quorum call:

quorum call:

mr. feingold: mr. president? the presiding officer: is not frr wisconsin is recognized. mr. feingold: are we in a quorum call? officer we're, senator. mr. feingold: i ask that further proceedings under the quorum call be dispensed with.

the presiding officer: without objection, so ordered. mr. feingold: mr. president -- mr. president, i come to the floor to recognize the 40th anniversary of earth day and to remember the man who founded earth day, the late-wisconsin governor and senator gaylord nelson. before he was the founder of earth day and one of the nation's greatest conservationist, avenues son of which is wissments avenues young boy growing up in the town of clear lake, wisconsin amid the great natural beauty of our state. when asked how he developed his lifelong interest and dedication to the environment, nelson would say, "by osmosis" while growing up in clear lake, which is which. he reflected the very best of our state from the beginning, building on wisconsin's long tradition of environmental conservation. our state passed landmark forest and water power conservation act acts during the progressive era and lays claim not only to

gaylord nelson but to other giants of the conservation movement like aldo leopold. all were inspired, as nelson was, by the beautiful wisconsin wilderness, the natural beauty of our state charted the course of nelson's life from the shores of clear lake to the banks of the potomac where he changed the way we think about our planet and changed the law to protect the water we drink and the air we breathe. there are few members of this body, past or present, who have left such a valuable legacy. so today i'm proud to help celebrate that legacy with a resolution in the house and senate celebrating the 40th anniversary of earth day and its founder. as we look ahead to the many challenges we face, we can draw strength from the example gaylord set for us all. he drove tremendous change and with earth day created a new

momentum that has been critical to so many efforts to protect the health of our environment. gaylord also understood the connection between fiscal responsibility and conservation. too often a federal program that is wasting taxpayer dollars is also laying waste to our air, or water or our public land. the nation's outdated mining laws are a perfect example. these laws allow mining companies to on our public lands for next to nothing and leave behind an environmental mess for taxpayers to clean up. gaylord fought to change those laws. and when i was elects to the senate he asked me to take up this fight, and i have. i made it part of my control spending now act, legislation to cut the deficit by about $500 billion over the next ten years. mr. president, if we scrap these outdated mining laws, we could save taxpayers hundreds of millions of dollars and protect

the public lands that belong to the american people. they don't belong to the mining companies. i'm also wogging on another environmental issue that has a special connection to gaylord nelson, and that's clean water. the man from clear lake did so much for clear, clean water everywhere, including being a champion of the clean water act. today the clean water act is under threat because two recent supreme court decisions have jeopardized it. those decisions put a nearly 20 million acres of wetlands habitat and more than 50% of our extreme miles in the lower 48 states at risk. these waters could now become polluted or wiped off altogether unless congress takes action. i'm working to see that congress stand up to the special interests that want to roll back the clean water act's protection and ensure that these bodies of water can continue to provide drinking water, wildlife

habitat, recreation, and support for industry and agriculture for generations of wisconsinites to come. so i've joined with minnesota representative jim oberstar to introduce the clean water restoration act this. bill is designed to accomplish one basic and important goal: ensure that the clean water act of 1972 stays in place. there are no new regulations in our legislation. only a return to the original intent of the clean water act, which has protected our waters for more than 35 years. gaylord nelson and others have done so much to protect the health of our waters, and we owe it to them and ourselves to carry that legacy forward. that's what i seek to do in the senate with the clean water restoration act. now we face many challenges -- other challenges as well. of course climate change looms largest of all. we need to address the serious problem of climate change and do so without unfairly hurting

wisconsin, which relies on coal for much of its energy needs. if we do this right, we have an opportunity to pass legislation that will reduce greenhouse gas emissions and create energy jobs in wisconsin. we can help american businesses gain a competitive advantage developing new renewable energy and energy-efficiency technologies. the desire to protect our air, our water, and our planet will bring people together tomorrow all around the world. it will talk about global issues we face and the local environmental issues in their communities that they want to address. they will organize, mobilize, and galvanize new momentum for change. that's exactly what gaylord nelson intended. he knew the power of people coming together and what that could mean for the air we breathe. the water we drink and the national parks and public lands we all cherish. he knew that these natural resources connect us all and

that earth day would bring us together to protect them. i am so grateful to have known gaylord nelson, and i'm proud of the legacy he left behind. the 40th anniversary of earth day, we remember the man from clear lake who came to this body inspired by the beautiful wisconsin landscape of his childhood and in the end made a better world for us all. madam chair, i yield the floor. a senator: madam president? the presiding officer: the senator from vermont. mr. leahy: madam president, first, i would say to my distinguished friend from wisconsin, i was delighted to hear those words about gaylord nelson. i had the privilege of serving for a term with senator nelson. down to earth, respected by all in this body, but a commitment

to the environment rarely ever matched. the senator from wisconsin has said it far more eloquently than i could, but i think how fortunate we are that we have the, this the senator from wisconsin who has carried out that commitment to the environment, that commitment to the best ideals of our government. and i know that our dear friend, departed friend, gaylord nelson would be so proud to have you here in the senate representing wisconsin. mr. feingold: i thank the senator from vermont for those kind words, for his remembering gaylord nelson, and of course for his incredible legacy of his own with regard to the environment, coming from one of the most beautiful states in this country: vermont. i thank you. mr. leahy: thank you. madam president, today the senate will finally, finally

confirm professor chris schroeder. i say finally because he was nominated by president obama nearly 11 months ago. he appeared before the senate judiciary committee last june. he was reported favorably last july a year ago with no dissent. all democrats, all republicans committee, no dissent. but then he sat on the executive calendar for five months blocked by mysterious holds from the republican side. then, madam president, as the last session drew to a close, republican senators objected and carried over professor schroeder's nomination. the president had to renominate him. the president did that, to his

credit. his nomination was reconsidered, reported favorably by the judiciary committee again, a roll call vote, a majority of the republicans voted for him. and for three months it's been blocked on this floor again. professor schroeder is a scholar and public servant who has served with distinction on the staff of the senate judiciary committee and in the justice department and has support across the political spectrum. the judiciary committee received -- and i will ask consent to include in the record -- letters of support from professor schroeder's nomination from arrest they are are -- from arthur koberhouse, ken starr, former solicitor general under president george h.w. bush, 11 high-ranking department officials and dean

levy of duke law school. i ask consent to include those letters in the record. the presiding officer: without objection. mr. leahy: chris schroeder is well known to many of us in the senate. he served in many positions, including chief counsel for the judiciary committee, when the chairman was then-senator joe biden. he spent years in private practice as a professor, including for the last ten years as director for the program public law at duke university law school. he's extraordinarily well prepared for the position he's been nominated to. in fact, in my nearly 36 years here, it's hard to think of somebody more well qualified. he graduated -- he served a number of high ranking positions at the justice. he graduated from princeton university, received his master of divinity from yale definitive school before earning his law

degree from the university of california berkeley in 1974. there's no question he's well qualified to run the office of legal policy. and it shouldn't require somebody who's going to be confirmed easily, it shouldn't be necessary for the majority leader to have to file cloture in order to end the republican filibuster and for the senate to at last have an up-or-down vote on professor schroeder's nomination. what has this place come to, madam president, when we have filibusters on routine nominations like this? we never had anything like this before. i remember when i first came here, probably the biggest nomination we had before a heavily democratic-controlled senate was the nomination of a conservative republican president -- gerald ford -- for the u.s. supreme court, nominating a republican from chicago, well-respected but a

republican from chicago, seen as conservative, john paul stevens. we took that nomination to the republican president. two and a half weeks after that nomination arrived here, we all voted for john paul stevens for the supreme court. i was one of those -- in fact only one of three senators still here who voted. senator inouye and senator byrd are the other two. now what have we come to when we have a nomination who is as extraordinarily well qualified as professor schroeder, who is going to be confirmed but he has to get past a republican filibuster? this is a far cry, incidentally, from the way the democrats treated the last president, president bush's nomination to run the office of legal policy. a democratic majority confirmed

president bush's first nominee to head that division by a vote of 96-1 only one month after he was nominated and only one week after his nomination was reported by the committee. the the three nominees in that office who preceded mr. din, daniel bryant, are a which he will branch, elizabeth cooks were nominated in a shorter time. none of these nominations were returned to the president without explanation. none of them required cloture to be filed before being considered. what is going on that when a republican president is treated with fairness but a democratic president -- president obama -- is treated this way? it makes me think of when the

leaders of the republican party said last year "i want this president to fail." well, madam president, you have objections to a nomination, vote against it. but none of us should want, whoever is the president of the united states, to fail. because if the president fails, america fails. and we all suffer, republican and democrat alike. we have to get out of this mind-set tat -- mind-set that if president obama is for something, everyone has to find ways to block. i agree with the observation earlier this week concerning the schroeder nomination, the remark that perhaps republicans were blocking this nomination because professor schroeder has been nominated to lead the office, the best potential judicial nominees. well, he's right, just as senator kaufman spoke so

eloquently on behalf of professor schroeder today. it seems that to deflect criticism for the republican delays on obstruction to judicial nominations has left 25 judicial nominations languishing on the senate calendar. senate republicans have tried to place the blame by sending too few nominees to the senate. by making a lose-lose proposition, the same republicans who held up the nomination to lead -- in other words, they stopped the person who is supposed to do the initial review on judicial nominations, and then they say, oh, my goodness, president obama's not sending up enough nominations. come on. come on.

this is -- this is like a burglar saying "i should be excused for burglarizing this warehouse because you had such nice things in the warehouse to steal. it's your fault for having such nice things to steal. how can you blame me for stealing them?" what they're saying is it's president obama fault for not moving through judges who have to be vetted by blocking somebody from vetting them. i know the department of justice would be grateful to have professor schroeder to help prepare judicial nominations. as he emphasized in response to a question from senator sessions, any interpretation of the constitution must begin with documents, text, history, structure and purpose as well as judicial precedent. a fundamental qualification for anyone being considered for a

judicial appointment is that he or she understand the constitution has binding force and must be applied faithfully in cases that come before any court independent of his or her own policy or preferences. again i thank senator kaufman. he's one of the most valued members of the judiciary committee, somebody i am going to miss sorely when he retires this year, for his dogged efforts in support of professor schroeder's nomination and for his assistance in managing the debates so well today. i congratulate professor schroeder and his family on his confirmation. i have every confidence he will be an equityive, devoted -- he will be an effective, devoted public servant. i might note -- i think of this as i see the distinguished professor who is presiding over the senate today, the senator

from north carolina. among the 25 judicial nominees stalled before a final senate vote, two k court of appeals nominees from north carolina. i know that the distinguished presiding officer took a totally nonpartisan attitude toward recommending these judges and worked extraordinarily hard, and i hope judge wynn and judge diaz will soon be allowed by senate republicans to be considered and voted on. they're supported by both the distinguished presiding officer, senator hagan, and the distinguished other senator from north carolina, senator burr; supported by a democrat and republican. incidentally, judge wynn was reported out of the committee 18-1. most of us would love to win elections by that kind of a

margin. judge diaz was reported unanimously three months ago. so let's stop the -- let's stop this unprecedented kind of stalling, clear these, the backlog of these 25 judicial nominees. in fact there are 100 nominees overall. madam president, i see nobody else seeking recognition. i ask unanimous consent, madam president, that at 2:15 p.m. today the senate proceed to vote on confirmation of the nomination of christopher schroeder with the time until then equally divided and controlled as previously order. further, any other provision of the previous order with respect to the nomination remaining in effect. the presiding officer: without objection. mr. leahy: madam president, i yield the floor.

