obligation here. the value of treasuries would plummet leaving 401(k), investors holding much less value the value of the dollar would decline significantly. ultimately the question of american sovereignty, the way that we control our future would be in doubt and other countries would dictate results. we must pay our bills. we must pay our debts. we must vote for this legislation. a senator: madam president? the presiding officer: the senator from new hatch hire. hire -- new hampshire. mr. gregg: the senator from upon montana is right. we so pay our bills. but we can't continue to -- it is not responsible to raise the debt ceiling in this manner if you're not going put in place any responsible activity to bring under control the rising debt.

and there is no proposal here to do that. in fact, just the opposite. the proposal from the administration and passed by this congress was a budget that will increase the debt every year for the next ten years by over a trillion dollars, on average. and there is no proposal to bring that down. the debt will double in five years. it will triple in ten years under the budget passed by the democratic leadership of this congress and under the president's budget. that isn't fiscal discipline. to raise the debt ceiling by by $1.9 billion while doing nothing to address the debt and how it is being added to is totally irresponsible. it's like a drunken sailor asking to have the bar open all night. and why are we going to this number, by the way? why $1.9 trillion? so that the congress doesn't

have to face up to the debt ceiling before the next election. we ought to have to face up to it again before the next election because the people in this country have a right to know whether or not this congress is going to do something about controlling the rate of growth of the debt, before the next election. instead, we're seeing this attempt to try to take this off the table by moving it past the next election. well, the american people don't believe it should be off the table. that's what massachusetts is all about. they are worried about this debt. they are worried about what we're doing to the next generation of americans, to our children, by running up this debt. so this is not correct. we should not vote for this massive increase in the debt ceiling until we get some responsible action around here on the issue of how we're going to control the debt and the deficit. thank you, mad chair. mr. baucus: before the vote, i i -- i have seven unanimous consent requests for committees

to meet during today's session of the senate. i ask that they be agreed to and printed in the record. the presiding officer: without objection. the question is on the amendment 3299 as amended. is there a sufficient second? there appears to be. the clerk will call the roll. vote:

vote:

the presiding officer: are there any senators in the chamber wishing to vote or change their vote? if not, on this vote, the yeas are 60, the nays are 40. under the previous order requiring 60 votes for the adoption of this amendment, the amendment is agreed to. the motion it reconsider it considered made and laid on the table.

there are now four minutes of debate equally divided. resident? the presiding officer: the senator from montana. mr. baucus: madam president, i fixed -- the presiding officer: could i please have order. mr. baucus: i yield back the balance of my time and i suggest the other side do the same. the presiding officer: is all time yielded back? all time is yielded bk. the clerk will read the joint resolution the third time. the clerk: house joint resolution 45, increasing the statutory limit on the public debt. the presiding officer: is there a sufficient second? there appears to be. the clerk will call the roll. vote:

vote: are there

any senators wishing to vote or

to change their vote? seeing none, on this vote the yeas are 60, the nays are 39. under the previous order requiring 60 votes for the passage of this joint resolution, the joint resut pas. mr. reid: move to lay that on the table. e presidg officer: without objection. mr. reid: madam president? the presiding officer: the majority leader. mr. reid: i ask unanimous consent that the order with respect to debate prior to the cloture vote on the bankruptcy nomination provide that the debate be extended until 3:20 p.m. this afternoon with the majority controlling 60 minutes of that time and the remaining time under the control of the republicans much that at 3:30 the senate vote on the motion to vote cloture on the nomination. if cloture is voted, all postcloture time voted -- yielded back. upon confirmation, the motion be considered made, and laid on the table and the president be

notified of the senate's action and the senate resume legislative session. the presiding officer: is there objection? without objection, so ordered. the majority leader. mr. reid: we want to make sure that all senators understand we're going to be debating through the respective meetings that the two caucuses are having. it's important that we get this done in the time allotted here so people are not going to be able to wait until 3:20 to do speeches. i yield three minutes to the senator from south dakota, tim johnson. the presiding officer: under the previous order the senate will proceed to executive session to consider the following nomination which the clerk will report. the clerk the clerk: nomination, federal reserve system, ben s. bernanke

of new jersey to be chairman of the board of governors for a term of four years. the presiding officer: the senator from south dakota. mr. johnson: madam president, i rise in support of the reconfirmation of chairman ben bernanke to serve another term as chairman of the federal reserve board of governors. as the administration and song continue to look for ways to restore our nation's financial stability for economic recovery and work on the legislation to ensure that another economic crisis like the one we faced last year never happens again, we need chairman bernanke's steady leadership. while there has certainly been criticism of the federal reserve for not doing enough to protect

consumers and for unprecedented actions it took during the financial crisis, there is also consensus that mr. bernanke kept the nation out of a depression and has kept inflation in check. as our nation recovers and faces additional challenges in the months ahead, there is no doubt that having one of the world's foremost experts on the great dpletion at the helm of the fed is a benefit to our nation, but it cannot be business as usual for the fed. like many banks on wall street, the fed must be more transparent and more accountable for its actions. the federal reserve cannot just be the organization that picks up all the financial

institutions' bills while placing our entire economy at risk in doing so. the status quo at the fed is not acceptable. our nation needs a central bank that is proactive in addressing concerns for our national institutions and the economy. i believe mr. bernanke is committed to these goals and i support mr. bernanke's confirmation. madam president, i yield the floor. the presiding officer: who yields time? a senator: madam president? the presiding officer: the senator from alabama. mr. shelby: madam president, i rise today to oppose -- to oppose the reappointment of ben bernanke for a second term as chairman of the board of governors of the federal reserve system. madam president, the principal reason for my opposition to this

nomination is that i believe in accountability. in particular, i believe that it is the duty of this body -- that is, the united states senate, to hold accountable those regulators hooz poor oversight of our financial institutions and markets help produce the greatest economic crisis this country has experienced in some 80 years. madam president, because the preserve during chairman bernanke's tenure failed to take the steps to ensure that our financial institutions were properly regulated and would not need federal bailouts to survive, i do not believe that mr. bernanke should be confirmed for another term. prior to the recent financial crisis, as a member of the board of governors, dr. bernanke advocated monetary policies that contributed to excessive risk taking.

subsequently, as board chairman, he ignored or down played the serious emerging risk. he failed to use regulatory authority available to the fed to prevent housing speculation and unsound lending practices, often misjudged the nature of problems in markets, contributed to market turbulence by appearing to act inconsistently and in an ad hoc manner he failed to ensure transparency of actions and basically took actions damaging to the political independence of the federal reserve and of our nation's monetary policy. madam president, i do not believe that chairman bernanke has executed sound judgment and oversight over the fed's monetary policy. lender of last resort and regulatory and supervisory functions. i will explain. chairman bernanke has advocated policy of remarkably low

interest rates for an extended period of time following the 2001 recession, providing an environment -- providing an environment that helped fuel a speculative bubble in real estate lending. madam president, subsequently, in the face of rising home prices and risky mortgage underwriting practices, the fed failed to act under bernanke's watch by choosing not to use its rule-making authority over mortgages to arrest the risky practices and address growing risk. and yet, madam president, amazingly, given a history of failure in supervision and regulation, chairman bernanke now continues to actively campaign for maintaining and further expanding the regulatory powers of the federal reserve. madam president, the financial panic that our markets experienced in 2008 was the most

severe, as i said, in modern memory. its repercussions have resulted in our unemployment rate surging to more than 10%, and the worst economic growth in a generation. our present economic problems, however, are no accident. in large measure, they stem directly from the actions of our financial regulators. madam president, it's the responsibility of our financial regulators to ensure that our financial institutions are properly supervised and that they promote rather than threaten our national economy. unfortunately, the recent financial crisis demonstrated that our financial regulators did not do their jobs. our banks were undercapitalized. mortgage lending standards were far too loose and expectations of government bailouts were too prevalent. madam president, dr. bernanke's

federal reserve played a key role in setting the stage for the financial crisis that we're in now. first, under his leadership, the federal reserve failed to ensure that our financial institutions were adequately capitalized, as i mentioned a minute ago. indeed, the federal reserve, our federal reserve, led the effort to reduce capital, reduce capital, madam president, in our largest financial institutions through the adoption of the capital accords. the fed even considered abandoning a leverage ratio which ensures that all banks maintain at least 4% of capital. think about it a minute. as a result, when the crisis struck, many of our financial institutions did not have the capital necessary to withstand the downturn. not surprisingly, the federal

reserve then argued that a taxpayer bailout of the banks was the only way to prevent an economic collapse. but rather than do its job and ensure that our financial institutions were adequately capitalized, the fed waited until the crisis was in hand -- at hand and then rescued its banks with taxpayer funds. think about it a minute. ben bernanke's federal reserve also failed, madam president, to detect and to address the decline in lending standards and growing use of subprime loans. at the core of our financial crisis is the fact that far too many home loans were made that borrowers will be unable to repay, probably ever. the failure of bear stearns, leeman, washington mutual and a.i.g. largely stem from the sharp declines in mortgage values, and although the congress gave the federal reserve authority to address lending standards and subprime

loans when it passed the homeownership and equity protection act in 1994, the fed failed to enact strong regulations until 2008, more than two years under -- into chairman bernanke's term. in addition, ben bernanke's federal reserve has failed to adequately supervise many of our largest financial institutions, most notably citigroup. for years, it's been no secret that the problems of citigroup have been well known everywhere, but the federal reserve always sought to look the other way rather than deal with its complicated problems. by failing to address citigroup during the good times, the federal reserve left our largest financial institution at that time highly vulnerable to the next downturn. in the end, the federal

government had to inject inject $40 billion and guarantee more than $300 billion of citigroup's assets. the fed's failure as a supervisor, the regulator, placed u.s. taxpayers and our economy directly at risk. madam president, regardless of how chairman bernanke performed during the financial crisis, the record of the fed leading up to the crisis should not be ignored by the congress. a close examination of chairman bernanke's performance during the financial crisis reveals that he was too slow to recognize how serious the situation was, and when he did react, he acted in an ad hoc fashion that greatly exacerbated the crisis. madam president, after the housing market bubble began to burst in 2006, chairman bernanke was slow to entertain possible spillovers from housing into the general economy and the financial system itself.

even after bear stearns failed, chairman bernanke did little to prepare for additional failures. in other words, bernanke fiddled while our markets burned. in the next six months, between the failure of bear stearns and lehman, the federal reserve did very little to prevent either another taxpayer bailout or a sudden and disorderly collapse of lehman, even though the problems were well known to the fed and to everybody else. as a result, when leeman was ultimately -- when lehman was ultimately allowed to fail, our markets responded sharply because they could not understand why the fed let lehman fail but rescued bear stearns. markets need clarity about policy, especially in times of crisis, yet just when our markets needed clarity about fed policy, chairman bernanke's ad hoc responses left our markets in the dark. consequently, the failure of lehman was far more disruptive

and damaging than it needed to be. bernanke's response to the financial crisis also raises questions about his judgment. in october, 2008, he appeared before the banking committee in the u.s. senate to urge the passage of tarp. he testified that government purchase of top assets from banks was the best way to respond to the financial crisis. at the time, as a lot of you know, i opposed tarp because i did not believe that purchasing toxic assets was a workable solution or should we bail out anybody. i argued that it risked ruling our financial -- risked making our financial problems worse by indirectly causing the failure of other financial institutions, and it did. despite chairman bernanke's urging that an asset purchase was the best solution just days after the passage of tarp, the treasury department and the federal reserve abandoned the very asset purchase plan that he

judged to be the best course forward when he testified before congress. equity injections were employed because the usual -- because the asset purchase plan was proven to be unworkable, he said. madam president, the full story of a.i.g. is yet to be told. unfortunately, the fed and other regulators have gone out of their way to hide what really has gone on at a.i.g. both before and after the bailout from congress. what is clear, however, is that the fed knew more about a.i.g.'s problems than it has admitted so far. the fed has repeatedly stated that it did not learn of a.i.g.'s problems until the weekend of september 12, 2008, and that it was stunned to learn of its problems. really? yet, in his recent book "too big to fail," andrew ross sorkin reports that the c.e.o. of a.i.g. met with then the new york fed president tim geithner

about a.i.g.'s problems on at least two occasions prior to september 12, 2008. on one occasion, a.i.g.'s c.e.o. gave mr. geithner at that time documents detailing a.i.g.'s financial condition and its exposures to other financial institutions. we still do not know what treasury secretary geithner at that time did upon learning about the problems with a.i.g. or whether chairman bernanke knew of a.i.g.'s meeting with the new york fed, at that time mr. geithner. the fact that the fed may have known about the problems with a.i.g. before its collapse raises serious questions here about whether they ignored early warnings and failed to take action before the situation became untenable without massive taxpayer bailouts. madam president, many have said that if chairman bernanke is not reappointed, financial markets will be rattled. the notion seems to be that

continuity of leadership will be valued more by markets than the assurance of responsible and accountable leadership at the fed. i believ -- i believe this is shortsighted and wrong. it is more important to find the most competent person available for the job than to simply adhere to the status quo. madam president, it's also wrong to speculate as to what might happen should someone other than mr. bernanke serve as chairman. i believe it's far more important to consider the facts surrounding chairman bernanke's record than it is to speculate about the impact of his depaver tour. -- departure. the record clearly indicates that considerable economic devastation occurred as a result of chairman bernanke's loose monetary policy and weak regulatory oversight. millions of people are now out of work in this country, and trillions of dollars in savings have been lost. madam president, those who try

to frighten others with notions of what might happen are ignoring the hard reality of what already has happened. if we don't hold chairman bernanke accountable, what precedent are we setting for future regulators? what incentive will they have to take to tough steps necessary to ensure that our financial institutions are adequately regulated? i fear, madam president, that the prospects of a high-paying job on wall street will diminish a lot of the incentives to be a good regulator unless they know that congress will hold them accountable. if they fail to do their job. how can we ever expect our regulators to perform if after the greatest financial crisis in living memory not a single culpable regulator is held accountability? unfortunately, this is a theme that is repeated too often here in washington. something terrible offer happend

although congress exposes both individual and institutional failures, nobody is held accountable and the only one thing that ever seems to happen is that the failed institutions along with their failed leaders get more authority and more money. madam president, this needs to end. the american people rightly believe that any one of us who neglected to do owrd job, we should be tholed account, not rewarded. madam president -- mr. president, i intend to do my job and vote "no" on a second term for ben beer naing ceevme ceevment. the presiding officer: the senator from connecticut is recognized. mr. dodd: i recognize my colleague from new jersey for five minutes. the presiding officer: without objection. mr. menendez: mr. president? the presiding officer: the senator from new jersey is recognized. mr. menendez: thank you, mr. president. let me thank my distinguished chairman of the banking committee for yielding time. i rise in support of a man whose

