICIAL DECISION.
BUTNY FAIR-MINDED READING OF
THE DISSENTING OPINION IN THE
SIXTH CIRCUIT WOULD SAY THERE
WAS PLENTY OF ROOM FOR A
JUDICIAL DECISION, ADEQUATE
BASIS FOR STANDING IN THAT CASE.
WE CURRENTLY HAVE BEFORE THE
JUDICIARY COMMITTEE LEGISLATION
ON ANOTHER ISSUE WHICH
ILLUSTRATES THE SHIFT OF POWER
FROM THE CONGRESS TO THE
EXECUTIVE BRANCH BECAUSE OF THE
FAILURE OF THE SUPREME COURT TO
DECIDE A CASE.
AND THAT INVOLVES THE LITIGATION
KILLED IN 9/11 AGAINST THE
GOVERNMENT OF SAUDI ARABIA,
SAUDI PRINCES AND SAUDI
CHARITIES, ON A LITIGATION WHERE
THERE IS ENORMOUS FACTUAL RECORD
SHOWING THE CONNECTION BETWEEN
FINANCING OF AL QAEDA AND THE
SAUDI CHARITIES WHICH ARE REALLY
INSTRUMENTALITIES OF THE SAUDI
GOVERNMENT SHOWING THE FINANCING
FROM SAUDI PRINCES AND FROM THE
GOVERNMENT ITSELF.
THE SECOND CIRCUIT DENIED THE
CLAIM ON WHAT I THINK IS A
SPURIOUS GROUND, SAYING THAT
SAUDI ARABIA IS NOT ON THE LIST
OF COUNTRIES DECLARED BY THE
STATE DEPARTMENT TO BE TERRORIST
STATES.
WELL, THERE'S AN ALTERNATIVE
UNDER THE IMMUNITY STATUTE, AND
THAT IS FOR TORTIOUS CONDUCT.
THAT IS WRONGFUL ACTIONS,
CERTAINLY WOULD ENCOMPASS FLYING
A PLANE INTO A BUILDING.
AND SENATOR SCHUMER, SENATOR
LINDSEY GRAHAM AND I HAVE
INTRODUCED LEGISLATION TO
CLARIFY THIS ISSUE.
WHEN AN APPLICATION WAS MADE FOR
CERTIORARI TO THE SUPREME COURT,
THE ADMINISTRATION OPPOSED
HAVING THE SUPREME COURT HEAR
THE CASE ON THE GROUND THAT THE
ACTS BY THE SAUDIS IN FINANCING
THE TERRORISTS OCCURRED OUTSIDE
OF THE UNITED STATES.
NOW, THAT HARDLY IS A RATIONAL BASIS.
WHEN YOU PLOT IN SAUDI ARABIA
AND PAY MONEY TO BRING
TERRORISTS TO THE UNITED STATES
TO BOARD AIRPLANES, TO HIJACK
THE PLANES TO FLY INTO AMERICAN
BUILDINGS, TO FLY AND CRASH IN
PENNSYLVANIA, FLY AND CRASH IN
THE PENTAGON, THAT CERTAINLY
HAPPENS TO THE UNITED STATES.
ARGUABLY, THE MOST BARBARIC
CONDUCT IN THE HISTORY OF
MANKIND, CERTAINLY AMONG THE TERRORISTS.
EVENTUALLY THESE CASES, BECAUSE
WHEN I PRESSED MS. KAGAN, AND
OTHERS DID, WHAT STANDARD WOULD
YOU APPLY, GOING BACK TO FACT
FINDING, THE TWO STANDARDS ARE
PROPORTIONATE AND CONGRUENT,
CONTRASTED WITH RATIONAL BASIS.
THAT'S NOT ASKING A NOMINEE TO
DECIDE A CASE, ASKING A NOMINEE
TO DECIDE A STANDARD; CERTAINLY
WELL WITHIN THE AMBIT OF
MS. KAGAN'S FAMOUS LAW REVIEW
ARTICLE IN 1995.
BUT SHE SIMPLY STATED WOULD NOT ANSWER.
ON THE CASES INVOLVING THE
TERRORISTURVEILLANCE PROGRAM
AND THE LITIGATION ON 9/11,
WOULD SHE GRANT TO HEAR THE
CASE, NOT HOW SHE WOULD DECIDE
THE CASE, BUT WOULD SHE TAKE THE
CASE.
AGAIN, A REFUSAL TO ANSWER THE QUESTION.
SO THAT IN THIS CONTEXT, WE ARE
REALLY SEARCHING FOR WAYS TO
FIND OUT MORE ABOUT THE NOMINEES
MS. KAGAN HAS SAID JUST ENOUGH
TO GET MY VOTE BECAUSE OF MY
VOTING MY HOPES RATHER THAN MY
FEARS THAT SHE WILL BE IN THE
MOLD AS A GENERAL SENSE OF
JUSTICE THURGOOD MARSHALL AND
ALSO BECAUSE OF HER POSITION ON
TELEVISION, WHICH I THINK HAS
THE POTENTIAL FOR BEING A VERY
AMELIORATING FACTOR IN WHAT GOES
ON IN THE SUPREME COURT.
AND THAT IS THE BUSINESS OF
PUBLICITY AND THE FAMOUS
STATEMENT, ARTICLE ACTUALLY OF
WHAT PUBLICITY CAN DO BY LAWYER
LOUIS D. BRANDEIS BACK IN 1913
PROVIDES INSIGHTS AS TO WHERE WE
MIGHT GO IN THE MODERN WORLD
WITH TELEVISION.
IN THAT ARTICLE, BRANDEIS MADE
THE FAMOUS STATEMENT THAT
"SUNLIGHT IS SAID TO BE THE BEST
OF DISINFECTANTS."
THAT MAY BE A LITTLE STRONG FOR
THESE CIRCUMSTANCES.
WE'RE NOT EXACTLY LOOKING AT A
DISINFECTANT, BUT NEITHER WAS
BRANDEIS.
AND HE WAS REALLY TALKING ABOUT
PUBLICITY IS THE WAY YOU DEAL
WITH PROBLEMS IN OUR SOCIETY.
AND I BELIEVE THAT IF WE HAD
PUBLICITY AND PEOPLE UNDERSTOOD
WHAT WAS GOING ON, THERE WOULD
BE A REALISTIC CHANCE TO HAVE
THE COURT RESPECT THE POWERS OF
CONGRESS AND HAVE THE COURT
RESPECT THE SEPARATION OF POWER
BETWEEN THE PRESIDENT AND THE CONGRESS.
I NOW TURN TO THE CONFIRMATION
PROCEEDINGS AS TO CHIEF JUSTICE
ROBERTS AND JUSTICE ALITO, WHICH
BEAR VERY HEAVILY ON THIS SUBJECT.
BOTH OF THE NOMINEES WERE
QUESTIONED AT LENGTH DURING THE
COURSE OF THE NOMINATION PROCEEDING.
AND THIS IS WHAT CHIEF
ROBERTS -- CHIEF JUSTICE ROBERTS
TESTIFIED TO ON THE QUESTION OF
FACT FINDING -- QUOTE -- "THE
REASON THAT CONGRESSIONAL FACT
FINDING AND DETERMINATION IS
IMPORTANT ISECAUSE THE COURTS
RECOGNIZE THEY CAN'T DO THAT.
THE SUPREME COURT CANNOT SIT AND
HEAR WITNESS AFTER WITNESS IN A
PARTICULAR AREA AND DEVELOP THAT
KIND OF A RECORD.
COURTS CAN'T MAKE THE POLICY
JUDGMENTS ABOUT WHAT TYPE OF
LEGISLATION IS NECESSARY IN
LIGHT OF THE FINDINGS THAT ARE MADE.
THE COURTS DON'T HAVE IT.
CONGRESS DOES.
IT'S CONSTITUTIONAL AUTHORITY.
IT'S NOT OUR JOB."
AND HE GOES ON TO SAY THAT WHEN
COURTS ENGAGE IN FACT FINDING,
THEY ARE REALLY IN EFFECT
LEGISLATING.
THESE ARE HIS EXACT WORDS IN THE
CONFIRMATION HEARING.
AS A JUDGE, YOU MAY BE BEGINNING
TO TRANSGRESS INTO THE AREA OF
MAKING A LAW.
THAT'S WHEN YOU ARE IN A
POSITION OF REEVALUATING
LEGISLATIVE FINDINGS BECAUSE
THAT DOESN LOOK LIKE A
JUDICIAL FUNCTION.
AND THIS IS WHAT JUSTICE ALITO
HAD TO SAY IN HIS CONFIRMATION
HEARING -- QUOTE -- "THE
JUDICIARY IS NOT EQUIPPED AT ALL
TO MAKE FINDINGS ABOUT WHAT IS
GOING ON IN THE REAL WORLD.
NOT THIS SORT OF LEGISLATIVE FINDINGS.
AND CONGRESS, OF COURSE, IS IN
THE BEST POSITION TO DO THAT.
CONGRESS CAN HAVE HEARINGS AND
EXAME COMPLEX SOCIAL ISSUES,
RECEIVE STATISTICAL DATA, HEAR
TESTIMONY FROM EXPERTS, ANALYZE
THAT AND SIN -- SYNTHESIZE THAT
AND REDUCE THAT TO THE FINDINGS.
THESE TWO JUSTICES WERE IN THE
FIVE-PERSON MAJORITYHICH
DISREGARDED 100,000 PAGES OF
CONGRESSIONAL FINDINGS TO MAKE
THE DECLARATION THAT
McCAIN-FEINGOLD WAS
UNCONSTITUTIONAL.
THEN YOU HAVE THE SIMILAR ISSUE
OF STARE DECIS.
THE BEST WAY TO LIMIT JUDICIAL
ACTIVISM IS BY RESPECTING WHAT
CONGRESS HAS DONE ON FACT
FINDING.
AND WHEN THE COURT DISREGARDS
CONGRESSIONAL FACT FINDING AND
SUBSTITUTES ITS OWN JUDGMENT,
AND ON POLICY THEY'RE MAKING THE
LAW.
THAT'S CONCEDED BY THE CITATIONS
THAT I HAVE READ.
THEN THERE WAS EXTENSIVE
QUESTIONING OF BOTH CHIEF
JUSTE ROBERTS AND JUSTICE
ALITO ON THE ISSUE OF STARE
DECISIS, AND THIS IS WHAT CHIEF
JUSTICE ROBERTS HAD TOAY IN
PART ABOUT STARE DECIS: "I DO
THINK THAT IT IS A JOLT TO THE
LEGAL SYSTEM WHEN YOU OVERREAL
RAOUL A PRECEDENT -- WHEN YOU
OVERRULE A PRECEDENT.
PRECEDENT PLAYS AN IMPORTANT
ROLE IN PROMOTING STABILITY AND EVENHANDEDNESS.
IT IS NOT ENOUGH THAT YOU MAY
THINK THE PRIOR DECISION WAS
WRONGLY DECIDED."
JUSTICELITO SAID ABOUT THE
SAME THING IN PART -- QUOTE --
"IT IS IMPORTANT -- THAT IS
STARE DECISIS IS IMPORTANT --
BECAUSE IT LIMITS THE POWER OF
THE JUDICIARY.
IT IS IMPORTANT BECAUSE IT
PROTECTS RELIANCE INTERESTS."
THESE ARE THE TWO OF THE
FIVE-PERN MAJORITY WHICH
DECIDED IN CITIZENS UNITED THAT
McCAIN-FEINGOLD WAS UNCONSTITUTIONAL.
THIS IS WHAT THE SEVENTH CIRCUIT
JUDGE RICHARD POSNER, A
DISTINGUISHED JURIST HAD TO SAY
ABOUT THE ROLE OF CHIEF JUSTICE
ROBERTS IN THESE DECISIONS --
QUOTE -- "COMING FROM HIS BOOK
'THE JUDGE AS OCCASIONAL
LEGISLATOR,' LESS THAN TWO YEARS
AFTER HIS CONFIRMATION, HE
DEMONSTRATED BY HIS JUDICIAL
VOTES AND OPINIONS THAT HE
ASPIRES TO REMAKE SIGNIFICANT
AREAS OF CONSTITUTIONAL LAW.
THE TENSION BETWEEN WHAT HE SAID
AT HIS CONFIRMATION HEARING AND
WHAT HE IS DOING AS A JUSTICE IS
A BLOW TO ROBERTS' REPUTATION
FOR CANDOR AND FURTHER
DEBASEMENT OF THE ALREADY
DEBASED CURRENCY OF THE
TESTIMONY OF NOMINEES AT
JUDICIAL CONFIRMATION HEARINGS."
IN -- GOING INTO THESE ISSUES AS
TO THE CONTRAST BETWEEN WHAT
CHIEF JUSTICE ROBERTS AND
JUSTICE ALITO TESTIFIED TO AND
WHAT THEY HAVE DONE ONCE ON THE
COURT, I DO NOT CHALLENGE THEIR
GOOD FAITH.
I UNDERSTAND THE DIFFERENCE
BETWEEN WHAT HAPPENS IN A
JUDICIAL CONFIRMATION HEARING
AND WHAT HAPPENS IN COURT OR
WHEN THERE IS A CASE IN
CONTROVERSY TO BE DECIDED BY THE
JUSTICES OF THE SUPREME COURT.
BUT THESE VARIATIONS ARE SO
STARK, THAT HAD THERE BEEN AN
UNDERSTANDING BY SENATORS ON
THESE CONFIRMATION HEARINGS AS
TO THE JUDICIAL PHILOSOPHY AND
HOW FACT FINDING WOULD BE
HANDLED IN COURT AND HOW
PRECEDENTS AND STARE DECIS
WOULD BE HANDLED IN COURT, TO
TAKE THE OPINION BY CHIEF
JUSTICE ROBERTS, HIS CONCURRING
OPINION IN THE CITIZENS UNITED
WHERE THEY DISREGARD THE AUSTIN
CASE AS A -- QUOTE --
"ABERRATION."
THERE IS YOUR ROLE TO ELIMINATE STAR DECIS.
THE CASE IS AN ABERRATION, DOWN
THE DRAIN.
SO WHAT HAPPENS -- WHAT HAPPENS
TO THE PRECEDENTS?
IS ROE V. WADE SAFE BASED ON
THAT STANDARD?
I QUESTIONED AT LENGTH CHIEF
JUSTICE ROBERTS ABOUT ROE V.
WA, THE SUCCESSOR, CASEY V.
PLANNED PARENTHOOD AND HOW THE
CASE STOOD.
AUSTIN WAS NOT REVERSED WHEN THE
SUPREME COURT HAD AN OPPORTUNITY
TO DO SO.
CHIEF JUSTICE ROBERTS SAYS IN
HIS OPINION, WELL, NOBODY ASKED
US TO REVERSE -- NOBODY ASKED
THE SUPREME COURT TO REVERSE THE
AUSTIN CASE.
WELL, THE WAY THE COURT REACHED
FOR THE HILLARY MOVIE IN
CITIZENS UNITED, THE WAY THEY
RECONSTRUCTED THE ISSUE, YOU
DON'T HAVE TO -- IT'S A THIN
HAVVENEER TO SAY THAT THE COURT IS
GUIDED AND WHO ASKS THE COURT
FOR A DECISION MUCH WHERE THAT
LEADS US TO IS REALLY WHAT CAN
BE DONE TO HAVE JUSTICES FULFILL
STANDARDS AGREED TO AT THEIR
HEARINGS?
WHAT CAN BE DONE TO HAVE
JUSTICES ADHERE TO STANDARDS
AGREED TO AT TIR HEARINGS?
I SPOKE EARLIER ABOUT THE
SANCTITY OF JUDICIAL
INDEPENDENCE AND HOW THE COURT
IS THE BULWARK OF OUR REPUBLIC
AND THE RULE OF LAW.
AND THE MOST PROMISING IDEA THAT
I HAVE FOUND IS -- IN THE SEARCH
IS TO DEMONSTRATE TO THE PUBLIC
WHAT THE COURT DOES, HOW
POWERFUL THE COURT IS.
HOW IT MAKES DECISION THE
CUTTING EDGE OF ALL OF THE
JUDGMENTS IN OUR SOCIETY.
IT DECIDES WHO LIVES AND WHO
DICE, A WOMAN'S RIGHT TO CHOOSE.
IT DECIDES ON LATE-TERM
ABORTION.
IT DECIDES ON THE DEATH PENALTY.
IT DECIDES WHETHER JUVENILES MAY
BE EXECUTED FOR CRIMES COMMITTED
BELOW THE AGE OF 18.
IT DECIDES AFFIRMATIVE ACTION,
WHO GOES TO SCHOOL, WHO GETS
INTO THE BEST COLLEGES, WHO GETS
THE BEST JOB.
IT DECIDES ASSISTED SUICIDE.
IT DECIDES CASES OF
INTERNATIONAL LAW.
ON ALL OF THE CUTTING ISSUES,
AMICA'S CITED AS BEING THE
MOST LITIGIOUS COUNTRY ON THE
FACE OF THE EARTH.
THERE IS NOT AN UNDERSTANDING AS
TO HOW FAR THE POWER OF THE
SUPREME COURT IS, HOW THEY HAVE
TAKEN IT FROM THE CONGRESS, HOW
THEY HAVE LET THE EXECUTIVE
BRANCH TAKE IT FROM THE
CONGRESS.
IN AN ARTICLE PUBLISHED JUST
YESTERDAY IN "THE WASHINGTON
POST", STEWART TAYLOR JR.,
NOTED, A COMMENTATOR THE SUPREME
COURT HAD SOME INTERESTING
OBSERVATIONS RIGHT ON THIS PRECISE SUBJECT.
THIS IS WHAT HE WROTE IN PART --
"THE KEY IS FOR THE JUSTICES TO
PREVENT -- IS TO PREVENT
JUDICIAL REVIEW FROM DENIGRATING
INTO JUDICIAL U USER PATION, WHICH
GOES TO THE -- TO DEFER MORE
OFTEN TO THE ELECTED BRANCHES.
WELL, THAT'S THE CONGRESS.
THAT'S THE HUE AND CRY.
THAT'S THE QUESTION ASKED EVERY
TIME WE HAVE A CONFIRMATION
HEARING IN THE JUDICIARY COMMITTEE.
WILL UOU INTERPRET THE LAW
RATHER THAN MAKE THE LAW?
BUT THESE ARE MATTERS WHERE THEY
MAKE THE LAW.
AND THEN TAYLOR GOES ON TO WRITE
THAT THE WAY TO DEAL WITH THE
COURT -- WELL, I'LL QUOTE IT
DIRECTLY, "THE JUSTICE THE KNOW
AS LONG AS THEY STOP SHORT OF
INFURIATING THE PUBLIC, THEY CAN
CONTINUE TO ENJOY BETTER
APPROVAL RATINGS THAN CONGRESS
AND THE PRESIDENT EVEN AS THEY
USURP THOSE BRANCH'S POWERS."
THIS IS AN INTERESTING TEST.
THE FIRST TIME I'VE SEEN IT
ARGUE PARTICULAR RATED THIS WAY,
IT'S THE -- QUOTE --
"INFURIATING THE PUBLIC TEST."
AND WHATEVER YOU MAY SAY IN A
DEMOCRACY IN OUR SOCIETY THE
PUBLIC HAS THE ULTIMATE POWER
AND IT IS FELT.
IT IS FELT IN MANY, MANY WAYS.
PERHAPS EVEN BY OSMOSIS,
WHEREVER YOU GO.
WHEN THE PUBLIC ATTITUDE CHANGES
ON SEGREGATION, THE SUPREME
COURT CHANGES THE DECISION.
WHEN THE PUBLIC ATTITUDE CHANGES
ON -- ON SEXUAL ORIENTATION, THE
SUPREME COURT DECISION CHANGES
WHEN YOU FIND SO MANY STATES
RECOGNIZE SAME-SEX MARRIAGE, IT
IS A CHANGE RECOGNIZED BY THE
COURTS AS THE MASSACHUSETTS
COURT RECENTLY DID IN DECLARING
THE DEFENSE OF MARRIAGE ACT
UNCONSTITUTIONAL.
IT WOULDN'T HAVE PASSED WHEN IT
WAS 86-14 IN THE SENATE OF THE
UNITED STATES IN 1997.
SO HOW DO YOU ACTIVATE THE
DOCTRINE OF -- QUOTE --
"INFURIATING THE PUBLIC," CLOSE
THQUOTE?
THE BEST WAY, TO MY KNOWLEDGE I
TO TELEVISE THE COURT.
IN THAT MAGNIFICENT CHAMBER
ACROSS THE GREEN FROM WHERE WE
SIT, I STAND, YOU SIT AT THE
MOMENT, YOU HAVE A -- A -- A --
A ROOM WHICH SEATS ABOUT 300
PEOPLE.
AND FOLKS GET TO GO IN THERE FOR
ABOUT THREE MINUTES.
AND THAT'S WHERE THE MOST
IMPORTANT BUSINESS OF THE -- OF
THE COUNTRY IS BEING CONDUCTED.
YEARS AGO THE SUPREME COURT
DECIDED THAT WHEN IT CAME TO
JUDICIAL PROCEEDINGS THAT
NEWSPAPERS HAD A RIGHT TO BE IN
THE COURTROOM.
THAT SAME LOGIC WOULD GIVE
TEVISION CAMERAS AND
ELECTRONIC RADIO A SIMILAR --
SIMILAR RIGHTS TO INFORM THE PUBLIC.
THAT WAS A CASE IN 1940.
TODAY THE INFORMATION IS GLEAMED
LARGELY FROM TELEVISION AND BY A
LESSER EXTENT BY RADIO.
AND SO IF THE PUBLIC KNEW WHAT
WAS GOING ON IN THE SUPREME
COURT, IF THEY UNDERSTOOD IT,
THERE WOULD BE A CHANCE THAT
THERE WOULD BE -- THEY WOULD BE
A LITTLE MORE RESPECTFUL OF THE
CONSTITUTIONAL DOCTRINE OF
SEPARATION OF POWERS.
WHEN THE CASE OF BUSH V. GORE
WAS SCHEDULED FOR ARGUMENT, THEN
SENATOR BIDEN AND I WROTE TO
CHIEF JUSTICE REHNQUIST ASKING
THAT TELEVISION CAMERAS BE
PERMITTED INSIDE THE COURTROOM.
TO GET INSIDE THE COURTROOM THAT
DAY, YOU PRACTICALLY HAD TO BE
ON THE JUDICIARY COMMITTEE, AND
IT WAS PACKED.
AND AMERICA SHOULD HAVE BEEN
ABLE TO SEE IT.
AND SURROUNDING THE BUILDING ON
ALL SIDES WERE MOBILE TELEVISION
UNITS.
I'M NOT SURE EXACTLY WHAT THEY WERE DOING.
THE MOST THEY COULD HAV WOULD
BE STANDUPS OUTSIDE THE CHAMBER
BECAUSE THEY COULDN'T -- THEY
COULDN'T GET INSIDE THE CHAMBER.
AND THAT DAY THE SUPREME COURT
DID RELEASE AN AUDIO OF THE
PROCEEDINGS, WHICH WAS, I
BELIEVE -- I BELIEVE A NOVELTY
AT THAT TIME.
AND THEY HAVE DONE THAT
OCCASIONALLY SINCE.
BUT RELATIVELY RARELY.
RELATIVELY RARELY.
AND I'D LIKE UNANIMOUS CONSENT
TO INTRODUCE A TABLE PREPARED BY
C-SPAN SHOWING THE FREQUENCY
THAT THE SUPREME COURT HAS
DENIED EVEN AN AUDIO TO BE
RELEASED WITHIN A RELATIVELY
REASONABLE PERIOD OF TIME.
THE PRESIDING OFFICER: WITHOUT
OBJECTION.
MR. SPECTER: WELL, IN THE FACE
OF -- OF THESE
BEEN PRESSING FOR MORE THAN A
DECADE FOR LEGISLATION TO TELL
VIE SUPREM --TELEVISE THE SUPREME COURT.
IT HAS COME OUT OF THE JUDICIARY
COMMITTEE 12-6 AND MOST RECENTLY
THIS YEAR 12-6, A LEGISLATIVE
PROPOSAL THAT WOULD CALL FOR THE
SUPREME COURT TO BE TELEVISED
AND, SECONDLY, A SENSE OF THE
SENATE RESOLUTION URGING THE
SUPREME COURT ON ITS OWN TO --
TO BE TELEVISED.
I BELIEVE, AS A LEGAL MATTER,
THAT THE CONGRESS HAS THE
AUTHORITY TO REQUIRE THE SUPREME
COURT TO BE TELEVISED.
AND I SAY THAT BECAUSE IT IS AN
ADMINISTRATIVE FUNCTION.
CONGRESS HAS THE AUTHORITY TO
DECIDE, FOR EXAMPLE, HOW MANY
JUSTICES THERE WILL BE ON THE
COURT ILLUSTRATED BY THE FAMOUS
ROOSEVELT COURT PACKING PLANT
WHERE THE EFFORT WAS MADE TO
RAISE THE NUMBER FROM NINE TO 15
THROUGH NEW FACES TO CONTROL THE
DECISION.
THE CONGRESS, BY LAW,
ESTABLISHES THE NUMBER OF
JUSTICES FOR A DECISION MAKING,
A PLURALITY, SIX MUST DECIDE THE CASE.
THE CONGRESS DECIDES THE COURT
WILL BE IN SESSION THE FIRST
MONDAY IN OOBER.
THE CONGRESS HAS SET THE TIME ON
THE HABEAS CORPUS ON THE SPEEDY
TRIAL ACT.
I THINK A STRONG CASE, AND, IN
FACT, THE APPROPRIATE CONCLUSION
IS THAT THE CONGRESS HAS
AUTHORITY TO ACT IN THIS FIELD.
THE SUPREME COURT PROCEEDINGS,
THE HIGHEST COURT PROCEEDINGS
ARE NOW TELEVISED IN GREAT
BRITAIN.
THEY'RE NOW TELEVISED IN IN CANADA.
THEY'RE NOW TELEVISED IN MANY
FEDERAL COURTS, WHICH HAS
UNDERTAKEN THEM ON A TRIAL BASIS.
A RECENT POLL WAS CONDUCTED
RELEASED ON THE DAY OF THE START
OF THE HEARINGS ON SOLICITOR
GENERAL KAGAN, A POLL CONDUCTED
BY C-SPAN, SHOWED THAT 63% OF
THE AMERICAN PEOPLE OUGHT TO
THINK THE COURT OUGHT TO BE TELEVISED.
AND AMONG THE 37% WHO SAID NO,
WHEN THEY WERE TOLD THAT THE
PROCEEDINGS ARE OPEN TO THE
PUBLIC, BUT PEOPLE HAVE TO COME
TO WASHINGTON TO SEE THEM AND
CAN ONLY STAY FOR THREE MINUTES,
MOST OF THOSE FOLKS DECIDED THAT
THEY OUGHT
SO THE NUMBER WENT FROM 63 TO
85% OF THE AMERICAN PEOPLE WHO
THINK THE SUPREME COURT OUGHT TO
BE TELEVISED.
SO I WOULD SAY TO MY COLLEAGUES
THAT THAT'S A PRETTY GOOD
SOCIATIOINDICATIONTHAT THEONGRESS OUGHT TO ACT.
THAT THE SUPREME COURT WILL NOT
OPEN ITS DOORS ON A VOLUNTARY
BASIS, THAT THE CONGRESS OUGHT
TO -- OUGHT TO RESPOND.
ON RECENT NOMINATIONS I HAVE
ASKED EVERY NOMINEE, WHAT IS
YOUR ATTITUDE ON TELEVISION?
AND I WAS PLEASED BOTH IN THE
INFORMAL MEETING WITH MS. KAGAN
THAT HER TESTIMONY BEFORE THE
JUDICIARY COMMITTEE THAT SHE
SAID SHE WAS IN FAVOR OF TELEVISION.
THAT THE MORE INFORMATION THE
PUBLIC HAS, THE BETTER OFF OUR
SOCIETY IS A PRETTY OBVIOUS
CONCLUSION, THAN SHE WOULD PRESS
THE ISSUE WHEN NOMINATED.
AND A KEY FACTOR IN MY
AFFIRMATIVE VOTE FOR MS. KAGAN
IS HER -- HER SENSE OF HUMOR,
HER -- HER QUICK WIT, WHICH SHE DISPLAYED.
SHE WAS EVEN ALMOST A MATCH FOR
THE DISTINGUISHED SENATOR
FROM -- JUNIOR SENATOR FROM
MINNESOTA WHO'S HAD SOME EXPERT
PERIENCE IN THAT LINE.
AND I THINK THAT WILL STAND HER
IN GOOD STEAD IN THAT
IDEALOGICAL BATTLE IN THAT SMALL
CONFERENCE ROOM WHERE THESE BIG,
BIG DECISIONS ARE MADE.
AND CHIEF JUSTICE ROBERTS SAID
THAT HE WOULD BE OPEN TO THE
IDEA.
JUSTICE SCALIA TESTIFIED THAT HE
VOTED FOR IT ON THE THIRD
CIRCUIT BUT WOULD WANT TO CONFER
WITH HIS COLLEAGUES.
I BELIEVE JUSTICE BREYER SAID
THAT A HEARING BEFORE -- IN THE
HOUSE OF REPRESENTATIVES A FEW
MONTHS AGO THAT TELEVISION WAS INEVITABLE.
JUSTICE GINSBURG WAS QUOTED AT
ONE POINT AS SAYING THAT IF IT
WAS GAVEL TO GAVEL THAT IT WOULD
BE SATISFACTORY.
JUSTICE SCALIA HAS BEEN NEGATIVE
ABOUT IT MOST OF THE TIME
BECAUSE THERE WOULD ONLY BE NI
NISNIPPETS IT COULD BE GAVEL TO
GAVEL THERE WOULD BE SOME FLEX
ABILITY ON HIS PART.
BUT I THINK IT IS AN ITEM WHOSE
TIME HAS COME.
BECAUSE INSTITUTIONALLY WE OUGHT
TO BE DOING SOMETHING ABOUT IT
IN THE UNITED STATES SENATE.
INSTITUTIONALLY WE HAVE THE
RESPONSIBLE TO CONFIRM.
AND WE AREN'T DOING A VERY GOOD
JOB OF FINDING OUT WHAT
REASONABLE UNDERSTANDING IS OF
WHERE THESE NOMINEES ARE
HEADING.
AND WHILE WE ARE FIDDLIN FIDDLING, OUR
INSTITUTIONAL POWER IS BURNING.
IT WON'T AMOUNT TO A TINGER'S
DAM WHEN THE SUPREME COURT
AGREES WITH OUR FACTUAL FINDING
NO MATTER HOW VOLUMINOUS IT WILL
BE AND WHAT GRAVITATES DOWN
PENNSYLVANIA TO THE WHITE HOUSE.
SO IT'S TIME TO SIT UP AND TAKE
NOTICE.
MS. KAGAN QUOTED ME IN HER 1995
LAW REVIEW ARTICLE SAYING THAT I
SAID THAT ONE DAY THE SENATE'S
GOING TO HAVE TO STAND UP ON ITS
REAR LEGS AND REJECT A NOMINEE.
WELL, NOW IS NOT THE RIGHT DAY
IN MY OPINION FOR THE REASONS I
HAVE SAID.
ONE OTHER POINT I WANT TO MAKE,
AND I WOULD ASK HOW MUCH TIME I
HAVE LEFT, MR. PRESIDENT, BUT I
THINK A MORE APPROPRIATE
QUESTION IS HOW MUCH TIME HAVE I GONE OVER?
THE PRESIDING OFFICER: THE
SENATOR HAS CONSUMED HIS TIME.
MR. SPECTER: WELL, WHAT'S THE
ANSWER TO MY QUESTION, MR. PRESIDENT?
TH
MINUTES.
EXTRA.
MR. SPECTER: EXTRA?
THE PRESIDING OFFICER: YES.
MR. SPECTER: I ASK CONSENT FOR FOUR MORE MINUTES.
THE PRESIDING OFFICER: WITHOUT
OBJECTION.
MR. SPECTER: ONLY ONE COLLEAGUE
IS PRESENT AND IT'S THE
CONGENIAL JUNIOR SENATOR FROM
FLORIDA, SO I THANK MY
COLLEAGUE.
I WANT TO MAKE ONE MORE POINT
AND THAT IS ON THE ISSUE OF THE
SUPREME COURT TAKING MORE CASES.
HERE AGAIN IF THERE WAS
TRANSPARENCY, AMERICA WOULD BE
OUTRAGED AT THE WORKLOAD ON THE
SUPREME COURT.
AS THAT COURT HAS MOVE FROM ONE
CLERK TO TWO CLERKS TO THREE
CLERKS TO FOUR CLERKS.
AND AS THE SUPREME COURT -- AND
I DON'T BEGRUDGE THEM THE TIME
BETWEEN THE SESSION ENDING IN
LATE JUNE AND THE FIRST MONDAY
IN OCTOBER WHERE THEY TRAVEL AND
LECTURE AND WRITE BOOKS.
BUT I AMUCH CONCERNED ABOUT
THE CIRCUIT SPLITS FOR ANYONE
WHO MAY BE WATCHING ON C-SPAN2,
AND I KNOW MY AUNT AND SISTER
ARE WATCHING.
THESE CASES ARE VERY IMPORTANT
BECAUSE IF THE THIRD CIRCUIT
HAVING PENNSYLVANIA, NEW JERSEY,
AND DELAWARE DECIDE A CASE ONE
WAY, AND THE NINTH CIRCUIT
GOVERNING CALIFORNIA AND THE
WESTERN STATES DECIDES IT
ANOTHER WAY AND THE CASE ARISES
IN WICHITA, KANSAS, NOBODY KNOWS
WHICH PRECEDENT TO FOLLOW
BECAUSE THE CIRCUITS ARE
AUTONOMOUS.
AND THERE ARE MANY, MY
IMPORTANT CASES WHICH THE
SUPREME COURT DOES NOT DECIDE
WHEN THERE ARE CIRCUITS SPLIT,
SO THEY HAVE TIME TO DECIDE THEM.
THEY HAVE TIME TO DECIDE THE
CONFLICT BETWEEN THE FOREIGN
INTELLIGENCE SURVEILLANCE ACT
AND THE TERRORIST SURVEILLANCE
PROGRAM, AND THEY HAVE TIME TO
HEAR THE CASE INVOLVING THE 9/11
CRASH AND SOVEREIGN IMMUNITY.
BUT THESE ARE THE STATISTICS
WHICH WERE VERY INFORMATIVE.
IN 1886, THE SUPREME COURT
DECIDED 451 CASES.
IN 1987, THE SUPREME COURT WROTE
146 OPINIONS.
THAT WAS CUT BY LESS THAN HALF
FROM 2006 -- IN 2006 TO 68, 2007
TO 67, 2008 TO 75, 2009 TO 73.
THIS IN THE FACE OF CHIEF
JUSTICE ROBERTS' TESTIMONY AT
HIS CONFIRMATION HEARING THAT
THE SUPREME COURT OUGHT TO HEAR
MORE CASES.
MS. KAGAN SAID ABOUT THE SAME
THING.
MY RECOLLECTION IS THAT JUSTICE
SOTOMAYOR SAID ABOUT THE SAME THING.
SO HERE AGAIN, IT IS A MATTER OF
THE -- OF THE PUBLIC UNDERSTANDING.
WE'RE VERY CONSCIOUS IN THIS
BODY ABOUT NOT MISSING VOTES.
WHEN WE MISS VOTES -- WHEN I
MISS VOTES, IT APPEARS IN ""THE
PHILADELPHIA INQUIRER ""AND "THE
PITTSBURGH POST GAZETTE."
E PUBLI DOESN'T LIKE TO SEE
ARLEN SPECTER MISSING VOTES.
I'M PAID TO VOTE.
WELL, YOU CAN'T VOTE ON A CASE
IF YOU DON'T TAKE A CASE.
HAVING THE DISCRETION NOT TO
TAKE THE CASES LEAVES THIS LEVEL
OF WORKLOAD WITH CIRCUITS
UNDECIDED.
AND THIS IS SOMETHING WHICH
OUGHT TO BE HANDLED.
I HAVE LEGISLATION PENDING TO
COMPEL THE SUPREME COURT TO
TAKE, FOR EXAMPLE, THE TERRORIST
SURVEILLANCE PROGRAM.
MOST PEOPLE DON'T KNOW, BUT
CONGRESS CAN'T DECIDE CASES FOR
THE COURT, BUT CONGRESS CAN
MANDATE WHAT CASES THEY TAKE.
AS WE DID THE FLAG BURNING CASE,
AS WE DID McCAIN-FEINGOLD AND
MANY, MANY OTHER CASES.
SO IT IS MY HOPE THAT WHEN WE
CONFIRM MS. KAGAN -- AND IT
LOOKS LIKE WE WILL CONFIRM
HER -- THAT WE WILL PAUSE ON THE
NOMINATION PROCEEDINGS AND FOCUS
ON THEIR UTILITY, IF NOT TO GET
SUBSTANTIVE ANSWERS, TO SEE WHAT
THE DEXTERITY, THE INTELLECTUAL
DEXTERITY OF THE NOMINEE IS, BUT
PROVIDING AN OPPORTUNITY TO
REVIEW WHAT THE COURT IS DOING,
WE HAVE TO BONE UP ON WHAT
HAPPENS SINCE THE LAST
NOMINATION PROCEEDING, AND I
THINK THE RECORD IS OPEN TO
SUBSTANTIAL QUESTION.
I THINK THOSE
ANSWERED FOR THE REASONS I HAVE
GIVEN IF WE MOVED AHEAD WITH TELEVISION.
MR. PRESIDENT, IN CONCLUSION, I
ASK UNANIMOUS CONSENT THAT A
FULL COPY OF THE TEXT OF MY
STATEMENT, MY WRITTEN STATEMENT
BE INCLUDED IN THE RECORD WITH
THESE EXACT WORDS SO PEOPLE WILL
UNDERSTAND THAT WHAT I HAVE SAID
UP UNTIL NOW IS REPEATED TO SOME
EXTENT IN THE NORMAL WRITTEN STATEMENT.
THE PRESIDING OFFICER: WITHOUT
OBJECTION.
MR. SPECTER: AND I ASK CONSENT
AT TWO LETTERS WHICH I WROTE
TO CHIEF JUSTICE ROBERTS IN
ANTICIPATION OF HIS NOMINATING
PROCEEDING, THREE LETTERS I
WROTE TO JUSTICE ALITO, TWO
LETTERS I WROTE TO JUSTICE
SOTOMAYOR AND THREE LETTERS I
WROTE TO MS. KAGAN BE INCLUDED
IN THE RECORD.
THE PRESIDING OFFICER: WITHOUT
OBJECTION.
MR. SPECTER: ALTHOUGH
CUMBERSOME, I THINK IT IS
IMPORTANT TO SEE THE CONTRAST
BETWEEN WHAT CHIEF ROBERTS
TESTIFIED TO AND WHAT HE SAID IN
HIS CONCURRING OPINION IN THE
CITIZENS UNITED CASE, THAT 28 OF
MY 30 MINUTES WERE CONSUMED ON
STARE DECIS, THAT THAT RECORD
OF THE HEARING BE INCLUDED WITH
THE CONCURRING OPINION IN THE
CITIZENS UNITED.
THE PRESIDING OFFICER: WITHOUT
OBJECTION.
MR. SPECTER: AND FINALLY, A COPY
OF AN ARTICLE WHICH I WROTE
WHICH APPEARS IN THE "USA TODAY."
THE PRESIDING OFFICER: WITHOUT
OBJECTION.
MR. SPECTER: AND I ASK CONSENT
THAT PRIVILEGES BE GIVEN TO
LINDA HOFFA, A DETAILEE IN MY
OFFICE FOR THE REMAINDER OF THE
CONGRESS.
THE PRESIDING OFFICER: WITHOUT OBJECTION.
MR. SPECTER: I THANK THE CHAIR
AND I THANK MY DISTINGUISHED
COLLEAGUE FROM FLORIDA.
. LeMIEUX: MR. PRESIDENT? THE PRESIDING OFFICER: THE
SENATOR FROM FLORIDA.
MR. LeMIEUX: ALWAYS GOOD TO
FOLLOW MY DISTINGUISHED
COLLEAGUE FROM PENNSYLVANIA AND
HEAR HIS COMMENTS.
HERE TO TALK ABOUT THE BILL THAT
THE SENATE JUST VOTED ON AND
PASSED, THE FINANCIAL REGULATION
OVERHAUL BILL.
IT IS, MR. PRESIDENT, IN MY MIND
A MISSED OPPORTUNITY.
WE HAD THE OPPORTUNITY TO TRULY
ADDRESS THE CAUSES OF THE
FINANCIAL MELOWN AND PUT INTO
PLACE MEASURES THAT WOULD STOP
THE MELTDOWN FROM HAPPENING THE
NEXT TIME, BUT UNFORTUNATELY, AS
I HAVE SEEN HERE IN ABOUT A
YEAR'S TIME THAT I HAVE HAD THE
PRIVILEGE TO SERVE IN THE UNITED
STATES SENATE, IT SEEMS THAT
IT'S THE PREDILECTION OF THIS
CONGRESS TO TAKE A CRISIS AND
THEN COME FORWARD, NOT WITH A
NARROWLY FOCUSED AND TAILORED
SOLUTION, BUT INSTEAD A
LARGE-RANGING COMPREHENSIVE BILL
THAT CREATES MORE GOVERNMENT,
THAT CREATES MORE BUREAUCRACY,
THAT PUTS MORE DEBT O OUR
SYSTEM OF GOVERNMENT AND STILL
FAILS TO ADDRESS THE VERY
PROBLEMS THA WE SHOULD BE
TRYING TO FOCUS UPON.
WE WERE SUPPOSED TO REIN IN THE
WILD AND RISKY SPECULATIVE TOOLS
AND EMPOWER OUR REGULATORS TO
PREVENT ANOTHER CRISIS, BUT WE
DID NOT, AND I HEARD SENATOR
DODD, WHO I HAVE ENORMOUS
RESPECT FOR AND I THINK THAT HE
PUT A TREMENDOUS AMOUNT OF TIME
INTO THIS BILL, BUT I HEARD HIM
ON THE FLOOR THE OTHER DAY AND
GIVING HIS SORT OF SUMMATION AS
TO WHY THIS BILL SHOULD BE
PASSED, SAY THAT THIS WILL NOT
STOP ANY FUTURE RECESSIONS, AND HE'S RIGHT.
HE'S RIGHT BECAUSE WE DIDN'T DO
WHAT WE NEEDED TO DO IN ORDER TO
TRULY FIX THE PROBLEMS THAT
HAPPENED
ERA WHEN WE HAD THIS TREMENDOUS
FINANCIAL MELTDOWN, THIS
MELTDOWN WHICH HAS DEPLETED
TRILLIONS OF DOLLARS OF NET
WORTH OF AMERICANS, THIS
MELTDOWN THAT HAS LED TO ONE OF
THE GREATEST -- IF NOT GREATEST
RECESSION SINCE THE GREAT DEPRESSION.
IN MY HOME STATE OF FLORIDA,
PEOPLE ARE SUFFERING MIGHTILY.
WE HAVE NEARLY 12% UNEMPLOYMEN
WE
DEPENDING UPON THE MONTH, IN
MORTGAGE FORECLOSURES, AND OUR
PEOPLE ARE BEHIND ON THEIR
MORTGAGE PAYMENTS MORE THAN ANY
OTHER STATE IN THE UNION.
WE ARE A STATE THAT HAS BEEN
BASED PERHAPS TOO MUCH ON
GROWTH, SO WHEN FOLKS ARE NOT
COMING TO BUILD A NEW HOME, THE
CONTRACTOR DOESN'T HAVE A JOB.
WHEN FOLKS ARE NOT COMING TO
VISIT OUR BEACHES OR OUR TOURIST
ATTRACTIONS, THE RESTAURANTEUR,
THE HOTELLIER, THEY LOSE THEIR
WORK.
SO THINGS ARE VERY DIFFICULT IN
FLORIDA, AND THIS FINANCIAL
CRIS STEMMED IN PART BECAUSE
OF SOME OF THE PROBLEMS THAT WE
SAW IN LENDING, IN REAL ESTATE,
AND THERE WAS NO PLACE THAT WAS
ANY WORSE THAN WHAT HAPPENED IN
FLORIDA, AND WHAT THIS BILL
FAILS TO ADDRESS, THE
UNDERWRITING STANDARDS THAT
SHOULD HAVE BEEN IN PLACE TO
STOP THESE SO-CALLED NINJA
LOANS.
NO INCOME, NO JOB.
THEY CALLED THEM NINJA LOANS.
ANYBODYOULD GET ONE, AND
PEOPLE WERE PUT INTO HOMES THEY
COULD NOT AFFORD.
WHY DID THAT HAPPEN?