quorum call:

quorum call:

quorum call:

quorum call:

mr. lemieux: madam president? the presiding officer: the senator from florida. mr. lemieux: i ask that the quorum call be dispensed with and speak as if in morning business. the presiding officer: without objection. mr. lemieux: madam president, i come to the floor of the united states senate today -- the presiding officer: the senator from florida is recognized. mr. lemieux: thank you. madam president, i come to the floor of the united states senate today to talk about the issue of financial regulatory reform, an issue that is consuming the good efforts and time of many of our colleagues here in the senate. and it's an issue that's very important to the future economic health an viability of this country. you know, as we go about our lives, even in this difficult economy, i think it's easy to forget how bad things were just a couple of years ago. how bad things were in the fall of 2008. and it's important for us to remember the situation that we were put in where our stock

market fell precipitously, where our financial institutions were on the verge of collapse, where the united states congress was forced to step in to give billions of dollars of taxpayer money to save the financial institutions, to avoid what was perceived at the time to be a situation as dire as of that which had happened in the late 1920's when the great depression started. it's important for us to remember that terrible and challenging time as we evaluate what we should do now to prevent that time from happening again. and we should be looking back to the causes of that crisis in order to figure out the solutions that we should impose today. now, there has been good work that has been done between members of both sides of the aisle, senator dodd, senator shelby, senator cork he and

others, on the banking an finance committee have been working overtime to come forward with piece of legislation that will help put us in a situation where we will no longer have companies too big to fail, which could put us back to the american taxpayer, asking the american taxpayer to bail out wall street to save our financial institutions. we should never be put in this position again. so i commend the work that's being done. i am hopeful that we will have a bipartisan product. there are pieces of this legislation that's currently constructed which give me concern. the cause of a bailout to again be a situation that the united states congress has to address gives me great concern. there is particular legislation, as part of this package, which would setup a fund of $50 billion, certain companies designated as too big

to fail. i think that's the wrong strategy. i think, therefore, you're guaranteeing future bailouts. you are saying to these companies, you are too big to fail, the federal government is giving you its bank of approval, we will come in and rescue you with taxpayer dollars or shareholder dollars, in that case. i think it sends the wrong insentive and promotes risky behavior and it creates an unfair playing field for those institutions which have played by the rules, which have had sound financial management. we should not forget in this debate and discussion that the way business is supposed to work in this country is you put together a venture to sell a product or a service. if you succeed, you have a profit. if you fail, you go out of business. the failures of the american economic system are, in many ways, just a important as the

successes. where we be if technologies proved to be failures were subsidized and prevented better technologies from coming forward in that doesn't make any sense for consumers. it doesn't make any sense for the american way of life. we need to make sure that businesses can fail if they don't succeed. we've got a system of bankruptcy in this country that is -- that takes companies into its procedures that organizes them or liquidates them. that is how it should work. we do not want to support bad businesses with bad practices and bad ideas. we want the good businesses to succeed and we certainly don't want to create a playing field where the good businesses who run their businesses the right way are at a disadvantage. so i have problems with that portion of the bill. and there are other portions of the bill that i have trouble with. certainly we should not be in a

situation of more taxpayer bailouts or shareholder bailouts. madam president, i want to talk today about the causes of the prior crisis and what this bill needs to do to make sure that that crisis doesn't happen again. if we go back to the mid 2000's, we can see now in hindsight what led to this financial meltdown. in a state like mine from florida, we have been particularly impacted from the meltdown that occurred. because the basis of this meltdown was residential property and the mortgages that went along with that property. now in a state like mine in florida, we've been very fortunate over the last 30 years or so, because as we've had slowdowns in our real estate economy, which is a main driver of the economy in florida, construction and real estate, other parts of the market have

been able to step in and succeed when real estate construction fell back. never before until this most recent crisis was the financial market whetted together with the real estate market. so let's look back at the circumstances that occurred. sometime during the early 2000's, a process started where by banks and lending institutions would give mortgages to people who did not have the ability in all honesty, to afford the home that they were purchasing. there's a type of loan in florida, and i'm sure in other parts of the country, called the ninja loan, no income, no job. now, why would any lending institution give you a loan if you were not credit worthy in order to obtain that loan? i had the opportunity to purchase my first house back in

1995, and when i did, i can only put down 15%. my bank required me to get purchase -- to get mortgage insurance in order to make it to the 20% deposit requirement. that was the way it was in this country. there was a time when you tried to obtain a mortgage or the bank was very vested in you being able to pay because they were holding the note. well, sometime in the early 2000's, the process started whereby mortgage brokers and banks could sell off your mortgage into the marketplace because we started to securitize mortgages. make mortgages trading instruments. and when that happened, and when now the mortgage broker or the bank who generates a fee from the writing of mortgage of itself, can take that mortgage and send it off and sell it off

to somebody else, we created a bad incentive. the bad incentive was, i don't care about the credit longer have to hold the mortgage. so the creation of these instruments, these securitized instruments to trade mortgages created that bad incentives. -- incentive. all of a sudden mortgages were being written to people who otherwise didn't have the credit and didn't have the likelihood of repaying them. well, what did that do? easier money meant prices became inflated. most folks in florida, and all around this country, don't look at the price of the home they're purchasing, they look at their monthly payment. interest rates are extremely low, money was easy to get, a downpayment was no longer required. this helped the billing business, the home construction business, to take off. more homes, more mortgages.

well, the financial markets on wall street found that putting together these mortgage-backed securities, these large trading instruments with thousands -- tens of thousands of mortgages was very profitable for them. they could trade these back and forth and they too could receive a commission on the sale of these products. that made them money. and, guess what, they weren't responsible if they went under either. now, in order for all of this to work, someone had to vouch for the worthiness of these large mortgage-backed security -- these trading instruments of mortgages. and wall street looked, as it always has looked, to these rating agencies, s&p, moody's, fitch. they came along and allegedly looked at these products and

stamped them as being triple a, the highest level of credit worthiness, very unlikely to have any problems with them where the person who purchased some kind of instrument on there would not get paid let alone lose their investment. the challenge was is that the rating agencies didn't understand the mortgages that were in these products. they didn't do the due diligence and we protect them by federal law for any recourse against them for the most part. they didn't have any skin in the game either. now you have the borrower with no skin in the game because they didn't have to put anything down on their house. they're basically renting you have the bank and the mortgage broker with no skin in the game because they don't have to hold the mortgage on their books. you have the financial firms with no skin in the game because they're just trading these large securitized instruments and, worse still, they create what they call synthetic ingredients

where you don't have to hold any of this -- these mortgages yourself, you're creating a shadow instrument that trades the same underlying mortgages, but, in fact, does not hold them. it's sort of lick me betting that -- like me betting that your house will burn down without me having any interest in your house. and we created this long chain of people in this marketplace from the borrower to the mortgage broker bank to the financial institution to the rating agency who had no skin in the game on these transactions. and the sale of these mortgage-backed securities and later the credit default swaps, which was the insurance policies against them, created huge fees for the financial firms. and we did for the first time in the history of this country something that we had never done before. we put the prime asset of most

americans, their home, in play on wall street. and year after year after year the demand for these mortgages drove the excess. more and more and poorer and poorer mortgages written to feed the beast on wall street. and at the end of the day, the housing market couldn't sustain itself and when the mortgages started to fail -- when people started to not be able to make their payments, when the increase in property prices could not increase anymore because gravity affects everything after a while, the whole system in 2007 and then 2008 began to fall apart. and weep found out -- and we found out that companies like a.i.g. were all entangled in buying and selling insurance products on these products. that they had huge exposures.

that wall street banks ha had $5 billion, $10 billion, $15 had $5 billion, $10 billion, $15 billion or more in these institutions and some of these financial institutions failed. first bought up by other companies and then ultimately bailed out by you, the taxpayer. i go through this history, madam president, and explain it in the best way that i know how. it is a very complicated topic -- because what we do in this reform bill has to address the skin in the game problem. so i have made to my friends, senator dodd, senator shelby, senator corker, senator warner and others who are in the midst of negotiating the bill that will come to this floor -- i have made three suggestions as to what we need to do to make sure that we do replicate this problem again. first of all, these rating agencies who are captive to the investment banks whose products

they rate can no longer be held harmless to not do the due diligence required and stamp triple-a on products that they do not investigate and do not understand. but for these rating agencies, this crisis probably would not have happened. but for them -- but for the triple-a stamp, people would not have slept well at night buying a product they did not understand. it is like consumer reports. consumer reports says, this is a great car, it's safe. you as a consumer don't understand the modern workings of a car with all its computer technology, but you buy "consumer reports "requests and you read it. it tells you that this is the safest car in america, s so you feel safe putting your wife and kids in that car. but you didn't know understand this circumstance that the very rating agencies who were rating these products weren't doing any

due diligence and were being paid by the investment banks whose products which they were rating. that's got to change. suggestion number two: in terms of residential mortgage underwriting, in a broker or bank is going to write some exotic-type mortgage where there is little to nothing down, then they should be required to maintain a portion of those mortgageds on their books. let them bear the risk. don't let the bank shift it off so that it can become securitized in the marketplace and tangle all of our financial institutions and put us, the taxpayer, at risk. if we make those banks hold some of those nontraditional mortgages, i guarantee you they will do a better job of making sure that the people they're lending money to are good credit-worthy investments for them. the third suggestion is this:

these issuers of securitizations, including the synthetic -- which really basically means manufactured, not real -- collateralized debt obligations, they also, too, should be required to maintain a substantial stake of the instruments they market. they have to have skin in the game as well, so that if those instruments fail, they are going to lose money. we have got to have not only in this discussion but throughout the problems that we address, madam president, we have got to understand the incentives we're creating. we cannot have a financial market system whereby there is no exposure to me in any part of the equation because that's going to encourage bad behavior. it is the same reason we got it wrong on health care reform, because as long as we have third-party payers, medicare, medicaid insurance companies, we, the consumer, have little interest in the cost of what we're paying for.

therefore, costs don't go down. it's the same brewing problem that we're going to have when a recent statistic says that 47% of americans don't pay taxes. if 47% of americans don't pay taxes, do they actually care if the united states government does a good job of spending money effectively and efficiently? the incentive is for them not to care, because it's not their money. we've got to address this issue today in the financial markets and tomorrow in all of the legislation we pass. americans, banks, consumers in all formers -- whether buying health care services or financial products, whether buying a home or trading on wall street, we have to have skin in the game. where we create bad incentive -- or we create bad incentives that harm our country. with that, madam president, i conclude my remarks and suggest the absence of a quorum. the presiding

quorum call:

mr. brown: madam president? the presiding officer: the senator from ohio. mr. brown: i ask unanimous consent to dispense with the quorum. the presiding officer: without objection. mr. brown: and, madam president, i ask unanimous consent to speak for up to five

minutes. the presiding officer: without objection. mr. brown: i thank you, madam president. and if a republican -- i know that the democrats are a bit shorter than that on time. if a republican comes to the floor, i will yield the floor more quickly, if they scvment i have a couple of things i want to saivment i just came earlier from the agriculture committee meeting where we passed legislation, bipartisanly, on -- to regulate derivatives. it was a major step in financial reform. it -- there was -- the discussion was vigorous, the discussion was not really contentious but there was a good bit of disagreement. in the end, the committee voted bipartisanly for stronger derivative legislation. its it will provide financial stability by require banks to put capital behind their trades. it will use transparency and accountability to prevent wall street banks from taking advantage of their business customers. and it'll reduce speculation that fuels bubbles in markets

like natural gases and mortgages. we need that derivatives can be used responsibly by businesses to hedge commercial risk, but commercial businesses make up a relatively small part of the derivatives business. they used to make up a much, much larger part. but because of a lot of the synthetic c.d.o.'s and other derivatives that have become way and way more commonplace and, parenthetically but importantly, put us in the position that we're in as a nation and our economy. i no he that wall street excesses -- the reason that this bill was so important and i commend senator lincoln for her advocacy and leadership in voting out a strong derivatives regulation, the reason this is so important is because we know what happened because of wall street excess. what happened is homeowners in bryan, ohio, some lost their homes. we know that retirees in ravena,

ohio, lost a good by th bit of r wealth. that's repeated in charlotte and raleigh and ashville, north carolina, as it is true in cleveland and bedford, ohio, because of wall street excesses too many people lost their homes, lost their wealth, lost their retirement, lost their jobs of the and this legislation today, coupled with senator dodd's legislation coming out of banking, this legislation was bipartisanly passed, it will move us in the right direction, it was bipartisan but not a compromise with wall streevment when bipartisan means bring wall street to the table to write the legislation, that's not what the american people want. when bipartisanship means that our committee writes strong language and republicans and democrats -- at least one republican and democrats come together, that's what we ought to do. that's the direction we should go -- that's the direction we should go and that's what responsible govern something about. i yielthe floor and suggest the absence of a quorum.

