quorum call:

quorum call:

quorum call:

mr. brown: mr. president? the presiding officer: the senator from ohio is recognized. mr. brown: i ask unanimous consent to dispense with the quorum call. the presiding officer: without objection, so ordered. mr. brown: i ask unanimous consent that any time spent in the quorum call on the motion to proceed to s. 3217 during today's session be divided equally between both sides. the presiding officer: that was previously ordered. mr. brown: mr. president, i have ten unanimous consent requests for committees to meet during today's session of the senate. they have the approval of the majority and minority leader.

the presiding officer: without objection, so ordered. mr. brown: mr. president, i ask unanimous consent that these requests be agreed to and these requests be printed in the record. the presiding officer: without objection, so ordered. under the previous order, the senate stands in recess until 2:15 p.m.

>> more now on that financial regulations bill pending in the senate. assistant treasury secretary for financial institutions michael barr spoke yesterday about it to a conference of independent community bankers meeting in washington, d.c. his comments are about 10 minutes by analysis by charlie cook of the "cook political report" on the impact this issue is likely to have on upcoming midterm elections.

>> that's what i would like to talk to you about this morning. just over a year ago, when president obama took the financial system, as you all know too well was teetering on the edge. a failing financial system threatened to drag the economy into depths of another great depression. desigh sieve action staved off the worst but the cost to every american has been devastating nonetheless. many have seen their house values drop precipitously, their savings threatened, jobs eliminated or reduced, their small businesses lose financing. the administration is pursuing a broad range of initiatives to help american families recover. they're are encouraging signs that recovery is beginning to take hold. administration's strong steps to restore confidence in the financial system help to lay the foundation for growth. the recovery act enacted by congress, signed into law by president obama, has helped businesses keep their doors

open, and workers keep their jobs. but at this juncture we need hens sieve financial reform to rebuild our economy on a more stable foundation. the crisis reminded us painfully, painfully how much larger economy depends on a well-functioning, banking and financial system. our system itself was unstable. so unreliable it could collapse seemingly overnight. it was inefficient funneling trillions of dollars into a housing bubble instead of productive investments that would grow the economy over long term. it was unfair, as community banks lost market share to less responsible competitors using risky tactics that hurt responsible families and small businesses. reform is about security for family and their savings. it is about laying the foundation for investment in small business and entrepreneurs. it is about the creating a level playing field for responsible, financial service providers.

it's about promoting the growth we need to create jobs. we're at critical time in our efforts to pass financial reform. we have a chance to enact the strongest, most importantal reforms since those that followed the great depression. we need to get the job done so that our country can focus all of its full attention on healing damage that has been inflicted and rebuilding a sustainable economy for the future. i want to talk today about five reasons that we need reform, and we need to get it done now. secretary geithner repeatedly laid out this clear-cut case for reform. the five reasons why we need reform. the first reason, is that failures in our system were devastating. in the last two years, more than 8 million people have lost their jobs. too many small businesses have closed in your community, and others are struggling to find the credit they need maintain operations and hire. american families have lost

trillions of dollars in savings in home equity. damage, particularly to the middle class has been greater than in any financial crisis in generations. many factors contributed to this crisis, including unrealistic expectations about rising home prices, and widespread failures in corporate risk manage. we will debate other causes for years to come but there can be no dispute that the crisis was also the result of failures in government oversight, due in large part to a financial regulatory system so open to arbitrage, that it permitted a fast and furious race to the bottom in standards. as community banks no first-hand, we weak fragmented regulation and enforcement has been recipe for a vicious cycle. financial service providers were able to shop for the weakest regulation and most compliant regulator. explosive growth in less regulated sectors allowed risk and leverage to build up even as it applied pressure on traditional

banks to loosen their standards. regulators did not keep from falling. by the time they acted to provide basic standards for sale and underwriting of subprime mortgages, the subrhyme mortgage explosion was nearly over. the country was already heading towards the worst financial crisis in generations with a regulatory system that did not provide sufficient buffers and tools to minimize damage from failing firms. and these were the tragic and devastating failures that should never ever be repeated. the second reason we need reform now is that the crisis has proven market discipline alone is enough. we all agree that market discipline is necessary and beneficial. but this experience has demonstrated that market discipline can not effectively compensate for weak oversight or regulatory gaps. at its peak the shadow banking system, companies that engage in the business of banking, but are not regulated as banks, finance roughly 8 trillion in

assets. the shadow system grew almost as large as the traditional banking system. it operated with little if any regulation on the assumption that market discipline was sufficient but the market did not effectively discipline companies in the shadow banking system. they aaccumulated massive risk and pressured traditional banks to engage in many of the same unsustainable practices. when investors finally lost confidence, the resulting run on both the shadow and traditional banking system put the eneconomy in jeopardy. we can not rely on the same failed strategy and same failed regulatory system going forward to be stable and efficient, markets need common sense rules of the road. we need to bring derivatives trading out the dark. we need to reform our securitization kets and credit rating agencies we need to be sure that large interconnected financial firms are subject to comprehensive capital and supervision standards, whatever their corporate form. the third reason we need

reform now is to generate innovation, efficiency and economic growth. one of the great strengths of the american financial system has been way it channeled savings to finance future invasion. in run-up to the crisis that same system invested trillions of dollars in a housing bubble while underinvesting in innovation, infrastructure, new technologies, and entrepreneurs. the business community can not afford to leave the debate about financial reform to the protectors of wall street. we can not let the weakness of the current regulatory system remain, lest our economic recovery be erected on a crumbling foundation. now the fourth reason that we need reform is that we're more vulnerable than ever to future crises. the obama administration, when it took office acted quickly to break back of financial panic, recapitalize the system and reopen mark for equity capital and debt. we succeeded thus far at much lower cost than almost anyone expected.

if congress adopts the president's financial crisis responsibility fee, we'll succeed the at zero cost to the american taxpayer but we are still living still living with the same flawed financial system that brought us to this point. without reform the very success of the crisis response makes future crisis more likely. without reform, the expectation that some firms are too big to fail will survive. and risk will build up again in parts of the financial system where regulatory authority is lacking. we've got to close these loopholes so no major firm escapes serious oversight. we must have comprehensive reform of our financial markets including for derivative transact and securitization of mortgages. we must consolidate federal consumer protection into truly accountable and independent body with resources to maintain standards in every corner of the market. we must end the corroding

perception of too big to fail. [applause] the final reason we need reform today, delay will increase uncertainty, and it will undermine growth. even with improving markets many banks are reportedly lending less in part because of their uncertainty over the path of reform. delay hinders economic growth prolonging uncertainty. delay hurts community banks and their customers. american families and businesses still struggling to rebuild what has been lost. everyone needs a stable and predictable financial system. one where all financial services providers are held to the same minimum federal standards, and concentrate on the hard work of recovery. we can not afford any further delay. now opponents of reform who are seeking to delay or weaken it are not speaking to real interests of community banks or small business, or american families.

opponents of reform are seeking to protect vested interests that have benefited from the flaw in the regulatory system and want to perpetuate those flaws. the senate bill under consideration offers significant benefit to community banks. the bill contains strong measures to put an end to the perception that some firms are too big to fail. this perception has given largest firms an unfair funding advantage over smaller banks. the bill would explicitly mandate a failing financial firm, a big firm, like the firms that failed in this last crisis, would be sold off, broken apart and liquidated. culpable management would be replaced. creditors would be allowed to suffer their losses and shareholders would be wiped out. by requiring assessments on largest firms in the financial industry to recoup any expenditure, the bill makes absolutely clear that large financial firms, not taxpayers, not community banks, would bear any costs associated with the resolution of a failed large

financial firm. [applause] now, anyone who argues the senate bill perpetuates taxpayer bailouts, just hasn't read the bill. the bill would level the playing field for traditional banks by applying the same minimum standards to unregulated financial firms, in shadowing system that compete with you. today, more than 15 times as many federal dollars for example, are spent on consumer protection oversight of banks as on non-bank financial service providers. the senate's bills bureau of consumer financial protection would have a mandate to address that imball and insure high standards across the marketplace. community banks would continue to follow the same federal consumer laws they follow today but with as urns iss that competitors would be held to the same high standards -- assurance. consolidating consumer protection into singleable

body will prevent largest banks from shopping for the weakest protection standards. consolidation means government could act much faster to addressee merging issues. months rather than years it took federal agencies to set common sense rules of the road on subprime mortgages. consolidation means that a single federal agency can and should be held accountable for examining and forces federal law against the financial service providers that pose the most risk to consumers in fair competition. very large banks, companies in the mortgage business, and other non-bank financial service companies. in the coming days and weeks we'll be pressing to finish the job of financial reform. the urgency reform is increasing. not he decreasing, as the crisis recedes. it is now been 2 1/2 years since the crisis started. it has been ten months since president obama first laid out a proposal for reform. and it has been four months since the house passed major reform bill. now, the senate is preparing to act.

as the president said last week, wall street reform is an essential part of the foundation for economic growth. as we seek to provide this economy, it is incumbent upon us again to rebuild it, stronger, than before. we welcome the significant contribution to community banks can make, to common sense reform and to recovery of the broader american economy. thank you very much. [applause] >> the independent community bankers conference also took a look at what impact the financial situation in the u.s. may have on the upcoming midterm congressional election. they heard from political analyst charlie cook of "the cook political report" for about 50 minutes. [applause]

>> charlie, i already did your introduction. >> oh wow! [laughter] >> it was great by the. >> thank you. thank you. they all applauded. >> my mother appreciated it. you thought they were teasing about the latest information. hang on a second, something that literally just did come through. although you just have been listening to senator shell, hang on a second here. why are we not working here? okay. yes, abc, "washington post", abc, approximately 2/3 of americans support stricter regulations of banks and financial institutions conduct their business. you knew that. thank you very much for having. you know what a lot of you may not realize is when i started my business, my "cook political report", 26 years ago, it was with my $6,000 out of senate retirement fund and a

$10,000 loan from a small community bank in mississippi that my father-in-law -- [applause] my father in law colined it, cosigned it. and anyway. i'm not sure, actually, who is here from mississippi? anybody? no, no, no? i'm not sure the bank of hollen dale, mississippi still exists they got paid off, i assure you that. would be interesting to do a survey of american business, find out when you first started where did you get your first money in? my guess the folks in room and your predecessors are responsible for a whole lot of those loans but thank you very much for having me. normally i tell a bunch of jokes at the front end, you know all like that, but the problem is we've got so much to about this morning that would chew up too much of my time. let's stipulate that i'm extremely funny, and, move

on. [laughter] we've got meat and poe tates here i don't want to into. when i sort of step back, i'm going to sort of start off at 50,000 feet and kind of work my way down, when you, think about three numbers, 4012, and 14, then think of circles and you say what is this guy talking about? think about for a second, for 40 years, from 1955 through 1994, democrats had control of the u.s. house of representatives. 40 years. and during that time you had a big chunk of the cold war. the civil rights struggle, vietnam war, three tragic assassinations. you know, watergate, you gosh, i haven't counted up how many recessions we had during those 40 years. the thing about it a lot went on during 40-year period of time, yet through the whole 40 years, 20

consecutive elections, democrats had a majority in the house of representatives. you think of everything that went on in american society, everything that went on in our country, 20 consecutive elections democrats had the house. in 34 out of those 40 years democrats also had a majority of the senate. in 26 of those 40 years, republicans had the white house. and so, here you had this incredibly tumultuous period in america and yet our political process was really remarkably stable. then in 1994 you had, it was president clinton, remember, first term, midterm selection. you had newt beginning republican led tsunami tidal wave election that swept democrats out of the house first time in 40 years and senate, democrats had 34 out of 40 years. for the next 12 years, republicans had control of the house and for much of that time, also controlled

the senate. president was evenly split during that period of time. then in 2006 you had another tidal wave election coming in although this was a democratic tidal wave election that was washing republicans out. so in 2006 republicans lose their majorities in the house and senate. so here we are in 2010, jugs four years after that last wave election and we're looking at another wave. and, the question is do democrats, they're, democrats are almost certainly going to lose their majority in the senate. the thing is, they're barely lose, they're either going to lose the house or come really close to losing the house. i personally think they're more likely to lose it than not but it is a close call. there are lot of very talented people on the other side that equation from me but everybody agrees that the house is in very, very real danger. now if you think about it,

40 years, 12 years, maybe, four years, it's like the circle is getting tighter and tighter, faster and faster. and i think what this is telling us is that voters are getting increasingly less patient, less tolerant with their elected officials and with their parties. think about the old burger king commercial, have it your way. well right, voters want to have it their way, and they want it their way now and they're getting very itchy trigger fingers and just as they turn republicans out four years ago of the guess and republicans out of the presidency two years ago, they may be throwing democrats out of the house of representatives this time. but, boy, it is, as i said, an itchy trigger finger. and i say that because although, the grate former speaker, late speaker house, tip o'neill used to say all

politics is local, and that is one of the most widely quoted lines in american politics, the charlie cook variation of that is all politics is local except when it's not. that is deeply profound stuff here. but the thing is from time to time, we have, you know, most elections, all politics is local. and you look at a state or a aggressional district or a state senate or state representative district, and you study the people, and you know, in that place, you study did the voting patterns in that place. you look at the candidates, the campaigns, the issues. you know, who has got money who isn't, that sort of thing. and, you could pretty much figure out most cases who is likely to win a general election there, the kind of stovepipe. but occasionally we have these elections where all politics isn't local. go tell a democrat during that 1994 gingrich tidal wave election that all politics is local.

they will think you're crazy or republican in 2006, they will think you're crazy. and so you have to just kind of be aware that from time to time, we have these wave elections where there is like an invisible hand that is pushing the candidates of one party forward and pulling candidates of the other party backward. in those kinds of elections, independent voters general are swing overwhelmingly in one direction. undecided voters usually swing overwhelmingly in one direction. one side's voters are really motivated. another sides voters are lethargic. big things tend to happen in these wave elections. the other thing to remember, these midterm elections, they're not just sort of a preference between parties or in a lot of cases not even preferences between candidates. people are not saying well, gee, i think i like republicans more than democrats this year, or i think i like democrats more than republicans. that's not -- midterm

elections are referendum on the party that's in power. now sometimes if you have one party with white house and one party in congress or congress is split, it gets kind of complicated, not quite as clean cut but when party has presidency, the house, the senate, oh, and, a majority of governorship, then in that circumstance, there's only one place, if anybody is unhappy with anything, there's only one party to blame. so that's why this business and i will talk about this in a few minutes, well they don't like either party, or, they're upset with incumbents of either parties. don't, don't buy that because, it's generally, it is a referendum on the party that's in power. some first term, midterm elections are worse than others but boy, one common denominator with the exception of the midterm election right after 9/11, the party holding the

white house, you know gets hit in those first term, midterm elections. let's step back for a second and about the parties and, you know, we tend to think of this as a two-party. increasingly almost like we've got three parties. now, gallup organization, they're doing interviews every single night. then they lump them up by weeks and months and by quarters. coming out with, they have a new designed web site. lots of really good stuff. when gallup asks the question, generally speaking do you interest consider yourself a democrat, republican or an independent? then they ask the independents, just straight party identification then they ask the independents do you lean to the democratic side or do you lean to the republican side just to get another cut on it. when you do that and you sort of push the leaners each way, for the first quarter of this year, democrats, 46%.

republicans, 45%. and then 8% in the middle that are independents don't lean either way. they're what we call pure independents. now, compared to the fourth quarter of 2008, when democrats won the presidency, and picked up that second big wad of seats in the house of representatives and in the senate, democrats were nationally up by 11 points. in the fourth quarter of 2006, they were up by 14 points. so this majority was built in elections when democrats had party identification advantage of 11 and 14% in what we call lean party identification, and now they have an advantage only one point. wow!, that is kind of a warning sign. if, don't push the leaners and just leave democrats, republicans and big wad of independents there, it is 32% for democrats, 28% for republicans, and 39% the

independents, the people that to do the swinging, swinging around a lot. the thing is, reason, using that measurement, at the time of 2008 election, democrats were up by seven and republicans were up by six and now they're up by only four. so you can see there has been real erosion on party identification situation. now let's look at each of the parties. let's talk about the 32% of the american people, of the voters that are pure democrats, that aren't leaners, they're, they, independents who lean democrat. they really are democrats. the president has an 86% job approval rating among these democrats. 86%. and generally speaking, you could say that these democrats, they love president obama, they may have misgivings about some of his policies, the troop surge in afghanistan, lack of a public option on health care, offshore drilling, support for building nuclear power plants but basically they're loyal to the guy.

they love the guy. now, they love president obama but they kind of like the democratic congress. now these are democrats. they are not real enthusiastic at all about their friendly neighborhood democrats but they are are really, really loyal to president obama. you go over to the republican side, 28% pure republicans. the president's approval rating is 12% among republicans. i'm not sure who the 12% are. i haven't seen many lately. i did see a decent number of republicans that actually voted for him in november 2008, but a lot of them fell by the wayside during the spring and summer of last year. now, i don't want to say these republicans hate president obama. let's just say they really rye really, really, really, really intensely dislike him . . it's interesting that even when they agree with him on something like the issues i mentioned

before the -- that there's an ulterior motive. i know there's something behind that. i know he can't possibly be right on this issue, you know? there's that assumption. but the thing about it is, even though they really, really, really, really intensely dislike president obama, they actually loathe the democratic congress. they're just loathe, despise, hate, pick your word. they really, really are not big fans of speaker pelosi, majority leader harry reid, the democratic congress. boy, there's an even greater intensity there. now, you kind of expect okay your team is going to love you. the other team is going to hate you. you kind of expect. but it's the independents to me that are the really interesting people. and when you sit behind the glass in a focus group or you look through the polling data and you try to understand these independents, they really are a

different, different kettle of fish than the other two. and among that 39% that are the big lump, big group of independents including the leaders, president obama has a job approval rating of about 45%. you know, he had been above 50% until sort of the second half of the summer. and he started dropping down. now, among these independents, they like president obama personally, the polls show. and they think he's really bright. and they think that the symbolism of his presidency of having an african-american president -- they really like that. but as i said, starting about the middle part of the summer, they began dropping sort of out of the approval column. and you started seeing them questioning, gosh, i thought he was a centrist. or i thought he saw the role of government in the same way i did.

and while they still like him and respect him, but they're beginning to think that he's not exactly who they thought he was or to put it differently, this wasn't the cruise they signed up for. now, whatever affection and respect that they do have for president obama does not extend to the democratic congress. they're really, really unhappy with the democratic congress. it's not quite loathing like among republicans but it's a pretty potent feeling. that's the way i sort of slice up the electorate. now in my business, there are two kinds of elections. there's normal elections and then there's sort of abnormal elections when you have these waves. and what we look for is sort of diagnostic indicators that tell us is this going to be a normal election or is this going to be -- that other kind of election?

