can impact foreclosures. >> because there are some borrowers for whom the offers that we have extended so far have not been generous enough. and in order to enable, who truly want to stay in their home -- >> let me move one step further because i'm about to lose my time. would this also impact the overall economy what you are doing? >> we believe that bringing stability to a neighborhood by ensuring that homeowners who want to stay in their homes can get to and affordable payment, and have sort of a vision for the future of that homeownership is important. at the same time, we do believe that there are some borrowers for whom being able to afford staying in that home is not a viable alternative to answer we need to work with them to transition them out of that home and as dignified a way as possible. ideally, without having to go

through foreclosure, but a short sale or some other alternative into an alternative housing arrangement. >> thank you. thank you, mr. chairman. >> the gentleman woman from illinois. >> thank you, mr. chairman. it was almost two years ago that we had a hearing about what was then the looming foreclosure crisis in this committee. we were concerned about debt-to-income ratio, loan-to-value ratios, which were unsustainable. and at that time, what we produced at the committee level was the hope for homeowners program which i do provide a proper balance between providing relief to those who found themselves upside down while also protecting taxpayers against moral hazard by requiring those that received related to pay back taxpayers by sharing any upside in equity appreciation back with the government. clearly the hope for homeowners brogue ram has had little to zero participation from

organizations like yourself. so my question is why? recognizing there were some complaints issues that we later address about a year into the program. does that include the second lien treatment and how it's different than the h.a.m.p. program? and i guess my other question would be, would you agree that he shared equity approach does tackle moral hazard by discouraging homeowners from intentionally defaulting? because they think they will get a deal if they have to share equity later, that would discourage them, but it also encourages those that are in a troubled situation to stay in the home because they have a more realistic potential at some equity appreciation in some realistic future, just adding all the debt down at the end of the day. is there anything precluding you as services from already working out your own shared equity arrangements with the borrowers? is there something we should do in the h.a.m.p. program posted

to the? and can we start with ms. desoer? >> please identify yourself for the record. >> i am jack schakett with bank of america home loans. the hope for homeowners, a theoretical point of view looks nice because the idea of a sharing appreciation feature getting both the homeowner a chance for appreciation and investor a chance to share and that is appealing. but every program has operational concerns. what probably heard hope for homeowners the most was because it was a significant deviation from the standard fha program. the operational hurdles were in place have been very difficult. so we have been working on rolling out hope for homeowners for sometime but were still not there yet. a new program put out by fha which is simpler like eliminating sugar creation will be much more operationally easily to roll out and much more effective from that point of

view. >> thank you. transixty? i would say that while hope for homeowners was a complicated program in terms of how it could be executed, i generally tend to be a little bit more in favor of shared appreciation because i believe that unless there is some sharing of the upside that the whole notion of sharing on the downside doesn't seem fair. i defer to my colleague if he has any additional on this. >> i think i would, i'm steve hemperly, citimortgage, for the record. i would tend to agree with mr. schakett's comments. we look forward to introducing the new fha program as well as hope for homeowners. >> congresswoman, this is a very complex program, and one that we have wrestled with. were in the process of doing what's necessary changes to assistance to be able to allow

it, and we plan to watch it sometime this summer. >> thank you. >> i think the new fha refinance program has some real advantages over the hope for homeowners. it is a simple program. what we know that so far, it would be if you're using fha requirements. the approach between first liens and second liens is a more equitable sharing under the new program so it has some advantages to that as i said in my testimony, we intend to make sure that our second liens did not prevent these from happening. >> can i also ask, by maybe a nod, is there anything to cleaning services from working at shared equity arrangements with borrowers now? on your own. are you doing those in some situations? >> we really do need or a response as. >> you can you say whether you're doing them or whether you are allowed to. >> we are not doing them but we introduced the concept of our

principal forgiveness into our sensible reduction program. >> okay. >> weekly don't have any programs operational that include shared equity, but we're in the process of constructing some pilots your. >> weekly don't have a program. >> and we have been using the principal forgiveness as part of the program starting in january 2009 as a way to get customers help. >> thank you. i see my time has expired. >> thank you, mr. chairman. in yesterday's "wall street journal," a bank of america spokesperson is quoted as saying quote in efforts to avoid a foreclosure fails then we do reserve the right to recover the unpaid balance on the second lien if permissible by state law. however, our practice has been to only pursue recovery in situations where we believe that customer has sufficient non-retirement assets to satisfy their debt obligation, end quote. ms. desoer, can you expand upon

the process your that goes through in determining which customers making appropriate? >> yes. part of the evaluation of underwriting to determine the hardship where we look at the verification of income and other assets that the borrowers might have. and in order to mitigate the risk of moral hazard, try to draw that line to determine who is eligible for certain programs based on the hardships, and if they are not eligible for that hardship, that we might reserve the right to pursue other assets or to income and ability to afford the payment, the right to do so. >> i yield back. >> i'm going, i have a question begin. let me ask, i was approached yesterday i believe in my office in newton by an attorney who purported to me he has got

people who are in modification programs with chase who are still getting collection letters. i'm wondering if you or visit she had would know about that or how we solve that? i assume it's not appropriate. >> we do make mistakes. we are dealing with a lot of customers and a lot of transactions. i would be happy to address th that. >> along the same lines, i've also been told by a national organization that does a lot of work here, not her, that they've had some difficulty getting some answers on some pending requests for modifications, which is a channel, what do people do when they don't get the answers that the thought of going to get, who do they talk to? >> we have a special group that deals specifically with the community groups, including naca into those channels as how you would -- >> in some case if the channels are working is there an appeal on what do they do it their getting frustrated?

>> company. >> are you, ms. sheehan. your first name is? >> molly. from chase. >> indicated she could be the one who could be, talk to on his. and the gentleman from texas. >> thank you, mr. chairman. there have been a number of editorials written about the approach of the administration on foreclosure mitigation. "usa today" wrote on the first of this month, quote, helps irresponsible lenders, borrowers, unquote. "the wall street journal" the same day wrote quote instead we're heading towards year five of the housing recession with washington proposing even more ideas to prolong the agony, one senior banking regulator we talk to calls it quote pretending --

excuse me, extending and pretending. the question i have, i spent part of the congressional recess over easter speaking to a number of private equity funds, banks, within the dallas metropolitan area which i have the opportunity to represent sections of the citi of dallas and congress. and there is great concern that the government is artificially propping up values in a marketplace that create uncertainty and leave private pools of capital on the sideline. now, i admit most of my evidence is anecdotal, but i hear it over and over and over. that people are afraid to invest in pools of residential mortgages because, number one, they don't know that the market has reached its true value. and second of all, they don't

know what the next public policy shoe to drop maybe. and so, at least in my mind, i'm not sure that washington is being helpful at the moment. they may be more hurtful. i would like any comment on the validity of the observations made by a number of people in the in investment and banking community in dallas, texas. anybody care to comment? mr. heid? >> i would say as a general statement uncertainty is certainly not good for the investment community. >> congressman, i'd like to rein in on that. we are actually saying that in certain markets there is, in fact, improvement in markets, for example, markets in california received some stabilization. and the governments role is welcome in terms of getting us

all together, and i don't believe that it's interventionist in enforcing of two great artificial pools of opportunity for capital. i think it is important in first and second mortgages to get is all working together. that is an important set of actions that will make the market more efficient. >> this will be my last question. i guess i'm looking to be persuaded as a member of congress that this is a good investment of the taxpayers money. i know that there's a 50 billion-dollar pool of money here, and i know that kim and i had this exchange are here. i think as a matter of fact, the h.a.m.p. program was a gratian of the obama administers and, be that as it may. there's a 50 billion-dollar pool of money here. we know that we are a nation that, today, is on an

unsustainable fiscal path, not my language. i believe that comes from dr. elmendorf of the congressional budget office. chairman bernanke has echoed that. i think economists paul samuelson has said that we have a fiscal cancer that could threaten our nation. that's a paraphrase. i don't have the quote in front of me. but already we're looking at levels of debt to gdp going from 40% of the economy to 90%. we are looking at a budget that is going to triple the national debt over the next 10 years. we are looking at almost a trillion dollars of interest payments alone at the end of the decade. and so the question i have, when everybody from the cbo to omb, the president own director of omb says we are on and on sustainable fiscal path, why don't we use $50 billion to pay you guys to do something that

you probably are already incentive to do as opposed to pay off the national debt? if i see no enthusiastic takers of the question, i will yield back my time spent you would mean it again. the joan from illinois will have the final questions. >> thank you, mr. chairman. my last question was, one of the things i hear from a constituent services folks in my district is that people who have been trying to get, a number of them have been approved for the temperate modifications while unemployed and on unemployment insurance. but then they are disapproved for permanent modification because they don't have employment. can someone explain to me why you would be able to get into a temporary and not a full modification? and should we be using the same

criteria? can i start with you? >> yes. and there's a change in the program. so the only way i believe that could potentially happen is if in establishing that customer into a trot modification, we asked what their income was but maybe not the source of their income. and we verbally verified that they could be to require must, put them in a trial modification. than once without documentation of income, and understood the length of time that was going to be in place, because the intent of the program is to make a long-term affordable payment, that that's when that disconnect would potentially happen. >> so is unemployment and, qualify in any case or need a case of? >> it is qualifying income, but it is, it's only for nine months. so you have to see the path to either another member of the household having income that

would be part of the equation or not. so you have to understand the specific circumstance to give you something more specific, but that's potentially. jack, i don't have anything to add. >> they have to have at least nine months of unplugged insurance left. as barbara said, potentially stated income in the first place now required full documentation. we didn't know exactly the period. we may have thought the qualified. we determine they only had six months remaining than they would have qualified under h.a.m.p. >> the same issue. just want to add, it's pretty much the same issue and i think that issue is significantly mitigated with a new program as barbara mentioned. >> thank you. >> the hearing is adjourned. [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> to move banking regulation forward. the bill needs at least one republican to support moving to build debate. senator richard shelby this spoke at the independent community bankers conference and said negotiations continue but no republican will support the bill get. the senate will vote this afternoon. you can see live coverage of the vote starting at five eastern here on c-span2.

>> west virginia held a memorial yesterday for the 29 miners killed earlier this month in the worst u.s. mine disaster in 40 years. massey energy companies said air samples didn't show high enough levels of explosive gases just before the explosion. i look now at yesterday's memorial service for those miners that this portion is about an hour and a half. >> jason madden atkins.

[applause] [silence] [silence]

carl "peewee" acord. [applause] [silence] [silence]

james "eddie" moone. [applause] [silence] [silence]

joshua scott napper. [applause] [silence] [silence] [silence]

kenneth a. chapman, sr. [applause] [silence] [silence] [silence] [silence]

[silence] timmy davis. [applause] [silence] [silence]

benny r. willingham. [applause] [silence] [silence] [silence]

[silence] gregory steven brock. [applause] [silence] [silence]

cory thomas davis. [applause] [silence] [silence] [silence]

steven j. "smiley" harrah. [applause] [silence] [silence] [silence]

nicolas mccroskey. [applause] [silence] [silence]

christopher lee bell, sr. [applause] [silence] [silence] [silence]

joel r. "jody" price. [applause] . .

deward alan scott. [applause] [silence]

>> grover dale skeens. [applause] [silence]

>> william "grif "griffith. [applause] [silence]

>> mike lee "cuz" elswick. [applause]

>> howard daniels "boone" payne, jr.. [applause]

[silence] [silence] >> gary wayne quarles. [applause]

[silence] [silence]

>> william roosevelt lynch. [applause] [silence] [silence]

>> ricky workman. [applause] [silence]

[silence] >> richard "rick "keith lane. [applause]

[silence] [silence] >> adam keith morgan. [applause]

[silence]

>> edward dean jones. [applause] [silence]

[silence] [silence] >> robert eugene clark. [applause]

[silence] [silence] >> joe marcum. [applause]

[silence] [silence]

>> ronald lee maynor. [applause] [silence]

[silence] [silence] >> dillard earl "dewey" persinger. [applause]

[silence] >> rex lane mullins. [applause]

[applause] >> thank you. and now would ask you to remain standing for the posting of the colors and the singing of our national anthem.

[silence] [silence]

♪ oh say can you see, by the dawn's early light, what so proudly we hailed at the twilight's last gleaming ♪. ♪ whose broad stripes and bright stars, through the perilous fight, oer the ramparts we watched, were so gallantly streaming ♪. ♪ and the rockets red glare, the bombs bursting in air, gave proof through the night that our flag was still there ♪. ♪ oh say does that star-spangled banner yet wave, oer the land of the

free, and the home of the brave ♪. [applause] [applause] >> we ask that you please remain standing for prayer. we noticed that when the dignitaries came in everyone stood and when the families

came in, everyone stood appropriately. but there is another presence in the building here today and that sweet, sweet presence is the presence of the lord. [applause] today, appropriately is the lord's day. many of you have just come from the lord's house, worshipping him in spirit and in truth and i assure you he blessed you so you could be a blessing to you here today. somebody can say amen. somebody can say thank you, lord. i had the privilege to spend time with these families during the tragedy and i can assure you, that they worship together, they pray together, they sing together, they danced together, they thank godded together.

they held out hope together. so nothing would make them happier today -- [applause] and if we lift him, the king of glory will come in with healing in his wings because this is not only hope and help but it is a healing service. when i lived here in beckley years ago, this was known as the raleigh armory. now it is called the convention center. why don't we have a convention today, a healing convention, a praise convention. a thank you convention. [applause] these families deserve it. we need to do it the west, by god virginia way, hallelujah. [applause] because we are west, by god, virginia, god-fearing,

god-loving, god-praising people and we need to act like it and we need to show it here today because the eyes of the world are upon us. and we want to fwlorfy our god for whom all blessings flow. let us pray. our father and our god, we come this day thanking you for for divine presence, throughout this entire tragedy has been real. these families have shown how to go through tragedy and trials and, tragedies and disbelief and wondering about their loved ones. they showed the world, father, how that even when they go through the valleys of the shadow of death you are with them and that they would fear no evil. they told the world that they were still holding onto god's unchanging hand.

that they still love god and were not blaming god, but were clinging to him because we know from whom our blessings flow. and father god, as we look to you here today, this is not a political convention. this is not a umw convention. this is a healing convention, and a heaven convention because we believe that you are here! you are here to bless, to lift up our hearts, to heal broken spirits. these families need something to be able to just smile about, lord. they need something to be able to laugh about. and i believe you're here today to provide that and have already done that and auld of those that will come and be on this program we pray that you will bless them but that today, will not be the end of our our prayers. will not be the end of our

concerns. will not be the end of our loving them and helping them but today is the beginning of the healing process and we are going to say thank you, jesus, thank you, jesus, thank you, jesus. thank you, lord. you're worthy. you're worthy. we ask, father that these families might know that weeping will endure but the night and many nights but joy can and will come in the morning and that our hope for their loved ones is that one of these old days when the lord himself shall appear and the dead in christ shall rise and we who are alive and remain shall be caught up together with them in the air, that we will see them in that number. that john said, no man could number coming up before the throne of god almighty. we thank you, and we look

forward to that day. and we pray, father, and ask for your blessing and help upon each and everyone of us. help us to continue to labor together, bind together, love together, pray together. and when we leave from this place, lord i believe we will be able to say it has been good in the house and presence of god almighty who sits high and looks low. we will never cease to that or praise you or honor you in the wonderful name of our lord and savior who lives forever and every and ever, amen. all the church can say, amen. thank you, god bless you. you may be seated. >> please be seated. good afternoon.

i want to welcome, everyone and thank you for joining us today. families of our fallen miners, mine rescue teams, fellow miners, first-responders, our clergy, our volunteers, our friends, first lady gayle manchin, all of our members of the legislature, senator rockefeller and senator byrd, members of our congressional delegation, mr. president, mr. vice president, and thank you so much. albert einstein said, learn from yesterday, live for today, and hope for tomorrow. we are here to honor the 29 brave men that we lost, and the two who were injured during that devastating blast at montcoal, west virginia on april the 5th. today, is the a day for us to come together, as a state,

and speak about the strength of our miners, the strength of their families and the strength of west virginians. today is also the day for our state with a nation joining us, to begin the healing process that allows us to move forward when we have been so badly wounded. i want to thank everyone around the nation and throughout the world for their prayers and wishes, during this last couple of weeks. we feel your sympathy, and your love here in the mountain state. my main goal, since i learned of the explosion, was to make sure our miners were represented honorably and that their families would have the support and protection that they needed during this difficult time. i personally have been through this type of a tragedy. i lost my uncle, and a lot

of my classmates in 1968 at the farmington, west virginia mine explosion. so it was important to me to make sure that those who did not know west virginia mining families would come to understand the character and substance of these wonderful people who play such an important part in this great state, in this great nation of ours. as i listened to our first lady read each of our 29 miners names and watched as each family came towards, came forward to place a helmet in honor of their loved ones, i was saddened like all of you but i was also inspired. amid the pain i see courage. it is the same courage i saw in the face of these wives, these mothers, the fathers, brothers, sisters, the sons and these daughters.

those long nights as we all waited for more news at the upper big branch mine. each of you, each of you, exhibit a will and a spirit that we all admire. and this service today, it is our expression of love and hope for the comfort that we wish for all of you and your family. these were strong men. they were strong in stature. they were strong in character. they were strong in their love for you. they were strong in their courage. they were strong in their communities. they were strong in their commitment to every family member. around they were so strong in their faith in god. today is our is our chance to be strong in their honor. these were hard-working and

brave men. and i know you all know it takes brave men to work beneath the surface. today is our chance to be brave also in their honor. mining was the job they chose and it was the job they loved. they were very skilled and they were very good at what they did. i believe, i believe, that each of those 29 miners, like every miner working today, as well as many of their fathers and grandfathers, that worked before them had not only a strong commitment to provide a good living for their families, but a deep, patriotic pride that the work they did, and the energy that they produced, made america strong and free. [applause] . .