the presiding officer: the clerk will call the roll. quorum call:

quorum call:

quorum call:

quorum call:

quorum call:

a senator: mr. president? the presiding officer: the senator from wyoming is recognized. a senator: mr. president, i ask that the quorum call be vitiated. the presiding officer: without objection, so ordered. the question is on executive calendar number 699, the mom make of chris -- the mom -- nomination of christopher schroeder. is there a sufficient second? there appears to be. there is. the clerk will call the roll. vote:

vote:

the presidinoffir: are there any senators in the chamber who wish to vote or to change a vote? if not, the yeas are 71, the nays 25, and the nomination is confirmed. under the previous order, the motion to reconsider is considered made and laid upon the table. the president will immediately be notified of the senate's tion. the clerk will report the next nomination. the clerk: judiciary, thomas i. vanaskie of pennsylvania to be united states circuit judge for the third circuit. thpresiding officer: under the previous order, there are three hours of debate on this question, with them equallyime? who yields time?

a senator: madam prede? the presiding officer: the senator from north carolina is recognized. mrs. hagan: i would like to ask for five minutes of senator ley's time. the presiding officer: will the senate come to order? will senators please take their conversations from the well? the senator from north carolina carolina -- will senators please take their conversations from the well? the senator from north carolina is recognized. mrs. hagan: thank you, mr. president. there are two judicial nominees on the calendar from north carolina whom i believe would be confirmed by this body overwhelmingly. judges jim wynn and al diaz, nominees for the fourth circuit court of appeals were both approved by the senate judiciary committee in january. judge diaz had the vote of every

single member of the committee and just one senator opposed judge wynn. the reality of this situation, though, is that north carolina has been waiting for one of these judges since 1994. that's 1994. since then, there has been only one judge from north carolina on the 15-judge panel of the fourth circuit court of appeals, even though north carolina is the largest and fastest growing of the five states in the fourth circuit. partisan bickering has continually blocked qualified north carolinians from confirmation since the court's establishment back in 1891. but in consultation with both me and senator burr, the president has appointed two highly qualified, experienced and fair-minded north carolina judges -- al diaz and jim wynn. judge diaz of charlotte is a

business court judge and handles extremely complex business cases. before that, he was a state superior court judge. judge wynn of cary is a 19-year veteran of the north carolina court of appeals and formally served on the north carolina supreme court. the american bar association has given both of them its highest possible rating. they both have served our country in the military. they have the support of democrats and republicans, including my north carolina senate colleague senator richard burr. they have no real opposition that i am aware of. finally, we have not one but two qualified and bipartisan choices to serve north carolina and our country on the fourth circuit. i am hopeful that we are close, close to confirming these two outstanding nominees for the fourth circuit. i will continue working with my colleagues to ensure that they

are confirmed as swiftly as possible. mr. president, i yield the floor. mr. casey: mr. president? the presiding officer: the senator from pennsylvania is recognized. mr. casey: mr. president, i rise today to speak about the nomination that we're considering in the next few hours, and that's the nomination of judge thomas i. vanaskie. i can't tell you how proud i am to talk about his nomination. i have known him for a long, long time, and i think it goes without saying that i join a lot of people who have spoken about him already and know him, that we strongly support his nomination and confirmation for a seat on the united states court of appeals for the third circuit. tom vanaskie is a legal scholar, he's fair-minded, he has unquestioned integrity and ability, he's an experienced

federal judge since his appointment in 1994, and on top of all that, he's a decent, compassionate man. the standing committee on the federal judiciary of the american bar association has unanimously rated judge vanaskie well qualified to serve as a judge on the united states court of appeals for the third circu circuit. judge vanaskie's biography highlights both his scholarly and professional accomplishments and the high esteem in which he's held by his colleagues in the legal profession. he graduated magna cum laude from williamsport college in pennsylvania, where he was also an honorable mention football player and a first-team academic all american. he was an outstanding male student athlete and the recipient of a highest award given to a graduating student. then went to law school at

dickinson school of law in pennsylvania, from which he graduated cum laude in 1978. judge vanaskie served as editor of the law review and received the m. vostie burr award, a scholarship given by the faculty to the student deemed -- quote -- "most deserving." after graduating from law school, judge vanaskie served as a law clerk for judge william j.nealon, chief judge at the time of the united states district court for the middle district of pennsylvania. judge vanaskie practiced law for two highly regarded pennsylvania law firms before his appointment to the united states district court for the middle district of pennsylvania in 1994. he became the middle district's chief judge just five years later, in 1999, and completed his seven-year term in that capacity in 2006.

he was appointed by chief justice rehnquist to the information technology committee of the judicial conference of the united states, where he served as chairman for three years, and he also participated in several working groups of the administrative office of united states courts, most recently on the future of district cmecf working group tasked with determining the design and development of the next generation of the federal judiciary's electronic case filing program. and finally, he's an adjunct professor at dicki inson school of law and is active in civic and charitable endeavors in northeastern pennsylvania. like me, a northeastern pennsylvania native and resident. just a few accolades about his service from a wide variety of people. we could read a number of these. i'll just highlight a few.

lawyers who've appeared before judge vanaskie have expressed tremendous respect for his intellectual rigor and the disciplined attention he brings to matters before him. one attorney who has tried over a dozen cases before judge vanaskie has described him as -- quote -- "objective, fair, analytical, dispassionate, extraordinarily careful and very respectful of appellate authority." this same lawyer, this same practitioner said that he had not always agreed with judge advance i ask's decisions but -- vanaskie's decisions but he also felt that his ratings -- i'm sorry, his rulings, reflected what the judge considered to be the most appropriate result and the result that he was obligated to impose under the law. judge nealon, u.s. district court judge william j. nealon, for whom judge vanaskie clerked, has described him as follows --

quote -- "superbly qualified, he's out stand, he's brilliant, he's -- he's outstanding, he's brilliant, he's objective, and he is tireless." judge vanaskie recognizes that for many citizens, his decisions will be the final word on their claims before the court. he treats people with respect and honors their right to be heard. his deep understanding of and respect for the rule of law will serve him well in rulings on cases and authoring opinions that will be influential in the third circuit court of appeals and beyond. so for all these reasons and many others, i'm proud to -- to stand to support judge vanaskie and urge his confirmation today. and with that, mr. president, i would yield the floor and note the absence of a quorum. the presiding officer: the clerk will call the roll.

quorum call: mr. casey: mr. president? the presiding officer: the senator from pennsylvania is recognized. mr. casey: i would ask that the quorum call be vitiated. the presiding officer: without objection, s ordered. mr. casey: i ask unanimous consent that all quorum calls during the controlled time on the vanaskie nomination be equally divided. the presiding officer: is there objection? without objection, so ordered. mr. casey: and i would suggest the absence of a qrum. the presiding officer: the clerk will call the roll. quorum call:

mr. casey: mr. president? the presiding officer: the senator from pennsylvania is recognized. mr. casey: mr. president, i would ask that the quorum call be vitiated. the presiding officer: without objection, so ordered. mr. sey:hank you, mr. president. i would ask consent that i be permitted to speak as if in morning business. the presiding officer: without objection. mr. casey: mr. president, i rise today to talk about a major issue that's before the senate or i should say will be before the senate very shortly and that we spent some time on in the agriculture and enforcement

committee over many weeks and many days, but most recently today in a markup and i'll talk more about that in a couple of moments. but it's now time that the senate in the next couple of days and weeks, really, focus on passing comprehensive reform measures that will put an end to wall street's reckless endangerment of our economic system. for too long, in fact, for many years now, we've allowed this system to be in place where high-risk deals were cut on wall street. some people made a lot of money but our economy went into the ditch because of it. and it wasn't always like that, because for decades following the great depression, we enjoyed a financial system that worked, that worked for american families and small businesses. it was pretty simple when you think about it and successful at the same time. local banks operating in communities across the nation took deposits, made loans for

homes and cars and businesses. people knew their bankers and their bankers knew them. and each party was invested in the success of the other. during this time, our economy thrived, it experienced prolonged growth and innovation, and these benefits were felt across the board by people across our economy, across our country. let's contrast that period of growth and shared prosperity with what's happened in the last few years but even longer, over the last 30 years. this more recent period can be characterized by massive growth of the financial sector. in 1978, commercial banks held $1.2 trillion in assets, equivalent to 53% of gross domestic product. by the end of 2007, that same measurement, commercial banks held -- what they held in

assets, that had grown to $11.8 trillion in assets, or 84% of gross domestic product. so the percentage went from 53% to 84% and the number went from $1.2 trillion to $11.8 trillion in assets. unlike the preceding period, this growth was not spread across the real economy to households and businesses. instead, it was explicitly shifted away from families and communities and concentrated on wall street. the impact of this concentration has been acute. whereas people used to rely on local institutions, they now face a financial service marketplace dominated by a few banks with retail outposts sprinkled across the country. instead of supporting the small businesses or little league teams or families, like their local predecessors, these megabanks gather deposits from

main street then slice and dice them and then leverage them to the hilt and use the hard-earned wages and savings of americans to make a handful of people very, very rich. and make no mistake about it, the megabanks have profited tremendously from this new model. over the last 30 years, profits and compensation in the banking industry have skyrocketed. from 1948-1979, the average compensation in the banking sector was more or less the same as any other job in the private sector. today, bankers earn on average two times what other private-sector employees take home. simply stated, american families and small businesses are no longer the customer in this broken system. instead, these institutions function to make wealth for themselves and their stockholders. a clear example of this point can be found in the recent news stories detailing record profits of these megabanks.