and maybe it's sort of -- this is probably a tortured analogy. but it's kind of -- you put the parties through stress tests sort of. you figure out how strong are they? and i like to think of the mid to late 1960s tv show "lost in space." and remember they had the robot danger, will robinson, danger, danger. what we're looking for are the danger signs, you know, any midterm election that it might be this other kind of -- this wave kind of election. and the first one we typically look at is a question that -- do you think the country is headed in the right direction or do you think it's off on the wrong track? dick worthland who was president reagan's poll sister used to say that was the dow jones indicator of american politics. in the latest poll, only 33% of americans think the country is headed in the right direction. 59% say it's off on the wrong track.

we start off with that and that just tell us the natives are very restless. then you looks like at congressional approval. and i used the gallup numbers for the the month of march. 22% approve of the job congress is do. 72 disapprove. now, among democrats, 41% of democratic voters approve. only 20% of independents, 7% of republicans. so first of all, for democrats, for the democratic controlled congress keep in mind they've got 59% of all the -- around 59, 60% of all the seats are held by democrats, 42% of the people in their own party isn't happy with congress but among the independents, the voters that are the real swing voters, which is where you get your mojo, only 20% -- 1 in 5 approve the job congress is doing.

boy, that's another danger will robinson, danger. then when gallup asked the question, do most members of congress deserve re-election, and among rentgistered voters s yes. that is a record low, lower than it was before the last two tidal wave elections in 1994 and 2006. and only 25% of independent voters think that most members of congress deserve re-election. and then but you always hear people say well, people don't like congress but they like their congressman. and we do hear that a lot. and so gallup asked the question, does the member of congress in your congressional district deserve re-election? and only 49% of the voters said yes, and that was almost a record low. and the no, my local member of congress does not deserve re-election was 40% which is a

record high. and by 46 to 43 independent voters said no. that's another danger, will robinson, danger, danger. when your opponent is starting off with 40%, i don't care who you are. i'm voting for you. wow, that's kind of interesting. independents going that margin. finally you look -- not finally but then you think of the party favorable/unfavorable ratings. and the thing you have to think about over the last decade, republicans did a remarkable job of destroying their corporate brand. i mean, they did a fabulous job. in a year and a half, democrats have basically replicated that feat. [laughter] >> and, you know, we saw the republican party's favorable ratings go -- you know, had been up in the mid-50s, dropped down in the 30s early last year.

right now in a gallup poll, 41% of americans rate the democratic party favorably. 41%. and 54% unfavorably. the republican party, 42% of americans rate the un-republican party favorably. 1 point higher. and 51% rate them unfavorably, which is actually 3 points lower. to give you a comparison in 2006, that wave election when democrats took control of congress, democrats had a favorable 52, unfavorable, 37. so they've had 11-point drop since then. and in 2008 it was 55 favorable, 35 unfavorable. you see that democratic party brand is now as badly damaged as the republican side but remember what we talked about earlier. this isn't even about preferences. it's the referendum on the party in power.

and finally you just sort of look at the president's job approval ratings and they're at 48, 49 which are not horrible. but they're basically on track where president clinton's were at this point and we kind of know what happened in 1984. i talked about party identification which is a lagging indicator. and then the final thing that we look at is what we call the generic congressional ballot test. and different pollsters ask it different ways. if the election was held today would you vote for the democratic candidate for congress core the republican candidate or some ask which party would you rather see in col. -- control. now, most of the time when you see it it's asked of just registered voters. all registered voters -- that means everybody that voted in a presidential election and the people who are registered to vote who didn't happen to vote in a presidential election, that

poll question asks all people. midterm elections turnout turns out to be a third lower than in presidential elections. and we know that even -- not knowing what kind of year it is, in midterm elections, it's more senior citizens are voting. fewer young people, fewer minorities. you kind of get the general idea. say, well, who are democrats -- who is the president the democrats are having problem with, older voters. who are they stronger with younger voters. and strong among, minority voters, weaker with white voters. so even -- the point is that these polls that we see among registered voters are inflating how democrats are doing. and so keeping that in mind, in both the pollster.com and all the polls tests, republicans are ahead. in the gallup poll republicans were ahead in the last two weeks.

we don't have but we'll get later today the numbers for this past week but for the week before the republicans were ahead by 3 and 4 points. in those two previous weeks but more importantly when gallup asked the question, how enthusiastic are you about voting in the midterm election or about this midterm election, and this was for the latest -- for the week ending april 18th, 45% of republican voters were enthusiastic. 45%, only 28% of democratic voters were enthusiastic. so 45 for republicans. 28, democrats. 27 independents. you could see that republicans are loaded for bear. nbc/"wall street journal" poll asks it a slightly different way. on a scale of 1 to 10 how interested are you? and in the categories of very, very -- very, very interested, 67% of republicans are very interested. 46% of democrats are very interested. so you sort of look at these

diagnostic indicators. and they tell you this is, you know, warning signs that something bad may be happening. -- may be happening to democrats. this is a bad -- you know, it's never a good time to have a bad election. boy, that's another profound one. [laughter] >> but there are worse times than others to have a bad election. and one of the worst times is an election that ends in a zero, because in elections that end in zero, that's the election where you elect the governors legislatures that draw the maps for state legislatures and congressional districts in most states for the next decade. so the thing is if you're going to get hosed, you really don't want to get hosed in the last -- the election of the census year when they pick the people that i have going to be drawing the maps. so that's one reason. but the second is democrats are

going into this election really, really overexposed. they're sort of at a high watermark based on part on what happened in 2006/2008. basically democrats had back to back great elections in '06 and '08 that have left them at a point where they have no place to go but down. you know, think back to 2006. president bush's job approval rating was 38% going into that election. now, president obama's job approval rating right this 48, 49, 50% which is not real sporty but imagine your party going into a midterm election when your president is at 38%. the war in iraq was at its low point going into the 2006 election. we had had a series of scandals, jack abramoff, bob ney, mark foley, scooter libby, the mood was pervasive. the republican voters were

lethat thissic. independent voters swung by an 18-point margin in favor the democrats and boom, democrats pick up 30 seats in the house and control the house. six senate seats and control the senate. big old election pushes them way up. then you had the 2008 election. now, president obama -- excuse me, president bush's approval ratings were not in the mid-30s. they were at 25% going into the november, 2008, election. the war in iraq was getting better but, oh, the economy had collapsed. the time for change movement was just as pervasive. republican reporters were still lethargic and not particularly energized by senator john mccain's candidacy. democratic voters were hypermotivated. and you had young voters and minority voters who were particularly worked up and energized and exercised and they were voting for barack obama and while they were there they were going to vote for anybody with a

blue jersey on. and then independent voters swung by an 8-point margin in favor of president obama. and while they were there they were generally voting for democrats, too. and lo and behold democrats picked up another 21 house seats on top of the 8 -- the 30 they picked up before. they picked up 8 senate seats on top of the 6 before. and the end result -- what we had focusing on the house is 53 democrats today that are sitting in seats that were held by republicans four years ago. they were '06 and '08 in subsequent special elections. we had 48 house democrats that are in districts that john mccain won, 47 are in districts that mccain and george w. bush won. and keep in mind, the margin the democrats and the house have is 40. and so they've just flat have a whole bunch of people that are in enemy territory. now, the senate is different because it has that six-year calendar but there's still some weird exposure there.

and let's face it, the -- you know, democrats are very, very, very, very likely to lose the seat, the senate seat that president obama had in illinois. the seat that vice president biden had in delaware. and the seat that ken salazar, who was democratic senator now secretary of interior -- you know, that he had is basically a toss-up. you throw in some -- the tough environment, tough retirements by byron dorgan in north dakota and evan bayh in indiana and yes there's some others but i'm combining the retirements and you have an unusually great level of just broad exposure in the senate as well. and so you think of that exposure, it's like, wow, this really is a bad time to have a bad election. and then you think of the economy. and, you know, with any recession, the party in party will have problems even if they inherited the recession. and if you have the worst economic downturn since the end

of world war ii, that's even more problematic. but the thing about it is, it's for than it should be for democrats because strategic decision, the calculation that president obama and the democratic congressional leadership made to focus last year on health care more than on economy and jobs, that's left democrats even more exposed than they would be in this kind of recession. remember in 1992 when he was running for president, bill clinton said if elected, i'm going to focus on the economy like a laser beam. what a great metaphor, focus like a laser beam. now, you could have a great argument about whether a president, a congress, a federal government -- how much they can affect the course, the trajectory of the economy and how much they could affect unemployment. but from the voters standpoint, they want you to give a college try, they want to focus.

and i would argue that every month, every week, every day, every hour that washington seemed focused on health care, and even if -- even for all those voters who think health care is important, the polls were pretty, pretty clear their preference was, hey, that's fine, that's nice. we ought to do that sometime. but we would rather you focus on the economy and jobs. that's what people were looking for. and so that's why democrats are particularly exposed at this point. on that. and then you sort of throw in the broader issue, the climate issue agenda. and one thing is that we have seen a shift in attitudes over the last year or two. in one poll question that gallup do you think government is doing too many things better left to individuals and business? 57%. only 38% say government should

do more to solve our country's problems. that's a 19-point spread. and that's the widest gap in a dozen years. and that gap -- it's fairly different from where it was a year or two ago. and where -- and it's sort of the opposite direction from where a lot of democrats would kind of like that kind of issue agenda to be. and i think there's something broader that goes on. this is kind of touches into what you folks know about for a long time. and i know i'm trying to -- it sounds like i'm trying to behave like a psychologist or something. but for many, many years people have been warned the government spending deficits -- that we had to get government spending and deficits under control. that we had to rein in entitlement spending. we had to worry about our national debt. and we had to get our own personal savings rates up. we were told if we don't get our fiscal house in order

collectively and individually, that the sky is going to fall. then came september, 2008, when lehman brothers fell, credit markets seized up, stock market plummeted and the american people were terrified. and they wondered if the skied fallen. now obviously what happened in september of 2008 had nothing to do with federal budget deficits and the debt and all of that. but the fact is the american people did, in fact, get in the head with something. they had long been warned about the sky falling. and it really kind of sobered them up. and it got them thinking about all those warnings from all those people all those years. and it kind of sensitized them to some things. and then you had t.a.r.p. you had various bailouts and takeovers. you had the economic stimulus package. cap-and-trade. health care. and then health care reform. and all these alarm bells started going off.

and particularly for republican voters. but even by pretty good degree among independent voters, not so much with democrats. now, the thing is with t.a.r.p. and, you know, this is something that you guys all know a lot more about than i do. it may have been imperfect. and i'm sure if fed chairman ben bernanke and hank paulson could do it over again, they would have probably -- they may have made some changes here or there. but the fact is, we were about to go off a cliff. and -- i mean, we were looking at an economic apocalypse. and it may have been imperfect and maybe it should have been done somewhat differently, but it did stabilize the credit markets. and it did keep us from going into something that looked more like the great depression just a lot more complicated. but having said that -- and i say this as someone who thought that it was something that was necessary. that we really needed to do. in a million years, you will never be able to convince the american people that t.a.r.p.

was necessary or good. and it is real, real clear in the polling focus groups, that sort of thing, that they don't get t.a.r.p. they don't get the bailouts and takeovers. they are really, really, really upset by it. and i think in some ways, some of our policymakers, there may have been a reticence to sort of, you know, level with people about what the alternative to getting t.a.r.p. through. but no matter -- whatever it is, the american people are really, really, really against it. they saw it as an unnecessary and dangerous expansion of government. they saw the economic stimulus package as an extension of that. and i confess it was undisciplined and flawed. but in the minds of the voters, it was totally discredited. and while most americans wouldn't know cap-and-trade from cap and gown, you know, enough of the ones that did know what it was didn't like it at all and then you kind of segued into

health care, and what you ended up was sort of like a series of explosions. in the voters minds that have just made an enormous, enormous impact. so what's the bottom line? republicans have a gain and democrats would have a net loss to turn the house over although that number may change because we have two special elections for the house coming up in the next month in pennsylvania and hawaii. the cook political report -- what we're projecting officially right now that republicans will be gaining at least 30, probably in the 30 to 40 range. so in other words, a lot more than average. all the way up to the point that would be the tipping point of the house. now, that's the official line. personally, me personally, i think it's actually -- it -- if the election was held today, it would go higher than that. i think just sort of -- when we do our race by race count, our

internal model we have it at 30 seats. and my experience has been in sort of normal elections, that model works great. but in wave elections, it understates it. it's the starting point, not the midpoint. and i think -- i think if the election were held today, it would be going north of that. so it would be going over 40 seats, i think, if the election were held today. in the senate it's 59-41. the republicans would need a net gain of 10 seats to get the senate back. i think that the sort of the worse case scenario for republicans -- best case scenario for democrats would be republicans picking up only 4 or 5. i think the best case scenario for republicans and worse for democrats would be 7 or 8. the 6 is kind of a midpoint. and i'm suggesting that i think -- i'm pretty sure the democrats are going to hold onto their majority in the senate.

but the scary thing that democrats need to keep in mind is that in the next elections, 2012, 2014, that's when all those senate seats that they won in 2006, 2008 -- those fabulous years for democrats come up and suddenly that's when -- whether they're 29 democratic -- i'm sorry, 20 -- there are -- only 9 republican seats up. yeah, here we go. in 2012, there are 24 democratic seats up. only 9 republican seats up. in 2014, there are 20 democratic seats up. 13 republican seats. so in those combined years, there's 44 democratic seats up. only 22 republican seats. let me translate that for you. there's a republican senate in your future. it's probably just not in 2000. it's probably not in 2010.

so to sort of look at this, could things change in the next six months? and could democrats avoid, you know, this near apocalyptic election? yeah, things could change over the next few months. they could. but change is the operative term. things would have to change. 'cause the trajectory is headed towards a bad place. now, if i wanted to be nasty i could say, things could change in the next six months. i could be thin in the next six months. [laughter] >> but that would be -- that would be tacky. [laughter] >> when you ask -- okay. what could change things? well, unemployment could change. if unemployment got a lot better, now it was 9.7% in january, 9.7% in february, 9.7% in march and we've got new

numbers coming up in the next two weeks -- if unemployment got a lot better between now and then, sure, it could. but the thing is the economic forecast, both the blue chip economic indicators forecast -- you know, for example, you know, they're suggesting that between now and the third/fourth quarter maybe it gets better by two-tenth, three-tenths of a percentage point. that's all. that doesn't bring on you the mission accomplished banner. it's got to get better than that. the president's council of economic advisors -- their february forecast for the year was just sort of -- let's just say 10% just for grins. it's like, wow! you can't accuse them of being overly optimistic at least on unemployment this year. unemployment is not likely to be the lifeline between now and then. it takes 100,000 net new jobs a month just to cover population growth and then it probably takes another 100,000 or so net

new jobs on top of that just to pick up the people that had been unemployed that had given up looking for work and start trying to re-enter the labor force, start looking for jobs and coming in and then they get thrown back in the unemployment rate. unemployment is not likely to happen. and then secondly, as well could public attitudes towards health care reform change? between now and november? actually, this is where i probably should have said yeah, i could, of course, i could be thin. it would be more appropriate there. but the thing is, with health care, you know, yes, there are some positive things that were in the bill that may be kicking in now. yes, that's absolutely true. but i think that's going to be offset by any business, any person that gets a rate increase on their health insurance premiums between now and november. whether it has anything to do with health care reform, boom, it gets blamed on it. anybody that has a claim

disallowed between now and november, it's going to get blamed on health care. i think those things are going to sort of cancel themselves out. i'm left with just two possibilities. one would be, is there some kind of, as they say, a black swan event, you know, some kind of an outside the box totally unanticipated event that could change things significantly? sure. it could. and that's always the case. but the other thing would be -- in the more realistic possibility, you know, if democrats are going to avoid this -- you know, a disastrous midterm election, can republicans seized defeat from the jaws of victory? and there's sort of two different scenarios here. one is that i think in a lot of these -- given this current political climate, i think there are a lot of races around the country, senate races, house races, races for other things where republicans nominated a

placebo that would probably win. [laughter] >> and this is a technical political science term, what if they nominate a whack job? [laughter] >> where if you nominate a placebo off the street, if you nominated a nut, wow, we'll see how good a year is it? [laughter] >> is it really that good of a year for republicans? and i think that should be some sort of sobering thought or the other variation of that is, you know, say the tea party folks or whatever aren't happy with who's nominated and if they start running third-party independent candidates that siphon votes out of the political column. and these things are possible. they could happen. and here or there i think it

will happen, you know -- you know, some places around the country but does it happen enough to sort of prevent this for being a disastrous election. my hump is no. -- hunch is no. a couple of last points. number one, i do think there's a liberal blogger that called me for democrats the prophet of doom. and i guess, you know, considering we were the first to predict that democrats would take the house back in 2006, then i'm comfortable being the first to do the other way. but maybe i'm the prophet of doom for them. but the thing about it is, it is a huge mistake to make any assumptions about the 2012 presidential year based on what happens in this midterm election. midterm elections are terrible predictors of what's going to happen in the next -- in the next presidential election. republicans took some tough losses in 1982, in that midterm election. president reagan's first term midterm election. they lost 26 seats in the house

of representatives. if democrats had put a full team on the field, had recruited candidates they didn't even know they were going to have a good year until a few months before the election -- if they had a full team on the field, the democrats probably would have picked up a lot more than 26. and while there was no net change in the senate, there were like -- i think it was 4 republican victories, senate victories of a votes nationwide. they came of 50,000 votes of losing their majority in the u.s. senate. so 1982 was a very ugly year, recession you remember, very ugly year for republicans. and what happened two years later? president reagan is re-elected with a 49-state landslide winning every state in the union except his opponent walter mondale's home state of minnesota. and the district of columbia. so that midterm election was of no predictive value or the other one is look at 1994.

president bill clinton's first term midterm election. the year the democrats lost their majorities in the house and senate. it doesn't get much uglier than that. what happened two years later he wins pretty comfortably over senator bob dole in 1996. just simply not good predictive indicators. and one little historical fact -- and i wouldn't overread this. but -- and there are important qualifiers here. among elected presidents, that means elected, not appointed, didn't come in because somebody died or something. elected presidents who when they took office they took over from the other party, only one of them in the last century -- >> we'll take you live to attorney general eric holder and kathleen sebelius in the health care sector. live coverage. >> secretary sebelius and i made it a top priority for both of our departments to crack down on

health care fraud which we know cost taxpayers billions of dollars every year. failure our health care fraud prevention and enforcement action team, better known as h.e.a.t. we have brought the full resources of government of individuals and corporations who divert taxpayer resources for their own game. today we are here to announce the latest results of that effort. the pharmaceutical company has agreed to pay $520 million to federal and state taxpayers it off settle claims that it illegally marketed the antipsychotic drug for uses that were not approved as safe and effective by the food and drug administration. now, as part of this scheme, astro-zeneca violated the federal antikickback statute in furtherance to support the drug's use for a host of illnesses for which it was never approved.