[cheers and applause] [cheers and applause]

[applause] >> they are seated among the floor among our following highers family members. -- miners family members. they stood side by side and put their own lives at risk to find their fallen brothers. when we ultimately learned we had lost them all, our rescuers, those rescuers switched their cap lights back on and went back in the mine to bring their friends home in the most honorable way. god bless you. [cheers and applause] >> we all thank you. we are honored that you are with us this evening. i want to thank president obama and i want to thank vice president biden who have come

today to make this journey of honor with us. thank you so much. [cheers and applause] >> and i hope -- i hope that everyone here today and everyone watching around the nation has discovered during this time of tragedy what's so special about our miners and our mining families. after today, we turn our focus on their legacy. i don't have the answers about why this is happened. but i promise you, we will find the answers. and i pledge -- [applause] >> and i pledge to each and every one of you that your loved

one will not have died in vain. i pledge that to you. we owe it to you, and we owe it to them. i know also from personal experience that you will never fill the void from their loss. you won't fill that void. but i also know that you will never lose those precious memories that belong to you about these wonderful men, our miners. a chinese proverb goes something like this: to get through the hardest journey, we need take only one step at a time. but we must keep on stepping. our journey through grief is loanny. -- lonely. but our healing has began. thank you. and may god bless each and every one of you. [applause]

>> in memoriam we have gathered to honor the beloved 29 coal miners who's lives were given unto these mountains of west virginia some 20 days hence. in our gathering today, we lift up the memories of all of the miners who sacrificed for generations gone by to provide energy for the people of this nation and the world. and now this past thursday

another miner, 28 years old john king from glen daniel died in a separating mining accident here in raleigh county. bringing mining fatalities this year to 33. we hold the king family in our prayers. and as we turn the news on this morning, we saw devastation from a tornado effecting the lives of families in mississippi and we raise them up in our prayers. i stand before you bringing greetings from the people of this state, the nation and the world who are united in the shared grief and the bond of love. for you.

the families present here today. for you. the mothers, the widows, the sons and daughters, and your immediate and distant families. for friends and coworkers, rescue teams and neighbors of those we honor and remember this day. sunday our school children from across this land have sent their love. brooklyn from west virginia sent a card, god loves you miners. miners we will pray for you. and hudson, a student, said this: texas sends its love.

hundreds have sent contributions to the montcoal mining disaster fund. and they all send expressions of their thoughts and their prayers. while the rain seems to threaten us today to fall around us with a sense of the heavens weeping, spring mountain flowers are sprouting as a message of hope with prayers of healing and peace offered throughout all of the faith communities of this land. in support of the miners, and their behalf, i bring you greetings. greetings to you in the name of the church of jesus christ in all its expressions who are represented here today by so many pastors and church leaders

from this community and beyond. many of these church leaders sit at the council of churches unity table. and three of them are our faith community dignitaries that we call bishops and we with rightfully honor them as welcome them today. others are leaders in the faith community and we had a pregathering and prayed for this gathering earlier today. i greet you in their behalf as well as all of the church leaders who pray in unity in the name of christ. we have to give a special thank you to governor joe mansion and all of our congressional delegation for the heartfelt

compassion in the past week as we also greet our dignitaries. [applause] >> as we greet our dignitaries and especially our president, president obama and vice president biden. [applause] >> greetings to all with the words adapted from the ancient biblical prophet, the mountains shall burst into song and the trees of the field shall clap their hands, and it shall be to the lord a memorial, a sign of hope, healing, and eternal life of god.

amen. [applause] ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ [applause]

>> we who have gained strength and courage in these west virginia hills under the words of the song. i lift up my eyes to the hills from whenst does my help come? my help comes from the lord who made heaven and earth. he will not let your foot be moved, he who keeps you will not slumber. he who keeps israel will neither slumber nor sleep. the lord is your keeper. the lord is your shade at your right hand. the sun shall not strike you by day, nor the moon by night. the lord will peep concern -- keep you from all evil. he will keep your live.

he will keep your going out and coming in from this time forth and forever more. the word of god for the people of god. [applause] >> mr. president, mr. vice president, all gathered here, we come today together as a community to grieve and to mourn our lost miners. you are the families. you must endure this terrible loss and suffering.

please know that you have the love and profound gratitude and respect of not all of us here only, but of all of the world. that has been made possible by the e norma si of the tragedy. these past weeks the entire country has been living with west virginia. and the families of our miners. they have witnessed our strength, and they have shared our pain and our sadness. but still for years too many people beyond these hills have unestimated what it means to be a coal miners. too many people do not understand our miners dedication

to their families and fellow miners, their work ethic, their faith, their inner toughness, and their enormous pride. they don't know how strong our miners are. how strong they need to be. in fact, to survive. mining is a way of life in west virginia. and we deeply cherish that. those of us who live here. and we honor that profession. and people say, well, why do they go into those coal mines? they go into those coal mines to provide for their families and in the process, they keep the

lights on in america. [applause] [cheers and applause] >> but for the families, that means waiting each day, every day, for the sound of your loved one's foot steps on the front porch. it means waiting anxiously to hear that they have returned safely. every day. and the 29 families who one day never heard those foot steps, knew what that terrible silence meant. it is almost too much to bear. so we ask why? why does this happen yet again?

as the governor said, we will find out. we will learn exactly what happened. we will get answers and we will pass legislation to meet the requirements of those answers. and we will do it for you, the miners of west virginia and america. [applause] >> in closing, i should note that west virginia, all of west virginia is in pain. and not without some anger. [applause] >> but we will find our sol lis

and bind together as a community. because that is what west virginians do. we will find a way to go on by finding strength in each other. because, in fact, that is west virginia. god bless you. [applause] >> mr. president, mr. vice president, you honor us with your presence. west virginians know all too well how shared hardship and sorrow make for strong and lasting ties. such is our connection to so many in this room today.

i have spent a life time in and around our coal fields of the state, and like you, i am proud, very proud, to be able to say that. here in these fields and house that is we call home, when man relies upon another, aboveground as well as underground, life intersects life, dreams intersect dreams, and today grief intersects grief. i will never forget the initial anguishing hours that grew into painful days following the explosion at the upper big branch main on april 5. i will always be haunted by the sound of gentle sobbing in the distance. that of a grandfather who sat in his car all week gently sobbing, waiting for word about his grandson. i will be haunted and always

remember the warmth, the generosity of families sharing and hope and join and dispair. heart wrenching, yes. heartwarming, yes. on that spring day, west virginia and the nation lost 29 and decent souls, god fearing men, loyal citizens, caring fathers, adoring sons, generous neighbors who worked hard and earned an honest wage. these men, our men, have now joined the ranks of too many miners before them who left home and headed to the daily shift anticipating the warm embrace of wives and children and grandchildren at day's day who merged instead into the outstretched harms of their heavenly -- arms of their heavenly father. our loss is surely heaven's gain. our following miners, a flock of fisherman, faithful christians

with the deacon squarely in the middle. a talented second baseman and courteous football player, a tractor driving papa, and a horse and fallen miners, nascar fans, gardeners, and proud veterans. [applause] >> a country music lover, a coach and a substitute teacher, a dirt biking fan, a steelers fan, and a young and wild-eyed father, a young and wide-eyed father, karate instructor, hairly man, these were our fallen miners. you know, mr. president, right

about now i kind of think that saint peter has a new nicknames and the pearly gates has been completely detailed. the scent of barbecue is rafting across the clouds and someone is picking at the deviled eggs. you know, the bible tells us in roman's 14:7 for none of us live to ours and no one dies to ourself. if we live, we live in the lord, and we if we die, we die in the lord. therefore whether we live or die we are the lords. christ died and rose again that he might be the lord of both the dead and the living. tragedy and grief, yes bring us here today. just as hope and faith and our commitment to seeing that some true god will come to the loss will see us through the tomorrows to come. on behalf of on colleagues, representative it is our hope

that god will bless these loving families and carrying friends and his strength may abide with them. god bless you all and god bless our rescuers. [applause] >> at this time, we'll sing amazing graze. we'll sing the first and last and then sing again the last stanza. let's stand together as we sing. ♪ amazing grace ♪ how sweet the sound ♪ that saved a wrench like me ♪ i once was lost

♪ but now i am found ♪ but -- was blind but now i see ♪ ♪ when we've been there 10,000 years ♪ ♪ bright signing on the ♪ we know that day ♪ god grace had come ♪ amazing grace ♪ ♪ how sweet the sound

♪ that saved a wretch like me ♪ i once was lost ♪ but now am found ♪ was blind ♪ but now i see [applause] >> a reading from the holy gospel according to john. jesus said to his disciples, do

not let your hearts be troubled. you have faith in god. have good faith also in me. in my father's house, there are many dwelling places. if there were not, would i have told you that i am going to prepare a place for you? and if i go and prepare a place for you, i will come back again and take you to myself. so that where i am, you also maybe. where i am going, you know the way. thomas said to him, master, we do not know where you are going. how can we know the way? jesus said to him, i am the way and the truth and the life. no one comes to the father expect through me. the gospel of the lord.

[applause] >> good afternoon. it is indeed an honor to stand before the family members today. our 29 miners who were tragically taken from us 20 days ago, you are without a doubt some of the most wonderful people that i've been blessed to meet. and i'm thankful to call you my friends. i also stand here today in honor of the 29 miners themselves whom i feel i know through each and every one of you.

through the hundred hours that we spent together at the family sight and the precious moments at 24 of the 29 viewers and funerals was blessed to attend. you shared with me the stories of your loved ones. these were stories that illustrated the solid character, sense of humor, love for god, and country, family, and friends, and love for life itself. and woven into each of their stories was the essence of a west virginia coal miners. things like courage, and strength, and brotherhood, and family devotion and selflessness. this is in their memory, it is for your support, and it is in your honor that i stand here today, monday april 5th in the evening hours i arrived at the family center and started

talking with each of you who were present. i could see the anticipation on your faces and i could hear the eagerness in your voice. longing to know the status of your loved one. seven families were informed that very evening of their loss and 22 others clung to that hope that four who were unaccounted for were their loved ones. and as you remember well, that monday night was a night that was full of tremendous hurt and pain. after the governor addressed us, something happened that changed the rest of that week. we all joined hands and prayered to our heavenly father for what he alone could provide. things like peace, in the midst of perplexity, things like calmness in the midst of the calamity, and strength in the midst of suffering, and when amen was spoken, many of you

repeated with a resounding amen. and amen. many of you shared with me that week your personal faith in the lord jesus and that who you looked forward to as much as the briefings were our times that we would spend together in prayer. i understand how we are comforted when we pray to the lord. for me know and remember what the scripture teaches us about him. in in the gospel matthew, the scripture says he was moved with compassion for him because they were weary and scattered like sheep having no shepherd. and in the gospel luke, it said as he approached the town gate, a dead person was being carried out. the only son of a mother, and she was a widow, and when the lord saw her, his heart went out to her. and he said, don't cry. let us know forget the compassion demonstrated in the

book of romans. but god commended or demonstrated his love towards us and that while we were yet sinners, christ died for us. yes, i agree with you, family. he is a compassionate god. 10 years ago this fall, i lost my father to cancer. he was my father, my counselor, and my friend. about a month before his death, he asked me to take him for a ride in the truck. upon our return, we sat in the truck as the sun burst through the wind shield on to his very serious demeanor. i looked over and i said, dad, what are you think abouting? he he replied, son, everything changes, nothing ever stays the same forever. you know, in a temporal sense, my father was correct. in an eternal sents, i'm

strengthened to know that almighty god never changes. my almighty god, he never fails and he's never defeated and he has never succumb to anything. amen. [applause] [applause] >> i drew strength from that very truth and drawl it today. i still miss him. miss him greatly. as you will. but the lord has given me grace and strength to survive. my friends, i'll leave with you this thought from the gospel john, chapter 14, when the disciples were grieving over the separation from jesus, he told them, let not your heart be troubled. he understood they were grieving and he did not criticize their grief. instead, he gave them a remedy for the grief. first of all, he said -- he told them to have faith. he said you believe in god,

believe also in me. secondly, he told that he was their friend. he said in my father's house, there are many mansions or dwelling places, if it were not so, i would have told you. you see the lord jesus never tells us a lie. he told us, i am the way, the truth, and the life. yes, he is indeed a true friend. third, i would leave you with this, he told them to remember he was their future. he said i go to prepare a place for you. i will come again and receive you on to myself. that where i am, there you may be also. those who believe in jesus believe that this is not the end, oh, no, this is only the beginning. this is the commencement. [applause] >> in the words of the late

african-american pastor from san diego, california, in a sermon he preached entitled "that's my king" he stated these words. my king is the only one whom there are no means of measure that can define his limitless love. he's the sinner savior, he's the center piece of civilization, he's the only one able to supply all of our needs. he supplies strength for the weak, he's available for the tempted and the tried. he sympathizes and he saves. he heals the sick, he cleanses the lepers, he delivered the captors, he defends the feeble, he blesses the young, he serves the unfortunate, he regards the age, he rewards the weak. his word is enough. his grace is sufficient. his reign is righteous.

his yolk is easy and his burden is light. you can't get him off of your mind. you can't get him out of your hands. you can't outlive him, and you can't live without him. death couldn't handle him, and the grave couldn't hold him. amen. [applause] >> from the people here today said, amen. amen. and amen. may god bless our miners and families, may god bless each and every one of you, and may god bless the state of west virginia. [applause]

>> governor, the families, the miners that we lost and the president and i had the pleasure to meet. i learned about courage and valor and gumption of miners sitting around my grandfather's kitchen table in scranton, pennsylvania, hearing stories. stories of men they knew. and lives that were lost. but i actually learned more from robert c. byrd who's here. i served with him so many years. [applause]

>> his incredible pride, and his state and his miners is only matched by his loyalty. and its good he was here today. the men will member today when in the darkness, so that we could have life. they embraced a life of hard work, and a career full of peril. it was dangerous, it was dangerous work and they knew it, but they never flinched. what amazed me is how they saddled up every day, squeezed in side by side for a cramped journey, into the heart of darkness. many of them loved it. and some of them dreaded it. but all of them, all of them approached it with dignity, resolve, and strength, they went into the mines as it's been

referred earlier, not only to provide for themselves and their families, but in a very direct way, for all of us. and though this work defines them, it did not describe them. as nick rahall said, they were fathers, grandfathers, sons, nephews, husbands. they loved hunting, fishing, riding horses and four wheelers, they hated the cay coach rodriguez left virginia for michigan. [applause] >> they rebuilt cars, they loved motorcycles, and they practiced random acts of kindness. they had their given names, but as we all learned today, they answered to cuz and peewee, and

smiley. some had -- some had been mining for decades. some for months. one was planning a wedding, one was planning for retirement. as individuals, these men were strong. as were proud. they were providers. collectively, they represent what i believe is the heart and soul and the spine of this nation. and ladies and gentlemen -- [applause] >> a nation mourns them. to every member of every family that has been touched by this tragedy, i can say that i know what it's like to lose a spouse and a child. and i also know when the tributes are done, and the flags are once again flying at full

staff, once the miners you see today go back to work, that's when it will be the hardest for y'all. when life is moved on around us, but it has yet to spir within you. that's when you're most going to need one another. because for other people, for the lucky ones, life gets to go on. but as a community and as a nation, we would compound tragedy if we let life go on unchanged. certainly, nobody should have to sacrifice their life for their livelihood. [applause] but as the governor and senator rockefeller said, we'll have the

conversation later. the rest of us bare the responsibility, to be aware of, to recognize, to respect, to honor those who risk their lives so that we can live ours. and those who will continue to do this hard and dangerous work. so often when we're met with this kind of sorrow and pain, receive search as the clergy here today can tell you for meaning and purpose, where there seems to be none. we look for answers to questions that are literally hard to ask. and even when answered, at this moment they provide little relief. to paraphrase a hymn from my church, i have a wish for all of you. all of your families. may he raise you up on eagles

wings and bare you on the breath of dawn and make the sun to shine upon you, and until you are reunited with those you lost, may god hold you in the palm of his hand. for, you know, this band of 29 roughneck angels watching over you are doing that just now as they sit at the right hand of the lord today and they are wondering why is all of that fuss about me? [applause] >> you know -- [applause] >> you know, folks. there's a famous headstone in an irish seck cemetery and it reads this, death leaves a heart ache no one can heal, love leaves a

memory no one can steal. i can tell you from my own personal, that eventually the painful heart ache you feel will be replaced by the joyful memory by the ones you loved so dearly. my prayer for you is that day will come sooner than later. may god bless you all and may god protect all miners. >> tonight, a discussion on fcc policy with one of the newest members of the commission mignon clyburn and what the comcast decisions means for net neutrality on the community -- "communicators" c-span2. >> meet the grand prize winners tomorr morni and see all of the winning videos at studentcam.org. >> the u.s. senate votes this

afternoon on beginning debate over new financial regulations. we will have live coverage. the senate gavels in at 2:00 eastern. that vote takes place at 5:00 eastern. the top republican, richard shelby talked about the vote today during comments in the independent bankers committee. he said no republicans will are support the bill until democrats agree to some changes. his comments last about 10 minutes. [applause] >> i have a prepared speech. but in your best interest, i believe i will just hold it and talk with you. this is a great crowd here. thanks for inviting me.

a lot of presidents has been here. a lot of other people have been here. it's a good place to hold a convention. i'm sure you're enjoying it. but you're not up here this week strictly for enjoyment. you are have a lot at stake. and you are very much aware of that. if you are not, you should be. if i could, i'd like to go back and talk to you about the regulatory bill, the reform bill, whatever you call it. you know, when you put a reform name on anything up here, it's got a few legs on it. you know? and what's the old saying in washington, d.c., you can kill something, you can kill a bad idea, you can bury it, you can do a postmortem on it, you can do countless obituaries and six months or a year later in another congress it pops up again under another name. you've seen it happen over and over.

well, this reform is not all bad. i'll tell you why, and you know why. but i'll just remind you. 18 months ago, we had a real financial crisis in this country. we had a lot of banks, mainly big ones at that time, but some small ones too that were just basically insolvesolvesolve -- the question is what are we going to do and how will we do it? will we do it right? will we do it with balance? banks are important, not because you're here in washington, banks are important without a free market economy. without them, it won't work. it never would. small banks, medium-sized banks, there are a lot of you. a lot of you in the communities,

your community banks are known as community banks. and you work the community. you know the community. and so forth. then we have some huge money spender banks. a lot of those is what got us in trouble. not just by themselves, but they did. a lot of them were in trouble over time before. some of them are still in trouble. some are them are still sick, as you know. there are a lot of small banks sick too. there are a lot of them that probably won't make it this year. i hope all of them make it. but we're where we are. senator dodd who is chairman of the committee, i told him that -- one day he's an old friend of mine from our house days. we go back a long time. he was on the banking committee when i went there. i was chairman before he was. and then when the democrats took over, i told him, i said, chris, i said other than myself, and the other republicans, i just as soon have you as a chairman.

that's not much of a compliment. he knew that. i was cutting up with him. i'd rather have you than a lot of others. but we have worked together on a number of issues. we have differences of opinions on a lot of things. and that's going home today. today later today, you know, we're going to have a cloture vote. i believe that 41 republicans, right now, are going to stand together. i wish we'd stand together period. you know? and we would make us stronger and give us more negotiating authority. and more clout. and i'm continuing to work with senator dodd and their staff and our staph to try to see if we can come up with a bipartisan meaningful, subs stantive bill that we can be proud of that will forever and ever as best we can end too big to fail.

you know? [applause] i personally believe if you are a financial institution or a manufacturing company or what were if you fail, you should be wound down. you should not be propped up by the government or whatever. because most of those -- it's just not right. it's not very popular. but it's just not right. and i go back a long time. i know my first -- one of my first votes is a freshman member of the u.s. house of representatives. and i'm a proud voter on that. was to vote against the crisis or bailout in 1979. so it was easy for me to bail out the -- to vote against the bailout of the banks. you have to say where does it stop? and you remember the t.a.r.p. deal. the t.a.r.p. deal was supposed to have taken bad assets off of banks. some of the banks.

but that's not what happened. you know? they changed on it. now i have to say this, some the banks who -- a lot of banks who got t.a.r.p. money, paid it back and paid the warrants back on the premium and so forth. but if anybody in this room believe that is general motors and chrysler and aig and all of them are going to pay that money back. no. i got a lot of things. you know? but i wish if were true. and i wished it would happen. but we have seriously to be unambiguous as far as we can, and this is part of the negotiations, to make sure that we don't create the status quo. the dodd deal, and i tale -- tell him that, and i told him in the committee, 13-10 vote all of the republicans, i voted against it. i said that bill has it is now createddism -- created i

believe, doesn't really deal sufficiently. that should be the number one deal. that should be a fight. doctor volcker, he said if you are too big to fail, maybe you are too big to exist. i'm not advocating breaking up banks here today. i don't necessarily believe that being big is bad. but being big and thinking you're going to be bailed out by the taxpayer and the u.s. government and the taxpayer ultimately, i think that's worse than bad. and that's something that we got to work on. thank you. [applause] >> the second big section that we're dealing with as you know are derivatives. now when i went on the banking committee, we knew that people hedged in commodities. they henned in everything like that. but they hedged -- in currencies, but they didn't, but

the commodity market has grown way past the derivatives, past that as you well know. but i do believe this is a bona fide use of derivatives every day in america. and in the world to hedge and manage risk and we got to recognize that. but at the same time, i believe banks that are operating basically a casino with the implicit backing of the taxpayers, that's wrong. and we got to put an end to it. you know? [applause] >> i don't mind people trading in a proprior -- proprietary way. but thinking you're on the end and you could be bailed out, i think that's something we have to get around. so the derivatives titles, they are working on it. the ag committee has some

jurisdiction here. i know that there's some movement dealing with it last night. we're looking at some of the language. we got to remember the republicans, we're only 41 of us. i like 55. you know? [laughter] >> senator shelby earlier today as we go live now to the u.s. senate where senators are starting the day with general speeches. in about an hour, discussion on whether to begin work on the financial regulations bill. senate coverage now on c-span2. strength and wisdom to handle them. give our lawmakers enough faith to live this day with courage. help them to be steadfast in the face of temptation and earnest

in working for liberty. fill their hearts with your spirit that they may run the race of life with high honor. we pray in your matchless name. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington, d.c, april 26, 2010. to the senate: under the provisions of rule 1, paragraph 3, of the

standing rules of the senate, i hereby appoint the honorable mark r. warner, a senator from the commonwealth of virginia, to perform the duties of the chair. signed: robert c. byrd, president pro tempore. the presiding officer: the majority leader. mr. reid: note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

mr. reid: i ask unanimous consent the calofhe quom be terminated. the presiding officer: without objection of the mr. reid: mr. president, following my remarks and those of senator mcconnell, we will go to a period of morning business for -- well, actually until 3:00 p.m., with senators permitted to speak during that period of time for up to ten minutes each. following morning business, the senate will resume the motion to proceed to 3217, the wall street reform legislation. at 5:00 this afternoon, the senate will proceed to vote on the motion to invoke cloture on the motion to proceed.

mr. president, last week, i criticized the republican leader for the way he was handling wall street reform. i even criticized him for a series of meetings he held in new york and the result of the meetings. i want the record to be very clear, however, i was in no way impugning the integrity of my friend from kentucky. the senior senator from kentucky and i have fundamental policy differences on a number of issues, but no one should take my disagreement with my friend to question his honesty. mr. president, wall street reform is as complex as the financial instruments that fueled the worldwide recession. voting to start debate on the wall street reform is as simple as right and wrong. this bill and the debate are about the ability to trust our financial system again. they're about giving families the peace of mind that they'll be able to keep their homes, that their savings will be safe. we have a responsibility to bring accountability to wall street because each of us is

accountable to the american people. we owe our states' constituents and our nation's taxpayers the promise that they will never again have to endure another financial crisis like the last one. today's vote to begin debate on wall street accountability will answer many questions. it will reveal who believes we need to strengthen oversight on wall street and who does not. it will demonstrate who believes we need to strengthen the protections for consumers and who does not. in light of the extraordinary effort we've seen from the republican leadership who will force each senator to publicly proclaim whether party unity is more important than economic security. i know many on the other side would like to pretend that that's not what's at stake, but we're not fooled, and neither are the american people, two-thirds of whom we learned today support cracking down on wall street. i, this past weekend, was in four different countries in never -- different counties in nevada. i heard the same thing everywhere i went and from everyone with whom i spoke.

they said, get this done. so many nevadans are suffering because of the mess wall street created, and they know better than anyone we have to fix it. democrats agree. that's why we stand for guaranteeing taxpayers that they will never again be asked to bail out big banks and that no wall street firm can become too big to fail. democrats stand for giving families more control over their own finances and for giving consumers more clarity so they can make the right financial decisions. democrats stand for protecting hard-working americans' life savings from wall street's gambling. we stand for making our financial system more transparent so we can rein in risky bets before it's too late. in short, democrats stand for bringing more accountability and transparency to wall street. as far as i can tell, the only thing republicans stand for is standing together. they boasted about banning together at this time at all -- banding together at this time at all costs, even at the cost of our national economy. but a party that stands with wall street is a party that

stands against families and against fairness. among the many reasons we need to reform wall street is that those who work there have conspired for too long under the cover of darkness. they've acted recklessly because they know they won't be held accountable for their risks. and they don't think twice about using working families as pawns in a get-rich-quick scheme. mr. president, i would direct everyone to read the best-seller, "the big short" by michael lewis. it is stunning in describing what they do with our money on wall street. when you come to nevada to gamble at one of the casinos -- i'm sorry, mr. president. when you come to nevada to dam bell in one of the casinos, you're at least gambling with your own money. the people on wall street are guam discipliningambling with o. we don't wall street doesn't like this bill. of course it doesn't. it changes the system big

bankers and hedge fund managers have taken advantage of for years. look at the rules of the road on wall street. traders get to gamble away someone else's money with little risk and large reward. they get to take home their wings and ask taxpayers to save them from their losses. that's how the system worked when they brought our economy to the brink of collapse. sadly, mr. president, the problem is today it's still the way the system works. that's what we're going to correct with this legislation, a bill that is the product of months of bipartisan discussion, a bill that embraces republicans' ideas and democrats' ideas. this afternoon's vote is a vote merely to begin debate. it's not the end of the process, just the beginning. all we're asking is to be able to start debating. my republican colleagues certainly don't hesitate to debate this bill in press conferences or in interviews, so why would senators object to debating it on the floor itself, the senate floor? moving to this bill will move this issue from the sidelines to the playing field.

it will bring these proposals on to the senate floor so we can amend them, improve them, and act upon them t. will ensure this debate is part of the legislative process broadcast live on television so every american around the country can watch and weigh it. let's have that debate. there's one more reason we need to reform how this financial system works. for far too long, too many on wall street have been on -- bet on failure. yes, mr. president, on failure. they have made billions betting on the housing market collapsing or our failures in the economic system. we'll see this afternoon whether enough republicans in the capitol are determined to bet on failure also. i hope not.

mr. mcconnell: mr. president? th mr. mcconnell: later today the senate will cast its first vote in the debate over financial regulation, and let me just say this at the outset, republicans are united in our desire to protect the taxpayer from those who would put them at -- put them and our nation's financial system at risk through recklessness, stupidity, greed, or some combination of the three. but as we consider this legislation today, republicans are also acutely aware of the fact that government solutions to big, complex problems like this one are rarely as effective as they're made out to be, especially when they're rushed. and republicans are conscious of something else this morning, t too. when it comes to fixing the problems that we see in the

economy or in our health care system or anywhere else, the days of taking the democrats' word for it are over. there's a reason public confidence in government has slipped to one of its lowest levels in half a century, and it's not because congress takes its time to get legislation right. the reason americans are so mistrustful of government at the moment is because on issue after issue, they feel as though they're being sold a bill of goods. the reason there's such a serious trust deficit out there is because what americans see as so rarely what -- see is so rarely what they get from washington these days. just consider the national debt, for example. the international monetary fund is right now warning us that mounting government debt is perhaps the greatest single threat to the global financial system. as a senator, the president seemed to understand that. he said america's debts and

deficit were spinning out of control and that it was a failure of leadership not to address them. yet under his administration, the debt has increased over $2 trillion. in february, we ran the largest monthly deficit ever. and this year alone, we're expected to run a deficit of $1.4 trillion. what about the stimulus? congress passed this trillion-dollar bill about 18 hours after the legislative text was available because democrats said they needed it right away, right away, to keep unemployment from rising above 8%. a year later, unemployment is hovering around 10%. it's even higher in kentucky and other states. we've lost some 4 million jobs since the president took office, and every day it seems we hear about some new wasteful project funded by this bill. then there's health care.

health care. the white house and its allies in congress told the american people again and again and again that this legislation was absolutely necessary in order to cut the costs of care and to ensure our anything's economic security. americans were skeptical. they wanted us to take our time. but democrats said they couldn't wait. they cut their deals and jammed it through. now we're beginning to see who was right in that debate. last thursday, a report out of the department of health and human services concluded that the health care bill falls short of the president's goals. rather than cutting costs, it's expected to increase them. the white house also said the bill wouldn't raise taxes on the middle class. yet now we're finding out that nearly 15 million -- 15 million middle-class americans, as defined by the white house, will get hit with a new tax increase. the white house said premiums would go down, too, yet now

we're learning that premiums will keep going up. pick the issue, whether it's the stimulus, the debt, health care, bailouts, you name it, the concerns republicans raised are being validated. and democrats have the nerve in this debate to say that we're the ones who are being dishonest. as i said, all of us want to deliver a reform bill that will tighten the screws on wall street, but we're not going to be rushed into another massive bill based on the assurances of our friends on the other side. it's just this kind of rush that gets us a $13 trillion debt. a trillion dollars for turtle tunnels and sidewalks to nowhere and a so-called health care reform bill, the primary effect of which, so far as i can tell, is higher taxes, higher premiu premiums, and higher costs. americans have been rushed by this congress before.

they've seen the results. they're not going to be rushed again. now, when it comes to financial regulations, my constituents have a fairly short list of demands. they don't want to be on the hook for recklessness on wall street. and they don't think any financial institution should be considered too big to fail. but if the senate votes to get on to the dodd bill tonight, there is good reason to believe we will never truly solve these core problems. some on the or side may deny this but the fact is the bill that the majority leader wants to bring to the floor tonight still contains a number of loopholes that enable future bailouts. this isn't just me talking. not just me talking. a finance reporter on national public radio last week said he couldn't find a single expert -- said he couldn't find a single expert, not a single expert, who was willing to agree with the administration's claim that this bill puts a stop to

taxpayer-funded bailouts. not a single expert who was willing to say this bill really solves the problem we were asked by our constituents to solve. isn't that reason enough to slow down and get it right? this is a financial expert on n.p.r. -- not exactly a bastion of conservatism -- who said he couldn't find a single expert anywhere in the country that thought the bill that we'd be voting to go to this afternoon ended taxpayer-funded bailouts. if we can't look our constituents in the eyes and tell them with absolute certainty that we've addressed their core concerns, then tell me, why are we voting on this bill? the democrats want us to trust them on this one. with all respect, americans aren't in a trusting mood. the burden is now on the democrats to prove it when they say they are legislation will or will not do something. so a lot -- to a lot of

americans, that's what this debate has become. it's about proving to our constituents and to the rest of the country that congress can actually deliver on its assurances. americans aren't inclined to take our word for it when we say this bill doesn't allow for bailouts that it won't kill jobs or that it won't allow the administration to pick winners or losers, like they did with the auto bailout. they have heard all that before. this time they want us to prove it. they want us to prove that this bill doesn't end up punishing wall street under the guise of reforming wall street. they want us to show them where it says in the text that the next time there is a crisis the government will have to seek permission from the taxpayer if it is seeking to create a new bank debt guarantee program. at the moment, we can't say that. that's unacceptable to my

constituents, and it's unacceptable to the rest of the country. we can solve this problem, but we won't solve the problem if we vote for cloture tonight. a vote for cloture is a vote is a they's risa vote that says wee listening to the american people. a vote against ending this debate tonight is a vote that says it's no longer enough to tell our constituents to simply trust us. it's a vote that says, this time we'll prove it. mr. president, yieldhe floor. the presiding officer: under the previous order, the leadership time is reserved. there will now be a period of morning business until 3:00 p.m. with senators permitted to speak therein for up to 10 minutes each. the senior senator from arizona.

mr. mccain: mr. president, i ask unanimous consent to engage in a colloquy with my colleague from arizona, senator kyl. the presiding officer: without objection. mr. mccain: mr. president, as is well-known by my colleagues and most americans, over the weekend -- over the last several days the governor of arizona signed legislation which is controversial, which is designed to affect the issue of illegal immigrants into the country across the arizona border. that legislation was enacted by the arizona legislature and signed by the governor because of the frustration that the governor and the legislature and indeed the majority of my constituents have incredible frustration over the federal government's failure to carry out its responsibility to secure our border. and many have viewed this as a

civil rights issue. there's no intention whatsoever to violate anyone's civil rights, but this is a national security issue. this is a national security issue where the united states of america has an unsecured border between arizona and mexico, which has led to violence, the worst i have ever seen, and numbers that stagger those who are unfamiliar with the issue. numbers such as 241,000 illegal immigrants were apprehended on the tucson sector border of arizona just in the last year. you do the math -- we'r -- we'rg about a million people crowing our border illegally -- crossing our border illegally. this is not just a human smuggling issue. this is a drug issue. the flow of drugs is staggering across our border. last year in the tucson sector alone, there were over 1.3 million pounds of marijuana that

were apprehended. 1.3 million pounds of marijuana apprehended on the arizona border. the numbers of methamphetamine, cocaine, other drugs crossing our border by the drug cartels is staggering, as i said. "the los angeles times" reported last week that over 22,000 mexican citizens have been killed in the drug wars against the cartels. have no doubt, this is an existential struggle against the drug cartels, the human smugglers that work together and the security of the united states of america. the violence has already spilled across our borders, and unless we get it under control, it will get worse. three american citizens were murdered in juarez, mexico, as they were trying to get home.

a rancher in southern arizona was murdered as he was out patrolling his own property. the people in southern arizona have had their rights violated by the unending and constant flow of drug smugglers and human traffickers across their property. their homes are being broken into. their rights are being violated. their rights, as american citizens, to live in a safe and secure environment, as most of the pundits who are criticizing this legislation enjoy. the fact is that our borders are broken, they are not secure. it is a federal responsibility to secure our borders. it is not being done. senator kyl and i have a 10-point plan that can be enacted immediately in order for us to secure our borders and secure it quickly. and before i ask my colleague to comment, there is the question

about whether we can secure our borders or not. of course we can. of course we can. we have seen in the yuma sector of arizona a dramatic decrease in illegal crossing and drug smuggling. but, again, i want to mention to my friend from arizona, have no doubt that this is not just a human smuggling problem -- and people trying to cross our border illegally to find work. this is a human smuggling cartel aligned with the drug cartels that are sending drugs across our border and killing our citizens. and the cartels are in the human smugglers, a direct threat to this nation. just two weeks ago a highly organized syndicate that takes people who are coming across our border i will eelly to tucson -- illegally to tucson, taking them

to phoenix in van vans. these individuals come from as far away as china. have no extent of the cruelty, the barbarity. challenge we face -- of the challenge we face, of the human smugglers that are just south of our border. and the state of arizona has been bearing the brunt of trs and the administration has -- an--and the state of arizona has been bearing the brunt of it, and the administration has failed to act. we need to take a number of other steps that senator kyl and i will describe, but this situation is the worst i have ever seen. and it is time for the federal government to act. if you don't like the bill -- the legislation that the legislature passed and the governor signed in arizona, then carry out the federal responsibilities, which are to secure the border. you probably wouldn't have had this problem. mr. kyl: mr. president? the presiding officer: the

senator from arizona. mr. kyl: mr. president, may i just ask my cleelg, senator mccain -- may i just ask my colleague, senator mccain, you have been down on the border recently. you went to the tucson sector, which is the sector that has about half of all of the illegal immigration in the united states coming across in that one sector; is that correct? mr. mccain: i have. and i would point out again, there were 241,000 apprehended last year. there are estimates that five to one are not apprehended. so that could have been over a million people who cross the arizona illegally in one year. that's staggering in itself. mr. kyl: and, mr. president, the point here is that the tucson sector is one of two sectors in arizona -- it's maybe -- i'll just estimate here -- maybe 60% of our southern border. the yuma border, maybe the other 40%. and the tucson sector ends i believe at the new mexico border. so you're talking about a couple hundred miles, give or take, not

that many miles, when you consider the more than 2,000-mile border all the way from the go gulf of mexico to -- all the way from the gull of mexico to the san diego area. so about won-tenth of the-- --so about one-tenth of the entire border area. and my colleague senator mccain was there within the last month or soavment i was down in the yuma sector. these two sectors -- it is literally the tale of two approaches to immigration reform. as senator mccain said, there is absolutely no doubt that application of the right principles and resources to the border can secure the border. let me give my experience with the yuma sector and then ask my colleague to talk a little bit more about the tucson sector because those are the two sec fers in arizona. the yuma sector has virtually eliminated illegal immigration. now, there is substantial drug

smuggling and that's a lot of what they're focused on right now. how could this have happened? mainly three thins things: first of all, they completed the fencing in that particular area. there are just a couple of miles left to go. but they have 11 miles of good fencing in the urban area around yuma. there's so many areas where it is even triple-fenced. they have enough border patrol investigates, so we have to be careful that we don't take some and send them over to the tucson sector because they need them. once you take the arks you need to have enough troops to hold the area or the bad guys come back n so we need the border patrol there. and if we could have some national guard troops, as my colleague, senator mccain, has recommended, it would absolutely be the final person l solution here. i can remember when the guard

was withdrawn and there was only one guardsman left and they still stayed away from him. i'm not even sure if he had his weapon with him. let's phut this way. the bad guys on the other side of the border do not want to mess with the united states military. and they won't. and that's the reason my colleague, senator mccain, why then-governor napolitano and many others believe that we need more national guard on the border. and what was the third thing that brought the illegal immigration in the yuma sector almost to an end? it's called "operation streamline." it is very simple. when you cross the border, you get flown in jail. the first time it is about two weeks. the second time it is 30 days. the third time it is about 60 days. the rest of them want to come

here for work. they can't work and make money while they're in jail. so there's a huge disincentive for them to dplos that area. so what the border patrol and department of justice said was to say, fine, if you cross in this arks you go to jail. well, they stopped crossing in that eamplet they expanded those areas i until it covered the entire yuma sector. now the illegal coyotes know if they try to bring somebody across the yuma sector, immediately those people will go to jail. so they don't try it anymore. as a result, the statistics are, as my colleague just pointed, in the tucson sector you got almost a quarter of a million people apprehended. how many in the tucson sector? well, this year 4,946 so far. from a quarter of a million almost to 4,000-plus. and it wasn't always so.

in the yuma sector in 1996, 114,000. the next year it went down to 37,000. and then 8,000, 7,000, probably 5,000 in year. you can see that the impact of the fencing, the personnel, and "operation streamline" have made a huge difference. mr. president -- mr. mccain: i ask unanimous consent with the indulgence of my friend from hawaii, for three additional missense. the presiding officer: without objection. mr. kyl: mr. president, i've made my point here. senator mccain is absolutely right. if you want to do it, you can do it. you just have to apply the will and the resources. what worked in the yuma sector can work in the tucson sector. almost all of those things are included in the ten-point proposal that senator mccain and i have made. mr. mccain: i also emphasize the violence is worse than it's ever been.

22,000 mexicans have been murdered on the mexican border. american citizens have been murdered on our border. this is no longer a situation where someone from mexico or some other country decides they want to cross our borders. these are highly organized, highly sophisticated, well equipped, well trained, armed cartels, drugs and human smuggling cartels coordinate with each other through these corridors. they have better communication than our enforcement agencies do due to our lack ofibility operability. they have sophisticated equipment, sending drugs over using ultra lights. this is a struggle for the existence of the government of mexico. this is a struggle on our side of the border for the fundamental obligation that any government has, and that is to provide its citizens with secure borders. right now our citizens are not safe.

and, therefore, the federal government should be fulfilling its responsibilities to provide the necessary equipment and manpower to secure our borders. as my colleague from arizona just pointed out, it can be achieved. it is now a massive failure on the part of the federal government, and they should also fund it. i thank my friend from arizona and i thanky colleague from hawaii for his indulgence. mr. akaka: mr. president, i want to make some remarks and ask unanimous consent that my full statement be recorded in the record. the presiding officer: without objection. mr. akaka: enactment of emergency legislation in the fall of 2008 to stabilize the financial markets and the economy brought with it an obligation to reform our financial system, to make it

fairer for working families. i support s. 3217, the restoring american financial stability act of 2010. i appreciate all of the extraordinary work done by the chairman of the banking committee and his staff on developing this vital legislation. i, along with many of my colleagues on the committee, worked together to develop a bill that protects, educates and empowers consumers and investors. the legislation incorporates many ideas from members of both parties. we must act quickly to enact this bill. a lack of consumer protection was a core cause of the financial crisis. prospective home buyers were

steered into mortgage products that had risks and costs that they could not understand or afford. we must do more to protect consumers. this legislation includes essential protections to do so. the new consumer financial protection bureau has tremendous potential for restructuring predatory financial products and unfair business practices. the bill will work to prevent unscrupulous practices provided from taking advantage of consumers. the legislation also creates an office of financial literacy within the bureau. the financial literacy office is tasked with developing and implementing initiatives intended to educate and empower

consumers. the strategy to improve the financial literacy among consumers that includes measurable goals and benchmarks must be developed. i'm also proud of the work we have done in the bill to better protect, inform and empower retail investors. my proposal to create an investor advocate within the securities and exchange commission is in this legislation. it is necessary to create an office of the investor advocate within the s.e.c. to strengthen the institution and ensure that the interests of retail investors are better represented. the investor advocate is tasked with assisting retail investors to resolve significant problems within the s.e.c. or the

self-regulatory organizations. the investor advocate's mission includes identifying areas where investors would benefit from changes in commission or s.r.o. policies and problems that investors have with financial service providers and investment products. the investor advocate will recommend policy changes to the commission and congress in the interest of investors. i have highly valued the contributions that national taxpayer advocate ms. nina olson. ms. olson has helped us develop policies that have improved the lives of taxpayers. a similar office in the s.e.c. will benefit retail investors. the creation of the office of

the investor advocate has widespread support from consumer, labor and industry organizations. mr. president, the text of an amendment i had developed which clarifies that the s.e.c. has authority to effectively require disclosures prior to the sale of financial products and services is included in the legislation. many working families rely on their mutual fund investments and other financial products to pay for their children's education, prepare for retirement and attain other financial goals. we must ensure that working families have the relevant and useful information they need when they are making decisions that determine their future financial condition. i appreciate the efforts of senator michael bennet on this

issue. mr. president, i worked with senator kohl to develop title 12 of the legislation which is intended to increase access to mainstream financial institutions for the unbanked and the underbanked. many are low- and moderate-income families that cannot afford to have their earnings diminished by reliance on high-cost or predatory financial services. underbanked consumers rely on nontraditional forms of credit, including payday lenders or refund anticipation loans for financial needs. the unbanked are unable to save securely for education expenses. a down payment on a first home or other financial means.

regular checking accounts may be too costly for consumers. unable to maintain minimum balances or afford monthly fees. poor credit histories may also hinder their ability to open accounts. more must be done to promote product development, outreach and financial educational opportunities intended to empower consumers. title 12 authorizes programs intended to assist low- and moderate-income individuals, establish bank or credit union accounts and encourage greater use of mainstream financial services. mr. president, title 12 will also encourage the development of small, affordable loans as an alternative to more costly payday loans. payday loans often have

extraordinarily high interest rates. payday loan flipping often leads to instances where the fees paid for a payday loan well exceed the principal borrowed. this situation often creates a cycle of debt that is very hard to break. there is a great need for working families to have access to affordable small loans. this legislation would encourage banks and credit unions to develop consumer-friendly small-dollar loan alternatives. consumers who apply for these loans would be provided with financial literacy and educational opportunities. one example of an innovative payday lending alternative can be found at the winward community federal credit union

in kahlua, hawaii. winward f.c.u. developed an alternative to payday loans to help the u.s. marines and other members that they serve. this program was developed with a national credit union administration, c.u.a. grant. more working families need access to small loans. we must encourage mainstream financial service providers to develop affordable small loan products. mr. president, working families often send substantial portions of their earnings to family members living abroad. in my home state of hawaii, many of my constituents remit money to their family members living in the philippines. consumers can have significant problems with their remittance

transactions, such as being overcharged, or not having their money reach the intended recipient. remittances are not currently regulate the under federal law, and state laws provide inadequate oversight. the bill will modify the electronic fund transfer act to establish remittance consumer protections. it will require simple disclosures about the costs of sending remittances to be provided to the consumer prior to and after the transaction. a complaint and error resolution process for remittance transactions would be established by the legislation. we must act quickly to enact this legislation that will protect, educate and empower consumers and investors. thank you, mr. president.

a senator: mr. president? the presiding officer: the senator from tennessee. mr. alexander: mr. president, i ask to speak as if in morning business. the presiding officer: we are in morning busines the senator is recognized. mr. alexander: so i can actually speak in morning business, not as if i were in morning business. mr. president, thank you very much. mr. president, we'll be voting at 5:00 this afternoon on a motion by the majority leader, and i can almost hear him now saying something about the party of no as we talk about the financial regulation bill. i would say to my friend, the majority leader, that he's rapidly becoming the leader of the "party of no" by offering so many "no" motions because the motion this afternoon is one more of a record number of "no"

motions offered by the majority leader to say no to more amendments, no to more debate, and no to checks and balances on a runaway government in washington. what we on the republican side have been trying to do on the financial regulation bill is to work with the majority party and with the president to help fashion a set of rules and regulations that takes us from the financial crisis that we had a few years ago and which continues today in the lives of americans everywhere to complete a bill that most of us can support so that we can say to america and say to the world these are our rules and regulations. we've done our job. we've set the rules. even if republicans capture control of the congress in november, which we hope we do, these still will be the rules because we did this in a bipartisan way, the kind of way that the president talked about when he campaigned for election a couple of years ago.

mr. president, unfortunately, that's not what's been happening. it's just been one "no" motion after another from the majority leader, a record number of them. and he will even bring that up, which i wouldn't -- i would respectfully say i wouldn't do. 26 times the majority leader has filled the amendment tree. that's just a no motion that says no more amendments. he's done it nearly as much as the last five majority leaders combined. he's got the record in saying no to more amendments, no to more debates, and no to more checks and balances on what the congress is doing. 141 times the majority leader has filed cloture on the same day a bill came up. that's simply another no motion. it says no to more amendments, no to more debates, no to more

checks and balances on the ltion that congress is considering -- legislation that congress is considering. some may ask, well, let's get on with it. why do we need these checks and balances. mr. president, we were reminded over the weekend of why we need the checks and balances. all of us remember the hc debate result -- health care debate resulting in the health care law. passed the chamber by one vote. we were here day after day. the vote came up during a snowstorm, 1:00 a.m. in the morning, had to be done during christmas, nearly 1,000 pages before it all got through. no checks and balances on that bill. we said, slow down. wait a minute. it's expanding a health care delivery system that we all all know that we can't afford when we should reduce its costs so that more americans can afford to buy health insurance.

over the weekend a report issued on thursday by the chief actuary of the center for medical -- medicare services. he is the chief actuary. this is the first neutral analysis of the new health care law. lo and behold, what did he stay in his analysis showed that it will increase health care costs instead of lowering them. in other words, we will increase -- we will increase spending on a health care delivery system that we all know we can't afford today, yet, off we went with our new trillion dollar bill. it will raise premiums on health care. it will threaten seniors access to health care, it will create, in effect, a health care bridge to nowhere for a great number of low-income americans who will find that they can't get a

doctor or in washington state that walgreens won't fill their prescription. this will make that problem worse. and to those who are going to be serving as governor between 2014-2019, it's very bad news. because it talks about the increased cost of medicaid, which is the largest government health care program and many of those costs are passed on to states. i know in our state, our legislature, republican, and our governor, democrat, has said, we don't see how we can afford this. it is $1.1 billion to $1.5 billion. it will call tax increases and tuition increases at the the universities and i think it will seriously damage public education. anyone can read this for himself or herself. but over the weekend the chief actuary of the federal government said, the health care law does what we republicans feared it would but the psychology was on the other side

of the aisle, we won the election, we'll write the bill, we'll pass it even by its one vote, unlike civil rights, unlike medicare, unlike medicaid, unlike social security, it was a purely partisan bill with no checks and balances, and the american people see the results. now here we go again thp afternoon at 5 -- again at this afternoon at 5:00. this should be a different situation. it's a very important bill. it's the financial regulation of this country. this country produce 25% of all the money in the world every year. 25% of the welt is created by this country for those who are privileged to live here. one would think that we would be as careful as we could in getting this done. for a long time on this bill many members of the senate on both sides of the aisle have been working on it carefulfully and in a bipartisan way. -- carefully and in a bipartisan way. so why would we bring another one of these record-setting no motions up today to vote on?

why would we say in the middle of debate and discussion to improve the bill, let's rush it on through, no to more amendments, no to more debate, no to more checks and balances? there's some pretty big issues to resolve here to make sure we've got right. there's general agreement across both sides of the aisle that we want a situation where we don't have these big banks that are too big to fail. now, the senator from virginia, who's the presiding officer today, and my colleague, senator corker from tennessee, worked for a year on this. i went to some of their sessions. it's complex stuff. but they were coming up with a bipartisan solution to the problem and one of the advantages to a bipartisan solution is, a, it might be more likely to be right an, b, it almost certainly likely to be accepted. if there is a corker-warner or warner-corker solution, you republican-democrat solution on banks too big to fail, the american people might look up

here and say, if they both agree on it, maybe i won't worry about it and maybe i won't spend the next three years trying to repeal it. the same thing is true on other parts of the issue. i commend senator dodd for starting out in that direction. he was working with senator shelby on this side on consolidating bank regulators and consumer protection. senator reid on the democratic side and senator gregg working on derivatives. senator warner and corker on systematic risk, the too big to fail issue, senator schumer and crapo working on security exchange issues and corporate governance issues. they weren't coming to an agreement on every single one of these issues. the last one is an especially difficult one. but they're making real progress. yesterday, senator shelby who is the ranking member, and senator dodd said on nbc's "meet the press," mr. shelby -- quote --"we're closer than we've ever

been." mr. dodd added, we're closer than we've been. if we're closer, why are we saying no to more amendments, no to more debate, no to checks and balances? that's a serious question for the american people because if i were to suppose that what -- in my state the major issue before the -- before the people of tennessee is today, is that many independents, almost every republican and some democrats would say we need checks an balances on a runaway washington government. here's an opportunity to have checks and balances on a runaway washington government and to get things right. instead we seem to have a campaign team at the white house that says, let's play a little politics here and make it look like the republicans are in bed with wall street bankers. they even -- they said republicans took contributions from wall street bankers. when the newspapers added it all up, it looked like the democrats got more contributions from the

wall street bankers than the republican did. the race is about politics and who took the most money from the wall street bankers, the democrats win that is not the basis to decide upon this. i liked the way the committee was working on this for the last year, republican and democrat teams working to solve big, complex problems for the country that produces 25% of all of the money in the world and the acknowledged financial capital of the world. instead we seem to have a faction of the administration that says, we won the election, we'll write the bill an up comes the majority leader with another no motion. a historic number of no motions. so, mr. president, i'm here today simply to say this, this is a piece of ltion that presents president obama -- legislation that presents president obama and our congress with a historic opportunity to do something right. we're coming out, we hope, of a

great recession. we need some signals to our country and really to the world that sings things are stablizing. every small business person or big business person i talked with says a little certainty would help. we're not going to hire another person, we're not going to invest another dollar until we get a little more certainty in the business environment in america. and people are waiting to see how we're going to deal with this too-big-to-fail issue. are we going to put up rules that will give big banks an advantage over community banks? are we going to put in regulation that's are so cumbersome that they move the financial capital of america from new york city to washington, d.c., or even to london and singapore and shanghai along with the prestige and the opportunity of an increased standard of live that goes with it? we have within our grasp an opportunity to do as senator

shelby and senator dodd said. we're close to getting it together. we think we'll get together. and if we were to get it together and relie upon the work of senator warner and senator corker and the others that i mentioned, to work together over the last year and stand together with the president and let him say, republicans and democrats have been working more than a year on this. we have taken enough time to develop a consensus in the united states senate, a consensus between parties that this is the right thing to do for our country. we want to tell the american people that these are the rules forl financial regulation. and tell -- for financial regulation. and tell the world that the united states of america is capable of governing itself an writing its rules and doing in a bipartisan way. think of the signal that would send to this country and to the world. it might be a tipping point in the recovery from the great recession. that kind of signal from washington, d.c. i can't think of a better one. yet, the vote today is just the opposite.

it's another no motion, t no to debate no, to amendment, no to working together, no to checks an balances. i hope that we prevail on this motion. i hope that we will say yes to more amendments, yes to more debates and yes to checks an balances. i hope that the result is a regulation bill affecting this country that all of us can vote for or at least most of us can vote for that we can proudly give each other credit for. that's the way we like to work. that's why we came to the senate. and when the country see that's, they'll have more confidence in in us, in this government in this economy and the world will too and we'll have taken an important step forward. and the president will be able to say, look, this is the way i wanted do it all along this is what i campaigned on and i'm glad that we worked together to get 70 or 80 votes in the united states senate to get a consensus on a financial regulation bill

to get this country moving again. mr. president, i yld the floor. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

the presiding officer: the senator from connecticut. mr. dodd: mr. president, i ask unanimous consent the call of the quorum be rescinded. the presiding officer: without objection. mr. dodd: mr. president, what is the business before the united states senate? the presiding officer: morning business is closed. under the previous order, the senate will resume consideration of the motion to proceed to s. 3217, which the clerk will

report. the clerk: a motion to proceed to the consideration of s. 3217, an original bill to promote the financial stability of the united states by improving accountability and transparency in the financial system and so forth and for other purposes. mr. dd: mr. president, as i understand it, there is a vote scheduled at 5:00 p.m., is that correct? the presiding officer: that is correct. mr. dodd: and the time between now and 5:00 p.m. will be general debate on the matter on the motion to proceed? the presiding officer: that is correct. mr. dodd: that's fine. mr. president, i recognize my friend and colleague from the state of delaware, senator kaufman. how much time -- mr. kaufman: i think it's about 16 minutes. mr. dodd: fine. i recognize my colleague for 15, 16 minutes you say? mr. kaufman: yes. thank you, chairman dodd, and thank you for all the incredible work you have done on putting together this bill on financial reform. it's truly an historic effort. it's the third historic evident you have taken this year.

credit card reform. historic is not a word i use lightly. putting in perspective the last 40 years, you have been a leader on a truly historic piece of legislation this year. i have never seen a member do this before -- have credit card reform, chairing the health committee, bringing up health care reform, and now the financial regulatory reform bill. it's a great accomplishment. mr. president, i ask consent -- mr. president, i return to the floor today to discuss the problem again of too big to fail, which i remain convinced is the key issue in any financial reform bill. first, i urge my colleagues to vote yes on the motion to proceed because these issues are of profound importance to our country, and they deserve to be debated and voted upon. for example, it was over ten years ago that congress debated and passed the graham-leach-bliley act which formally repealed the glass-stegall's act's sensible and long-standing separation of commercial banking and investment banking.

while this landmark legislation passed the u.s. senate by a 92-8 margin, there were some voices who spoke out then that the bill would lead us on a glide path to disaster. i recently read the speech given in 1999 by the senior senator from north dakota, and i was thunder struck, truly thunder struck by how accurately byron dorgan warned them about the future. now, there were eight people that voted against the graham-leach-bliley -- senator boxer, senator dorgan, senator feingold, senator harkin, senator mikulski, and senator wellstone. i first came to this body as a staff person in 1973, and i have seen times when a few people in the senate -- i don't think either party has a monopoly on it -- get together and just say

the senate is off in the wrong direction. i think that day, those eight people said that. but senator dorgan deserves a special recognition, a special award because senator dorgan predicted in 1999 when he said, and i quote -- "we will in ten years time, look back and say we should not have done that, repeal glass-stegall, because we forgot the lessons of the past." he went on to say, and i quote -- "this bill will also, in my judgment, raise the likelihood of future massive taxpayer bailouts. it will fuel the consolidation and mergers in the banking and financial services industry at the expense of customers, farm businesses, family farmers, and others." i mean, that is amazing. that is absolutely amazing. he absolutely totally, completely nailed it. he predicted that it would lead

to future massive temporary bailouts. i think we should listen carefully to senator dorgan now and any prediction he makes about what we are going to do today in the senate. he also said -- "we also have another doctrine at the federal reserve board called too big to fail." now, remember, this is ten years ago. "remember that term, too big to fail. they cannot be allowed to fail because the consequence on the economy is catastrophic and therefore these banks are too big to fail. that is no-fault capitalism. too big to fail. does anybody care about that? does the fed? apparently not." ten years ago, he said this. these words would work just as well on the floor today. how many of us thought the term too big to fail was coined only in this recent disaster? not senator dorgan. he knew and warned about too big to fail in 1999. he also added -- "i say to the people who own banks, if you

want to gamble, go to las vegas. if you want to trade in derivatives, god bless you. do it with your own money. do not do it through the deposits that are guaranteed by the american people and by deposit insurance." again, right on point. perfectly accurate today. byron dorgan and brooke seborn were warning about derivatives in 1999 but we did not listen. america suffered a catastrophe of monumental proportions less than ten years after these words were spoken. finally, senator dorgan said -- "i will bet one day" -- i think we're at that day -- "somebody is going to look back at this and they are going to say how on earth could we have thought it made sense to allow the banking industry to concentrate, through merger and acquisition, to become bigger and bigger and bigger, far more firms in the

category of too big to fail? how did we think that was going to help this country?" end of quote. well, senator dorgan, you were right and we have arrived at that day. let me repeat. did it help our country? will it help our country in the future? each senator has to answer that question. senator dorgan knew that further binding the financial industry would accelerate the deregulation and leading to bigger issues. ushering in too big to fail and ever more casino-like version of financial capitalism. he knew that by lifting basic restraints on financial markets and institutions and more importantly by failing to put in place new rules to deal with the market's ever-more complex innovations, that this deregulatory philosophy would unleash the forces that would cause our financial crisis in the great recession of 2008. i couldn't agree more with senator dorgan.

banks and other financial institutions that are too big to fail have become only more so today. they are so large, so complex, and so interconnected that they can't be allowed to fail because their demise would threaten the stability of the overall financial system. there are those on the other side of the aisle who would propose to simply let them fail. they say the solution is to stand back and let these megabanks follow the normal corporate bankruptcy process. i call that dangerous and irresponsible, a slogan, not a real solution. president bush didn't allow that to happen, and no president should be faced with that decision again. when lehman failed, our credit markets froze and failed and counterparties panicked. we have the opportunity today to restructure our financial industry so that it will be safe for generations that. is what the senate den -- for generations. that is what the senate den d in the 1930's when it passed the glass-steagall exact it stood the test of time for six decades.

it now relies too much on discretion and a he can mechanism that's largely unusable for the most large and complex institutions. under this arrangement, the megabanks will still have incentives to arbitrage their capital requirements, thereby continuing to grow and take on even greater and greater risks. the six largest u.s. banks have assets totaling more than 63% of our overall gross domestic product. 15 years ago, the six largest u.s. banks had assets equal to just 17% of gross domestic product. in 15 years, from 17% to 63%. instead of girding a broken regulatory system, congress must act decisively now to end the doom loop that senator dorgan so accurately warned the senate about in 1999. we need stronger statutory medicine. i believe the time has come for congress to draw hard lines and high walls and statutory limits. we need limits on banks in order to eliminate too-big-to-fail.

senator dorgan has said he's working on an amendment to address this problem. i look forward to hearing more from senator dorgan about his proposals and i hope the senate will listen carefully to him, since his credibility on this issue is borne in the wisdom he showed in 1999. congress, which represents the people who are most hurt by the financial crisis, should not pass the buck to the very regulators who failed to prevent the crisis in the first place. congress must do it ourselves, as it did in the 1930's, by separating commercial from investment banking activities and putting limits on the size and leverage used by systemically significant banks and nonbank players alike. this is a proposal that i introduced last week with senator brown and other colleagues. of course, there are those who make the argument the problem isn't really about size. the institutions resident actually too big to fail. insteadinstead they say that institutions like lehman brothers were actually too interconnected to fail based upon interlocking counterparty exposures arising from credit derivatives and repurchase agreements contracts. but trying to contrast the distinction between too big to fail and too interconnected to

fail is a distinction without a difference. the massive growth for the derivatives market, including that for credit derivatives, which intertwined the fates of banks, hedge funds and insurance companies through side bets on whether mortgages, corporate bonds or or assets would pay o off -- or other assets would pay off moved to lock step with a runaway growth of the megabanks' balance sheets. all of these activities interconnected their fates. while also making them far more risky and far bigger. so big, in fact, that their failures would threaten the stability of the financial system. senator brown and i emphasized last week, our bill is a complimentary idea, not a substitute, to the banking committee bill. there are many regulatory provisions in that bill that are designed to make the megabanks less risky and less interconnected, and we strongly support them. but why gamble the regulators will do a better job now and well into the future when they have the power today impose a redundant fail-safe thriewtion to limit -- solution to limit

the size and leverage of our biggest banks? we will not lose out globally, other than a race to financial destruction. the limits senator brown and i propose would shrink these banks from massively large institutions to only really large institutions, at a size well beyond the level at which economies this scale are achieved. as senator dorgan asked in 1999: why leave oversized institutions in place when they are too big to fail? instead, we should meet the challenge of the moment and have the courage to act to limit the size and practices of those literally giant financial institutions whose stability of which is a threat to our economy. but we can only meet these challenges once the bill reaches the floor. so again, i urge my colleagues to vote "yes" on cloture and not stand in the way of the debate and collective wisdom from this need this country so badly needs. if we are to prevent another financial crisis, we must move forward with this debate and act strongly in the interest of the american people. mr. president, i yield the flo

floor. mr. dodd: mr. president, i'd notehe absencef a quorum. the presiding officer: the clerk will call the roll. quorum call:

mr. dodd: mr. president? the presiding officer: the senator from connecticut. mr. dodd: i'd ask consent that the call of the quorum be rescinded. the presiding officer: without objection. mr. dodd: mr. president, i suspect that sometime over the next hour and a half there will be other members who would care to come on over and comment about the -- including the presiding officer, and i'll be glad to take a few minutes and share some opening comments myself to give him some relief so he can be heard on this matter as well. let me thank him, by the way. i want to thank senator warner. i want to thank my colleagues on the banking committee, both democrats and republicans. we've spent a lot of time together over the last, well,

two years now, longer, in fact, going back even before the arrival of my friend from virginia when i became chairman of the banking committee in january of 2007. i was asked to pick up this issue and we began to look at the issue of the mortgage crisis in the country through all of 2007 and, of course, the following year as events began to unfold in the spring, culminating in of course, the disaster we encountered in the fall of 2008. but the members of the committee have worked very, very hard. we've had literally hundreds of hearings and meetings listening to people across the spectrum on how best to address these issues of filling in the gaps that led to the near collapse of our economy, what steps we ought to be taking to provide intelligent, thoughtful, commonsense regulation as well as, of course, seeing to it that in the process of doing so we don't stifle the ability for this country to either lead in the financial services sector globally as well as, of course, provide for the innovation and

creativity necessary for our country to grow and prosper economically, the wealth creation that's necessary for our country. so it has been a long and arduous journey. i was just speaking to senator bob corker of tennessee, with whom i've spent a great deal of time, as i know the presiding officer has as well. i want to thank richard shelby, my colleague and the former chairman of the banking committee, who is the ranking republican on our committee. we have spent a lot of time together on these issues, including even some time earlier this afternoon and meeting again, depending on the outcome this evening, one way or the other, continue our conversations to try and resolve some of the outstanding matters in a very long and complex piece of legislation. i won't enumerate the names of each and every member of the banking committee, but suffice it to say at this juncture that the work they have done has been tremendously helpful and has produced i think a good and strong bill on financial service reform. so, mr. president, today the senate faces its first vote on

this issue which will occur in a little less than two hours from now in deciding whether or not we could even go tbord and debate the matter. -- go forward and debate the matter. and again, my hope would that be our colleagues wouldly on lou us to debate this issue -- would allow to us debate this issue. i not there's differences, not unanimity even within the chamber itself on the issue of which way to go, particularly in areas involve the matter of systemic -- involving the matter of systemic risk, of dealing with the so-called too-big-to-fail provisions, dealing with the provisions of how we administer the notion of our exotic instruments, the derivative community and the like. there are significant discussions that have gone on, and the assumption somehow we're going to resolve all of those issues prior to actually getting to debating the issue i think is somewhat unrealistic if we're trying to reach accommodation on all the various matters that are included in 1,400 pages of the proposal that we'll have before this body. so today my plea is not so much on the substance of what's here,

although i'm willing to discuss all of that because it's important that our colleagues know what we've tried to achieve and accommodate in our legislation. but to plead with them to let to us get to the debate. i don't think the american people understand this. regardless of where you come out on the issue, where you stand on any of the various provisions in this bill, i think -- i don't know i don't know how you explain to people who always we are as vulnerable as we are today in the waning days of april 2010 as we were in the fall of 2008 when we saw what happened to our economy. nothing has changed except, of course, jobs have been lost, homes have gone into foreclosure, retirement incomes have evaporated, housing values have declined. almost $11 tril job i trillion d wealth has been lost. now, that's what's happened in it is last 18 months. but we have yet to stand up and address what caused that to happen in our country, to fill in those gaps, provide the regulation, put the cops on the beat, create the provisions that

would minimize when the next economic crisis occurs. and it will occur. there's nothing i've drafted here that can protect our country from a future economic difficulty. as certain as i am standing here today, we will face yet another crisis or crises in the future. the question is: are we going to be better positioned to minimize that crisis so we don't see the collateral damage that's been caused to businesses, to individuals, to retirement, to homes, all of the things that have suffered because we didn't have in place the kind of safeguards that might have put a tourniquet on this problem in its earliest stages? not to have eliminated the crisis but certainly limited the damage that it caused because we didn't have the cops on the beat, we didn't have the regulations, and we didn't have what is exactly included in this bill to minimize the danger in the future. i've tried to explain this issue. it's complicated to people when you start talking in these words that are arcane, credit

defaults, swaps, derivatives, systemic risks and all the other terminology that is used to talk about financial services. but let me just try to phrase this in more graphic terls, if i can. imagine coming home from a weekend. you've been away, taken your family out for a trip and you come home and find your front door swingin swinging wide open. when you walk inside your house, you realize you've been robbed. your tv's are gone, your furniture is gone, your jewelry, important documents, cash, family photos -- all have been stolen out of your home. maybe woit of all, there's broken glass, pottery everywhere. not only did they steal but decided to wreck the house in the process. looks like these robbers had quite a party. you're wondering what's next. you wonder how long it will take before you clean up the mess, how much it will cost to you replace your tv and your stereo. then you find out at the end of all this by the way, of this a

identified the robbers who've broken into your home, stolen everything and, by the way, you're going to write a check to them. the very people who have caused the damage are going to get a check written out to them. that's in effect what happened 18 months ago. people came in and robbed our home, in fact they took the home. they took the income, they took the retirement. the jobs went out the window. the very people responsible for it were stablized because we wrote a check tout to stablize those institutions. and as we did so, we got them back on their feevment the leaders -- or at least many of the leaders of he these very industries began to reap massive bonuses because we did stablize them, put them hon a solid footing. they benefited from this financially. yet the 8.5 million jobs that were lost, the 7 million homes in foreclosure, the 30% decline in home values, the 20% decline

in retirement of working families that thought they were protected, all of that is gone. and somewhere between $11 trillion and $13 trillion -- not a "b," billion, but "t," trillion. if that's not wreckage of your economic home, i don't know what is. today we're just as vulnerable as we were 18 months ago. our mouse is still unlocked, in a way. and what happened 18 months ago could happen again. i don't think there is an ounce of willingness on the part of the american people to write that check again. and what they're asking for is for us to step up, think carefully as we tried to do over the last year or so, as we've gone through this process, and craft some ideas that would minimize that from again, so that there's not a huge part of our economy that's totally unregulated, as we had with

brokers, real estate brokers, who their web site, mr. president, had their first rule -- the brokers, the first rule on their web site, convince the borrower you're their financial advisor, when they were anything but your financial advisor. so luring people into mortgages they couldn't afford, convincing them they could pay for it, knowing full well they never, ever corks and of course then the banks themselves, who were bundling these mortgages, only holding them for 8 or 10 weeks and selling them off, branding them tri triple-a to unsuspectig invisitors, creating the bubble that was the ultimate cause of the collapse -- today that same problem can exist with the absence of a law we're putting before our colleagues. maybe i should have said this at the outset, mr. president, hardly do we claim perfection in what we've written herement but we believe in sound ideas that deal with these very issues that caused the problems in the first place. what we need to do is to be able to debate those ideas.

if my colleagues in this chamber -- as many do -- disagree, some think i've gone too far, some think i haven't gone far enough, those are two maybe legitimate points. but how are we going to ever resolve it if i can't ever bring up the bill to have the debate in this chamber was designed to engage in. what's the point of having 100 seats here coming from 50 states when a major issue affecting our country cannot even be the subject of a debate? so, mr. president, i urge my colleagues -- i urge them -- let us get to this debate. let us do our best to resolve these matters. as adults, as people who have strong views and feelings, many of which we agree on, by the way. i mentioned my colleague from virginia, the presiding officer. i don't know how long mark warner and bob corker spent -- hundreds and hundreds and hundreds of hours -- to make sure that in this proposal never, ever again would a financial institution in the united states of america reach

such a status that it would be guaranteed implicitly that the federal government would bail them out, when they engage in excessive risks and put themselves in great jeopardy. our bill does that, without any question whatsoever. those entities, if they reach that point will fail. they'll go into bankruptcy. they'll go into receivership. management gets fired. you don't get a bonus. you get fired. shareholders lose their resources -- or their investments as well as creditors do, not to mention other problems associated with t but the idea is that those entities go out of business. we wind them down in ways that doesn't jeopardize other areas of our economy. if there's one area we all agreed on, it was to make sure that wouldn't havment the senator from tennessee and the senator from virginia were involved in that discussion and debate, writing the words in this bill that we believe

achieve that desired result by the american people. we also said, look, one of the problems that happened over the last number of years leading to this crisis was we didn't really know what was going on out there. people said, well, i didn't even know this was happening. we heard bob ruben, the former secretary of the treasury. we've heard alan greenspan and others -- and whether you believed them or not, they said, we didn't understand how this was happening or why it was happening or hurricane katrina that it was happening. well, that excuse ought to never occur again so that bill, we create that early radar system, if you will, for again maybe a more graphic description of what our systemic risk council does, made up of the various federal agencies. not just one but a multiple set of eyes with differing backgrounds, to be constantly monitoring and watching what's occurring out there. not just in our own country but around the world. how many of us have read headlines about greece and what

problems it may pose to europe and other parts of ash global economy? or what happened in the shanghai stock market a number of years ago where decline in value in that exchange put the entire world in a tailspin for several days. so the notion that it is just what happens mere at home on mortgages or other issue, it is not limited. it is also what happens around the world. this part of the bill is designed to be that early warning system, that radar system. again, i want to thank my colleague from virginia and my colleague from tennessee. one of the provisions in that early warning system is data collection on a daily basis, so we know what's happening hon an hour-to-hour basis economically in the country. that will be of great value as we sit there and try to make these assessments and pick up on these problems in the earliest stangs before they can occur. -- in the earliest stages before they can occur. consumer protection, mr. president -- this ought toab a radical idea, to protect

consumers from any problems financially. how many of us read the tragic news over the last few weeks about an automobile manufacturer that had a defective accelerator. and what was the first thing you heard? the cars are being recalled, so that you won't be at risk driving them. we hear "recall qurgs qurgs allr "recall" all the time on products. you can send it back and recall the product and be protected as a consumer. what happens when you get a financial product that doesn't work or is defective or is producing results that were never intended bu and are causing major problems? where do you go to get a recall on a faulty mortgage or on a credit card that was corrupt or deceptive or abusive? why shouldn't we deal with financial products that can bring to you financial ruin and yet you can do it with a toaster, trvetion or automobile? our bill sets up a consumer

product financial safety commission, bureau, division that we've established in this bill so that consumers themselves can have someplace to go to get redress. rules can be written to protect them. otherwise -- and i appreciate my colleague in delaware mentioning my credit card bill -- but we shouldn't have to write a bill every time there is a deceptive or fraudulent process. why not have regulations in place that would protect consumers? and let kneel you what else that does, mr. president. it isn't just protecting you from the faulty financial products. one of the most important elements in our economy is consumer confidence. it is having a sense of optimism and confidence, faith that our institutions will be there to work for them, not against them. one of the great, great damages to our country -- and i don't know how put a number on it -- i can't cite the number on home value lost or wealth lost or

mortgages or foreclosures or jobs lost. tell me what price i put on the loss of the american public's confidence in our financial system. what is that number, that people no longer trusts or have deep questions about whether or not they're going to be protected with their hard-earned dollar, that insurance policy, that stock they want to buy, not that they ought to be guarantee add return on it, but there isn't going to be some deceptive, abusive practice that will put them at risk? and to me that is about as important an issue that you can have: confidence in the american people that our financial srnl the architecture of our financial system is one they can have faith in, confidence in. that reputation has been damaged severely over these last number of months. i don't claim that what we've written in this area of consumer protection solves every problem. but for the first time in our nation's history, for the very first time, we'll have a consolidated consumer protection agency whose principal responsibility it is to watch

out for the consumers of financial products. and i think that's a major achievement for our bill. lastly, let me mention here the old issue of these exotic instruments that i mentioned earlier that have complicated definitions of what they do and how they work. one of the major problems is, of course, it's been an unregulated eamplet it has been what they call the shadow economy. to give an idea of how the issue has exploded, in 1998, the area of derivatives generated about $91 billion in activity. that's 12 years ago. last year -- i think it was 20 2000-2009 that i have numbers on this. but in the last year we have anyplace on this, the activity jumped from $91 billion to almost $600 trillion. $91 billion to $600 trillion in ten years. in unregulated activity, in the

shadow economy. there were those activities that also contributed so much to the economic difficulties we're going through. the agriculture committee run by my good friend from arkansas, blanche lincoln, the members of her committee and our committee on the banking committee, have worked out, we believe, a sound and solid proposal on how we can protect the american consumers from these very risky instruments, if they don't be subjected to some basic rules of margin requirements, capital, let the sun shine on them in the exchanges where people can see the value, the market can determine that. all of those things are critical. derivatives are note a bad thing. they're needed, in fact, to have economic growth and prosperity. the problem is not using them. it's how they're used. whether they're operating in the shadows or bright light, where everyone knows where they are and how to value them. that's in our bill as well. there's a lot more in this legislation. my intention here was not to go through and enumerate every section of the bill -- all 12

sections of the bill. my point is, let us get to this debate. let us have a chance, if you don't like what i've done in consumer protection on derivatives, if you don't like what we've done on too big to fail, if you don't like what we've done on other matters of the bill, then come and bring up amendments, let's discuss them, let's debate them, but let's have that -- that ability to at least try and shape this legislation. so at 5:00 this afternoon, the very first time since the crisis hit really, other than the credit card bill and the housing tbhail we had come out of my banking committee, this is the first chance we've have in 18 months-to-since the worst economic crisis in 80 years, which we're still suffering from -- i know the markets are doing better. i know corporations are doing better. i know the stock market is make more money. but for most of us in this chamber we know it hasn't quite reached down there the economic recovery to an awful lot of average citizens in our country

who lost their homes, lost their jobs, lost their retirement, lost the wealth they built up. all of that's been gone. for a lot, it's not going to come back. and so what we need to be doing is to step up and try to provide some answers to the american people. a lot of the rage and fury and anger that we're seeing around other issues happened in no small measure because of what happened to our economy. and because of the failure to have regulatory procedures in place and to have cops on the beat to enforce those regulations, to be able to have the early warning system to identify problems before they spun out of control. and, mr. president, our bill, we believe, steps up and addresses those issues. and, again, the opportunity to the very least, debate. we can't ever get to the resolution of these matters if the matter is not on the floor. senator shelby and i have been talking. we talked over the weekend.

we talked. we have talked already this afternoon. we'll meet again. even if we get this done and move to the bill, we've got to sit down and work on how we're going to manage all of this. i want to thank him again for his willingness to do that. and i deeply believe that senator richard shelby of alabama wants to get to a bill, as i believe most of my colleagues do here. but we can't ever get there if we don't have that debate. mr. president, i didn't mean to speak this long, but i wanted to at least let my colleagues know how important i believe this issue is. and, frankly, i don't think it serves our interest well to be screaming at each other about who cares more about this issue than the other. i think it would be unfortunate that a number of my republican friends who i know care about this very, very much would be branded somehow that they don't care about it to such a point they wouldn't even let this get to a debate. they've got ideas on this legislation, they want to participate in the debate, they want their amendments considered, and they don't want to be told that they can't even

do that because we don't have some large sweeping agreement on a bill here. senator shelby and i are very close on some issues that we can reach an understanding on. and i'd hoped maybe we'd get there before this afternoon, but there is no reason to stop all of this, in my view, and not get to that adoption of the motion to proceed. so, mr. president, for all of those reasons, i urge my colleagues at 5:00 p.m. to vote to proceed to this matter and let us take the next few days to consider, to consider this legislation. mr. president, i ask unanimous consent that the following members of my staff be granted floor privileges for the duration of the consideration of s. 3217, restoring american financial stability act of 2010: matt green, mark gikling, debra kads menhodge chalura and erica

green. the presiding officer: without objection. mr. dodd: mr. president, i would note the absence of a quorum. quorum call:

a senator: mr. president? the presiding officer: the senator from virginia. mr. warner: mr. president, i ask unanimous consent that balow wynn, a fellow in my office -- the presiding officer: quorum call, please. mr. warner: mr. president, i ask unanimous consent to dispense with the quorum call. the presiding officer: without objection. mr. warner: mr. president, i ask unanimous consent that bowden wynn, a fellow in my office, be granted privileges of

the floor during consideration of restoring financial stability to america act of 2010. the presiding officer: without objection. mr. warner: mr. president, i rise today to urge my colleagues to support bringing forward chairman dodd's regulatory reform bill. the chairman has just spoken with great passion about how we got here. i want to perhaps take somewhat of a similar tack and describe as a new member why i think this piece of legislation is so terribly important. you know, mr. president, i've had the opportunity today on other mondays, as you often noted, to sit in the chair and listen to my colleagues come in and talk about this issue. i've heard today colleagues talk about health care, talk about stimulus, talk about unemployment as somehow reasons why we shouldn't start a debate about financial regulatory reform. i'm not sure i understand the connection. candidly, the american people could do with a little less

political theater and a little more action. and regardless of what happens this afternoon, the vote at 5:00, i hope -- and i honestly believe most of my colleagues on both sides of the aisle -- that we will get to that agreement in a bipartisan, new set of rules for the road for the financial sector that will withstand the test of time not for a year or two, but for decades to come. before i get into a substantive discussion of how we got here and how i believe the dodd bill takes dramatic steps forward, there is one other issue i need to address. i've sat, mr. president, in the presiding officer's chair and have heard -- as presiding officer, i know we have to bite our lips at times, but i've heard colleagues on the other side of the aisle come forward and somehow portray this piece of legislation as a partisan

product. i have only been here for 15 months. in the 15 months that i've had the honor of serving this body, i have not seen any piece of legislation that anywhere approaches the type of bipartisan input, discussion and ongoing dialogue that chairman dodd's bill has. literally in the 15 months that i've had the honor of serving on the banking committee, we held dozens, if not hundreds, of hearings on the objectives of this legislation, objectives, again, that i think colleagues on both sides of the aisle agree upon, making sure there's never again taxpayer bailouts for mistakes made by two large of financial institutions, making sure that we've got more transparency and, as the chairman said, a return to the sense of fairness to our whole financial product system. and, third, that ultimately the american people, the consumers of this nation will make sure that there's somebody watching out for the financial products

that sometimes they have been purchasing without appropriate knowledge or appropriate recourse when these products explode in their face. again, unlike the presiding officer who served around this body for many, many years, i'm a new member. but i saw last november where the chairman did something that i think is somewhat unusual with a major piece of legislation. rather than simply saying he had all the knowledge and all the input, he actually invited in members of the committee, junior members, senior members of both parties to set up working groups to take on some of the challenging aspects of this bill: consumer protection, systemic risk, corporate governance, a whole question of derivatives. and let me state absolutely, because i can state from the systemic risk, too big to fail

portion, the products that we develop that are critical parts of this legislation are bipartisan in nature, bipartisan in ideas and find that common ground that has been so absent from so many of our previous debates we've had over the last 15 months. i think particularly about the fact of the systemic risk, too big to fail and resolution authorities that senator corker and i have worked on. and there's been no better partner i could have than senator bob corker, kind of grinding through hundreds of hours, recognizing there was no democratic or republican response to too big to fail and systemic risk, but that we had to get it right. while there may be parts of this bill that can still be be tightened up and tweaked here and there, the overarching goal of making sure that the taxpayers never would be again on the hook, i believe we've taken giant steps forward. and if you've just heard from the chairman already, those conversations are ongoing even

today. so please, while we kind of give sometimes in this body to hyperbole, anybody who makes the claim that this piece of legislation is partisan only just doesn't recognize the facts or hasn't seen the experience of the members of the banking committee over the last 15 months. i may also acknowledge, and i recognize i've got a number of things i want to say and there may be other members who want to come. let me also acknowledge something else about this discussion. 16 months ago when i came to this body, i actually thought i knew something about financial services sector. i spent 20 years prior to being govern around financial services, taking companies public. i had some ideas about how we'd sort through these issues. i've got to tell you what i quickly found was that oftentimes my original idea or

oftentimes the simplistic sound bite solution that i thought might be the solution more often than not proved not to be the case. and that trying to sort our way through this labyrinth of financial rules and regulations in a way that brings appropriate regulation but maintains america's preeminent role as the capital markets capital of the world has been challenging. again, i want to thank my colleague, senator corker. i think we both realized no democrat or republican way to get this right, but we had to get it right. the we over the last year have set up literally dozens of seminars where we invited members off of the banking committee to come in and kind of get up to speed as well. 15 months later, with this legislation now before the floor, i think we have taken a giant steps forward in getting it right. i also want to revisit for a moment, before we get to the substance of the bill, how we got here.

i've actually been stunned sometimes sitting in that presiding officer's chair, hearing colleagues come in and try to cite as the causation of the crisis that arose in 2007 and 2008, a single legislative action back in the 1970's or a single individual's activities over the last two decades. the claims are so patently absurd that sometimes they don't even bear recognition or bear rebuttal. but it is important to take a moment to look back on the fact that none of us come with clean hands, this process of how we got to such a mess in 2008 that we were on the verge of financial meltdown. think about the fact, back in the early 1990's, 1993, the congress actually passed legislation to give the federal reserve the responsibility to

regulate mortgages. a responsibility that we've seen time and again they didn't take up the challenge to meet. the presiding officer spoke very eloquently earlier this afternoon about the actions of the congress in 1999, the gramm-leach-bliley bill. it broke down the walls between traditional depository bank and investment banking set up by the glass-steagall act. the presiding officer and i may differ now is i'm not sure we can unscramble those eggs, but clearly a little more thought in 1999 as we internationalized these large financial markets was one of the precipitating factors of this crisis as well. candidly, bank regulators were not given the tools to regulate.

and oftentimes regulators of both depository institutions, their bank holding company and the securities firms oftentimes had no collaboration or coordination. during our hearings in the banking committee when we looked into one of the most egregious excesses of the last few years -- the bernie madoff scandals -- we heard regulators that started down the path to try to find out the source of some of the criminality that took place in the madoff case only to find that because of our mishmash of regulatory structure, they got to a door that they couldn't open because that was the purview of another regulator. regulators under our existing rules were actually prohibited from looking at derivatives. derivatives, which the chairman mentioned in the last decade, have gone from what seems like a large number of 90-plus billion

to hundreds of trillions worth of value. in the early part of the 2000's and not many sounded the alarm at that point. we overrelied on low interest rates an monetary policy to pull us out of the 2001 recession. as we came out of the 2001 recession, we left the monetary policies in place which led to a housing bubble that we're still paying the price of. and i know some of my colleagues on the other side have said, well, this bill does not take on the g.s.e.'s, fannie and freddie, and, yes, they're right. and in subsequent action we will have to make sure we have a new model in place for these institutions. but that should not be used as an excuse not to put in place major financial regulatory reform. candidly, if we're going to be

really truthful with each other and the american people, we've got to acknowledge that everyone, not just the banks, but everyone got overleveraged. quite honestly, we all -- the american people need to take a look in the mirror as well. because i think as we bought those adjustable rate mortgages, took out that second and third loan on our home, ended up getting that deal too good to be true and moved away from the conventional idea that you ought to go ahead and before you get a mortgage be able to put 20% down and be able to show you can pay it back, we all got swept up in this who cares about tomorrow, let's just borrow for today. we also saw innovations. american capitalism has worked pretty well, particularly for the last 100 years. we saw innovations in the last five or six years alone, innovations that originated on

wall street that were supposed to be about better pricing risk. derivatives and all of their cousins, nephews and bastard offsprings. these tools that were supposed to better price risks, we now found were more about fee generations for the banks that created them and instead of lowering overall risk, created this intertangled web that once you started to put the string on potentially brought about the whole collapse of our market. and time and again we saw rather than transparency in the market opaqueness and regulators that never looked beyond their silos. now, i think most all of our colleagues want reform. colleagues on both sides of the aisle want to get it right. but i believe there are two real

dangers as we go down this reform path. one is to resort to sound-bite solutions that at first blush sound like an easy way to solve the problem, but in actualality may not get to the solution that we need. i know that we're going to have a fervent debate on this floor and i look forward to it about the question of whether the challenge with some of our institutions was their market cap or it really putting pressure on the regulators to look at their level of interconnectionness and the level of risk taking that was taking place. i look forward to that. there's valid points on both sides. when we get to that debate, i'll point out the fact that in canada where there's actually a higher concentration of the banking industry than in the united states because there was greater regulatory oversight an actual restrictions on leverage,

those canadian banks didn't fall prey to the same kind of excess that we found here in the united states. we also need, and i know the chairman and chairman lincoln are working through this on the question of derivatives. where should they be housed? because they do provide important tools it when used appropriately. and there will be a spirit of debate whether we should break off derivatives functions from financial institutions. i look forward to that discussion. but i do want to make sure that simply breaking off these products into a more unregulated sector of the industry, we get an effect if we don't do it right create a greater harm down the road than we've got right now. so the first challenge is to make sure that we don't fall prey to the simple solutions and recognize the complex of these issues. the other challenge that we have to be aware of is the converse.

i know the chairman has heard, the i know the presiding officer's heard, any of us who tried to get into this issue, have had folks from the financial industry come in and talk to us about the unforseen consequences of any of our actions. some of those arguments are valid. but oftentimes those arguments are simply -- they always start the same. we favor financial reform, but don't touch our sector of the financial sector, because if you do this, the unintended consequences would be enormous. and because the knowledge level and the complexity of these discussions are so challenging, what we also have to fight against in this body is the more easy process to default to the status quo. because timidity in this case will not solve this crisis and will not provide the new 21st financial rules of the road that we need.

we can't be afraid to shine the light on markets or, for that matter, to raise the cost of certain activities. because the unforseen consequences of the interconnection of these activities, as we saw in 2007 and 2008 pose grave risk to our financial system. and as we've seen with the eight million jobs lost and trillions of dollars of value lost from the american public. so what does the chairman's bill do to accomplish this? i spend most of my time on two titles that senator corker and i worked on and the chairman and his staff adopted and changed a bit. but still provide the framework of, i think, the right structure. first thing, the chairman's already mentioned this. we create for the first time ever an early warning system on systematic risk. if there was one thing that has

come clear from all of the hearings that have been held, not just at the banking committee, but under senator levin's investigation committee an senator lincoln's agriculture committee, is that there is very little combination an sharing of information between the regulatory silos. the chairman's bill creates a nine-member financial oversight council chaired by the treasury secretary and made up of the federal financial regulators. this group will bear the responsibility both good and bad if they mess up of spotting systematic risk and putting speed bumps in place to prevent -- because we can never prevent another future crisis, but to do all we can to slow and minimize the chances of those crisis. the most important part of the systematic risk is that it will actually share information. so no longer will we have one

regulator looking at the holding company and another looking at the depositry and the third looking at the security concerns and not sharing that data. we will place increased costs on the size and complexity of firms. the largest, most interconnected firms will be required -- required, not optional, but required to have higher capital, lower leverage, better liquidity, better risk management. those have all been traditional tools that have already been in our regulatory system. but this systematic risk council will require those large incident tiewkses to meet all these -- institutions to meet all these higher cost, in effect, their cost of being so lodge and interconnected. but what we're also bringing to the table are three brand-new

tools that i think have executed and im -- if executed and implemented correctly will, again, provide tremendous value in preventing that next financial crisis. those three tools are contingent debt, our so-called funeral plans, and, third, the office of financial re. so i and since these -- re. so i and since these are new tools, let me spend a moment on each. one of the things that we saw in the 2007-2008 crisis is that these firms got to their day of reckoning it. it became virtually impossible for them to raise up their virtual capital to shore up their equity. once they start going down the tubes, the ability to track new investors, particularly from a management team that sometimes doesn't recognize how far and how close they're coming to the brink is a great challenge. so working with folks from the fed and experts across the country, this bill includes a

whole new category within the capital structure of these large institutions, contingent debt. it will be the funds within the capital structure that will be debt that will convert into equity at the earliest signs of a crisis. now, why is this important? this is important because if this debt converts into equity, the effect it has on the existing shareholders is it dilutes them. it takes money right out of their pocket. so existing shareholders will have a real incentive to hold management accountable not to take undue risks because long before bankruptcy or resolution, we'll be able to have this trigger in place that will convert this debt into equity diluting existing shareholders and candidly diluting management as well. how effectively we will use this tool will be yet to be seen.

but it will provide another early warning check on these large institutions. second new addition that the chairman's bill includes is basically funeral plans for these large institutions. what do i mean? i mean a management team will have to come before their regulators and explain how they can unwind themselves in an orderly way through the bankruptcy process. we heard stories -- i won't mention the institution -- we heard stories about the height in the crisis in 2008 how certain very large international institutions, in effect, came before the regulators and said, you've got to bail us out because we can't go through bankruptcy, it's just too hard. never again should any institution be allowed to be in that position. and if we use this tool

correctly, this is an area where i know the presiding officer has great interest, if the regulator does not sign off on the funeral plan for this institution on how we can unwind itself even with many of its international divisions through an orderly bankruptcy process, then the regulator can, in effect, make this institution sell off or dispose of parts that can't be through a regular order of bankruptcy. by doing this we create the expectation in the marketplace that bankruptcy will always be the preferred option. never again will there be an excuse that we're too big and too complicated to go through that orderly process. creditors and the market will know that there's a plan in place that has to have been approved by the regulator and constantly updated so we've got a way out. third area -- and, again the

chairman -- i was very pleased to hear the chairman mention this because within the press or the commentary it has gotten no focus at all and that is a creation of a new office of financial research within the treasury. one of the things that we heard time and again from regulators is that we kind of went back and looked at how we got in the crisis of 2007 and 2008, the regulators didn't realize the state of interconnectiveness of some of the institutions they were supposed to be regulating. no one had a current real-time market snapshot of all of the transactions taking place on a daily basis so nobody knew what happened if you pull the string on a.i.g. even though it was their london-based office, what would happen if those contracts suddenly all became suspect? by creating this office much financial research we will give

the regulators and systematic-risk council on a daily basis the current state of play across all the markets of the world. it's too -- this tool if used correctly will be, again, another terribly important early warning system. but, as the chairman has mentioned, with all this good work, you still can't predict that there is never going to be another financial crisis. chances are wall street and others, creativity being what it is, will find some way, even with all this regulatory additional structure and oversight, you can never predict again that there might not be another crisis. so what do we do? first and foremost, what this bill puts in place is a strong presumption for bankruptcy, so the creditors and the market alike will know what happens if

they get themselves in trouble, and particularly for these larger institutions that are systemiccally important, they will have to have their preapproved, in effect, bankruptcy funeral plan on the shelf so that we can pull that off in the event of a crisis and allow this institution to go through an orderly bankruptcy process. and again, bankruptcy will be the preferred option of any reasonable management team, because through bankruptcy, there is at least some chance you may emerge on the other side. in some form for another, your institution, you may be able to keep your job if you're part of management, some of your shareholders may still have some equity remaining. what happens if we have a firm that doesn't see the inevitable, isn't willing to move to bankruptcy? what happens if we have a circumstance where an institution, its failure could

cause systemic risk and bring down the whole system? with an appropriate check and balance -- and again, i commend senator corker for his additions here, effect simultaneously action of three keys, head of the fed, the fdic and a judicial oversight, all of these actions taking place, there then isn't an ability to say how do we resolve an institution, in effect put it out of business. unlike in 2008 where the government invested in effect a conservatorship approach that said we're going to prop you up to keep you alive because we don't know what do do with you. they are so live and so systemiccally important. instead what we have created in this bill is a process that says if you as a management freedom are crazy enough not to go into bankruptcy but actually allow a resolution to take place, you are going out of business. senator corker said you are toast. your management team is toast, your equity is toast, your unsecured creditors are toast.

you are going away. again, we're going to put this institution out of business in a way that does not harm the overall financial system. you have got to have an orderly process. we saw during the crisis of 2008 what happens when one of these institutions fails without any game plan. we see the values of these institutions disappear oversight as confidence in the market, confidence within the market in the -- and the institution is lost. so working with my colleagues and experts from the fdic and others, we said what you have got to do is you have got to have some dollars available here to keep the lights on. so that you can sell off the portions of the institution that are systemiccally important and unwind this in an orderly way that doesn't have an effect the equivalent of a run on the bank

or a run on the financial system. again, we have heard critiques of -- of the approach that senator corker and i came up with in this resolution fund, this how do you put yourself out of business in an orderly way fund. we actually thought it ought to be paid for by the financial industry, with the ability then to have that fund in effect replenished after the crisis is over. there is a poll went out today that shows the overwhelming majority of americans actually think the financial sector ought to bear the costs of up winding one of these large, systemiccally important firms. let me say if there are other ways to do it, as a matter of fact, there are some even in the administration that have suggested other ways, i'm sure we can find common ground. as long, as long as we do at these two principles. first and foremost, the taxpayer

must be protected. and industry, not the taxpayer, has to take the financial exposure. and secondly, funding has to be available quickly to allow resolution to work in a way to orderly unwind this process. and it ought to be done in a way -- and again, this is where some of the judgment comes in, where there is not so much capital available that you create a moral hazard, that a bailout fund is created. personally, i believe the house legislation goes too far in creating a fund of that size. i think the chairman's mark strikes a much more appropriate balance. but if there are ways to do this that protects the taxpayers, allows speedy resolution with funds that will be available so you don't have a run on the market, a run on the institution that creates more systemic risk, as long as the industry at the end of the day is going to pay for it, i'm sure there are other

ways that we can find that common ground. now, what we did here in this process of resolution is we said let's take what's worked, let's see what's best from the fdic process which currently resolves banks on a regular basis. one of the things that i have heard, again from some of my colleagues on the other side, i don't know about their community banks but my community banks in virginia, i would bet the community banks in delaware and the community banks in connecticut, don't want to get stuck paying the bills for the large wall street firms who bring the system to the brink of financial catastrophe. so, again, one of the aspects of the chairman's bill is to make sure that any resolution process does not burden, charge or in any way otherwise interfere with community banks. so what we think we have struck here is a process that puts

costs on those institutions that make the business decision to get large and systemiccally important. we think we have put in place abilities for the regulators, the funeral plans to make sure if this interconnectedness is so large that they can't go through bankruptcy, that you stop them from taking on these new activities. because you can't always predict every eventuality. you say if we need to use a resolution process, let's make sure that it's orderly, paid for by industry, and that we set it up in a way that no rational management team would ever expect or want to choose resolution. now, again, the chairman has already mentioned -- i know my other colleague from new hampshire who has been a great partner in this legislation as well as on the floor. i will end in just a couple more moments.

there are other departments in this bill that haven't received a lot of attention. in this bill, the chairman has included an office of national insurance. one of the things that we saw in the crisis in the fall of 2008 was nobody really knew how entangled a.i.g.'s activities were with the whole financial system. this doesn't get to the question of who should regulate insurance companies, but it does create at the federal level at least the knowledge within the insurance sector of its interconnectedness. the chairman has mentioned that he and chairman lincoln are working to grapple through one of the toughest parts of the bill. again, an area that i know my colleague senator gregg has been working on, how do we get it right around derivatives? again, there is no policy difference. both sides of the aisle agree the derivatives are an important tool when used appropriately and that particular industrial companies need to use

derivatives to hedge against the risk within their businesses. the problem is how do you not draw that end user exemption so large that every institution on wall street suddenly transforms itself into an industrial end user? and secondly, while these accounts are unique, they have to have more light shown on them i know that chairman dodd and chairman lincoln and senator reid and senator gregg will be working through this. one suggestion i would have is, because as someone who has seen wall street act time and again. i wish them all the luck. my concern is that whatever rule we come up with, there is so much financial incentive on the other side that a year or two from now we may be back because they found a way around. that we again need to give the regulators certain trip wires. i, for one, believe we ought to take the industry at its word. the industry says end users are only going to be 10% or 20% of

total derivative accounts. then let's put that in as a regulatory goal, and if they end up exceeding that, then we can bring the draconian consequences to bear. or if they say yes, we can make most of these transactions and most of these contracts transparent through clearing or exchange, great, let's accept them at their word, but if they don't get to those totals, then perhaps some of the actions, particularly members on my side of the aisle, would like to take -- to be put in place. again, folks of goodwill can come to common agreement here. finally, the area around consumer protection, where the chairman and i know the ranking member have worked at great length to kind of sort this through. everybody agrees on the common goal. there needs to be enhanced consumer protection, particularly for the whole nonregulated portion of the financial industry that now exceeds the regulatory half. too often, it was the community bank that was chasing the mortgage broker on some of the bad financial products because there was no regulation on the

mortgage broker to start with. so, again, there will be differences, but i think the chairman's approach is to keep this with the appropriate rule-making ability, but to make sure, particularly for those smaller banks, you don't end up with conflicting information of a consumer regulator showing up on monday and a safety and soundness regulator showing up on wednesday, to do that in a combined fashion so there is commonlyity of message, particularly to our smaller banks, strikes that right balance. again, i can only say for the banks in my state of virginia, those smaller banks who oftentimes have said they didn't cause a crisis and they didn't. we are the first ones to say we need enhanced consumer protection to make sure our financial products are regulated by the type of product, not boy the charter of institution that issues the product. there may be ways to improve on this section. again, i think senator dodd and senator shelby are working to get it right.

we have seen as well major action on the rating agencies, questions around underwriting. there are tremendous parts of this bill that haven't been subject to great criticism because they are that common ground that i think senator shelby has said in earlier quotes, 80% or 90% that both sides agree on. and where we don't agree, though, we ought to debate and offer amendments. i look forward to working with a number of colleagues on the other side of the aisle on technical amendments to this bill where we think we can make it slightly better. but if we're going to get there, we have to get to the debate. so, mr. president, i hope that we move past procedural back and forth, but i have to tell you as a new guy here, i don't still fully understand. i think it is time to fully debate this bill out in the open. the chairman made mention of what has been taking place just in the last few years in greece. i know the presiding officer has helped educate me on -- on a whole new activity that's taking

place in the financial markets right now around high-speed trading and colocation that could be the forebear of the next financial crisis. how irresponsible would we be 18 months after -- again, the analogy the chairman made, after our house was broken into when we haven't even put new lox on the door if we ended up with another robbery, whether it was caused by international actions or whether it was caused by high-speed trading because we didn't have new rules of the road in place? in the 15 months that i have had the honor of serving in this senate, i can't think of a piece of legislation that better represents what's good about this united states senate. folks on both sides of the aisle, coming with their ideas, trying to fashion a good piece of legislation. i can't think of an area where there is less traditional partisan left versus right, democrat versus republican divides. i can't think of an applause line better whether i'm talking to a group of liberal bloggers or folks from the tea party than the notion that we have got to

end taxpayer bailouts. so i believe and i urge my colleagues on both sides of the aisle let's get through the procedural wrangling, let's find that common ground that i think we're 90% of the way there, let's pass a bill that gets 60, 70, 80 members of this united states senate and set financial rules of the road that will last not just for the next congressional session, but for decades to come. mr. president, i yield the floor. a senator: mr. president? the presiding officer: the senator from new hampshire. mr. gregg: mr. president, i wanted to rise to speak on this bill also. it's a complex piece of legislation that's difficult to debate in a sense that is understandable because there is so much technical -- so much of a technical aspect to the bill, but let's start with the purpose, what i believe our purposes should be. our purpose would be, one, to do as much as we can to build a regulatory regime which will reduce the potential for another event, the type of which we had

in the end of 2008 where we had a massive breakdown in the system, financial system of this country, and as a result of huge systemic risks being built into the system which wasn't properly regulated and certainly was not handled correctly by either the financial institutions or by the congress. congress maintains a fairly significant responsibility for the meltdown that occurred at the end of 2008 for the policies that we had running up to that period in the area of housing. that should be our first goal. prospectively, trying to reduce systemic risk as much as possible in the system through putting in place policies which will do that and accomplish that. the second goal should, however, be that we maintain what is a unique and really rare strength which america has, which is that we have the capacity as a country to create capital and credit in a very aggressive way

so that entrepreneurs who are willing to go out and take risks have access to capital and credit, and that creates jobs and that creates the dynamics of our economy. and we shouldn't put in place a regulatory regime that overly reacts and, as a result, significantly dampens our capacity to have the most vibrant capital and credit markets in the world while still having a safe capital and credit -- safe and sound capital credit markets. now, the bill that the senator from connecticut is bringing forward, i presume, is going to have a lot of different sections in it. i just want to focus on one, because it's become the point of significant attention and that's the derivatives section. derivatives are extraordinarily complex instruments and there are a lot of different variations of derivatives. they're basically insurance policies on underlying product that is occurring somewhere in

the economy. and their notional value is almost staggering. $600 trillion of notional value out there in derivatives, which is just a number that nobody can comprehend, but you can understand it's a pretty big issue. notional value means, of course, that if everything were to go wrong at the same time, you'd have $600 trillion of insurance sitting out there that had to be paid off. that's not obviously ever going to happen, but the fact is it shows the size of this market and what its implications are. and all sorts of different elements in this market. and it's one monolithic market. its not even a hundred, it's thousands, tens of thousands of different and various things that are being -- having derivatives run -- written against them, although they divide into pretty understandable categories. within the bill that came out of the agriculture committee, there was a, well, for lack of a better word, an antipathy

expressed towards the entities which presently manage the derivatives markets in this country, which are essentially the large financial houses, and there was an equally antipathy expressed relative to the entities that use these derivatives, including large amounts of manufacturing companies in this country, people who are dealing with financial debt instruments in this country, people who are dealing with the housing markets in this country. it was almost as if somebody sat back and said, we really dislike these folks and we're going to put in place a regime which will sort of gratuitously penalize them for the business that they do because we just don't like it. it's too big, it's too complicated and i think the people who wrote it felt it wasn't understandable and, therefore, they decided to -- to take -- put forward proposals which will fundamentally undermine the capacity to do

derivatives in this country. is that bad? yes, it's very bad, because derivatives basically are at the -- are used for the purposes of making commerce work in our nation. of making it possible for people to borrow money in our nation, of making it possible for companies to sell overseas in our nation, making it possible for people to put a product in a -- in the stream of commerce and presume that when they enter into an agreement on that product, the price will be not effected by extraneous events such as fluctuations in the currency costs or fluctuations in material cost. so it's really critical that we get the derivatives language right. now, there needs to be a significant and new look at the regulatory regime of derivatives. and the essence of the exercise should be transparency, maintaining adequate capital for the counterparties and margins, liquidity.

that should be where we focus our energy. trying to make sure that the different derivatives that are brought to the market are as transparent as possible and also have behind them the support they need in the form of collateral, capital and margin to, if something goes wrong, be paid off, for lack of a better word. this proposal, however, as it came out of the agriculture committee, doesn't try to accomplish that. rather, it tries to essentially eviscerate the use of derivatives as products amongst a large segment of our economy. it sets up something called section 106, where it essentially says that the people who are doing derivatives today, which are for the most part large financial houses, must spin those products off from their financial houses. now, that sounds in concept like a reasonable idea, especially if you were in argentina in 1950

and working for the peron government. but as a very practical matter, it's a concept which will do fundamental harm to the vitality of our economy. why? because you won't have a lot of derivative products in this country that will be able to pass the test of being spun off. you don't have to listen to me to believe this. let me just quote from a message that was sent to us by the federal reserve, which is reasonably fair arbiter in this exercise. they -- they really don't have a dog in this fight other than financial stability of our country. section 106 -- this is the fed talking, not me -- "would impair financial stability and strong prudential regulations of derivatives, would have serious consequences for the competitiveness of the united states financial institutions, and would be highly disruptive and costly, both for banks and their customers." that's about as accurate and succinct statement as to what the affect of this section would

be as i could have said. i didn't say it. nobody would probably believe me. the fed said it, the fair arbiter said it. now, why did they say that? well, it's pretty obvious, if you know anything about the way these products work, but essentially if you spin off these products, you're going to have to create entities out there to replicate the entities that they were spun off of. so if a large financial institution is now doing derivatives and you spin the derivatives desk off, the swap desk off from that financial entity, that spun-off event is going to have to replicate the capital structure of the financial institution which was basically underpinning the derivatives desk. and so that capital structure is estimated to be somewhere in the vicinity of a quarter of a billion -- a quarter of a trillion dollars to half a trillion dollars.

of capital will have to be created. well, what's the affect of that? when you start putting capital like that into the system, that capital comes from somewhere, assuming it comes at all, it comes from somewhere. and where it comes from, quite honestly, is the credit worthiness of other activity. it's not new capital. it's taking capital and recreating an event, a freestanding entity here, which capital isn't around. it also will mean that there will be a contraction -- and this is an estimate not of the fed but of the group of entities that actually do this business and, therefore, it can be called suspect, but i think it's in the ballpark. it will take a couple hundred billion dollars. it will also cause a contraction of about $700 billion in credit in this country, to say nothing

of the fact that if you're looking for a derivatives contract and you can't go to the financial houses that usually do it in the united states and you're a commercial entity or a hedging group, you're going to go overseas and do it because they aren't going to have these types of restrictions. and you're going to be able to buy that contract in singapore. so a large amount of entities, a large amount of business will move offshore almost immediately upon the passage of this bill should this section be kept in. and is it necessary, is the question. is it necessary to make the derivatives market work right in this country? absolutely not. this is just punitive language put in out of spite because there is a movement in this country and in this congress, unfortunately, which i call partnering populism -- pandering populism, which just simply dislikes anything that has to do

with wall street -- sure, they did a lot of things wrong and they caused a lot of problems -- but if you're going to apply the problems that occurred here fairly, we should be looking in the mirror at ourselves for a lot of things that happened in the economy, by forcing things on a housing market that couldn't sustain it. it's just penal. that's the purpose of this, punitive. and in the end it's going to cut off our nose to spite our face because our -- it will be our credit that contracts and it will be our business -- and business can be done and could be done in a very effective way here in the united states overseas. what should be done here, what should be done rather than this exercise, as the fed has said, in causing a highly disruptive and costly effect on banks and their customers and having serious consequences on the competitiveness of the united states? remember, we are competing in the world. that may have escaped -- escaped the attention of the agriculture committee when they wrote this language, but we are in a world

competition on the -- derivatives are not a unique american product. they are a world product. so these are jobs that go overseas, this is credit that goes overseas, this is business that goes overseas, this is main street that will be affected by this language. how should it have been done? well, it should have been done in a rational way, not in a punitive way. we know that the derivatives market was not transparent enough. we know that there was not enough capital, liquidity, margin, whatever you want to call it, behind the products and the counterparties that were exchanging products in the derivatives markets in the over-the-counter system. we know, because we got a.i.g. as example number one, that a tremendous amount of c.d.s.'s especial remember being written with nothing behind them except a name -- especially being written with nothing behind them except a name. we can fix all that and it can be fixed in a way that almost everybody is comfortable with

by, first, making sure that only the exempted products from going to a clearinghouse are products which have a specific commercial use and are customized and are narrow. and that the people doing those products are not large enough in their business so that there are systemic issues. secondly, we put everybody else on a clearinghouse. what's a clearinghouse mean? well, it essentially means there will be a third party insurer, or holder, of the basket of assets necessary to support the derivatives contracts. so that we are fairly confident that when a trade is made on a clearinghouse, the counterparties have the liquidity and the margin behind their positions to support their trades. at the same time, the clearinghouse itself must be structured in a way that it has

adequate capital. and where's that capital going to come from? it can only come from one place, really, it comes from the people who trade in these instruments. they're going to have to put up the capital. and the regulators -- s.e.c., cftc -- will have direct access to controlling and making sure that that capital is adequate in the clearinghouses and making sure that the clearinghouses are adequately monitoring the contracts. and then as the contracts become more standardized -- and they will and they can, we all accept that -- they move over to exchanges, where they're basically traded like stock and then you've taken -- then you have absolute transparency, price disclosure and you -- you don't have the issue -- issues of the over-the-counter market that caused so much problems for us. and that will happen. that will happen almost naturally, but you could have the regulator stand up and say,

well, we think this group of derivatives is standardized enough and you've got to move it to an exchange. we could give that power to the regulators. that makes sense. but it would happen naturally anyway as we moved on to -- as these clearinghouses become more effective and standardizing the products and people become more comfortable with standardized products in these areas. and, of course, there would have to be realtime disclosure to the regulators of what the prices were if they are o.t.c. prices or clearinghouse prices so that they know what's going on. and then it would be up to the regulators to decide when that information should be disclosed to the markets, depending on how you make these markets. sometimes you can't disclose information immediately, otherwise you wouldn't be able to make a market, otherwise you wouldn't be able to do the contracts and, therefore, you wouldn't be able to do the business which underlies the need for the derivative. so all of that could be done.

all of that could be done, and it does not require creating this entity or these series of entities out there which the federal reserve has described as impairing the financial stability and strong prudential regulation of derivatives. in other words, what the federal reserve is saying is that when you go the direction of what is being proposed in the agriculture committee in the area of derivatives and set up this independent swap desk, you're not making things stronger in our financial structure. you're making them weaker. you're significantly reducing the strength of the regulatory arms that guide the derivatives or oversee derivatives, and you're also, as imansed earlier, creating -- as i mentioned earlier, creating an almost guaranteed-to-fail situation with regard to the need for capital to support these transitions.

it's just -- it just makes no sense at all. you know, to begin with, derivatives are, by definition, a bank product, sod idea that they have to be spun out of banks and financial institutions is on its face absurd. really absurd. and just counterproductive to the whole purpose of doing derivatives, which are very important. you know, the congress recognizes that. in gramm-leech-bliley, we call derivatives a bank product. we understand that then. we seem to have forgotton now. you know, i have real estate been trying to figure out what's behind this type of language, because it's so destructive to our competitiveness as a nation, really. i mean, this is the type of thing, as i said earlier, you would have seen in argentine tha--argentina in the 1950's, an tashing on entities simply

because they're large and because obviously there's a populous feeling against them. winds up, by the way, significantly -- which ends up, by the way, significantly affecting mainstream in a negative way. look at a argentina, in 1945 -- 1937, somewhere in that period, they were the seventh-best economy in the world. now they're like 54th or something. it is because of this populous movement which has driven basically their ability to be competitive offshore. so now we have this huge populous movement here. i'm trying to think, what really is the rationale here other than just rampant pandering populism? a vote occurred in the budget committee last week, which i happen for ranking member on, which crystallized the situation for me. senator sanders from vermont,

who i consider a friend and i enjoy immensely, a great guy, a great sense of humor -- but we disagree son a lost thifntle he runs as a social iflt. i run as a conservative. senator sanders offered an amendment which said that the government -- the government would be four or five people down ototreasury or three or four people down oto-- i don't know where they'd be, some new office somewhere -- has the right to break up large corporations. didn't say "break up large corporations which had problems." which had overextended themselves, which everybody agrees should happen. that's what senator warner was talking about. he's done extraordinary work in this area, and i'm eelly supportive of his -- and i'm rulely support of it of his efforts in resolution thomplet where if a big bank, a big financial house or big entity gets into trouble, they've overextended themselves, they're essentially insolvent, they get broken up.

there's no -- the taxpayers do not come in, in any way, shape, or manner, and support that entity. that's what the warner-corker language does. i believe the senator from connecticut has tried to incorporate a lot amount of that. that should be our policy. but what the sanders amendment said was that any bank, any financial house could be broken up simply because it was deemed to be "big." no matter how resilient or strong it is, no matter if it is a major player for our nation and being more competitively internationally -- remember when an american company goes overseas, they want to use an american bank. they don't want to have to use the credit suisse or the bank of singapore. they want to use it an american bank to follow them around the world. those banks have to be pretty

big to do that. this language would have said, no matter how strong and profitable you are and how much -- how robust you are, how much you contribute to the american financial system -- we need large financial institutions that can support very complex, sophisticated international activity and come to stuck economic activity -- that they would be broken up because a group of people here in washington didn't like them for social policy, social justice reasons. they didn't lend enough men to some group that they wanted to lend to. or they lent too much money to some group they didn't want money lent to. for social reasons we'll break up this company even though this is strong and fiscally responsible. that was the policy proposed in the budget committee. ten people voted for that policy. ten. ten out 2692 people who voted

volted for thavoted for that po. where does that stop? where does that stop in where does this section 106 stop? do we break up wail mat because they're not union? do we break up mcdonald's because they sell foods that some people think makes you too fat? do we break up coca-cola because they have too much sugar in their products? is there anything in this country that gets broken up because there is an attitude that big is bad, whether it contributes or not, unless you happen to be big and union, in which case you get saved, as the u.a.w. was able to work out for g.m. and chrysler. this language isn't about fixing the derivatives market at all. you can fix the derivatives market in a most comprehensive

and substantive way that keeps americans the best way to create these types of product peds in the most sound and safe way. you can do that. as i've outlined pretty specifically how you would do it, without this section, which i will close by reading one more time how the fair arbiter has defined it, the federal reserve. this is such a damaging section that it cannot be underestimated the damage that would be done to our economy were it to be approved. section 106 would impair the financial stability and the strong regulations of derivatives, would have serious consequences for the competitiveness of the united states financial institutions and would be highly disruptive and costly both to the banks and their customers. and, remember, their customers are the people that work on main street for the dhaps use derivatives. and almost every company in this country of any size uses a

derivative to hedge their risks. ironically, this is all done in the name of social justice because wall street is bad. so we're just going to go out and cut off our nose despite our face. it is incomprehensible that a nation which has become as strong and as vibrant as we have by promoting a market economy would decide to go down this route. which is the an tinge me of a market commitment of but that's where we're. that's what's happening. that's the direction we're going. unnecessary, by the way, as i said earlier. unnecessary. because a derivative can be made safer and sounder by simply restructuring the transparency and the manner in which they are put on clearinghouses, limiting

the amount of those that are subject to exemption and pushing people towards exchanges to the fullest extent possible and to the extent it will work. all of that can be done without this diploma type of language, s so destructive, and uke, and, ae federal has said, will have the direct opposite efft of what it is alleged to do. mr. dodd: i thank my colleague from new hampshire. and and i are great friends. we've worked on a number of issues together. in a number of months, both of us will be former members of this institution. let me express my gratitude to him for his service over the years and his commitment to these issues. he has focused his ateption on the if i can matter coming -- he has focused his ategs on the particular matter coming out of the agriculture committee.

that proposal was supported by democrats as well as my colleagues know a republican on a committee, my colleague from arkansas will point out, as i'm sure we've heard already, thrfsz at least an appearance of bipartisanship on this bill. he raises some very important issues. there are a number of our colleagues which have strong feelings, different than those of my friend and colleague from new hampshire. as he knows, otherwise it would have have come out of the committee with the vote it did. therefore, the subject of a debate in this chamber. and i should, of course, have begun by thanking him as a member of the banking committee for his participation and involvement in our product in the banking committee. and the issue before us in the next few minutes as to whether or not we can have this debate on these issues, and again, as my colleague from alabama has pointed out on several

occasions, where 80 or 90 percentage are there in terms of agreeing in a major part of what our bill proposals. obviously we're not only there. but you can't ever get all there in one of these debates before you actually have the opportunity to do exactly that, where members have the chance to be heard, to raise their ideas, a different point of view than my friend from new hampshire, who feels as passionately as he does about their point of view. and that is the purpose for having a debate and an institution like this for that debate to occur. and so my hope would be again that when this motion to proceed occurs, even though you may have -- you may share the views of my friend from new hampshire or you may have an alternative view -- certainly as is the case in major parts of this bill, as i have writton along with my complete -- whitten it along with my committee members, that is the purpose for which this

institution exists to have that debate. no one member no one committee no handful of members should even suggest that they have the right to write the legislation without the consideration of others. so there is a difference of opinion on these matters. i see my colleague from vermont. mr. sanders: would my friend yield forea fe for a few minute? mr. dodd: you better take the next three minutes. mr. sanders: i will do what i can in three minutes. the presiding officer: the senator from vermont. mr. sanders: my good friend from new hampshire, my colleague from across the river, apparently does not have a problem with the issue that the largest financial institutions in this country that we bailed out because of their recklessness, greed, and illegal behavior have since the bailout become even larger. three out of the four major financial institutions, all of whom were bailed out, have

become larger, and no matter what anybody tells you, when one of these institutions is about to tip over and take a good part of the economy with them, despite the rhetoric today, people are going to be bailing them out. they're going to lose millions of jobs if you don't. now, mr. president, the reality is that we have a situation now where the top six banks in this country, despite when the senator from new hampshire has suggested, now have total assets in excess of 63% of g.d.p. we're talking over $7 trillion. now, when you have six institutions with 63% of total assets compared to g.d.p., i think you've got a problem.

and you've got a problem for two reasons. number one, they are -- you have a problem in terms of taxpayer liability and the fact that we will once again have to bail these behemoths out. but, second of all, as teddy roosevelt told us 100-plus years ago, it's time to break these guys up because they have incredible concentration of ownership over our entire economy. it is incomprehensible to me that the senator from new hampshire can be comfortable as a conservative -- doesn't like big government but apparently doesn't mind huge, huge financial institutions. so i think that anyone who is not worried about the concentration of ownership within our financi