position i do not envy. chairman bernanke neighed some -- has faced some extraordinary economic circumstances and kept a steady hand on the tiller in a perfect economic storm that has threatened this nation's economic financial stability. facefaced with an economy that s in a downward spiral, chairman beer nieng key had to make tough decisions to preside is over a global economic meltdown. doing nothing is not an option. having said that i do believe there was more the fed could have done to supervise the banks and provide credit to small businesses. i believe -- and chairman bernanke admitted himself, he could have been ambassador to mitigate risks. in the future, i expect the fed will be more responsive to the

needs of main street where there is a small business innovating is selling the new jobs of the 21st century and needs of american families across this country. i expect it will be more vigilant to prevent a repeat of the economic crisis we have experienced and we'll get ahead of future challenges we will face, like commercial loans and credit card defaults. despite these reservations, i will be voting in favor of confirmation because it is my belief that history will show the recession would have spiraled into a depression had chairman bernanke been timid in his actions. i am voting "yes" because chairman bernanke has proven his val to this nation during this unprecedented crisis. a vote against confirmation would unnerve investors and exacerbate economic uncertainty in an economy that needs

confidence and stability, not volatility. i believe chairman bernanke san astute scholar of the great depression and is now arguably the first and foremost expert on the great recession. at this moment in history, someone who has learned from two of the most devastating economic disasters in american history is certainly qualified to lead the fed. i will vote "yes" because in my view what we should not do is change leadership at the fed at a time when what we need smos a steady -- 0 need most is a steady, experienced hand at what appears to be the very beginning of an economic recovery. i will vote "yes" because recently chairman bernanke has committed to more muscular regulatory reform that will corral the bulls on wall street. he has had the will to take politically unpopular strategic action which history will show was necessary under the economic circumstances created by the last eight years of runaway las

say fair financial regulator regulatory policies. he understood the importance of keeping inflation low and stablizing the financial system. this time, mr. president, his work is not yet done and i believe we need the wisdom of patience. as elizabeth baron browning said, "measure not the work until the day is out and the labor done." i'll vote "yes" because chairman bernanke has vowed in a letter h. to being aing comptroller to provide all records necessary for a g.a.o. audit of the fed to give a clear understanding of his and the fed's action in the billout of a.i.g. i believe he understands the danger of exacerbating the danger by tightening monetary policy at the wrong tievment president kennedy said, "in knowledge is light. we must think and being a not only for the moment but for our

time." told the story after man who asked his gardener to plant a tree but the gardener said it was a very slow tree. at this point, the man said, there's no time to lose. plant it this afternoon." solving our economic crisis surely will not take 100 years. the seeds of recovery that are taking place right now need to beer in toured by an experienced hand. i urge my colleagues to join knee ensuring confidence at the fed, not volatility. it is necessary for our time. with that, madam president, i yield back whatever time i have left to the chairman. mr. bunning: mr. chairman? the presiding officer: the senator from kentucky is recognized. mr. bunning: i yield myself

such time as i may consume. i have up to 30 minutes, i don't think i'm going to need that. four years ago when chairman bernanke was first nominated to be chairman of the federal reserve, i was the only senator to vote against him. in fact, i was the onl the senao raise serious concerns about his nomination. i opposed him because i knew he would continue the legacy of alan greenspan, and i was right. but i did not know how right i would be, and i could not imagine how wrong he would be in the following four years. from monetary policy to regulation, consumer protection, transparency, and independence, chairman bernanke's time as fed chairman has been a failure. we must put an end to his and

the fed's failure, and there is no better time than now. the greenspan legacy on monetary policy was breaking from the tailor rule to provide easy money and, thus, inflate bubbles. not only did chairman bernanke continue that policy when he took control of the fed, but he supported every greenspan rate decision when he was a fed governor before he became chairman. sometimes he even wanted to go further and provide more easy money than chairman greenspan. yet even to this day, chairman bernanke continues to deny that fed actions played any role in inflating the housing bubble, despite overwhelming evidence and the consensus of economists

to the contrary. and in his efforts to keep filling the punch bowl, which is a term used by chairman bernanke himself, he cranked up the printing presses to buy mortgage securities, treasury securities, commercial paper, and other assets from wall street. those purchases, by the way, led to some nice profits for the wall street banks and dealers who sold them to the fed. on consumer protection, chairman bernanke went along with the greenspan policy before he was chairman and continued it after he was promoted. the most glaring example is it took him two years to finally regulate subprime mortgages, after the fed had already done

nothing for the prior 12 years. even then, he only acted after pressure from congress and after it was clear subprime mortgages were at the heart of the economic meltdown. and on other consumer protection issues like credit cards, he only acted at a time -- when the time aproposed for his confirmation to -- when the time approached for his confirmation to another term at the fed. as the economy started to slide and the housing bubble peaked and then burst, chairman bernanke failed to notice the problems or do anything about them until it was too late. during that time, he made statements showing just how he did not understand what was really going on in the economy or how severe the crash would be. i want to read a few of those

statements so that everyone understands just how wrong he has been. in march of 2007 -- this is chairman bernanke -- he said: "the impact on the broader economic and financial markets of the problems in the subprime market seem likely to be contained." then in may of that year, he said, "we do not expect significant spillover from the subprime market to the rest of the economy or to the financial system." the following february he said, "among the largest banks, the capital ratio remains good, and i don't expect any serious problems of that sort among the large internationally active banks that make up a very

substantial part of our banking system." a few months later in june of 2008, he said, "the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so." then in july of 2008, he said that "fannie mae and freddie mac are adequately capitalized and in no danger of failing." finally, in may of last year, speaking about unemployment -- the unemployment rate, he said, "currently, i don't think it will get to 10%." well, we all wish he had been right in that one. i could read a few more quotes, but i think those are enough to show how wrong he has been on

major economic issues. of course, everyone makes mistakes, so i asked chairman bernanke about these errors in written questions i gave him after his confirmation hearing. his answers did not make me feel any better. he said, the fed did not understand the relationship between financial firms, how the problems in the financial sector would move to the real economy, or how severe the financial crisis would be. that's in his written response to me. i thought those were the kinds of things regulators and the fed in particular were paid to understand and address. we shouldn't be paying fed chairmen to learn on the job. just like with consumer protection, chairman bernanke

did not take the job of regulating the banks under the fed's authority seriously. instead of close supervision of the biggest and most dangerous banks, he allowed them to he grow their balance sheets and increase risk. and the same is true on derivatives. after taking over the fed, he did not see any need for serious regulation of derivatives until it was clear that we were headed to a financial meltdow meltdowns in part to those products. even worse than the failure and flawed policies i just mentioned, chairman bernanke destroyed the independence of the fed. he bowed to the political pressures of the bush and obama administration and turned the fed into an arm of the treasury.

walking arm in arm with the treasury, chairman bernanke bailed out all the large financial institutions including many foreign banks. and he put the printing press into overdrive to fund the government spending and hand out cheap money to the wall street firms. instead of taking that money and lending it to consumers and cleaning up their balance sheets, the banks started to pocket record profits and pay out billions of dollars in bonuses. and now it appears that chairman bernanke is compromising the independence of the fed to get votes for his confirmation. after a meeting with chairman bernanke, the majority leader issued a statement saying that he had expressed concerns to

chairman bernanke about things that the fed was not doing and that chairman bernanke committed to take action. the majority leader went on to state that his support for chairman bernanke was not unconditional. i do not question the majority leader's intent or actions here. and i certainly do not have a problem with a senator telling the fed chairman about his concerns urging him to take action. i have done so myself on many occasions and it is not a problem for the fed chairman to agree that he -- he and the fed need to address concerns raise bid a senator. but what is not appropriate is the fed chairman making commitments in order to secure votes for himself. i hope that is not what is happening in this case.

now with greater power goes the responsibility to use that power in an open and certainly a transparent way. we have all heard chairman bernanke talk a lot about transparency. but his actions speak louder than his words. he promised congress more transparency when he first became fed chairman. and he promised us more transparency when he came begging to the congress for tarp. while he has published some more information than before, those efforts fall far short and he still refuses to provide details in all of the fed's actions over the last two years. after his confirmation hearings, i asked chairman bernanke for a

list of documents for us to review. all of which are reasonable for congress to see. for example, the list included documents about the bailout of bear stearns and a.i.g. information about the fed's regulation of banks before and during the crisis and traps scripts of monetary policy meetings that have not been made public. but his answer made it clear that he's not going to put -- not going to open the fed's actions to review by congress or the taxpayers. instead of providing those documents, what i got in return was a folder full of paper that was printed off the fed webpage. that kind of response is not

only disrespectful to the senate, but it raises the question of what are they hiding? following the markup of chairman bernanke's nomination, chairman dodd did arrange for the banking committee members and staff to review some of the documents surrounding the a.i.g. bailout. i thank him for doing that and i took him up on the offer and went down to the fed myself to look at them. in reviewing those documents some interesting and useful facts came to light that will be helpful as we craft banking and farm legislation. more importantly for what we are talking about today, some of those documents contain new information that raises serious questions about chairman bernanke's judgment, leadership, and personal role in the a.i.g.

bailout. unfortunately under the agreement with the fed to get access to those documents, i am not allowed to talk about the details and i was not able to copy those details and bring them back and show them to other senators. i think that every senator should be able to see those documents prior to voting. and i ask chairman dodd to subpoena them this week, but that has not happened. senators should be especially concerned about voting now because last week chairman bernanke, himself, asked the g.a.o. to conduct a review of these same documents, but that review will not be complete and not made public until well after this vote has been taken in the senate. while all of the reasons are

enough to vote against chairman bernanke, the simplest reason is that a vote for ben bernanke is a vote for bailouts. chairman bernanke has been in the middle of all the financial bailouts during the crisis. it was his fed that bailed out bear stearns in march of 2008. it was his fed that bailed out a.i.g. in september of 2008. and it was chairman bernanke, along with secretary paulson, who came to the congress begging for tarp. and if you like those bailouts, by all means vote for chairman bernanke. but if you want to put an end to bailouts and send a message to wall street, this vote is your

chance. i urge you to vote no on the confirmation of chairman ben bernanke for another four-year term as fed chairman. i yield the floor -- yield the floor and reserve my time. mr. dodd: mr. president? the presiding officer: the senator from connecticut is recognized. mr. dodd: mr. president, i'm ing to ask to address the chairman for three minutes and reserve the balance of my time for later in this debate. and let me say to my friend and colleague from kentucky who is a member of our committee, and a worthwhile member of the committee. while we disagree on this nomination, i'm appreciative. he raises very good questions. he does so with a great deal of compassion and conviction on these matters. and i appreciate his gracious comments and trying to

accommodate his -- the matter affecting a.i.g. where $180 billion of taxpayer money was involved. there are of course my colleagues aware, investigations going on by the independent commission that is looking at all of this and individual senators going down and getting information. while it may not be satisfactory to everyone, there is an effort to be made to make sure that the people can be informed as they possibly can about that matter and there is a hearing on the house side as well on this issue. the matter before us, obviously is whether or not to confirm mr. bernanke, the chairman of the federal reserve, for a second term. i'm a strong supporter of this nomination and i want to explain briefly why and i'll complete my remarks later in the debate. very simply, mr. president, i have yet to meet a nominee that i ever voted for that i was say 100% for, but comes to a nomination with a record that is

going to necessarily be embraced by all 100 people here or even those who support nominees. the issue is is certainly looking back is important to do. but the most important issue relative to the two questions looking back or looking forward, i think most americans would agree where are we today and where are we going in these matters? i happen to believe over the last year or a little more than a year the chairmanship of ben bernanke has in no small measure made it possible for this nation to avoid a catastrophe that i think would have loomed as large as great depression an maybe larger because of the global implications of decisions that were need to be made. had it not been for ben bernanke and the chairman of the federal reserve, i think we'd be looking at a very different america today. now he was not my choice to become the chairman of the federal reserve. the previous administration nominated ben bernanke. i voted for him. and then when i became chairman

of the banking committee in january of 2007, for the first time, i went through a very frustrating year on that committee. on february 7 of 2007, i had my first hearings on the issue of the mortgage crisis in the country. and we had 12 such hearings on that committee over the remaining months. almost one every month on this issue. yet, i could not get the chairman of the federal reserve to pay as much attention as i thought he should have. beginning in the latter part of 2007, and going forward, his leadership in my view was absolutely critical to avoiding the kind of problems this country faced. so, mr. president, i'll speak for a few more minutes later in this tee baivment but i think we would make a great error, indeed, if we were to reject this nomination. we'd not terminate this filibuster, vote up and down on this nominee and provide the confidence, the stability that our markets demand.

this economy, as fragile as it is, is going to continue to get back on its feet again. to do otherwise, i think would do great damage to our nation at this critical moment. mr. president, i yield the floor and withhold the balance of my time. we have a lot of members who want to be heard. it is limited time. the presiding officer: the senator from rhode island is recognized. mr. whitehouse: i do wish to comment today on the nomination of bernanke for a second term at his critical post on the federal reserve. as our nation continues to recover from the worst financial crisis since black tuesday of 1929, and the deepest recession since the great depression, the chairmanship of the federal reserve is one of the most important positions in the federal government. earlier this month goldman sachs, the wall street behemoth, announced a bonus pool o of $16.2 billion.