now, according to the settlement, the illegal marketing of the drug led to millions of dollars in false claims against federal and state programs like medicare and medicaid. these were not victimless crimes. illegal acts by pharmaceutical companies and false claims against medicare and medicaid can put the public health at risk, can corrupt -- can corrupt medical decisions by health care providers and take billions of dollars directly out of taxpayers' pockets. as we have said, we will not let such actions stand. this administration is committed to recovering taxpayer money lost to health care fraud, whether it's by bringing cases against common criminals operating out of vacant store fronts or executives at some of the nation's biggest companies. the settlement that we are announcing today is a major accomplishment in that effort.

it is the largest amount ever paid by a company in a civil-only settlement of off-label marketing claims. the federal government will receive $302 million. over the past 15 months we have nearly $2.8 billion in health care fraud cases through use of the false claims act. money that will be fed back into the federal coffers. in 2009 the justice department also reached an all-time high in the number of health care fraud defendants charged with more than 800 indictments and more than 580 convictions. our strike forces now operate in 7 cities and we plan to expand to more this year. now, these are major success stories with our partners at hhs. but we know that we must not rest. and we will not. as long as health care fraud

pays, and as long as it goes unpunished, our health care system will remain under seize with tremendous cost to the quality of health care provided in this country and to the nation's fiscal health. as secretary sebelius and i both said when we launched h.e.a.t. in 2009, you should expect to hear from us again on this subject. the american people expect results. and we are committed to delivering them. now, before i turn it over to secretary sebelius, i'd like to thank the civil division for its hard work on this case and it's antifraud efforts across all sectors. over the past 15 months the civil division in partnership with u.s. attorneys offices across the nation has recovered more than $5.7 billion in civil recoveries and criminal fines by uncovering fraud in a range of areas. i'd also like to think united states attorney michael levy of the eastern district of pennsylvania and his great office for their fine work in this case.

and i need like to thank the partners who have made invaluable contributions to our effort. i would like to turn it over to secretary sebelius. >> well, thank you, general, not only for your efforts here at the justice department but for this incredible partnership. there's no question that the leadership that the justice department has provided terrific effort in the work to crack down on health care fraud and their partnership in fighting fraud across the country is essential. and i also want to acknowledge some of the agencies from our department who are represented here today. we've got dr. margaret hamburg from the fda and the legal and scientific staff who provided really important assistance in early identification fwhaik. -- in this case. dan levinson who was the

inspector general and his office whose agent know more about health care fraud than anyone. and helped to prosecute the case. they've been an intrical part of the h.e.a.t. partnership with the department of justice. rooting out health care fraud is a top priority for the president, for the attorney general and for me. and today we want to remind those intent on defrauding the american taxpayers that they are being targeted, and they will be caught. the historic settlement we're announcing today reflects unprecedented energy, resources, and the use of new ideas that this administration has devoted to eliminating waste and fraud in our health care system. and thanks to the efforts of the people here on the stage and those in the audience and those they represent, we're returning hundreds of millions of dollars that one company fraudulently took. and putting it back in medicare trust fund and putting it back toward the medicaid program where it belongs.

the health care costs strange our federal budget and household budgets are well-known to americans. but the president believes it's never been more important to safeguard those health care dollars. and so today's actions strengthen the program that millions of seniors depend upon and millions of our low-incomed american families depend upon. and let me make it clear what happened in this case. the drug company took kickbacks to doctors as part of an illegal scheme to market a drug for unapproved uses. they marketed the drug to the elderly, to children, to veterans, to inmates. and they bilked medicare and medicaid, the defense department health system, the veteran department and even our department of corrections. and what they did endangers patients and drives up health costs. and it's a perfect example of why the administration is determined to crack down on health care fraud. no matter what form it takes.

a little less than a year ago, as the general said, the task force h.e.a.t. was created. and it brings together the top officials from our two departments so we can share information, spot trends, coordinate strategy and develop new fraud prevention tools. it's changing the way we fight fraud. helping us be nimble and creative just the same way the criminals act where we're targeting. i'd encourage you to stay tuned for some new regulations that our department will be announcing as part of that law in the next couple of weeks. like the rest of our partners who are here today, the department of health and human services is committed to doing everything we can to keep americans and their health care safe. we're getting better at fighting fraud every day. and i look forward to working with this extraordinary team in the months to come to put our new capabilities to use. and now i'd like to turn things over to assistant attorney

general tony west. >> thank you, secretary sebelius. and thank you for your great leadership on this issue. my name is tony west. and i'm the assistant attorney general of the civil division. and in that capacity i oversee much of the federal government's civil litigation across the country including the justice department's efforts to recapture billions of dollars lost to fraud, such as health care fraud. today's announcement is important not only because the drug company has agreed to pay over half a billion dollars to resolve serious fraud allegations, and not only because this is the largest amount as the attorney general mentioned ever paid by a company in a civil-only settlement to resolve claims of off-label marketing. this settlement is important because of what it says about the u.s. government's coordinated efforts to protect the integrity of programs like

medicare and medicaid, which millions of americans rely on every day. health care fraud is not only illegal, it drives up the cost of medical care for all of us. consumers pay more for premiums. companies pay more to cover their employees. and today's settlement demonstrates that health care fraud is a top priority for the civil division and for the department of justice. and when it comes to marketing the drugs that so many of us depend on, we expect pharmaceutical companies to be honest in the claims about the drugs they sell. this investigation and the settlement that we are announcing today would not have been possible without the cooperation of our state and federal partners. u.s. attorneys across the nation, the hhs office of inspector general, the u.s. postal service office of inspector general, the fda, the

national association of medicaid fraud control units, state attorneys general from around the country and the talented lawyers in the civil division at the u.s. department of justice all worked incredibly hard to bring this matter to a successful resolution. i also want to commend james wetta the whistle blower who brought this case to the government's attention as well as other whistle blowers who have brought to our attention many other cases. and successful collaborations like this one aren't just limited to the justice department's fight against health care fraud. that interagency, federal and state commitment extends to other areas where we are also tackling fraud on the taxpayers. in november, 2009, president obama elevated the battle against financial fraud to a cabinet-level priority by asking the attorney general to chair the financial fraud enforcement task force. the increased enforcement

efforts aimed at addressing fraud in the housing and mortgage industries have increased recoveries in this arena from $15 million in 2008 to $52 million in 2009 and the first part of this year. our commitment also extends to rooting out fraud in connection with the procurement of goods and services used by our military and civilian agencies including fraud that affects our men and women fighting in iraq and afghanistan. since january, 2009, procurement fraud cases have accounted for approximately $630 million in recoveries. over three times more than the department's recoveries in 2008. investigations into other wrongdoing are active and ongoing. and we've also increased our recoveries in government grant fraud cases from $14 million in 2008 to $104 million since

january, 2009. in total, in the past 16 months as the attorney general mentioned, the civil division standing side-by-side with u.s. attorneys and state attorneys general across the country has obtained over $5.7 billion in civil fraud settlements and adjustments, criminal fines, penalties, restitution and forfeitures. civil recoveries alone are $7.5 billion and the consumer litgration criminal cases have amounted to close to $2 billion. and yet even with all of our success, we know there's still much work to be done. with the help of our law enforcement partners gathered here today, i'm confident that we will continue to do all that we can to protect taxpayers and consumers against fraud, waste and abuse. and now it's my pleasure to introduce michael levy, the

acting u.s. attorney for the eastern district of pennsylvania. >> attorney general holder, secretary sebelius, assistant attorney general west, thank you for the kind words about our office. your thanks should not be addressed to me. however, they should be addressed to the hard-working people who actually did the work on this case, my first assistant united states attorney virginia gibson, assistant united states colin sherico, dennis cook, it is hard-working agents from health and human services and postal inspector generals and the hard-working attorneys from the hhs ig. each united states attorney's office focuses upon the health care fraud that it finds in its district. in the eastern district of pennsylvania, we have had great success pursuing pharmaceutical companies that have defrauded the government through kickbacks and off-label marketing. in the last five years this

office has recovered more than $4 billion for taxpayers from pharmaceutical companies that cut corners and did not play by the rules. they used its sales force to pressure doctors to prescribe seroquel for purposes that had never been approved by the food and drug administration. the fda only approves drugs after they have been rigorously tested to ensure that they are safe and effective. by pushing seroquel for unapproved purposes, they made patients into guinea pigs in an unsupervised drug test. today's settlement puts a cost on such misconduct. thank you. [laughter] >> questions? >> you said it's not a victimless crime. is there any place where impacts have been found in this action?

>> i do not think that's the case. >> i don't know if i can give you statistics. i know there are a number of civil lawsuits pending against ast astro-zeneca for the prescription of this drug. it's not brought by the government. brought by private plaintiffs. >> how dangerous when the companies are potentially messing with people's minds for giving drugs for off-label uses. how dangerous is that and what could the impacts be? >> well, as i've indicated the fda approves drugs so that they will be safe and effective for their intended use. and when off-label uses occur, it means that the drug is being used to treat a patient in an instance where there has not been the focused study review and approval for that use. so i don't know the specifics in terms of the types of patients

who received this medication off-label. and it would be inappropriate to speak to, you know, the specifics of harm. but i think that what's important here is to recognize that the company was actively marketing a drug that wasn't approved for certain uses. and encouraging physicians to use the drugs in those ways. and that is a dangerous situation because the drugs have not been tested, reviewed and approved for those uses. >> mr. attorney general, if i could ask you a question. unrelated to this. [laughter] >> there's a new video out showing umar farouk abdulmutallab would that have any information for your counterterrorism efforts and will they be reviewing that video with him himself?

>> let me just say the investigation that mr. abdulmutallab is a part of -- he's been cooperating for some time. that investigation continues. we'll be looking at all the information, all the evidence that is uncovered. and going through with him much of this information. so that we can glean actionable intelligence. but that process continues? >> have you seen the video? >> i have. >> and what was your reaction to it? >> i've seen the video. [laughter] >> mr. holder, what is the -- excuse me, what is the status of the -- this department's preliminary review at this point of the arizona immigration law? >> well, i think that law is an unfortunate one. i think that it is, i fear, subject to potential abuse. and i'm very concerned about the wedge that it could draw between communities that law enforcement is supposed to serve. and those of us in law enforcement.

the justice department along with the department, along with dhs is looking at the law. to decide exactly how we are going to react to it. we are considering all possibilities including a possibility of a court challenge. >> do you think it's clearly unconstitutional measure? >> well, as i say we are reviewing the law right now. we have a group that has been together over the past few days to examine exactly what our reaction is going to be to it. so that review is underway. >> if i could ask about another medical case. a few months ago the department announced there are settlement in a defibrillator safety case. a minnesota judge rejected the proposed plea deal. have you had a chance to look at it and do you have a comment? [laughter] >> we're aware of the decision of the judge. we're taking a look at that. we're reviewing it. and we're assessing what our next steps are.

>> the guantanamo decision, every week we're told a couple more weeks, a couple more couple of weeks. there's a lag time in trying what to do. i mean, what's happening right now? and how much of the decision will be made by you? >> we're in the process of that review. what we want to do is make sure that we get it right. and we're not rushing, we're not hustling. we're making sure that we look at all the factors that have to be examined. and i am a part of that process. >> madam secretary, if i could ask you, there was a report -- an hhs report about the cost of the health care overhaul that was apparently released after a key vote on the reform. are you aware of that? some people are saying the report was suppressed by hhs

because they didn't want to influence the vote? >> well, i don't know which report -- the actuary is an independent office in hhs. so i can guarantee you that nothing was suppressed because we actually -- the actuary does not work for me or for members of the department. it's set up legislatively, independently to report directly to congress. so the timetable of the report really was when they got the information together. and i think they were looking at the impact of the reconciliation measure, which was voted on. so they have provided acuarial information of each of the proposals up until then. i think they released it as soon as it was ready. >> general holder, i understand that you sent a letter to the senate homeland security committee. responding to their request for indications of subpoenas for documents and witnesses. what did you tell them?

>> well, we have certainly made -- we're certainly cooperating with the committee. we have made available to them in the past, i think, thousands of pages of documents. we have made available to them members of the joint terrorism task force and are prepared to share additional documents with them, make people available for briefings. deputy attorney general spoke to senators lieberman and collins yesterday as did the deputy secretary of defense. and so we are looking for ways in which we can interact with the committee and satisfy the needs that they have while keeping in mind that what is most important is the ongoing case, the ongoing litigation. we don't want to do anything that said jeopardize our chances at having a successful outcome in that trial. >> did you tell them there are certain things they can't do? that you can't do? because it would jeopardize it? >> well, we would certainly follow what we've always done here at the department and with regard to people who are

involved in litigation or potential witnesses, line agents, line attorneys. those are people who we generally do not make available. >> in about 20 minutes the senate will return at 2:15 eastern time. the weekly party luncheon break continues until then. "the wall street journal" reporting that u.s. senate leaders have scheduled their second big showdown in less than 24 hours on financial overhaul legislation for this afternoon ratcheting up the pressure on lawmakers from both sides of the aisle. senator majority leader harry reid said they will vote on a procedural matter to see if they can begin debate over the legislation overhauling regulation of u.s. financial markets. that vote coming less than a day after republicans stood together to block the senate from proceeding debate. lawmakers voted 57-41 yesterday evening in a test vote falling short of the 60 votes needed

with all gop senators present voting against invoking cloture. two democrats mr. reid and senator ben nelson of nebraska voted with the gop although mr. reid's vote was a procedural maneuver. again our live senate coverage continuing at 2:15 eastern time. that vote coming up today at 4:30 eastern here on c-span2. until the senate returns a look at the economy from today's "washington journal." >> host: our guest now is an analyst for business economists. the nabe. a new study out. what did you learn about the economy? >> guest: each quarter we go out and talk to a variety of our member companies, economists at firms across the economy. this quarter we talked to about 68 economists at different firms to get a feel for where they see things. again, with this survey we continued to see things

improving. things like industry demand are picking up, our profit margins are picking up. unemployment is starting to improve. so we continue to see this slow measured recovery coming out of the survey results. >> host: what industries are heading in the positive discretion? >> guest: really across-the-board depending on which of the indicators you're looking at across-the-board, things seem to be improving marginally, of course, the story behind that macrotheme is different for directions. >> host: "usa today" plays all of this out. i don't know if you had a chance to see the story. good news on the economy. they tk about sign of a turn-around. a bumpy economy with hope in the midwest and the south. it's their cover piece and they go through a lot of different sections of the country and sectors of the economy. but speak to us in terms of regions of the country. you say you looked all over.

but can you point to particular bright spots right now? >> guest: this particular study doesn't dive into regional differences across the country. you know, certainly areas that have been hard hit by the decline in residential real estate, the sand states if you will, some of those are starting to show recovery. which is is, you know, a good sign. new york, which was hit by the distress in financial markets is starting to show recovery which is a good sign. you know, the industrial midwest as some of those industries start to come back is improving. of course, the west coast -- the u.s. recovers and imports start to flow in helps parts of those -- that region. so we're seeing in different story lines play out but generally improving throughout the country. >> host: we have plenty of time for your questions and comments on different parts of the country or different sectors of the economy. our guest is an industry survey analyst at the national

association for business economists. and the numbers to call as we look at the economy perhaps recovery here, jobs ahead according to this report. republicans 202-737-0001. democrats, 0002. what else can you tell us about the survey? what are the most important things we should know and take from this? >> guest: one of the things we saw is that, you know, we are starting to see prices increase for some of the companies specifically for cost of materials. either starting to indicate that there are pressures brewing on wages and salaries. employment was the best take-away of this quarter survey. we saw more firms reporting that they were hiring, employment was increasing. that was the first time we saw this. in two years.

firms going back, will to hire again. that is a good sign. continuing to look at capital expenditures so they're will to make those investments necessary to take advantage of a recovering economy. credit conditions remain probably the biggest negative in this survey. a large number of firms still reporting that current credit conditions are impacting them directly. so that is a -- probably the biggest negative in this story. >> back to the plus side, were you surprised to hear positive news this soon or are you expect it to come later? >> guest: we're right in line where we would expect things. we've now had three quarters in a row where we saw positive industry demand. in fact, this quarter we saw more firms reporting growing demand than shrinking demand. the biggest gap we've seen in four years. and so you would expect that as economies start to take advantage of a recovering economy that they'll then start -- that they'll start to

hire and then start to see some of these pressures on costs. you know, we continue to see things like shortages for skilled labor start to increase as part of a recovery. and the recovery so those type of things are consistent with what we could expect. >> host: back to "usa today," caterpillar is uppinoduction a global economy that is clearly improving. they are planning to increase production of it's mining equipment after reporting a strong first quarter profit on monday. they're the world's largest maker of construction and mining commitment encouraging view of the economy and world growth of 3.5% but it is still it has still hired back 2,000 people since cutting 19,000 jobs so there's plenty of room for that company to get back to normal and others i would imagine. >> guest: i think that's a great sign of the recovering economy. the u.s. tends to recover faster than it's trading partners.

so as the rest of the world starts to recover, we'll see demand for things like heavy equipment, jets and other things like that. start to recover. in the survey of this quarter, communication, and technology, of course, has done quite well from the consumer side we're now starting to see the enterprise side come back. as they'll hire workers they'll need to bring in computers and phones for those individuals and we start to see those expenditures come out as part of a recovery as well. >> host: plenty of calls coming in for our guest, shawn dubravac, peggy, independent, you're up first, good morning. >> caller: hi, good morning. and thanks for taking my call. >> guest: sure. >> caller: i have a comment and a question. i heard senator gregg on the floor say we were overreacting to the financial problems.

and i wonder what planet he has been link on. -- living on. weaving back every problem we have had has stemmed from wall street. somehow directly and indirectly. and my question to you is, where are in your survey that you did -- where do you see the green jobs being created. in a certain part of the country or a specific state? thank you so much. >> host: does the survey speak to green jobs? >> guest: we didn't ask specifically about green jobs. you know, certainly i think as demand for renewable energy and demand for some of these other technologies continues to grow, you'll see jobs in those sectors grow as well. >> host: rockford, illinois, john, you're on the democrats line. hi, john. >> caller: hey, good morning. >> host: good morning, sir. >> caller: i appreciate being able to call in. >> host: sure. >> caller: i'm in the real estate business. and one of the things that i do is i draw a lot of analogies to our current situation. back into real estate.

i believe what we've done is we've created a bad neighborhood as a result of this economic and financial mess. and once the neighborhood goes bad, it's very difficult to turn it around. there's going to be people that's going to invest back into this situation. but unfortunately, i believe, that they're going to wish that they were taking another look at it. so i just wanted your person's comment on that. >> host: more about real estate. >> guest: yeah. you know, i think if you look at the broader economy, the broader u.s. and some of the things going on globally, i mean, right now the u.s. does look like to continue the analogy the best house in a bad neighborhood. if you will. looking specifically at real

estate, we have had this major correction happen really relatively across the country, some states hit harder than others. as i mentioned the sand states hit extremely hard. we're starting to see recovery happen in many of those markets. and some of those markets that were less severely hit by the downturn are starting to recover as well. >> host: you spoke earlier about lending and problems in the lending industry. so connect the potential growth for real estate with problems in lending 'cause obviously you need the loan to buy the house. >> guest: definitely. and we see that impacting that credit issue impacting both sides of the equation, both on the consumer side and their inability to get capital to buy things like property and also on the enterprise side. where companies are looking to expand their resistance now take advantage of a recovering economy and they can't get access to those funds. my daytime job as the chief economist for the consumer electronics association. we represent about 2,000 or so technology companies.

and i hear all the time in recent months from the smaller companies that say access to capital continues to be a major constraint in growing their business. they see the opportunity. they're having a difficult time, sometimes getting access to those funds. >> host: what's it going to take to improve that area? >> guest: some of it is just a matter of time. you know, historically recessions bounce hard off the bottom and they're driven more by the investment seibel. -- cycle. as a result of that difference will take a longer time. we know that banking-induced financial crises tend to have recovery periods of six to seven years as opposed to one to two years, what we might see from a traditional investment cycle-led downturn. it will take a number of years to fully work through the troubles that we've seen in the last few. >> host: we have russell on the republican line from phoenix now. good morning to you. >> caller: yes, sir. good morning. >> host: hi.