record profits at a time of historically high unemployment and a bad economy. these profits were not made through savvy lending to their customers. in fact, in the case of j.p. morgan chase, citigroup, and bank of america, three of our largest megabanks, they have cut lending, they have cut lending through a key small business administration lending program by between 85% and 90% from one year to the next. these multibillion-dollar profits have been made through high-risk trading operations with money deposited by families and businesses. the banks are expecting people in our communities to shoulder all the risk while getting none of the upside. something has to give in this situation. these megabanks, these big companies are entitled to make profits but we will no longer

allow them to continue to use the federally insured deposits of working people as capital for their money-making schemes. we need commonsense rules that separate conventional commercial banking operations from high-risk financial gambles. in no area is this need for reform more apparent than in the so-called derivatives market. a derivative is a high-risk bet that the value of another financial instrument or commodity or other product will go up or down. it's a bet. for years, wall street fought and won the battle to keep derivatives unregulated. in this highly unregulated market, wall street could place bet on bets without backing them up. therefore, when the underlying weakness of assets became apparent, the derivatives market went bust. and along with it, the wall street banks who were playing in

the market, causing the need for massive bailout of these institutions. to prevent another catastrophe, we need a strong regulation of the derivative -- derivatives market. today, the senate committee of which i'm a member, the senate committee on agriculture, nutrition and forestry, had a markup session. when we talk about markups, we're talking about members of the committee voting on -- on amendments and then voting for final passage of the bill out of committee. that's what we mean by markup. but we had that markup session today on the wall street transparency and accountability act of 2010. i want to applaud our chairwoman, senator lincoln, for her work for putting forth a bill that cracks down on the reckless activities of wall street. i also want to commend her and other members of the committee for reporting it out of committee so we can incorporate it into the banking committee

bill that will we'll be considering on the floor very soon. the wall street transparency and accountability act of 2010 will add those two important words to our financial system, both transparency and accountability. and in particular, we'll add it to the -- or impose it, i should say, on the derivatives market. number one, by requiring that derivative transactions, most of them, be cleared through a central clearinghouse. and, second, require realtime reporting similar to the stock exchange of transactions that parties are entering into. besides a more transparent market, the most important provision in this bill is the requirement that commercial banks that have fdic-insured accounts can no longer trade on the derivatives market. this provision will force commercial banks to refocus on what should be -- what should be -- their number-one priority: the customer instead of just

profits and their own stockholders. our current financial system, mr. president, is broken and no longer works for families and small businesses sms whe. when i travel across the commonwealth of pennsylvania, i often hear about the financial difficulties people are experiencing. we have close to record-high unemployment, 582,000 people out of work. a lot of people lost their job or their homes or both and in so many ways their hopes and their dreams. then they read about in the paper every day, it seems, they read about record profits of these big megabanks and they think, what about me and my family? why can't i get a loan, they will ask people like me. why is the interest rate being raised on my credit card? questions like that have persisted for so long now. didn't we bail out these megabanks on wall street already so they could continue to lend people tmoney to people like me?

that's the questions i get. the answer to each of these is the same: these institutions have failed the american people. really, it's that simple. and by extension, they've helped to collapse our commitment of thank goodness we're starting to turn, seeing some job growth in our economy. but we need financial institutions that focus on the needs of our families and our small businesses once again. senator lincoln's bill is a step in the right direction. we're not there yet, but with that bill, with the work we'll do on the banking committee bill, we can begin to restore not only transparency and accountability and sunlight, but i believe we can restore some measure of confidence in our financial system, make it work better for real people, for families, and for small businesses and also to strengthen our economy. with that, mr. president, i

would yield the floor and note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from connecticut. mr. dodd: i'd ask unanimous consent that the call of the quorum be rescinded. the presiding officer: wowfnlings. mr. dodd: i would like to take a few minutes to discuss further the efforts in financial regulatory reform and i'd be remiss, mr. president, if i didn't note the contribution of the presiding officer to this effort. i want to thank him personally once again as a member of the

banking committee. he has expressed a strong interest in this legislation and various parts of trgs and i thank you for it. but today i want to talk about aspects of this. i have been talking about this bill on the floor every day of the last several days, dealing with issues of the so-called too big to fail, which we addressed very aggressively in our legislation. we've talked about the efforts that have been made to try and forge a comprehensive bill, a strong bill which we've involved -- invited virtually everyone who was interested to participate in a product and to which i'm proud to say many did offer their ideas and thoughts as we tried to develop a proposal that was not only strong and broad-based but attracted, again, a strong group of our colleagues, both democrats and republicans, to this effort. today -- over the days we've spent a lot of time discuss, of course, the impact of wall street on large financial firms

and big banks, the investment banks, the nonbanks and others, corporate executives, federal regulators, and other power players in the financial sector. that's been the subject after great deal of attention and the complicated subject of derivatives and how they wosh and how they apply and shadow economies and black pools and systemic risk and all of this language and discussion that sometimes can leave the averages citizen feeling as though they're talking in a foreign language about these matters. and the question they ask is, how does this affect me? i'm glad you're going to try to clean this up, but what is happening with all of this that has some positive impact on my life as a taxpayer, as a working american? i'd like to know what's being done here to see to it that my interests are going to be considered if you're trying to resolve all of these larger questions that somehow seem very distant to my concerns every day. so today i'd like to take a few

minutes to talk about the impact of this legislation on millions and millions of our fellow citizens who aren't financial wizards, would be the first to tell you so, they're not bigwigs on wall street, major players in large banks or financial institutions. they're people who are just trying to build a nest egg for their family, invest in their futures, maybe take a loan out to buy an automobile, a home, send a child to college because that child has done everything they've asked them to do over the years and now want to go on to that educational opportunity and need the resources to do so. the stories are myriad. there are many. the demands and the needs are obviously clear. unfortunately, as we know, and as many americans have found out, over the hard way particularly in these last years, our current financial system leaves consumers too often, mr. president, vulnerable to being deceived into purchasing risky financial products if not outright ripped off by greedy wall street firms

and others. after all, at the heart of the financial crisis that has cost our nation so dearly were the subprime mortgages sold by unscrupulous lenders to americans who didn't understand their terms and who never, ever, ever could have afforded them and the lenders knew it. they knew it going into it, and yet they lured them into those arpghtses, with great damage done to individuals and the economy as a whole. wall street's unquenchable thirst for profits and utter disregard for ordinary consumers led to a pattern of greed and recklessness that darn near lead to a complete collapse of our financial economy. millions of the americans lost their jobs while more than 8.5 million -- homes, seven million have gone into foreclosure.

maybe more importantly than all of this, if you lost your home, your job, your retierntle they've lost their faith and their sense of optimism and dmfd our financial system in this country. and that loss of confidence, that loss of optimism, that loss of belief that while they may make a bad bet on a stock, that the system was sound and fair and would treat you fairly, that you weren't going to get hurt because we had a good system in place. that confidence, that faith has been lost. and that may be more important than everything else i mentioned in terms of the future strength of our economy and the country. to add insult to injury, those same americans then saw those same firms collecting $1 billion bailouts at the expense of the taxpayer, paying $1 million bonuses to the same executives whose bad decisions put us in the mess in the first makers who would have been -- in the first makers who would have been o*ut

out of a job had a bailout not occurred. and then turn around and their expression of gratitude was to write themselves a huge bonus check, and only could do so because in this chamber we voted 75-24 to stabilize our financial system, a decision, mr. president, i believe was the right one. i think we made the right call in doing it, as difficult as it was. but at the end of all of that, you have major executives in these companies then reward themselves as the head of these institutions because we and the taxpayer -- mostly the taxpayer, by the way -- had come up with the resources to make it possible for those institutions to survive. mr. president, the american people are angry and with good reason. but they are also wondering who's looking out for us? who's job is it to make sure this doesn't happen again? while our current system pays lip service to consumer protection, those

responsibilities are divided among some seven different regulators for whom consumer protection is just an afterthought in too many cases to the primary safety and soundness missions they are responsible for as well. the result is that regulators put the interest of banks, large financial institutions in too many case, before the interest of the consumers who rely on those institutions for their long-term economic security. if this sounds like a recipe for failure, that's because it is. assistant secretary of the treasury michael barr testified before our banking committee not long ago, and let me quote him. he said today's consumer protection regime just experienced massive failure. it could not even stem a plague of abusive and unaffordable mortgages despite clear warning signs. it cost millions of responsible consumers their homes, their savings and their dignity, and it contributed to the near

collapse of our financial system. we did not have just a financial crisis. we had a consumer crisis. end of quote. mr. president, that massive failure could happen again. today we're in no different position than we were in 2007, 2008 and 2009. nothing has changed. and yet, we are on the brink of creating change that could make a difference in this very area. today those massive failures are still lurking out there, and the same consumers who lost their homes, lost their jobs, lost their retirement, lost their health care are in no different position today should another crisis happen tonight or tomorrow. it's exactly the same system, exactly the same structure, exactly the same so-called regulators out there charged with protecting consumers from the kind of problems that led us to the difficulties we're in

today. wall street, again, the financial products and practices are being devised on wall street even as we speak here today, that will even make it more difficult in many ways. are they safe? are they exploitive? tpwhao*ef idea. neither do the american people because no one is looking out for them at this juncture. our legislation answers the questions who is looking out for ordinary americans. the bill that we'll present here in a matter of hours to our colleagues in this chamber creates an independent consumer financial protection bureau, a watchdog with bark and with bite. this new bureau won't have any job more important than helping american consumers make smart financial decisions because protecting, educating and empowering american consumers will be their only job. it will have an independent director appointed by the president of the united states and confirmed by the united states senate. it will have a dedicated independent budget paid by the

federal reserve board. it will be empowered to write consumer protection rules governing any institution, whether it's a bank or a payday lender that offers consumer financial services or products. it will have a new office of financial literacy to ensure that consumers are able to understand the products and services that are being offered, and a national toll-free consumer complaint line so that for the first time americans have somewhere to go when they need to report a problem. mr. president, when i talk to people back in my home state, they understand that it's their responsibility to make smart decisions about their family finances, and nothing in our bill suggests otherwise. that's the first line of defense. so we all bear responsibility to learn more, pay attention, and understand the financial arrangements we're getting into. we're not saying anything different. unlike wall street, they're not looking to shirk that responsibility. they welcome the responsibility.

they would like to understand it better. what they need is clear, accurate information so that they can make those good decisions and a cop on the beat to stop abusive practices when they occur. that is what our legislation does. it finally puts consumers in control of their financial lives by requiring large financial institutions and credit card companies to tell you what they're selling you in plain english. you don't need a master's in business administration to understand. and it will finally put an end to the practices that have become almost standard operating procedure: skyrocketing credit card interest rates, the explosion of overdraft tpaoerbgs predatory -- fees, predatory lending by mortgage firms and more. this congress has taken steps to address these abusive practices. passing the credit card act authored by the members of our committee -- i thank the presiding officer for having

been a part of that -- forcing large banks to change their overdraft fee policies. credit card banks continue to look for a way around the new rules. history shows them to be pretty good at getting away with it as well. between 1997-2007, credit card companies engaged in a wide variety of, frankly, unethical practices, so-called double-cycle billing, universal default, retroactive and ash arbitrary tr-t heights. in that entire decade, a decade in which millions of our fellow citizens were overcharged or outright ripped off by these banks, there were just nine formal enforcement actions taken by the seven regulators in our federal government. let me repeat it: in that entire decade not a single citizen in this country could not tell you about one horror story in this country, every gimmick and trick

was used to squeeze every last nickel out of a consumer's pocketbook there were only nine formal enforcement actions taken by the regulators at the national level. then there was the story from mario viera in connecticut, a home builder who accidentally overdrew his account by $25. mario, 75 years old, a small business contractor. he overdrew his account by $2 and was charged $35. the bank took several days to notify him that the account was overdrawn. in the meantime, of course, his additional minor purposes yielded three additional $35 fees, a total of $140 that mario livieri was charged because he was $2 overdrawn in his banking account. unfortunately that story by this individual in my state can be repeated millions of time across