j.p. morgan recently handed out a $9.3 billion set of bonus payments. and "the wall street journal," reports that bank of america is expected to match the bonus level that it paid in 2007, prior to the collapse of the financial bubble and the taxpayer bailout. mr. president, it these bonuses make it clear that wall street has recovered from the economic downturn. a recover further indicated by the ted spread which failed today to 0.17, again, signaling recovery for the banking system. in contrast to the restored prosperity being enjoyed on wall street, americans on main street struggle through the aftermath of the bush recession. unemployment nationwide whoevers around -- hoover around 10%. rhode island is worse. rhode island's official unemployment rate was 12.9% last

month. the proportion of rhode islanders underemployed, working overtime is worse than that. families in my state and across the nation are struggling to pay for groceries and to stave off foreclosure. the economic distress is so widespread in places like rhode island that hardly anyone remains untouched directly or undirectly. it's hea hear heartbreaking to e around province where nearly every house is boarded up, families are evicted from their homes. the explosion of the housing bubble left wreckage across the nation that will take years, perhaps decades, to cleanup. mr. president, ben bernanke bears considerable responsibility for the lax regulation that brought about the housing bubble. and there is nothing that he could question confess to erasea

quick view of the public statements in the months leading up to the crisis demonstrates a troubling pattern of false confidence. on february 7, 2008, months before the start of our great recession, chairman bernanke said this, the nonfinancial business sector remains in good financial condition with are strong profits, liquid balance sheets and corporate leverage near historic lows. by 2010, our most recent projections so output rates picking up to close to its long-term trend and the unemployment rate edging lower." well, here we stand in 2010, and it could not be more clear that mr. bernanke was far wrong. regarding the housing crisis, chairman bernanke said on may 17, 2007 -- "we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system." again, he would not have been

more wrong. regarding the strength of our financial sector, chairman bernanke said on february 28, 2008 -- "among the largest banks, the capital ratios remain good, and i don't expect any serious problems." we need a fed chairman with the foresight to anticipate problems and to take action before they occur. chairman bernanke has clearly not demonstrated this capability. as the president of the united states noted in his state of the union address last night, the bank bailout was about as popular as a route canal. -- as a root canal. well, it appears that chairman bernanke will be reconfirmed, but i want to express with my vote that the leaders of president president obama's economic team must pivot from the necessary rescue of our major financial institutions to equally if not more necessary help to america's families. in prioritizing the recovery of wall street, leaders at the fed

and the treasury, i believe, made significant errors in several key areas. failing to establish a due process mechanism to legally make adjustments to wall street pay, bonuses, and counterparty liabilities so they all had to be paid 100 cents on the dollar. hoarding the tarp reserve for banks long after banks were secure when families were desperate for help, but no, they clung to that reserve just in case the banks needed it. never mind the present need of american families. third, allowing the banks to prevent families in this chamber fighting against it, access to bankruptcy courts to readjust their home mortgage debts, the way any other debtor can do for any debt including the big banks themselves. giving banks and investment banks unlimited access to zero percent loans at the fed window to use for arbitrage while

profitable small businesses are desperate for credit to use for jobs. other nations, the u.k. and france, have announced special taxes on banker bonuses to help pay for bailouts. not here. if you're a scorekeeper of our recovery, it looks like it can be summarized in the two-word phrase -- bank wins. that is not a balanced score. so i will conclude by saying that whoever leads the fed for the next four years, i urge that we start prioritizing help for the middle class. the fed has enormous powers that could be used to help people. it can regulate credit card rates. it can force big banks to reduce principle and underwater -- to reduce principal and underwater mortgages. if our nation's central bank is to regain the confidence of the american people, its priorities must serve the american people. i thank the chair. i thank the distinguished chairman, and i yield the floor.

a senator: mr. president? the presiding officer: the senator from new hampshire is recognized. mr. gregg: thank you. i believe my time is being yielded off of senator shelby's time. mr. president, i rise in support of the confirmation of chairman bernanke to another term at the fed. there are a lot of reasons, there are a lot of reasons, but let's begin with the most obvious one because i think it's also one of the most important. we were in the fall of 2008 looking over a precipice of massive disaster to our financial structure as a nation. we were at a point where it was a distinct possibility that the entire financial system of this country was going to implode. what would have been the implications of that had it occurred? what would have been the outcome of that had it occurred? not only would we have lost the basic super structure of our

banking system in this country, which is at the essence of a strong economy a good banking system because credit, especially in our capitalist system, is a critical element in order to create prosperity. people have to be able to get credit in order to take risk and create jobs, but equally important, the implications to just everyday americans would have been overwhelming. i understand it's difficult for people to appreciate how severe this was because the event didn't happen, but had it occurred, had the financial system collapsed, as i believe it probably would have, then everybody in this country would have found their lifestyle and their quality of life reduced, i suspect, because the capacity to just basically operate a business would have been significantly constricted. just getting money from your

bank would have been a problem. the ability to get loans would have basically disappeared for a while. it would have created a massive disruption in our economic structure, which it is projected it led to unemployment rates of as high as 25%. i don't know if that's true, but that's the projections from some realistic people. this didn't happen. yes, we went into a very severe recession, and yes, that recession is still hurting americans. there are still americans hurting as a result of it. but the massive collapse did not occur. it didn't occur because a few people stood up and took very aggressive action, much of which was totally new and out of the box in the way it was -- the way it proceeded, and the key player

in this -- or one of the two key players in this effort was the secretary of treasury. and the other key player was the chairman of the fed. two secretaries of the treasury stood up and made the tough calls, treasury secretary paulson, treasury secretary geithner, but there was only one fed chairman throughout this whole period. and he took the fed down a path which it had never been down before. he injected into the economy over $2 trillion of liquidity. he basically allowed the fed to become the lender of the nation. nobody had ever done that. the way he did it was extraordinary in its creativity and the results were that the country's financial system did not collapse. and many americans, everyday americans' lives were not fundamentally disrupted because

of the actions of chairman bernanke. he deserves credit for having been willing and courageous enough to have been made these types of decisions, and that is the type of leadership we needed. strong, definitive leadership at a moment of acute crisis. that's what chairman bernanke gave our nation. he deserves to be confirmed just for that action alone. now, there is no question but you can monday morning quarterback what he did, and you can analyze it and you can probably say he should have done this better or that better. no question about that. but the fact is that the results of what he did accomplished the goal which was to stabilize the financial institutions of this country. the way i describe it is as if you're coming up to a bridge in your car with your family, and the super structure of that bridge is about to collapse.

somebody comes along and they fix the bridge just as you get on it, and you drive over the bridge and you didn't even know it got fixed. but it was fixed. if it hadn't been fixed, you would have had a disaster. that's what chairman bernanke and the treasury secretaries paulson and geithner did for our nation, so he deserves to be reconfirmed for that reason. the second reason he needs to be reconfirmed, in my opinion, is because as we look forward, we're still looking at some very tough times, and the money, the liquidity that was required to be put into the system, this this $2 trillion, as the system recovers, becomes a risk for the system. we all know that. if that liquidity is allowed to play itself out and to multiply, you could end up with a fairly significant inflationary event. as we all know, inflation is the

cruelest tax of all because it devalues people's savings and it undermines the productivity of a nation. so how this liquidity comes out of the markets, how we get this this $2 trillion-plus as it has been multiplied out of the system is going to be a very complicated, but very important undertaking. it's going to be primarily the responsibility of the fed to do that. chairman bernanke has outlined fairly clearly and i think in a very positive way how he intends to accomplish that, how the federal reserve will start to draw down that liquidity. and as far as i know, it's the only proposal out there that has any legitimacy, and it's an important proposal as we go. so we need him in that spot, not only out of respect because he did such a great job, an important job and a successful job in stabilizing the financial

situation of the late 2008-2009 period, but because we need him to deal with the perspective problem here that we're looking to confront. so that's another reason to confirm him. now, some will argue he shouldn't be confirmed because for years he participated along with chairman greenspan in keeping the money supply, the rates on interest too low. that is a debatable point. i tend to think rates were too low for too long. i think it's one of the reasons we ended up with this huge bubble in the real estate industry, and it's one of the drivers, but i don't think that was a primary driver of what caused this financial downturn in this huge real estate bubble. the primary driver was a decoupling of the responsibility to lend constructively from the people who were actually doing the lending. we had a breakdown in

underwriting standards, to put it quite simply. people -- because we had all these different people originating loans who had no real interest or vested interest in the loan because they were selling them and because a lot of our banking institutions have become lax in their underwriting standards, loans were being made to people who couldn't pay the loans back on assets which didn't have the value to support the loan. people weren't looking at the loan. they were looking at the fees they were going to get. then they were selling the loans. and the sale -- when the loans got sold, they got securitized, sub divided and multiplied as to the implications. that wasn't the fed's failure. to some degree in their oversight bank holding companies, you can argue it was the fed's failure, but i tend to put that more on the bank supervisor as the authorities that were specifically on the ground. so yes, interest rates were kept

too low too long in my opinion, but is that a reason to reject him as fed chairman? i don't think so. i think that again is the monday morning quarterbacking exercise. i think the real test of his leadership and his ability to manage the money supply and to live up to the primary commitment of the fed, which is to have sound money and a strong economy, was how we handled the crisis of late 2008, and as a corollary to that, how he intends to handle the impending problems with the -- with the liquidity that's in the market and needs to come out of the market. so as i have said before, if i were looking around for someone to do this job, this would be the person i would want to hire because i think he is the best person for the job, and is he perfect? no. nobody's perfect anywhere, but has he proven himself to be an extraordinarily talented and aggressive leader who saw a

crisis, managed it, and kept a lot of americans from having a much more severe impact on their lifestyle as a result of his actions? yes, he has. that i think is a test. that is the test. i certainly hope my colleagues will vote for him. i understand that there is this populist fervor around here now. populism has always been a heavy strain in our body public in america. i understand that populism usually has to have an member. usually it -- has to have an enemy. usually it has to be an enemy that can be hyperbollized into a conspiratorial group. so the fed because it's separate from the former government, and it has to be because we do not want the congress managing our money supply. that would be a disaster. look at what we do with our fiscal house. think of what we would do with the money supply. the fed becomes an easy target

for those who wish to fire the flames of populism, both on the left and the right. and i regret that the president has joined in this exercise, because i think he's thrown kerosene on the fire. you don't know where the fire is going to go when populism gets ignited. but populism usually involves exaggeration. and it almost always involves misapplied purposes. the substance is usually very significantly different than the actual description of what the events are. and in this case, that's true. the fed is not some secretive institution which is trying to undermine the quality of life in america. just the opposite. the fed is a very public institution that is audited fairly completely, with the exception of the open-market window which shouldn't be

audited because we don't want congress managing money supply, and an audit of that responsibility would put the congress into the business of managing money supply. and not only does it not undermine america's prosperity, it is the key to america's prosperity -- or one of the keys. because it maintains a sound money supply and tbhaws a time of crisis -- and because in a time of crisis like we had in late-2008, it is there to step up and may make the tough decisions, independent of the political process, and it has proven that it can do it. and so i would hope we wouldn't allow all of this fervor to find fault with people to overwhelm an extremely talented nominee who deserves to be reconfirmed and who we quite honestly need, who we need in that position as chairman of the federal reserve.

mr. president, i yield the floor. the presiding officer: the senator from oregon is recognized. mr. merkley: mr. president, i rise today to oppose the nomination of ben bernanke as chairman of the fed. i do so as a member of the banking committee who voted against his nomination in that committee, because i researched his record, and on that record i believe that ben bernanke is not the right person to lead the fed. in short, bernanke's decisions over the last eight years as a member of the federal reserve board, as chairman of the council of economic advisors, as chairman of the fed helped set the fire that destroyed our economy. now, mr. bernanke is a calm and unassuming man, responsive and thorough in his explanations and very likeable. in addition, to keep the analo

analogy, he has ha done a good b with the fire hose over the last year. he understood that tightening credit during a collapsing bubble economy would be pliek turning off the fire hydrant in the middle of a fire. he did keep the fire hydrant turned on. and i give him credit for that. but now we need to rebuild our economic house, and that takes an architect, not a fireman. that takes a builder, not someone turning on a fire hydrant. based on his performance over the last eight years, i do not believe that ben bernanke is the right architect to rebuild our economy, an economy that will work for working families. consider the following: ben bernanke failed to react to the enormous danger from an

interlocking web of derivatives that created high-speed channels for massive financial contagion. let me put it simpler: derivatives turned our financial institutions into a set of dominoes, which when one falls, others fall. and, ben bernanke did not respond to the growing threat of derivatives. bernanke failed to respond to the increase of. mr. pryor: tear trading that amplified risk in both depository lending institutions and our financial system as a whole. mr. merkley: again, let me put this more simply. gambling on stocks and bonds and derivatives is fundamentally incompatible with bank stabili stability. but bernanke did not respond. ben bernanke supported and advocated for policies that reduced capital and increased leverage in both commercial

banks and investment banks greatly magnifying risk across the system. he supported greenspan's philosophy of deregulation and self-regulation. he advocated for bozel2. it was to say to the largest banks in america you can set your own leverage ratios. what did that result in? that resulted in banks going to 30-1 leverage. now, if you invest money 30-1 in an up market, it's a killer. you make all kinds of money. but when you're at 30-1 leverage and the market turns down, you blow up immediately. now, there is not an analyst in america who can tell you at any one moment when the market will go up and when the market will go down. but they can tell you that it will go up and down over a period of time. what goes up must come down.

there is never going to be a steady, upward climb fo forever. so, if you allow 30-1 leverage, you're going to make a lot of financial institutions very, very happy. they're going to make a lot of money until the markets turn down. well, ben bernanke set loose the leverage requirements that paid the path -- that paved the path, that set the fire, that burn the our economy. ben bernanke failed to protect homeowners from deceptive practices. why is this important? let me explain to you what happened over those eight years. families went to their real estate agent and the real estate agent followed a strict code of conduct, a strict code of ethics and they arranged to buy a house. and then they went to a broker and they assumed that there

would be a similar strict code of ethics and therm going to get a loan for their house and the broker said, you know what? homeownership has gotten very complicated, mortgages have gotten very complicated. i'm going to be your advisor. i'm going to be your advisor. trust me and sign this loan right here. this will be the best one for you. and what was w. wrong with that is that the homeowner did not know that the broker was being paid a large sum of money called a "yield spread premium" also known as "a steering payment" because they were designed to steer people into certain loans, also known as "a kickback." the broker was receiving those and families that qualified for prime loans ended up in subprime loans. what institution was responsible for consumer protection on mortgages? the fed was responsible. ben bernanke did not do a thing to protect consumers from this gross conflict of interest that

torpedoed the financial prospects of millions of americans' families but he had direct responsibility. in the fed, monetary policy has been in the penthouse, as it must. that is a primary responsibility. safety and soundness in the upper floors and consumer protection in the basement. we cannot leave consumer protection in the basement. so i'll close with this: ben bernanke was not alone in helping to set this fire. he had a lot of company. but over eight years he made critical mistake after critical mistake that in the short term large financial institutions loved but it set the tone for our economy to burn down and it results in a loss of retirement, loss of savings and with the job

loss, loss of health care. that's an extraordinary mament t of damage. we need somebody to build our economy. ben bernanke is not that man. thank you, mr. president. the presiding officer: the senator from arkansas. mr. pryor: thank you, mr. president. i would ask that my remarks be made as if they were made in morning business. the presiding officer: without objection, so ordered. mr. pryor: mr. president, homes in watson, winchester, even andy and barney -- for the last 20 years i have had bob rustle. for the past seven year, he's been my great chief of staff providing able counsel, know-how and hugh momplet bob is headed to the private sector but i cannot let him leave without thanking him for his public service in the arkansas attorney general's office and in the senate. bob was instrumental in

assembling an exceptional team of talented aides and many of them are in the gallery today. over the last seven years, he led that team as he steered a number of legislative initiatives to success, including legislation to improve chairman's safety, help military families and strengthen arkansas families. none of these accomplishments would have possible without bob's hard work, integrity, and deliberation. bob believes in the do-right rule. he came to the senate to get these things done for arkansas. he realized that partisanship was getting in the way. he took action. along with tom ingram, former chief of staff to lamar alexander, he formed the bipartisan chiefs of staff group. this informal group meets regularly to facilitate working relationships across the aisle. these friendships translight into solutions -- thrans late into solutions instead -- translate into solutions instead of barriers. bob and tom recognized early on that common ground on federal