>> caller: hi. yes, i personally believe that obama is not effectively knowing how to try force. >> host: let's move on to another call. hopefully a substantive one. key largo, florida. tom, an independent, hi there. >> caller: it looks like you're on a time delay. so it kind of makes it difficult for me. anyway, the question is, i've been a businessman -- i've worked for myself and i've had more government against me than anything in my life. and how do i, you know -- i've got -- i've got my father who's 88 years old and all i want to do is make sure he can live out his life. and a mother that's 79. and they're good people. and all through our life we've given to them. anybody who came to us, we gave

to them. and we may have worked but now you can't make work. you can't -- i don't know what's going on here. >> host: caller, what do you see as the role of government overall at this point in economic matters? >> caller: in economic matters, i think that you have an elitist group that want to take care of it. >> host: simply put by that caller. anything to respond to there? >> guest: no. i think, you know -- i think we're still kind of working through a lot of the issues that as a result of the downturn. some of those things take a lot of time. >> host: "the wall street journa journal", they talk about caterpillar and whirlpool posting strong results on monday. how demand is spreading across consumer and industrl suppliers. something you've touched on.

speak more to international sales because your survey touched on that quite a bit. tell us more about what you learned there. >> guest: well, one of the things that we looked at was the percentage of sales that the respondents are seeing coming from overseas. we know that these international markets are a key markets for many of these u.s.-based companies. that they need to sell not to just u.s. customers but also global customers. certainly highlighting the role that free trade plays. that's an issue that's taken a little bit of the back burner in the recent political debates. but a key issue to growing the u.s. not only this year but in years to come. it's to really open up those markets for u.s.-based companies that rely on those overseas revenues. >> host: on the economy, from the a.p., here's a piece, the maker of clinique and avadea

strong results overseas and improving u.s. sales estee lauder saved $100 million in the quarter. also from the a.p. mor how customers are doing shipping giant ups is optimistic about the economic recovery. it is seeing in countries where it does business around the world. the company made the comment as it >> host: can you speak more about them? >> guest: definitely, you're seeing growth in consumer purchases and so that's help driving some of those shipment things. we've already mentioned some of the large purchases that consumers here are making and also overseas are making. so during a recession we tend to delay those large purchases. of course, automobiles very hard hit during this downturn other what economists refer to as durable goods, very hard hit, washer, dryers, mainly purchases. we're finally starting to see those come back. certainly "the wall street

journal" article that hits on earnings talks a little bit about that. we're seeing that part of the economy start to recover. consumers and businesses have a little bit more visibility into what the next year will look like. they are willing to go out and make those purchases. where they over the last two years have delayed major purchases like washers and dryers, trying to squeeze out an extra year of that washer. squeezing out an extra eight months much car they are willing to work on those purchases. we're starting to see a recovery in spending in those key categories. >> host: connect this to a 10% unemployment rate. so lots of positive news but for folks who have lost their jobs who are working fewer hours, maybe they've lost their jobs for many months now, connect the dots here. this positive news to an unemployment rate. when might it go down? >> guest: i mean, first of all, certainly unemployment has been a major issue in this economy.

one of the key aspects of that is that we've had a very long downturn and it's caused long-term unemployment to be extended and very long. so about 44% of those people that are currently unemployed have been unemployed for over six months. the highest we've seen it in a very, very long time. even going back to the dark '81, '82 recession we didn't see long-term employment that high. you have not only a high number of individuals on unemployment. you also have them on unemployment and having been unemployed for a very long time. what we know from the past few recoveries is that unemployment tends to be a lagging indicator. so it's recovering long after the recovery of the rest of the economy. that is a story that's playing out now as well. that unemployment will recover over a much longer period than the overall economy will recover. companies are quick to lay off workers. they were looking to cut costs

in '08, and '09. we entered this recession with unemployment at 4.5%. it will be many years until we get back to that 4.5% level. for areas that probably had overhiring during the boom years, construction perhaps finance, many of those will have to look for jobs in other sectors and so that will involve a longer structural change as well where they'll have to be retrained. they'll have to go out and find work in -- >> we'll leave this recorded portion of "washington journal" as the senate has returned after weekly party lunches. later today at 4:30 eastern another procedural vote to move forward with a financial regulations bill. our live senate coverage on c-span2. wgwmwgomwm intricate, is because we on our side feel very strongly that we should be involved in the negotiations of a better bill. we're not asking that there be no bill. just the opposite. we're saying there's a lot in this bill that just plain needs to be improved. for example, in the area of too

big to fail, we have to make absolutely sure that if a company is large and it gets into trouble and it overextends itself, that if fails, that the american taxpayer doesn't come in and support that company in the financial sector or anyone else as far as i'm concerned, the automobile sector also. so that language in this bill needs to be tightened up because it doesn't accomplish that as effectively as we think it should. in addition, as i said yesterday, the derivatives language has some very serious problems. i talked just about one of them but there are a whole series of serious problems. the purpose of our derivatives part of this bill should be, one, to reduce systemic risk and make sure that prospectively we do everything we can to make these instruments, which are critical to the ability of the economy to be liquid and -- and produce credit, that there are as safe and as sound as possible while at the same time making sure that we do not overreact and create a situation where this market, which is so crucial

to manufacturers across this country and especially to main street, which basically benefits from the credit which is generated by drif thifs, that that market -- derivatives, that that market doesn't excessively overcorrect due to regulation or that it doesn't go overseas, so that we lose today the fact that we are the center of capital and credit. we want to be the best place in the world to create capital and to create credit, and we should have a bill that accomplishes that. and i've been outlining concerns i have in the derivatives area. section 106, i could highlight a number of other areas. for example, the immediacy with which derivatives are pushed from a clearinghouse into an exchange situation, which i don't think will work under this bill. i think basically you would end up contracting the market dramatically. but what i wanted to specifically speak to today were things that were left out of this bill that should be addressed in order to make sure that we don't have occur again what happened in 2008, in september of 2008 on into the

rest of that year. that tremendous trauma that our nation went through and is just now coming out of, and for some people is still a trauma because they don't have a job, which is the worst trauma of all for somebody, that trauma was caused by some very distinct and specific events occurring. a lot of them were the responsibility of the congress. i mean, if you want to look for who is the cause of the downturn and the crisis in the subprime market, you can look -- we can look at ourselves in the merer and say we were, to a large degree. easy money was also a problem. but right i think at the center of the problem was the collapse of underwriting standards in this country. you know, it used to be up through the 1990's to get a loan on a home, you had to -- you couldn't get much more than 85% of the value of the home. had you to put some money down. and had you to be able to show to the person who was lending you the money, the mortgagor,

that you could pay it back, you could pay the money back. well, what happened when we went into this huge expansion of lending, which was driver large part by two things. one, the monetary policy of the fed, which basically allowed for easy money to flow out there very quickly into the market. and, secondly, the congress. specifically insisting that everybody should be able to have a home whether they could afford it or not or whether the home was properly valued or not. those two factors led to an explosion in homeownership, equally led to an explosion in mortgages which, first, did not meet the value of the underlying asset. and, in fact, in some instances were actually valued at more than the underlying asset, even at the time they were issued. but almost all these subprime mortgages presumed that there would always be an appreciation of real estate prices and, therefore, you could throand 100% and so the -- lend to 100% and at some point you'd be down

to 90% or 85% of value that. didn't happen, of course, went just the -- that didn't happen, of course, went just the opposite way. the value went down and so the mortgages went underwater to their basic value. and then secondly, it was -- the moneys that was lent to individuals who, because of the way they structured these loans for the first two or three years, could pay the interest or the mortgage payment, but as soon as these loans reset to a realistic interest rate, they couldn't pay it. and everybody knew it when they did the loan. well, why -- why did people do that? why was there this collapse in underwriting standards? well, there are a lot of reaso reasons. i happen to think the -- probably the primary one was that we separated the owner of the loan from the actual loa loan-making process and, therefore, the people originating loans weren't really interested in the underlying security. they weren't even interested whether the person could pay the money back. they were interested only in the fees they were generating. 10 we had a collapse in the

underwriting standards, and -- and what happened was we had an inverted pyramid where you had this person down here borrowing money from this entity over here on a piece of property which wasn't worth what the value was that was being borrowed and the person who was borrowing the money couldn't pay the money back but nobody cared because that loan was then taken and sold and securitized and subdivided and syndicated and sometimes put into a synthetic instrument, or had a synthetic instrument mirroring it, and sow had this one little loan down here at the bottom of the pyramid and this massive structure of churning of that loan on top of it. and the loan wouldn't support all that structure over it and it collapsed on us. in late 2008. so this bill, however, doesn't address that issue of underwriting standards in any effective way. now, senator isakson and i have spoken about this on the floor a number of times and we're going to come up with a proposal -- i hope it can be bipartisan, should be bipartisan -- but it will significantly improve this

bill because it will put in place some underwriting standards that will make sense and we'll basically be going back to some underwriting standards that used to be in place back in the 1990's, not only for the individual origination of the loan but also for the securitizer of the loan. and this is critical. i mean, if you're going to fix this problem -- and the purpose of our bill should be to fix the problem that created the crisis and make sure it doesn't occur again; that's the real goal -- then there should be spurned writing standards. secondish -- should be underwriting standards. second issue in this bill that's not addressed is fannie and freddie. these two entities have trillions of dollars of outstanding liability, outstanding notes. and it is estimated that the taxpayer has a $400 billion to $500 billion -- that's half a trillion dollars -- of liability here because a lot of these notes aren't going to ever be paid back. and yet fannie and freddie are

still operating almost as if business as usual mind-set, pushing money out the door, pushing -- buying up bonds and notes and mortgages and doing it almost as if there's no end to the -- to the taxpayers' pocketbook. in fact, we don't even put fannie and freddie on the federal balance sheet. we know, since we own 80% of those companies, we know that the taxpayers are on the hook for this debt. $400 billion to $500 billion of debt that we're on the hook for. this bill doesn't address it. it acts as if it doesn't even exist, and yet that was one of the primary drives of the economic -- drivers of the economic collapse of 2008, which we are all suffering from and have suffered from. so this bill should have at least a initial step into the arena of how we handle and are going to handle this issue of straightening out the g.s.e.'s, as they're called.

the first step is that we ought to bring their liabilities under our books so that we know, the taxpayers aren't being lied to, so that we're telling the truth to the american people as to how much it's going to cost to us straighten this out and we start thinking about how we're going to straighten it out. and yet this bill doesn't do that. so that's another place where we as republicans, and i think a lot of other people, would like to see this bill improved, and that's why we're opposing going forward with the bill in its present form until we're allowed to participate in the negotiations on improving it. that's what this is all about. the third issue, of course, is the credit rating agencies. we know without any question that the credit rating agencies failed miserably and that people relied on that -- on their information, their credit rating of very securities and that that's one of the primary drivers or one of the reasons that people were willing to buy a lot of the instruments we were floating around, because they believed genuinely that the credit rating agency which it

said it was a aaa rated security, that they had done their due difficult dispense that it was a aaa rated security. well, it turns out it wasn't in many instances. and as a result, sloppy underwriting again by people who were willing -- financial houses which were willing to buy these securitized products, the c.d.o.'s and various other products, they didn't do the heavy lifting of going in and looking at the actual -- actual assets which were backing these products up. they relied on the rating agencies and the rating agencies didn't do the job either. and so we have this real serious issue with rating agencies, and that needs to be addressed. it's not effectively addressed in this bill. but you cannot correct the problems which created the 2008 crisis and caused this very severe recession and put this country through this tremendous trauma unless you address that issue also, along with underwriting standards, g.s.e.'s, credit rating agencies.

and then the bill -- and so that's -- republicans are saying hey, let's look at that, let's try to fix that. that's why we don't want to go forward until we're brought to the table and allowed to address that issue. another question: they filled this bill with all sorts of extraneous things that have nothing, absolutely nothing, to do with the -- with the housing crisis and the -- and the economic melt down that followed. a lot of corporate governance rules that have been kicking around this city for a long time and that are the agenda of certain groups in the city who have a political agenda dealing with wanting to have control over corporations, a lot of it influenced by organized labor, they've been thrown into this bill willy-nilly. they havthey nothing and they he nothing to do with the overarching issues that affect protecting the -- protecting the market and making -- and giving

us a sound financial system, and yet they're in this bill. they shouldn't be in the bill. or if they are going to be in the bill, they should be significantly adjusted. so these are some of our concerns. you know, people ask: well, why are -- why are -- why are the republicans not -- why are we stopping this bill at this point? because we want a better bill and we've got specific proposals for accomplishing that. we want language which does accomplish twail, tha too-big-tt ends that policy. we want language which makes the derivative market not only safe and not a systemic risk but sound and a strong force for credit in this country. we want language which addresses better underwriting standards. we want language which addresses the issue of the g.s.e.'s. and we want language which addresses the failures of the credit rating agencies. and we don't want a lot of extraneous language which is just simply brought along because the train was leaving the station and thrown on it, and which, while in many instances in my mind at least,

undermine rather than be a constructive force for a better financial system in this country. so that's what our concern is, and that's why we are continuing to insist that we be allowed to be at the table to negotiate these very critical issues on this very complicated bill. and i want to thank the senator from north dakota for showing me courtesy of allowing me to go first. and i yield the floor. mr. dorgan: mr. president? the presiding officer: the senator from north dakota. mr. dorgan: mr. president, let me ask consent to speak in morning business for 15 minutes. the presiding officer: without objection. mr. dorgan: mr. president, change is very hard in this country and in this chamber. change is always hard. i was thinking as we've been blocked from proceeding for wall street reform, which is a very important issue, i was thinking about what probably was the case on another big change at the turn of the last century when upton sinclair wrote about the meatpacking houses in this country. he wrote a book called "the jungle" and described his visits

to the meatpacking houses in chicago and the unbelievably unsanitary conditions in those meatpacking houses. rats all around those meatpacking houses. but that's all right, they poison the rats. they take loaves of bread and soak it in poison and lay it around and then dead rats and all of the -- all of the things that existed in those meatpacking houses went down the same chute and out the backside came meat right to the grocery store to the american people, an unsuspecting public. the most unsanitary conditions in the world. and then, as a result of the publishing of the book, "the jungle," there was a public outcry saying, we demand something be done. and the congress finally at least, at long last, beat back the opposition of a very strong meatpacking industry and passed safe food laws, created a food and drug administration. change is so very hard. but people knew then something had to be done about that, and

the american people know now something has to be done about this. it's interesting to hear people come to the floor of the senate and say, well, we're blocking a motion to proceed to go to a wall street reform bill because we want to make it better. does anybody really believe that? they want to weaken it. they don't even want it in the first place, to the extent they can avoid it. that's why they didn't do anything in 9 committee. -- anything in the committee. there were negotiations for weeks in the banking committee. i'm not there but i'm told by all those involved there were negotiations for weeks in the banking committee. and then they had a markup and the republicans didn't offer one suggestion. if they have a whole backpack full of suggestions on how to improve the bill, why was there not one amendment offered in the committee? so now we have the spectacle of the desperate need for reforming our wall street in this country, reforming wall street finance and the entire republican caucus in the u.s. senate votes "no." every single one of them.

well, let me describe what we're facing here, if i might. this economic collapse is not a stranger to most persons. somewhere around 15 mil millionr 16 million of them got out of bed this morning jobless, looking for work, can't find work. they understand the costs of this economic collapse. here's what it cost the taxpayer. by the way, we don't have all of these numbers. this is an enterprising report from bloomberg that did good work, federal reserve reserve, $7.8 trillion, fdi fdic $2 trillion, treasury treasury, $2.7 trillion; h.u.d h.u.d. $300 billion. 12.8 trillion has been spent by the taxpayer to try to get out of this deep hole. now, even as we found ourselves in this deep hole here, by the way, is what has happened to the

biggest financial institutions in the country. you'll see going back 10 years ago when the congress decided, in my judgment, without any wisdom at all, because i voted against it to say, let's homogenize the big financial institutions. let's put them in -- fdic, real estate, security, put them in one big holding company and things will be great. it will allow us to compete with europe and others. here's what happened to the biggest financial institutions in the country. they've gotten bigger, bigger, and much, much bigger. that happened even during this collapse. even during the deepest recession since the great depression, they've continued to grow. now, let me, again, describe some of the origin of this, the

cesspool of greed. one person -- i talked about him in the past -- makin making $3.6 billion in one year, one person, $3.6 billion betting against america, selling short. by the way, if you're wondering, that's $300 million a month or if this person's spouse says, how are we doing sweetheart? he can say we made $10 million a day every single day. now, this is on the internet right now and this is the origin of all of this greed and it goes up from here to a security to a hedge fund to an investment bank and they're all making obscene profits right on up through the collapse. by the way, they're doing it again. this is a company called easy loan for you. get the loan you seek fast and hassle free. talking about a home loan. we'll approve your loan immediately regardless of your credit score or history. you need a loan? doesn't matter how bad your credit is. come us to. here's one on the internet now.

speedy bad credit loans. it says bad credit? no problem. no credit? no problem. how about bankruptcy? that's not a problem either. come to us. get a guaranteed bad credit loan today. and, yes, this is on the internet today, "bad credit personal loans," a christian-based service. no credit, bad credit, job loss, divorce, need more money? no problem. this is the origin of what went on in this country and it's still going on. come to us, get a loan. you don't have to make interest payments or principle payments and you don't have to document your income to us in order to get. it so we wallpapered this country with this sort of nonsense. fundamentally ignorant banking practices and then turned them into securities and sold them up, up, up the chain.