the country. a $2 by a conscientious individual that he was made unaware of, and every subsequent purchase he made, an additional $35 was thrown on his account to the point where he had a bill before he discovered it of $140 because of $2 overdrawn. that went on all the time, and in too often cases it still does. mario protested, the bank waived one of the four $35 charges, but they told him he could do to fight the fees because the practice was perfectly legal. and then there are the auto dealers who have been shown to take advantage of military service members, the shady payday lenders who prey on minority communities and the wide range of other malicious actors who took advantage of american consumers. this bill that will be before this body that passed out of our committee puts an end to those abuses, and that's why it's supported by the military coalition, civil rights organizations, consumer rights groups, and more. it's also why it's opposed by

large financial institutions whose business strategies are based too often on taking advantage of their very own customers. let me take a moment to put an end to some of the malarkey we've been hearing from the wall street crowd. the large banks are paying for ads now claiming that this legislation will impose new restrictions on dentists and butchers and other main street merchants. that's not true, mr. president. you and i know this. that kind of falsehood, it goes out across the country here, is exactly the kind of propagandizing that they are determined to engage in to undermine this legislation. these rules that we crafted apply only to firms engaged in offering consumer financial services or products, not the butcher, not the lawn did a mat -- laundromat, not the dentist here at all. you have to be engaged in financial services or products. just because you're a butcher

doesn't mean these new rules apphraoeufplt moreover, this legislation -- apply. moreover this legislation doesn't seek to strangle innovation. quite the opposite. we're not dictating what products can be offered anymore than the consumer product safety commission directs what toy makers can invent. but just as the consumer product safety commission watches out for toys that could hurt your children, the independent consumer financial protection bureau will watch out for products that can hurt your finances so that customers and consumers can make smart decisions. the large financial institutions that tried to push this notion that this legislation creates an enormous burden on small community banks, let me address that. how nice of them to look out for their competitors, the ones they have been trying to drum out of business for decades. the fact is the small community banks with $10 billion or less in assets, won't see any

regulatory changes. they won't be charged any fees or assessments. they'll follow the same rules that they follow today. and even better, the small community banks will be able to operate on a level playing field without the unfair competition from the underregulated or unregulated shadow banks that don't operate with any rules whatsoever. mr. president, this legislation has many important objectives: preventing taxpayer bailouts, establishing an early warning system so future financial crises can be nipped at the bud before they threaten our entire economic system. but for millions of americans who don't pay much attention to what goes on on wall street except when they have to write a check to bail out the firms that live there, perhaps nothing in this bill will impact their lives more directly this be the consumer protection bureau. finally there will be a cop on the beat watching out for them. safety and soundness of our financial institutions is

critically important. i'm not arguing against that at all. but that's not the only consideration. as this real estate bubble was building up, we were told over and over again that the system was safe and sound. why? because people were making money. it was growing in profits. what we failed to look at and understand was it may have been safe and sound from that narrow perspective, but for consumers relying on these financial institutions, foyer their economic -- for their economic security it was anything but safe and sound. with the establishment of this division, or this bureau, we will be for the first time in the history of our country saying that financial products ought to be no different than any other product that consumers buy. you ought to have a place you can go when you've been deceives or defrauded in the use of these financial products. if your lawn mower breaks, your car malfunctions, we get all sorts of reports, as recently we've seen w-rbgs recalls of

products -- with recalls of products because they're unsafe for that consumer to use them. why shouldn't that also exist if you're out there purchasing a financial product that can put you in great danger, in fact bankrupt you and ruin your life because you've been drawn into a financial arrangement because it was a quick profit-making situation for the lender but put you at great risk and caused the ultimate financial ruin of families and businesses. thus, we have established a parity between physical products you can buy and financial products. americans will be able to rely on clear and accurate information about their family finances. they know that someone is looking out for them, mr. president. there is no better way to restore faith. again, the loss of homes, the loss of jobs, the loss of retirement, all of which have occurred, but maybe the greatest tragedy of all is the loss of

faith in our financial system, and we need to restore that. the absence of that won't make this get better. every other single thing we do will not achieve its goal if americans don't have confidence in our financial systems, the faith that it's there, it's safe that they can be secure in the knowledge that when they deposit a hard-earned paycheck, when they buy an insurance policy, when they buy a stock, when they engage in a financial activity, the structure, the system there is not unfair. not out there to deceive them, defraud them, to take advantage of them, but to see to it that they're protected. that's our goal in this bill. my hope is that our colleagues will allow us to get to this debate. if you have objections or ideas to this, let's have that debate that's been the history of this chamber on important matters that have come before it in the past. we ought not be denied that opportunity again on this bill. but i wanted to take a moment and talk about the consumer protection efforts of this legislation and, again, i

compliment my colleague in the presiding chair. i say to my colleague because he has been a champion in our short service together in this committee on the very issues i addressed today. i want to publicly thank him for his efforts, his commitment and passion for those issues. with that, mr. president, i yield the floor and i see my colleague and friend from arizona and so i won't note the absence of a quorum. mr. kyl: mr. president? the presiding officer: the senator from arizona. mr. kyl: mr. president, i -- before i again talking about this bill, specifically, compliment chairman dodd for the hard work he's put into this matter. i believe it is important for us to reach a bipartisan consensus and that many of the things that were just discussed are matters on which we can reach consensus. that is the goal of republicans. i am concerned, i must say, that there has been some a littl poln of this issue by many of the other side and, frankly, some in the administration. i know that senator chambliss, a

republican, and senator link ong, a democrat worked -- lincoln, a democrat, worked together and were told by the white house that it was not acceptable and this chairman lincoln need to go back and redo it the way that they wanted it done. as a result, the bill was passed out of the banking committee on an almost partisan -- partisan line. and the same thing was true of the legislation that came out of the banking committee. now, while chairman dodd is here, let me make this point. he suggested this morning that there are republicans who support this bill he knows, but they're being told by republican leadership that they can't support it. now, mr. president, i want to make it clear that our leadership does not do it that way. one of the reasons is i am one of our leadership. our members of the republican caucus think for themselves and we came to a conclusion unanimously in the republican

conference that the partisan bill that came out of the banking committee, and it was partisan. it was written by democrats, not republicans, and it was passed on party line vote, that that bill was not wait to move forward. it was partisan, it was flawed. and, among other things, it would provide for per peptal bailouts and therefore didn't achieve the first goal of the legislation which was to finally end the taxpayer bailouts. and so all 41 of us wrote to the leader and said we will not vote to proceed to that bill because it's a partisan bill. it would be better if we could work together in a bipartisan way to bring the bill to the floor of the senate that represented not just republican ideas, but a combination of democrat and republican ideas that had been negotiated by the members of the banking committee, members of the agriculture committee, and others. that would ordinarily be the way that we would take up a bill here on the senate floor. having said that, i am still confident, based upon what

senator shelby and other republicans on the banking committee have said, that it is possible to reach a bipartisan consensus here. i know that senator dodd and senator shelby have been working hard every day on various aspects of the bill to try to reach a conclusion. the second point i want to make here is that one should not describe the bill that passed out of the banking committee as the end of the story as a successful bill that's going to solve all of these problems. i don't think it will. it doesn't end taxpayer bailouts, for example. and at a minimum, it seems to me, it ought to do that. so in just a few minutes here, i'd like to describe some of the things that i think the bill should address and that i hope are being addressed in the bipartisan negotiations. i'm sure it's obvious that it's very difficult once a bill comes to the floor and you have a chairman and leader supporting the bill with 59 senators on their side of the aisle, it's very hard to amend that bill. and that's one reason republicans would like to see a

bill brought to the floor that already has bipartisan consensus and then, yes, we can work our will on the bill and maybe amend it, maybe no. but at least we know that it's not going to be a purely partisan proposition. there's been much attention paid to the $50 billion fund that's created by this bill. and while it is true that the financial institutions, of course, pay for the money that goes -- or supply the money that goes into that fund, we all know where the money eventually is -- is paid. the costs are passed on to the consumers. but that's not the real problem here. because there are other funds in which, like the fdic fund, for example, which the banks obviously pass on to their consumers in order to have an ability to take care of their expenses to creditors should they not be able to do so. but what this bill does is not just create this $50 billion fund, but continuing government

obligations beyond that and it provides not an orderly bankruptcy type of procedure for the resolution of a failed company, but rather an ad hoc procedure determined by bureaucrats who are not accountable to anybody and who can apply pretty much any rule they want to the winding down of the institution. now, what does that do? today, and frankly it's been this way for two centuries, we have a series of laws that dictate what happens in the event of the failure of a company. primarily these are our bankruptcy laws. and you know in advance what happens. if you are a company that can't make it and you go bankrupt, there are two basic ways that you can file bankruptcy. one where you liquidate and the other where you reorganize. in those two situations, the law thrives what happens to your creditors. bankruptcy by definition means you can't pay all your debts. all right. so who gets paid and who doesn't and how much do they get paid

and in what order? all that is resolved by the bankruptcy laws and by the body of laws that built up as precedent in the bankruptcy courts. that's why you know when you either lend money to an institution or you invest in it in equity investments, you have an idea of where you stand, your loan or investment equity stands in your loan if the entity fails. for exam, a secured creditor would be high on the list. security means you have something to fall back on to take from the company if they can't pay their debt to you. as a result, you can lend them money at a lower rate because you don't have to account for that risk when you lend the money. it's a good way for companies to borrow money. now, granted they -- they have to have something that backs it up. sometimes it's even a personal guarantee of the c.e.o. of the company. but you get at pretty cheap loan that way because the lender knows that he or it is going to get his money back. by the same token if you need

money pretty badly and you don't have anymore security, you might want to ask people to invest in your company or to borrow money on an unsecured basis, well, you're going to get charged a higher rate of interest on that because there's more risk to the investor or to the lender. but in every case they know where they stand in the event that you can't make it or you fold. what this bill does is to substitute an unknown, untested process for the tried and true rules of bankruptcy. now, nobody is suggesting that there couldn't be some modification of the bankruptcy process or rules that might govern these particular institutions. they are unique institutions in some respects and to the extent that the rules should be tailerred in order to fit these circumstances, they could be. but that's not what's done in this legislation. instead new entities are created. bureaucrats are allowed to decide when a company could

destabilize the markets and, therefore, decide what to do about it. and their range of options is, essentially, unlimited. the bottom line is that taxpayers could be on the hook for the bailout. that's true with the fdic. it's true with the fed and this bill has specific language in it that provides for that. there are those who say why not get rid of the $50 billion fund and the problem will go away. no, the problem doesn't go away notice you correct that other language as well. i will not try to substitute my judgment for others who say that we need the $50 billion fund. i will say that fund -- that, therefore, there will be instability in the market. i also suspect that those who have an implicit guarantee from the fund are more likely to receive credit, for example, at a lower rate because there's more of an insurance that the

lender or equity investor will get money back. there are downsides to this fund. but leave those aside if you want to do away with the fund, ok. if you want to keep the fund, ok. but what you shouldn't do is provide that beyond that the taxpayers ron the hook. here's the problem, lehman brothers i'm told is well over 00 billion in -- $600 billion in liabilities and a $50 billion fund does not go a long way toward resolving a $600 billion liability. in the case of fannie mae and freddie mac who aren't even dealt with in this legislation, even though they were the prime causes of this problem -- by the way that's a deficiency in the law that needs to be corrected. i hope these negotiations will provide something in that regard. but they have now created -- it is about $6.3 trillion in obligations. and guess who is on the hook for those obligationings? congress never passed a law to

say that taxpayers would be on the hook. but that's the result of the action taken by the bureaucrats who decide these matters now. i don't want to create a perpetual situation where not congress, not the courts, but bureaucrats -- and, by the way, i don't use that term pejoratively. government officials. let's use that term. government officials, who we give the power to, simply decides who gets bailed out, when, under what circumstances who gets paid back and who doesn't get paid and and how much it will cost the taxpayers. that is provided for in this legislation. so when they say that this bill needs to pass because it ends too big to fail, it doesn't. the taxpayers are still on the hook. if those -- if that is fixed, my criticisms in that respect goes away. we have not heard that that's what's being done. i told my colleagues don't come to the floor that says this is a

great bill, it ends too big to fail, and that there's nothing wrong with it. there are things wrong with it that need to be fixed. i would assume on a bipartisan basis if you ask the abstract question of every 100 of the senators, do you think we ought to end too big to fail. yes would be the answer. ask our -- the answer would be yes. what about the language in the bill -- quote --"the fdic will guarantee the obligation of banks under certain circumstances. that's language that has got to be carefully either defined, limited, or eliminated or we're going to have taxpayers continue to be on -- on the hook for these obligations. like i said, we haven't done anything to fannie and freddie in the legislation and that is going to mean a continuing taxpayer obligation as well. as i said before, too, those firms, the ones deemed too big to fail, have a -- an advantage over the smaller banks, the

community banks. my colleague just mentioned those a moment ago. we met with the community bank representatives in arizona, and they fear that this kind of provision will make them uncompetitive vis-a-vis the big boys and what will happen is we will end up with a few really big banks and some that are kind of a medium-sized operation and almost all of the smaller banks having to go out of business because of this anticompetitiveness that will result from the legislation. now, one of the other ways in which what i've been talking about occurs is through section 113, the so-called financial stability oversight council. this is one of these entities that allows for the backdoor bailout. gives the authority of this new -- that this new council deems to be a threat to the stability in our economy. this is a board based in washington. it decides which institutions gets special treatment.