BECAUSE THERE WAS NO
UNDERWRITING STANDARDS, THERE
WAS NO SKIN IN THE GAME FOR
THOSE GETTING MORTGAGE, THERE
WAS NO SKIN IN THE GAME FOR THE
MORTGAGE BROKER WHO WAS ABLE TO
SELL OFF THIS MORTGAGE TO WALL
STREET.
WHERE THERE WAS THIS VAST AND
GREAT DEMAND TO BUNDLE THESE
PRODUCTS INTO MORTGAGE-BACKED
SECURITIES, AND FOR THE FIRST
TIME EVER TIE OUR REAL ESTATE
MARKET, OUR HOMES, OUR MOST
IMPORTANT INVESTMENTS WITH THE
FINANCIAL
AS SOON AS THAT WAS DONE, THE
SPECULATION AND THE SPECULATORS
RAN WILD, AND THIS BILL DOESN'T
DO ENOUGH TO PREVENT THAT IN THE
FUTURE, TO PROVIDE THE REAL SKIN
IN THE GAME THAT SHOULD BE
NEEDED TO TRADE THOSE
MORTGAGE-BACKED SECURITIES.
WE FAILED TO ADDRESS THOSE TWO
FACTORS.
PERHAPS EVEN WORSE, WE FAILED TO
ADDRESS FANNIE AND FREDDIE, THE
GOVERNMENT-SPONSORED ENTITIES
THAT STOOD AS SILENT GUARANTEORS
TO ALL THESE -- GUARANTORS TO
ALL THESE MORTGAGES, TO LET THEM
HAVE THE FAITH AND CONFIDENCE
THAT THE GOVERNMENT WAS THE
BACKSTOP TO THESE MORTGAGES THAT
SHOULD NEVER HAVE BEEN LET.
THIS BILL FAILS TO ADDRESS IT.
TWO OF THE LEADING CAUSES OF THE
FINANCIAL DEBACLE FAILED TO
ADDRESS.
FINALLY, A POINT THAT WE NEEDED
TO ADDRESS AND WE DID, AND MY
COLLEAGUE AND FRIEND WHO
PRESIDES OVER THE SENATE THIS
AFTERNOON WAS A PERSON WHO WAS A
LEADING PROPONENT ON TRYING TO
DO SOMETHING ABOUT THE RATING
AGENCIES, AND WE DID DO
SOMETHING AND I WAS PLEASED TO
WORK WITH SENATOR CANTWELL AND I
WAS APPRECIATIVE OF THE EFFORTS
OF SENATOR FRANKEN TO TRY TO DO
SOMETHING ABOUT THESE RATING
AGENCIES, AND WE DID, AND THAT
IS ONE GOOD THING ABOUT THIS BILL.
THEY ARE WRITTEN OUT OF LAW.
THESE RATING AGENCIES COMPOUNDED
THE PROBLEM BECAUSE WHEN THESE
MORTGAGES PACKED TOGETHER,
MORTGAGES THAT WEREN'T ANY GOOD,
THAT WEREN'T GOING TO GET PAID,
THAT THEN GOT TURNED INTO A
TRADING VEHICLE, WENT UP TO WALL
STREET, THESE RATING AGENCIES
WHO ARE PAID FOR BY THE
VESTMENT BANKS, STAMPED THEM
WITH AAA RATINGS, GAVE THEM THE
GOOD HOUSEKEEPING SEAL OF
APPROVAL AND LET THE WORLD
BELIEVE THAT THEY REALLY WERE
SOUPED INVESTMENTS.
THEY FAILED.
AND LO AND BEHOLD, WE FIND OUT
THAT THE GOVERNMENT HAS GIVEN A
SANCTION IN LAW TO THESE RATING
ENCIES TO BE THE DETERMINERS
OF CREDITWORTHINESS, A MONOPOLY,
IF YOU WILL.
ONE GOOD THING THAT THIS BILL
DOES, IT STRIPS THAT OUT.
NO LONGER WILL THEY BE GIVEN
THAT STATE-SPONSORED MONOPOLY,
NOW THE MARKETPLACE WILL HAVE TO
WORK, NOW WE WON'T BE SO RELYING
UPON PEOPLE WHO ARE PAID FOR BY
THE INVESTMENT BANKS WHO DIDN'T
DO THEIR HOMEWORK AND IN PART
CAUSED THIS CRISIS.
IF WE WOULD HAVE TACKLED THE
G.S.E.'S, FANE AND FREDDIE,
AND IF WE WOULD HAVE TACKLED
UNDERWRITING STANDARDS, I WOULD
BE HERE GIVING A SPEECH TODAY
TALKING ABOUT WHY I VOTED FOR
THEILL.
BUT WE ONLY DID ONE OF THE FOUR THINGS.
AND UNFORTUNATELY, NOW WE HAVE A
BILL THAT WALL STREET LOVES,
CITIGROUP LOVE IT, GOLDMAN
SACHS LOVES IT, BUT MAIN STREET
IS VERY CONCERNED ABOUT IT.
WE'RE GOING TO MAKE SURE THAT
ORTHODONTISTS ARE REGULATED
BECAUSE THEY EVERY ONCE IN A
WHILE EXTEND CREDIT TO THEIR
PATIENTS, BUT THE FOLKS ON WALL
STREET THAT REALLY CAUSED THESE
PROBLEMS AND THE UNDERLYING
CAUSE OF THE DEBACLE, THE
MORTGAGE PROBLEM, THE
UNDERWRITING PROBLEM AND THE
FANNIE AND FREDDIE PROBLEM
DOESN'T GET ADDRESSED.
ACCORDING TO A STUDY BY THE U.S.
CHAMBER OF COMMERCE, THIS BILL
WILL CREATE A HUGE NEW
GOVERNMENTAL BUREAUCRACY.
70 NEW FEDERAL REGULATIONS FOR
THE BUREAU OF
PROTECTI.
54 NEW FEDERAL REGULATIONS
THROUGH THE U. COMMODITIES
FUTURES
11 NEW FEDERAL REGULATIONS
THROUGH THE FEDERAL DEPOSIT
INSURANCE CORP, 30 THROUGH THE
FEDERAL RESERVE.
205 THROUGH THE S.E.C.
WELL, YOU SAY WELL, THAT SOUNDS
GOOD, WE NEED MORE REGULATIONS,
RIGHT, THERE WAS A PROBLEM.
BUT IF THE REGULATIONS DON'T GO
AFTER THE PROBLEM THAT CAUSED
THE DEBACLE, WHAT DO THE
REGULATIONS DO?
WE'RE IN A SITUATION RIGHT NOW
WHERE BUSINESS IN THIS COUNTRY
IS FROZEN.
IT IS FROZEN SOLID BECAUSE OF
THE ACTIONS OF THIS CONGRESS AND
THIS ADMINISTRATION WHO ARE
DOING SO MUCH TO THIS ECONOMY
THAT BIG BUSINESS AND SMALL
BUSINESS ALIKE DOES NOT FEEL
THAT THEY CAN HIRE NEW WORKERS.
THERE IS SO MUCH UNCERTAINTY IN
THE MARKETPLACE.
AND I HEAR THIS, MR. PRESIDENT,
FROM SMALL BUSINESS PEOPLE IN
FLORIDA WHERE WE HAVE
1.9 MILLION SMALL BUSINESSES TO WORK FORCE CENTERS WHO ARE
TRYING TO GET PEOPLE BACK TO
WORK, TO INCUBATORS WHO ARE
TRYING TO GROW NEW JOBS TO
PRESIDENTS OF CHAMBERS OF
COMMERCE AND OTHER FOLKS THAT I
TALK TO REGULARLY, THEY TELL ME
BUSINESS IS FROZEN.
WASHINGTON IS DOING SO MUCH TO
THE ECONOMY, THEY DON'T KNOW
WHERE TO TURN NEXT.
AND BECAUSE THEY DON'T KNOW WHAT
THE FUTURE LOOKS LIKE AND
BECAUSE THIS GOVERNMENT IS
PULLING THESE HUGE LEVERS ON THE
ECONOMY, THEY FEEL LIKE THEY
CAN'T MAKE ANY MOVES.
BUSINESSES IN FLORIDA, SMALL
BUSINESSES ARE TELLING ME
THEY'RE NOT GOING TO HIRE NEW
PEOPLE BECAUSE THEY CAN'T AFFORD
THE NEW REGULATION.
IN FACT, SOME OF THESE
BUSINESSES ARE NOT ONLY GOING TO
NOT HIRE NEW PEOPLE, THEY ARE
GOING TO LET NEW PEOPLE GO.
THIS FINANCIAL REFORM BILL,
BUSINESS PEOPLE HAVE TOLD ME IN
FLORIDA, THAT ITS TRADING DESK
IS GOING TO THE BAHAMAS.
THOSE FOLKS ARE NOW GOING TO
MOVE AND NO LONGER ADD TO OUR
TAX BASE AND THE WEALTH AND
DIVERSITY OF OUR COMMUNITY
BECAUSE THIS REGULATION'S GOING
TO PUT THEM IF A SITUATION WHERE
BUSINESS SAYS IT'S MORE
BENEFICIAL TO MOVE THEM OUT OF
THE STATE, OUT OF THE COUNTRY.
THERE IS ALWAYS UNINTENDED CONSEQUENCES.
AND WHEN WE PULL THESE HUGE
LEVERS ON THE ECONOMY, WE CREATE
TREMENDOUS UNCERTAINTY.
AND BUSINESS DOES WHAT BUSINESS
NEEDS TO DO TO KEEP ITS PEOPLE
WORKING AND TO MAKE PROFITS.
THAT'S WHAT BUSINESS IS FOCUSED ON.
THOSE ARE THE JOBS THAT ALLOW
ALL OF US TO WORK, TO PROVIDE
FOR OUR FAMILIES.
AND RHT NOW THOSE JOBS ARE
UNDER SIEGE.
IN A STATE LIKE MINE,
MR. PRESIDENT, WHERE WE HAVE
NEARLY 12% UNEMPLOYMENT, WHERE
TIMES ARE ESPECIALLY DIFFICULT,
THE LAST THING WE NEED IN THE
WORLD IS FOR THE FEDERAL GOVERNMENT TO BE MONKEYING WITH
THE ECONOMY TO THE EXTENT THAT
BUSINESSES CAN'T FEEL LIKE THEY
CAN HIRE NEW WORKERS.
THIS FINANCIAL REGULATORY REFORM
BILL DOES MORE OF WHAT THE
HEALTH CARE BILL DID AND IT
SEEMS TO BE THE PENCHANTF THIS CONGRESS.
WE SHOULD BE FOCUSED ON JOBS,
MR. PRESIDENT.
WE SHOULD BE HERE DAY AND NIGHT
TRYING TO FIND WAYS TO MAKE SURE
THAT BUSINESS HAS THE INCENTIVES
IT CAN TO CREATE NEW JOBS AND
RETAIN JOBS.
BECAUSE WE NEED TO GET PEOPLE
BACK TO WORK.
SO THIS FINANCIAL REGULATORY
REFORM BILL WAS SOMETHING THAT
WE SHOULD HAVE HAD 80 OR 90
VOTES ON.
IT SHOULD HAVE BEEN NARROWLY
FOCUSED AND TAILORED ON THE
PROBLEMS THAT CAUSED THE
FINANCIAL DEBACLE OF 2008 THAT
WE STILL SUFFERED THROUGH.
AND THIS CHAMBER NEEDS TO GET IN
THE BUSINESS OF FOCUSING ON WHAT
SHOULD BE DONE TO ADDRESS T
PROBLEM AND NOT USING EVERY
CRISIS AS AN EXCUSE TO GROW
GOVERNMENT.
THIS NEW CONSUMER AGENCY THAT WE
JUST CREATED WHICH WILL COST US
BILLIONS OF DOLLARS WHICH WILL
EMPOWER A NEW FEDERAL GOVERNMENT
EXECUTIVE WHO REPORTS TO NO
BOARD, TO BE ABLE TO MAKE BROAD
AND WIDE-RANGING POLICY
DECISIONS ACROSS THIS COUNTRY
AND IN THE BOARDROOMS OF
BUSINESSES OF AMERICA'S
COMPANIES.
THAT'S HOW WASHINGTON SOLVES THE
PROBLEM THESE DAYS.
WE DON'T FIX THE S.E.C., WHO'S
THE AGENCY THAT'S SUPPOSED TO BE
DOING THE JOB
WE DON'T GO IN AND FIRE ALL THE
PEOPLE AT THE SECURITIES AND
EXCHANGE COMMISSION WHO SHOULD
HAVE BEEN ON TOP OF THIS.
WE CREATE A WHOLE NEW
GOVERNMENTAL LEVEL OF
BUREAUCRACY.
WE LAYER GOVERNMENTAL AGENCY ON
TOP OF GOVERNMENTAL AGENCY,
CREATE MORE POWER, CREATE BIGGER
GOVERNMENT, SPEND MORE OF YOUR
MONEY AND RUN THIS COUNTRY INTO FURTHER DEBT.
WE NEED A CHANGE, MR. PRESIDENT --
MADAM PRESIDENT.
WE NEED TO DO THINGS DIFFERENTLY.
I WISH I COULD HAVE VOTED FOR
THIS BILL.
I WISH IT WOULD HAVE FOCUSED ON
THE ISSUES THAT WE NEEDED TO,
BUT, UNFORTUNATELY, I CAN'T
BECAUSE IT DOES MORE HARM THAN
GOOD.
I'M APPRECIATIVE TO MY
COLLEAGUES FOR SUPPORTING THE
AMENDMENT I DID WITH SENATOR
CANTWELL ON THE RATING AGENCIES,
BUT REALLY ONLY IN THAT REGARD
AND IN A FEW OTHER REGARDS DID
WE DO SOMETHING THAT ACTUALLY HELPED.
MOST OF WHAT WE DID DIDN'T
ADDRESS THE PROBLEM AND IT
CAUSED MORE HARM THAN GOOD.
WITH THAT, MADAM PRESIDENT, I
YIELD THE FLOOR TO MY COLLEAGUE
FROM KENTUCKY.
MR. BUNNING: MADAM PRESIDENT? THE PRESIDING OFFICER: THE
SENATOR FROM KENTUCKY.
MR. BUNNING: MADAM PRESIDENT, I
HAVE COME TO THE FLOOR TO TALK
ABOUT THE CONFERENCE REPORT ON
THE FINANCIAL REGULATION BILL
THAT THE SENATE HAS JUST PASSED.
I THINK IT WAS A HUGE MISTAKE.
I VOTED AGAINST THE BILL AND NOW
I WANT TO TAKE SOME TIME TO
EXPLAIN WHY.
THE SHORT EXPLANATION IS THE
BILL DOES NOT ADDRESS THE CAUSES
OF THE FINANCIAL CRISIS AND
INSTEAD IT SEWS THE SEED OF THE
NE FINANCIAL CRISIS.
ADDING UNNECESSARY STRAINS ON
OUR ALREADY STRUGGLING ECONOMY.
I'M GOING TO SPEND THE NEXT
LITTLE WHILE GIVING THE LONGER
EXPLANATION.
AS I HAVE SAID MANY TIMES ON THE
BANKING COMMITTEE AND ON THE
FLOOR OF THE SENATE, I WANT TO
PASS A STRONG FINANCIAL REFORM
BILL THAT REINS IN THE EXCESSES
OF OUR LARGE FINANCIAL COMPANIES
AND THE FEDERAL RESERVE.
NO ONE HAS BEEN A STRONGER VOICE
AGAINST THE FINANCIAL INDUSTRY
ENABLERS AT THE FED THAN I HAVE.
AND I HAVE FOUGHT EVERY BAILOUT
BROUGHT THROUGH THE CONGRESS AS
WELL AS THE BAILOUTS THAT THE
FEDERAL RESERVE THAT BOTH THE
BUSH AND THE OBAMA
ADMINISTRATION PUT IN PLACE
WITHOUT THE APPROVAL OF
CONGRESS.
I VERY MUCH WANTED TO PASS A
BILL THAT ENDS BAILOUTS AND
REINS IN THE RECKLESS ACTIVITIES
OF OUR FINANCIAL SYSTEM.
UNFORTUNATELY, JUST LIKE THE
BILL PASSED BY THE SENATE
EARLIER THIS YEAR, THE
CONFERENCE REPORT BEFORE THE
SENATE TODAY DID NOT END
BAILOUTS.
IN FACT, IT DOES JUST THE
OPPOSITE: IT MAKES THEM
PERMANENT.
MR. BUNNING: THIS BILL WILLLSO
LEAD TO FUTURE FINANCIAL
DISASTERS BECAUSE IT IGNORES THE
ROOT CAUSES OF THE CRISIS, FAILS
TO PUT THE NECESSARY HANDCUFFS
ON THE KEY PARTS OF THE
FINANCIAL SYSTEM AND WILL RESULT
IN EVEN GREATER CONCENTRATION OF
THE FINANCIAL SYSTEM AND A VERY
FEW LARGE FIRMS.
THE LARGEST SINGLE CONTRIBUTING
FACTOR IN THE CURRENT FINANCIAL
CRISIS AND MOST OTHER FINANCIAL
CRISIS IN THE PAST IS FLAWED
FEDERAL RESERVE MONETARY POLICY.
STARTING IN THE LATE 1990'S,
FORMER FED CHAIRMAN ALAN
GREENSPAN USED EASY MONEY TO POP
UP THE FINANCIAL FIRMS,
MANIPULATE THE STOCK MARKET AND
MICROMANAGE THE ECONOMY.
THAT EASY MONEY INFLATED THE
TECH STOCKS AND THE DOT-COM
BUBBLE.
AFTER THAT BUBBLE BURST AND ALSO
FOLLOWING THE SEPTEMBER THE
11th TERRORIST ATTACKS, HE
AGAIN LOOSENED MONETARY POLICY
WHICH BEGAN TO INFLATE THE
LARGEST ASSET BUBBLE IN HISTORY.
WHILE THE BUBBLE WAS THE MOST
VISIBLE IN HOUSING, IT REALLY
WAS A DEBT BUBBLE THAT SPREAD
ACROSS ALL HOUSEHOLD, CORPORATE
AND GOVERNMENT BORROWING.
IN ABOUT 200, THE HOUSING
BUBBLE STARTED TO BECOME
UNSTABLE, BUT LENDING STANDARDS
WERE RELAXED AND THE RISE OF
SUBPRIME AND OTHER
NONTRADITIONAL MORTGAGE ENABLED
THE BUBBLE TO KEEP GROWING FOR
ANOTHER COUPLE OF YEARS.
EVENTUALLY THE HOUSING BUBBLE
BECAME UNSUSTAINABLE AND POPPED.
THE CORPORATE DEBT BUBBLE
LARGELY DID THE SAME AND WE ARE
NOW SEEING GOVERNMENT DEBT
BECOME UNSUSTAINABLE AROUND THE
WORLD, INCLUDING HERE IN THE
UNITED STATES OF AMERICA.
DESPITE THE FED'S HISTORY OF
CAUSING FINANCIAL CRISIS AND ITS
CLEAR ROLE IN THE CURRENT
CRISIS, THIS BILL DOES NOTHING
TO REIN IN THE FED.
CHAIRMAN DODD'S ORIGINAL DRAFT
BILL PRESENTED TO THE BANKING
COMMITTEE LAST YEAR TOOK SOME
POSITIVE STEPS TO GET THE FED
BACK ON TRACK BY REMOVING THE
FED AS A REGULATOR.
BUT, UNFORTUNATELY, THAT DID NOT
MAKE IT INTO THE FINAL BIL.
NOTHING IN THIS BILL WILL STOP
THE NEXT BUBBLE OR COLLAPSE IF
THE FED CONTINUES WITH ITS EASY
MONEY POLICIES.
CHEAP MONEY WILL ALWAYS DISTORT
PRICES AND LEAD TO DANGEROUS
BEHAVIOR NO MATTER -- NO AMOUNT
OF REGULION CAN CONTAIN IT.
IN ADDITION TO ITS FLAWED
MONETARY POLICY, THE FEDERAL
RESERVE HAS FAILED AS A
REGULATOR LEADING UP TO THE CRISIS.
THE FED WAS RESPONSIBLE FOR
REGULATING MOST OF THE LARGE
FINANCIAL HOLDING COMPANIES, BUT
INSTEAD OF REGULATING THEM, IT
WAS A CHEERLEADER FOR THEM.
THE FED, ALONG WITH OTHER
REGULATORS, ALLOWED THOSE FIRMS
TO GROW EVEN LARGER AND TAKE
UNWISE RISK.
AND IN WHAT MAY BE THE FED'S
GREATEST REGULATORY FAILURE,
CHAIRMAN GREENSPAN REFUSED TO DO
THE JOB CONGRESS GAVE HIM AND
THE FED IN 1994 -- 1994 -- THE
JOB TO REGULATE MORTGAGES.
INSTEAD OF TAKING ACTION THAT
COULD HAVE PREVENTED AT LEAST
PART OF THE HOUSING BUBBLE
INFLATED BY SUBPRIME AND
NONTRADITIONAL MORTGAGES,
CHAIRMAN GREENSPAN ENCOURAGED
HOME BUYERS TO GET THOSE KIND OF
MORTGAGES.
HE AND CHAIRMAN BERNANKE, ANG
WITH MANY OTHERS AT THE FED,
SANG THE PRAISES OF THOSE
MORTGAGES AS FINANCIAL
INNOVATION THAT REDUCED RISK.
HOW WELL DID THE FED APPROACH TO
REGULATION WORK, I ASK YOU?
WELL, IN 2008, MOST, IF NOT ALL,
OF THE LARGEST FIRMS REGULATED
BY THE FED WOULD HAVE FAILED HAD
THEY NOT BEEN BAILED OUT THROUGH
TARP OR BY THE FED ON ITS OWN.
THAT SEEMS LIKE A PRETTY
OPEN-AND-SHUT CASE FOR ME FOR
REMOVING ALL REGULATORY
RESPONSIBILITY FROM THE FED AND
GIVING IT TO SOMEONE WHO WILL
USE IT.
BUT THAT IS NOT WHAT THIS BILL
DOES.
INSTEAD OF REAL REGULATORY
REFORM, THE BILL CONCENTRATES
REGULATION OF THE LARGEST
FINANCIAL FIRMS AT THE FEDERAL
RESERVE DESPITE THE FED'S LONG
HISTORY OF FAILED REGULATION.
AS I MENTIONED EARLIER, THE
ORIGINAL DRAFT OF THIS BILL
REMOVED BANK AND CONSUMER
PROTECTION REGULATIONS FROM THE
FED AND ALL THE OTHER REGULATORS
AND CREATED A SINGLE NEW BANKING
REGULATOR.
THAT IS A BETTER APPROACH BUT IT
WAS DROPPED BEFORE THE BILL EVER
GOT OUT OF THE BANK
COMMITTEE, AND NOW THE FED GETS
MORE POWER FOR BOTH JOBS.
EXCEPT FOR POSSIBLY CHAIRMAN
DODD, NO ONE HAS CRITICIZED THE
FED MORE THAN ME FOR ITS FAILURE
TO USE ITS CONSUMER PROTECTION
POWERS TO REGULATE MORTGAGES.
CHAIRMAN GREENSPAN DID NOTHING
FOR 12 YEARS AFTER CONGRESS GAVE
HIM THE POWER, AND CHAIRMAN
BERNANKE TOOK ANOTHER TWO YEARS
TO ACT AFTER HE REPLACED
CHAIRMAN GREENSPAN.
CLEARLY THE FED DID NOT TAKE
CONSUMER PROTECTION SERIOUSLY
AND IT DESERVES TO LOSE THAT
JOB.
I SUPPORT STRENGTHENING CONSUMER
PROTECTION IN THE FINANCIAL
SYSTEM BUT JUST CANNOT
UNDERSTAND KEEPING THAT JOB
INSIDE THE SAME FED THAT IGNORED
IT FOR DECADES.
NEXT TO REINING IN THE FED, THE
MOST IMPORTANT GOAL OF THIS BILL
SHOULD BE TO END BAILOUTS AND
THE IDEA OF TOO BIG TO FAIL.
INSTEAD, THE BILL MAKES TOO BIG
TO FAIL A PERMANENT FEATURE OF
OUR FINANCIAL SYSTEM AND WILL
INCREASE THE SIZE OF THE LARGEST
FINANCIAL FIRMS.
AS I SAID EARLIER, THE BILL
CONCENTRATES REGULATION OF THE
LARGEST FINANCIAL INSTITUTIONS
AT THE FEDERAL RESERVE.
THE FED FAILED AS A REGULATOR
LEADING UP TO THE CRISIS AND
SHOULD NOT BE THE REGULATORY --
REGULATOR OF ANY BANKS.
BUT NOW FED REGULATION WILL BE A
SIGN THAT A FIRM IS TOO BIG TO
FAIL.
AND ON TOP OF THE NEW FED SEAL
OF APPROVAL FOR THE LARGEST
BANKS, THIS BILL CREATES A NEW
STABILITY COUNCIL THAT WILL
DESIGNATE OTHER NON-BANK FIRMS
FOR FEDERAL REGULATION AND,
THUS, TOO BIG TO FAIL.
FED REGULATIONS OF THE LARGEST
BANKS IS NOT ONLY THE WAY THIS
BILL MAKES TOO BIG TO FAIL AND
BAILOUTS PERMANENT.
THE LARGEST BANK HOLDING
COMPANIES AND OTHER FINANCIAL
FIRMS WILL NOW BE SUBJECT TO A
NEW RESOLUTION PROCESS.
ANY RESOLUTION PROCESS IS, BY
DEFINITION, A BAILOUT BECAUSE
THE WHOLE POINT IS TO ALLOW SOME
CREDITORS TO GET PAID MORE THAN
THEY WOULD IN A BANKRUPTCY
COURT.
AND THE REGULATOR WILL HAVE THE
ABILITY TO PICK WINNERS AND
LOSERS BY PAYING SOME CREDITORS
OFF ON BETTER TERMS THAN OTHER
CREDITORS.
EVEN IF THE FINANCIAL COMPA IS
CLOSED DOWN AT THE END OF THE
PROCESS, THE FACT THAT THE
CREDITORS ARE PROTECTED AGAINST
THE LOSSES THAT THEY WOULD
NORMALLY TAKE WILL ENCOURAGE
MORE RISKY BEHAVIOR.
THAT WILL LEAD TO MORE BEAR
STEARNS, LEHMAN BROTHERS, AND
A.I.G.'S.
NOT LESS.
THE RESOLUTION PROCESS IS NOT
THE ONLY WAY THIS BILL KEEPS
BAILOUTS ALIVE.
THE BILL DOES NOT SHUT OFF THE
FEDERAL RESERVE BAILOUT POWER.
WHILE SOME LIMITS ARE PLACED ON
THE FED, THE BILL STILL LETS IT
CREATE BAILOUT PROGRAMS TO BUY
UP ASSETS AND PUMP MONEY INTO
STRUGGLING FIRMS THROUGH
BROAD-BASED PROGRAMS.
THAT WILL PUT TAXPAYERS DIRECTLY
AT RISK AND MAKE FED BAILOUTS A
PERMANENT PART OF THE FINANCIAL
SYSTEM.
INSTEAD OF PUTTING ALL THESE
BAILOUT PARTS INTO LAW, WE
SHOULD BE PUTTING FAILED
COMPANIES INTO BANKRUPTCY.
BANKRUPTCY PROVIDES CERTAINTY
AND FAIRNESS AND PROTECTS THE
TAXPAYERS.
UNDER BANKRUPTCY, SIMILAR
CREDITORS ARE TREATED THE SAME,
WHICH PREVENTS THE GOVERNMENT
FROM PICKING WINNERS AND LOSERS
IN BAILOUTS.
SHAREHOLDERS AND CREDITORS ALSO
KNOW UP FRONT WHAT LOSSES THEY
ARE FACING AND WILL EXERCISE
CAUTION WHEN DEALING WITH
FINANCIAL COMPANIES.
SOME OF US TRIED TO REPLACE THE
BAILOUT PROVISIONS WITH A
REVISED BANKRUPTCY SECTION FOR
FINANCIAL COMPANIES, BUT,
UNFORTUNATELY, WE WERE NOT
SUCCESSFUL.
SINCE THE BILL DOES NOT TAKE
AWAY ANY GOVERNMENT PROTECTION
FOR FINANCIAL COMPANIES AND
SENDS THOSE THAT FAIL THROUGH
BANKRUPTCY, IT SHOULD AT LEAST
MAKE THEM SMALL ENOUGH TO FAIL.
DECADES OF COMBINATIONS HAVE
ALLOWED A HANDFUL OF BANKS TO
DOMINATE THE FINANCIAL
LANDSCAPE.
THE FOUR LARGEST FINANCIAL
COMPANIES HAVE ASSETS TOTALING
OVER 50%F OUR ANNUAL GROSS
DOMESTIC PRODUCT AND THE SIX
LARGEST COMPANIES HAVE ASSETS OF
MORE THAN 60% OF OUR GROSS
DOMESTIC PRODUCT.
THE FOUR LARGEST BANKS CONTROL
APPROXIMATELY ONE-THIRD -- NOW
GET -- GET THIS, NOW.
THE FOUR LARGEST BANKS CONTROL
APPROXIMATELY ONE-THIRD OF ALL
DEPOSITS I THE UNITED STATES OF
AMERICA.
THIS CONCENTRATION HAS COME
ABOUT BECAUSE CREDITORS WOULD
RATHER DEAL WITH FIRMS SEEING
TOO BIG TO FAIL KNOWING THAT THE
GOVERNMENT WILL PROTECT THEM
FROM LOSSES.
I WOULD RATHER TAKE AWAY THE
TAXPAYER PROTECTION FOR
CREDITORS OF LARGE FIRMS AND LET
THE MARKET DETERMINE THEIR SIZE.
BUT IF THAT IS INTO THE GOING TO
HAPPEN -- BUT IF THAT IS NOT
GOING TO HAPPEN, WE SHOULD PLACE
HARD LIMITS ON THE SIZE OF
FINANCIAL COMPANIES AND LIMIT
THE ACTIVITIES OF BANKS WITH
INSURED DEPOSITS.
ANY FINANCIAL COMPANY THAT ARE
OVER THOSE SIZE LIMITS MUST BE
FORCED TO SHRINK.
THIS WILL LEAD TO A MORE
COMPETITIVE BANKING SECTOR,
REDUCE THE INFLUENCE OF THE
LARGEST FIRMS, AND PREVENT A
HANDFUL OF THEM FROM HOLDING OUR
ECONOMY AND GOVERNMENT HOSTAGE
EVER AGAIN.
LIKE MOST OF THE OTHER REAL
RERM IDEAS THAT WERE PROPOSED
WHILE PREVIOUS VERSIONS OF THIS
BILL WERE IN THE BANKING
COMMITTEE OR ON THE SENATE
FLOOR, MEANINGFUL LIMITS ON THE
SIZE OF BANKS WERE ALSO LEFT
OUT.
ALONG WITH NOT SOLVING TOO BIG
TOAIL, THIS BILL DOES NOT
ADDRESS THE HOUSING FINANCE
PROBLEMS THAT WERE AT THE CENTER
OF THIS CRISIS AND ARE STILL
WITH US TODAY.
FIRST, THERE IS NOTHING IN THIS
BILL THAT WILL STOP UNSAFE
MORTGAGES UNDERWRITING PRACTICES
SUCH AS ZERO DOWN PAYMENT AND
INTEREST-ONLY MORTGAGES.
THERE'S A LOT OF TALK OF MAKING
FINANCIAL COMPANIES HAVE SKIN IN
THE GAME, BUT WHEN IT COMES TO
MORTGAGES, THE SKIN IN THE GAME
THAT MATTERS IS THE BORROWER'S.
SECOND, THE BILL IGNORES THE
ROLE OF GOVERNMENT HOUSING
POLICY AND FANNIE MAE AND
FREDDIE MAC, WHICH HAVE RECEIVED
MORE BAILOUT MONEY THAN ANYONE
ELSE.
THE BILL DOES NOT PUT AN END TO
THE GOVERNMENT-SPONSORED
ENTERPRISES.
TAXPAYER GUARANTEES AND
SUBSIDIES, OR STOP THE TAXPARS
FROM HAVING TO FOOT THE BILL FOR
THEIR IRRESPONSIBLE ACTIONS OVER
THE PAST DECADES.
OVER 96% -- 96% -- OF ALL
MORTGAGES WRITTEN IN THE FIRST
QUARTER THIS YEAR WERE BKED BY
SOME TYPE OF GOVERNMENT
GUARANTEE.
UNTIL WE RESOLVE THE FUTURE OF
THESE ENTITIES, THE PRIVATE
MORTGAGE MARKET WILL NOT RETURN,
AND THE RISK TO THE TAXPAYERS
WILL CONTINUE TO INCREASE.
AS I MENTIONED AT THE BEGINNING
OF MY STATEMENT, THIS BILL IS
GOING TO HAVE REAL CONSEQUENCES
FOR THE ECONOMY AT A TIME WHEN
THE RECOVERY IS LOOKING MORE
LIKE A SECOND DIP OF A
RECESSION.
COMBINED WITH THE TAX INCREASES
THAT WILLAKE EFFECT AT THE END
OF THIS YEAR, I AM AFRAID WE
WILL NOT SEE REAL RECOVERY UNTIL
2012 OR LATER.
ONE WAY THIS BILL IS GOING TO
AFFECT THE ECONOMY IS BY
INCREASED CONSUMER PROTECTION
REGULATION THAT WILL REDUCE THE
AVAILABILITY OF CREDIT FOR BANKS
AND OTHER FIRMS THAT HAD NOTHING
TO DO WITH THE FINANCIAL CRISIS.
ANOTHER WAY WAS HIGHLIGHTED IN A
FRONT-PAGE ARTICLE IN THE "WALL
STREET JOURNAL" YESTERDAY ON THE
IMPACT OF THE DERIVATIVE
REGULATIONS IN THE BILL ON
FARMERS.
I HAVE BEEN AS CRITIL AS
ANYONE OF THE LACK OF REGULATION
OF DRIVIVES, WHICH WAS AGAIN
LARGELY THANKS TO ARE AL.A.N.
GREENSPAN AND I THINK WE NEED --
LARGELY THANKS TO ALAN GREENSPAN
AND I ANY WE NEED MORE REGULATION.
BUT THE BILL GOES TOO FAR IN ITS
IMPACT ON THE ORDINARY END USERS
WHO ARE USING DERIVATIVES TO
HEDGE COMMODITY COSTS OR
INTEREST RATES AND CURRENT RISK.
THE WALL STREET CASINO SHUT DOWN.
BILL INTO SHOULD NOT
PREVENT RESPONSIBLE BUYING.
I HAVE MANY, MANY OTHER CONCERNS
ABOUT THIS BILL THAT I HAVE
DISCUSSED IN THE PAST ON THIS
FLOOR AND IN THE BANKING
COMMITTEE.
THE BILL RETURNED BY THE
COMMERCE COMMITTEE WILL NOT
SOLVE THE PROBLEMS IN OUR
FINANCIAL
IT IS A
WITHOUT REFORM.
I HAD HOPED WE COULD WORK
TOGETHER IN A BIPARTISAN WAY TO
COE A BILL THAT ENDS -- TO
CRAFT A BILL THAT ENDS TOO BIG
TO FAIL FOREVER.
BUT THIS IS A HIGHLY PARTISAN
BILL THAT WILL ACCOMPLISH
LITTLE.
AND ONE OF THE CHIEF, CHIEF
AUTHORS OF THE BILL, CHAIRMAN
DODD, ADMITS THAT EVEN HE DOES
NOT KNOW HOW THE BILL WILL WORK
AND WON'T UNTIL AFTER IT IS IN
PLACE.
THE VERY AUTHOR OF THE BILL HAS
SAID THAT.
IN THE END, THE BILL GIVES SO
MUCH DESCRIPTION -- DISCRETION
TO THE FEDERAL RESERVE THAT THE
BEST DESCRIPTION OF THE NEW
REGULATIONS IS THEY ARE WHAT THE
FED SAY THEY ARE.
OR TO BORROW THE TITLE OF DAVID
WESTLES'S RECENT BOOK, "IT CAN
BE DISCRETE AS IN FED WE TRUST."
WE SAW HOW WELL THAT WORKED
LAST TIME.
I CAN'T UNDERSTAND WHY ANYONE
EXPECTS IT WILL WORK BERL BETTER THIS TIME.
I THANK THE CHAIRWOMAN, AND I
MADAM CHAIRWOMAN, I SAY THAT A
REQUEST A CALL FOR A QUORUM.
THE PRESIDING OFFICER: THE
CLERK WILL CALL THE ROLL.
QUORUM CALL:
THE PRESIDING OFFICER: THE
SENATOR FROM GEORGIA.
KHAPL WHAT IS THE CURRENT STAT
--
MR. CHAMBLISS: WHAT IS THE
CURRENT STATUS OF THE SENATE?
THE PRESIDING OFFICER: THE
SENATE IS IN A QUORUM CALL.
MR. CHAMBLISS: I WOULD ASK
THAT THE QUORUM CALL BE
DISPENSED WITH.
THE PRESIDING OFFICER: WITHOUT OBJECTION.
MR. CHAMBLISS: I RISE TODAY TO
URGE MY COLLEAGUES TO JOIN ME,
AND MY COLLEAGUE FROM GEORGIA,
SENATOR ISAKSON IN HONORING THE
LIFE AND COMMITMENT OF FIRST
LIEUTENANT ROBERT COLLINS OF
TYRONE, GEORGIA.
LIEUTENANT COLLINS GREW UP IN
THE SMALL TOWN OF TYRONE IN
FAYETTE COUNTY WHERE HE ATTENDED
SANDY CREEK, GH SCHOOL, PLAYED
FOOTBALL ON FRIDAY NIGHTS WHERE
HE BECAME A STANDOUT STUDENT.
THEY WOULD TAKE HIM TO THE HALLS
OF WEST POINT WHERE HE ATTENDED
CHURCH WITH HIS FAMIL EVERY
SUNDAY MORNING.
ON THE 7th OF APRIL, 2010,
LIEUTENANT COLLINS MADE THE
ULTIMATE SACRIFICE WHEN AN
IMPROVISED KPHROE SEIVE --
SKPHROE -- EXPLOSIVE DEVICE
DETONATED ON THE STREETS IN
IRAQ.
HE WAS 24 YEARS OLD.
LIEUTENANT COLLINS GRADUATED
FROM WEST POINT IN 2008, BECAME
AN OFFICER IN B-COMPANY, 1st
BATTALION, 64th REGIMENT OF
THE ARMY UNIT BASED IN FORT
STUART, GEORGIA HE DEPLOYED TO
IRAQ IN THE AUTUMN PERIOD OF 2009.
LIEUTENANT COLLINS SERVED AS HIS
PLATOON'S COMMANDER AND WHILE IN
IRAQ HIS UNIT WAS CHARGED WITH
IMPROVING SECURITY AND THE
QUALITY OF LIFE FOR THE IRAQI PEOPLE.
HE AND HIS MEN ALSO PROVIDED
SECURITY FOR THE RECENT
SUCCESSFUL IRAQI ELECTIONS.
THEY WERE DEDICATED TO THE GOAL
OF A DEMOCRATIC IRAQ AND SOUGHT
TO HELP ITS PEOPLE LEAD NORMAL,
SAFE LIVES.
ROBERT'S FRIENDS HAVE DESCRIBED
HIM AS A MAN OF GREAT COMPASSION.
HE WAS A NATURAL LEADER WHO
TRULY FOUND A CALLING IN THE
NOR AND PATRIOTISM OF SERVICE
IN THE UNITED STATES ARMY.
HE'S BEEN DESCRIBED BY HIS
SUPERIORS AS A YOUNG MAN WHO
PERFORMED HIS DUTIES
COURAGEOUSLY WITHOUT HESITATION
AND WITHOUT RESERVATIONS.
BECAUSE, AFTER ALL, HE WAS A
SOLDIER IN THE UNITED STATES ARMY.
AS A SMALL TOKEN OF GRATITUDE
AND REMEMBRANCE FOR THE ULTIMATE
SACRIFICE PAID BY LIEUTENANT
COLLINS, I'M PLEASED TO JOIN
SENATORSAKSON IN URGING OUR
COLLEAGUES TO RENAME THE POST
OFFICE IN TYRONE, GEORGIA, AS
THE FIRST LIEUTENANT ROBERT
WILSON COLLINS POST OFFICE
BUILDING IN LIEUTENANT COLLINS'
HONOR.
NOTHING WE CAN DO CAN EVER REPAY
THE DEBT AND THE ULTIMATE
SACRIFICE THAT THIS YOUNG MAN
HAS MADE.
BUT THIS WILL ENSURE THAT HIS
NAME LIVES ON NOT JUST IN HIS
FRIENDS' AND FAMILIES' HEARTS
T IN THE VERY HEART OF HIS HOMETOWN.
WITH THAT, MADAM PRESIDENT, I
WOULD YIELD THE FLOOR TO MY
KHRAOERBGS SENATOR ISAAC
MY COLLEAGUE, SENATOR ISAKSON.
MR. ISAKSON: MADAM PRESIDENT,
I'M PLEASED TO JOIN THE SENIOR
SENATOR FROM GEORGIA AND MY
FRIEND, SAXBY CHAMBLISS, TO PAY
TRIBUTE TODAY TO ROBERT COLLINS.
THIS NAMING OF THE POST OFFICE
IS MOST APPROPRIATE IN TYRONE,
GEORGIA, AND IT'S MOST
APPROPRIATE BECAUSE OF THE GREAT
SACRIFICE OF THIS YOUNG MAN
WHOSE STORY, AS SENATOR
CHAMBLISS SAID, IS COMPELLING.
BUT ONE INTERESTING POINT I WANT
TO MAKE IS HE WAS THE SON OF TWO
LIEUTENANT COLONELS RETIRED FROM
THE UNITED STATES MILITARY.
HIS MOTHER, LIEUTENANT COLONEL
SHARON L.G. COLLINS AND HIS
FATHER LIEUTENANT COLONEL
BURKETT DEACON COLLINS.
HIS MOTHER SAID WE NEVER ASKED
HIM TO FOLLOW US INTO THE FAMILY
BUSINESS BEING IN THE MILITARY,
BUT HE DID -L FOLLOW US INTO THE
FAMILY BUSINESS IN LARGE MEASURE
BECAUSE OF WHAT HAPPENED ON 9/11.
FOLLOWING THAT TRAGIC DAY IN
AMERICAN HISTORY WHEN HE WATCHED
THE TERRORIST ATTACKS ON THE
TWIN TOWERS, HE EXPRESSED TO HIS
PARENTS A DIRE TO JOIN THE
UNITED STATES MILITARY.
HIS MOTHER RESPONDED ALONG WITH
HIS FATHER BY MAKING IT A POINT
FOR HIM TO VISIT WEST POINT.
THEY TKREFD HIM UP IN HIS VERY
BEST OFIT AND TOOK HIM TO WEST POINT.
UPON LEAVING TYRONE, ONE OF HIS
FRIENDS STOPPED HIM BEFORE HE
GOT IN THE CAR TO GO TO WEST
POINT AND SAID WHY ARE YOU
DRESSED UP SO WELL?
HE SAID BAUSE MY MOM AND DAD
ARE COLONELS.
THAT'S THE KIND OF MAN HE WAS.
SO HE APPLIED TO WEST POINT.
SENATOR CHAMBLISS APPOINTED HIM
TO WEST POINT AND HE WAS THERE
WITH DISTINCTION.
LATER IN 2009, HE WENT OFF TO
SERVE IN THE UNITED STATES
MILITARY.
UNFORTUNATELY ON APRIL 7, MADE
THE ULTIMATE SACRIFICE FOR THE
PEOPLE OF THIS COUNTRY.
IT IS ONLY APPROPRIATE IN EVERY
WAY POSSIBLE THAT WE PAY TRIBUTE
TO THE YOUNG MEN AND YOUNG WOMEN
WHO SACRIFICE ALL SO ALL OF US
CAN ENJOY THE FREEDOM OF OUR COUNTRY.
AND I AM PLEASED AND I AM
HONORED AND I AM PROUD TODAY TO
JOIN SENATOR CHAMBLISS IN NAMING
THIS POST OFFICE IN TYRONE,
GEORGIA, AFTER FIRST LIEUTENANT
COLLINS WHO WAS A MEMBER OF
B-COMPANY, FIRST BATTALION,
64th REGIMENT, FORT STUART,
GEORGIA AND I YIELD BACK THE
BALANCE OF MY TIME
ABSENCE OF A QUORUM. THE PRESIDING OFFICER: THE
CLERK WILL CALL TH
QUORUM CALL:
A SENATOR: MADAM PRESIDENT?
THE PRESIDING OFFICER: THE
SENATOR FROM ALASKA.
MS. MURKOWSKI: THANK YOU, MADAM PRESIDENT.
MADAM PRESIDENT, THIS HAS BEEN A
VERY DIFFICULT WEEK FOR OUR --
THE PRESIDING OFFICER: THE
SENATE IS IN A QUORUM CALL.
MRS. MURK: EXCUSE ME, MADAM PRESIDENT.
I REQUEST THAT PROCEEDINGS UNDER
THE QUORUM CALL BE DISPENSED WITH.
THE PRESIDING OFFICER: WITHOUT
OBJECTION.
MS. MURKOWSKI: THANK YOU.
AS I MENTIONED, THIS HAS BEEN A
VERY DIFFICULT WEEK FOR OUR
MILITARY AND FOR OUR VETERANS'
COMMUNITIES IN THE STATE OF ALASKA.
ON TUESDAY OF THIS WEEK, WE CAME
TOGETHER AT THE COAST GUARD AIR
STATION TO HONOR THE MEMORY OF
THREE MEMBERS OF THE UNITED
STATES COAST GUARD WHO GAVE
THEIR LIVES IN A VERY, VERY
TRAGIC ACCIDENT, CRASH OF AN
H-60 JAYHAWK HELICOPTER.
THIS WAS OFF THE COAST OF
WAINGTON JULY 7.
A REAL TRAGEDY FOR THE COAST
GUARD FAMILIES AS A WHOLE, THE
COMMUNITY OF SITKA IS ONE THAT
TRULY EMBRACES THE MEN AND WOMEN
OF THE COAST GUARD IN ADDITION
TO BEING THE ONES THAT PLUCK THE
FISHERMEN OUT OF THE SEA WHEN
THEY ARE IN JEOPARDY OR AT RISK.
THESE ARE THE MEN AND WOMEN
HELPING AT THE LOCAL CHURCHES,
HELPING WITH THE BOY SCOUTS,
COACHING KIDS AND TRULY MEMBERS
OF OUR COMMUNITY, SO THE LOSS OF
THESE THREE MEN IS REALLY VERY
PAINFUL FOR US ALL.
I ATTENDED THAT CEREMONY ON
TUESDAY AT THE HANGAR IN SITKA,
AND AFTER I LEFT, I TOOK THE
FLIGHT BACK TO WASHINGTON, D.C.,
TOOK THE READEYE, AND WHEN I
ARRIVED HERE ON WEDNESDAY
MORNING, IAS INFORMED OF THE
PASSING OF A VERY DEAR FRIEND OF
MINE, A GENTLEMAN WHO MADE A
PROFOUND CONTRIBUTION TO THE
LIVES OF SO MANY OF ALASKA'S
VETERANS.
I'M SPEAKING TODAY OF AN
INDIVIDUAL BY THE NAME OF MAURICE BAILEY.
WE CALLED HIM MO.
MO WAS FROM WASILLA, ALASKA.
HE WAS A DISABLED VIETNAM-ERA
VETERAN WHO FOUGHT THE V.A.
BUREAUCRACY TO OBTAIN HIS EARNED BENEFITS.
AND HE FOUGHT FOR HIMSELF AND HE
WAS SUCCESSFUL WITH THAT, BUT HE
WENT ON BEYOND THAT.
HE DEVOTED THE REST OF HIS LIFE
TO ENSURING THAT THE CHALLENGES
OF ALASKA'S VETERANS WERE NOT FORGOTTEN.
HE FOCUSED HIS EFFORTS ON THOSE
VETERANS WHO LIVE IN THE MORE
THAN 200 RURAL COMMUNITIES THAT
ARE NOT CONNECTED BY -- BY ROAD
TO THE REST OF ALASKA OR
CERTAINLY TO THE CONTINENTAL UNITED STATES.
THESE ARE THE COMMUNITIES OF
BUSH ALASKA.
IN 2003, MO FOUNDED THE VETERANS AVIATION OUTREACH.
THIS IS AN ORGANIZATION OF
VOLUNTEER PILOTS THAT TRAVELED
TO RURAL ALASKA AND IN THE
COMMUNITIES THAT ARE HUNDREDS
AND HUNDREDS OF MILES FROM THE
NEAREST V.A. FACILITY, AND HE
AND HIS OTHER VOLUNTEERS DID
WHAT THE V.A. SIMPLY WAS NOT
DOING.
THEY -- THEY SOUGHT OUT THOSE
FORGOTTEN VETERANS AND REALLY
HELPED THEM IN EVERY WAY THAT
THEY POSSIBLY COULD, AND WHEN
YOU -- WHEN YOU LISTEN TO THE
STORIES ABOUT WHAT MO DID AND
THE VETERANS AVIATION OUTREACH
GROUP DID, IT WAS -- IT WAS A
LITTLE BIT OF EVERYTHING.
THEY HELPED THE VETERANS FILL
OUT APPLICATIONS FOR THEIR BENEFITS.
OFTENTIMES, IT MEANT
VOLUNTEERING TO FLY A VETERAN TO
ANCHORAGE FOR A MEDICAL
APPOINTMENT OR PERHAPS RAISING
THE MONEY FOR AN AIRPLANE TICKET.
AND IN SO MANY OF OUR VERY
RURA VERY REMOTE COMMUNITIES,
AGAIN, THERE IS NO ROAD, YOU
DON'T GET IN YOUR CAR AND DRIVE.
AND SO FOR THE VETERAN TO GO FOR
CARE, THEY MAY BE TRAVELING
HUNDREDS OF MILES.
THEY DON'T HAVE THE MONEY TO DO SO.
SO MO WOULD BRING HIS GUYS
TOGETHER OR HE WOULD GET IN HIS
PLANE AND HE WOULD FLY OUT THERE
AND HE WOULD PICK HIM UP.
SOMETIMES THE HELP MEANT
DELIVERING MOOSE MEAT, CLEARLY A
VERY DESIRED FOODTAPLE IN
RURAL ALASKA.
SOMETIMES IT MEANT BUILDING A
WHEELCHAIR RAMP IN A VETERAN'S
HOME.
THIS WAS AN ALL-VOLUNTEER
OPERATION.
IT FUNCTIONED ON RAFFLES AND
BAKE SALES AND REALLY ALL TOO
OFTEN MONEY STRAIGHT FROM THE
POCKETS OF ITS OWN VOLUNTEERS.
WE ARE A STATE THAT REVEERS ALL
OF OUR VETERANS IN ALASKA.
WE'RE HOME TO MORE VETERANS PER
CAPITA THAN ANY OTHER STATE IN
THE UON, AND WE'RE ALSO KNOWN
AS A VERY STRONG STATE FOR
VOLUNTEERISM, AND SUPPORT FOR
VETERANS IS -- IS CLEARLY THE
RULE, AND IN MANY OF THE
COMMUNITIES, IT'S DIFFICULT
TO -- TO PROVIDE FOR THAT LEVEL
OF SUPPORT, BUT WE FIGURE OUT A
WAY TO DO IT ANYWAY.
IT IS UNIVERSALLY ACKNOWLEDGED
THAT THERE WAS SOMETHING
EXCEPTIONAL ABOUT MO BAILEY.
HIS WAS A LIFE OF SELFLESS
SERVICE, SACRIFI AND HUMILITY.
HE WAS -- HE WAS TRULY A CUT
ABOVE THE REST.
THAT'S A PRETTY STRONG STATEMENT
WHEN YOU CONSIDER THE MANY
VETERANS THAT CALL ALASKA HOME.
BUT MO NEVER SOUGHT RECOGNITION
FOR HIMSELF.
HE WAS SO HUMBLE.
BUT THIS DIDN'T STOP HIS FRIENDS
FROM ENSURING THAT HE RECEIVED
THE RECOGNITION THAT HE HAD SO,
SO HONORABLY EARNED.
IN 2007, MO WAS AWARDED WITH THE
PRESTIGIOUS ALASKA GOVERNOR'S
VETERANS ADVOCACY AWARD.
AND I -- I DO NOT BELIEVE THAT I
AM OVERSTATING WHEN I SAY TODAY
THAT WE MOURN THE LOSS OF ONE OF
OUR STATE'S MOST SIGNIFICANT
VETERAN LEADERS.
MO BAILEY WAS BORN IN 1939, GREW
UP IN MEMPHIS, TENNESSEE, DURING
THE JIM CROW ERA AND HE HAD --
THE STORY GOES THAT HE WAS
LOOKING UP AT THE B-17'S FLYING
OVERHEAD AND HE TOLD HIMSELF
THAT SOMEDAY, SOMEDAY I'M GOING
TO BE FLYING THOSE.
MO RECOUNTED IN A 2009 INTERVIEW
PUBLISHED IN THE "FRONTIERSMAN
NEWSPAPER."
HE SAID -- "BLACK PEOPLE THERE
DIDN'T THINK THIS WOULD EVER
HAPPEN, BUT AT 7 YEARS OLD, I
KNEW THIS IS THE UNITED STATES
OF AMERICA AND YOU CAN DO
ANYTHING YOU WANT.
THAT WAS MY HEART'S DESIRE."
WERE MO'S WORDS.
MO ENLISTED IN THE ARMY AT THE
AGE OF 17.
THOSE OF YOU PAGES DOWN HERE, HE
JOINED THE ARMY AT 17.
HE FORGED HIS FATHER'S SIGNATURE
ON THE CONSENT FORM.
THENE SERVED 20 YEARS.
HE PULLEDWO TOURS IN VIETNAM
AND ONE IN ALASKA.
HE WAS A HELICOPTER CREW CHIEF
AND A GUNNER.
AND THEN UPON RETIREMENT FROM
THE ARMY, HE DECIDED TO STAY IN
ALASKA AND GET INVOLVED IN OUR COMMUNITY.
HE BECAME A PRIVATE PILOT,
FLIGHT INSTRUCTOR.
HE WAS A TRAINED VETERANS'
SERVICE OFFICER, AND HE SERVED
AS PRESIDENT OF THE VIETNAM
VETERANS OF AMERICA CHAPTER 903.
IT WAS NOT TOO LONG AGO THAT MO
DISCOVERED THAT HE HAD LEUKEMIA,
BUT HE SAID THIS IS -- THIS IS
NOT GOING TO SLOW ME DOWN.
AGAIN, IN AN INTERVIEW IN "THE
FRONTIERSMAN NEWSPAPER," MO
SAID -- "QUOTE --" I FEEL AS
THOUGH I'M PROBABLY ON SOMEBODY
ELSE'S TIME, BUT THAT'S OKAY.
THERE IS NO QUIT, NO WAY, NO HOW.
I'M NEVER GOING TO -- I'M NEVER
GOING TO PREPARE MYSELF TO DIE, NEVER."
MO REALLY DID LIVE HIS LIFE AND
LIVE IT LARGE.
I GOT A CALL IN EARLY JANUARY.
I WAS TRAVELING AND I GOT A CALL
FROM MY STAFF PERSON OUT IN THE
MATSU VALLEY AND THEY SAID MO
HAS LEUKEMIA, HE'S NOT DOING WELL, HE'S IN THE HOSPITAL, THIS
MAY BE IT.
AND I CALLED THE HOSPITAL AND A
MAN ANSWERED, AND I ASKED TO
SPEAK TO MO.
THE GUY ON THE OTHER END SAYS
WELL, THIS IS MO.
I SAID MO, YOU SOUND PRETTY HEALTHY.
HE SAYS YEAH, THEY TELL ME I'M
NOT GOING TO MAKE IT.
THEY TELL ME THAT I'M DONE, I'M
IN THE HOSPITAL.
HE SAYS BUT I JUST DON'T FEEL LIKE DYING.
I DON'T FEEL LIKE I'M READY.
I SAID MO, YOU DOWNED SOUND LIKE
YOU'RE GOING ANYWHERE.
I SAID YOU SOUND LIKE YOU HAVE A
LOT OF FIGHT LEFT NEW.
AND MO SAID, HE SAYS, YOU KNOW,
THERE ARE SOME THINGS THAT I
WANT TO DO.
I HAVE BEEN WORKING ON THIS
VETERANS' GATHERING.
IT'S A BIG GATHERING IN THE
VALLEY WITH SO MANY OF OUR
ALASKAN VETERANS, AND HE SAYS
I'VE GOT A LOT OF THINGS TO DO.
I HAVE GOT SOME THINGS I WANT TO
GIVE YOU.
AND, YOU KNOW, I'M FOCUSING ON
THAT.
I SAID MO, I'LL SEE YOU IN MAY
AT THE GATHERING.
THIS WAS JANUARY, AND HE HAD
BEEN TOLD THIS WAS PRETTY MUCH THE END.
BUT IN MAY, MO HOSTED THE
GATHERING IN PALMER, THIS ANNUAL
DAY-LONG EVENT THAT PROVIDES
ALASKA VETS ACROSS THE
GENERATIONS AN OPPORTUNITY TO
SPEND TIME WITH ONE ANOTHER.
THEY LISTEN TO MUSIC, THEY
DONATE SOMETHING TO THE
VETERANS' AVIATION OUTREACH, AND
REALLY THEY HAVE A LOT OF FUN.
AND THERE ARE SOME SPEECHES, TOO.
YOU CAN'T GO TO ANY VETERANS'
GATHERING WITHOUT A SPEECH OR
SO, BUT AT THAT MAY GATHERING,
MO HONORED ME WITH A VETERANS'
AVIATION OUTREACH JACKET.
IT'S GOT MY NAME ON IT AND I'M
AN HONORARY MEMBER OF THE
VETERANS' AVIATION OUTREACH, AND
MO STOOD WITH ME THERE AND WE
BOTH TALKED ABOUT THE FACT THAT
BACK IN JANUARY, MAY LOOKED LIKE
IT WAS A LONG WAYS AWAY, BUT MO
IS A FIGHTER.
MO IS NOT ONE THAT WAS GOING TO
GO OUT EASY.
AND AT THAT SPEECH, THOSE MANY
SPEECHES, I -- I TOLD THOSE AT
THE GATHERING THAT AS MUCH AS I
CAN DO, AS MUCH AS I WANT TO DO
FOR OUR VETERANS AND HERE IN THE
SENATE TO HELP ALASKA'S VETERANS
AND ALL VETERANS, I SAID
MO, I'LL NEVER HOLD A CANDLE TO
YOU, BUT I PROMISED TO TRY AND I
PROMISE TO TRY AND DO MORE.
AND TODAY I RENEW THAT
COMMITMENT IN MO'S LOVING
MEMORY.
NOW, MANY OF US THAT WERE
GATHERED THERE THOUGHT THAT THIS
EVENT WAS GOING TO BE MO'S, KIND
OF HIS LAST HURRAH AND, INDEED,
THAT IS THE WAY THAT IT TURNED
T, BUT MO CONTINUED TO FIGHT
RIGHT UP UNTIL THE VERY END ON
TUESDAY EVENING.
MADAM PRESIDENT, I COULD GO ON
FOR AWHILE ABOUT MO'S WORK IN
SERVICE TO THE ALASKA VETERANS
COMMUNITY BUT I WOULD SUGGEST
THAT IT'S PROBABLY A MORE
POWERFUL STATEMENT, A MORE
POWERFUL STORY IF IT'S DONE IN
MO'S OWN WORDS.
AND I WOULD THEREFORE ASK
UNANIMOUS CONSENT THAT TWO
ARTICLES, ONE FROM THE "VIETNAM
VETERANS OF AMERICA MAGAZINE,"
AND THE OTHER FROM THE
"ANCHORAGE DAILY NEWS" BE PRINTED IN THE RECORD AT THE
CONCLUSION OF MY REMKS.
THE PRESIDING OFFICER: WITHOUT
OBJECTION.
MS. MURKOWSKI: MADAM PRESIDENT,
I PLACE THESE ARTICLES IN THE
RECORD NOT ONLY BECAUSE MO'S
LEGACY NEEDS TO BE PRESERVED IN
HISTORY, NOT ONLY TO DO JUSTICE
TO THE TREMENDOUS CONTRIBUTIONS
OF MO BAILEY, I'M REALLY HOPING
THAT THESE ARTICLES WILL CATCH
THE ATTENTION OF SOME OF THE
SENIOR OFFICIALS WITHIN T V.A.
READING ABOUT THE GAPS IN
SERVICE THAT MO BAILEY SOUGHT TO
FILL MIGHT CHALLENGE THE V.A. TO
THINK JUST A LITTLE BIT HARDER
ABOUT HOW IT CAN IMPROVE ITS
SERVICE TO OUR RURAL VETERANS.
AND AT THE VERY LEAST, IT MIGHT
CAUSE THE V.A. TO ACKNOWLEDGE
THE DEBT THAT IT OWES TO PEOPLE
LIKE MO BAILEY AND TO SO MANY
OTHERS IN OUR VETERANS SERVICE
ORGANIZATIONS WHO ARE GIVING OF
THEIR OWN TIME, THEIR OWN
ENERGY, THEIR OWN MONEY TO FILL
THESE GAPS.
SO MAYBE, JUST MAYBE, MO'S
STORY, WHICH HAS BEEN AN
INSPIRATION TO SO MANY OF US IN
ALASKA, WILL ALSO INSPIRE THE
V.A. TO DO MORE AND TO DO BETTER
BETTER.
ON BEHALF OF ALL MY SENATE
COLLEAGUES, MAY I EXPRESS MY
DEEPEST CONDOLEES TO MO'S WIFE
ANNE AND ALL OF THOSE WHO HAVE
BEEN TOUCHED BY MO BAILEY'S
GENEROSITY AND KINDNESS.
AND WITH THAT, MADAM PRESIDENT,
I THANK YOU, AND I YIELD THE
FL
MR. MENENDEZ: MADAM PRESIDENT?
THE PRESIDING OFFICER: THE SENATOR FROM NEW JERSEY.
MR. MENENDEZ: MADAM PRESIDENT,
AT THE CONCLUSION OF MY REMARKS,
I WANT TO NOW ASK UNANIMOUS
CONSENT THAT THE SENATE PROCEED
TO A PERIOD OF MORNING BUSINESS
WITH SENATORS PERMITTED TO SPEAK
FOR UP TO TEN MINUTES EACH.
THE PRESIDING OFFICER: WITHOUT OBJECTION.
MR. MENENDEZ: THANK YOU,
MADAM PRESIDENT.
MADAM PRESIDENT, I COME AND HAVE
COME TO THE FLOOR MANYIMES TO
SPEAK OUT ABOUT THE CASTRO
REGIME ABUSES OF THE CUBAN
PEOPLE, AND TODAY I COME TO THE
FLOOR ONCE AGAIN
STRONG OPPOSITION TO ANY ATTEMPT
IN THIS CHAMBER TO PASS ANY BILL
THAT IN ANY WAY LIFTS OR LESSENS
THE TRAVEL BAN ON CUBA.
I WANT TO MAKE IT ABSOLUTELY
CLEAR THAT I WILL OPPOSE AND
FILIBUSTER IF I NEED TO ANY
EFFORT TO EASE REGULATIONS THAT
STAND TO ENRICH A REGIME THAT
DENIES ITS OWN PEOPLE BASIC
HUMAN RIGHTS.
MADAM PRESIDENT, I -- I DON'T
WANT TO OBSTRUCT THE BUSINESS OF
THIS CHAMBER BUT I KNOW MY
COLLEAGUES ON BOTH SIDES OF THE
AISLE ARE WELL AWARE OF HOW
DEEPLY I FEEL ABOUT FREEING THE
PEOPLE OF CUBA FROM THE
REPRESSIVE REGIME UNDER WHICH
THEY HAVE SUFFERED FOR TOO LONG.
THE FACT IS THAT BIG CORPORATE
INTERESTS BEHIND THIS MISGUIDED
ATTEMPT TO WEAKEN THE TRAVEL BAN
COULD NOT CARE LESS WHETHER THE
CUBAN PEOPLE ARE FREE OR NOT.
THEY CARE ONLY ABOUT OPENING A
NEW MARKET, INCREASING THEIR
BOTTOM LINE.
THIS IS ABOUT THE COLOR OF
MONEY, NOT THE DESIRE FOR
FREEDOM.
THE RY FACT THAT A TRAVEL BILL
HAS MOVED THROUGH THE HOUSE
AGRICULTURE COMMITTEE MAK ONE
WONDER WHY AMERICAN AGRICULTURAL
INTERESTS WOULD EVEN CARE ABOUT
TOUR
ONE CAN ONLY ASSUME THAT
TOURISM DOLLARS FOR THE CASTRO
REGIME TO BUY MORE AGRICULTURAL PRODUCTS.
THAT WOULD ONLY SERVE TO ENRICH
THE REGIME AND DO ABSOLUTELY
NOTHING TO BRING DEMOCRACY TO
THE ISLAND.
LET'S BE CLEAR.
THOSE W
INCREASING TRAVEL WILL MAGICALLY
BREED DEMOCRACY IN CUBA ARE
SIMPLY DEAD WRONG.
FOR YEARS, THE WORLD HAS BEEN
TRAVELING TO CUBA AND NOTHING
HAS CHANGED.
MILLIONS OF TOURISTS FROM
DEMOCRATIC NATIONS HAVE VISITED
HAVANA, AND THE CASTRO REGIME
HAS NOT LOOSENED ITS IRON GRIP
ON ITS PEOPLE.
IT HAS NOT ENDED ITS REPRESSIVE
POLICIES.
IT HAS NOT STOPPED IMPRISONING
AND BRUTALLY ABUSING
PRO-DEMOCRACY FORCES.
NOW, SOMETIMES I WONDER, THOSE
WHO LAMENT OUR DEPENDENCE ON
FOREIGN OIL BECAUSE IT ENRICHES
REGIMES IN TERRORIST STATES LIKE
IRAN SHOULD NOT HAVE A DOUBLE
STANDARD WHEN IT COMES TO
ENRICHING A BRUTAL DICTATORSHIP
LIKE CUBA RIGHT HERE IN OUR OWN
BACKYARD.
HOW COINCIDENTAL THAT SUDDENLY
NOW THE CONGRESS IS CONSIDERING
LIFTING A TRAVEL BAN THE CASTRO
REGIME IS HOPING THE WORLD WILL
BELIEVE THAT IT WILL RELEASE 52
PRISONERS OF CONSCIENCE.
WELL, LET'S SET THE RECORD STRAIGHT.
MANY PEOPLE ARE WRONGLY UNDER
THE IMPRESSION -- WRONGLY --
READING AND WATCHING MEDIA
REPORTS THAT 52 POLITICAL
PRISONERS HAVE ALREADY BEEN
RELEASED AND ARE FREE IN CUBA.
THE FACT IS, ONLY ABOUT SEVEN
HAVE BEEN RELEASED, AND
FORCIBLY, FORCIBLY DEPORTED FROM
THEIR COUNTRY, ANOTHER HUMAN
RIGHTS VIOLATION.
INSTEAD OF ALLOWING THEM TO STAY
AND PEACEFULLY ADVOCATE FOR
CHANGE WITHIN THEIR OWN COUNTRY.
SO EVEN WHEN THE REGIME RELEASES
PEOPLE WHOSE SIMPLE CRIME WAS
TRYING TO PEACEFULLY CREATE
CHANGE IN THEIR COUNTRY AND GET
IMPRISONED FOR YEARS FOR THAT
PEACEFUL ACT, THEN WHEN THEY
RELEAS
WITH THE UNDERSTANDING THAT THEY
WILL BE DEPORTED OUT OF THEIR
COUNTRY SO THEY CAN NO LONGER BE
ADVOCATES, PEACEFUL ADVOCATES
FOR CIVIL AND DEMOCRATIC CHANGE.
IMAGINE IF THOSE OF US
AMERICANS COULD BE ARRESTED
SIMPLY BECAUSE WE DISAGREED WITH
THE GOVERNMENT, SOUGHT TO
PEACEFULLY CHANGE IT AND THEN
ULTIMATELY AFTER BEING ARRESTED
FOR YEARS WERE DEPORTED TO SOME
OTHER COUNTRY IN THE WORLD.
THE REMAINING 47 PRISONERS ARE
SET TO BE RELEASED BUT NOT NOW,
NOT TOMORROW, NOT NEXT WEEK, NOT
EVEN NEXT MONTH BUT SOMETIME
DURING THE NEXT THREE TO FOUR
MONTHS, WE ARE TOLD, OR SO THE
REGIME SAYS.
ACCORDING TO REPORTS IN THE
"MIAMI HERALD," NINE OF THOSE
PRISONERS HAVE SAID THEY WILL
REFUSE TO LEAVE FOR SPAIN IF
RELEASED, AND MANY WHO WERE
RELEASED AND FORCIBLY DEPORTED
TO MADRID HAVE VOWED TO CONTINUE
THEIR ACTIVISM IN EXILE.
THEY HE TOLD REPORTERS THEY
FEEL THE SHOCK OF BEING FORCED
TO LEAVE THEIR COUNTRY.
ONE TOLD A REPORTER HE FEELS --
QUOTE -- "LIKE I WAS STILL IN
PRISON.
I LEFT BEHIND PART OF MY FAMILY.
I STILL FEEL LIKE I HAVE THE
CUFFS ON MY HAND."
THE RELEASED MEN SAID CONTINUES
IN THE PRISON WERE HORRENDOUS.
THEY SHARED THEIR CELLS WITH
RATS.
DISEASES INFESTED THE PRISON,
THEY SAID, AND THEY TOLD OF
INMATES TRYING TO KILL
THEMSELVES OR DO THEMSELVES
BODILY HARM BECAUSE OF THE
SQUALID PRISON CONDITIONS THEY
WERE FORCED TO ENDURE.
REMEMBER, THESE A POLITICAL
PRISONERS, NOT PEOPLE WHO
CREATED COMMON CRIMES.
ONE OF THE DISSIDENTS ALSO TOLD
THE REPORTERS -- AND I QUOTE --
"THE HYGIENE AND HEALTH
CONDITIONS IN PRISONS IN CUBA
ARE NOT TERRIBLE, THEY'RE WORSE THAN TERRIBLE.
WE HAD TO LIVE WITH RATS AND
COCKROACHES AND EXCREMENTS, AND
IT'S NOT A LIE.
GALVEZ', A 66-YEAR-OLD
JOURNALIST WHO WAS SENTENCED TO
15 YEARS, SIMPLY BECAUSE OF WHAT
HE SOUGHT TO WRITE" -- 15 YEARS
OF HIS LIFE IN THESE HORRIBLE
ISONS, SAID -- "THEY ARE
OUTBREAKS OF DENGE FEVER AND TUBERCULOSIS."
HE SAID THERE WERE MORE THAN
1,500 PRISONERS IN THE PRISON IN
VIAKALADA.
40 PRISONERS TO A CELL MEASURING
32 SQUARE FEET.
ANOTHER PRISONER, NORMAN
HERNANDEZ SAID -- QUOTE -- "THE
PRISONERS ARE TIRED OF DEMANDING
THEIR RIGHTS.
THEY LOSE ALL HOPE.
THEY LOSE THE DESIRE TO LIVE AND
THEY TRY TO HURT THEMSELVES SO
THEY WILL GET ATTENDED TO."
NOW, THESE MEN WERE LUCKY TO BE
RELEASED BUT THEY NOT GIVE UP.
THEY WILL TELL THEIR STORIES AND
THEY'LL CONTINUE TO FIGHT FOR
FREEDOM FOR ALL CUBANS.
MADAM PRESIDENT, I ASK THE
QUESTION, IT TOOK THE REGIME ONE
NIGHT IN MARCH TO ARREST THESE
52 PEOPLE, ONE NIGHT.
SCOOPED UP 52 PEOPLE WHO WERE
PEACEFULLY ADVOCATING FOR CHANGE
IN THEIR OWN COUNTRY.
SO WE MIGHT ASK THEMSELVES, IF
IT TOOK YOU ONE NIGHT TO ARREST
52 POLITICAL PRISONERS, WHY WILL
IT TAKE FOUR MONTHS TO RELEASE
ALL OF THEM?
IT'S NOT A COINCIDENCE THAT
DURING THE NEXT THREE TO FOUR
MONTHS, THERE WILL BE MEMBERS OF
THE CONGRESS WHO WILL BE LOOKING
TO PROVIDE THE CASTRO REGIME
WITH BILLIONS OF DOLLARS OF
ADDED TOURISM REVENUE.
IT'S NOT A COINCIDENCE DENTS
THAT IN SEPTEMBER --
COINCIDENCE THAT IN SEPTEMBER,
THE EUROPEAN UNION WILL ONCE
AGAIN DELIBERATE THE WDOM OF
ITS REMAINING SANCTIONS.
THE NAGGING QUESTION THAT
LINGERS IN MY MIND IS: WILL THE
47 EVER SEE THE LIGHT OF DAY OR
WILL THEY BE FORCIBLY DEPORTED
FROM THEIR COUNTRY AND ANOTHER
52 ARRESTED OVERNIGHT TO TAKE
THEIR PLACE?
BE TO.
HERE'S ONE OF THOSE PRISONERS.
LAST MONTH, A MAN NAMED ARIAEL
SIEGLER WAS RELEASED FROM A
CUBAN PRISON ON THE VERGE OF DEATH.
LET ME HAVE THAT BACK A MINUTE.
NOW, HE WAS A 250-POUND AMATEUR BOXER.
YOU SEE HIM THERE IN GREAT
HEALTH.
THIS IS THE PICTURE OF HIS
RELEASE.
A HUNDRED-POUND PARAPLEGIC.
HE DID NOTHING TO DESERVE THOSE
SET OF CONSEQUENCES.
LAST MONTH, THE REGIME ONCE
AGAIN REFUSED TO LET THE UNITED
NATIONS SPECIAL RAPATEAUR ON
TORTURE VISIT THE ISLAND, WHICH,
IN MY OWN VIEW, SPEAKS VOLUMES
ABOUT THE CONDITIONS OF THE
THOUSANDS OF CUBANS WHO HAVE
BEEN IMPRISONED.
WHEN YOU OPPOSE THE CASTRO
REGIME, YOU ARE CALLED DANGEROUS.
AND THERE IS A CHARGE OF
DANGEROUSNESS.
THOUSANDS OF CUBANS HAVE BEEN
SENT TO CASTRO'S PRISONS BECAUSE
OF DANGEROUSNESS.
THAT DANGEROUSNESS IS SIMPLY
OPPOSING THE REGIME AND SEEKING
CHANGE IN YOUR HOME COUNTRY.
AND FOR OTHER TRUMPED-UP
POLITICAL CHARGES.
NOW, IF THAT IS WHAT'S HAPPENING
TO THE 200 INTERNATIONALLY
RECOGNIZED AND KNOWN POLITICAL
PRISONERS, THEN HOW MUCH WORSE
MUST IT BE FOR THE THOUSANDS OF
ANONYMOUS POLITICAL PRISONERS
WHO HAVE NOT BEEN REPORTED
BECAUSE THEY FALL UNDER THE
CHARGE OF DANGEROUSNESS?
ACCORDING TO THE STATE
DEPARTMENT -- QUOTE -- "THE
TOTAL NUMBER OF DETAINEES IS
UNKNOWN BECAUSE THE GOVERNMENT
DOES NOT DISCLOSE SUCH
INFORMATION AND KEEPS ITS
PRISONS OFF-LIMITS TO HUMAN
RIGHTS ORGANIZATIONS AND
INTERNATIONAL HUMAN RIGHTS
MONITORS." ACCORDING AGAIN TO THE STATE
DEPARTMENT -- AND I QUOTE --
"ONE HUMAN RIGHTS ORGANIZATION
LISTS MORE THAN 200 POLITICAL
PRISONERS CURRENTLY DETAINED IN
CUBA.
IN ADDITION TO AS MANY AS 5,000
PEOPLE SENTENCED FOR DANGEROUSNESS."
YET IN THE FACE OF THIS
REPRESSION, SOME MEMBERS WANT TO
PROVIDE THE CASTRO REGIME WITH
ITS NUMBER-ONE SOURCE OF INCOME:
TOURISM.
MADAM PRESIDENT, THIS ISN'T
ABOUT TRAVEL.
THIS IS ABOUT REWARDING A
REPRESSIVE REGIME.
WE ALREADY HAVE HUNDREDS OF
THOUSANDS OF AMERICANS WHO
TRAVEL TO CUBA FOR FAMILY,
EDUCATIONAL OR HUMANITARIAN
REASONS UNDER OUR EXISTING LAW,
BUT TOURISM TO CUBA IS A NATURAL
RESOURCE, AKIN TO PROVIDING
REFINED PETROLEUM PRODUCTS TO A
COUNTRY LIKE IRA
IT'S REPORTED THAT 2.5 MILLION
TOURISTS VISIT CUBA EACH YEAR.
1.5 MILLION FROM NORTH AMERICA.
A MILLION CANADIANS.
MORE THAN 170,000 FROM ENGLAND.
MORE THAN 400,000 FROM SPAIN AND
ITALY, GERMANY AND FRANCE
COMBINED.
ALL BRINGING IN NEARLY
$2 BILLION IN REVENUE TO THE
CASTRO REGIME.
AND YET NOTHING -- NOTHING --
HAS CHANGED IN CUBA EXCEPT THE
AMOUNT OF THE TOURISM DOLLARS
THE REGIME HAS AT ITS DISPOSAL.
WHAT DOES IT DO WITH NEARLY $2
BILLION OF RESOURCES FROM
TOURISM?
DOES IT PUT MORE FOOD ON THE
PLATES OF CUBAN FAMILIES?
DOES IT CREATE A BETTER QUALITY
OF LIFE FOR THE CUBAN PEOPLE?
NO.
EVEN WITH ALL OF THAT MONEY
COMING IN, THE CASTRO REGIME
STILL RATIONS PEOPLE'S FOOD.
YOU HAVE TO STAND IN A LINE WITH
A COUPON TO GET ACCESS TO A
SIMPLE MEAL.
WAITING IN LONG LINES FOR
SUBSISTENCE MEAL.
OF COURSE, WHEN YOU RATION
PEOPLE AND THEY'RE ON LINE JUST
TRYING TO GET THE MEAL FOR THE
DAY, THERE'S NO TIME FOR
PROMOTING DEMOCRACY OR HUMAN RIGHTS.
YOU ARE TRYING TO JUST EXIST.
YOU'RE TRYING TO KEEP YOUR
FAMILY FED.
THERE IS NO TIME BUT TO STAND IN
LINE.
DESPITE SEVERAL BILLIONS OF
DOLLARS TO THE CASTRO REGIME
FROM TOURISM.
TO ME, THAT'S AN IRREVSIBLE
CONCESSION TO A REGIME THAT THIS
WEEK ARRESTED A CUBAN-AMERICAN
FOR PROVIDING LASER PRINTERS AND
INK CARTRIDGES TO A RURAL
WOMAN'S OPPOSITION MOVEMENT IN SANTIAGO.
HE WAS INTERROGATED.
THE HEAD OF THE MOVEMENT'S HOME
WAS RAIDED BY 1 DOZEN STATE
SECURITIES AGENTS.
THE PRINTER AND THE CARTRIDGES
WERE CONFISCATED.
WHAT A THREAT.
A BUNCH OF PRINTERS AND INK CARTRIDGES.
THREAT.
HE WAS SUBSEQUENTLY RELEASED AND
PUT ON A PLANE BACK.
MEANWHILE, AN AMERICAN REMAINS
IN PRISON FOR HELPING THE
ISLAND'S JEWISH COMMUNITY
CONNECT TO THE INTERNET.
AFTER SIX MONTHS IN JAIL, THIS
INDIVIDUAL STILL FACES NO TRIAL
AND NO CHARGES.
A UNITED STATES CITIZ JAILED
SIMPLY BECAUSE HE WAS TRYING TO
HELP THE JEWISH COMMUNITY IN
HAVANA BE ABLE TO ACCESS THE
INTERNET.
WHAT A CRIME.
AND YET, FOR THE MOST PART,
WE'RE RELATIVELY SILENT.
THEY WERE LOOKING TO HELP THE
CUBAN PEOPLE, BUT THE REGIME
DOESN'T WANT ANYONE ENGAGING
WITH THE CUBAN PEOPLE.
THEY WANT TOURISTS TO PROVIDE
ONLY ONE THING:
HARD CURRENCY.
DOLLARS.
MONEY.
NOW, VISITING THE BEACHES OF
VALLALARA, AND SIPPING AN DRINK
PROVIDES MONEY TO CONTINUE RECESSION.
IT WON'T CHANGE
THE WOMEN AND WIVES.
THESE ARE WOMEN WHO ARE THE
MOTHERS, DAUGHTERS, SISTERS,
WIVES OF THOSE MANY POLITICAL
PRISONERS IN SKAS STROH JAILS
WHO EACH WEEK, NORMALLY ON
SUNDAY, MARCH DRESSED IN WHITE
IN PEACEFUL PROTESTS WITH A
GLADOLA AND SIMPLY IN DOING SO
ARE ULTIMATELY TRYING SAY "FREE
MY RELATIVE."
AND THIS IS THE CONSEQUENCE OF
WHAT THEY FACE.
THIS IS THE CONSEQUENCE OF WHAT
THEY FACE.
STATE SECURITY DRESSED UP AS
CIVILIANS ULTIMATELY, AS YOU CAN
SEE, ASSAULTING THEM, HURTING
THEM, ARRESTING THEM.
IT WON'T CHANGE THEIR FACE OF
THE WOMEN IN WHITE, AND IT WON'T
CHANGE THE FATE OF THE FAMILY
THAT REMAINS JAILED.
IT WON'T CHANGE THE FATE OF
BEING IMPRISONED BY THE REGIME
AND THEN BE RELEASED, AS THEY
HAVE DONE SO MANY TIMES WHEN
THERE IS SOME INTERNATIONAL
SPOTLIGHT ON AN INDIVIDUAL ONLY
TO BE REARRESTED OVER AND OVER
AND OVER AGAIN.
IT WON'T CHANGE THE TRAGIC FATE
OF ORLANDO SABATO DOMAYO WHO WAS
DEEMED BY AMNESTY INTERNATIONAL
OF DYING IN FEBRUARY AFTER BEING
ON A HUNGER STRIKE IN A CUBAN
PRISON FOR 85 DAYS PROTESTING
HORRIFIC PRISON COND
IT WON'T END THE DESIRE FOR
FREEDOM OR CHANGE CONDITIONS IN
CUBA FOR MEN LIKE GUILLERMO WHO
BEGAN HIS HUNGER STRIKE AFTER
THE DEATH OF ZAPO, ENDING IT
AFTER HE HEARD OF THE PRISONER
RELEASE BUT VOWING THAT HE AND
OTHER COURAGEOUS CUBANS WOULD
JOIN TOGETHER IN YET ANOTHER
HUNGER STRIKE IF THE 52 OTHER
POLITICAL PRISONERS ARE NOT
RELEASED AND PUT BACK IN THEIR
HOMES BY NOVEMBER 7.
THIS IS WHAT HE HAS BEEN
EMACIATED TO IN HIS HUNGER
STRIKE.
LIFTING THE TRAVEL BAN, ALLOWING
TOURIST DOLLARS TO FLOW TO THE
REGIME WILL NOT END ANY OF IT.
ITILL NOT FREE THE PEOPLE OF
CUBA.
IT WILLOT CHANGE THE FATE OF
THE WOMEN IN WHITE OR THE DESIRE
FOR FREEDOM OF GUILLERMO AND SO
MANY OTHER PRETTY WELL
PRISONERS.
IT WILL ONLY ENRICH THE REGIME.
NOW REPORTS THIS WEEK HAVE
POINTED OUT THE ECONOMIC IMPACT
OPENING TRAVEL TO CUBA WILL
CAUSE TO THE GULF STATES, LIKE
WHAT THE VIRGIN ISLANDS OUR
OTHER DEMOCRATIC NEIGHBORS IN
THE CARIBBEAN.
THE DOLLARS THAT WILL BE
TRANSFERRED FROM THOSE TOURISM
ECONOMIES SHOULD BE FOR T
BENEFIT OF A DEMOCRATIC
GOVERNMENT IN A FREE CUBA, NOT
TO BAIL OUT A BRUTAL REGIME.
BUTASTROS DON'T DESERVE IT AND
THE U.S. GULF STATES AND OUR
CARIBBEAN FRIENDS CAN'T AFFORD
IT.
ACCORDING TO THE JAMAICA DAILY,
"THE RESULTS OF THE VARIOUS
STUDIES OF THE LIKE LAY IMPACT
OF LIFTING OF U.S. TRAVEL BANS
SUGGESTS THAT CUBA'S TOURISM
ARRIVAL WOULD SURGE TO FULL
CAPACITY AT THE EXPENSE OF OTHER
CARIBBEAN DESTINATIONS.
APART FROM PRACTICALLY PUERTO
RICO AND THE U.S. VIRGIN ISLANDS
AND THE MOST VULNERABLE SHOULD
THE LEGISLATION TO LIFT THE
TRAVEL PASS ULTIMATELY INCLUDE
MANY OF THE ISLANDS IN THE
CARIBBEAN WHO WOULD HAVE
ENORMOUS ECONOMIC DAMAGE TO
THEM."
IT SEEMS TO ME, MADAM PRESIDENT,
WE SHOULD BE PROMOTING TOURISM
TO THE BEACHES ALONG THE GULF
COAST, NOT TO THE APARTHEID
BEACHES OF CASTRO'S CUBA.
YOU KNOW, YOU'RE NOT EVEN
ALLOWED, AS A CUBAN CITIZEN, TO
GO TO THE BEACHES -- MANY OF THE
BEACHES YOUR OWN HOME LAND
BECAUSE THEY ARE RESERVED FOR
TOURISTS.
YOU CAN'T ENTER SOME OF THE
HOTELS UNLESS A TOURIST IN YOUR
OWN COUNTRY BRINGS YOU IN.
THAT'S WHY WE CALL IT APARTHEID.
YOU CANNOT HAVE ACCESS IN YOUR
OWN HOMELAND -- IMAGINE IN MY
HOME STATE OF NEW JERSEY WE LOVE
THE NEW JERSEY SHORE.
IMAGINE ME AS A NEW JERSEYAN NOT
BEING ABLE TO GO TO ANY OF THE
BEACHES IN NEW JERSEY BECAUSE
THE GOVERNMENT WANTS TO RESTRICT
ME FROM INTERACTING WITH TOURISTS.
AND THAT THOSE PEACHES BEACHES
WOULD BE RESERVED ONLY FOR
FOREIGN TIEFORTS IN MY OWN HOME
STATE IN MY OWN HOME COUNTRY.
THAT IS WHAT GOES ON.
ALLOWING THE REGIME TO BENEFIT
FROM INCREASED TOURISM WILL NOT
ANGE A THING IN CUBA.
IT WILL NOT BRING DEMOCRACY TO
CUBANS.
IT WILL NOT MAKE CONDITIONS FOR
THE CUBAN PEOPLE ANY BETTER OR
CHANGE THE HISTORY OF THE
BRUTALITY OF THE CASTRO REGIME,
A BRUTALITY THAT CONTINUES TO
THIS DAY.
AND SOMETIMES I THINK SOME OF MY
COLLEAGUES JUST DON'T HAVE A
SENSE --
THIS IS NOT USING THE WORD
"BRUTALITY" R SAKE OF IT.
I THINK THE PICTURES TELL 1,000
WORDS.
BUT I WOULD LIKE MY FRIENDS HERE
IN THE SENATE AND OTHERS BEYOND
WHO MAY NOT REALLY HAVE FULLY
ENGAGED IN UNDERSTANDING WHAT
THIS BRUTALITY IS ALL ABOUT TO
RECALL THE WORDS OF ARMANDO WHO
WROTE THE PRIZE-WINNING BOOK,
"AGAINST ALL HOPE."
HE WAS IMPRISONED IN THE
INFAMOUS PRISON IN 1960 FOR HIS
OPPOSITION TO COMMUNISM.
HE LIVED THROUGH THE HELT HELL
OF CASTRO'S JAIL, SUFFERING
VIOLENCE, FORCED LABOR, AND
SOLITAIRE CONFINEMENT.
HIS WRITINGS WERE SMUGGLED OUT
OF CUBA, READ THROUGHOUT THE
WORLD, AND H WAS FINALLY
RELEASED AFTER INTENSE
INTERNATIONAL PRESSURE 22 YEARS
AFTER HE WAS TAKEN PRISONER.
THEY HAD TO REHABILITATE HIM
BECAUSE THEY DIDN'T WANT HIM
RELEASED AND SHOWN TO THE WORLD
IN THE CIRCUMSTANCES THAT SOME
OF THESE PRISONE ARE.
HERE ARE SOME OF HIS MEMORIES OF
A ACTIVITY -- CAPTIVITY AT THE
NDS OF THE CASTRO BROTHERS
THESE ARE HIS WORDS.
QUOTE -- "I RECALL
SERGEANTS, PLUNGING THEIR
BAYONETS INTO ERNESTO'S BODY.
ONE OF THE POLITICAL PRISONERS
DENIED WATER AFTER MORE THAN 50
DAYS ON A HUNGER STRIKE BECAUSE
CASTRO WANTED HIM DEAD.
HIS POOR MOTHER BEATEN BY
LIEUTENANT ABAD IN A POLITICAL
POLICE STATION JUST BECAUSE SHE
WANTED TO FIND OUT WHERE HER SON
WAS BURIED.
OFFICERS THREATENED FAMILY
MEMBERS IF THEY CRIED AT A FUNERAL.
I REMEMBER ESTAVITA DYING IN
BLACKOUT CELLS, THE VICTIMS OF
BIOLOGICAL EXPERIMENTATION.
SO MANY OTHERS MURDERED IN THE
FORCED LABOR FIELDS, QUARERIES
AND CAMPS, A LEGION OF SPECTORS
NAKED, CRIPPLED, HOBBLING AND
CRAWLING THROUGH MY MIND AND THE
HUNDREDS OF MEN MUTILATED IN THE
HORRIFYING SEARCHES.
EDUARDO'S FINGERS CHOPPED OFF BY
A MA CHETTY.
CONCENTRATION CAMPS, TORTURERS,
WOMEN BEATEN.
IN THE MIDST OF THAT APOCALYPTIC
VISION OF THE MOST DREADFUL AND
HORRIFYING MOMENTS IN MY LIFE,
IN THE MIDST OF THE GRAY, ASHY
DUST AND THE ORGY OF BEATINGS
AND BLOOD, PRISONERS BEATEN TO
THE GROUND, A MAN EMERGED.
THE SKELETAL FIGURE OF A MAN
WASTED B HUNGER WITH WHITE
HAIR, BLAZING BLUE EYES, AND A
HEART OVERFLOWING WITH LOVE,
RAISING HIS ARMS TO THE
INVISIBLE HEAVEN AND PLEADING
FOR MERCY FOR HIS EXECUTIONERS.
'FORGIVE THEM, FATHERS, FOR THEY
KNOW NOT WHAT THEY DO.'
AND A BURST OF MACHINE GUN FIRE
RIPPING THROUGH HIS CHEST.
""I HOPE MY COLLEAGUES REMEMBER
THESE ARE THE REALITIES OF
CASTRO'S PRISONS.
THESE RILLET REALITIES, THESE
MEMORIES OF ARMANDO AND OTHERS
BEFORE WE THINK ABOUT REWARDING
THE CASTRO REGIME IN ANY WAY.
THEIR SINS ARE TOO GREAT AND
THIS IS NOT A THING OF THE PAST.
THEIR BRUTALITY AND REPRESSION
HAVE BEEN GOING ON SINCE THE
INCEPTION AND STILL GO ON TODAY.
IT HAS NEVER STOPPED.
IT HAS NEVER GOTTEN BETTER.
IT HAS NEVER CHANGED.
AND IT NEVER WILL, FOR SO LONG
AS THE REGIME IS IN POWER.
WHEN I HEAR MY COLLEAGUES COME
TO THE FLOOR AND TALK ABOUT
LIFTING THE TRAVEL BAN, I'M
COMPELLED TO ASK, WHY IS THERE
SUCH AN OBVIOUS DOUBLE STANDARD
WHEN IT COMES TO CUBA?
WHY ARE THE GULAGS OF CUBA SO
DIFFERENT THAN THE GULAGS OF
OTHER PLACES IN THE WORLD?
WHY ARE WE WILLING TO TIGHTEN
SANCTIONS AGAINST SOME BUT
LOOSEN THEM WHEN IT COMES TO AN
EQUALLY REPRESSIVE REGIME IN
CUBA, NEIVELG REWARDING THEM?
TBH IT COMES TO CUBA, WHY ARE WE
SO WILLING TO THROW UP OUR HANDS
AND SAY, IT'S TIME TO FORGET?
WELL, MADAM PRESIDENT, I DON'T
BELIEVE IT'S TIME TO FORTH.
WE CAN NEVER FORTH HOSE WHO
SAWRCHEDZ DIED AT THE HAND OF
DICTATORS, WHERE EVER.
IT IS CLEAR THE OPPRESSION
CONTINUES UNABATED,
NOTWITHSTANDING THE EMBARGO,
NOTWITHSTANDING CALLS THAT WANT
US TO EASE TRAVEL RESTRICTIONS,
EA SANCTIONS, NOTWITHSTANDING
THE FACT THAT YOU HAVE MILLIONS
OF VISITORS FROM OTHER PLACES IN
THE WORLD BRINGING BILLIONS OF
DOLLARS AND STILL THE REPRESSION
GOES ON.
IN GOOD CONSCIENCE, I CANNOT DO
THAT.
AND I WILL NOT STEP BACK.
I'VE COME IN THIS FLOOR IN THE
PAST TO OPPOSE ANY ATTEMPT IN
ORDER TO DO THAT, TO PASS ANY
BILL THAT IN HE SENSE LIFTS THE
TRAVEL BAN ON CUBA.
AND I WILL CONTINUE TO DO SO.
I WILL CONTINUE TO DO SO UNTIL
WE HAVE THE OPPORTUNITY TO MAKE
SURE THAT THE CUBAN PEOPLE ARE
ULTIMATELY FREE.
MAKE SURE THAT THEY HAVE THE
BASIC FUNDAMENTAL RIGHTS THAT
YOU AND I ENJOY HERE IN THIS
GREAT COUNTRY AND TO ENSURE THAT
ALL OF THOSE WHO LANGUISH IN
CASTRO'S JAILS FOR WHICH THE
WORLD SEEMS TO BE DEAF TO,
CANNOT HEAR THEIR CRIES, DOES
T SEEM TO CARE, DOES NOT SEEM
TO SPEAK ABOUT DOES NOT DO
ANYTHING ABOUT, WILL CONTINUE TO
RAISE THEI
CHAMBER AND BEYOND.
WITH THAT, MADAM PRESIDENT, I
YIELD THE FLOOR.
AND I OBSERVE THE ABSENCE
QUORUM.
THE PRESIDING OFFICER: THE
CLERK WILL
QUORUM CALL:
MR. DORGAN: MADAM PRESIDENT? THE PRESIDING OFFICER: THE
SENATOR FROM NORTH DAKOTA.
MR. DORGAN: MADAM PRESIDENT, I
MAKE A POINT OFRDER THAT --
LET ME
BE VACATED, MADAM PRESIDENT.
THE PRESIDING OFFICER: WITHOUT
OBJECTION. MR. DORGAN: MADAM PRESIDENT,
SOMETIMES ON THE FLOOR OF THE
UNITED STATES SENATE GOOD
FRIENDS DISAGREE, PERHAPS IS NOT
AS OFTEN AS SOME WOULD THINK.
BUT ON OCCASION, THAT'S THE
CASE, AND IT'S THE CASE TODAY
WHEN I OBSERVED AND LISTENED TO
A PRESENTATION BY MY COLLEAGUE
FROM NEW JERSEY ON THE SUBJECT
OF CUBA.
I'M SURE WE DON'T DISAGREE ABOUT
SOME PARTS OF THIS SUBJECT --
THAT IS I DON'T LIKE THE CUBAN GOVERNMENT.
I WANT FREEDOM FOR THE CUBAN
PEOPLE WE, I ASSUME BOTH BELIEVE
THAT AND BELIEVE THE POLITICAL
PRISONERS IN CUBA THAT LANGUISH
IN CUBAN JAILS FOR EXERCISING
THE RIGHT OF FREE SPEECH ARE
DOING THAT IN THE DARK CELLS I
A MANNER THAT IS WHOLLY UNFAIR.
WE SHOULD AS A COUNTRY DO
EVERYTHING WE CAN TO TRY TO
BRING THE VESTIGES OF FREEDOM TO
THE CUBAN PEOPLE.
I UNDERSTAND ALL THAT.
I SUPPORT THAT STRONGLY.
I'VE BEEN TO CUBA.
I'VE SPOKEN TO CUBA GOVERNMENT
LEADERS, I'VE SPOKEN TO
DISSIDENTS, I'VE SPOKEN TO
PEOPLE ON THE STREETS OF CUE
PWAFPLT I WANT CUBA -- OF CUBA.
I WANT
COUNTRY.
LET ME DESCRIBE HOW LONG CUBA
HAS HAD COMMUNIST RULE AND, BY
THE WAY, HOW MANY PRESIDENTS
THAT COMMUNIST RULE AND,
THEREFORE, THE EMBARGO THAT'S
BEEN LEVELED AGAINST CUBA ALL OF
THESE YEARS, LET ME DESCRIBE HOW
MANY PRESIDENTS THAT EMBARGO
EXISTED THROUGH.
THE PRESIDENCY BEGINNING WITH
JOHN F. KENNEDY AND THROUGH THIS
ADMINISTRATION.
THAT'S TEN PRESIDENCY IS IS.
WE SLAPPED -- THAT'S TEN
PRESIDENT DEN SEUS.
WE SLAPPED AN EMBARGO AGAINST
CUBA AND PUNISHED THE AMERICAN
PEOPLE IN THE PROCESS BY SAYING
WE'RE GOING TO LIMIT YOUR RIGHT
TO TRAVEL TO CUBA AND SHUT OFF
ALL COMMERCE TO CUBA, INCLUDING
RESTRICTIONS ON SENDING FOOD AND
MEDICINE TO CUE PWAFPLT THE
EMBARGO HASN'T SEEMED TO WORK
VERY WELL.
IT'S NOW 50 YEARS OLD AND IT
STILL EXISTS.
WELL, WHAT HAS HAPPENED AS A
RESULT OF THE EMBARGO?
WE HAVE NOW A DEBATE ABOUT WHAT
SHOULD HAPPEN WITH RESPECT TO
OUR RELATIONSHIP TO CUBA AT THIS POINT.
MY COLLEAGUES SAY, DON'T DO
ANYTHING THAT WLD REWARD THE
CUBAN GOVERNMENT. FAR FROM IT.
I HAVE NO INTEREST IN REWARDING
A GOVERNMENT THAT I
SUBSTANTIALLY DISAGREE WITH, A
GOVERNMENT THAT I BELIEVE THROWS
INNOCENT PEOPLE IN JAIL.
I HAVE NO INTEREST, NOR DO THE
PEOPLE WHO SUPPORT THE BILL THAT
SENATOR ENZI AND I HAVE NOW
OFFERED IN THE UNITED STATES
SENATE WITH 40 SENATORS
COSPONSORING IT.
WE HAVE NO INTEREST IN REWARDING
THE CUBAN GOVERNMENT.
THAT IS NOT THE ISSUE.
BUT WE DO BELIEVE THAT THE
RESTRICTION ON THE AMERICAN
PEOPLE'S RIGHTS, THE DECISION BY
A GOVERNMENT THAT SAYS WE'RE
GOING TO TELL THE AMERICAN
PEOPLE WHERE YOU CAN AND CAN'T
TRAVEL.
WE BELIEVE THAT'S INAPPROPRIATE,
AND WE DO BELIEVE THAT OUGHT TO
CHANGE.
SO WHAT I'D LIKE TO DO IS TALK
ABOUT A COUPLE THINGS,
INCLUDING, NUMBER ONE, LIFTING
THE TRAVEL BAN TO CUBA AND
MAKING IT EASIER TO SELL FOOD TO CUBA.
I WAS THE PERSON WHO CHANGED THE
LAW TEN YEARS AGO THAT ALLOWED
FOR THE FIRST TIME JUST A CRACK
IN THIS EMBARGO THAT ALLOWS US
TO SELL FOOD INTO CUBA IF IT'S
PAID FOR WITH CASH.
I THINK IT'S IMMORAL FOR A
COUNTRY TO USE FOOD AS A FOREIGN POLICY WEAPON.
I DON'T THINK FOOD OUGHT TO BE
PART OF ANY EMBARGO.
THAT I THINK'S IMMORAL.
BY THE WAY, USING FOOD AS A PART
OF AN EMBARGO, THAT JUST HURTS
POOR, SICK AND HUNGRY PEOPLE.
YOU THINK THE CASTRO BROTHERS
MISSED BREAKFAST, LUNCH OR
DINNER BECAUSE WE HAD AN EMBARGO
ON FOOD SHIPMENTS TO CUBA?
HARDLY.
SO TEN YEARS AGO I GOT THE LAW CHANGED.
IN FACT, IT WAS THE
DORGAN-ASHCROFT AMENDMENT.
GOT A HROU CHANGED THAT ALLOWED
US -- GOT A LAW CHANGED THAT
ALLOWED US TO BEGIN SELLING FOOD
INTO THE COUNTRY OF CUBA.
AND THAT IS THE FIRST
OPPORTUNITY TO BEGIN TO MAKE ANY
CHANGES AT ALL IN THIS EMBARGO.
NOW THE QUESTION IS TRAVEL TO
CUBA BY THE AMERICAN PEOPLE.
SHOULD WE CONTINUE TO SAY TO THE
AMERICAN PEOPLE, YOU HAVE NO
RIGHT TO TRAVEL TO CUBA?
WE DON'T LIKE THE CUBAN
GOVERNMENT, SO WHAT WE'RE GOING
TO DO IS RESTRICT THE RIGHTS OF
THE AMERICAN PEOPLE.
WE'VE BEEN DOING THAT FOR 50
YEARS, AND IT'S TIME, LONG PAST
THE TIME FOR IT TO CHANGE.
NOW LET ME JUSTESCRIBE A
LETTER THAT CAME
U.S. HOUSE OF REPRESENTATIVES.
AND, BY THE WAY, THE REASON THAT
THIS ISSUE HAS NOW COME TO THE
FOREFRONT IS THE AGRICULTURE
COMMITTEE OF THE U.S. HOUSE JUST
PASSED A BILL THAT LIFTS THE
TRAVEL RESTRICTIONS ON THE
AMERICAN PEOPLE TO TRAVEL TO CUBA.
AND IT ALSO MAKES SOME CHANGES
IN THE CONDITIONS UNDER WHICH
AGRICULTURAL GOODS CAN BE
MADE -- CAN BE SOLD TO CUBA,
WHICH IS VERY IMPORTANT TO DO AS
WELL BECAUSE EVEN THOUGH TEN
YEARS AGO I GOT THE PROVISION
ENACTED INTO LAW THAT ALLOWS THE
SALE OF FARM PRODUCTS FOR CASH
INTO CUBA IN 2003 AS A RUN-UP TO
THE 2004 ELECTION, PRESIDENT
BUSH TIGHTENED ALL OF THESE
PROVISIONS AND ACTUALLY CHANGED
A RULE SO THAT IN ORDER FOR CUBA
TO PURCHASE GOODS FROM OUR
COUNTRY -- THAT IS AGRICULTURAL
COMMODITIES -- THEY HAD TO PAY
IN CASH BEFORE THE COMMODITIES
WERE EVEN SHIPPED.
WELL, THAT NEVER HAPPENS IN A TRANSACTION.
YOU PAY CASH WHEN YOU GET THE GOODS.
BUT THE PRESIDENT, PRESIDENT
BUSH, WAS ATTEMPTING TO RESTRICT
THE SALES OF AGRICULTURAL
PRODUCTS TO CUBA.
SO WE NEED TO FIX THAT AS WELL. THE HOUSE OF REPRESENTATIVES
AGRICULTURE COMMITTEE NOW PASSED
A BILL LIFTING THE TRAVEL BAN.
THAT MEANS THIS ISSUE IS GOING
TO BE FRONT AND CENTER, AND HERE
IN THE UNITED STATES SENATE I
AND SENATOR ENZI HAVE THE
BILL -- IT'S BIPARTISAN -- THAT
WOULD LIFT THE TRAVEL BAN TO CUBA.
AND WE HAVE 40 SENATORS THAT ARE
COSPONSORS.
NOW LET ME READ TO YOU A LETTER
THAT WAS SENT TO THE U.S. HOUSE
OF REPRESENTATIVES BY 74 CUBAN
HUMAN RIGHTS LEADERS.
MAY 30, 2010, JUST A MONTH AND A
HALF AGO, THEY SAID THE
SUPPORTIVE PRESENCE OF AMERICAN
CITIZENS, THEIR DIRECT HELP, AND
THE MANY OPPORTUNITIES FOR
EXCHANGE USED EFFECTIVELY AND IN
THE DESIRED DIRECTION WOULD NOT
BE AN ABANDONMENT OF CUBAN CIVIL
SOCIETY BUT RATHER A FORCE TO
STRENGTHEN IT.
SIMILARLY, TO FURTHER FACILITATE
THE SALE OF AGRICULTURE PRODUCTS
WOULD HELP ALLEVIATE THE FOOD
SHORTAGES WE NOW SUFFER.
THE CURRENT CUBAN GOVERNMENT HAS
ALWAYS VIOLATED THIS RIGHT TO
TRAVEL, AND IN RECENT YEARS HAS
JUSTIFIED ACTIONS WITH THE FACT
THAT THE GOVERNMENT OF THE
UNITED STATES ALSO RESTRICTS ITS
CITIZENS FREEDOM TO TRAVEL.
THE PASSAGE OF THIS BILL WOULD
REMOVE THIS SPURIOUS JUSTIFICATION.
THIS IS NOT FROM ME OR FROM THE
COSPONSORS OF MY BILL.
THIS IS FROM 7
RIGHTS LEADERS.
MADAM PRESIDENT, THE
LIFTING THE TRAVEL BAN, THE ONE
THAT WE'VE SLAPPED ON THE
AMERICAN PEOPLE IN ORDER TO
PUNISH SOMEBODY ELSE -- WE'VE
PUNISHED THE AMERICAN CITIZENS
BECAUSE WE'RE UPSET WITH
SOMEBODY ELSE.
HERE ARE PEOPLE WHO SUPPORT
LIFTING THE TRAVEL BAN: A
POLITICAL PRISONER, MARCELO
RODRIGUEZ FROM CUB
GUILLERMO FARINAS, A HUNGER
STRIKER FROM CUBA, YOANI
SANCHEZ, OSCAR CHEPE, MIRIAM
LEVA FOUNDER OF THE LADIES IN WHITE.
ONE OF THE FOUNDERS OF THE
LADIES IN WHITE
THIS TRAVEL BAN.
THEY ARE NOT SOFT ON CASTRO OR
SOFT ON A COMMUNIST GOVERNMENT.
THEY JUST BELIEVE THIS TRAVEL
BAN SHOULD BE LIFTED BECAUSE IT
WOULD BE BENEFICIAL TO THEIR
INTEREST AS LEADERS OF HUMAN
RIGHTS IN CUBA.
THE SACRIFICES THAT THOSE WHO I
HAVE SHOWN HERE IN PHOTOGRAPHS,
THE SACRIFICES THEY HAVE MADE IN
CUBA SITTING IN DARK PRISON
CELLS, HUNGER STRIKES AND MORE,
I THINK GIVE THEM GREAT
CREDIBILITY WHEN THEY SPEAK OUT
ON WHAT IS THE BEST WAY TO
PROMOTE DEMOCRACY IN CUBA.
I INDICATED THAT I GOT A LAW
PASSED THAT ALLOWED US TO SELL
SOME FOOD INTO CUBA FOR CASH.
SINCE THAT TIME, U.S. FARMERS
HAVE SOLD $3.2 BILLION WORTH OF
FOOD TO CUBA.
I MENTIONED THAT IN 2003, THE
BUSH ADMINISTRATION DECIDED TO
DRAMATICALLY CHANGE THAT TO TRY
TO RESTRICT THE SALE OF
AGRICULTURAL PRODUCTS TO CUBA,
AND THEY SUCCEEDED IN SOME RESPECTS.
WE NEED TO CHANGE THAT AS WELL.
IT MAKES NO SEN
THEY DID IN 2003.
BUT LET ME TRY
WAS DONE IN 2003 SO THAT
EVERYBODY UNDERSTANDS WHAT
HAPPENED.
THE PRESIDENT, TRYING TO GET
TOUGH IN 2003, ELIMINATED THE
PEOPLE, THE PEOPLE-TO-PEOPLE
VISITS PROGRAM WITH CUBA,
ELIMINATED SECONDARY EDUCATION
TRAVEL WITH CUBA.
RESTRICTED FAMILY TRAVEL TO CUBA
BY CUBAN AMERICANS.
RESTRICTED AMATEUR ATHLETIC TRAVEL.
PROHIBITED GIFT PARCELS WITH
CLOTHING, PERSONAL HYGIENE
ITEMS, SOAP MAKING EQUIPMENT AND
SO ON. RESTRICTED RELIGIOUS TRAVEL.
AND THEN ALSO IMPOSED THE CASH
BEFORE SHIPMENT RULE IN ORDER TO
RESTRICT THE SALE OF
AGRICULTURAL COMMODITIES TO CUBA.
SO THAT'S WHERE WE'VE BEEN WITH
RESPECT TO WHAT HAPPENED IN THE
PREVIOUS ADMINISTRATION.
PRESIDENT OBAMA HAS TAKEN SOME
UNILATERAL ACTIONS SINCE TAKING
OFFICE.
HE'S REMOVED THE RESTRICTIONS ON
CUBAN AMERICANS WHO WANT TO
VISIT CUBA FOR FAMILY VISITS.
AND HE'S AUTHORIZED U.S.
TELECOMMUNICATIONS COMPANIES TO
SELL THEIR SERVICES IN CUBA.
I THINK HE SHOULD GO FURTHER
IMMEDIATELY, AND I THINK HE HAS
THE CAPABILITY TO DO THAT BY
RESTORING PEOPLE-TO-PEOPLE
VISITS TO CUBA, RESTORE THE
DEFINITION OF -- I SHOULD SAY
PERMANENTLY RESTORE THE ORIGINAL
DEFINITION OF PAYMENT OF CASH IN
ADVANCE SO THAT FARMERS CAN
CONTINUE TO SELL PRODUCTS,
AGRICULTURAL PRODUCTS TO CUBA.
AND ESPECIALLY WE NEED HERE IN
THE CONGRESS TO PASS S. 428,
WHICH IS THE FREEDOM TO TRAVEL
TO CUBA ACT.
NOW, LET ME DESCRIBE THAT THE
AMERICAN PEOPLE HAVE THE RIG
TO TRAVEL ALMOST ANYWHERE THEY
WISH.
THEY CAN TRAVEL TO RUSSIA IN THE
MIDDLE OF THE COLD WAR.
IN FACT, WE SENT OUR
PHILHARMONIC ORCHESTRA IN 1959,
RIGHT AT THE HEIGHT OF THE COLD
WAR, TO PLAY MUSIC IN RUSSIA.
THEY WEREN'T RESTRICTED.
THERE WAS NO TRAVEL RESTRICTION
WITH RESPECT TO
THE NEW YORK PHILHARMONIC IN
2008 WENT TO NORTH KOREA.
IF YOU WANT TO GET A LUMP IN
YOUR THROAT AND FEEL REALLY
PROUD, GO GET THIS, THE
RECORDING, THE D.V.D.
WATCHING THE NEW YORK
PHILHARMONIC PLAY A CONCERT IN
NORTH KOREA, IT
EXTRAORDINARY.
BUT THEY WERE NOT PROHIBITED
FROM TRAVELING TO NORTH KOREA
BECAUSE YOU CAN TRAVEL TO NORTH
KOREA.
YOU CAN TRAVEL TO IRAN.
THIS IS FROM THE OFFICE OF
FOREIGN ASSETS CONTROL, WHICH IS
THE OFFICE DOWN IN THE BOWELS OF
THE TREASURY DEPARTMENT THAT
DETERMINES WHERE AMERICANS -- OR
HOW TY'RE GOING TO ENFORCE THE
TRAVEL BAN TO CUBA.
THEY SAY ALL TRANSACTIONS
ORDINARILY AND INCIDENTS OF
TRAVEL TO AND FROM IRAN ARE PERMITTE
LET'S REVIEW.
YOU CAN TRAVEL TO RUSSIA IN THE
MIDDLE OF THE COLD WAR.
YOU CAN TRAVEL TO IRAN RIGHT
NOW.
YOU CAN TRAVEL TO NORTH KOREA RIGHT NOW.
NORTH KOREA'S A COMMUNIST COUNTRY.
YOU CAN TRAVEL TO CHINA.
CHINA'S A COMMUNITY COUNTRY.
YOU CAN TRAVEL TO VIETNAM.
VIETNAM'S A COMMUNIST COUNTRY.
I'M CO-CHAIR ON THE
CONGRESSIONAL COMMISSION ON
CHINA.
WE HAVE THE WORLD'S MOST
COMPLETE DATABASE OF POLITICAL
PRISONERS HELD IN CHINA.
THERE ARE VERY SERIOUS PROBLEMS
IN CHINA WITH RESPECT TO THE
IMPRISONMENT OF INNOCENT PEOPLE
WHO ARE NOW SITTING IN THE DARK
CORNERS OF CELLS IN THE FARTHEST
REACHES OF CHINA,
PRISONERS.
AND WE DON'T DECIDE BECAUSE OF
THAT THAT WE'RE NOT GOING TO
ALLOW TRAVEL OR TRADE WITH
CUBA -- EXCUSE
VIETNAM.
WE HAVE DECIDED ENGAGEMENT
THROUGH TRAVEL AND TRADE IS THE
MOST PRODUCTIVE WAY TO MOVE
THOSE COUNTRIES TOWARD GREATER
HUMAN RIGHTS.
IT IS ONLY WITH CUBA THAT OUR
COUNTRY HAS DECIDED THAT THAT'S
NOT A STRATEGY THAT WORKS AT ALL.
WHAT REALLY WORKS IS PUNISHING
THE AMERICAN PEOPLE.
AND SO WHAT WE HAVE DONE IS WE
DECIDED WE'RE GOING TO PU
THE AMERICAN PEOPLE THAT TRAVEL
TO CUBA BY TRACKING THEM DOWN
AND DIVERTING 20% OF THE
RESOURCES IN THE OFFICE OF T
FOREIGN ASSET CONTROL, THAT'S A
LITTLE OFFICE IN THE TREASURY
DEPARTMENT WHO -- THEY'RE
SUPPOSED TO BE WORKING ON
TRACKING FINANCING BY
TERRORISTS.
INSTEAD ABOUT A QUARTER OF THEIR
TIME, I'M TOLD, IS USED TO TRY
TO TRACK AMERICAN TOURISTS WHO
ARE BEING SUSPECTED OF
VACATIONING IN CUBA.
WHEN THEY TRACK THEM DOWN, THEY
REALLY GET AFTER THEM.
THEY WANT TO LEVY A BIG FINE AND
I DESCRIBED PREVIOUSLY, AND I
WILL AGAIN, BECAUSE MY COLLEAGUE
WHO PRESENTED USED A LOT OF
POSTERS TO SHOW WHAT THE
CIRCUMSTANCES ARE.
BUT HER
FOREIGN ASSETS CONTROL SAYS WITH
RESPECT TO TRAVEL TO CUBA BY AN
AMERICAN CITIZEN, "UNLESS
OTHERWISE AUTHORIZED, ANY PERSON
SUBJECT TO U.S. JURISDICTION
ENTBAIDGES ANY TRAVEL-RELATED
TRANSACTION IN CUBA VIOTES THE
REGULATIONS." WHAT DOES THAT MEAN?
WHAT ARE THE CONSEQUENCES?
WELL, IT MEANS THAT WE ARE
PUNISHING THE AMERICAN PEOPLE
SAYING WE RESTRICT OUR TRAVEL.
SO CARLOS LAZIO, A MAN WHO I MET
AND A MAN WHO WENT TO IRAQ TO
FIGHT FOR HIS COUNTRY AND WON A
BRONZE STAR BECAUSE HE WAS
BRAVE, CAME BACK TO THIS COUNTRY
AFTER SERVING HIS COUNTRY IN
UNIFORM, WAS AWARDED WITH GREAT
FANFARE A BRONZE MEDAL FOR
BRAVERY AND THEN WAS TOLD WHEN
HE WAS INFORMED THAT HIS TWO
SONS WHO WERE LIVING IN CUBA WAS
SICK WAS TOLD THAT YOU HAVE NO
RIGHT TO TRAVEL TO CUBA TO SEE
YOUR SICK SON. UNBELIEVABLE.
I FORCED A VOTE IN THE UNITED
STATES SENATE ON THIS QUESTION.
SERGEANT LAZO BACK FROM IRAQ
WITH A SICK SON IN CUBA WAS
TOLD, YOU HAVE NO RIGHT TO
TRAVEL UNBELIEVABLE.
AND, YET, THAT WAS THE CASE.
AND I'VE SHOWN THI
DESCRIBE HOW UNBELIEVABLY
FOOLISH THESE POLICIES ARE.
THIS IS JOAN SCOTT.
I KNOW JOAN SCOTT AS WELL.
MET HER.
SHE WENT TO HAVANA TO DISTRIBUTE
FREE BIBLES ON THE STREETS OF
HAVANA.
FOR THAT HER GOVERNMENT TRACKED
HER DOWN AND TRIED TO FINE
HER $10,000 FOR GOING TO CUBA TO
DISTRIBUTE FREE BIBLES, THIS
GOVERNMENT IS GOING TRACK ITS
CITIZENS DOWNO TRY TO FINE
THEM $10,000?
AND I'VE MET JOAN SLOTE AS WELL
RIDING A BICYCLE IN CUBA.
SHE TOOK A BICYCLE TRIP TO CUBA.
AND THIS GOVERNMENT OF OURS
TRACKED HER DOWN AND TRI TO
FINE HER $10,000.
AND, BY THE WAY, THIS WOMAN, WHO
I THINK MADE $1,100 A MONTH IN
SOCIAL SECURITY, HER GOVERNMENT
DECIDED TO TRY TO ATTACH HER
SOCIAL SECURITY PAYMENTS.
WHAT WAS HER TRANSGRESSION
WHAT WAS HER CRIME?
SHE TOOK A BICYCLE TRIP TO CUBA
AS AN AMERICAN CITIZEN.
NOW, MR. PRESIDENT, I DON'T
VERY MUCH MORE ABOUT THI
THIS IS THE MOST UNBELIEVABLE
WITH RESPECT TO CUBA.
I'VE BEEN TO CHINA.
WE DECIDED THAT ENGAGEMENT
THROUGH TRADE AND TRAVEL IS CONSTRUCTIVE.
IT WORKS.
IT IS WHY, I ASSUME, THAT THE
LEGISLATION THAT SENATOR ENZI
AND I HAVE OFFERED IS
COSPONSORED BY SENATOR LUGAR,
THE RANKING MEMBER OF THE SENATE
FOREIGN RELATIONS COMMITTEE,
SENATOR DODD, THE CHAIRMAN OF
THE BANKING COMMITTEE, THEY ARE
PART OF THE 40 SENATORS WHO HAVE COSPONSORED LEGISLATION SAYING
TO OUR GOVERNMENT, WOULD YOU
STOP PUNISHING THE AMERICAN
SOMEBODY ELSE?
AND WOULD YOU STOP BEING SO
UNBELIEVABLY INCONSISTENT.
DON'T TELL US THAT TRADE AND
TRAVEL IS A CONSTRUCTIVE WAY TO
DEAL WITH COMMUNIST COUNTRIES
AND THEN TELL US THAT DEALING
WITH CUBA 90 MILES OFF OUR SHORE
REQUIRES US TO PUNISH THE
AMERICAN PEOPLE BY RESTRICTING THEIR RIGHT TO TRAVEL.
I SAY, AGAIN, BY WHAT RIGHT DOES
THIS GOVERNMENT HAVE TO TELL AN
AMERICAN CITIZEN WHERE IT CAN'T
TRAVEL?
IT CAN GO TO NORTH KOREA, IRAN,
CHINA, VIETNAM, BUT NOT TRAVEL
TO CUBA?
THAT'S OBSCENE.
IT MAKES NO SENSE TO ME.
AND I -- YOU KNOW, IT'S -- ASIDE
FROM WE OUGHT -- WE OUGHT TO
STOP DOING STUPID THINGS, ASIDE
FROM JUST THAT NOTION, WE SURELY
OUGHT TO DECIDE THAT IT IS NOT
IN THE INTEREST OF THIS COUNTRY
TO HAVE ITS GOVERENT TELLING
PEOPLE HOW, WHEN, AND WHERE THEY
CAN TRAVEL.
NOW, I WANT TO FINISH BY JUST
SAYING THIS AGAIN.
I DON'T DENY THAT THERE IS
SUBSTANTIAL HUMAN RIGHTS ASE
IN CUBA.
I'VE BEEN THERE.
I TALKED TO THE DISSIDENTS.
I TALKED TO THE CUBAN PEOPLE WHO
HAVE COME TO THIS COUNTRY WHO
KNOW OF, WHO HAVE SEEN, WHO HAVE
WATCHED THE UNBELIEVABLE LACK OF
HUMAN RIGHTS THAT EXISTS IN THAT COUNTRY.
SO THAT'S -- THAT'S NOT THE
POINT.
THE POINT ISN'T TO DIDN'T THE
CHARTS THAT PEOPLE SHOW ON THE
ABUSE.
I COULD BRING TO THE FLOOR OF
THE SENATE AS CHAIRMAN OF THE
COMMISSION THAT DEALS WITH
CHINA, I CAN CAN BRING TO THE
FLOOR DOZENS OF PHOTOGRAPHS OF
CHINESE PRISONERS HELD IN THE
DARKEST CELLS IN THE FARTHEST
REACHES OF CHINA WHO HAVE DONE
NOTHING BUT ARE SUFFERING.
BUT WE HAVE NOT DECIDED AS A
COUNTRY THAT WE WILL RESTRICT
THE AMERICAN PEOPLE'S RIGHTS TO
GO TO CHINA BECAUSE THAT EXISTS
IN CHINA.
WE'VE SAID QUITE THE OPPOSITE.
WE BELIEVE THE BEST WAY TO
PROMOTE A MARCH TOWARDS GREATER
HUMAN RIGHTS IN CHINA, VIETNAM
AND ELSEWHERE IS THROUGH TRADE AND TRAVEL.
THAT'S THE CONSTRUCTION THAT
THIS COUNTRY HAS TAKEN FOR A
LONG, LONG WHILE EXCEPT WITH
CUBA.
AND IN THAT CIRCUMSTANCE WE SAY,
NO, WE MUST -- WE MUST,
PREVENT AMERICANS FROM TRAVELING TO CUBA.
AND I SAY
CUBAN HUMAN RIGHTS LEADERS HAVE
SIGNED A LETTER SENT TO US FROM
HAVANA, CUBA, 74 OF THEM AND
SAID, LIFT THIS TRAVEL BAN.
THIS TRAVEL BAN MAKES NO SENSE.
YOU WANT TO HELP CUBA?
THEN -- YOU WANT TO HELP THE
PEOPLE OF CUBA, LIFT THIS TRAVEL
BAN.
AND I ALSO WOULD SAY, AGAIN, IF
I CANIND THE CHART THAT I
THE -- THE VERY BRAVE CITIZENS
IN CUBA WHO HAVE SPOKEN OUT AND
WHO ARE WIDELY RECOGNIZED WHO
HAVE SUFFERED, MAR CELLO
RODRIGUEZ, SANCHEZ, ALL OF THEM
HAVE SUFFERED UNDER THE CASTRO
REGIME IN CUBA.
ALL OF THEM BELIEVE THIS TRAVEL
BAN OUGHT TOE LIFTED.
I WOULD HOPE THAT THIS SENATE
WOULD PAY SOME ATTENTION TO THAT
AND FINALLY SEE IF W CAN'T DO
TWO THINGS AT THE SAME TIME.
NUMBER ONE, STOP PUNISHING THE
AMERICAN PEOPLE BECAUSE WE
DISAGREE WITH ANOTHER COUNTRY'S GOVERNMENT.
NUMBER TWO, DO SMART THINGS THAT
ALLOW US TO FIND WAYS TO PUSH
AND MOVE THAT GOVERNMENT TOWARD
GREATER HUMAN RIGHTS FOR ITS CITIZENS.
LIFTING THE TRAVEL BAN WILL
ACCOMPLISH BOTH.
BECAUSE THERE ARE 40 OF US IN THE UNITED STATES SENATE WHO
HAVE SPONSORED LEGISLATION AND
COSPONSORED LEGISLATION TO LIFT
THAT TRAVEL BAN, I BELIEVE THA
WHEN WE HAVE THE OPPORTUNITY FOR
THAT VOTE HERE IN T SENATE, I
BELIEVE THAT WE WILL PREVAIL AT LAST.
AT LAST, AT LONG, LONG LAST WE
WILL PREVAIL AND IT WILL BE
CONSTRUCTIVE PUBLIC POLICY FOR
OUR COUNTRY TO HAVE DONE SO.
IT WILL HAVE LIFTED THE YOLK OF OPPRESSION.
I'M TALKING ABOUT OUR
GOVERNMENT.
IT WILL LIFT THE YOLK OF
OPPRESSION FOR SOME 50 YEARS BY
TELLING ITS CITIZENS WHERE IT
CAN AND CANNOT TRAVEL.
I DON'T WANT TO HEAR ANYMORE
ABOUT A GOVERNMENT THAT
DOWN A GUY FROM STATE OF
WASHINGTON WHOSE FATHER WAS A
MINISTER IN A SMALL CHURCH IN
CUBA AND THEN IMMIGRATED TO THIS
COUNTRY AND HIS FATHER DIED AND
HIS FATHER'S LAST WISH WAS THAT
HIS ASHES WOULD BE STREWN ON THE
CHURCH PROPERTY IN CUBA WHERE HE
WAS A MINISTER.
AND SO HIS SON CARRIED OUT HIS
FATHER'S WISH, WENT TO CUBA AND
TOOK HIS FATHER'S ASHES TO THE
CHURCH WHERE HE ONCE SERVED AND
DEPOSITED THEM ON THE LAWN BY
CHURCH.
AND FOR THAT HIS GOVERNMENT
TRACKED HIM DOWN AND HAD A
SUBSTANTIAL FINE FOR THAT YOUNG
MAN FROM WASHINGTON.
I'M TIRED OF THOSE STORIES.
THAT IS ABOUT
WRONG AND WE NEED TO FIX IT.
AND I MAKE A POINT OF ORDER THAT
A QUORUM IS NOT PRESENT.
THE PRESIDING OFFICER: THE CLERK
WILL CALL THE ROL
QUORUQUORUM CALL:
QUORUM CALL:
MR. DORGAN: MR. PRESIDENT?
THE PRESIDING OFFICER: THE
SENATOR FROM NORTH DAKOTA IS RECOGNIZED.
MR. DORGAN
CONSENT THE QUORUM CALL BE
VACATED. THE PRESIDING OFFICER: WITHOUT
OBJECTION.
MR. DORGAN: MR. PRESIDENT, I ASK
UNANIMOUS CONSENT THATT
2:30 P.M. TUESDAY, JULY 20, THE
SENATE RESUME CONSIDERATION OF
THE HOUSE MESSAGE TO ACCOMPANY
H.R. 4213, THAT THE MOTION TO
RECONSIDER BE AGREED TO AND THE
SENATE THEN PROCEED TO VOTE ON
THE MOTION TO INVOKE CLOTURE ON
THE MOTION TO CONCUR IN THE
HOUSE AMENDMENT TO THE SENATE
AMENDMENT TO H.R. 4213, WITH
AMENDMENT 4425.
THE PRESIDING OFFICER: WITHOUT
OBJECTION.
MR. DORGAN: MR. PRESIDENT, I ASK UNANIMOUS CONSENT THAT THE
SENATE PROCEED TO EXECUTIVE
SESSION TO CONSIDER CALENDAR
NUMBERS THREE AND FOUR, TREATY
DOCUMENTS 111-1 AND 111-3, THAT
THE TREATIES BE CONSIDERED AS
HAVING ADVANCED TO THE VARIOUS
PARLIAMENTARY STAGES UP TO AND
INCLUDING THE PRESENTATION OF
THE RESOLUTIONS OF RATIFICATION,
THAT ANY COMMITTEE RESERVATIONS
AND DECLARATIONS BE AGREED TO AS
APPLICABLE, THAT ANY STATEMENTS
BE PRINTED IN THE RECORD, AND
FURTHER THAT WHEN THE VOTES ON
THE RESOLUTIONS OF RATIFICATION
ARE TAKEN, THE MOTIONS TO
RECONSIDER BE CONSIDERED MADE
AND LAID UPON THE TABLE EN BLOC,
THE PRESIDENT BE IMMEDIATELY
NOTIFIED OF THE SENATE'S ACTION
AND THE SENATE THEN RESUME
LEGISLATIVE SESSION.
THE PRESIDING OFFICER: WITHOUT
OBJECTION.
MR. DORGAN: MR. PRESIDENT, I ASK
FOR A DIVISION VOTE ON EACH OF
THE RESOLUTIONS O
THE PRESIDING OFFICER: THE
QUESTION IS ON TREATY DOCUMENT 111-1.
ALL THOSE IN FAVOR STA
COUNTED.
ALL THOSE OPPOSED STAND AND BE
COUNTE
TWO-THIRDS OF THE SENATORS
PRESENT HAVING VOTED IN THE
AFFIRMATIVE, THE RESOLUTION OF
RATIFICATION OF TREY DOCUMENT
111-1 IS AGREED TO.
THE QUESTION IS NOW ON TREATY
DOCUMENT 111-3.
ALL THOSE IN FAVOR STAND AND BE
COUNTED.
ALL THOSE OPPOSED STAND AND BE
COUNTED. TWO-THIRDS OF THE SENATORS
PRESENT HAVING VOTED IN THE
AFFIRMATIVE, THE RESOLUTION OF
RATIFICATION IS AGREED TO.
UNDER THE PREVIOUS ORDER, THE
MOTIONS TO RECONSIDER ARE
CONSIDERED MADE AND LAID UPON
THE TABLE EN BLOC.
MR. DORGAN: MR. PRESIDENT? THE PRESIDING OFFICER: THE
SENATOR FROM NORTH DAKOTA.
MR. DORGAN: MR. PRESIDENT, I
UNDERSTAND THAT H.R. 5712 HAS
BEEN RECEIVED FROM THE HOUSE AND
IS AT THE DESK.
THE PRESIDING OFFICER: THE CLERK
WILL READ THE TITLE OF THE BILL
FOR THE FIRST TIME.
THE CLERK: H.R. 5712, AN ACT TO
PROVIDE FOR CERTAIN
CLARIFICATIONS AND EXTENSIONS
UNDER MEDICARE, MEDICAID AND THE
CHILDREN'S HEALTH INSURANCE
PROGRAM.
MR. DORGAN: MR. PRESIDENT, I
WOULD ASK FOR THE SECOND READING
AND OBJECT TO MY OWN REQUEST.
THE PRESIDING OFFICER: OBJECTION
IS HEARD.
THE BILL WILL BE READ FOR THE
NEXT TIME IN THE NEXT
LEGISLATIVE DAY.
MR. DORGAN: MR. PRESIDENT, I
MAKE A
QUORUM IS NOT
THE PRESIDING OFFICER: THE CLERK
WILL CALL THE ROLL.
QUORUM CALL:
THE PRESIDING OFFICER: THE
SENATOR FROM ILLINOIS
RECOGNIZED.
MR. DURBIN: I ASK CONSENT THE
QUORUM CALL BE DISPENSED WITH.
I ASK UNANIMOUS CONSENT THAT
WHEN THE SENATE COMPLETES ITS
BUSINESS TODAY, IT ADJOURN UNTIL
2:00 P.M. ON MONDAY, JULY 19.
THAT FOLLO
PLEDGE, THE JOURNAL OF
PROCEEDINGS BE APPROVED TO DATE,
THE MORNING HOUR BE DEEMED
EXPIRED, THE TIME FOR THE TWO
LEADERS BE RESERVED FOR THEIR
USE LATER IN THE DAY AND THAT
FOLLOWING ANY LEADER REMARKS,
THE SENATE PROCEED TO A PERIOD
OF MORNING BUSIN
P.M., WITH SENATORS PERMITTED TO
SPEAK THEREIN FOR UP TO TEN
MINUTES EACH.
THAT FOLLOWING MORNING BUSINESS,
THE SENATE RESUME CONSIDERATION
OF H.R. 5297, THE SMALL BUSINESS
JOBS BILL. THE PRESIDING OFFICER: WITHOUT
OBJECTION.
MR. DURBIN: MR. PRESIDENT, THERE
WILL BE NO ROLL CALL VOTES
DURING MONDAY'S SESSION OF THE SENATE.
SENATORS SHOULD EXPECT THE NEXT
VOTE TO OCCUR AT APPROXIMATELY
2:30 P.M. ON TUESDAY, JULY 20.
THAT VOTE WILL BE ON THE MOTION
TO INVOKE CLOTURE WITH RESPECT
TO H.R. 4213, WHICH EXTENDS
UNEMPLOYMENT BENEFITS THROUGH NOVEMBER.
THAT IF THERE'S NO FURTHER
BUSINESS TO COME BEFORE THE
SENATE, I ASK THAT IT ADJOURN
UNDER THE PREVIOUS
THE PRESIDING OFFICER: THE
SENATE STANDS ADJOURNED UNTIL