and the fact is everybody was making big fees. rating companies were -- were -- with their pompoms creating aaa. there is a hearing going on. one of the large investment banks is under seethe. our friend, carl levin, has the goods. he has the internal memos and it shows that internal investment banking company is making profits now and was betting against its customers, betting against the american economy. so the question is: when all of that was going sour and the american taxpayers were told, you know what, these companies that are doing that are too big to fail, we have a moral hazard here, we have systemic risk with grave consequences to this

economy, therefore, the american taxpayer has to be told, you bail them out. the american taxpayer decides we're going to provide unlimited money and new loan window for the first time in history to investment banks. we go to the fed to say, how much did you put out there? and they say, you have no business knowing. we don't intend to tell you and we don't intend to tell the american people. that's where we find ourselves right now it's unbelievable. there's an old country saying, the water's not going to clear up until you get the hogs out of the creek. this issue of trying to get to the floor of the united states senate on a motion to proceed so we can do wall street reform is all about getting the hogs out of the creek. you know what? we will vote again today at 4:30. we voted yesterday, we'll vote today, i suppose we'll vote tomorrow and every single republican has said we don't intend to allow you to proceed because we want you to

strengthen the bill. oh, really? when two of the top republicans went to wall street 19 days ago to meet two dozen wall street executives in a closed session an come back here and say, we're going to stop wall street reform because we want to strengthen it. i don't think so. it doesn't sound to me like that's the case. you want to strengthen it? i would say to my colleagues, you say it's not strong enough in too big to fail. i'm going to offer an amendment on too big to fail. but you can't offer an amendment unless you get a motion to proceed to get a bill on the floor. i wonder how many republican votes i'll get to get an amendment that says if you're too big to fail, if you pose a moral hazard with grave consequences to our economy, it seems that we should back you away through divestiture. those saying they're trying to strengthen the bill, i doubt it by the way, maybe they'll join

me on that. i think it's unbelievable to come to the floor to say we haven't had a chance to discuss or debate this when, in fact, there were negotiations that went on for months in the senate banking committee. an before that, there were hearings that went on for a year in the senate banking committee. when they finally got to a point of writing a bill, the republicans decided, we don't have one suggestion for an amendment. not one. not any and now they're saying -- not any. and now they're saying, we're going to take a stand. we're not going to allow the united states senate to consider wall street reform because we think it needs to be improved. oh, really? i think they think it's too strong. i think they have a lot of friends who want to weaken it. that's my belief. so the question is: will we able to see perhaps at long, long, long last to allow the other side to stop making excuses?

is there any american who suffered the consequences of this deep, deep decline in our economy, the deepest decline since the great depression, is there any american who says, you know what? hands off the big investment banks, hands off the big finance companies. yes, we know they were trading things we don't understand. they were trading things like credit default swaps that were naked. i asked, how does a credit default swap get naked? it means that it has no insurable interest on either side. it is not investing, it is simply wagering. i said before, why pretend? why not put a keno chip or a craps table in the lobbiy? all it is making wagers or bets. we have large communities an many other areas in america that you can do that, las vegas and atlantic city. we've seen that happening increasingly in the lobbyists of

some of -- lobbies of some of america's biggest financial institutions. they have decided that if they bet an lose at least the record is the american taxpayers going to stand behind them to pick up the tab. well, no more. the legislation brought to us by senator dodd and senator lincoln dealing with financial reform and derivatives is -- he would be the first -- is not perfect. he would be the first to say that. none of us can offer any amendments unless there is a motion to proceed to get to the bill. i think the work done by senator dodd in the banking committee is work that needs to be commended. and it streeches my imagination, and i think others, for the excuse for voting against the motion to proceed to get to the floor and debate and offer amendments to allow as an excuse that the other side really wants to strengthen this. well, you know what is this we're going to get to the bill at some point somehow over the opposition of a determined minority that wants to protect

wall street's interests here even as we're holding these hearings today and discovering some pretty pathetic behavior on the part of big -- we will see who is on the floor of the united states senate on the side of the american people. we'll see who really wants wall street reform that does the right thing. there are many things that we need to do. and i mentioned too big to fail. i want to introduce an amendment that bans naked credit default swaps that have no insurable interest. that is betting, not investing. and so there are a lot of things for us to do. but we can't even begin to do that until we get a motion to proceed. and we would expect even by accident we would get one vote or perhaps two votes on the other side. we'll see. maybe this afternoon will be the time. but the american people deserve much, much better. as i said when i started, i know that change is hard. an big change is exceedingly hard. but this is a big issue.

this isn't some small potatoes. this is trillions an trillions of dollars -- and trillions of dollars. the american people have lost $15 trillion in value. and so they require us -- they demand of this congress to take action. not to take action just for the sake of having done something, but to take action for the sake of fixing this to make sure this sort of nonsense an behavior cannot -- and behavior cannot ever happen again in a way that threatens this country's economy. mr. president, i yield the floor. mr. sanders: mr. president? the presiding officer: the senator from vermont. mr. sanders: let me begin by commending my friend from north dakota and expressing my agreement virtually with everything that he said and commend senator dodd for the very hard work he has done in bringing forth a very strong piece of wall street reform legislation which is long overdue. but, mr. president, let me also say that my good friend and neighbor from new hampshire, senator gregg, took to the floor

yesterday to his ex -- to express his outrage that 10 senators on the budget committee voted for an amendment that i offered which lost, by the way, 12-10, to begin the process -- begin the process of breaking up too big to fail financial institutions that pose a catastrophic risk to our economy. and, quite frankly, after listening to senator gregg's statement, i wonder with all due sincerity what planet he is living on. apparently he has missed the fact that due to the greed, the recklessness and the illegal behavior of wall street that the american people continue to suffer through the worst economic crisis since the great depression. the damage done by wall street in bringing this economy to a grinding halt is incomprehensible. millions of people having lost

their jobs, their homes, their savings, young people trying to get out -- go out to the job market to begin a career in their lives unable to do that because of the greed of wall street. and the fact that just yesterday we could not get one republican vote to proceed to begin the debate on how we finally reform wall street is beyond my comprehension. this debate needs to be going forward and we need to pass strong -- underline strong legislation to make sure what happened a year and a half ago never ever happens again. and, mr. president, i also find it interesting that we have some of our conservative republican senators like senator gregg who day after day tell us how much they dislike big government. don't like social security, don't like medicare, don't like

big government, but apparently they have no problem with huge financial institutions which control a very significant part of our economy. in the last 15 years the six largest banks in this country have more than tripled in size and now have combined assets equal to 63% of the gross domestic product. let me say that again. the six largest banks in this country now have combined assets equal to 63% of this nation's g.d.p. so all of my conservative friends who come down, oh, government is too big. government is awful. what about banks that have trillions of dollars in assets? why aren't we talking about that

reality? the truth is that today when we are seeing with these huge financial institutions is not only the ongoing problem of what happens when they fail and whether the taxpayers will be having to bail them out again. but when you have that kind of concentration of ownership, you have a very, very dangerous situation. mr. president, the four largest banks in this country, four banks, issue two-thirds of the credit cards. now, what do we think about that? everybody in the world has a credit card. all banks issue two-thirds of that. now, how does that hollywood rhetoric i hear from my conservative friends about a competitive economy, competition is what drives prices down. well, maybe one of the reasons that millions of americans today

are paying 25% or 30% interest rates on their credit cards is there are four banks that issue two-thirds of them. mr. president, the four largest banks in this country provide half of the mortgages in america. i think that that is a real problem. the four largest banks control nearly 40% of all bank deposits in this country. now, over 100 years ago, we had some good republicans, william howard taft and teddy roosevelt. what they said when they saw the concentration of ownership and wealth that existed in their time, they as good republicans, they said let's start raking it up, and i think what they did over 100 years ago is a lesson that we should learn today.

if a financial institution is too big to fail, that financial institution is too big to exist, and the time is now to start breaking them up. mr. president, this idea of starting to break up large financial institutions is not just an idea that bernie sanders had. it's not just an idea that an amendment authored by senators brown and kaufman is going to speak to. it's an idea that is spreading all over this country. i would point out to you that the presidents of three regional federal reserve banks also support the need to start breaking up large financial institutions. they are james moore who is the president of the fed in st. louis, thomas honig, the president of the fed in kansas

city, and richard fisher, the president of the fed in dallas, texas. and they are all in general agreement that we have got to start breaking up these large financial institutions. mr. president, senator dorgan made this point, and i want to make it again, and that is that during the bailout, the fed decided that it was going to lend out trillions of dollars in zero or almost zero interest loans. and when chairman bernanke came before the budget committee on which i serve, i asked him what i thought was a pretty simple and straightforward question, and that is, mr. chairman, can you tell me and the american people who received these loans? i mean, we're talking about trillions of dollars in loans.

i don't think it's too much to ask who received the loans, what the terms were of those loans. well, mr. bernanke disagreed, and i offered an amendment that day that begins to bring transparency to the fed, and that amendment is called the federal reserve sunshine act, and i am happy to say, mr. president, that it has 32 cosponsors. interestingly enough, 22 of them are republicans, 10 are democrats. they are senator barrasso, bennett of utah, burr, cardin, chambliss, corker, crapo, demint, grassley, harkin, hatch, hutchison, inhofe, isakson, landrieu, leahy, lincoln, mccain, mikulski, risch, thune, vitter, and wyden. that is quite a cross-section of

political views in favor of bringing transparency to the fed. mr. president, what my amendment will do -- and we intend to bring that amendment to the floor during this debate -- is, in fact -- would require the federal reserve to release all of the details about the more than $2 trillion in zero interest loans the fed provided to large financial institutions, and also it would call for a g.a.o. audit of the fed. and the bottom line there, mr. president, is that it is imperative that the g.a.o. conduct an independent and comprehensive audit of the federal reserve within one year, and that's what our amendment does. it requires the federal reserve to disclose the names of the financial institutions that received over $2 trillion in virtually zero interest loans since the start of the

recession. and, mr. president, this is an amendment that i think plls of people -- millions of people wander -- this amendment both in the house and the senate brings together some of the more conservative members and some of the more progressive members. in the house, this language is supported by my former colleague ron paul, and i'm introducing it here in the senate. that, my friends, is a very significant disparity and political views. but we do agree that the fed needs transparency. so, mr. president, let me conclude by simply saying this. the time is now for the united states senate to begin to deal with the greed, the recklessness and the illegal behavior on wall street. the american people have

demanded action since this crisis began, and we owe it to them to deliver. and as we proceed with senator dodd's piece of legislation, which i think has many, many very positive actions, i think our goal as the debate continues is to make it even stronger. in that regard, as i just mentioned, i will be bringing forth an amendment dealing with fed transparency. i will be bringing forth an amendment which will put a cap on the interest rates that banks can charge. i think it is not acceptable, not moral that banks are now charging 25%, 30% interest rates. we're going to have a cap similar to what exists for credit unions. and as i mentioned also, we're going to have legislation and an amendment dealing with fed transparency. so, mr. president, my hope is that our republican friends will join us in beginning this debate

and in fact going forward so that finally, finally we can hold wall street accountable and bring forth the legislation to make sure that never again do we see a repetition of the disaster that we saw a year and a half ago. with that, mr. president, i would yield the floor. the presiding officer: the senator from kansas. mr. roberts: mr. president, i understand i have ten minutes in which to make my remarks, is that correct? the presiding officer: the senator can be recognized for ten minutes. mr. roberts: i appreciate that. thank you, mr. president. over the past two years, americans have seen an unprecedented government reach into the private sector, some of which may be necessary. they are angry about it, however, as they should be as it touches their individual lives and pocketbooks. for many, the overreach of

government began with a bank bailout or tarp for sure, the the $700 billion tarp that i opposed was passed in the fall of 2008 when every day we awoke to see a new financial crisis headlining the front page. now, tarp was initially intended to purchase the troubled assets and get them off the books of the troubled banks. yet, over time, the program evolved into a fund -- some would call it a slush fund -- to include bailouts for the auto industry and the housing market. the term bailout will never be the same again. i think the american people are right, mr. president, to demand that they are never again put on the hook to bail out a failed company. they are right to demand that those who got us into the financial mess not be allowed to do so again. unfortunately, unfortunately, the financial regulatory reform bill that the senate is set to

take up and debate does not achieve these goals. i know both sides are now involved in -- in discussions and the next 48 hours is going to be absolutely crucial to determine if, in fact, we can get a bipartisan bill. but with as any business, if it is mismanaged, if its leaders make poor decisions, the business should be allowed to fail. success and failure have until recently been the cornerstone of what has made our economy one of the strongest in the world. the bailouts of financial and auto companies have turned that philosophy on its head, and i think it is a dangerous road. we need to set a new course. it is what the american people want. this bill does not end bailouts. instead, it allows some of the largest financial institutions to contribute to a bailout fund to be used if a company were

again to fail. well, this does nothing to deter companies from taking risks that could lead to failure and the need for a future bailout. in fact, it sends a signal that the government will bail out institutions just as it bailed out fannie mae and freddie mac, the two troubled mortgage giants that have received received $125.9 billion -- might as well make it $126 billion in direct government funding and now have an unlimited u.s. credit line. yet, there is no mention, no mention, no mention of fannie or freddie in this bill. taxpayers are kept on the hook for more bailouts of these entities. the bill also allows the fdic and the federal reserve to continue to come to the aid of financial failing firms, which means that the financial markets will be fully aware of the government's authority and inclination to prop up large failed financial institutions.

the very existence of this authority undercuts the claim that the government will actually ever wind up with such firms. these firms along with their creditors and shareholders will take more risks and, yes, put the financial system in even greater danger. now, there has also been much attention paid to the creation of something called a bureau of consumer financial protection, bcfp. i would hate to try to pronounce that acronym. that sounds like a good idea at first. we all want, we all want, everyone in this senate wants to ensure strong consumer financial protection. that's not the issue. yet, rather than working with regulators to strengthen existing, existing consumer protection rules and crack down on unfair, deceptive and abusive practices, this provision adds another layer of bureaucracy and

financial regulation that will ultimately be harmful for consumers, and i mean all consumers by raising their costs for financial products and limiting the types of financial products and services that are available to choose from. not only that, this bill increases the regulatory burden for banks, including our community banks that are already subject to 1,700 pages of regulations in just the consumer area alone. under this bill, our community banks would have to comply with an additional 27 new or expanded regulations, including new burdens or small business loans. no telling how many pages these new regulations will add or how much they will increase the cost of lending to small business. finally, this bill harms the very innovation and entrepreneurship that has made our country so successful in creating one of the strongest economies in the world. it does this by limiting the

ability of small start-up companies to raise seed capital. currently, angel investors -- that's quite a name, but angel investors, those higher income individuals who would like to invest in a promising start-up company, take the risk, if you will, must have a net worth of at least $1 million or income of at least $250,000. this bill increases those requirements to $2.3 million and and $450,000 respectfully. estimates are that this provision, along with a provision in the bill that would subject start-up and investors to 50, 50 different sets of state regulations, would disqualify about 77% of current investors. in 2007, these individuals invested $26 billion in more than 57,000 ventures across the

country. we're talking about companies such as amazon, google, facebook. all, all benefited from angel investors, yet this bill makes it harder for promising young companies to get the capital they need to get started to grow and become successful. at a time when the unemployment rate is 9.7%, i think the last thing that congress should do is to make it more difficult for small businesses to start up and be successful. sms the president has acknowledged, the leading job creators in the country. mr. president, anyone, everyone, all of us agree we need better regulation of our financial system. however, the financial regulatory reform bill that came out of the banking committee does not achieve that goal. i dearly hope that the chairman of the committee and the ranking member can reach some accommodation to produce a better product. it does not address the problems as written that led to the financial turmoil, but instead imposes additional regulatory burdens on our community banks

and financial institutions that did not contribute to that turmoil. it does not discourage risk taking by large financial institutions. it does nothing -- nothing -- to address fannie mae or freddie mac, which had a central role in the collapse of the housing markets that helped trigger the financial crisis. it does not ensure that taxpayers never again have to bail out a failed company. however, it does increase the federal bureaucracy and make it more difficult and costly for consumers to obtain credit for their families and small business. senator enzi, at a recent lunch, just told us that he had actually read word for word the 268 pages that follow the $10 million criteria in regards to what this board or this council or this group will be responsible for. and, oh, by the way, who have we seen come in in the halls of congress to talk to individual offices by harley-davidson, and

they're worried about funding for their motorycycles. dentists, doctors, we have boat manufacturers, we have car dealers. 96% of their funding doesn't come from the automobile dealers. they come from somewhere else. they're worried. so as the news goes out and people read the 268 pages, everybody has to come to the conclusion that this is a bill like an octopus. it reaches out into anybody, any business that wants some venture capital or a loan or some leg up to start a company. this approach will not benefit consumers or community banks or our economy. we need to work to improve this bill. it is vital for our economy that we get it right when addressing financial regulatory reform because the consequences will be seen for years, for years to come. thank you, mr. president. mr. dodd: mr. president? the presiding officer: the senator from connecticut. mr. dodd: mr. president, i

recognize myself for ten minutes if i may and ask the chair to notify me when that time has expired. the presiding officer: the chair will do so. mr. dodd: mr. president, i have great affection for my friend from nebraska and appreciate his comments about the bill. he wants to fix the bill. that's a noble goal. and the way to fix the bill, of course, is begin debating the bill. i'm delighted to hear he wants to fix the bill. the problem i've got is i can't seem to get enough people on the other side to get to the point where we might give them opportunity to do exactly what they claim they want to do. mr. roberts: mr. president, would the senator yield for a second? the presiding officer: the senator from kansas. mr. roberts: i'm privileged to represent the state of kansas. mr. dodd: kansas -- excuse me. i apologize to my colleague. mr. roberts: nebraska is fine. their football team is a completely different -- mr. dodd: the basketball team is -- mr. roberts: so it's kansas.

mr. dodd: thank you. my point is they want to get to the bill. whether it is my friend from nebraska or kansas, they want to get to the bill. that's all this is about now. i want to talk about the bill in these brief moments i have before we actually get to a vote this afternoon on this matter. the american public are sitting there in sort of stunned disbelief. here we all acknowledge this huge problem that needs to be addressed. the 8.5 million lost their homes -- 8.5 million lost their jobs, the 7 million that lost their homes, the retirement income that's gone, all of the statistics we know this financial crisis has caused. overt last year and a half we've been busy trying to come up with answers on how to solve this problem in the future. here we are with about 14 weeks left to go before the close of this congress, with a bill on the floor of the united states senate that we put together over many, many weeks and months on a bipartisan basis, i might add. here it is, madam president, and now we're being told despite the

fact that 58 of us believe we ought to at least begin the debate. i'm not asking anyone to vote for the bill. i'm not asking to you vote for an amendment on the bill. all i'm asking you is can we begin discussing this bill here? that's the job of this body to do so. madam president, i'm delighted to receive all the lectures i've received from people about whether they like the bill or don't like the bill or what they want to add to it or subtract to it. that's all very interesting conversation. but the fact of the matter is until we move to the bill, which will be the matter once again before us this afternoon, all of that talk is just nothing but talk. if you've got an idea on what you want to change in this bill, tell me about it. more importantly, let's debate it, discuss it and then vote on whether or not to add it to this piece of legislation or take anything out you'd like to take out as well. but i can't even begin that process if in fact you continue to object to us getting to a debate. that's really what this is all about.

i guess it doesn't pay to get your hopes up in this town, but i was still disappointed yesterday when we ended up coming up short with the votes necessary to proceed to the bill. and to be honest, madam president, i'm still mystified by the reaction of our colleagues. yes, we've heard all the rhetoric from the minority leadership. we've seen the thundering hoards of wall street lobbyists desending on this community; paid millions of dollars to do everything they can to stop this, including the motion to even proceed to debating the bill. they had a victory yesterday. congratulations to the wall street lobbyists. you had a great day yesterday. the american people don't even have a chance to hear a bill being discussed that might avoid the kind of catastrophe that has befallen them over this past year and a half. yes, we're all familiar with the political considerations that seem as inevitable as the sun rise in this community. but still, madam president, i just can't bring myself to believe that he havery single

member of the -- every single member of the minority caucus wants to stand with the large wall street financial institutions who are the major, major objectors to this bill going forward. this morning goldman sachs executives testified, including this afternoon, before a senate committee. we all got another chance to understand why they did feel so -- why they feel so deeply wronged by this legislation. as frank rich said in "the new york times" this weekend -- and i quote him -- "something is fundamentally amiss in the financial culture that thrives on products that create nothing and produce nothing except new ways to make bigger bets and stack the deck in favor of the house." end of quote. our prosperity in this country was built on hard work of generations of americans. it was built in the cornfields of nebraska and kansas, engineered in the laboratories of massachusetts, forged in the foundries of chicago and manufactured, if i may say so,

in textile plants such as my home state of connecticut. and it's deeply ingrained in the american ethos that in this land of great opportunity you build wealth by creating something: an idea, a product, a service. this economic crisis wasn't caused by the creators, the producers, the small businesses and the working men and women who abide by that guiding principle. it was caused by some on wall street who wanted to get rich without contributing a thing, by executives who simply come up with ways to circulate money around in a large circle, taking a piece for themselves every time that circle spins. operating in the shadows of our economic structures in the places where regulators weren't equipped to do their job, firms like goldman sachs found ways to game the financial system, reaping unheard of profits and rewarding their executives with huge bonuses. mr. president, understand exactly what these bankers were

doing. they weren't just trying to predict the future. they were betting on the failure of the mortgage market, a failure they themselves were in a position to cause. early this month national public radio and the nonprofit journalingistic corporation reported on another firm, a hedge fund named magnatar. this hedge fund, according to the report, saw the housing market begin to decline in 2005, broad because the up an enormous -- brought up an enormous amount of doomed bonds and then made huge bondsant failure of the bonds they bought, knowing how worthless they were. thanks to this scheme, the housing bubble grew bigger and collapsed harder. magnatar walked away with billions dollars in profits. other firms saw the opportunity to run this same scheme.

the american people ended up paying this price, of course, as we are all painfully aware. i'm the chairman of the banking committee. i believe in the financial sector of our nation. small businesses need capital and credit. there are many honest people on wall street who want us to build wealth in our country. the problem isn't that these executives got rich without contributing to america. the problem, madam president, is that these executives got rich betting against america. they did it in secret, where no one could see what they were doing, let alone stop them until it was too late. they took outrageous risks with money that didn't belong to them because they could, in their view. by the time anyone realized what was going on, the damage they caused to the prosperity of our nation built over the course of generations. madam president, maybe i'm naive, but i just don't believe that any senator wants to be on their side in this debate. you know what? i've seen firsthand the

republicans who deeply want to get to this bill and get it done. that's why the legislation we want to bring to the floor reflects broad bipartisan agreement. this bill was not written by this senator alone or a handful of democrats on the committee. this bill was written in large part by the cooperation of my colleagues both democrats and republicans. the bill creates an early warning system so that we can see and stop the next wave of dangerous financial products and practices before they threaten the economic stability of our nation. it brings derivatives out of the shadows and into the sunlight so that wall street is held accountable for its actions. finally, it puts a cop on the consumer protection beat so that americans can make smart decisions based on information when planning for their financial futures and those of their families. madam president, to listen to the minority leader, the main point of contention over the last week or so, the reason he has given for his caucuses to

try to kill this bill as a bloc is the disagreement over the provisions of our bill that end too-big-to-fail bailouts. i have to tell you, madam president, i just don't believe that's the case. no fairly reading of this bill -- no fair reading of this bill allows to you claim with a straight face that it perpetuates taxpayer bailouts. it's just not true. i've debunked the idea before on this floor and i'll do it again. the morning after the minority leader made that claim, mcclatchy newspapers wrote -- and i quote -- "mcconnell" -- speaking of the minority leader -- "accused dodd of drafting partisan legislation. even though the banking committee chairman has worked for roughly half a year with key senate republicans and incorporated many of their ideas into his bill. mcconnell also said the bill continues controversial bank bailouts. but it doesn't." end of quote. and if you don't believe the press reports, madam president, here's what our friend, the head of the fdic, sheila bair, had to

say. she, as i said, is the head of that organization, the federal deposit insurance corporation, former legal counsel to the minority leader, bob dole, a republican in good standing, i might add, as well. she pointed out -- and i quote her -- she shuts down by the way failed banks for a living. she's a republican. she says, "the status quo is bailouts. that's what we have now. if you don't do anything, you're going to keep having bailouts." further, she says, "it makes this bill" -- talking about our bill, this bill here, "it makes bailouts impossible. and it should. we worked really hard to squeeze bailout language out of this bill. the construct is you can't bail out an individual institution. you just can't do it." end of quote. madam president, i will speak a little bit later. i know my colleagues and others may want to be heard. can i ask for two additional

minutes. the presiding officer: without objection. mr. dodd: thou how in the world the minority leader can come up with that argument doesn't make sense at all. he quoted from the infamous frank lust memo, the memo by frank lutz was written before the bill was written. frank lutz' political memo said the following: the single best way to kill any legislation is to link it to the big bank bailout. so he provided political recommendations and strategies even before this bill was written. the memo, of course, confirms that. no matter what we wrote, that was going to be their political argument here. so the minority leader blindly followed the political memo here. make that argument. whether or not it's true or not is irrelevant. say it often enough, and the old adage goes if you repeat it often enough, people will begin to believe it despite what the facts are. so, madam president, again, the language of others. but let me just, if i can,

because sometimes just talking about it, let me quote from the sections of the bill. 204 of the bill says, one, creditors and shareholders will bear the losses of the financial company. two, management responsible for the condition of the financial company will not be retained. let me translate: you get fired. and, three, the corporation and other appropriate agencies will take all steps necessary and appropriate to assure that all parties, including management and third parties, having responsibility for the condition of the financial company bear losses consistent with their responsibility. including action for damages, restitution and recoupment of compensation and other gains not compatible with such responsibility. section 206 of the bill, in taking action against this title, the fdic shall determine such action is necessary for the purposes of the financial stability of the -- stability of the united states and not for the purposes of preserving the financial company, ensure they

do not receive payment until after all other claims and the fund are fully paid, ensure that insured creditors bear losses in accordance with the priority of claim provisions in section 210 here and ensure that management spopbd for -- responsible for the failed condition is removed. again, fired, if you didn't understand those words. and not take an equity interest or became a shareholder of any covered financial company or any covered subsidiary. lastly in the sections not withstanding in the provision of law, the corporation is severe for a -- is receiver for a covered financial company shall succeed by operations of law to the rights, title, powers and privileges and shall terminate all rights and claims that the stockholders and creditors of the covered financial company may have against the assets of the covered financial company or the corporation arising out of the status as stockholders or creditors except for the right to payment, resolution or other

satisfaction of their claims as permitted under this section. the corporation shall ensure shareholders and unsecured creditors bail off consistent with the provisions under this section. we seem to agree on the problem and we agree on how to solve it, madam president. so again, i quote from the legislation. let's get to this bill, madam president. we've written the provisions that stop too big to fail forever. there are other very important provisions in this bill that deserve consideration. again, i'm not asking anyone to vote for the bill at this juncture or to vote for the amendments that come up, but for the life of me, i don't know how you explain to anyone in this country in light of what we have been through that we can't even begin the debate and discussion. by the way, no two senators are going to write this bill. there are 100 of us that serve here. every single member of this body has a right to offer amendments and be heard. as chairman of this committee, i will insist upon that, that every member who has an amendment has an idea will be heard, but please let us get to

it. madam president, with that i yield the floor and note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

mr. durbin: madam president? the presiding officer: the senator from illinois. mr. durbin: i ask unanimous consent the quorum call be suspended. the presiding officer: without objection. mr. durbin: i ask consent to speak for eight minutes. the presiding officer: without objection. mr. durbin: if the chair would notify me when i reach seven and a half, i'll come to a blazing

close. thank you. madam president, it's been over two years since bear stearns failed. it's been over 18 months since wall street collapsed and the economy teetered on the brink of depression, and it's been almost a year since the administration offered a detailed proposal to reform wall street. it's been four months since the house passed its version of wall street reform. yet, unfortunately, the minority party, the republicans in the senate, still want to delay any wall street reform. they want to put off wall street reform for another day. yesterday, the republicans in the senate had a chance to vote to end their filibuster on wall street reform so that we could start to debate this issue and consider amendments from both sides of the aisle, almost the way you remember learning about the senate in school, a real place where there is a real debate, differences of opinion.

votes, winners, losers, an amazing concept. you don't see much of it anymore, do you? a lot of empty chairs here. very little actual debate leading to a vote. so yesterday we said to the republicans after all this time since this started, after two years since bear stearns failed and all we have been through, isn't it about time for us to roll up our sleeves and get down to work here? shouldn't we bring some reform and transparency to wall street so we don't have to go through this ever again? wall street got away with murder, and the taxpayers ended upholding the bag. remember? almost $800 billion the previous administration asked to send to wall street to save the institutions that made some of the greediest, stupidest decisions in the history of american business. i was in those meetings. i can remember sobering moments. i'll bet the chairman of the banking committee can remember them as well. when the treasury secretary, mr. paulson, and the chairman of

the federal reserve, mr. bernanke, looked us in the eye and said if we don't put put $85 billion in a.i.g. today, it will fail and the american economy will fail with it. it takes your breath away. we do a lot of important things here, but nothing like that. then it wasn't two weeks later that they came in and said not enough. we need up to $800 billion to buy toxic assets in something called tarp. well, let me tell you, i'm a liberal arts lawyer. spent a lifetime in politics. i can't really start quibbling and arguing over puts and calls and derivatives and c.d.o.'s and all the rest of it. at some point you take the word of the person in charge, and i voted for it. the alternative was unthinkable. where are we today? sadly, some of the same firms we rescued with taxpayers' dollars sent us a thank you card that had a postscript that said incidentally, we have just declared that we're going to give one another $10 million bonuses for our wisdom. how do you buy that?

how do you sell it to the american people? we have come here with the leadership of senator dodd and the banking committee and senator lincoln on the agriculture committee which has a piece of this and said we're going to change this story. we're going to have more accountability, we're going to have more transparency and frankly we're going to put a cop on the beat when it comes to wall street. we're going to make sure we don't get involved in this mess again. i'm going to plug a book. michael lewis, "the big short." i recommend it if you can stand it. he tells the inside story of what happened on wall street. these so-called great, wise men didn't know what they were doing other than making a lot more money every single day. they were building this house of cards and eventually it fell. he tells the story about the folks that profited when it fell. they were completely out of favor for years. people said shorting the housing market, are you crazy? there is no way to go but up when it comes to housing. well, they made a lot of money, shorting the market, and the folks who came up with these

crazy vehicles to package all these mortgages left us in america holding the bag. it took $16 trillion to $17 trillion out of the american economy, this recession we're in. i don't need to tell anybody about it. if you looked at your savings account before and after, you know what i'm talking about. savings, retirement, the business down the street that closed, the neighbor who lost his job. you know the story as we all do. $16 trillion to $17 trillion. that's more than the total value of all the goods and services produced in the united states of america in any year. the total value yanked out of the economy. because of the stupidity of these folks. and now we come before the senate and say do you want to risk going through that again? shouldn't we learn something in the process here that avoids that problem? and republicans yesterday said no thanks, we don't care to vote on this.

well, in an hour, they're going to have another chance. i hope they have come to tir senses. i hope the people they represent have led them to their senses. we have given them ample opportunity and will to offer their amendments. let's hear their ideas. i'm going to be open to them. i certainly don't want to water down this bill. i think it's a good bill. i want to try to make it stronger. they want to water it down? we'll have a vote. debate and vote. almost like the united states senate. it will be amazing. there is a second provision in here for consumer financial protection. right now, strung out across our government are all these agencies that are supposed to be watching out for us. we have agencies that make sure that the toaster that you bought over the weekend doesn't explode, catch fire and burn down your house. we expect that, don't we? the consumer product safety commission. but we don't have an agency that makes sure that that mortgage that you signed doesn't explode and you lose your house.

that's what happened. stuck in mortgage provisions. ever been through a real estate closing? that stack of papers, sign as fast as you can. at the end of 15, 20 minutes, you have writer's cramp, a check, a key to the house and you're out the door. you didn't check the line, middle of the page, 35th document that you signed. it had a prepayment penalty in there for your mortgage. prepayment penalty, so what? well, it just says that mortgage -- when the interest rate goes up, you can't refinance it. oh, i didn't know that. of course you didn't. even lawyers don't catch those things. so we want to create the strongest consumer financial protection law in the history of the united states. not to create a massive agency. it won't be. but to empower consumers so that when you sit down at that closing or you decide to take out a credit card or a student loan or an auto loan, you know what you're getting into. the basics are in front of you, in plain english. wall street hates this idea like

the devil hates holy water. the notion that there would be some agency there looking over their shoulder, just sends fear in their hearts. i think it's a good idea. if someone wants to come here and debate it, i'm ready. but i think we ought to have a debate. what are the republicans afraid of? the presiding officer: senator, you have consumed seven and a half minutes. mr. durbin: let me go to my blazing close. let me just say at the end of the day, currently, lobbyists are being paid $120,000 a day by wall street to stop this bill. so far, they have the republicans on their side and they have been successful. in an hour, i hope that all changes. let them join us in a bipartisan effort to make this economy stronger, make the rules work for average people, and to put some protection in there for the consumers of america, and i yield the floor. mr. dodd: madam president, i am told there are others that want to be heard. the presiding officer: the senator from connecticut.

mr. dodd: madam president, so i would just at this juncture ask for -- i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: quorum call:

the presiding officer: the senator from connecticut. mr. dodd: i'd note the absence

of a quorum. and i see the presence of my friend and colleague from oregon, and -- i ask consent that the rescinde. the presiding officer: without objection. mr. dodd: and, madam president, i see on the floor the presence of my friend from oregon. let me just say i'll yield ten minutes, if i may, to the senator from oregon. mr. merkley: madam president? the presiding officer: the senator from oregon. mr. merkley: madam president, i thank the chairman of the banking committee for the time to address an issue that i think is essential in this bill and for all the good work that he has done to bring this reform bill to the floor of the u.s. senate. it really is time that we have an open debate on the floor of the u.s. senate about provisions that affect the financial foundations of our entire

economy. and i know the chair has been working hard. we've been holding the vote yesterday to try to proceed with an open debate. we're going to be holding another vote today, i believe another vote tomorrow, to say let us have this conversation about reforming wall street. today, though, i want to address a particular point which is limiting the ability of high-risk investors to blow up our economy. my colleague and friend, senator levin, did a monumental service to this institution today by holding a hearing with the executives of the large investment firm goldman sachs discussing practices that misled clients and bundled huge risks into our financial system. the s.e.c. currently has an investigation underway and the courts will determine the merit of that case. but today i want to address what

s.e.c. could not charge goldman sachs with. they could not charge them with the clear conflict of interest of holding a financial stake in a position completely opposite to the very security that they themselves had put together and were selling to their clients. and the reason the s.e.c. could not address this issue is because there is currently no law that says such a conflict of interest is unacceptable. madam president, this gets to the heart of what is wrong on wall street today. the executives of goldman sachs are insisting up and down that they were not making high-risk bets themselves. instead, that they were only market makers underwriting these deals. no matter how often you repeat something again and again, that doesn't make it so.

the facts, as it is said, are subborn thing. goldman was holding positions for its own benefit, large positions for its own benefit. they were betting the market would go one way or betting that it would go another. but that is not making a mark, where you bring buyers -- making a market, where you bring buyers and sellers together. that's proprietary trading, plain and simple. now, proprietary trading, or high-risk investing, costs investment firms and commercial banks billions of dollars in losses because they bet big on housing securities and the bets went bad. those losses were eventually covered in large part by the taxpayers through tarp. and this isn't a side issue to the financial meltdown, it is a core issue. that is why we need to begin debate on wall street reform right now.

we cannot let goldman and other firms continue to pretend that they weren't placing high-risk bets. we cannot let firms selling products to clients while betting against those product. this is an issue that goes to the integrity of the system, an integrity that is essential for folks who have capital and want to put that capital at risk, they need to know that they have a fair market in which to invest that capital. this goes really right to the core of the roll of wall street in aggregating capital and allocating that capital to the places where it would have the highest return. now, the bill we have before us is a very good bill. i think we can make it even stronger by including an amendment that senator levin and i have sponsored on high-risk investments and conflicts of interest. but to consider that amendment, we have to begin the debate and

that debate should begin now. and, madam president, let's not let lobbyists confuse the issue. they will try to argue that high-stakes investing was not complicated in this conflict. they will insist we move high-risk investments outside of the banking system, and by banking system, i'm talking about those banks that take insured deposits and make loans. but that is not the case, and i would like to read from a letter sent to me and to senator carl levin by john reid. john reid is the former chairman and c.e.o. of citigroup. and he spokes t speaks to thosee argument, and this is what he wrote. "i write to support your efforts to rein in the high-risk activities that helped cause the collapse of the world's financial system. the recent financial crisis demonstrated all too clearly the