it gives these bureaucrats tremendous latitude to pick winners and losers, again resulting in a competitive advantage and disadvantage. what determines whether a nonbank is a threat to staibilitiy? what are the criteria. and i quote -- "any other factors that the council deems appropriate." that's pretty much an open book. "any other factors that the council deems appropriate." i would think that if the congress tries to legislate in this very complex and difficult area, we would try to give very specific direction to the federal authorities to whom we give great power as to how we want it exercised. i don't think this is it. take towft built. let's have a bipartisan negotiation to do that. if somebody can demonstrate why that has to be left in, then great. these are the kind of things that lead me to the conclusion that, no, we should not agree to consider the bill that came out

of the banking committee on a purely partisan basis because there are problems in in it. ththe wall street journal say that's the dodd bill allows too much discretion to allow regulators to determine which firms to regulate and how and which creditors to reward and how. exactly what y -- what i was just saying, mr. president. it goes on to con cloud -- "the dodd bill subject to other executive approval, beyond deposit-taking institutions, to any financial company deemed to be systemiccally important, and it gives the fdic the discretion to discriminate among creditors as it judges who gets paid what as a part of a resolution. recall, the general says, how the white house exploited its authority under tarp to trash chrysler's creditors and give unions a better deal." end of quote. now, that's not the only section. section 1155 of the bill is entitled "emergency financial

stabilization." this is another way in which the bill guarantees bailouts and puts them into the law and leaves the taxpayers on the hook. under this section, the fdic would be allowed to create a new program of unlimited size to guarantee the obligations of depositories and holding companies with depositories. what does this mean? since there is no requirement that a company that receives guarantees and defaults on its obligations be taken into an fdic receivership, bankruptcy or resolution, the fdic and treasury can prop up whatever company it chooses. this authority can be exercised without congressional approval. it's one of the reasons why i have said i think there needs to be some -- some element of bankruptcy or other process prior to the instigation of this particular kind of authority. you can't say that this bill ends taxpayer bailouts as long as you have got all of these sections in it. now, finally, there is much said

about consumer protection. does anybody know anybody that doesn't favor consumer protection? i think we all do. there are questions about how to intelligently do it. you can create a lot more cost to consumers if you make the regulations so costly and inefficient that they end up paying more money than they would have otherwise, and that is i fear what could happen here. it happened with the credit card legislation we passed. it's predicted i think that it can happen here as well. it could easily happen with businesses that we don't even intend to cover. i know i have heard from dental offices and car dealerships. when you think about wall street bailouts, you don't think about your next door neighbor who sells cars or maybe your neighbor who is a dentist, but if they have an installment plan where it takes four months -- where you can get up to four months to pay your bill to them, boom, you can be covered by provisions here. and then all of the consumer protections apply and so on. let's be careful that in an effort to make sure that wall street handles its affairs

properly, that we don't impose conditions on main street, the folks that we would like to see thrive, particularly in times of recession here, in a way that would end up either causing them more expenses or at worst even making them uncompetitive with these so-called bigger guys. restraining credit is a big way to do this, requiring that they have to apply capital not to building their businesses but to somehow backing up their -- their credit issuance even though that is not the main part of their business. just quoting briefly here from the "new york post"." new restrictions on credit are likely to cost our economy tens of thousands of jobs each year." reductions in credit which would result here means declines in job creation. a lot of small businesses use -- in fact, start-ups use home equity debt or credit cards as their source of funding.

there is not a lot of home equity debt to be had these days. a lot of our homes are not mortgageable at the present time, so credit cards are maxed out and so on. that's a difficult way to do it, but you have to make sure if small businesses are doing this, that the credit flows are not stopped because of provisions of this bill. in an op-ed in the "new york post" today, mark callabria pointed out -- "the bursting of the housing bubble largely eliminated the first option." that's the mortgaging of your home to get additional credit. "now washington is trying its best to kill the second. the dodd bill's proposed consumer protections would reach beyond credit cards and restrict the availability of all forms of credit while raising costs." end of quote. now, mr. president, nobody intends this result. i don't think anybody in this body wants to impose additional costs, especially on smaller businesses or on starter businesses. it's simply an inevitable result of a policy that's written too broadly. we need to be careful how we do

it. we need to ensure that we don't write it so broadly that friends we want to protect here are not adversely impacted. they have been coming to my office, folks that you never dreamed of would be covered by this act or coming in saying here is how this bill could affect me. please make sure that it doesn't. all i urge my colleagues on the other side of the aisle to do is take these concerns on board. they are not partisan concerns. and make sure that when these negotiations figure out how to amend the bill, that we take into consideration the things that we're raising here. they are not partisan concerns. they are concerns of everyday americans, and we owe it to our constituents to think these things through and if need be change the bill. i'm sure even senator dodd would say the bill is not perfect. if there are things we need to see changed in it, then let's do that. and the last point has to do with another element of consumer protection. a lot of folks do business in more than one state. in fact, some of the larger

companies do business in all states. it is cost-effective for them if there is one rule, if there is one regulator. so they don't have, for example, to figure out what every single state requires in terms of different consumer protection or notice or whatever it might be and then have to comply with all 50 states, some of which might be contradictory as well as a federal regulator. so up to now, we have pretty much had a federal regime that has preempted the state jurisdiction in some of these areas. well, as i understand it, the legislation does away with a significant component of that and would allow the state regulators to impose individual requirements on these companies that are doing business throughout the united states. so you could have the anomalous situation where you have lots of different requirements. some of you have seen ads on tv, and it says call now to get your free -- your free -- well, to get your $29.95 knife.

if you call right now, you will get another one thrown in for me. the last ten seconds of the ad has some guy reading very fast language, offer not valid in new mexico, new york, arizona, tennessee, oregon and so on and so on, and you can't even follow what he is saying. but the reality is there are a lot of different requirements. and so what we would like to try to do is have things be as uniform as possible to keep the costs down because the greater the costs, the more cost to the consumer. unfortunately, as i said, however, this bill creates a patchwork of regulatory regimes that expand the number of regulators by 50 in certain areas. as a result, it's going to be much more -- a much more difficult thing to comply with and much more costly. if we believe that we understand what's necessary in consumer protections, then let's provide for it. if we think we don't, that we need to leave this to a lot of other regulators, then let's don't make the rules ourselves,

just let them do it. but you shouldn't do both. in addition to that, the chairman talked about safety and soundness. this is a technical term that essentially has regulators requiring banks and other financial institutions to carry a certain amount of reserves so that if people want their money back out of the bank, the bank has enough money to give to them. no bank believes that every day hundred% of its deposits are going to be called back by its depositors. but they have to have a certain percentage of those funds on deposit so if you go say i want my money out of the bank, they have enough money to give it to you. or if they have loans go bad, they have enough to carry those loans and so on. that's what the safety and soundness requirements of the regulators do, and it's a good thing. sews same people can also provide for consumer protections. and to say look, we know that the bank needs to reserve a certain amount of money, and we also know consistent with that that they need to ensure the protection of their consumers in

a certain way. what's difficult is when you separate these two functions as this legislation does so you have one group saying to the bank here's what you have to do for safety and soundness purposes and you have another totally independent group saying we don't care anything about that, but here's what you have got to do for consumer protection. you can end up with duplicative overlapping, costly and sometimes even consistent, inconsistent requirements, all of which make it more difficult for these institutions to give you a cheaper product, a better loan, credit card with a lower interest and whatever it might be. and i just urge my colleagues -- everyone is for consumer protection, everybody is for safety and soundness. let's try to do this in a way that doesn't influence -- impose such great burdens, especially on the smaller folks, that they are not able to be competitive and provide their consumers who, after all we should be mostly concerned about here, with the cheapest product that is backed by the safety and soundness of

the institutions. incidentally, on this last point, some who are a little more cynical have said well, maybe this is being done for a more nefarious purpose. if every single attorney general in the country can go out and hire trial lawyers on a special contract to bring class action lawsuits because of violation of state laws, then you have a brand-new cause of action for the trial lawyers to do even better than they have done in the past. i'm not going to suggest that's the motivation, but i am going to suggest i see nothing in the bill that would prevent that. as long as that is a potential, then katie, bar the door. so, again, there are many things in this legislation that are not partisan in terms of we all want to protect the same folks, but questions that have been raised that need to be dealt with. and i think it would be far better to take the time to have republicans and democrats sitting down and going through all of these issues carefully,

brieg up a bill they can agree on, bring that bill to the floor so the rest of us can look at it, and hopefully we would all say gee, that's a lot better product than we thought. it's not exactly as i would have done it. it looks like there are some compromises in there, but after all, that's what the process is when you have little more than half the body is one party and less than half is the other body. that's how you get things done. i can just assure you this, mr. president, and assure my colleagues on the other side, republicans want to work with our democratic friends to get a good bill that all of us can support and that will be good for our country, and i think if we can work in good faith toward that end, we'll be much happier with the result than if it is the result of a partisan or near-partisan vote in this body and likewise in the house of representatives. mr. president, i thank my colleagues for their patience and i'm happy to yield the floor. mr. brown: mr. president? the presiding officer: the senator from ohio.