judges was more favorable than senate gridlock. just a few weeks lairtd, 14 senators, including me, struck a deal that enabled the senate to move forward with judicial nominations and conduct regular business. that is the type of unseen influence bob rustle has had on this place for the last seven years. i love bob and i trust him. he's good family man and a good southern baptist. on many mondays, we could come in and say, tell me about your sermon. i will a miss his presence and insights. habe a good advisor to many of my staff and has made lifelong friendships here in wawsmg he is more than a chief of staff. he is my friend. frank san arkansas hero wrel-known for coaching the arkansas raiserbacks to a championship. one of his plashings jimmy johnson, who later coached as an assistant at arkansas under

broals, it's tough to let an assistant coach go. but when he's that good, he deserved to go out and don't great things on his own. i feel the same way about bob, especially since i know that ecclesiastes says, "for everything there is a season and a time for every matter under heaven." johnson went on to win a national championship and two super bowls. i know that bob will go on to a highly successful career in his own right. thank you, mr. president. mrs. hutchison: mr. president? pr recognized. mrs. hutchison: mr. president, i rise today to speak in opposition to the nomination of the honorable ben bernanke to be chairman of the board of governors of the federal reserve system. mr. president, i am somewhat conflicted about dr. bernanke's nomination for a second term as chairman of the federal reserve. our nation's economy is still realing from a -- is still reeling from a significant downturn in which foreclosures rapidly increased wreaking havoc

on our financial system. markets tumbled, banks and businesses failed, millions of jobs were lost. er ultimately, the american people have borne the brunt of this recession, watching jobs, homes, and life's savings vanish while seeing their hard-earned trasm dollars bail out the bad actors that caused it. that being said, the financial crisis could have been worse t could have turned into a depression and so far we are not there. i believe some of what dr. bernanke did was good. he is an expert on the great depression. he unlieshed an -- he unleashed an arsenal of financial tools to combat the recession. he tried to inject liquidity into the financial sector and did much to try to keep our markets afloat. while i commend him for that i am very concerned about some of

the precedent that has been set in this crisis. i'm especially troubled by the continuing expansion of tarp. almost immediately of its passage, the treasury department deviated from the intent of the program. instead of purchasing troubled assets, which we were told would be the purpose, the treasury purchased equity stakes in over 300 of our nation's financial institutions. it expanded the tarp to nonfinancial companies, pouring billions into a.i.g., general motors, and chrysler. we must begin to affect the winddown of tarp. with banks paying back their tarp receipts, we need to unwind tarp and pay down the deficit. as some have suggested, tarp is a resolving fund, that legislation was -- the legislation was never sold as ouch. not ever.

americans are tired of excessive spending. if there is anything that we ought to do right now, it is to stop spending tarp and stimulus funds that are not allocated and show the american people that we have heard the message in washington. it was designed as a one-time injection of assistance to prevent financial institutions from collapsing and taking down the larger economy. now that those financial institutions have gained their footing, we should back the american taxpayer. in bailing out our nation's financial system and large banks, we have left the very real impression that no bank is too big to faism this policy has a -- fail. this policy has allowed those who contributed to bring the economy to its knees to right the ship at the taxpayers' expense. it has enabled cheap capital from the government and safe and sound institutions like

community banks. i'm also concerned about the path our country is on in our recovery. in september chairman bankruptcy said our recession is over. while our economy may be recovering, many americans do not see it. at 10%, our national unemployment is still extraordinarily high despite huge spending measures such as the stimulus package which was supposed to create jobs. the debt and deficits that our nation has incurred over the past two years has sent our nation's debt on an unsustainable trajectory. our debt is at 12.394 - 12.394 -- $12.394 trillion. earlier today the senate voted to once again raise this ceiling by an astonishing $2 trillion. the fifth time to do so in 18 months. under chairman bernanke's leadership, i do not think the fed has paid enough nor has he

talked enough about the mounting debt and immense burden that it is going to place on our economy today and certainly on our children and grandchildren. fiscal sustainability is not on the horizon. instead, we see endless spending as far as the eye can see. health care reform, cap-and-trade legislation, a possible second stimulus will all be huge government programs which will not only raise our government spending, but raise costs on individuals and businesses in the form of new taxes and mandates. i'm concerned about the consequences that this increase in spending is having on our economy. i will not support chairman bernanke's renomination. i am conflicted as some of the things he did were good. but his actions to save our economy have helped set a very dangerous precedent for the

future. the president of mass spending -- massive spending is not the answer. i will continue to examine the fed's exit strategy and most certainly will encourage more action from chairman bernanke on our debt and our nation's finances. thank you, mr. president. and i yield the floor. a senator: mr. president? the presiding officer: the senator from new york is recognized. mr. schumer: i ask that four minutes be taken from the democratic side time. mr. dodd: that's fine. i know that the senator from north dakota had asked to be heard. did you want to be heard at this moment? the senator from new york. the presiding officer: the senator from new york is recognized. mr. schumer: i thought i was after -- okay. thank. thank you, mr. president. it was only a little over a year ago with the collapse of lehman brothers that we faced the financial crisis the likes of which few have seen in our lifetime. we were truly standing on the edge and staring into the abyss.

for all intents and purposes, the financial system was on the cusp of a total breakdown, a great depression loomed. a year later while we can't diminish the large and real problems that remain in front of us, we did succeed in preventing the catastrophe that seemed possible, if not probable, in the fall of 2008. no one was more -- to rescue the economy from what looked like imminent freefall than chairman bernanke. i was there at many of meetings and i saw his steady hand and guidance. and that's why i'm going to vote to reconfirm him as chairman of the federal reserve board. the fed certainly made mistakes in the runup to the financial crisis. failing to use its regulatory authority to rein in a skyrocketing credit boom. failing to adequately fulfill its responsibility to protect consumers from predatory lending practices in mortgages an elsewhere, and allowing too risky activities with too little

protection. now, while most of these policies began under the previous chairman, chairman bernanke presided over the fed and continued them and that is not something i'm sure he's proud of. but he has acknowledged that he has many lessons to learn from the crisis and he's working hard to make sure the same mistakes are not repeated in the future. now i also want to say a word about the consequences of failing to reconfirm him. our economy while struggling to return to solid ground remains fragile. unemployment is way too high, we have yet to turn the corner on sustained job growth. businesses small and large are still having hard time getting access to credit. they need to expand or grow. or even in many cases doing business as usual. singling out chairman bernanke and the fed for punishment, might be temporarily satisfying to some, but it won't help a single business add jobs. it won't prevent a single

homeowner from being kicked out of his or her house. instead it will accomplish just the opposite. by sending the message that the federal reserve and its monetary policy decisions are under the thumb of congress, business will be faced with the prospect that the fed might not be able to do what's necessary for the economy because of pressure from congress. economists tell us that one of the major things holding the economy back is uncertainty about the policies that washington will pursue. and this would exacerbate that concern and create a very bad outcome for the economy and the country. i've said it before and i'll say it again, if you don't like monetary policy when the fed does it, just wait until the politicians get their hands on it. i'm going to vote to confirm -- reconfirm chairman bernanke at fed chairman and i urge my colleagues to do the same and yield the floor.

mr. kyl: mr. president? the pring officer: the senator from arizona. -- is recognized. mr. kyl: when i think of what a federal reserve chairman is supposed to do, i think of two key responsibilities: maintaining stable prices and keeping our dollar strong. unfortunately, chairman bernanke's federal reserve has not performed well on either count. consumer inflation as measured by the bureau of labor statistics increased to 2.9% from june to december of 2009. manufacturers cost of production is up 4.4% v. last year. up 5% in the past six months an up 9.5% in the past three months. other measures of inflation such as the five year five years forward show an accelerating trend. inflation is the last thing our economy needs right now. as for the dollar during the last year its value dropped to more than 10%. much of this weakness is

attributable to the federal reserve setting interest rates at zero. gold prices surged as investor worry that the dollar is no longer a reliable value. opec has contemplated designated oil in a currency other than the dollar. and foreign economists have suggested that we issue our own government debt in yen or euros or yuan rather than dollars. while either of these actions is likely, it is clear that the federal reserve needs to pay greater attention to the dollar's value when making monetary decisions. the preeminence of the dollar is synonymous with american prestige abroad. nothing represents our nation's soft power more than its strength. another chief concern is that during chairman bernanke's tenure the federal reserve and other banking regulators showed an inability to use banking examinations to distinguish teen good and bad loans.

before the housing crisis, banking regulate recovers were permit -- regulators were permitting banking institutions to lend money to people who weren't able to repay. now, however, in seeking to be more cautious bank regulators are making another mistake. they've been telling institutions in my home state of arizona, and throughout the country, not to make loans even to the most credit worthy individuals and businesses. i've heard numerous stories from lenders an borrowers in my state about bank examiners deciding to downgrade a performing loan because on paper the underlying collateral was worth less than the purchase price. as a result the banks had to raise more money, which is incredibly difficult, or else the borrower had to contribute more cash to keep from technically defaulting on the loan. why would it be in our interest to force those who are current

on their loans into a situation that could lead to their bankruptcy? doing so makes a bad situation worse and creates problems that ripple through our economy. i'm also troubled that chairman bernanke refuses to take responsibility for the housing bubble. and disputes that the federal reserves lax monetary policy helped to create it. as the respected columnist bob robbs of "the arizona republic" explained and i quote -- "chairman bernanke is shadow boxing. when a bubble occurs in a commodity which is used using extensive borrowing, it is fact factus to claim that easy money doesn't play a significant role. chairman bernanke supported this lax monetary policy and he should own up to its role in the financial crisis. these are all reasons to oppose his renomination.

or his confirmation. nonetheless, i must vote for chairman bernanke simply because i'm concerned that any other nominee chosen by president obama would likely be less independent than chairman bernanke and would direct the federal reserve's resources to support the policy's interest and therefore bypass congressional approval for appropriated funds. this administration has a history of nominating partisan, out of the mainstream individuals for key jobs. and replacing chairman bernanke would be another opportunity which to do so. -- another opportunity to do so. i would hope if chairman bernanke is confirmed, he will take action to remedy the problems that others and that i have addressed. they demand his attention. a senator: mr. president? the presiding officer: the senator from north dakota is

recognized. mr. conrad: mr. president, i rise in support of the qirlingsn chairman bernanke. i do so acknowledging that he contributed to the crisis, but also recognizing that without his strong leadership, the crisis might have become a con ful --how did we get to the brif financial collapse? i would say to some of my colleagues they should look in the mirror because they too contributed to the forming of the bubble. how? an overly loose fiscal policy under the control of the congress and the administration. the previous administration ran up massive deficits, double the debt. that's a loose fiscal policy. it was accompanied by a loose monetary policy after 9/11.

after 9/11, the federal reserve kept interest rates very low, flooded the system with money and the combination of an overly loose fiscal policy and an overly loose monetary policy created the seed bed for bubbles to form. and, indeed, they did. we didn't just have a housing bubble. we had an energy bubble. oil prices went to $100 a barrel. we had a commodity bubble. wheat went to more than $20 a bushel. these are examples and evidence of bubbles being formed. and when you have an overly loose monetary policy and overly loose fiscal policy, bubbles are going to form and ultimately bubbles burst. and when they do, there is enormous economic wreckage. that is what has occurred here. all of it coupled with an era of

deregulation. under the previous administration and, yes, the federal reserve has responsibility here as well. there was too little regulation of major financial institutions and of major financial instruments. trillions of dollars of derivative instruments floating around the world unregulated. even unrecorded. of course there was danger there. warren buffett warned that derivatives constituted a nuclear time bomb hanging over the global economy. ultimately the bubbles burst and ultimately the economic wreckage built. bernanke bears some responsibility for that without a doubt. but once the crisis developed, he took charge in a way that is unprecedented. he took step after step to

provide liquidity to this global economy to prevent and avert a collapse. mr. president, i believe when the history of this period is written, in terms of the response to the dangerous cloud hanging over this global economy, bernanke will prove to have been one of the heroes of the peace. in instance after instance, he took action unprecedented to avert a collapse. his academic study was the great depression. he resolved as a young man to do everything he could to prevent any future collapse of that magnitude. he proved to be the right man at the right time, and he deserves to be confirmed in this vote this afternoon. i ask my colleagues to please be

judicious. let's recognize that he made serious mistakes. let's also admit the congress and the administration, the previous administration, made very serious mistakes. overly loose fiscal policy, overly loose monetary policy, a lack of regulation, the creation of bubbles, bubbles that burst, created enormous economic wreckage. but ben bernanke helped avert a global financial collapse. i believe history will prove that is the truth. i thank the chair and yield the floor. mr. reed: mr. president? the presiding officer: the senator from rhode island is recognized. mr. reed: thank you, mr. president. mr. president, i join my colleague, the senator from north dakota, in rising to support the nomination of

chairman ben bernanke for chairman of the federal reserve. as has been pointed out throughout the course of this debate, his position at the federal reserve prior to september, 2008, gave him the opportunity to -- and the obligation -- to look carefully at a building crisis. his response was not as perceptive or as adroit as we all in hindsight would like to see. he did recognize, however, by august, 2007, that this economy was slowing down, and he applied the traditional microeconomic tools by beginning to lower the interest rate. by december, 2008, the interest rate was virtually zero, the federal rate. that has helped, i think, keep the economy moving and has helped us move forward.

but the point that so many of my colleagues have made is that when it came to the critical moments of the fall of 2008, chairman bernanke understood the problem and was able to use extraordinary measures. first, persuading the federal reserve to follow his lead, and then using measures to begin to blunt the worst effects of this economic crisis that we faced and continue to face. his efforts to ensure that there is liquidity in the system. precisely what was done incorrectly in 1929, 1930, through the early 1930's where the federal reserve pulled back, accelerating the depression rather than cushioning the economy from further decline. he took innovative steps that seemed sort of esoteric, that

had no impact on people or on the streets of this country, but his very decisive intervention with respect to the money market mutual funds. when the reserve fund broke the buck, as they say, when its net asset value dropped below a dollar, there was a tremendous sense of not only uncertainty but potential chaos as everyone would flock to withdraw their funds from money markets, which would have created huge, huge problems and which would have affected every american in this country. but he moved decisively, aggressively, along with the treasury department to provide stability and support. his ability to inject liquidity into the system gave us a break, if you will, from a rapidly detear your waiting -- deteriorating situation.

i sense as my colleagues have said that in the future his reaction, calm, decisive, innovative, imaginative, his reaction was one of the things that prevented this catastrophic situation from becoming even worse, and that, i think, is an important aspect that we must consider for his renomination. and there is something else, too. if the chairman is not confirmed, there will be a period of uncertainty as to who is leading the federal reserve and what direction will it take. the last thing we need today is uncertainty in our economic future. the ability of individuals and institutions to invest, to commit their capital and their effort and their work, if that's put on hold, then the progress

we have seen -- and it is not sufficient, but we've seen some. in fact, there is expectations that reports on gross domestic product tomorrow will be significant increases rather than significant contractions. that's what we saw under the last administration. but if we inject this uncertainty, if we go months and months and months about who is in charge at the federal reserve, it will have a very, very tangible, rapid, and unfortunate effect on our ability to move forward with the economy. there is another issue here, and i think it's important to know. that other issue is that having done all these remarkable, innovative programs to increase liquidity, to keep the engine of the economy running, albeit not at the level and speed and power we want, but keep it moving, at some point those programs have to be unraveled, pulled back,

because we'll face another danger. we'll face a danger perhaps in terms of inflation rate effects. we'll face a danger perhaps in terms of the currency issue, in terms of the value of a dollar. this is something we recognize. this great pivot as i call it, moving away from low interest rates, from liquidity infusions to higher interest rates to dismantling some of these programs. for example, they have already announced the fed that they intend to begin to slowly get out of their support for the mortgage market within a few weeks. all of that has to be just as carefully managed, just as carefully understood as these programs were in the fall of 2008 and 2009 when the chairman was moving forward. and so as a result, i think we need someone that understands these programs and understands

them not just theoretically but literally from trial and error. from understanding what worked, what didn't work, what the consequences are. no one i think has that type of knowledge and insight at this juncture other than chairman bernanke. he is, of course, as an individual, a man i think of remarkable integrity and of character, who is committed to public service, and who is a pragmatist, not an ideologue. someone who i think will continue to provide not only guidance but leadership at a place we sorely need it, the federal reserve. mr. chairman, i would yield the floor -- mr. president. the presiding officer: who yields time? mr. dodd: mr. president, i believe there are some members coming over. the presiding officer: the senator from connecticut is recognized. mr. dodd: thank you, mr. president.

i believe at this juncture, absent someone walking in the door, i would note the absence of a quorum and ask that the time be equally allocated to both sides. the presiding officer: without objection. thelerk will call the roll. quorum call:

a senator: mr. president? the presiding officer: the senator from california is recognized. mrs. boxer: i ask the quorum call be dispensed with. the presiding officer: without objection, so ordered. mrs. boxer: mr. president, i ask that i be yielded five minutes of time off the democrats' time. the presiding officer: without objection, so ordered.

mrs. boxer: mr. president, i rise today to explain why i will not support the nomination of ben bernanke for another term as chairman of the federal reserve, but i also want to make it clear that i will not support a filibuster because i believe he deserves to have a vote on his nomination. no one doubts -- at least i haven't met anyone who doubts that chairman bernanke is very bright, he is very dedicated, he is conscientious, he is an expert on the depression era, and i am grateful for the work that he did in those critical weeks when the american system teetered on the verge of collapse -- that is, our economic system. but i do think this is a moment to take stock. in many ways, as president obama did in his state of the union

address. how did we get to this very difficult economic place, and i think as we look at that, i think people have to be held accountable for their actions along the way, and that means that chairman bernanke must be held accountable for his record. i asked my staff. i said, could you get me the charter of the federal reserve because i know that it has many objectives that it needs to fulfill, and here are the four main objectives of the federal reserve. one, conducting the nation's monetary policy in pursuit of maximum employment and stable prices. two, regulating the banking system to ensure the safety of the nation's financial system and protecting the credit rights of consumers.

three, maintaining the stability of the financial system and containing systemic risk that might arise in the financial markets. those are three out of the four responsibilities that i think we have to take a closer look at, because i look at those three responsibilities and, frankly, i just don't see how the fed met those responsibilities. remember, maximum employment, safety of the nation's financial system, protecting the credit rights of consumers, maintaining the stability of the financial system, and containing systemic risks that may arise in financial markets. put on top of that the fact that in the 1990's the congress gave the fed the very important responsibility of overseeing the housing market to stop predatory

lending. that was an added specific responsibility. and i have to say that i think chairman bernanke underestimated vastly the dangers of the housing bubble and unconstrained subprime lending. and this is what he said in may of 2007 -- quote -- "we believe the effect of the troubles in the subprime sector on the broadening housing market will likely be limited. we don't expect significant spillovers from the subprime market to the rest of the economy. the vast majority of mortgages, even subprime mortgages, continue to perform well." that's mr. bernanke in may 2007. now, that is hard for me to look at and say that we should vote to confirm him. he failed to spot the dangerous banking practices in addition to these mortgage practices that led to the crisis.

in february 2008, just seven months before the greatest financial collapse in 80 years, february 2008, he said -- quote -- "among the largest banks, the capital ratios remain good and i don't anticipate serious problems among the large internationally active banks." so until the crisis occurred, chairman bernanke was a major advocate for even more permissive banking regulation. and now we see unemployment at 10% nationally, in my state a horrific 12%-plus. and the american people have the right to ask whether the fed is truly committed to supporting main street's economy, not just wall street. and that is why i cannot support his reappointment. he sat by when president bush put all the policies into place

that led us to this crisis. he was george bush's choice, and he sat there and said everything was fine, everything was wonderful, everything was good. housing was okay. i would ask for 30 more seconds, and then i'll close. the presiding officer: without objection, so ordered. mrs. boxer: i will close here and say this, if mr. bernanke is confirmed -- and i expect he will be confirmed -- i hope that he will listen to what a lot of us are saying here and turn his full attention to main street, to the people who need his support. people out there need the wind at their back. they need somebody who understands what they're facing in terms of their housing problems, their unemployment problems, and let's get this economy back on track. thank you very much, mr. president, and i yield the floor. a senator: mr. president? the presiding officer: the senator from south carolina is

recognized. mr. demint: thank you, mr. president. it's not often that i agree with the senator from california, but i certainly appreciate her perspective on this issue. a number of us from a broad spectrum within both parties are concerned about this nomination, and i do rise to oppose the nomination of ben bernanke as federal reserve chairman. i think it's important that we look at this not just as a single nomination but as part of a much bigger picture that we need to recognize. because the confirmation of ben bernanke is a confirmation of the policies that brought our economy down if we ignore that, we're going to continue these same policies and condemn ourselves, our country, our fellow americans to high unemployment and much less prosperity in the future. it's never fair to blame any one

person for major problems like we have in this country, but it's really important when we have this kind of problem where millions of americans have lost in total trillions of dollars and jobs have been lost, families have suffered greatly, that we recognize the difference between the problems that we're looking at today and the real causes of those problems. what we call in business the root causes of problems. and we learned when we did strategic planning -- and i did this for years for companies -- if you go in and look at the problems and try to solve them and never go back and understand the root causes of those problems, then all you're doing is fixing symptoms which never get fixed because you didn't understand the causes of those problems. today in this country, we do have a difficult economic situation with high

unemployment. we've got debt at levels that everyone agrees is unsustainable. countries all over the world are beginning to question whether or not we can repay our debts. and some are beginning to question whether they should lend us any more money to fund our reckless spending. despite what we heard last night about a freeze on spending, everyone in the chamber laughed when we said "that starts next year." today we vote to extend the debt limit another $1.3 trillion. we're going to take that debt to over $14 trillion, and there is no forseeable way that we can pay that back. this is at a time when a large group of americans called the baby boomers are going to retire, and the cost of social security and medicare is going to skyrocket. these are promises we have to keep to seniors because they pay

for it, but we have no idea of how we're going to keep those promises to seniors right now, particularly in light of the current economic situation. as we look at where we are, we need to recognize how we got there. and as i've talked to banks, businesses, foreign financial ministers from europe who have come here, everyone agrees that there are two major causes of the economic problems here and around the world. and one is the high leverage or the high borrowing that went on because of the loose monetary policy at the federal reserve. easy money, cheap money encouraged companies and individuals to borrow more than they could afford to pay back because it was easy to get and cheap. the big banks on wall street could more easily borrow money than to raise capital. those were incentives created by the policies at the federal

reserve. the second problem is what we are calling toxic assets, which are securitized subprime mortgages that was facilitated by fannie mae and freddie mac, two government-sponsored enterprises that reflected the political policy of this congress. it's our responsibility to oversee fannie mae and freddie mac and to make sure that they were doing what was appropriate for our economy. but what happened is the criteria for lending went away. local mortgage companies could make almost any loan they wanted to anyone whether they could afford to pay it back, using easy money from the federal reserve and low criteria for giving these loans. and they sold them all to fannie mae. if fannie mae had not been there to buy these loans, these irresponsible loans would not have been made in the first place. but to make matters worse, fannie mae and freddie mac

bundled these subprime mortgages up into packages we call securities and sold them, sold them to banks as assets, sold them all over the world. these are the toxic assets that brought down our financial institutions once the housing bubble burst. so, folks, for the president, for ben bernanke, for secretary geithner to come in and indict the free market system and the greed of corporations and banks misses the whole point of what caused this problem. certainly these two causes created perverse incentives for the markets, the banks to practice irresponsible behavior. there's no question that went on. but to say that that was the cause of where we are today misses the whole point. my problem with ben bernanke and

the president and geithner -- or secretary geithner, excuse me, is not that they made mistakes because congress made mistakes in not overseeing fannie mae and freddie mac and asking the right questions to the federal reserve, but the fact that despite that the evidence is so clear of what really caused our problem, mr. bernanke still does not recognize those as the causes of our problem. in fact, he continues the same easy money policy. he r expressed no sense of urgency that we need to get the federal government out of owning a.i.g., fannie mae, general motors or chrysler. when we bring him in for hearings, he seems to be more of a command-and-control person than someone who believes in a free market system that we need to have good laws and regulations to guide. but he and secretary geithner and the president indicate that they can run this economy, that they can micromanage it.

but, folks, to confirm ben bernanke is to confirm the continuation of easy money policies, high leverage as well as a continuation of what fannie mae and freddie mac did to create these toxic assets. we're not asking the right questions. and i contend that we cannot solve today's problems with the same people who created them. president obama again last night liked to blame george bush for the problems, yet he's nominating his people. secretary geithner was involved with the federal reserve and was an architect of these bailouts. ben bernanke has been here for four years and was a key part of the bailouts, the easy-money policy and is yet to say that that was a problem. my colleagues and fellow americans, this is more than just another nomination.

everything we work for in a material sense rests on the value of our dollar in our monetary system. the american economy, the worldwide economy rests on what the federal reserve does. this is the tpefrb that told us -- this is the federal reserve that told us the subprime mortgage would not cause an economic breakdown. ben bernanke told us that fannie mae was well capitalized a few months before their collapse. we have to depend on the leadership at the federal reserve to tell us the truth. if our monetary system crashes because of bad policy, everything america's worked for, all our material wealth will be gone. and this country will see a crisis the likes of which it has never seen. this body is not taking this nomination seriously enough. we're moving ahead quickly when what we need to do is have a full audit of the federal

reserve to look at what has been going on, look at their involvement with the current crisis and to make sure that they're on the right path. the constitution gives the congress the responsibility to protect our monetary system. years ago we delegated that to the federal reserve, but that does not relieve us of our responsibility. to confirm ben bernanke without knowing what's even going on at the fed, without hearing them say what really caused the problem we have today is to condemn us to the same path that brought us to where we are. i think voting to confirm ben bernanke is a bad decision today. i ask all my colleagues to reconsider it. this is probably the biggest mistake we're going to make in a long time to continue the same policies we started at the federal reserve, our monetary system as well as what we've done here in congress. mr. president, i thank you for the time and again encourage my

colleagues to reconsider their commitment to confirm mr. bernanke. a senator: mr. president? the presiding officer: the senator from vermont -- connecticut. sorry. mr. dodd: how much time remains on the democratic side? the presiding officer: 8 minutes, 13 seconds. mr. dodd: i want to give 5 minutes to my friend and colleague from vermont. he feels very strongly about this issue, and i want to give him as much time as i can. mr. sanders: i thank my friend from connecticut for the time. mr. president? the presiding officer: the senator from vermont is recognized. mr. sanders: this is in fact an enormously important issue. the reality is that all over our country hard-working, decent people have lost their jobs, they've lost their homes. they've lost their savings. they've lost their ability to go to college. we are experiencing the highest level of unemployment since the great depression. all of this, mr. president, did

not happen by accident. it didn't just happen. it happened because of the greed, the recklessness and the illegal behavior of wall street, of c.e.o.'s there who converted our financial institutions into the largest gambling casino in the history of the world. mr. president, one of the major functions of the fed is to protect the safety and soundness of our financial institutions. there can be no debate mr. bernanke, as chairman of the fed, failed at that important job. and this country and the world almost saw a major financial collapse, and we have seen in this country an horrendous recession. mr. president, i think ordinary people do not understand -- average american citizens have a hard time understanding how we reward failure, how we say to

somebody who was asleep at the switch in terms of regulating our financial institutions, congratulations. you failed, there's a major recession, you're getting reappointed. i don't think people understand why and how that should happen. second of all, when we talk about the bailout, it's not just the $700 billion that went to tarp. there were trillions of dollars in zero-interest loans -- or almost zero-interest loans that went to major snngs financial -r financial institutions. mr. president, it is incomprehensible to me that the chairman of the fed can lend out trillions of dollars and when i asked him, who got the money, he said, sorry, the american people don't have the right know that, in so many words. i'm not telling you. how can you have confidence in the leadership of the ted when there's virtually no transparency, trillions of

dollars being lent out and we don't know who received it? that is not acceptable to me. we need a fed chairman who believes in transparency, who is going to tell the american people who has received those loans. mr. president, we're also today importantly not just talking about the past; we're talking about the future. we are talking about how we pulled this country out of a recession in which 17% of our people are unemployed or underemployed. and the fact of the matter is that the fed today -- today -- has the capability, the power to take significant action to protect the middle class and working families of this country. i don't know about illinois, but i'll tell you that in vermont i get call calls every week. why did i help bail out these large banks and now they're charging me 28%, 30% interest on

my credit card? mr. bernanke has the power to lower the interest rates today. i want a fed chairman who is going to do that. mr. president, we heard last night from president obama, who appropriately pointed out the very serious problems that small businesses all over this country are having in terms of getting the low-interest loans they need, in order to create the kind of jobs that our economy desperately requires. mr. president, the chairman of the fed today has the power to provide low-interest loans to small- and medium-size businesses. it is just large financial institutions who can receive zero-interest or low-interest loans. i know it is a great shock to the fed, but small- and medium-size businesses in the productive economy, who create real jobs, they can also receive those loans, and i want a fed chairman who will provide those loans.

mr. president, hard to believe that the largest financial institutions in this country that we bailed out because they were too big to fail -- you know what? three out of four of them are even bigger today. it is time to break up those financial institutions that are too big to fail. if they're too big to fail, they are too big to exist. mr. president, we need a new direction on wall street. we need a new fed chairman. thank you very much. mr. sessions: mr. president? the presiding officer: the senator from alabama is recognized. like to share my concerns in opposition to mr. bernanke's reappointment, and i think my colleague, senator demint, summed it up pretty well. one of the debates has been, did the central bank, which really is not a free market activity. people say the market failed. i agree with him.

i don't believe this is exactly correct to say that. the fed dabbles in the market in an attempt to manipulate the market. one of the debates has been that mr. bernanke allowed the interest rates in 2002 through 2005 to remain too low, which caused the bubble and which caused a burst, put us into this fix. the complaint has been that he violated the taylor rule, which is a rule that would advise how interest rates should be set by the central bank. and he made a speech in early january of this year that i think was defensive and went to some length to say he didn't violate the taylor rule and that low-interest rates did not cause the bubble.

so it's one thing to make a mistake. it's another thing to make a mistake and refuse to acknowledge a mistake. and i would just say, as background, that "the wall street journal" said that the minutes of the fed board meetings prior to his becoming chairman when he was merely a member of the board indicate that he was the advocate for lower interest rates and actually warned of deflation during this period and acting in that way, which was wrong. and mr. taylor responded, and he responded in "the wall street journal" and, i just quote what he said. "this rule calls for central banks to increase interest rates by a certain amount when price inflation rises and to decrease interest rates by a certain

amount when the economy goes into recession. my critique, which i presented at the annual jackson hole conference for central bankers in the summer of 2007" -- the summer of 2007 -- "is based on the simple observation that the fed's target toward the fed funds interest rate was well below what the taylor rule would call for in 2002 2002 through 2" close quote. he is the author of it. he warned of it in the summer of 2007. and mr. bernanke is insisting just a few weeks before this that he didn't violate the rule. a little later in mr. -- mr. taylor goes on to say, "in his speech, mr. bernanke's response to this main critique

was to propose alternatives to the standard taylor rule and then to use those alternatives to rationalize" -- i would say justify -- "the fed's policy in 2002-2005." close quote. mr. taylor goes on to say, "in one alternative, which addresses what he describes as his most significant concern regarding the use of the standard taylor rule, he put the fed's forecast for future inflation into the taylor rule rather than actual measured inflation. because the fed's inflation forecasts were lower than current inflation during this period, this alternative obviously gives a lower target interest rate and seems to justify the fed's decision at the time." close quote. mr. taylor says. so he's saying they took his

rule and they altered it and they didn't use as the factor actual interest rates, but what they predicted interest rates to be. and of course their prediction was wrong. mr. taylor goes on to say -- and he's written a book about this -- "there are other questionable points. mr. bernanke's speech raises doubts about the taylor liewl by showing that another version of the rule wroof called for very high interest rates in the first few months 26008, after the the bubble burst. but using the standard taylor rule with the g.d.p. price index as the measure of inflation, interest rates would not be so high," as mr. bernanke was suggesting, "as i testified at the house financial services committee in february of 2008." close quote. that's mr. taylor's view. mr. taylor goes on to say, "mr. bernanke also said that

international evidence does not show a statistically significant relationship between policy deviations from the day letter rule and housing booms -- from the taylor rule and housing booms." he's defending himself, saying that international studie studit show that deviations had anything to do with this mess. but mr. taylor responds this way. "but his speech does not mention that research at the organization for economic cooperation and development in march 2008 did find a statistically significant relationship." close quote. mr. taylor goes on to say, "mr. bernanke claimed that -- quote -- 'economists who have investigated the issue have generally found that, based on historical relationships, only a small portion of the increase in house prices earlier this decade can be attributed to the stance

of monetary policy. '" he's talking about the fed policy. they didn't have anything to do with the increase in housing prices. and he -- he calls mr. bernanke's hand. mr. bernanke was not right in that statement. mr. taylor says this. quote -- "but two of the economists he cites, frank smentz, director of research at the european central bank and his colleague, maureen jeresinski reported in the st. louis fed review, that -- quote -- 'evidence that monetary policy has significant effects on housing, investment, and house prices and that easing money -- that easy montana -- that easing monetary policy

designed to stave off risk of deflation in 2002-2004 has contributed to the boom in the housing market in 2004-2005'." mr. bernanke is saying economists around the world don't agree. and that's not accurate. as a matter of fact, they found just the opposite. so i first -- remember, "the wall street journal" said he was the advocate in the fed -- mr. greenspan may have been chairman, but at this point when he was -- in the early part of it, he was advocating these lower policies. and they were wrong. they did lead to a boom, helped -- at least a significant factor in the boom. and he's not acknowledging that. i don't appreciate it. i also am very much disappointed that he supported president obama's form of a stimulus package, saying -- quote -- "--

"the ink coming administration and congress are currently discussing a fiscal passage that could provide a significant boost to economic activity." however, according to a cnn poll just yesterday, 74% of americans believe at least half of the stimulus package was wasted and 63% believe the projects in the plan were included for purely political reason and will have no economic benefit." so, i would just say, this stimulus package -- $ $800 billn -- every penny of this going to increasing our debt, can only be justified if it was most carefully crafted kind of package that created jobs and it was not so. i knew it at the time and so did many others, that this was not a jobs-creating package. it was a political package put together by the president. it rewarded a lost his supporters.

but it wasn't the kind of jobs package we desperately needed. mr. bernanke supported it. so now we've got $800 billion added to our debt and very little job creation. so, mr. president, i would yield the floor at this point and just conclude by saying that i don't think this should be rewarded. i know a lot of people are worried that somebody might be worse. but we -- i haven't seen from him the kind of grap gravitas, e kind of stability of leadership, the kind of consistent message to the american people about the severe plight we're in and about his plan that's going to get us out of it. isn't that what he should be doing? shouldn't we know what he and -- working with the president hopefully -- would do get us out of this mess? i haven't seen it and, therefore, i don't feel that we have any burden to maintain him.

i think that's an argument that he should not be maintained. i thank the chair and would yield the floor. a senator: mr. president? the presiding officer: the senator from kansas is recogniz. brownback: thank you y much, mr. president. i think this is a really healthy discussion we're having. we don't usually discuss much, the fed chairman, the appointment or nomination of the fed chairman. yet monetary policy affects all of us in a huge way and it dramatically affects the world. this is, to me the sort of debate we ought to be having. i'm glad we've got some differences of opinion. it seemed as if everybody treated monetary policy as something in the theoretical world of economists and mathematicians and central bankers and they're the only ones that understands the language and the only ones affected by it and the only ones who discuss it. i'm not at all -- we ought to discuss the people an principles

involved and the people we appoint to these government positions and this government position, which is so critical and so important to all of us in this country and around the world. so i'm delighted we're having a discussion about -- about the fed chairman and appointment of the fed chairman in this particular case. i think ben bernanke is a bright gentleman. i've met with him. i've been the ranking member on the joint economic committee. i've had him in to testify. i find him quite interesting, bright, and a gentleman. but i do believe that now it is time -- now it's time for us to break this sort of washington-new york corridor that establishes monetary policy and bring somebody in from outside of that system to start at the fed and at the fed chairmanship and looking for

more toward what main street needs in a monetary policy rather than what wall street needs in a monetary policy. i'm not opposed to wall street but they have dominated this position and people from this washington-new york corridor for too long a period of time and too dramatically affects all the rest of us for it to simply shut out the rest of the philosophy and thought from across the country. we need to get to main street. and i also have another concerns that taking place beyond the issue of -- of us breaking out of this new york-washington corridor for the fed chairman and monetary policy and that second -- the second concern i have is that i think we're headed for a huge government bubble. we have seen a dot-com bubble come, bust, and go. we've just gone through or still going through a housing bubble, bigger than the dot-com bubble, blow up, get big, and blow up. lots of fiscal and monetary

policy to blame in both situations. i think we can really look back on the housing one and see both actions here or lack of actions toward fannie mae and freddie mac to pump up the housing bubble. you can see the monetary policy pumping up this housing bubble that burst with huge impact. near depression type of impact. and now we're heading possibly towards the biggest bubble of all of them. of a huge government bubble. blown up by the fed, huge amounts of money being put out in the system now to try to prop up -- to try to carry us through the situation and if not handled correctly, bursting in a more profound and difficult way than the housing bubble did. and, to me, it's just one of those difficulties that's staring us right in the face

that now a a chance for us -- now's a chance for us to talk about a different treks and i think we should -- direction, and i think we should do that. yesterday was a vote by the fomc, the money supply committee, and there was one descending vote and that was the chairman of the kansas city fed. and he believes; and he's hawkish on the money supply that we've got to start pulling the money supply back and out of the system before the inflationary bubble takes off. when you put this much money into the system, you're bound to get an inflationary bubble and you've got to start pulling it back before you start feeling it. this is the time you have to start addressing those issues. and i think we ought to look at somebody like a tom hoggin, hawkish on the monetary supply to get us in a stable monetary position and get us ahead of a government bubble bursting on us and also somebody from outside of the system.

somebody more focused on main street than wall street on monetary policy and monetary supply. now's the time do it. this is a good chance to debate this. i don't suppose -- suppose that that's going to happen here. we're probably going to go ahead with mr. bernanke, who is -- who is a fine man, but really now is the time to break out of this before this bubble gets bigger, bursts on us, and cause more of a problem than we've even seen with the prior two bubbles. let's get outside of that and let's deal with that before it's on us. mr. president, i thank my colleagues, and i would yield the floor. a senator: mr. president? the presiding officer: the senator from alabama. a senator: mr. president, i know we're getting close to the end of the debate and we'll be soon voting on the cloture. mr. shelby: mr. president, i'd like to take a few minutes to take ta few excerpts -- take a

few excerpts that ran in all places, "the wall street journal," dealing with chairman bernanke, his tenure in office and misdeeds and so forth. i ask at this time the full text of the editorials, dated january 25, 2010, december 32009 and june 2009 be included in the record. the presiding officer: without objection. mr. shelby: mr. president, the first point in "the wall street journal," editorial dealing with chairman bernanke's overt political activities stating and i'll -- quote -- "whether or not mr. bernanke is confirmed, the lesson is that overly political central bankers will eventually be undone by politics." always are. "the wall street journal," goes on to conclude and i quote -- "our own view is that mr. bernanke is already far too

susceptible to political pressure as a fed governor. he was alan greenspan's intellectual co-pilot last decade when the easy policies created the housing mania." on the loose -- the editorial voted that mr. bernanke was the intellectual architect to keep monetary policy exceptionally easy for far too long. he imagined a deflation never occurred, mr. president. he ignored the asset bubbles in commodities and housing. dismissed concerns about dollar weaknesses and in the process stoked a credit mania that led us to where we are today, the financial panic. finally, mr. president, "the wall street journal," points out in regard to chairman bernanke, and i quote -- "the fed chairman has shown he knows how to ease money, but that is the easy part

of his job. the hard part, the time when central bankers earn their fame is when they have to take the money away. we see little at this point in the chairman's policy history or guidepost to suggest he will be willing to endure criticism that will come with the tightening money amid a lackluster recovery, if that is what is required to protect the dollar or prevent an inflation outbreak. for these and others reasons, of all things, "the wall street journal," one of the most widely recognized business publications in the world poses -- opposes the nomination, as i do, of chairman bernanke.i yield the f. the presiding officer: the senator from connecticut. mr. dodd: how much time remains? the presiding officer: three minutes remain. mr. dodd: totally?

the presiding officer: the minority party has eight 1/2 minutes. -- 8 1/2 minutes. mr. dodd: we need to conclude this debate. let me go ahead, mr. president. i'm going to assume that we'll probably wrap-up the debate and three minutes remaining left. when you've got a diversity from paul goodman of "the new york times" matter as well as -- the diversity of opinions from paul goodman who is known as a more aggressive economist in favor of this nomination. albeit he reckons certain caveats he expressed about the nominee, ben bernanke, "the washington post" and others as well. warren buffett was asked on cnbc on this nomination. all he said if you turn him down, let me know in a day or two of advance because i would like to sell off stocks.

why? because the message to the stock market would be a devastating one. what we don't need is a short-term politics become the vehicle by which we decide fed policy. independence of the fed has been a critical component for stability in our economy. and i happen to believe, despite someone who was in the chair of the banking committee for awful 2007, as the presiding officer knows, and i could not get the attention of the previous administration, including the federal reserve, about the mortgage crisis in our country. we had 12 hearings, the first of which was and on february 7, 2007, on this subject matter alone. so if i were going to decide my vote on the basis for this nominee on that basis, i would vote against ben bernanke. because, frankly, it was a failure by the previous administration early on not to understand the gravity of this situation. but i can't make my decisions solely on that, mr. president. the fact of the matter is, i said earlier, we have had a

leader in the federal reserve over the last year and a half that has virtually saved our economy from a -- a predictable collapse he had not been there. beginning in the fall of last year when a group of us were in the room of the speaker of the house, democrats and republicans from the chairman of the federal reserve warned us that if we failed to act in a number of days, the entire financial system of this country and a good part of the world would meltdown, to give you an exact quote. i don't need to tell you that was the economic equivalence of a 9/11 moment. when you're warned by the most important central bankers in the -- banker in the world what could happen if we didn't act. as a result of ben bernanke's leadership and others, people like bob corker, chuck schumer, the leadership in the house and others, we were able to put together a package, terribly unpopular. but 75 of us on that night in this chamber, mr. president, voted for that very difficult proposition, to avoid the kind

of catastrophe that would have happened there are very few people who would have had the ability, creativity, but ben bernanke it we're in far better shape toosmed we're far from out of the woods. we have a foreclosure problem that is still huge. we have commercial problems coming along that will be massive. if we don't have chairman of the federal reserve but only an acting chairman, i don't know what that means. and particularly the individuals who help create the very imaginitive vehicles that allow us to come out of this problem. to have him walk away and find the federal reserve, its important central bank without leadership, that the critical moment, i think would be beyond shameful. it would be height of irresponsibility. now as democrats and republicans the previous administration offered up this nominee. many of us supported. it we need to come to -- come together at least on moments

like this not to abandon our country over partisan politics or ideology and failing to understand if there needs to be reforms in the fed, let's reform them. but let's not walk away from a critically important individual who made a difference in the country and the economy of our nation. for that, mr. president, i urge my colleagues to terminate this filibuster, to vote to end that and vote to confirm ben bernanke as chairman of the federal reserve. and i've been told i can go to 3:20. i won't take up all the time, mr. president. i expressed myself on the view, others have as well. as i said a moment ago, this is one of those moments here where we need to step back and recognize the danger of our actions. this is not just a free vote. i mom some people would -- i know some people would have the free vote to vote against the guy. that may work, but it is dangerously precarious, if we don't have the 60 votes to end the filibuster, if we don't have the votes to confirm him, then i

think this congress, this body here, regretfully, will have to bear the point -- responsibility of abandoning the people we talk about today, jobs, the housing market, getting our economy back on its feet again and anticipate the kind of reaction we'll see in the markets and elsewhere setting us back weeks if not months an years in our ability to get through this fragile period and it to watch our economy and the hopes and aspirations and the confidence of our people grow. i know it's an awful lot to stake the future of all of that on just a nomination, but this is not some assistant under secretary of some other agency. it is the central bank -- central bank president, chairman of the most important central bank in the world. it's a critically important component in our continuing our path of economic recovery. and we will bear the collective responsibility of failing to meet that obligation if we walk away from this obligation by

continuing this filibuster or dethe feeting this nominee. so i urge my colleagues, democrats an republicans, there's -- and republicans, there's enough to battle on how we'll deal with the issues in the coming weeks, but in this matter let us send a message to the american people, that we understand their frustration, their worries and we're doing everything that we can to get us back on track again, witness the president's remarks last evening. you have a laser-like focus on the economy in our country. don't make that effort fail because we send a message to our markets and the world that we cannot reconfirm an individual who saved us from an economic catastrophe in our country. for that, i urge my colleagues once again to defeat -- or to pass the cloture motion to end debate and then, of course, to confirm ben bernanke as the chairman of the federal reserve. with that, mr. president -- i know there is five minutes left on time, but i would yield back the remainder of that time and note the absence of a quorum. the presiding officer: the clerk

willall the roll. quorum call:

the presiding officer: under the previous order, the clerk will report the motion cloture. the clerk: cloture motion, we, the undersigned senators, in accordance with the provisions of rule 22 of the standing rules of the senate, hereby move to bring to a close the debate on the nomination of ben s. bernanke of new jersey to the chairman of the board of governors of the federal reserve system, signed by 17

the presiding officer: by unanimous consent, the mandatory quorum call has been waived. the question is is it the sense of the senate that debate on the nomination of ben s. bernanke of new jersey to be chairman of the board of governors of the federal reserve system shall be brought to a close. the yeas and nays are mandatory under th rule. the clerk will call the roll. vote:

vote:

the presiding officer: are there any senators wishing to vote or to change their vote?

on this vote, the yeas are 77. the nays are 23. three-fifths of the senators duly chosen and sworn having d affirmative, the motion is agreed to. under the previous order, all postcloture time is yielded back. the question occurs on the confirmation of the bernanke nomination. is there a sufficient second? it appears there is. the clerk will call the roll. vote:

vote:

the presiding officer: anyone wishing to vote or wishing to change their vote? hearing none, the ayes are 70, the nays are 30. the nomination is confirmed. under the previous order, the motion to reconsider is considered made and laid upon the table. the president will be immediately notified of the senate's action and the senate will resume legislative session. the senator from nebraska. a senator: madam president, i rise to make a parliamentary inquiry requiring the applicability of the senate's cloture rules to the budget reconciliation process. under the -- consideration of a reconciliation conference report, the question is: is a cloture vote necessary prior to a vote on adoption of the conference report?

the presiding officer: no. mr. nelson: thank you, madam president. another question. under the budget act, which limits the time for debate of a reconciliation conference report, how many hours are provided for debate? the presiding officer: 10 hours. mr. nelson: thank you. and, finally, and, therefore, under no circumstances would a cloture vote be necessary or required prior to a vote on adoption of a reconciliation conference report? the presiding officer: the senator is correct. mr. nelson: thank you, madam president. i yield the floor. a senator: madam president? the presiding officer: the senator from delaware. mr. kaufman: i ask consent to speak as if in morning business for five minutes much. the presiding officer: without objection. mr. kaufman: i rise today to recognize another great federal employee. over the past year we witnessed the most significant economic downturn since the great depression. in the 1930's millions of americans lost everything. and there was no social safety

net to catch those in greatest need. today we are fortunate that the federal government coordinates right isals program preventing millions of americans from slipping into a kind of poverty experienced in those days. perhaps -- and i think probably the most important agency involved in this effort is the social security administration. its mission is to provide a stable income for retired american workers and those who cannot work because of a disability. in the words of the great revolutionary patriot, thomas payne -- quote --"it is not charity, but a right. not bounty, but justice." he wrote those words in 1797 when he published an early proposal for social security. it was only in the midst of the great depression that such a system was finally established by the social security act of 1935. 75 years later, the s.s.a.'s

important work continues. one of great social security employ yeast is any gallagher who made a career of federal government work. annie w -- has worked in social security for eight years. as a child, annie attended the wilmington friends school and she received her undergraduate degree from mary boldwin college. she worked for two years in the broadcasting industry. in 1976, annie began a lifetime of public service working for then-senator bill roth, who was then the senior senator of delaware, in his wilmington office. her role as senior caseworker for constituent services was helping delawarians with veteran agencies. if you were a person of delaware who needed help, annie was the person in senator roth's office

who would contact the v.a. for you. if you were trying to adopt a child overseas and had an issue with the state department that needed clearing up, annie would clear it up. it was during this time when i was chief of staff of delaware's junior senator joe biden that i first met annie and witnessed firsthand her unmatched dedication and positive attitude. now, joe biden had really, really wonderful caseworkers, and they all thought very highly of annie, and the two offices worked together seamlessly to serve the people of delaware. annie handled important casework for senator roth for seven years before deciding to take time off to raise her two daughters. who, by the way, both share their mother's passion for serving the public. but the call to serve was strong, and after three years away from senator roth's office, annie returned. she continued working as an advocate for delawarians until senator roth left office in 2001. at the same time, she also served as a legislative

assistant for veterans affairs from 1994-1997. in 2001, annie spent several months working as the director of a nonprofit helping american families adopt children from overseas. in 2002, she returned to government service when she became regional public affairs specialist for the social security administration. in this role, annie serves as social security congressional liaison for five states in the district of columbia, which includes ten senate offices and 43 house districts. the reports issued by her office help members of congress as well as other federal, state, and local officials understand the status of social security distribution in their jurisdictions. throughout her work in social security in senator roth's office, annie has earned a reputation for thoroughness, dedication, and a kind heart. i have never met anyone who has dealt with annie who didn't like

her, wasn't impressed with her competence and intelligence. once while working for senator roth, annie received a call from an elderly work who had been in touch with her regarding a casework issue. it was in the midst of a snowstorm, and the woman who lived alone could not get to the grocery store for herself. 45 minutes later, annie and her husband mike pulled up to the woman's house with a car full of groceries. many of those she helped still keep in touch with her, even after 20 years. madam president, i hope my colleagues will join me in honoring annie gallagher and thanking her for her service to our nation and the people of delaware. i also hope all americans will recognize the important contribution made by all who worked for the social security administration and all those who work for the federal government. madam president, i yield the floor and suggest the absence of a quorum. the presiding officer: will the senator withhold? mr. kaufman: yes. mr. burris: madam president?

the presiding officer: the senator from illinois. mr. burris: madam president, i 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. burris: thank you, madam president. madam president, last night, just down the hall from this chamber, my colleagues and i assembled with our friends in the house of representatives to take part in a tradition as old as our republic. this is more than just a presidential address. it was a -- it is mandated by the united states constitution and is one of the greatest rituals of modern democracy. the practice of bringing the major offices of our government together to assess our nation's priorities. last night, president obama laid out a bold vision for the years ahead and a renewed commitment

to the uniquely american ideas that makes this country so great. so today, i'd like to take this opportunity to discuss a few of these things we heard in yesterday's speech and how our agenda will benefit the people of illinois. i'm glad the president recognizes that this is not a time to change our priorities. it is a time, madam president, to recommit ourselves to the values and ideas that the american people voted for in 2008. the mandate for better policies that could not have been more -- could not have been more clear. voters want us to focus on job creation. they want us to help small businesses repair our national economy and invest in clean energy. they want us to pass real health care reform, reduce the deficit,

and keep corporate money separate from politics. under president obama's leadership, my colleagues and i have already made significant progress on a number of these issues. a year ago, we passed far-reaching economic recovery legislation that brought us back from the brink of disaster. we voted to extend unemployment benefits and keep sending help to the people who need it the most during these difficult times. even today, we are poised to take up job creation and climate change bills and are closer to passing comprehensive health reform than ever before in our history. we're examining ways to address the deficit in pursuit of that goal. i believe we need to keep all options, madam president, on the table, all options on the table. in the wake of the recent supreme court ruling which dealt

a major blow to campaign finance reform, i believe we need to take steps to minimize the availability of giant corporations to include elections. we need to keep companies from overriding the voice of the people in congress. madam president, our system is designed for incremental change so that none of these things will come easily, but the agenda set by this president and the demands of this -- this trying moment in history dictate that we must set aside our partisan differences and come together to solve big problems. and, madam president, we have big problems in this country. we have made gains over the last years, and we will continue to make tangible strides already every single day, so i would like to talk about what does this mean to my home state of

illinois. when congress passed its economic recovery plan about a year ago, this country was losing more than 700,000 jobs a month and the economy was in free fall. today the economy is growing for the first time in two years and job losses have fallen to a tenth of what they were last year. ordinary illinoisans, this has made a real difference. in danville, illinois, for example, recovery act funding created 20 jobs at the east central illinois community agency. it put additional police officers on the street and created 14 jobs at the local housing authority. it created summer jobs that allowed local kids to help support their families. it helped fund the head start program in neighboring gibson city. and it funded three local projects through the department -- illinois department of transportation. this is the measurable impact our legislation had on only one community in illinois, but letters and phone calls and news stories have been pouring into my office and across the state, and the message is always the

same. from danville to chicago, from rockford to elwood park, i have heard from illinoisans who have felt the positive effect of our new economic foundation. we must not forget that america is still on the road to recovery, but our policies have always made a real difference in people's lives. one danville business owner even said, and i quote -- "i was leery of this whole stimulus thing at first, but they got it right." end of quote. madam president, that's why it's time for us to look ahead. it's time to redouble our efforts and to prove our commitment to the values the american people voted for in the last election. the national economy is no longer in free fall, but there are still far too many people without jobs and far too many families that are struggling to make ends meet. we need to use the remaining recovery act funds to create more jobs in cities like danville, illinois, and across america. we need to provide tangible help to small businesses that form

the backbone of our economy and local banks are essential to our national prosperity. as a former banker myself, madam president, i understand how important these institutions are to the communities they serve and then i know they are hurting badly right now. i'm grateful the president shared my support for these initiatives and i look forward to working with my colleagues in the senate and with the administration to take action. already president obama's speech is being analyzed by the media as a partisan rallying cry. recap of the administration's record and a dozen other things. but as i sat on that house floor last night, i heard more than that, madam president. i heard a bipartisan call to arms, a sobering recognition of the current situation and a strong vision for job creation, continued economic recovery and health care reform in the coming year. health care reform, madam president, is also a major part of that. the truth is the american people don't need politicians in

washington to tell them about the current state of the union. they are the union. they know that the challenges we face and the dischance that still yet to go. they don't care about partisan politics or electoral math or which party has a majority in congress. the american people are interested in the answer to one question -- where do we go from here? so as we set out to tackle the ambitious agenda that was laid out last night, we must approach these proposals with the same mindset. we must draw our energy and our strength from the american people and summon the principles and ideas that can make that vision a reality. this is about -- this isn't about scoring political winters or winning the elections. it's about how to move forward together as a congress, as a nation, and as a people. it is about making a difference for the hard-working people of illinois and every other state in this country.

this is a time to be thoughtful and reflective and forward thinking, but it's also a time to roll up our sleeves, madam president. colleagues, as president obama reminded us last night, this is a time for bold action, so today let us get to work. thank you, madam president, and i yield the floor. the presiding officer: the senator from washington. ms. cantwell: thank you, madam president. i rise to speak on the vote that we just had earlier here on the nomination of ben bernanke to be the federal reserve chairman, and while i did not support mr. bernanke's reconfirmation to that post, i'd like to take the time now to talk about that vote and my concerns and challenges that i think our country faces moving forward. when i look at this issue, i know that not one administration or not one fed chairman got us into the mess that we're in. in fact, it's not even to be

blamed on one party. what this is about is how we move forward with complete transparency and the proper regulation to give certainty and predictability to our financial markets. and i will do my best to represent my constituents with the proper level of oversight on these issues, with you i heard loud and clear from my constituents in december that they are as small business owners at the end of their rope without access to capital and that community banks aren't lending. so that is where i am spending my time now and focus and urging both the fed and treasury to act without passing legislation but acting now to get recovery programs specifically working for community banks who need access to capital and for those small businesses that are the

engine of economic growth for our economy. now, while i know that many of my colleagues think that programs that came out of the tarp funding, like the original talf program or the secretary's announced program in december, are things that have been in the works, but i can tell you that my constituents started this debate in earnest with credit default swaps and the concern about large banks, but are having a hard time, as i am, understanding the logic and the strategy that one day closes one of the largest banks in america and one of the largest banks in our state, washington mutual, wiping out 30,000 creditors and basically putting in jeopardy the retirement of many employees, and then four days later we pass a tarp bill. the government picking winners and losers at that point in time i believe was the wrong approach and advocated for an equity

program. but today my constituents want to know why is it that it was easy to figure out how, with loans and assets and creativity of the fed, over $1 trillion could be pumped into a.i.g. at 100 cents on the dollar and yet small business owners in the state of washington, and my guess around the country, basically had capital cut right from under them. when i can about what happens, it breaks my heart. to think about a company like vancouver columbia's gen business where the bank of clark county was shut down and assets moved over to another bank across the river, umqua bank, who received tarp funds. but where was the help for the small businesses that had performing lines of credit at that bank? what happened to them? well, i tell you what happened

to them. even though they had performing lines of credit, their funds were cut right out from under them. in fact, it forced the owner of that company to try to fund the operation of that business out of his own pocket. another business in that area, beach's restaurant, immediately their line of credit was frozen after the takeover. vancouver iron and steel was current on all of its loans and even eeked out a small profit in 2008 and never missed a bank payment. but vancouver iron immediately lost its $1.5 million credit line after the fdic took over. now how is it that we can act immediately to save the a.i.g.'s and we can't act immediately to save companies like vancouver iron and steel? i guarantee you, vancouver iron

and steel was not cooking up dark market derivatives, creating kpwred default swaps -- credit default swaps that destabilized our economy. nor is vancouver iron and steel continuing to operate derivatives in dark markets. no, madam president, they have nothing to do with that. they are manufacturing product for america and abroad, and producing jobs in this country. but the fact that we continue to make it hard for them to get access to capital is one of the reasons why i voted against mr. bernanke. the fed chairman has to realize the urgency with which the big banks have been saved and bailed out, that urgency has to be applied to main street. now, i know that they are trying, and i applaud the president for last night saying that he is going to put forth $30 billion to help with access

to capital to community banks. i urge him to do that within the administration. i'm sure my colleagues here could give input to basically spend another two or three months waiting for small businesses to get access to community banks, more and more business bankruptcies will happen. and while that is a program to get right, i think it's very clear to americans that when wanted to act with urgency, this government can act and the fed can act and the treasury can act with urgency to solve these problems. so i urge the fed now and the treasury to give consideration to making this their number-one priority, to get capital to

these community banks as urgently as possible through an equity program that gives them the infusion that it will take to get capital back to main street. now, there are other reasons why i did not support mr. bernanke. and as i said, this is not one fed chairman's problem or one administration's problem. this has been caused by policies over the last several decades prior to the repeal of glass-steagall in which we continue to say a deregulation of these markets was unimportant. and the policies at the commodities future trading commission and other policies that allowed for this kind of dark market activity of derivatives to grow into an international $56 trillion industry are the policies that have brought us to this point. but we now have to have the

urgency and the leadership of everyone involved to think creatively about the urgency of capital to community banks and small businesses and the reforms that must be put in place now. not to check a box, not to say we did reform or not to say we're responding to something that's happened recently. but to move our economy forward with the transparency and proper regulation that will provide for international stability. and so when i see from some of the well-known economists and investors across the globe that another bubble is forming, that this problem that we think that somehow we've corrected by passing the tarp program and doing other things is going to be alleviated, these individuals

are signaling that another bubble in the exact same situation could happen again. so, i want to see the fed and treasury advocate on the hill the policies that will give us that complete transparency and regulation to assure americans and those participating in financial markets around the world, that they will function with certainty and predictability, that they are not going to be inflated with something that has no real value behind it, such as the credit default schemes or, should i say, making credit default schemes that we are trying to outlaw here on the senate floor. i know what's happened thus far with the regulatory reform legislation that's come through congress. there have been many attempts to water it down.

and i am not blind to what i think the challenges will be to win this legislation -- to when this legislation comes to the senate. and that's why i want to see a fed chairman and a treasury secretary that are leading the charge for the principles of regulatory reform that will correct these problems with our markets. not to be for a few policies that might sound good -- let's reduce systemic risks. i'm for reducing systemic risks. or not to say that we want a consumer group. i'm for a consumer group. but the heart of this issue is whether we are going to properly regulate derivatives whr-rbgs we're going to -- whether we're going to pass a law that says manipulative devices or contrivances of these markets are a federal crime and that not only will you pay a penalty, but

you will go to jail. i get that many in the markets believe there's no way you can possibly control all of the new tools and all of the new financial terms that people can come up with to deviate from the standards that are set. but i know this, that by setting a statute into place and going back to glass-steagall can separate the risk to the taxpayer of having their money and their capital used to continue to prop up dark market act gists. i certainly believe that we have to have derivatives regulation. but the tactic of now saying that we can have that by definition of saying no proprietary trading on these companies, i guarantee you, madam chairman, we will be debating what the words

"proprietary trading" mean and the consequences mean there will be lots of money flowing into dark markets. i believe in the financial wherewithal to raise capital in america. it's one of the greatest things about our country. it's one of the greatest things that makes us competitive. the fact that we can create capital in such an inspiring way and that we can have, in an information age, the kind of public financing of ideas and creativity that continue to have us lead the way. but i would ask my colleagues to look at how many i.p.o.'s have been created lately. i would ask them to look at how much money has gone in to the small business and the banks of community banks loaning to small business juxtaposed to the amount of money that's gone into derivatives. the truth of the matter is you

make more money on derivatives. so why would you put your money in investing in i.p.o.'s? why would you put your money into the small businesses? and so what's happening, madam president, is more and more concentration into the large banks who then thwart the opportunities for small community banks to truly be competitive with them. and then what happens? less and less capital, less and less opportunities for small business. or as i saw recently, even the fact that some of the small business newspapers in this country haven't been able to get access to capital but they're going to end up in the hands of bankers -- now i don't know if those are big banks or small banks, but i know this, that small businesses deserve to have

a choice of lenders, a diversity of market size banks and a fed chairman that will pay attention to that issue. we live in a unique time created by at least two decades of deregulation, of markets that are now going to create another bubble. so my vote against the fed chairman has to do not with the past but with the future. the future prevention of another bubble, of more bankruptcies of small businesses, of getting our regulatory policies and our transparency of markets in place so the united states can get back to both the innovation and job creation in america but

financial markets that the united states leads in around the world. that we are not ten years from now seeing the kind of dark-market activity around the globe that has transpired here. instead, the united states, as the president says, learns from a teachable moment and leads the rest of the world on the types of markets and transparency that we expect. so i hope that the fed chairman will embrace this task of a more robust leadership, on the policies and regulation that need to be put into place to prevent another bubble and to helping immediately small businesses. i don't want to leave the american people with the thought that somehow wall street is more important than main street. that is not what sent us -- it's not what sent me to washington and it's not what sent my

colleagues. so i hope that we will work in earnest as republicans and democrats to urge the administration and the fed to pass, to immediately adopt and implement a program to give community banks and small businesses the access to capital. one of the people, madam president, that i met with is a small businessman who i used to go and eat in his restaurant many times, particularly when i worked for a software company working late at nights. when i was home in december, i found that after 55 years he was going out of business. after 55 years in his family, they were going out of business. the downturn definitely took its toll. he wasn't getting access to capital. he hemmed on for an entire year not laying off one employee.

keeping everybody he could instead of cutting them. and the end result after that year, without any more resources, without any more access to capital, he had to close that business. and not only that, because he mortgaged his house, he was probably going to lose his house. and he put his restaurant up for action. he told me if he was lucky, heed probably get $10,000 for it. after 55 years in business, weathering several downturns, not laying off any employees, he wanted to know where his lifeline was during this crisis. so, madam president, i am going to devote my time and energy along with working with the president and his commitment last night to making sure this program for community banks and small businesses gets kpwhrepltd

as soon as gets implemented as soon as possible. i thank the president and i yield the floor. a senator: madam president? the presiding officer: the senator from north dakota. mr. dorgan: madam president, first of all, let me thank my colleague from the state of washington. she has been tireless in trying to address these issues both in legislation and on the floor of the senate during debate. and it is so important. i too voted against mr. bernanke's nomination today, and i wanted to explain why. it's not certainly that i believe mr. bernanke is a bad guy. he is not. he's a well-respected economiste about the issues that persuade me that we need a change, a change in cull tiewrks a change in personnel in some respects. you know, if ever there has been a bright line in america between those who are too big to fail and those who are too small to matter -- that is, the too big

to fail are the ones that are the biggest financial institutions in the country that have been making a lot of money, paying large bonuses, and living high off the hog, and the too small to matter, the fogs on main street that sink everything their family has into a business trying to run a grocery store, maybe a drugstore, a gas station, a barbershop, a restaurant, and then they discover they can't make a go of it because things turn against it. and they are a told, you know what? that was your risk. if you can't make a go of it, that's your problem. what you do is you lock the door and somebody sells the inventory and you're out of business. by contreaft, the big of the financial -- by contrast, the big of the financial institutions that were engaged in wholesale gambling -- everything but the keno table and the craps tables and the blackjack tables in their lobby, everything but that -- it was the same thing. and they run their company and their country into the griewndz z ground, and they are told,

well, you know what? you're so big, we can't possibly let you fail. so we're going to give you a big bailout. so that's the too-big-to-fail versus the too-small-to-matter. is it any wonder that people are furious in this country about that kind of assessment that kind of value system? well, mr. bernanke is a nice guy. so is my uncle harold, by the way. mr. bernanke is an economist. my uncle harold isn't. mr. bernanke has now been the chair of the fed for a while. before that he was part of the economics team in the previous administration that turned, by the way, a big budget surplus in the year 2000, the first budget surplus for the federal government in a long, long, long time -- the new administration came in and turned that into the biggest deficits in history, up until now. and so i -- you know, i'm not impressed with the whole scheme

of a fiscal policy that turns the country from big budget surpluses to big budget deficits. but with respect to the federal reserve board itself, the federal reserve board has had responsibilities. those responsibilities, first by alan greenspan at the fed -- and, by the way, while alan greenspan was at the fed, mr. bernanke was at the fed at the same time during that period of time. the responsibilities are to supervise the banks, to deal with predatory lending, to address some of the scandalous behavior of some of the brokers in the subprime market, and yet they did nothing. all of this went on under their noses. the question for me in dealing with mr. bernanke and other oth, how many times do we have to learn the same lesson? i've been here at a time when

the savings and loans collapsed in this country. it wasn't surprising why they collapsed because we had a bunch of folks who used the savings and loans as a big piggy bank. the savings and loans were actually gathering deposits from around the country and they were like roman candles, just taking a small little savings and loan and turning it into a big institution with lots of deposits overnight and then guys like mr. milken were parking junk bonds ensured by the american taxpayers and things collapsed and it cost hundreds and hundreds of billions of dollars. the most perverse result was the american taxpayer got stuck with junk bonds in the taj mahal casino in atlantic city. think of that. now, how did that happen? well, donald trump builds a casino and whoever it is decides to take the junk bonds from the

casino, park them in a savings and loan and the savings and loan is guaranteed. the savings and loan is guaranteed by the american taxpayer. the savings and loan goes bankrupt and so the junk bonds in the savings and loan are now in the resolution trust and the men people end up with junk bonds in a casino. isn't that unbelievable? do we have to learn that lesson again? well, we did then. we learned it a second time after the s&l collapse. we learned it with the enron corporation, which in part was a criminal enterprise. they were manipulating wholesale electric markets on the west coast. schemes like get shorty, fat boy -- just to name a couple -- and then having people in addition to these schemes shut off and turn on power plants in order to manipulate supply so they can fleece ratepayers out of billions of dollars. it was one of the biggest robberies in the history of our country. and i led the hearings.

i chaired the hearings over in the commerce committee. ken lay came and raised his hand. we swore him in. he took the fifth amendment. he's now dead, but he was on his way to prison. mr. jeff skilling from enron corporation, he came -- he came and just talked and talked and talked. turns out none of it was accurate. he's now in prison. so would had to learn a second time about the fleecing of america. a big s&l scandal that cost the american taxpayers an unbelievable amount of money and then the enron scandal, a corporation that doesn't now exist, that became, in part, as i said, a criminal enterprise. and now this financial house of cards that collapsed on this country. it's not surprising why it collapsed. what happened was we had some of the biggest financial entrepreneurs in this country, some of the biggest operators, i

should call them -- not entrepreneurs -- some of the biggest financial operators in this country that were engaged in full-scale gambling with their company's money, the biggest financial companies in this country. my colleague talked about credit default swaps and c.d.o.'s and so on. we had synthetic derivatives. you know what synthetic derivatives are? at least a derivative is something you can j explain because it is keeked to some value. synthetic derivatives are simply an artificial device that allows you to place a wager on whether something will happen, unrelated to value on either side of the trade. it is just as if to say, take the biggest investment banks in america and put a craps table in their lobby and let them gamble from 8:00 a.m. until 5:00 p.m. and let the american taxpayer pay their losses. that's exactly what has happened. now, what's happening today?

well, this is bloomberg news. "wall street is marketing derivatives last seen before the credit markets froze in 2007." i've got actually a bigger chart here. derivatives last seenck before the credit markets froze in 2007 as the record bond rally prompts inkvestors to take more risks to boost returns." "bank of america and morgan stanley are encouraging clients to buy swaps that pay higher yields for speculating on the extent of losses in corporate defaults." and, again, "banks reviving synthetic bets as paul volcker blasts default swaps." bloom beg. so here we are, the financial system collapsed, steered this economy flight a ditch. millions and millions of americans lost their jobs, lost their homes, lost hope, are

still struggling. the biggest interests got bailed out and made whole and now are making record profits again, prepared to pay $140 billion, i'm told, in bonuses, and now we see they're back to trading synthetic derivatives, the very same firms. now, how often do we have to learn this lesson? once, twice, three times, or ten times before the congress will decide no more of it? my point is just like with kids you say, you know what, you better hope your kids are running around in a good crowvmentd i mean, that's the success, isn't it? having them run around in a good crowdopposed to a bad crowd. as i take a look at all these nominations and appointments, the question for me is, what kind of crowd do they run around in? and, ub know what? there's a kind of insular crowd that all comes from the same locations. and they all believe the same thing. and the fact is, none ever them have the stomach or the interest

or the interes courage to decidt down what is essentially gambling on wall street and firms that are too big to fail, which means it is no-fault capitalism and the men's people will pay the consequences. none of them have the courage to do that. in fact, they have now been given a year to organize and stop anything that's been doing- that's been done here in the united states congress. i stood on the floor of the united states senate and was one of eight snores to vote against the piece of legislation that created these big holding companies, the financial services modernization act that repeal the laws put in place after the great depression. i think that's going to set this country up for massive taxpayer bailouts. no, i didn't have a crystal ball and i don't necessarily prognosticate very well. but i knew if we allowed those who wanted to to do one-stop financial shopping putting together securities with investment banking, investment

banking with fdic-insured banking, we were headed directly towards a cliff. and ten years later it is the biggest financial scandal in the history of this country and this economy barely survived it. the american people lost $15 trillion in value as a result of this economic collapse. $15 trillion. and so who's accountable? well, there's never been the kind of hearings that i think should have been, developing the master narrative of what happened and who's responsible and who's accountable and where the buck ought to stop. but we know some of it. we knew who had some responsibility: the federal reserve board. p-mr. greenspan has since come to congres and said -- he apologized because he said he was mistaken. he thought self-regulation would be just fine. well, that's not why we have regulators. we have regulators because we know self-regulation doesn't work. the free market system is wonderful, but you need effective regulators who take a look at what's going on and call the fouls and blow the whistle

when they see the fouls. we we need to's went through a period where it was katie bar the door, do anything you like. that's what happened. the big banks took leverage from 10 times capital to 30 times capital. they began selling derivatives and credit default swaps and then synthetic derivatives were just instruments of gaming. and nobody seemed to care. and at the same time on another area of financial enterprise, we began to see the development of this new aggressive 0 orgy in mortgage scams to say to people, if you can't afford to buy a home, we've got a mortgage for you. if you've got bad credit, we've got a mortgage for you. if you've been bankrupt, slow pay, no ma pay, come to us. we'll help you buy a home. they wrapped it into a security, hold it to a hedge fund, to an investment bank and everybody knew better. pretty soon the whole thing collapsed and the men people

were told, now you pay the cost. you pay the cost to clean up this mess. well, at every step along the way, the federal reserve board had a responsibility. bad behavior by brokers, bad behavior by mortgage banks. they had a responsibility to oversee those things. and today we read that synthetic derivatives are now being pushed by bank of america and morgan stanley. so what's the federal reserve board doing about that? what about that buildup of additional bubbles of risk? does anybody care? is there anybody going to do anything about that? mr. bernanke is a good guy, but the fact is he's part of a crowd that i think has helped cause these problems. i think -- and i've said candidly -- during the darkest period where the question of whether this economy would completely collapse or not, i think mr. bernanke made some fine decisions. i don't think he is a bad person at all. bubut i don't think he -- and ts

would apply to some others in areas of responsibility -- i don't think he comes from the culture to say that this whole set of activities has to change. and change now and change aggressively. let me complete my thought by simply saying, i understand how important banking is. i understand how important investment banking is. i understand the financing system of our country is important and needs to be strong. i'm not suggesting that somehow you can finance all the things that we want to do in our country out of somebody's garage. that's not my point. my point is, however, there's the right way and the wrong way to construct a system of financing. we have over 200 years seen this back-and-forth between those who produce and those who finance production. sometimes one has the edge in terms of strength and power and sometimes the other. in the last 20 or 30 years, in my judgment, those who finance production have eellyn