20-year deregulatory experiment in combining critical commercial banking with equally critical but riskier investment banking failed." he continues, "in 2007 and 2008, losses from risky proprietary trades in the major financial firms quickly decimated the availability of credit and seriously damaged the economy far beyond the concrete canyons where those bets were made." continuing on, "when a firm is focused on market gain through proprietary trading, it too often will employ every available device to achieve those gains, including taking advantage of clients and putting the firm at risk. as recent cases in the media demonstrate, risk management and conflicts-of-interest systems do not alone accomplish those goa

goals. john reid, former chair and c.e.o. of citigroup, then concludes with this: i strongly support your efforts to put the provisions that chairman paul volcker has advocated firmly into law. i believe that the prop trading act and your proposed floor amendment based on that act does so. the legislation provides reasonable exceptions for client-oriented services while including the necessary safeguards to protect against the dangers of high-risk assets and high-risk trading strategies. putting these restrictions firmly into law will be good for our economy and good for our financial services industry even though they may now argue to the contrary. refocusing our financial firms on client services will help them restore the global leadership position that has been seriously undermined by the recent crisismen crisis.

certainly," he says, "we need many other reforms, including a strong consumer protection agency, imposing the duty of care to customers on financial providers, and we establishing a well regulated market for derivatives. but a strong volcker rule is one of the most important provisions to prevent too-big-to-fail institutions, to stop conflicts of interest and to support credit in our economy." madam president, i ask unanimous consent that the letter from john reid be entered into the record. the presiding officer: without objection. mr. merkley: it is very helpful to have a former c.e.o. of a group like citibank weigh in on the challenges before us. john reid, as chair and former c.e.o. of citigroup, is in a position to reflect on the deregulation and the combination

of the roles of lending banks and investment houses and how it contributed to creating the economic catastrophe that became the great recession. so i speak now to my colleagues to say, we need your help. we need your help in creating a fire wall between highly risky proprietary investments and the basic lending functions of banks. it is like storing fire works in your living room. fire works are wonderful and there's no problem with collecting them and utilizing them on the fourth of july or new year's, but you don't store them in your living room where they might end up burning down your house. second, we need clear conflict-of-interest rules that make sure that the investment houses maintain integrity with their customers, that if they

are promoting a security to their customers, they're not doing so while separately and secretly betting against it. these reforms is -- are important, they're an important part of the financial rules of the road that will be healthy for wall street and healthy for the foundation of our economy. the presiding officer: the senator's time has expired. mr. merkley: thank you, madam president. a senator: madam president? mr. dodd: i yield -- madam president, i yield five minutes to our good friend and colleague from the state of washington, patty murray. the presiding officer: the senator from washington. mrs. murray: thank you, madam president. madam president, yesterday afternoon we attempted to bring a bill to the floor that finally holds wall street accountable. it was a bill -- it is a bill that includes the strongest protection for consumers that has ever been enacted. it's an end to taxpayer bailou bailouts, and it gives tools to individuals, the resources they need to make smart financial

decisions. it's a bill that ends wall street's anything-goes rules which has meant that everybody else has paid. unfortunately, what the "no" vote from the other side did yesterday is it told us that they don't want strong, new protections that can't be ignored. it appears that they don't want to hold wall street accountable for years of irresponsibility and taxpayer-funded bailouts. instead of fundamentally changing the financial rules of the road, the other side wants to build a speed bump and pass a bill that neither reforms wall street nor protects main street. i fear that the obstruction and unwillingness to allow us to bring a bill to the floor is simply their push to get a watered-down bill that big banks can simply step aside and ignore and has been rubber-stamped by wall street lobbyists and signed off on by special interests. i fear that the delay is really just an effort to figure out how they can preserve the status quo and talk their way out of

change. i fear that delay is really about allowing special interests in washington and bankers on wall street and big-money donors to write a compromise bill, and i worry that just about everybody that has been invited to that table to write that bill except the american people, and that's because the vast majority of americans want to see strong wall street reforms that we put forward passed. in fact, just yesterday, "the washington post" released a poll that shows that 63% of americans want to see stronger regulations of wall street enacted. but you know what? there's still a widely held view on wall street, has yesterday's vote shows with many in this chamber, that the voices of the people can somehow be drowned out by big money and twisting words about the truth about what is in this bill. wall street thinks that they can get away with highway robbery because, unfortunately, they have. they think they can pull a fast one on main street, but i'm here to tell you they can't, they're

flat-out wrong. and i know because i got my values from main street. that's where i grew up, in a small town of bothel, a thousand people. values we leshed on main streetd on main street there is a good transaction is one that's good for your business and for your customer. we learned that an honest business is a successful one. we learned that our customers are not prey and businesses are not predatorsment -- predators. we learned that personal responsibility meaning owning up to your mistakes and making them right. and we believe that these values are strong throughout our country today. those values exist in small towns like i grew up in, in big cities in every one of our states. and everyone who voted against moving forward with this bill yesterday is going to hear from people who hold those values today, and i'm sure they're going to tell you in no uncertain terms it's time to pass a bill with strong reforms for a system that is out of control. it's time to protect our consumers.

it's time to end bailouts. it's time to restore personal responsibility and bring back accountability. madam president, i'm very hopeful that in the coming few days, that all of those who voted "no" will move forward with us and listen to the hard-working men and women in this country so that we can put forward a strong reform bill on wall street and protect the american people and the millions of people who've lost their job and lost their security and lost their homes in the last few years from ever happening -- from ever having this happen again. thank you, madam president. i yield the floor. the presiding officer: the senator from connecticut. mr. dodd: madam president, let me thank my colleague from t state of washington. i appreciate very much her comments and leadership. i see my friend on the floor, senator brownback as well. madam president, i would ask consent that the last 7 1/2 minutes be reserved for myself and before the vote at 4:30.

the presiding officer: without objection. mr. dodd: seven or 7 1/2? i thank the chair. mr. brownback: madam president? the presiding officer: the senator from kansas. mr. brownback: how much time remains on the debate? the presiding officer: 35 minutes. mr. brownback: i will yield as much time as i consume. i want to thank my friend from connecticut. a great family man. saw him out walking this morning. great senator, great hennage. sorry to see you leaving, senator dodd. however, on points on this view, i have one thing that i want to raise. there are a series of auto dealers who are here deeply concerned about the consumer financial products piece of this legislation. and they're concerned because it's going to hit them. and i would point out to my colleagues quickly about this

that a purchased car, i presume that everybody in this body has purchased a car. probably a number on credit. maybe not everybody. but they've gone into a dealership, they bought a new or used car, asked for financing on that new or used car, and they got it from the local dealership. 94% of those cars that are financed this way, that then -- that paper is actually from some relationship that they have upstream. it's from a bank. it's from a major consumer auto lending entity. it is from somebody else that does the financing. the local dealership just has the paper there and they're the ones that originate. they sell the car. they arrange for someone to do that. 60% does their own financing. the local car auto does their own financing. i would prefer this actually be built into the base bill, the

local auto dealership that doesn't loan their own money isn't required to comply with the consumer financial products in this bill requirement in this bill. it will add another level of regulation on auto dealers that are already struggling to try to get cars to market that people can purchase and financing for individuals. you put another level of regulation, it's going to add more costs and they're already regulated. and this would be regulated upstream already the financial institutions writing the note an paper are already regulated under this bill. why would we do the double regulation in the bill on top of the local regulation that they already have? and that's why the auto dealers are here in town today. -- today asking, saying they didn't cause the financial crisis, they're not banks and they don't think they ought to

be a part of this. they are quintessential main street. auto dealers are. and we lost a lot of auto dealers across this country in this financial downturn. we spent $3 billion trying to support the auto industry and now this is a heavy-handed regulation that's going to cost auto sales. and it doesn't seem to make sense that we would penalize main street for wall street's problems. they are small businesses, the auto dealers are. cities and towns throughout the country and we should talk about how we can support them and extend credit in the marketplace rather than regulating and tamping down their business. my amendment is very simple. it keeps the new banking regulations from touching auto dealers that do not loan their own money, that's all it does. if they loan their own money, they're subject to it. if some other bank, major house, financial institution does it, that financial house or institution is subject to the regulation, but the auto dealer

who is simply there trying to get a car sold and providing this instrument that comes from somebody else, they're not regulated. so they don't have the extra costs. so it's not double regulation from the same bill. and if an auto dealer does lend that money, as i mentioned, they'll be regulated, but this amendment only applies to auto deal hoarse facility loans -- who facilitate loans from larger financial companies. if i'm hearing anything from across my state, and i'm traveling a lot across kansas, they have had it with heavy-handed big government. why would we do this on top of it. franchised auto dealers are the retail outlets. they're the store fronts who process the paperwork for various branches with finance arms. under my amendment the finance arm would be regulated, but the

dealers who process the paperwork wouldn't. it's still regulated. it's not at the auto dealership themselves who have been crippled off of sales this last year, crippled off of the financial crisis that we hit and we've been trying to help and support it and this is -- you're breaking the cardinal rule. if you want less of something, tax an regulate it and that's what this is going to do. you have less of auto dealerships because you you're going to tax an regulate it. under my amendment auto dealersships would be regulated by the f.t.c. and various state laws. so there would be truth-in-lending that still applies. if they're concerned about auto dealers and what they'ring to in writing the paper retailwise, they remain regulated by the f.t.c. and various state laws an consumer protection laws currently in place. and i think those are things that should remain in place. they do remain in place, but we

don't need another level on top of it. why do we need to create a duplicative for each auto dealership and write each loan twice? this is what frustrates people so much. i've heard raised that people are concerned about what happens outside of military bases and auto loans outside of military bases. we have several major military bases in the state of kansas. we're very proud of our military bases and very proud of the mivment and they're siing that we want to get at auto loans and auto dealers there. they are regulated. they are currently reg laivmentd they are currently regulated under the f.t.c. and -- regulated. they are currently regulated under f.t.c. and various state laws. if they're concerned about an auto dealership and trying get financing for the military members, that's currently regulated. there are many states attorney generals that go after them now. it's not as if they're hiding.

they're located outside of military bases. if you want to hit attempt and regulate them, go to the state's attorney generals, go to the product agencies go to the state finance agencies and have them address it. why on earth with a big financial problem we've had that's been created by wall street and international traders, do you hammer the local auto dealer instead? and it's very interesting to me as well as i put this amendment forward, we've had a number of groups say, you know, the recreational vehicles, people who sell recreational vehicles, they're interested into being brought into this amendment and excluded or motor vehicle finance or any number of groups because they're seeing the same problem. they are small business people. they're going to be regulated by this enormous federal entity that was targeted at wall street and instead they, as a small business in their local community, are going to get hit. they're going to take the hammer and they're not setup to handle

it. they don't have huge staffs and these -- in these areas. they've got small staffs to take care of -- and now you're going to put a big regulatory entity on top of them that's already regulated upstream. it makes no sense. it will do no good. it will cost a lot more. it will make financing less available to individuals. it will hurt these businesses. it will hurt car sales. it will hurt motor vehicle sales. it will hurt these sales, hurt the economy for no good reason. i would ask my colleagues to focus in on what's happening in this area of the consumer products and their financing. and do we really want to hit auto dealers? i don't think so. i don't think that was the target of this bill. it certainly wasn't the cause of the financial crisis that we had. and why would we have to hit them? we don't. listen to your local auto dealers.

they're here in town today. hear their story about what's taking place. and, really, let's help the auto dealer as we have been trying to do and let's not hurt them with a heavy-handed regation. madam president, with that, i'd yield the floor. mr. kyl: madam president? the presiding officer: the senator from arizona. mr. kyl: thank you. madam president, let me begin, first of all, by complimenting my colleague from kansas who has been infatiguable in the argument and the cause he's espousing now. he's talked to all of us about this problem. he's made it clear this shouldn't be an intention within this legislation. we shouldn't try to expand the reach of a bill that's supposed to deal with wall street all the way to a local car dealer on main street. sometimes legislation sweeps with too broad a bush, but this is something we can fix and we need to fix it. in fact, it's not just the auto

dealers. the national federation of independent business, which bills itself as the voice of small business, and frequently does represent small business cause, has written a letter to us on april 26th describing this unduly large reach of the legislation before us, and i would like to ask unanimous consent to put this letter in the record at the conclusion of my remarks. the presiding officer: without objection. mr. kyl: thank you, madam president. just another word about what's said in this letter. they point out the fact that the consumer protection part of the legislation goes far beyond protecting consumers from wall street. it essentially goes to anybody that lends money on an installment basis where you have more four weeks -- excuse me or more than four installment payments. let me quote from the letter. -- quote -- "n.fib is -- providing consumers with clear and accurate financial information is an important goal. but because of the reach of the

bureau's authority many small businesses will find themselves subject to its regulations. in addition to the many new and duplicative burdens placed on community banks, the bureau is charged with regulating any retailor or merchant that finances a purchased subject to a financing charge or written payment plan with more than four payments. many small business retailers and merchants such as medical professionals, hardware, electronics and jewelry stores struggling through the current economic climate would be subject to these new regulations. these small businesses had nothing to do with the wall street meltdown and should not be faced with ownerrerus and new duplicative regulations because of a problem that they did not cause. so, madam president, the first concern i have with this legislation is this overbreadth in the consumer protections. wall street can take care of itself, fine to provide the

protections against wall street. but surely we can reach an agreement that we don't intend this legislation to reach into main street to the extent that it does. and i would just urge my colleagues to listen to the concerns expressed by the nfib and let's try to deal with those concerns in a way that would enable us to be more supportive of the legislation. now the second point that i would like to make has to do with the so-called too big to fail or taxpayer bailouts. there are different ways of talking about this. i find it interesting that some of my colleagues have apparently a great reverence for a pollster and wordsmith named frank luntz. frank luntz is a person i know. he is very good with words. he's a good pollster and so on. and at one time he apparently wrote a memo that suggested that one way to attack a bill like

the bill that is before us -- i think my colleague, the chairman of the committee, has noted this memo was written by luntz before there even was a bill, was to use bailout language. and i haven't seen the memo, but i understand that's what it did. number two, republicans have used this bailout language. therefore, number three, we are blindly following luntz. well, now, if iing suggested that to my professor in philosophy 101, i'd get flunked out of the course for a basic failure in logic. this is a logic fallacy, something followed, something else, therefore, was because of it. and the laws that the famous saying, obviously a fallacy. and so i -- i just defend those of my colleagues who have used language that maybe somewhat similar to luntz on the basis that just because they used the

language didn't mean that luntz caused them to use it. it may be that luntz figured out the same thing the rest of us figured out. this bill does not end taxpayer bailout. that's the problem. taxpayers are still on the hook. i can understand the sensitivity of those who tried to write the bill that are subject to the criticism in this language. but the solution to it is obvious. get the taxpayers out of this so they're no longer on the hook for any bailouts and the argument won't last anymore whether luntz likes it or not. that can be done through a process of negotiation. the bill was supposed to stop additional taxpayer liability. threats make sure that it z in this regard, madam president, i just have to object a little bit to some of the language used by some democratic senators. one of my -- we've got rhetoric about republicans' motives and i'm not going to suggest what senators are talking about.

but one of them spoke specifically with respect to the republican leader by name. this gets -- when you're questioning the motives of someone, suggesting the only reason they did it is because they read somebody's memo or because some lobbyist from wall street had been visiting them or suggesting that it was because of campaign contributions, that gets very close it a violation of senate rules. you know, senators can take responsible positions on bills, irrespective of what a lobbyist might have said or someone might have written in a memorandum. i'd like to have an honest debate about the bill rather than suggesting the motivations for senators with respect to the positions that they've taken. one of my colleagues -- in fact it was the senator from illinois -- asked the question with regard to the vote that we're bhea to take here, what are republicans fraid o afraid of? are we afraid of going to the bill and then having votes on amendments? let me answer that specifically.

one thing that i'm concerned about is we won't get to have votes on amendments. we were promised in the health care debate this 2,400 page -- $2,7-pag00 page bill that we'd e lots of opportunities for amendments. there was no more amendment process. there was no more debate. at that point cloture was filed, the vote was taken, he had his 60 votes. end of discussion. there is nothing to suggest that if we go to this bill that we're going to have a fair amendment process. and if that were made very, very clear by the majority leader, by the distinguished chairman of the committee and republicans had some sense that we would fare better than we did during the health care debate, then it would be one thing. but with the experience of the health care debate behind us, i think you can understand why we would be a little bit wary of

just "trust us, go to the bill, we'll let you have all the amendments that you want to try to fix the bill." so, that's the first point. let me get back a just little bit to this issue of the bailout because i made an asession and i need to back it up. the problem here -- i really don't think that any of us want to continue to have taxpayers on the hook. but this is complicated. and it may well be that the continuing authority, for example, of the fdic that's specifically written into the legislation, while not intended to result in taxpayers being on the hook, it nevertheless does. let me just refer to a couple articles. one is by a visiting professor at georgetown yiewrveghts business school professor, phillip schwag eflt l. the article is "yes, it is a bailout bill." and he says, among other things, "the discretion given to the government in the senate proposal opens the door undesirable actions such as

allowing the administration to write checks to favored parties. this concern is not theoretical. such mischief took place in the bankruptcies of chrysler and general motors, as the two auto companies were used as conduits to transfer billions of dollars from tarp to the president's political supporters." he is talk about labor unions. "a better approach," he says, "would be a resolution regime centered on bankruptcy." now, there's a lot of debate about how to do this liquidation process, unwinding process, quasi bankruptcy process and so on. there are a lot of good arguments and it is difficult to do. i appreciate that the chairman of the banking committee has had to deal with a lot of different ideas from different senators about how to do it as well a a lot of columnists. but it is a fact that under the whicexisting legislation there s still liability for taxpayers here that concerns some of us, and we'd like to see a genuine discussion about taking that out. and if it is a concern of all of you we all agree that that

shouldn't be, then let's have a little good faith here and get it out before we come to the floor and have to try an amendment where there are 41 republicans, 59 people that organized the democrats and we're not at all assured of being able to get it out of the bill. here's another article. it is in the ""national review"" online, april 26. the article is tilted, "the case against the dodd bill." they make several pint points in here. one is the resolution authority. "the resolution authority designed by the dodd bill might actually create more moral hazard than it would eliminate because it would give the fdic too much flexibility in how it resolves a failed firm." it goes on to say, "as structured, this authority would allow the government to bail out nonbank creditors and, worse, to play favorites among them, just as we saw when the obama administration gift-wrapped large state stakes in the automakers for its union allies at the expense of secured

creditors." now, my point here is simply that there are a lot of people who have looked at this and have come to the conclusion, as i have, that the bill is not tightly enough written, that as written it has too much in it that would allow various federal entity, including the fdic, pretty unlimited authority to use taxpayer money to resolve or liquidate or deal with companies that are deemed necessary to deal with. i won't say "too big to fail," because allegedly we're eliminating that. sure surely, we could get together and try to esolve this issue in a way that left no doubt that the ultimate conclusion is, there is no more taxpayer liability. i think we'd all like to see that. and it is a legitimate debate to have. and i don't think that we should criticize those of us who are raising these questions as somehow doing so because some lobbyist told us to. i don't care about the lobbyists or wall street here. what i care about is my