mr. brown: mr. president, i ask unanimous consent to engage in a colloquy with senator kaufman for up to 20 minutes -- for up to 30 minutes as if in morning business. the presiding officer: is there an objection? hearing none, so ordered. mr. brown: thank you, mr. president. i -- i want to believe what i just heard, and i do. i believe that the genuineness and the sincerity of the words of my colleague from arizona. i also, though -- and i agree with him, there are things we need to fix in this bill. there always are, and we can work to improve it. i met only two hours ago a dozen manufacturers from ohio, mostly metal-working companies, stamping, bending metal, all of that came to see me to talk about credit. their frustration with the banking system and with wall street is -- is pretty deep and pretty intense. anger, frustration, i won't speak for them to be sure, but

it's pretty clear that wall street hasn't served them well, hasn't served this country well. as i said, i know we need to fix some things about this bill, but i also watch -- a guy years ago told me don't tell me what you believe. show me what you do, i'll tell you what you believe. when i listen to leadership on the other side, especially to our colleague from kentucky, i really do watch what he does, not just what he says. i know he says this bill doesn't work because it will mean more bailouts. that's battle tested, focus group tested, poll tested. that's the right thing to say to say you're against the bill. but more than that, i watch what he does and i watch what republicans have done on this bill. back in december, 100 bank lobbyists met with republican leadership in the house to talk about how to defeat any kind of wall street reform. earlier this month, senator mcconnell and senator cornyn -- senator mcconnell is

the republican leader. senator cornyn is head of the republican senate campaign committee -- went to new york and met with 25 hedge fund and other wall street executives to figure out how to defeat the bill and to do what you would expect. the best way to defeat this bill is to elect more republicans, we need help, all of that. when i hear them talk about bipartisan, they want a bipartisan bill, what they really mean, mr. president -- and i know senator kaufman and i have talked about this. what they really mean is we want wall street to come to the table and help us write the bill. the same way the bipartisan in the health care bill of the last year was we want to invite insurance companies to the table to have them help write the bill. the public wants bipartisan. they want us to work together. they want us to cooperate. we do that in a lot of things. but in a big bill like this, the public doesn't want bipartisan if it means let's get the -- let's get wall street and the five biggest banks in the country to write this bill and then we can all be happy and let's get along and let's have legislation that way.

i mean, it -- and then i hear -- i hear over and over senator mcconnell, you know, kind of getting a little bit -- the leader gets a little upset when when -- when he talks about this bill. it's a little bit like, mr. president, when you throw a rock at a pack of dogs, the dog that yelps is the one you hit. that's kind of what's going on here. when you look at the relationship between far too many senators and wall street. what got us into this mess is for the last 10 years, the deregulation that the bush administration does the people that they appointed to watch -- just like the head of mine safety in the bush years was a mining executive. we pay the price for navment people in my state, people of west virginia too often families pay the price for a government not aggressive enough to regulate mine safety. we pay the price in this country because we didn't have a government aggressive enough to make the banks and wall street

behave. that's why they were able to overreach. that's why the legislation that senator kaufman and i are introducing with senators casey and whitehouse and merkley and several others will address the issue of too big to fail because too big to fail always -- not what do you if these banks are in trouble, how you pull them apart and they're about to fail and you want to make sure they don't -- we don't spend taxpayer dollars to pail them out and we make sure that they don't hurt the financial system. too big to fail means don't let them get too big. even alan greenspan, who's hardly been an ally -- who's hardly done the right thing in regulating the banking system, he says even, too big to fail means too big. that's what senator kaufman and i are addressing. let me give you some numbers. 15 years ago the six largest u.s. banks had assets equal to 17%, 1-7. 15 year, the six largest banks had assets equal to 17% of our

overall g.d.p. today these -- the six largest banks, 63% total assets -- total assets are 63% of overall g.d.p. three of these megabanks have close to $2 trillion of asetteds on their balance sheet sheets. that means we're setting ourselves up for one more round of serious, serious problems. that's why homeowners in youngstown, ohio, lost their homes. that's why retirees in sydney, ohio, lost a lot of their wealth. that's why workers in newark, ohio, lost their jobs -- because we -- because we had a banking system that was overreesmg, that was excessive, that got too greedy and we didn't do enough about it. and here's what's happening. these manufacturers i talked to this morning -- early this afternoon from ohio that are looking to try to -- they want to grow, they want to hire people, they've got orders, capacity, they just can't get loans to do this.

three of the largest banks slashed their s.b.a. lending by 86% over the last year. s.b.a. loans went from 4,2 in 2007 in ohio alone to 2,100. at the same time, banks have increased their wall street trading by 23%. something was wrong in the last ten years. we paid the price the last two years but something's still wrong when the banks get bigger and bigger, they trade more and more and they lend to main street less and less. that's why the legislation i'm turning to senator kaufman -- the legislation in a h that he d i introduced with several other senators today speaks to this. that we need banks to serve this country. and ultimately it is which side are you on? are you going it side with wall street or are you going to side witwith main street? today we had republicans and democrats together pass legislation, strong legislation to regulate derivatives. it is a good bipartisan step

where senator grassley joined all of us on the committee to pass a strong bill, into the bill that wall street helped to write but a bill thats for thatt works for american consumers and business and homeowners. mr. kaufman: obviously, i agree with what senator brown is saying. you know, this a very, very complex bill. it is a very complex area, but it's really -- what we're talking about is a very simple proposition. we can either limit the size and leverage of too-big-to-fail finance institutions, sawchts bill which senator brown and i are offering, now, or i will tell you we will suffer the economic consequences of their potential failure later. i believe -- i perso personally believe break apart too-big-to-fail banks is the first step in prevent ago noshing psyche of boom, bust, and bailout. even if we do that this bill is

required if we're going to deal with too big to fail. this debate is test of whether the power that have idea can spread and gain support. it is clearly the safest way to avoid another financial crisis. this idea, as senator brown said, must overcome tremendous resistance from wall street banks and their politically powerful campaigns against any kind of structural financial reform. moreover, the idea must overcome the inertia and the caution in a congress drawn to easier ideas than they were. but how much should we gamble that they will work? limiting size and leverage are fail-safe provisions to prevent a dangerous outcome. senator brown and i are proposing a complementary idea: to limit the size and leverage, not a substitute for breaking the banks apamplet the current banking bill has many important provisions that we support, but under its approach, we must hope

the financial stability oversight council can identify systemic risks before it's too late. we must hope that regulators will be emboldened to act in a timely manner when before and in the recent past they failed to act. we must hope better transparency in financial data will produce early warning signals of systemic danger so clear that a council and panel of judges will agree. we must hope that capital requirements will be set properly in relation to risks that are all too often hidden from view. we must hope the resolution authority will work when we know it has no cross-border authority to resolve global financial institutions. under the current bill we must hope all future presidents will appoint regulator regulators asd to carry out the same strict measures preached a by today's regulators who have been converted by the traumatic

failures. all rules to restrict excessive risk taking in banking have a half lifetime that is because the financial sector is full of very, very, very smart people with an incentive to find their way around the rules, particularly to load up on risk, as this is what provides them their excessive profits and their gigantic bonuses. i would rather not pin the future of the american economy on so much hope. i would rather congress act now definitively and respoon civil to end too big to fail. the changes and regulations envoition -- envisioned today in the bill that we're proposing would help initially, particularly in the next --ing in -- particularly the next caned who ainterpoz regulators who only believe in self-retle. this bill puts hard lines. one of the greatest things is

good fences make good neighbors. this builds the fences. then we let the regulators do it and we don't have to worry about the president picking the right regulators. our bill would provide a legislative size and leverages restriction that would last more longer than the half-life of who is appointed to be regulator. we want this to operate for a generation. in 1933 our forebearers came down and made hard rules. they passed glass-steagall, they set up the fdic, they set rules against margins, they set the uptick rule. weerved do no less. -- we should do no less. when they passed those bills in 1933, they helped us avoid a financial crisis for almost 50 years. some will argue that we need massive banks. but recent studies show that over $100 billion in assets and by the way these -- we have banks, as senator brown said, with over $2 trillion worth of assets. financial institutions no longer achieve additional economies of

scale above $100 billion. they simply become dangerous concentrations of financial power that benefit from an implicit government guarantee they will be saved if they fail. with this implicit guarantee these firms will continue to have every incentive to use massive amounts of short-term debt to finance the purchase of risky assets. that's what this bill would deal. it would deal with their ability to be able to do that and would stop it. they would go on and do this without us. they've done it in the past and there's no reason to think they won't do it in the future. until they cause the next crisis and the taxpayers must bail them out again. while the $100 billion banks would be smaller, they are not small banks. and such banks would have no trouble competing around the world. and under this bill, we would still have banks far bigger than even that size. just because -- and people say to me, well, look at the other countries. look what ther in a doing. just because other look what the they're doing.

just because other countries have banks that could send their country into a financial crisis, doesn't mean we should do the same. everyone agrees the most important thing is too big to fail. how much can we risk that, by doing what other countries are doing when they're creating banks that are clearly too big to fail? most people in the oil industry did well nders the break -- did well under the breakup of standard oil? and the breakup of at&t helped the telecom industry become more competitive and profitable. the bill contains many important provisions that address the causes of the financial crisis but why risk leaving oversize institutions in place where they potentially are too big to fail? instead, we should meet the challenge of the moment and the courage to act, as in this bill, to limit the size and practices of these literally colossal financial institutions, the stability of which is a threat to our economy.

this bill is the best hope to ensure future decades of financial stability and the livelihoods of the american people. this bill would put the days of too big to fail forever behind us. mr. brown: senator, you know, this is -- this is -- some people think about this as -- it's a pretty big step to decide, you know, we want to limit the size of baifntle it's not something we like to do. we don't want to do more regulation than we have to. we don't want to tell successful companies not to grow. but when you look at -- when you look at what's happened in the past, you look at what senator kaufman said, that we did this right in the 1930's and it protected our financial system, with a few hickups but with no serious, serious problems until the end of this last decade when president bush and the congress -- starting with president clinton; president bush accelerated it, weakened regulation, repealed regulation

and when there was regulation appointed, you might use the term "lap dogs" -- that might not be a senatorial word. mr. kaufman: people who basically believe that self-regulation will work. alan greenspan was also quoted as saying that we should break the banks up. at the time he said, after it was over, a year later he gave a peach and he said, look, you know, really thought self-regulation would work and i'll dismayed that it didn't. and the way i put it, it was like there was a whole group of folks -- not just in the financial regulatory, but all over the government -- who basically believed the markets are great. i am a big believer in markets but i also like football. and the idea that somebody would say, football is really great but the referees keep blowing their damn whistles. let's get the referees off the field so football players can be football players. that's what we essentially said. we knew what would happen if you pulled all the referees off the

field. i wouldn't want to be in the pile. we said we're going to pull the referees off the field and see what happens. these were good people. they just didn't believe that they had to regulate. we're now seeing the results. and senator t, senator brown, people say to us, when we propose these things -- i'm sure you get the same questions. , look, why don't we just leave it up to the regulators? they can set these numbers. we shouldn't set these numbers. let me read from a couple of things. the 1970 bank holding company act amoun amendments gave the fe power to terminate a cps authority to engage in nonbanking activities, basically doing what we're talking about doing, if it find such actions necessary to prevent undue concentration of resources. i wonder if that went on recently? -- dressed or unfair competition -- addressed or unfair competition -- decreased or unfair competition, conflicts of interest, or unsound banking

practices. they had -- the fed had the power to do this. they did not do this. the financial reform recovery act also gave them the power to restrict an institution's size. what we're talking about now is giving the regulators essentially what they already have in the present bill. what senator brown andry saying and the other cosponsors are saying is, look, the buck stops here. we should tell the regulators what these percentages are going to be because if you leave it up -- this is very difficult. as senator brown said, these are very powerful people and very powerful institutions. and they hire the very best people to come and make their arguments. so if you're signature there running a regulatory agency and you're say, oh, my god, i don't want to do this, i don't want to shrink these things downes. and remember one other thing, too. as bad as things were in this latest crisis, think about what's happened during this crisis. they've all exploded. what did we have happen?