constituents' taxpayers being on the hook for a bailout of one of these entities or to creditors of these entities or the shareholders of these entities. the final point i want to make is this: this is kind of like the sherlock holmes, the dog that didn't bark. there's something missing from this legislation here. you look through the entire bill and probably the biggest reason for the failure of our financial system was the fact that fannie mae and freddie mac were allowed to go whole hog, take on a bunch of bad loans and end up with an implicit guarantee that ultimately became an explicit guarantee by the taxpayers of america. you won't find any resolution of that problem in this bill. why is it that when everybody knows that this problem began with a lot of loans being made to people that couldn't afford them, those loans then being acquired by fannie and freddie and then sold off in fancy

esoteric instruments on the market here, why is it that there's nothing in here about the risk of fannie and freddie and the risk that they still pose? it is way north apparently of $400 billion. i have heard in the trillions of dollars. and that this would be a taxpayer liability. if that's the case, shouldn't we be focusing reform on the entities that actually created the problem? fannie mae and freddie mac? why isn't that being done? well, the former chairman of the bankings committee has explained. the senator from alabama, when he was chairntion he tried to get more regulatory authority over fannie and freddie. members of the minority party then, not the majority, tried to stop him. i remember especially a quotation from barney frank, the chairman of the house banking committee, that was especially colorful in this regard. he thought we could give them a

little bit more latitude here, that he didn't think any regulation woo was necessary. if we knew there was a big problem here, we didn't do anything about it at the time, and after the fact we discovered that's exactly what the problem is, why wouldn't we want to make sure that it'll never happen it again and we somehow resolve the problem? one of the answers is its real estate an awfully big problem to tackle. well, mr. president, this is an awfully big bill. if we can reach into main street, into your local car dealer or dentist because your kid's orthodontia takes more than four months to pay on install i wants, then surely we could deal with fannie and fred freddie, the biggest culprits of all. why aren't they dealt with here? let's don't think, well, we'll do that next time. i think it's pretty clear, whatever we do here, we're probably going to be stuck with for a long time. and the failure to deal with this is a glaring omission in

the legislation. nor do i think, mr. president, that if we grant the motion to proceed to the bill and one of us offers an amendment to cover fannie and freddie that it would fare too well in this body, and i won't specifically ask the chairman of the committee or anybody else would they support such an amendment, but the reality is that it is unlikely that this body would actually regulate fannie and freddie. that's a reason why some of us oppose the legislation. unless there is some ability to negotiator something in advance of the bill actually coming it - coming to the floor with very little likelihood that it would be done on the floor, it seems to me that this is another reason why those of us who have opposed cloture, i think, have every basis coming here and saying, until we goat -- until we get some satisfaction, some suggestion that this problem is going to be dealt with, why would we want to proceed to legislation which isn't going to fix the biggest part of the

problem that was crested i -- tt was created in the first place here. that is a third reason why i think up till now republicans have said we're not prepared toalg to this legislation. mr. president, might i inquire how much time is remaining on our side? i don't want to -- the presiding officer: 10 1/2 minutes. mr. kyl: 10 1/2 minutes remaining on our side. excuse me. i'll yield to the chairman of the committee. mr. dodd: i thank the senator from arizona, my friend, for yielding. let me just say a couple of things. mr. kyl: i might do, mr. president, is yield the floor, reserve the balance of the republican time. that way if one of my colleagues comes and i have to leave, then that time would be remaining. excuse me. the presiding officer: the senator from illinois is recognized. -- the senator from connecticut is recognized. mr. dodd: i have the last seven and a half minutes. otherwise i think we've run outs of time. i'll take one minute. i want to tell him and say this to him. i've been here 30 years, have

chaired bills on the floor. i never chaired a committee before 36 months ago when i became chairman of the banking committee. i want to say to my friend from arizona, and i want him to convey this to his colleagues through this vehicle, i would never deprive another senator the opportunity to offer amendments on the floomplet i revere this body. i served -- i began my service in this body sitting on the stems over there as a page. and thousand this senate works is because -- and how this senate works is because we all participate in the gaivment i know there are those that have this concern in fear. and obviously you don't have unlimited debate forever. the point is amendments ought to be offered. i have colleagues on my side of the aisle who want to make this bill stronger in their views. i know there are people who think i have gone too far with the bill and want to wawfort water it down a bit that. debate can only occur if we're on the bill. i want my colleague to know, as one of the leaders of the minority, that i would never

deprive another colleague of the opportunity to be heard, offer their amendments and thoughts and the process. i know he said that. secondly, on the too big to fail, i -- this goes back and forth. senator shelby and i worked on this. i only see the possibility that there are some workability amendments to tight than up. i'm all for that. senator boxer from california has an amendment that would say nothing in this bill could ever allow taxpayer money to be used. i'm for that amendment. i don't know how many different ways we can say it. i think all of us agree we don't ever want to see our country go through that again. so the only limitations are, are we finding additional language here that will satisfy us that we think we've done the job we've intended to do. and so the workability amendments, as again senator shelby and i have talked about how to do this -- and, again, if that's the holdup, that shouldn't hold us up because we're both committed to that. thirdly, i want to say, as there is a document circulating with some ideas of a republican alternative that includes getting into the government-sponsored enterprise.

it is a huge issue with the g.s.e.'s. is it needs it needs a lot of w. this language that i've read, i have no problem with whatsoever. i am note endorsing everything here because it is just a concept. but if that's an amendment, i've seen -- 90% of behave a seen here i don't have any problem with. that could be an amendment included with our bivment but i've got to get do to it. everybody is coming with things that he'd like to add or subtract from the bill. as my friend knows, having been a leader for a long time, you've got to get to the product. that's my frustration here. lastly, i would just say to him by the way on section 2 -- i don't want him to be bored with too much detaivment it is in section 1027. the last lines of limitations -- people have concerns about dentists or other people being drawn into our consumer protection. notwithstanding subparagraph "b"

a bureau may not make any enforcement -- with respect to a merchant, seller of nonfinancial goods or services that the no engaged significantly in offering providing consumer financial services. to insulate the very worry you would have and others have talked about the nfi. b, someone that has four installment payments. it may be your local grocer. people show up and buy food but usually at the end of the six months, you have to be in the business of financial services and products to be feactd by the legislation. i know there are members that have problems with that part of the bill and on my side who want to strengthen it. they think have not gone far enough on the bill. one of the difficult jobs is trying to reconcile differences that exist. but i can't begin to do so if we can't talk about it. that's my frustration, as chairman of the committee trying to get us to a point where all of us want to be. we don't want to leave here without saying we didn't really

deal with the problem. i know arizona, what you've been through with your housing issues is staggering. florida, california, i think nevada probably rank in the most difficult states where housing prices declined and foreclosures occurred. i want to assure you i will not deprive anybody of an amendment to be offered at all in the process. we'll try the workability issues on too big to fail. language, we've worked on the consumer protection, and we think we took care of those dentists and others worried about it. again, others may have amendments and ideas and we may have to consider them on the vote. but i appreciate you giving me a little bit of time. mr. kyl: mr. president, may i respond very briefly? the presiding officer: the senator from arizona. mr. kyl: thank you, mr. president. i appreciate those comments. i'm sure the chairman would acknowledge the basis for some republican concern here about the ability to offer not an unlimited number of amendments for the purpose of filibustering the bill, but rather enough to

try to solve what are perceived to be the problems of the bill. part of the problem here is a lack of trust, mr. president. there are some on the democratic side who have said that they believe that the intent of the republican leadership or republicans is to filibuster this bill so that there would be no bill. now, it's hard to prove a negative, but i don't know how many times the leader mcconnell and i and chairman or ranking member shelby have said that is not our intention. everybody acknowledges that there is work to be done in the regulatory regimes that govern the trade in these various esoteric instruments, the derivatives and others and regulating financial institutions and dealing with the problem when some of them become financially troubled. everybody acknowledges the need to do that. and i firmly believe that at the end of the day there will be

legislation passed that deals with that. i don't think there's anything that the minority could do even if it wanted to to stop legislation from ultimately passing. so to those colleagues on the other side who believe that it really is the republicans' intent to to want legislation -- intent to stop the legislation, to have no legislation, all i can say is yet one more time that is not true. i don't know of a single republican that believes that, absingle republican that doesn't want to see legislation. nor do i believe that it is analogous to health care in that there was a strictly partisan approach taken there. the lines were drawn, and we don't have to debate how we got there. the reality was at the end of the day republicans were trying to do everything we could to stop the legislation, and the majority did everything within its power to ultimately get it passed. that is not the same situation that i see with this bill.

because, first of all, i think that members are a little closer than was the case on health care. and secondly, there's been at least a negotiating process between the chairman and the ranking member and others that has suggested ways to at least approach some of these problems. republicans are suffering under no illusions that with a 59-49 senate lineup here that we should get 100% of the way or even 60% or 50% of the way. senator shelby made it clear he understands he needs to compromise because the majority has more votes than the minority does. but to try to get at least a proportional or representative sample of republican ideas in here. moreover, as my colleague's conversation just revealed, there is a lot of overlap in intent here. i don't think we intend the bill to reach into main street to the degree that some of us concerned it still does. i don't think there is the

intention to see taxpayers still on the hook to the extent some of us think the bill still does. and to the extent that the chairman of the committee says there have to be ways to ensure that that doesn't happen and we can do that, i accept what he says in good faith. and i also accept in good faith his view that amendments within reason should not be limited. and, again, there is no intent on the republican side to filibuster the bill to prevent a vote from ever occurring. i don't think we'd have that ability even if we wanted to do that. so we have to get over this problem of trust. and another way i think to do that is to lead by beginning to make a difference in the way that the -- not the legislation is discussed, but the senators are discussed, the motivations for different senators. it would be easy to come to the floor and talk about motivations. it would also be wrong. and i think that the leaders in the debate, starting with the

leadership and then chairman, ranking of the committee and on down, perhaps have some responsibility here to take the lead and making sure that the discussions on the merits of the bill. and when i raise a particular issue, as the chairman just did -- well, let me go to the language and see if we don't have that already covered, rather than i know why you're saying that, the senator from arizona. you have some ill motive. the senator wouldn't say that. so perhaps we can begin to reach a better sense of trust here where we can begin to work through these things in a much more constructive way by taking the leadership and getting a more civil conversation. when i say that, i point to nobody in particular as in violation, but rather point to myself and the other leadership as the place to start with setting that tone. all of these things could begin to build the trust that might enable us to begin to engage in the process -- how time flies when you're having fun. the presiding officer: the

minority time has expired. mr. kyl: -- to conclude a process that will be constructive to the american people in the process. thank you. mr. dodd: mr. president, let me thank the distinguished republican leader for his comments. part of what he just said is worthy of note. this institution suffers on -- we operate on unanimous consent. that's the way it works. and inherent in unanimous consent is trust. it's the only way this institution has ever operated. and there's been, i think, we all have to acknowledge somewhat of a breakdown, for a lot of different reasons in that. we've got to get back to it. this is an opportunity to do that. senator shelby and i have a very good working relationship. we trust each other, we talk to each other all the time. we talked this morning. we're meeting again at 5:00 today to talk one way or the other, where the bill is. there has to be a return to that comity, that understanding why we have differences of opinion here. if the american people believe that we cannot trust each other, when i say i will -- i was asked

at our conference lunch, again, the very question my colleague from arizona raised: will i be allowed to offer an amendment, senator dodd? absolutely you will on this. so it's a concern, i know that everybody has about whether or not they can be heard on these matters. and i would never, as a person who reveres this institution, want to depry anybody of an -- deprive anybody of an opportunity to be heard on a matter as important as this. we have amendments to be offered, i know of a cosponsor -- one senator enlisted the cosponsors of an amendment he wants to o. there - wants to o. i have concerns about that amendment. but the fact of the matter is it has bipartisan support for an amendment they want to offer. there are a lot of these ideas. i know within the republican circle, there are divisions as well as to what ought to be in this bill. we have them on our side as well. it is not as if there is some bright line here and one solid thought process here and an alternative here. there are as many different views on this bill as there may

be members of this body. but all i ask for is let us get to this. let us get to this debate. the leader got up and said this was a partisan bill. i worked very hard to avoid that. back in november when i introduced the bill, there were objections on the minority side as well as on the majority side. i put it aside. we spent from november up until just a few days ago really trying to put together a product here that would reflect all of this kind of different thinking. it is a vastly different bill than the one i introduced in november. i know it's not yet to everyone's satisfaction. but we need to debate this. it will take a long time. this is not going to be a short debate, i know that. but we need to allocate talking about what's in the bill or not in the bill rather than questioning each other's motives as to why we're not on the bill, it seems to me. my plea is, again, senator shelby has said i think we're in about 80% agreement. i believe that to be the case. 80% agreement ought to be enough of a basis upon which to move forward. if we disagreed on everything, i might still believe we ought to

debate it. i see my colleague. i realize he has to go. we're going to vote in a couple of minutes. i want to thank him for spending the time with me here and for hearing me out on these points. mr. president, those are sort of the points i intended to make in these closing minutes of this discussion. we had it yesterday, and here we are again this afternoon. and with all of the things that people are going through in the country, it seems to me again that this bill, which again has been the product of a year and a half of work -- this wasn't drafted in over a weekend or some short period of time, trying to reflect the interests of my colleagues -- is deserving of our consideration. i am not asking anybody to vote for this with this next vote. no one is asked to vote for this. no one is asked to vote for the various amendments i'm sure will be offered. i will welcome this part of the debate. all we're being asked to do in

the next seven minutes or less is to give this product a chance to be discussed. this product reflects a year and a half of effort to answer the question: what went wrong that caused our economy and our nation to go through the worst economic crisis since the early part of the last century? that's a legitimate question being asked. what are the gaps? what steps are you taking to fill in those gaps? are there cops on the beat to protect us? do they have the authority and the resources to do the job? is there an early warning system? these are all issues upon which i suspect based on my conversations of over a year and a half, or more than that now, that we have a lot of agreement on. i don't know of anyone in this chamber that wants to support a bill that doesn't end too big to fail. if they exist, i haven't heard their voices. i don't think there is anyone here that doesn't believe we shouldn't have an early warning system so we can identify problems before they become the large ones that cost us as much

as they have over the last several months, last year and a half. i think all of us, i've heard my colleagues say they're for a consumer protection agency. i believe them. we have a consumer protection agency in this bill. now there's a debate about how much authority we want to give them, the interface, interaction with prudential regulators. those are all arguments within the context of whether or not we ought to have a consumer protection agency. there's not a position over here that i know of -- maybe some have it -- that are flat-out against a consumer protection agency. senator shelby has told me this and others on the banking committee, we're for a consumer protection agency. we have differences on what ought to happen within this. that's the purpose of having a debate. we're told again, we heard it a moment ago, we ought to have a bright sunshine on derivatives, these exotic instruments that went to $91 billion in 1998 to $600 trillion -- that's with a

"t" 11 years later and that shattered economy that thrust significantly what we went there. we should not leave the situation as it is today as it was 18 months ago. we agree on that as well. let's have transparency. thr*ets have accountability. -- let's have accountability. there are differences. i'd be naive and foolish to suggest otherwise. but everyone agrees we ought to do something about it. so if you look at the major thrust of our bill and too big to fail, set up an early warning system to avoid the problems we saw in the past, deal with these exotic instruments out there and have some agency that at long last might keep an eye out for the average citizen in this country, to watch their credit cards, their mortgages and so many other financial activities they engaged in become deceptive and fraudulent that they suffer terribly. so we all agree on the basic goals outlined here in this bill. differences exist at least in one or two of the areas.

too big to fail, i don't think there is any real agreement. i don't think there is any agreement on the early warning systems as i've heard the debate. the differences exist in what happens inside the consumer protection agency and what happens in the aerocraft shadow economy -- in the area of the shadow economy, in dealing with the derivatives and other items. but not whether or not we ought to be doing something. mr. president, that's what w ought to be doing. mr. president, 30 seconds more. the presiding officer: without objection, so ordered. mr. dodd: -- let's vote. let's vote to invoke cloture and begin the long debate we need to have. i urge my colleagues to do so. the presiding officer: under the previous order, the motion to proceed to the motion to reconsider the motion, on the motion to invoke cloture onon t. the motion to reconsider is agreed to, and the question is on the motion to invoke cloture

on the motion to proceed to senate bill 3217 upon reconsideration. the yeas and nays are ordered under the raourblgs and the clerk will call the roll. -- under the rules,nd the the clerk will call the roll. vote:

vote:

the presiding officer: are there any senators wishing to vote or to change their vote? if not, on this vote, the yeas are 57, the nays are 41. three-fifths of the senators duly chosen and sworn not having voted in the affirmative, the motion is not agreed t upon reconsideration.

the presiding officer: the senator from california is recognized. mrs. feinstein: thank you. the presiding officer: could we have order in the chamber, please. a senator: mr. president, the senate's not in order. the presiding officer: can we have order in the chamber, please. the senate be in order. mrs. feinstein: mr. president? the presiding officer: the senator from california. mrs. feinstein: is it appropriate for me to speak on the bill for a few minutes, please? the presiding officer: the motion to proceed is pending. the presiding officer: thank you very much. mr. president, on a big bill, i find this a very -- mrs. feinstein: thank you very much. mr. president, on a big bill, i find this very frustrating, where for the second time, the other side has said we won't let

you go for a vote on the motion to proceed to a debate until there's an agreement on the bill. how can there be agreement on the bill if there isn't debate and if the majority at least isn't allowed to present its position? and i find on a bill of this size and the complexity of the bill, to refuse to go to a debate on the bill, to be just an amazing thing. and i would hope the other side of the aisle would begin to see that and would relent. i had a chance today to listen to some of the questions being asked in the special committee on investigations of goldman sachs, and if anything should show the need for this bill, it is what is going on in a committee of this body. and yet out here, we cannot even begin the debate on the bill. we cannot hear from the chairman of the committee, we cannot hear

from the ranking member, we cannot understand both points of view. we are prevented essentially from debating one of the most important bills this congress will pass. so i wanted to come to the floor today to say that and also to speak in support of the derivatives position put forward on monday by chairman lincoln and chairman dodd as part of the financial and commodities market reform package i think it's fair to i -- commodities market reform package. i think it's fair to say that i have long advocated for more aggressive regulation of derivatives which, in the main, are very complex financial instruments, exempted from federal oversight through loopholes in the commodities market modernization act of 2000. in other words, prior to the year 2000, we could regulate these. after the year 2000, they

floated free, nontransparent, no audit trail, no antifraud, no antimanipulation oversight whatsoever. the dodd-lincoln bill is the most aggressive and comprehensive proposal to regulate the out-of-control derivatives market that has been offered yet by this congress, and i strongly support it. the dodd-lincoln bill will require robust federal oversig oversight. it will establish transparency. it will reduce systemic risk. i believe this bill is the best chance to tackle these unregulated markets that were responsible for bringing down enron, a.i.g., lehman brothers with terrible repercussions for the american economy and millions of hard-working families. and this bill will rein in reckless traders who lack a moral compass. today there is nothing more