j.p. morgan chase, they now include washington mutual, ads 400 billion bank. bank of the america now includes merrill lithuania. bank of america now includes merrill lynch. wells fargo now has wachovia. these were were big. we put the regulation n we changed the laws. now they are bigger. as he says, 63% -- their assets are 63% of the gross domestic product of this country. 15 years ago they were 17% of gross domestic product. what do we have d.o.d. h. to do before someone sends the message that these things are too big understand that this congress, not pass the buck to the regulators who didn't do the job in the past and let me just say this. i think the world of our regulators now. i don't think they're people regulating now that who baiive basically believe we shouldn't regulate. we made a dishaition helped us

through three generation. what do we do with senators on the floor passing legislation based on the fact i trust my regulators now. why aren't we passing legislation that will work over the next two or three generations? something that will work whether we get a president that believes we should have market or not, whether we have a good regulator or not. why shouldn't the united states do its job and basically restrictions of the kind that are in this bill so that the regulators have? then they can enforce it. they can do the enforcement, which is their job. but we just send a clear message to people that this is what we have to do. mr. brown: exactly. senator kaufman made a point maybe five minutes ago that -- that some of the smartest people in the country are working on wall street, and there is -- there is huge incentive for smart people to go to wall street and be creative and -- and invent new instruments and new financial instruments and say in many ways a step -- stay

astep ahead of the regulators, in some sense a step ahead of the sheriff, if you will. and those regulators, who are paid probably 1/10th or 1/100th -- the regulators are paid decent middle-class salaries that most americans would be very happy with but some of these very smart people on wall street are paid a hundred time, a thousand times, tens of millions of dollars and there is huge incentive for them to figure out how to stay ahead of the regulators. that's why so it's so important that we -- we have strong regulators, we have -- we always work to do that. and we have good regulators. but -- and it's important that a president appoint people who have the public interest in mind, when presidents haven't always done in the last decade, and it's important that we write different rules, and that's exactly what -- what we want to do to keep these banks from being so big. and we had problems with rating agencies who gamed the system. we had problems with mortgage brokers. we had problems with wall street. we had problems with people creating these new c.d.o.'s and other financial instruments, particularly the so-called

synthetic ones that had no real basis in any -- any wealth creation for society, only wealth creation for each other. and that simply doesn't work f for -- ultimately it doesn't work for wall street. it certainly doesn't work for our country. so in summary, our legislation will -- we will likely offer -- we're introducing it today, five or six of us will offer it as an amendment sometime in the next week or two. we ask our colleagues support it. if we're going to deal with too-big-to-fail, we surely to want deal with it on the end if there are banks that are about to fail, but we need to -- to sort of ahead of time, anticipation deal with it by not letting these banks who, no matter how good the regulators are, not letting these banks get too big. mr. kaufman: we need to give the regulators the tools they need to do their job and the -- and the guidelines because we know what these guidelines are. these are not really, you know, terribly strict guidelines. they're just the ability to stop what's going on now, to get

banks back to the size they can be managed. as senator brown said, they -- these banks have a competitive advantage because when they're too big to fail, not only do we have to worry about bailing them out, but they get all their interest rate charges are low. and we know that. the interest rate charges on c.d.'s on these major banks, they get higher interest rate than other banks. and it's unfair competition to all the other small banks around the country. so this is not -- as i said in the beginning of my remarks, this is a very simple proposition, is the senate going to do its job to make sure tha that -- that we have in place the ability to keep these banks from being too big to fail and spropg we never have to -- preparing so we never have to get to the resolution authority. mr. brown: as senator kaufman said, if we do this right, mr. president, it will be -- it will take care of this problem so it doesn't happen in the next two or three generations the way people in the 1930's da, or if we don't -- did, or if we don't do this back, we're back at it in 10 or 15 years. mr. kaufman: by the way, let me say one thing about that. i'm not for overregulation.

but can you imagine if we have another problem, what the regulation would be like then? do you know what the proposals would be on this floor, if in fact, we have another problem 1234 it would be draconian. and the thing that's important is, we want to -- it's important for all of us. we all care about our capital markets. it's one of the things that drives this country, makes us great, is the capital markets. and we want to be credible, we want to be fair and we want them to work. so what we want to make sure is we don't get faced with this, and i think that's exactly what senator brown and i are trying to do. we're trying to do a little bit of prevention here so we never get to that end of the road where we have to go to the resolution authority. mr. brown: and it's worked so well for many years aren't working for local manufacturers or small businesses today. i thank senator kaufman and yield the floor, mr. president. and i suggest the absence of a quorum. the presiding officer: the clerk will call thwill read the roll. quorum call:

mr. specter: mr. president? the presiding officer: the senator from pennsylvania. mr. specter: mr. president, i ask consent that further proceedings under the quorum call with terminated. the presiding officer: without objection. mr. specter: i have sought recognition to vigorously, enthusiastically support the nomination of united states district court judge thomas i. vanaskie for the court of appeals for the third circuit. judge vanaskie is someone known to me personally for the better part of two, perhaps even three

decades as a practicing lawyer in pennsylvania, as a judge on the middle district court. i had the privilege of recommending him to the court of appeals for the united -- for the court of appeals too but originally for the district court during the clinton administration. and have had the privilege of joining with senator casey in recommending him to president obama for the court of appeals for the third circuit. judge vanaskie has a spectacular record. a graduate of lycomie college, 1975, b.a. degree cum laude,

dickinson law school, 1978, magna cum laude, was law clerk to judge william nealon from 1978-1980. for those who know judge nealon, a masterful judge, a paragon, a great person to learn from. and private practice in scranton from 1980-1994. and he was confirmed to the united states district court for the middle district of pennsylvania on february 10 of 1994. judge vanaskie has been awaiting confirmation for some time now. he has had his hearing, was reported out of the judiciary committee by a vote of 16-3.

a really outstanding jurist. during the course of the discussions on the judiciary committee, where i have served during all of my tenure in the senate, there was nothing really said in any way which was substantive in opposition. contention was raised that he has cited foreign law, the law of other countries, but that is in keeping with the decisions of the supreme court of the united states which have cited foreign legal precedent. not that they are binding. they are not the united states constitution. they are not the decisions in the united states federal judicial system. but they have been recognized by the supreme court as worthy of some consideration.

it is regrettable that judge vanaskie has been caught up in the partisan battle in the united states senate. this is part of a broader picture of gridlock of the congress of the united states as we have seen the popularity and approval rating of members of the house and senate fall precipitously because of what america is seeing going on in the -- in this body and across the rotunda in the house of representatives. we see a stimulus package where there is very little willingness on the part of people on the other side of the aisle to negotiate with people on this side of the aisle. we have seen a health care

package enacted into law without a single vote in the united states senate. in the house of representatives, 176 republicans said no and one said yes. on reconciliation, all 177 said no and all 41 in the united states senate said no. there has been a point reached where there's really an issue of whether there could be governance at all with an obstructive majority standing fast. we have seen a slight break in ranks when the issue came up on the vacation for the payroll t tax, one republican stood up and voted with democrats and that led a few others to -- to join.

and on unemployment compensation, again one republican took the lead and a few others joined. and it is i think realistic to conclude that it's the pressure from back home. there are some on the other side of the aisle who may sensibly calculate -- i don't fault them for the calculation -- that they have to have some flexibility if they want return to this body. we have had concerns on wall street which are overwhelming with what has gone on in the economy. the precipitous great recession which has engulfed america and has engulfed the world, and for a lengthy period of time there has been resistance to any real

negotiation by the other side of the aisle. and finally within the last day or two there has been some willingness to consider legislation, although wall street issued. and i think that has come about as a result of public pressure. it's simply stated in politic to be against reform in wall street considering what has gone on. but it would be my hope that these cracks in the dye would lead to some substantial shift in position so that we could return to a bipartisanship which was present in this body when i was elected in 1980. at that time we had a senator in

maryland willing to cross the aisle and mark hatfield in oregon similarly and lowell weiker in connecticut and bob stafford in vermont and john heinz in pennsylvania and john chafee in rhode island and bill cohen in maine. so that when we had the so-called wednesday club, it was full. and that has dwindled so that the moderates can meet in a telephone booth today. and we really ought to go back to the days of just a little bipartisanship. we had an enormous problem in 2005 when the shoe was on the other foot, and the filibustering was being done on this side of the aisle. fortunately we were able to work through that problem.

there was flirtation with the nuclear, so-called constitutional option which would have changed the rules on filibuster. we preserved the procedure of the senate, the tradition of the senate to be the saucer which cools the tea, as the expression was used during the colonial days. and i think very importantly to maintain that tradition and that procedure. it was the coolness of the senate which saved the independence of the federal judiciary in the impeachment proceeding of supreme court justice chase in 1805 that preserved the independence of the presidency and the acquittal on the impeachment proceeding of andrew johnson, when a controversy arose with the claim being made that there had to be congressional or senatorial

approval to fire a standing secretary of war barricaded himself in the office. president johnson refused, articles of impeachment were filed and he was saved by the vote of a senator from kansas. growing up in kansas, there was great pride in the state about that courageous senator who stood up and later was defeated. maybe that's -- i won't make any predictions there -- the cost of standing up. but important to maintain the traditions of this body. but we have to do it in the context of capacity to the government. supreme court justice jackson in a somewhat different context said the constitution is not a suicide pact. whatever rules we have are not

substitute for our capacity to govern. we have seen this pattern illustrated by the nomination of barbara keenan of virginia. judge keenan's nomination was stalled for four months. after the time-consuming process of cloture, her nomination was approved 99-0. well, if she can be approved 99-0, why require the filing of a cloture petition? why tie up this senate for the better part of two days? may the record show that the distinguished presiding officer, the junior senator from minnesota, is nodding in agreement with my statement that's a procedure we lawyers used to perfect the record. but that has been the policy. tying up this body, going to cloture, the delay, and then

overwhelming confirmations, not only unanimous, but very, very substantial. and i predict that is what will happen with judge vanaskie here today when the roll is called a little later this afternoon. one additional note, teeth proceed -- these proceedings take a very heavy toll on the nominee. judge vanaskie is a man devoted to public service. when he was practicing law in scranton, his paycheck was a great deal bigger than when he became a federal judge. and when he comes in to the process of nominating procedure and he is questioned and his writings are impugned because he follows the supreme court of the united states, it's a jolt, and it's hard on the vanaskie family and it's hard on the community. i've had many calls from the

people in judge vanaskie's community saying what's going on in the united states senate? what is going on? what is happening? repeated calls. so finally i decided to write a column for "the scranton times tribune" explaining what happens in the united states senate as to why the delay has occurred. so i am glad to see this brought to a close. i hope that we will move the appointments of the president. consideration is being given to limiting the filibuster, not having it apply to members of the administration. we all concede it is a governmental doctrine that the president ought to have the right to name his own team.

maintain the filibuster for judicial nominations where you're talking about lifetime appointments. but this is a good and true man, and he's been subjected to a process which is fundamentally unfair. and i'm glad to see it brought to an end this afternoon. i ask consent that the copy of the article which i wrote for "the scranton times tribune" dated february 26, 2010, be included in the record. the presiding officer: without objection, so ordered. mr. specter: i thank the chair and yield the floor. mr. specter: i suggest the absence of a quorum.

the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from pennsylvania is recognized. mr. specter: i ask further proceedings under the quorum be terminated. the presiding officer: without objection, so ordered. mr. specter: i ask unanimous consent that the vote on confirmation of the nomination of judge thomas vanaskie occur

at 5:30 p.m. today with the time until then divided as previously ordered, and the remaining provisions of the order governing consideration of this nomination still in effect. the presiding officer: without objection, it is so ordered. mr. specter: in the absence of any senator seeking recnition, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll.

quorum call:

quorum call: