some get fabulously rich. but then they just drive the economy off a cliff. so just, again, so what we do to protect ourselves against floods, what do we do? well, we do a lot of upland treatments, we build dams, we build levees, we do all kinds of things to protect ourselves. there are things that we can do to protect ourselves from financial collapse too. it's just putting into place the kinds of oversight and transparency and regulations that allow our capitalist system to operate but to operate within some bounds, operate within some bounds. i don't think anyone is in favor of what we might call unbridled capitalism, the kind that we had in the 19th century, the late part of the 20th century. i don't think anybody wants to go back to those days. yes, we believe in a capitalist

system where people can take their savings and invest it and make their money work for them, loan it out to other people so other people can start businesses. that's the capitalist model. there is nothing wrong with that. but should we let people take our money that we have saved up for pensions, for example, or other kinds of investments and take those and sort of go to las vegas? i don't think so. we want some rules and regulations so they can make prudent investments, so those investments can be used to start businesses to invest in economic growth on a broad basis, but not to be used for speculation, not to be used for just gross speculation on wall street. so that's why we need this financial reform bill that we have that we're trying to get up here on the floor. it will guard against future

massive meltdowns that always cost us, always cost us, not only so much money but just in ruined lives, ruined lives. and by all means, the strong financial reform must include regulations of the derivatives market. this is something, mr. president, i have been involved in for a long time on the agriculture committee through all the years i have served there with the commodity futures, trading commission. and having some -- looking at what's happening in the derivatives markets, and i'm pleased to say that the legislation that we're trying to bring up here includes the provisions that passed out of the agriculture committee under the leadership of our chairman, senator lincoln. derivatives contracts have been at the heart of the wall street's financial manipulation. from december, 2000, to june, 2008, the height of the wall street boom, the face value --

they say that notional value, notional value. face value of over-the-counter derivatives grew from from $95 billion in 2000 to to $683 trillion in 2008. there was really nothing underlying this, other than people just shifting things back and forth and betting on them back and forth. but there was nothing underlying this. now, i want to make it clear, people say are you against all derivatives? i say no. there are basic derivatives that can be healthy for our economy and for individuals. businesses to the farms to individuals. i always point out the classic derivative is like an individual buys a home. they buy their home, they buy a new house, it's their home. they put their money down, they have a big mortgage, they're going to pay it off.

a lot of times, people will get a little insurance. it's called homeowners insurance, that if you die, your mortgage will be paid for. a lot of us -- i remember when we bought our house, we bought that kind of insurance. that's a derivative. nothing wrong with that. i buy some insurance to protect my family. farmers use derivatives. businesses use them to protect against currency fluctuations, things like that. that's fine. these are basic derivatives. mr. president, since i see no one else on the floor, i ask for another seven minutes. the presiding officer: without objection, so ordered. mr. harkin: thank you. so like i said, i have no objection to the basic derivatives. it's when these derivatives get out of hand. it's when you have a derivative on a derivative on a derivative and on and on and on, and that's what's happening to the derivatives markets. these become just little

gambling things. there are instances of derivatives passing back and forth between speculators two or three or four times a day, on small margins, small, .1%, maybe .01% margins, but on big pools of money, big pools, pure speculation. well, so despite the youthfulness of -- the usefulness of derivatives in certain cases, it got out of hand. so what we reported out of the agriculture committee would, number one, bring all these transactions to the light of day, no more behind the scenes. it would have to be reported to regulators in real time. it would bring the vast majority, 90% or more of these on to clearing houses and exchanges. it would help to reduce the concentration of risk, bolster public transparency and the legislation that we're trying to

bring up here that the republicans keep blocking gets to the heart of the too big to fail problem by prohibiting these swaps entities, these derivative entities from also being commercial banks. we kind of go back to glass stegall and say a commercial bank backed by the government or fdic should not be able to use that government backing to support these high stakes gambling. if you want to be a commerce bank, god bless you, be a commercial bank, but you can't be dealing in these swaps and derivatives. let the investment houses take care of that. it's unfair to taxpayers and to our economy to let our banks do that. it's unfair to community banks. i just met in my office yesterday with all our community banks -- not all, but most of the community banks in iowa. they don't deal in swaps and derivatives. they take deposits, they loan them out for business starts and people that need a loan for different things. they are not dealing in swaps and derivatives. so why should we allow these big

banks on wall street to do it themselves? no reason for that other than they just want to do it and again to continue this kind of rampant speculation. also in this bill, we put in an independent financial consumer protection agency to guard against rip-offs and abuses and mortgages, credit cards, payday loans and other financial products, to protect consumers. sorely needed. we slam the door on too big to fail financial institutions. no more a.i.g.'s, no more citicorps. when companies make huge bets and lose, there ought to be a process for liquidating those companies, period. not that there is too -- not that they are too big and we have to rush in with taxpayers' help. now, to further improve the bill, i am cosponsoring legislation offered by senator cantwell that would re-create the great depression era regulation that prohibited the mixing of banks and insurance companies. it's almost like restatement of

glass istea fall gal. -- of glass stegall. i'm also a cosponsor of the safe banking act offered by senator brown and kaufman that would limit the size of banking institutions. no more too big to fail. in addition, i support legislation by senators merkley and levin that block institutions that are insured by the fdic from proprietary trading with their own money, with their own funds. we just can't have these big banks playing with their money if it's backed by the taxpayers of this country. again, mr. president, america has been through financial collapses and deep economic downturns before, but we learned in the great depression, we learned. f.d.r. answered that crisis by implementing tough new regulations to stabilize the financial system, rein in risk taking and recklessness on wall street, make the economy work for ordinary americans. because of those -- those reforms made in the 1930's, we

had decades of shared economic prosperity unprecedented in our nation's history. and then we threw it all overboard about ten years ago, 11 years ago. what we did in the 1930's needs to be our model. not the same, but it's a different system. it needs to be our model as we shape today's financial reform legislation. financial reform legislation ought to separate these big entities out. we can't have too big to fail. we need to have transparency. we need to stop banks from engaging in swaps and derivatives back and forth if they are backed by the fdic. now, these amendments, the cantwell amendment, the merkley amendment and others that i happen to be supporting, again we can't offer it unless we get the bill to the floor. i don't know if we'll win or not on those, but we ought to have the right to offer those amendments. i tell you, i -- i just want to thank senator dodd. he has been in the forefront of this fight for a long time,

trying to bring this bill to the floor to crack down on all of this speculation, to put regulation in there, to have a good consumer protection agency out there to protect our consumers. senator dodd has led this effort, and i know where his heart is. i know how he is trying to make sure that this system works for everybody, not just wall street. and i don't know, i don't want to be in the role of bashing wall street all the time. i know that's a popular sport. wall street has a role to play in our society. they sure do. they are a fountain of investments on a large scale. i have no problem with that. my only problem is with some of the dealings they have been doing with the swaps and derivatives and things like that. but let's get wall street back to what wall street does the best -- accumulating capital,ha,

gets us back to that system. straightens things out and helps us to protect us from these kind of collapses in the future. i do not understand why the republicans will not let this bill come to the floor, won't even let it come to the floor. i don't mind if they want to vote against it. if they want to be on the side of keeping wall street speculating with taxpayers' dollars, letting these things get too big to fail, that's their right, but why not let the bill come to the floor so we can debate it and amend it? if they want to change it, let them offer amendments. but you can't do that unless we bring the bill to the floor. i hope the american people understand this. i hope they understand that that side of the aisle, the republicans, will not let this bill even come to the floor for debate and vote. i say to my friend and my colleague, senator dodd -- the presiding officer: the senator has used his seven minutes. mr. harkin: i ask one more minute. the presiding officer: without objection, so ordered. mr. harkin: i say to my friend

senator dodd, i thank you for all the hard work you have put into this, you and your staff and your committee. this is a good bill. we may not agree on every little dot and tittle of it. but this is a good bill, it's a solid bill. it will help us get control back again over wall street and all the wild speculation, and it will help our country grow as it should. not in one small area, but broadly based economic growth in our country. so i thank senator dodd for his great leadership on this. i just hope my republican friends will understand that we have to get this bill up on the floor and we have to protect the american people from these financial collapses like have happenedust the last couple of years. mr. president, with that, i yield the floor. the presiding officer: the senator from connecticut is recognized. mr. dodd: as i understand it, the time of the democratic side has expired, is that correct? the presiding officer: that is correct. six minutes left. mr. dodd: i don't have a

republican colleague to ask consent if i can speak for a couple of minutes. i will ask consent that i be allowed to speak for five minutes. the presiding officer: without objection, it is so ordered. mr. dodd: but i thank the chair. mr. president, let me first of all thank my friend from iowa for his tremendous work on so many issues but also his deep interest in this dubt matter, and obviously the subject of the the -- subject of the exotic instruments and derivatives and the like are a critical issue for all the country, but particularly in farm state america where these play a very important role. so all of us have maybe a higher degree of interest on one subject matter or the other, but i'm particularly grateful to him for his long-standing interest. this is not an interest that emerged with the problems t need to say much more about it. again, the headlines looking into mortgage deals and the like have reached a certain crescendo that most people are probably aware of those things. there was another headline, however, that wasn't at the top of the newspaper but it was

certainly underneath it. in this case, the local paper here in washington had "greek debt downgraded to junk. europe crisis deepens. dow falls% in global selloff." the reason i mention that here is obviously the goldman sachs story is the one that got the attention, but to my friends, there are problems emerging around the world that affect us as wellñ our legislation doesn't rewrite rules but the united states has led historically in financial services. if we are unable to get' bill passed here to change the rules to give us a greater chance o of -- sense of transparency and protections, we're actually -- that were missing over the last number of years that helped create some of the problems we're now facing, then -- and then lead globally so that other nations will harmonize their rules with ours, then the problems that exist in the shanghai or a greece can affect us here. and so again, i say to my colleagues, we have a lot of work to do. i expect that if we get on this bill, we're going to be here for several weeks engaged in a

series of amendments and ideas to try and strengthen this bill, to make it better, if you will. i, as the author or one of the authors of this bill, i don't claim that this is a perfect piece of legislation. i've never seen one of those, mr. president, in my 30 years here. normally you bring out a bill, you do your best you can. there are obviously others who have different points of view. it would be presumptuous of senator shelby and i to suggest somehow that we can come to some great agreement here and tell everyone else, whether you like it or not, this is the deal. that's not what we got elected to do here. i've got colleagues on my side of the aisle who are sympathetic to what i've tried to do here. they want to change this bill. in fact, there's one amendment i know my colleague from vermont is going to offer that i think has 32 or 33 cosponsors. two-thirds of those cosponsors arcosponsorsare are on this side aisle. a third of them are over here. they have a right to offer an amendment to change this bill, which is what they want to do. i'm prepared, fully prepared, as a manager of this product to allow for that amendment to go

forward, engage in that full-throated debate. but i can't get there if you won't even allow notice bring the bill up -- allow me to bring the bill u. s up. so the incongruity of complaining about the product and then simultaneously saying i'm not going to let you vote on it, i don't know how you explain that to people in the country. at the end of the day, if you want to vote against this bill, do so. if you want to vote against all the amendments or all vote for -- that's -- do it, if you want. i'm not suggesting that anything i'm offering at this juncture would preclude you from that conclusion. but you can't get to that conclusion unless we have the product in front of us. and today, all we've had is a series of speeches over three days and denying us the necessary votes in order for us to move effectively. in effect, a filibuster is ongoing here, and the only way you can break the filibuster is by getting 60 votes that will allow to us move to the product. 57 of us have said let's get there. and i've said this before and i'll say it again. this ought not to be at this

juncture a partisan issue. it may get partisan later on over some of these ideas, but i am fully -- i believe fully aware that there are a number of my colleagues here who believe we ought to get to this debate and we ought to get there sooner rather than later. and again, that's not to suggest that they agree with the product by taking that position. in fact, i suspect they don't agree with the product, at least good parts of it or some parts of it. but i think they understand the importance of getting to a point where we can then try and change this in some way. 1so my -- i appreciate it and i'll conclude. i just make that appeal once more. we've been through this twice already. it's -- i hate to seem coming and getting in a partisan debate about this. we shouldn't do this, mr. president. it doesn't reflect well on this institution on a matter of this import not to allow this to go g forward. so with that, mr. president, i yield the floor. i yield back all time.

the presiding offir: all time is yielded back. the clerk will report the motion to invoke cloture. the clerk: cloture motion. we, the undersigned senators, in accordance with the provisions of rule 22 of the standing rules of the senate, hereby move to bring to a close the debate on the motion to proceed to calendar number 349, s. 3217, the restoring american financial stability act of 2010. signed by 17 senators. the presiding officer: by unanimous consent, the majority quorum is waived. the question is: is it the sense of the senate that the debate on the motion to proceed to s. 32 3217, the restoring america's financial stability act of 2010, shall be brought to a close? the yeas and nays are mandatory under the rule. and the clerk will call the roll. vote:

vote:

vote:

the presiding officer: are there any senators wishing to vote or to change your vote? seeing none, the ayes are 56, the nays are 42. thrifts of the senators duly -- 3/5 of the senators duly chosen and sworn having voted in the affirmative, the motion is not agreed to. mr. reid: i ask for a motion to reconsider to invoke cloture on the motion to proceed.

the presiding officer: the motion is entered.

a senator: mr. president? the presiding officer: the senator from new jersey. mr. lautenberg: madam president, i think it's been said before, but here we go again. what we have just seen tells us what the american people ought to know. there are fundamental questions being asked of senators this week and the principal of those

is whose side are you on? who do you work for? on monday, tuesday and again today, we got an answer. the other side of the aisle, they made it clear. they stand with the big banks. they don't stand with the infrastructure of everyday people who make this country the great place we have become. they do not stand for opportunities like the ones that allowed americans to come together after world war ii to get an education, get jobs, become the greatest generation that built our nation into the greatest on earth. instead, our friends across the aisle stand with wall street lobbyists who demand that we do not take up this bill. what an outrage. they stand for maintaining a banking system that denies people and businesses the funds that they need and sells people

mortgages that they can't afford while lining executive pockets with billions in compensation. the picture is quite clear, very obvious as to what's taken place here. after hearing the demands of the wall street lobbyists, the other side of the aisle systematically marched down here, voted no in lockstep, not once, not twice, but three times. no one bold enough to say yeah, we ought to do something about this situation that hurt our economy so, that destroyed jobs, lives and homes. what the republicans voted against three times this week was simply to start debating the wall street reform bill to make it an even fairer system. the banking lobbyists may not want us to take up this bill, but everyday people do want

reform, they do want change, they do want to see capital flowing into small businesses so they can get on with work and planning their families and their children's futures. so on behalf of the everyday people whose side we are on, we'll keep voting to take up this bill until the other side understands that that's what the american people want and give them a break. now, some say that they voted no because they wanted more time to make a deal. the reality is that the american people are fed up with back room deals that leave them out in the cold. we have listened to the testimony carefully that has been developed these days and are shocked to find out how they think that hiding the deals were okay but they didn't want it to

be known to the public. they -- they want us to roll up our sleeves, talk a lot about this bill, tell the public the truth, vote on amendments, and pass the strong wall street reform bill. that's what the average person in this country wants. so why don't the banking lobbyists like our bill? there are several reasons. because it puts an end to giant taxpayer-funded bailouts by creating a safe, responsible way to liquidate failing firms. they don't like it because it will end the era of too big to fail. and stop protecting irresponsible executives who mismanage their companies. because it will help prevent reckless gambling with investors' money by starting a new consumer protection watchdog. they don't want those things to happen. and because it moves the

derivatives markets from the shadows to the sunlight so that these transactions are transparent so that people understand what's going on. madam president, right now, across our country, ordinary americans are facing real tough problems. many struggle to find a job, meet their monthly bill. many are struggling to pay for a college education. far too many of our people are unable to keep their homes from falling into foreclosure. that's why we have been working so hard to reform our financial system. to make big banks accountable and shine a light on wall street. but not on the other side of the aisle. they literally have taken their marching orders direct from wall street. we know that we republicans met with wall street executives and political consultants about how to attack this bill, about not permitting us to exercise the

responsibility that we have. but it's not working because we're on the side of everyday people, the people who sent us here, sent us here with a plea. help us, help us with our lives, help us take care of our families, help us educate our kids, help us protect ourselves. when health care is so required. and the american people have made it clear they are not fooled by the delaying tactics and secret deals and they want wall street reformed. in the last decade, we saw how much power the financial sector has over our entire economy. irresponsible actions by big banks led to the subprime bubble that led homes to appreciate far beyond their worth and led millions of americans to take on loans that they should never have qualified for.

the results were catastrophic and the collateral damage immense. many of these people were seduced into taking loans that they were advised that they could handle. they didn't use good judgment, but they paid a heck of a price for it. eight million jobs were lost. retirement accounts shriveled and small businesses shut their doors. the ethical failures of wall street almost brought our economy to the brink of a second great depression. and as a former c.e.o. of a major company, i understand the need for a strong financial sector, but i also come to work every day reminded of the millions of people who have lost their jobs through no fault of their own. make no mistake, wall street reform, wall street change is absolutely necessary, and that's why we're going to keep moving

toward this, forward on this critical bill. we have to continue to take our message to the american people and let the other people on the other side of the aisle say no, no, no. the people on the other side of the aisle may try to distort, they may try to distruct. we'll continue the fight for ordinary americans for people who wake up every morning, play by the rules. and i repeat something i said a moment ago. that is how can we ignore to support the infrastructure in our country the people who make the things happen every day, who are there to do whatever the jobs are that are necessary and reserve the best and the most

for those through at the top. we can't do it that way. we have an infrastructure here that is even far more precious than our physical infrastructure, and that's our human infrastructure. we're going to continue to tell the american people what's happening so we can make the changes necessary to avoid the catastrophe that we have had over these last couple of years. thank goodness through the leadership of president obama and the administration and the work of colleagues who are making progress, but the progress is not rapid enough nor broad enough. we're going to insist on moving down the road of progress. we'll insist on doing what is right for our country, for our families and for our future. and i hope somebody, someone on the other side of this political aisle will say hey listen, we're not getting anywhere by just walking down the steps together and saying no and not permitting change to take place that's critical for our society and our world. with that, i yield the floor and

note the absence of a quorum. mr. dorgan: let me ask the senator to withhold. well, madam president, if we are in a quorum call, i -- the presiding officer: the senator from north dakota. mr. dorgan: madam president, first of all, i want to make just a couple of comments about what has just transpired on the floor of the senate. for the third time, we had a vote, not on anything relating to the ingredients of a bill dealing with finance reform or wall street reform. just on the question of the motion to proceed to debate the bill. just the motion to proceed. yes or no, shall we proceed to bring the bill to the floor and debate it? third day in a row, all of the members of the minority voted no, we won't even allow the senate to proceed to debate wall street reform. it's unbelievable to me. in the shadow of yesterday's hearings with one of the major investment banks of this country and the disclosure of emails

deep from the bowels of that bank that clearly suggested they were peddling securities to clients and customers that they knew to be bad securities, and also betting against the position of their clients, betting against a recovery for our country, in the shadow of all that, how on earth can the minority decide that we shouldn't even move to debate wall street reform? now, i find it really interesting that we have people saying well, government can't solve this. there is too much government, too much this, too much that. when we have suffered a great depression in this country, it was the federal government that took action to put in place some things that tried to protect our country's economy and did so for about 60, 70 years. they said we're not going to allow banks and fdic insured banks and investment banks and

securities dealers and others to commingle under one corporation. we're not going to take banks and put risky enterprises fused to those banks. it doesn't make any sense. so legislation was passed to protect this country. well, about ten years ago, there were a bunch of really smart people who decided that stuff was old-fashioned. we have to compete with the europeans. let's allow holding companies to be created. we'll bring banks and investment banks and real estate and all these things together into one big holding company under one roof, and it will be just fine. well, it turns out it wasn't just fine. and at the same time that this was happening, big holding companies now being created in which you brought risky things in the middle of banking enterprises whose very perception of safety and soundness is critical to their future, at the very same time that was happening, we had a bunch of people come to town who were supposed to be regulators,

the referees, who said we're going to be willfully blind. we don't even like government. do what you want. we're not going to watch. we won't look. at the same time that was going on, alan greenspan down at the federal reserve board decided we'll let all these institutions behave in their own self-interest and their self-interest will govern what will be the right thing. that was a huge mistake, i think so, probably a $15 trillion mistake. but the fact is those who were supposed to be regulating and decided not to regulate, those who were supposed to be the referees to call the fouls, wear the striped shirts, blow the whistles, call the fouls when the free market system was being abused, they weren't around. they were out to lunch someplace for years and years and years. now, my colleagues who say, well, we don't want government to do this, look, i don't know who else is going to set the rules here to decide we're not going to let this happen again. does it take any amount of

intelligence to understand that if you are a mortgage company advertising to people in the following way, do you have no credit, slow credit,no pay, bankrupt? come to us, we'd like to give you a loan. on the floor of the senate, i've shown solicitation after solicitation by companies that said, if you've got bad credit, slow pay, no pay, come to us, we'd like to activ give you a he loan. now, it doesn't take a lot of intelligence to understand that doesn't work. by the way, they also said, if you've got bad credit, come to us. in fact, we won't even ask you what your income is. we'll give you a no-document loan or you don't have to document your income. it's called no-doc. and by the way, we'll give you a liar's loan. they didn't call it that but a no-doc liar's loan. now, does it take a genius to understand that's not working very well? but why was everybody anxious to do all of that? because you could wrap it into a big, fat security, then you could sell it to an investment

bank and they could sell it to a hedge fun and they could sell it back again. and meanwhile, whoever made the original loan got rid of the liability once they sold it upstream and they got the -- the rating agencies to rate these things as triple -- as aa amendment incidentally, conveniently the rating agencies are paid by the very companies whose securities they rate. sound like trouble to me? it does. so all these things were happening and everybody understands that that's not going to hold up. ultimately all of this thing is going to collapse. it's a house of cards that's being built. so how do you put this back together? well, senator dodd and the banking committee put a beg together -- put a bill together, and that's the bill we're trying to get to the floor of the senate. i think it's a pretty good bill. it tightens things up, gives authorities to regulators they're going to need and will try to prevent this from ever happening again. i mean, this was not some hurricane katrina that came ashore and flattened a bunch of buildings.

this wasn't a -- a volcano erupting, it wasn't a tornado that comes sweeping through and destroys a town. this was an economic catastrophe that took away $15 trillion from this country's economy, it devastated a lot of families, put a lot of people out of work, a lot of people out of their homes. and in the meantime, we see what has happened. well, there's substantial amounts of misery around this country for families and people who have still not recovered from the devastation of financial near collapse. the folks at the top are now making record profits. yes, the investment bank that testified yesterday, record profits, big bonuses. i described earlier bonuses of $142 billion were projected on wall street. i talked about in the year 2008 at a point when this all began to collapse, we had something

like $36 billion in losses just on wall street and those firms that had $36 billion of losses paid $17 billion in bonuses to their employees. now, i have an m.b.a. and went to business school. this isn't any book that teaches that in business school. lose a ton of money and get big bonuses. and yet that is what has been happening. it's a carnival of greed at the top. and by the way, the instruments they created with these mortgage securities and others, securitizing almost anything they could get their hands on, with exotic titles like credit default swaps. credit default swaps. by the way, that's brand-new. we've always known about derivatives. i wrote an article which was the cover story for the "washington monthly" magazine in 1994. that's almost 16 years ago. and my cover story for that magazine was titled "very risky business." and it was about the danger that

derivatives posed to the banking system. that is 16 -- almost 16 years ago now. and i made the same point in the year 1999 when glass-steagall was repealed and i opposed it. very risky business. so they create synthetic credit default swaps, synthetic would be the same as calling it naked credit default swaps. that means instead of having something at either end of a contract, there is nothing. it is two people making a wager or a bet that something else will happen. now, i happen to think that there ought not be what is called a naked credit default swap. i think they ought to be outlawed. that's just gambling. that's not investing, that's betting. and if you want to bet, there are plenty of places to bet in this country starting with las vegas and atlantic city. and they have a business doing that. no one ought to show up on an airplane in las vegas or atlantic city, however, with

their depositors' money or with their clients' money and decide that's what they're going to wager on a craps table or a keno table. and yet that's exactly what has been happening with what is called -- what are called naked credit default swaps. and by the way, i believe it was the lank of london that -- the bank of london that estimated that of the credit default swaps in england, and i suspect it would hold true here, 80% of them had no insurable value on the other side. now, i would not be allowed today, this afternoon to decide i'm going to buy a -- an insurance policy on the house of the presiding officer in north carolina. it would be illegal for me to say my interest today is to invest in fire insurance on the presiding officer's home. because i have no insurable interest in that home. and it might be that i'd buy fire insurance if i could and walk around with a box of matches. that's the problem, right? so i have no insurable interest. it would be against the law for me to buy fire insurance on the

home of the presiding officer. that is not the case with respect to naked credit default swaps. you don't have to have an insurable interest in anything. you just, with someone else, say let's make a wager here on what's going to happen to this bond, and there's an investment bank -- perhaps the investment bank will take part of that wairnlg. they'll certainly want -- will take part of that wager. they'll certainly want to arrange it because they get big, fat fees. but that's not investing in america. that's not making loans to small or medium-sized businesses. that's not investing in america's future and strength. that's just gambling, and that's what we've come to. you cannot in a country like ours expand our economy without two things: production and finance. and this have been over 200 years times when production has the upper hand and then other times when finance has the upper hand. we've been through a period here in the last couple of decades where the financing system of our country has the upper hand. and we need a banking system, we need a financing system with all

of the levels of finance. yes, fdic insured banks, yes, investment banks, venture cap tavment w --capital. we need all of those things. but we need to get back to basics, to the old-fashioned standard of what banking really should and used to be; that is, making deposits and then providing -- taking deposits, rather, and then making loans. and when you make a loan, you do what is called underwriting. that is, you sit across the desk from someone who needs a loan and you look at them in the eye and you evaluate what is their income, what is their idea, their need, their property. and you decide yes or no. there has been no underwriting on many of these loans that helped create this foundation of sand in this economy. there was no underwriting. because if you could say to someone, do you know what? we'll give you a new home mortgage and you don't have to pay any interest and we -- you don't have to pay any principal even and you don't have to tell us what your income is. that's a no-doc liar's loan. we'll do that for you.

why? why would someone do that? because they're not going to have any risk. the minute they do it, they get to wrap it into a fat security and then sell it to someone else. and by the way, because the rating agencies think all of these things are aaa, whoever else bought it thought it was a safe security. and then they sold it again and again. and you just passe pass the risk forward. this was a cesspool of greed with a lot of people making a lot of money and creating a structure that was destined to fail. now the question is: are we going to do something about that? is somebody going to take some action and say you can't do that anymore? that's what the senator from connecticut asks with a bill coming from the banking committee. the fact is, he brought that bill out of the banking committee and not one republican offered an amendment. not one. they said, we're not going to participate. after they had had hearings for a year and the senator from connecticut had negotiated with them for five, six months, following all that they had a markup on a bill to write the bill and the republicans said,

we're not going to participate, we won't offer any suggestions, no amendments. then when the bill is now brought to the floor of the senate, the republicans say, well, we weren't part of it. well, sure, they decided they didn't want to be a part it was and that's why they weren't part of it. that was an -- that was an action that they took. and they say, well, we believe this is a bailout bill. it's not a bailout bill. i'll tell them what a bailout bill. i voted against it. a bailout bill was when george w. bush and his treasury secretary came to the congress and said, i want to you pass a three-page bill in the next three days putting up $700 billion to bail out america's biggest financial firms. yes, that was a bailout bill. and most of those who have called this a bailout bill voted for that. they know what bailout is because they voted for it. i didn't. but nonetheless, this is not a bailout bill. this is a bill that finally begins to shut the door on activities that should never have been taking place. and is the bill perfect? no, sure isn't. should it be changed?

there are a number of areas where i think it will be changed once we get to the floor. but you can't even address those unless we get past the motion to proceed. what the minority is doing is saying we don't intend to let you proceed at all. well, how about deciding that we're going to do this together and we'll get the best of what both political parties have to offer, get the best amendment -- amendments that can be offered. i've just suggested one, that is ban naked credit default swaps. you have no insurable interest? ban it. mr. pearlstein, who writes a column for "the washington post," made a suggestion that makes a lot of sense to me. why would you allow more securities in the form of credit default swaps to insure bonds, why would you allow more of them than there are bonds to insure? well, the answer is obvious. because that's just gambling above that level. it's very much like about a year and a half ago when the price of oil, or almost two years ago now, the price of oil went to $147 a barrel in day trading.

and i made the point on the floor there was 20 times more oil bought and sold each day than there was produced each day. just an unbelievable orgy of speculation in the oil market. nearly broke that market. well, it finally came back down and the people that made the money on the upside also made money on the downside. but, you know, that's -- that's what's been happening in this economy now for far too long. and the bill that should come to the floor of the united states senate -- and my hope is that perhaps the next vote we'll have a couple of folks on the other side that agree with us -- let's bring a bill to the senate, let's address these issues that caused this unbelievable avalanche of greed on wall street and elsewhere, and -- and let's tighten the reins so this can't happen -- reigns so this can't happen again. do we really want this to happen again? i showed yesterday on the floor of the senate i think four examples of companies that are still advertising. do you have bad credit in come to us, we'll give you a loan. do you have no idea, slow pay?

come to us, we'll give you a loan. you've been bankrupt? come to us, we want to give you a loan. it's still going on. and all of this is about securitizing everything and everybody making big fees and being paid big bonuses. there's a smarter way to do financing and banking in this country. we've watched it work for decades and it got far afield in the last decade or two and we need to pull it back in and say that's not what our country's about. the free market system is the best allocator of goods and services that i'm aware of, but it is not perfect. sometimes there are fouls in the free market system. sometimes people try to manipulate it and do so successfully. that's why you need a referee and it's why you need effective regulations that work. and that's what the bill is about, putting together those effective regulations that work that will prevent this kind of economic collapse from happening again. this is not just some academic exercise. there were somewhere around 16 million to 17 million people

today in this country who woke up this morning and are jobless and don't have any work. and some of them not only feel jobless but they feel helpless and hopeless because they can't find work. and some of them, by the way, have not only lost their job, they've lost their homes. this is a very deep recession we've been in and it's caused unbelievable pain across this country. but not for everybody, because once again some of the largest financial institutions in this country are now showing record profits and paying record bonuses. and the question is: are they doing that because they're making loans out there to businesses that are ready to recover and expand? no, the answer's, unfortunately, no. once again, they are trading securities back and forth, exchanging fees, securitizing virtually everything. there's a much better way to do financing and banking in this country to will strengthen the future of this country. and i want to get at the business of getting this bill to the floor, having the minority

stop blocking us and begin offering amendments so that we can get the best of what both political parties have to offer. it's been long -- a long, long time since we've had that sort of thing happen on the floor of the senate. i was hoping that if there's one, one thing that might galvanize some bipartisanship in this body, it might be an understanding of the unbelievable ex excruciating pain that the american people have felt since the great depression and perhaps that the american people understand that this congress do something about it to prehe vent this sort of thing from happening again. i guess that was too much to hope for at least until now. on wednesday i will have an opportunity -- on tuesday, wednesday, thursday, and friday and perhaps get one or two people to agree with us and say,

yes, let's bring this thing to the floor, offer amendments, debate amendments and do what's necessary for the people of this country. i know that the biggest financial institutions in this country have some big disagreements with this bill. but, you know what? i have some big disagreements with them. i think what's gone on is pretty unbelievable. and they have a role to play in this country's future going ahead. but it's not a role i consider to be betting. it's a role i consider to be investing. if they want to continue to simply make wagers about america and about securities, that is not the financing system that we have known and grown to believe is important for this country's future. madam president, i -- i know that there's a lot of disappointment after this last vote, but my hope is that there will be some who continue to think and rethink is this what my constituents want? do they really want me to just decide to even block the opportunity to address these unbelievable gaping holes in our

financial structure that allowed this country to be steered right into the ditch, the biggest economic wreck in 70 years? i think they would understand that's not what their citizens and constituents want for the future of this country. madam president, i yield the floor and make a point ofm is n. the presiding officer: the clerk will call the roll. quorum call:

a senator: madam president? the presiding officer: the senator from maryland. mr. cardin: i ask unanimous consent that the quorum call be dispensed with. the presiding officer: without objection. mr. cardin: madam president, let me just express to my colleagues how disappointed i am that we were unable to move forward with the debate on wall street reform. i think people in this nation should know that what was on the floor that we recently voted on was a motion to proceed so a bill could be brought to the floor of the united states senate for debate. it did not at all speak to how that bill would be considered on the floor.

it's open to amendment. and each member of the senate would have the opportunity to submit amendments for the -- for consideration. the bill that senator dodd has brought out of his committee is a bill that establishes the types of reforms of wall street that is necessary. strict new regulations to stop wall street gambling so that we have a clear, responsible -- responsibility in the regulatory framework so each of the financial institutions understand the clear roles in which they must operate under and how those regulations will take place. the framework is based on the size of the institution and the jurisdiction of the institution. the bill provides for adequate capital to prevent too big to fail. our first goal here is to avoid an institution to be from

becoming so large and so vulnerable that its failure jeopardizes the economy of our nation. well, if we have a clear regulatory structure and we have the right capital rules and we have right regulatory oversight, we have a better chance of protecting the public's interest. that's why the strict new guidelines to stop wall street gambling is critically important so that we don't run into that situation in the past. so more taxpayer bailouts. i hear that over and over again from my constituents, and i agree. if an institution can't make it, it should fail. it shouldn't be getting a government bailout. this bill makes it clear: no more government bailouts. it gives the regulators the authority they need. the authority they need to intervene a lot earlier. if necessary, to restructure the

institution or to break it apart or to have it merge or to close it down. and it doesn't involve public funds. you have the regulatory structure. today we see institutions that call themselves banks that are not regulated -- or act like banks and are not regulated under banking statutes. we find insurance companies that claim that their insurance -- they're insurance companies, but they do things other than insurance and get themselves into trouble and there's no regulatory consistency. well, that's changed with the bill that senator dodd has brought to the floor. this bill puts consumers in control of information in plain english by a strong consumer provision within the bill. well, this is absolutely adequate -- necessary. we -- we know today that consumers and small businesses are being victimized under our

current financial structure. consumers have been victimized by predatory lending. small businesses have been victimized by banks that won't make loans to small businesses. we need a strong consumer presence in this -- in this bill. senator dodd in his bill has brought out an independent consumer agency so what this bill provides is tough regulation, a framework in which we can intervene earlier in order to protect our economy. no government bailout and a way in which consumer issues can be handled independently to protect the consumers of this nation. so why not move forward? i'm puzzled. i truly am puzzled and i listened to my colleagues who oppose -- bringing this bill forward to speak on the floor, and i -- i still don't understand their argument. because if we move forward, amendments are in order.

amendments that are germane will have to be considered. they're going to have to be voted on. that's the rules of the senate for us to move the bill off the floor we're going to need at least 60 votes. we know that. it should be an open -- an up or down vote. but we know from the prior record that the minority will invest on 60 votes. we should be willing on an important issue like this to vote up or down. but they still have that right. so they're not jeopardizing the ability of the minority to block the final consideration of the bill. but what they are doing is blocking the debate on the bill. and the only thing i can think of is they would prefer to work out their issues behind closed doors rather than on the floor of the unite united states sena. and the reason, madam president, to me, is kind of -- kind of

self-evident. if you're trying to weaken the regulatory framework and you don't want your finger prints on it, it would be -- fingerprints on it, it would be easier to do that outside the spotlight of this chamber. or if you're trying to diminish the consumer protections that are in this bill, you would certainly rather have that in a bill brought to the floor than having to offer an amendment to change it. so i can only presume from this delay that the opposition is not to negotiate in good faith, but the opposition is to avoid the public knowing the changes that they're seeking in the bill or to weaken this bill or even worse in hopes that the major sections of this bill will be dleetd or -- deleted or struck. that's not what this process should be about. we need to move forward with wall street reform. we all know how our economy was

brought to near brink of destruction. we know how many millions of americans have been adversely affected by what happened on wall street. people in maryland to people in this nation are saying: let's reform wall street. let's make sure that the reckless gambling doesn't take place in the future. let's make sure that too big to fail ends. let's make sure that those who are responsible are held accountable. the dodd bill is a very good start to that process. debating the issue is what we should be doing in the united states senate. the delay here is aimed at preventing the public from knowing what is going on or, even worse, to weaken this bill or to make sure it doesn't pass. i urge my colleagues to reconsider. let us move forward and debate the wall street reform bill. let us get on with the people's business first, our nation's security first, our nation's economic growth first. let's bring this bill to the floor for immediate debate.

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

quorum call:

mr. sanders: madam president? the presiding officer: the senator fr vermont. mr. sanders: i would ask that the quorum call be vitiated. the presiding officer: without objection. mr. sanders: madam president, since the beginning of the financial crisis, the federal reserve, the fed, has provided over $2 trillion in taxpayer-backed loans and other financial assistance for some of the largest financial institutions and corporations in the world. let me repeat that. over $2 trillion, with a

t, $2 trillion. over a year ago, as a member of the budget committee, i asked ben bernanke, the chairman of the fed, a very simple question. a very simple question. couldn't be simpler. and the question in so many words was, mr. bernanke, you lent out $2 trillion. who got that money? who received that money? what were the terms of those loans? and mr. bernanke's answer was no, i'm not going to tell you, senator sanders, i'm not going to tell the budget committee, and i'm not going to tell the american people. and i think that that is outrageous. i think when $2 trillion of taxpayers' money is placed at risk, the membership have a right to know. how many debates have we had here on the floor of the senate about legislation of $5 million,

of $30 million? feverish debate, whether it's a good idea or a bad idea. and now you're looking at trillions of dollars of taxpayer money being placed at risk, and we don't know who received that. that, to me, is an outrage and that, to me, is unacceptable. on that very day after ben bernanke denied the american people the right to know who received those loans, i introduced legislation requiring the fed to put that information on their website. madam president, you know as well as i do that millions of lives have been ruined by the greed, the recklessness and the illegal behavior of wall street, and while the fed was providing secret loans at virtually no interest to some of the largest financial institutions in this country, millions of americans were losing their jobs, their

homes, their life savings, their ability to send their kids to college. as a direct result of the same wall street firms that the fed was propping up. so you have a situation where all over this country, families are suffering, small and medium-sized businesses are in desperate need of affordable loans, and yet you have the fed providing trillions of dollars to the people who caused the recession and to some of the wealthiest and most powerful c.e.o.'s in the country. the very least that we can do for the american people is to tell them, to give them the information as to who got bailed out by the fed. i don't think that that is too much to ask. we have to explore whether or not there were conflicts of interest. how does it work when financial

institutions get huge amounts of zero or near zero interest loans? who sits on the committee? are there conflicts of interest? we have to know, for example, what i believe to be the case, that some of those financial institutions that receive billions in zero or near zero interest loans may have invested that money in t bills, in treasury bonds earning 3% or 4%. now, what kind of scam is that? you have zero interest loans from the fed and you invest in government-backed t bonds at 3% or 4%. thatthat is an incredible scam. did some of those financial institutions do that? i suspect they did, but we don't know what they did with that money and we have a right to find out. madam president, let us be very clear, the money put at risk does not belong to the fed. it belongs to the american people and the american people

have a right to know where their taxpayer dollars are going. therefore, madam president, during the debate on financial reform, i will be offering an amendment to audit the federal reserve and to require that the fed release all of the details regarding the more than $2 trillion in virtually zero interest loans the fed has provided to large financial institutions since the beginning of the economic crisis. this amendment -- you know, we talk a lot around here about the need for bipartisanship or tripartisanship. i'm an independent. well, this amendment really does that. i don't know that there is any amendment out there that is more -- that has more bipartisan support. this amendment is being cosponsored by senators feingold, leahy, wyden, dorgan and boxer, democrats. it is being cosponsored by senators demint, mccain,

grassley, vitter, brownback, graham, risch, and wicker, republicans. but quite significantly on the base bill that i introduced from which this amendment comes, this legislation is being supported by 32 cosponsors, and that is 22 republicans and 10 democrats. they run the gamut from some of the most conservative members of the senate to some of the most progressive, and the senators who are supporting the base bill are senators barrasso, bennett of utah, boxer, brownback, burr, cardin, chambliss, coburn, demint, dorgan, feingold, graham, grassley, harkin, hatch, hutchison, inhofe, isakson, landrieu, leahy, lincoln, mccain, thune, wicker, and wyden. that is a very broad cross-section of the united states senate. from some of the most conservative to some of the most progressive members on the base

bill who say it is absurd that the fed can lend out trillions of dollars without the american people knowing who has received that money. and let me just tell you what our amendment would do, and it's pretty simple. number one, it would require the nonpartisan government accountability office, the g.a.o., to conduct an independent and comprehensive audit of the fed within one year, and secondly, it would require the fed to disclose the names of the financial institutions that received over $2 trillion in virtually zero interest loans since the start of the recession. that's it. that's the whole amendment, pretty simple. and i would hope and expect that we would have widespread bipartisan support for this amendment when it gets to the floor. madam president, this amendment also has widespread community support from organizations all over this country. it has

the support of americans for financial reform, a coalition of over 250 consumer, employee, investor, community, and civil-rights groups, including the afl-cio and the aarp. i should also mention that increasing transparency at the fed is obviously something that the american people want to see in -- want to see, and poll after poll suggest that. madam president, this bill is similar -- this amendment is similar to the federal reserve transparency act that was introduced in the house by congressman ron paul and now has 320 bipartisan cosponsors. that's a lot. 435 members, 320 are on the house bill. and a version of that bill passed the house financial services committee by a vote of 43-28 and was incorporated into

the financial reform bill that passed the house last december. so not only do we have widespread bipartisan support in the senate. senate, that same type of support exists in the house. last week the speaker of the house, nancy pelosi, said the congress should ask the fed to put this information on the internet, like they've done with the recovery package. and that's exactly what this bill would do. madam president, interestingly enough, not only do we have widespread bipartisan support in the congress, not only is the house moving vigorously on this issue already, but importantly, but the courts have ruled in support of what we are trying to do. bloomberg news has been very aggressive on this issue and they have won two court decisions requiring the fed to release this information to the

public. but despite widespread congressional support, despite two court decisions, the fed continues to resist the transparency which our country desperately needs. madam president, as long as thed to keep the information on their loan secret, we may never know the true financial condition of the banking system, and this has resulted in a whole myriad of problems, and i think it's time that we brought some sunshine to the goings-on of the fed.

madam president, let me just conclude by saying this. the american people are outraged, regardless of their political views, by the behavior of wall street. they have seen the greed of wall street lead us into a recession in which millions of jobs have been lost, homes have been lost, savings have been lost, families have been destroyed, and they want to make sure that we do everything that we can to make sure that what caused this terrible recession never happens again, and i think one of the most important things that we can do in terms of wall street reform is to bring transparency to the fed. so madam president, this is an incredibly simple amendment. this is an amendment that has grassroots support. this is an amendment that has support from the most progressive and conservative

members of the congress, and when i bring this amendment up, i would certainly hope that we can get a great deal of support from members of the senate. i would be very pleased to yield to my friend from illinois. the presiding officer: the senator from illinois. mr. durbin: i would like to ask the senator from vermont, through the chair, about another issue in this bill relative to the interest rates that are being charged across america, and i'd like to ask the senator from vermont if he would tell me his take or evaluation of the provision in this bill which exempts usury laws and interest rates from the consideration of the consumer financial protection agency. i know that the presiding officer here has an interest in some exploitation that is occurring in her state of north carolina and frankly in my state of illinois and probably across this nation are the so-called payday loans and title loans

operations where average people who are struggling economically go in for high interest loans that are then rolled over time and time and time again until they lose whatever security has been offered for the loan and frankly find themselves even deeper in debt. i'd like to ask the senator from vermont who i have discussed this with on many occasions his thoughts about consumer financial protection and the interest rates being charged across this nation. mr. sanders: i thank my friend from illinois for raising that question, and i want to congratulate him because our colleagues should know he has been a leader on this issue for many years and has already achieved some significant success. my memory is that we had payday lenders. if you can believe this, madam president, we're charging men and women in the united states armed forces who in many cases don't have a lot of money, who are trying to take care of their

families, outrageously high interest rates on check cashing and payday loans, and the senator from illinois led the effort successfully to put a cap on that, and i thank him very much for doing that. that's a start, but clearly as the senator from illinois indicates, we have got to go further. and here's the story. madam president, just a couple of weeks ago, there was a rally right here on capitol hill led by religious groups, religious groups who said that it is immoral and unacceptable that in the united states of america, what we are now seeing is usury and loan sharking taking place by some of the largest financial institutions in this country. so we're not just talking, i would say to my friend from illinois, about an economic issue, we're talking about a basically moral issue. and if you read the bible, the

old testament, the new testament, the koran, every major religion on this planet has said that usury is immoral. that if you are desperate and you need money, i cannot charge you outrageously high interest rates. that's just immoral and the wrong thing to do. and yet in this country today, as a result of some supreme court decision some years ago, you have millions of americans who are paying 25%, 30%, 40%, 45% interest rates. and this is not from loan shark gangsters on a street corner in chicago. this is from some of the large largest, most distinguished financial institutions in the world. we've got to put an end to that. and i would tell my friend from illinois that the legislation that we have offered would put a cap of 15% except under extraordinary circumstances on the interest rates that the banks can charge the american people.

and we came up with this idea because this is what credit unions in this country have been doing for several decades and they've been doing it successfully. mr. durbin: i'd like to ask through the chair again the senator from vermont, first, i want to give credit where it's due. the original amendment that he talked about that protected military families was offered by senator jim talent of missouri. and i supported it, everyone supported it, because we found men and women in the military, trained to defend our country, who signed up for these payday loans and quick loans, they became so deeply mired in debt they were forced to leave military service. and so we said as a matter of national security, we can't sacrifice well-trained men and women who can keep us safe as a nation to loan sharks who have these storefront operations in my hometown of springfield and your hometown o in vermont and l across the nation. i would say to the senator from

vermont, he and i have joked about this a little bit, but i tried to come up with a number and said this will be the maximum interest rate that can be charged. i went to a mutual friend who i respect and said, what is a number that no one can argue with? and she said 36%. and when i mentioned that number to people back in illinois and other places, they're aghast. they said, we don't want to pay 36% for anything. and i said, i don't either, but this is like a ceiling. well, it turned out it's a little more confusing than illuminating, and i happen to think that the senator from vermont is certainly right with the cap that he is suggesting. now, is it not true, i ask the senator from vermont, that as this roll call vote reflects, that if the republican senators in this chamber continue this filibuster against this financial reform bill, this wall street reform bill, this consumer financial protection bill, we can't even engage in this debate, let alone this

amendment, to try to protect families across america from being preyed upon by these outrageous, reptilian credit operations. mr. sanders: well, the senator from illinois, madam president, is, of course, absolutely right. and what the senator from illinois, the point that he is making, which makes eminent sense, is if our friends disagree, if our friends want to offer an amendment, if the republicans want to alter the bill, that is their right, that is what the senate is about. but we can't proceed and go forward in putting a cap on the outrageous interest rates that financial institutions are charging the american people, the loan shark, unless we get this bill going. we can't talk about fed transparency unless we get this bill going. so i certainly agree with my friend from illinois, people have a right to disagree, but the american people are disgusted and frustrated with what's going on on wall street. they want action.

and to simply have our republican friends saying, no, no, no, we're not going forward doesn't make any sense to me. mr. durbin: i'd ask the senator from vermont through the chair, as informative and entertaining as our presentations are on the floor, the fact is that 98 chairs here are empty on the senate floor, chairs that could be filled with members of the senator from both political parties debating the issues we're talking about, actually voting on amendments, proposing changes in the law to ultimately work with the house and send it to the president to solve some of the problems facing our nation. but as long as we are facing -- and we've had three filibustered votes so far this week; more to follow -- as long as we are facing this republican filibuster, we're not one single republican -- where not one single republican senator will break with the republican caucus or the wall street position that opposes any reform, we can't even bring this bill to the floor for debate so that we can address the biggest economic and financial challenge america has

faced in decades. mr. sanders: maps madam president, i would just say my friend from illinois -- i illinois is exactly right. you've got the 57 members of the senate who want to go forward, you've got the president of the united states who want to go forward. you've got 57 senators here who want to go forward. now is the time to go forward. i would add to what my friend from illinois just said. let's be -- let's be very clear about this. last year in 2009, as i understand it. our friends on wall street who are doing everything they can to make sure that congress does nothing to reform the way they do business -- that's what they want; let's be clear about it -- dwheun the doyou know what theyt year? i would tell my friend from illinois that my understanding is they spent $300 million on lobbying and campaign contributions. and i know my friend from

illinois knows that you can't walk around the capitol without bumping into one or another lobbyist representing wall street. and why are they here? why are they representing hedge fund managers who make billions of dollars in a year? they want to continue to be able to do the exact same things they've done in the past which has led to this terrible, terrible recession. so let's not be naive. there are huge amounts of money flooding capitol hill right now and the goal is, no matter what anybody may say, let's do no wall street reform. mr. durbin: i thank the senator from vermont for yielding for questions, and i would yield the floor and unless someone seeks -- mr. sanders: i would just like to thank the senator from illinois for his continued efforts on wall street reform and the excellent work that he has done. mr. durbin: i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

mr. burris: madam president? the presiding officer: the senator from illinois. mr. burris: thank you, madam president. i would make a motion that the quorum call be suspended. the presiding officer: without objection. mr. burris: thank you, madam president. we just witnessed a few moments ago the third try to try to do something about financial reform legislation in this body. and for the third time, it went down. you know, madam president, i'm an old baseball player. i played a lot of baseball in my young days, and there's a rule in baseball that says three strikes and you're out. we're at three tries at this financial reform and i will tell the distinguished colleagues on

the other side of the aisle, we're not out, that we're just beginning to fight under the circumstances we're confronted because we're fighting on behalf of the american people. earlier this week, our distinguished majority leader called for a vote to open the debate on major financial reform and we've seen well-designed proposals from the senator from connecticut, chairman dodd. this bill reflects the priorities articulated by president obama and supported by an overwhelming majority of the american people. it will end these so-called twaitoo-big-to-fail and prevent massive banks from making risky decisions that threaten the entire american economy.

it will eliminate the need for government bailouts. and it will institute commonsense regulations so companies can create investment that are designed to -- that's designed to fail and then bet against them. in short, this legislation is a good starting point, madam president. as a matter of fact, we've heard chairman dodd say time and time again we have to get it on the floor so that we can improve this legislation. i know i'm supporting a couple amendments that would be beneficial to improve the legislation. it may not be the complete wall street reform package in its final form but it contains a

number of good provisions and it is worth debating so i'm asking my colleagues, let's stop debating to debate. the majority leader scheduled a vote to bring this bill to the floor so members of both parties can offer amendments and make improvements. this is not a vote on the legislation itself, madam president. leader reid was not asking the senate to pass the bill without debate or without amendment. he simply wanted to start the process. to begin deliberations on the floor of this chamber in front of c-span cameras and in front of the american people. but when the roll was called and my colleagues and i came to the chamber, every single one of my republican friends voted to block the debate plus one of

ours. so we try again, i hope this afternoon, if not tomorrow, but we're not playing baseball here on the floor. this is not the all-american game but it is the all-american future. there was a second vote -- there was a second vote to start debate and move on head in this process and it takes up consideration of financial reform. but for a third time, my republican friends stood in the way. they know they will have plenty of opportunity to try and defeat the bill once it's on the floor, but they have decided to drag their feet anyway. madam president, we've seen this kind of thing before. this is the same republican

playbook we saw with health care reform. the same obstructionism, the same tired politics. in the past there have been -- they've been able to use this strategy to score political points, but this time i would respectfully suggest that our republican friends have miscalculated. the issue of health care reform was complicated, so when it came time for debate, it was easy to distract and delay and spread misinformation. it was easy to muddy the waters and -- so they could gain traction in delaying president obama's agenda. when the health care debate was over, good policy won out over good politics and we passed the bill. but not before my friends on the other side had scored some

political points. this time it's different. financial reform, itself, is very complex. that's why it is so easy for big banks to take advantage of consumers. that's why it's difficult to apply the kind of oversight we would -- we actually should have seen in the years leading up to the recent collapse. the issue itself is hard, madam president. this time around the tactics of distraction and delay will not work. that's because the americans are smarter than that. they know who the bad guys are. about two years ago lehman brothers was one of the first dominoes to fall. next came bernie madoff and then

a handful of other ponzi schemes came crashing down. most recently, and just as yesterday as you witnessed the hearing at goldman sachs, one of the largest and most respected firms on wall street has been charged with fraud. mr. president, when it comes to financial reform, we know where the problems lie. my republican friends can try to distract and obstruct all they want but they will not succeed in confusing the american people. ordinary following have had their pocketbooks bled dry by this financial crisis. they've seen their hard-earned savings disappear and their future become drastically -- or dramatically less secure. and they know exactly who to blame. for far too long wall street

banks have been subject to relaxed oversight. as a result, the focus of their business has changed. it stopped being about lending money to businesses, making smart investments, and encouraging free enterprise. when i was in the banking business, mr. president, that's with a we -- that's what we did. i was at the largest bank in illinois, the seventh largest bank in america, where we made loans, collected interest and took deposits in and paid them interest and kept the economy going. instead, madam president, wall street has basically turned into a casino. look at the derivatives market. here you particularly have an object that is traded which has no value of its own. it has no ties to the actual

economy. there's no product or business idea, no actual investment. it's just a high-stakes bet without intelligent risk management capital standards and basic rules of the road, these bets have the potential to undermine the strength of our entire economy. wall street is a casino gone wild and they're gambling with our money. it's not their money. and they're making money over our money. the american people know this, mr. president. they can see through the distractions and the political posturing. they recognize the need to reform wall street so we can end bailouts with commonsense rules in place and make sure we never experience this kind of economic crisis ever again. so i'm not sure what my republican friends hope to gain by blocking our debate on this

bill. they said that they want to improve it. but that's exactly what we'll be able to do once it's on the floor. maybe they believed that they can water down our reform package by dragging out this process. maybe they think the chance to hold some on wall street before they have to take a vote on the legislation itself or maybe they simply don't have an alternative plan and they know that they can't win this argument on the floor of the senate with the eyes of the nation on them. i'm not sure what they hope to gain by stalling financial reform. but i urge them to let us move ahead with this process. to my distinguished colleagues on the other side of the aisle, please, let us move ahead with this process. i urge them to set aside these

political tactics and bring these ideas to the table so that we can strengthen this bill and makure our economic -- and make sure our economic future safe. i call on them to amending and improving this important legislation rather than dragging their feet on the bill that has so much public support. when we pass this into law, after extensive discussion, it will be a victory for the american people. and if my republican friends join us in this effort, it can be a victory for both political parties. the american people will benefit by this legislation. this deserves to be debated in open session. i ask my republican friends, let us move ahead. but if they will no. if they continue to delay and obstruct, then i challenge them to come to this floor and explain why. i challenge any one of my

distinguished colleagues on the other side of the aisle to walk into the senate chamber today and seek recognition from the chair. i challenge them to stand before the american people and tell them why american families should be asked to fund wall street reckless -- recklessness and greed. i want them to explain it to me, mr. president. i believe we need to end these practices. i believe we need to take up the issue of financial reform without delay. and if my friends on the other side of the aisle disagree, it is certainly their privilege to do so. but i believe they owe the american people an explanation. and i'm pretty sure it will be very difficult to explain to them why they're holding up this important piece of legislation. thank you, mr.redent and i yield the floor.

a senator:he senator -- the presiding officer: the senator from missouri is recognized. mr. bond: i'm delighted to join in this debate and i invite my friend on the other side of the aisle to listen and our home communities are saying. and don't spend time soliciting funds on wall street. mr. president, let's be very clear. we all agree that we need to hold wall street accountable for the habit wreaked on main street. we all agree that we need to enact reform to prevent another financial crisis. where we disagree is what responsible reform looks like. i have real concerns that in its current form, the democrats' bill, written with the white house, is a massive government overreach which will punish main street, hurt families, and cost jobs by stifling small businesses and entrepreneurs. to sum it up, democrats want to treat main street, our community

banks, our farm lenders, you our auto lenders like they were goldman sachs or others on wall street. we, as republicans, want to ensure that we fix wall street without crippling main street. the only way to do that is to force the democrats to listen to the concerns of main street, to open this up and make it a bipartisan process. it has not been and it isn't going to be until we get some discussions and real substantive changes in what i view as a very dangerous bill to the economic climate and the economic health of our country, our states, and our communities and the creation of jobs. today let me share with you some of the concerns i've heard from main street. like families in every community and every state in the union, small businesses were the victims. they weren't the perpetrators of the financial crisis called among other places on wall

street. small businesses were not responsible for the financial crisis and should not be treated as if they were. but that's exactly what this bill does. this 1,400-page bill reaches far beyond wall street and will impose new costs an onerous new regulations on small businesses to fix a problem they were not responsible for causing. in short, this bill will change the way every american does business. we're not just talking about the way wall street banks do business, but also how every community banker, local dentist, farm lender, auto dealer and other businesses depending upon or having some credit exposure does business. and i would urge my colleagues to take time away from the floor and listen to the people at home. they have a very different message than that which we're hearing from our friends on the other side of the aisle. the concerns are not just

republican concerns. i hope that my colleagues on the other side of the aisle are also hearing from their constituents back home about disturbing provisions in the democrat proposals and have begun to agree with senate republicans there's a lot of work to be done before we bring this 1,400 page monstrosity to the floor. now, don't misunderstand me. like nearly two-thirds of all americans who favored some sort of reforp of wall street, -- reform of wall street, so do i and my republican colleagues, but we need responsible and bipartisan reform that all can be proud of. i want to work with my friends on the other side of the aisle to address the concerns of missourians. first, i continue to be stumped that any real reform in a financial system would ignore fannie mae and freddie mac which were significant if not majority

contributors to the crisis. but that's what this bill does. that's a mistake. so is leaving out the rating agencies who gave triple -- aaa ratings, the bad paper those foisted on the system. fannie mae and freddie mac contributed to the financial meltdown by buying high-risk loans made to people who could not afford them. in addition to the cost to taxpayers, these responsible american -- these responsible -- irresponsible actions turned the american dream into the american nightmare for too many families who face foreclosure, lost their homes, which devastated entire neighborhoods and communities as a property -- as the property values diminished as well as the credit rating of the families displaced. responsible reform must address the g.s.e.'s. responsible reform would put an end to the taxpayer funded

bailout of freddie and fannie and refocus them on promoting affordable housing. that's what's critical in reforming wall street, we are not punishing main street. instead we should be protecting small business startups that are so critical to job creation. unfortunately, this bill will kill small business startups. while title 9 of the dodd bill has been little noticed, it would have devastating consequences. specifically, this provision would kill small business startups by delaying and limiting the availablity of private investor seed capital which is responsible for these startup survival and growth. through new, burdenson regulations by the s.e.c., innovators and entrepreneurs would be subject to registering with the commission for a four-month review before they could get out and start soliciting money. this tying up of vital venture

capitals with capital dollars needed for immediate use by small business would cripple their startup efforts. this is not a measure that's going to protect people from wall street. this is not a measure needed because venture capital and small startup entrepreneurs and innovators were causing the crisis. no, they're part of the solution to the jobless problems we have now. this is -- this provision is an overreach by the federal government which would shut down job creation main street provides and this country desperately needs. raising the net worth threshold for those who can invest in these venture capital firms t to $2.3 million from the existing $1 million and remain -- and raising the annual household income threshold t to $450,000 as the dodd bill proposes to do would disqualify two-thirds of the current

acredited ininvestigators according to "the wall street journal,". these are the investors who otherwise could help fund small start-ups, in your communities and mine. these are the people whom these innovators, these entrepreneurs have to go. and you're making it impossible for them to get the money they need. therefore, some woman, some man with a great idea is much less likely in your hometown to be able to get the funds she or he needs to start a business. i believe strongly, and i have always said and will continue to say, that small businesses and start-up companies are the backbone of our country. and i understand the critical role that these so-called angel investors can play in the creation and development of new companies, small or large. let me tell you about my position. right now in missouri, i have been working to help build an

agribiotech corridor across the state. we have the ability to foster a whole new industry in advanced agricultural research and biotechnology. this agricultural research and biotech industry is our best opportunity to stimulate and create high-paying, skilled jobs in rural missouri, rural america, and in the cities as well. these stimulus biotech companies are spurring -- they are being spurred in missouri, also are happening in other states across the nation. according to the kaufman foundation located in kansas city, between 1980-2005, companies less than five years old accounted for all, all job growth in the u.s. as a matter of fact, the same study showed in 2008, angel investors provided roughly roughly $19 billion in more than

55,000 companies. you're going to put an end to that with this bill? let's go back and think about it before we bring this monstrosity to the floor. the new bill if enacted would deny immediate access to the capital. if enacted, it would say to innovators and entrepreneurs, you are too small to succeed, too small to survive. now, that's far different from what this bill was promised and promoted as doing, of stopping too big to fail. yes, i'm going to see in my communities and you're going to see in your communities too small to survive. that is not where we should be going. killing small business start-ups and jobs on main street is not the only unintended consequence of the democrats' current proposal that have come to light. caught up in the democrats' fervor to pass a bill, any bill, without careful consideration are members of the u.s. military

and their families. last week, i heard from active duty and retired military members who fear this bill would hurt their financial security. you see, under the democrats' bill, the united services automobile association, usaa, a financial and insurance provider for members of the u.s. military and their families, would after an 87-year track record no longer be able to manage their own portfolio. also as a result of the dodd bill, this company that serves our military and veterans would have the ability to offer certain competitive products to service members and their families jeopardized and their ability to return money to service members and their families limited by this massive expansion of government authority. this must be fixed. i would urge my colleagues to listen to the military and veterans and their families in your states, see what they think. unfortunately, the unintended consequence of the bill just keep piling up. the next major concern i have heard from in missouri, the

community banks that provide critical lending to families and small business, is the creation of the so-called consumer financial protection bureaus. cfpb. this massive new government bureaucracy has unprecedented authority and enforcement powers to impose mandates on any entities that extend credit. we're not just talking about big wall street banks here, but also your community banker, your local dentist. dentists are telling me that they have to offer credit, they would be regulated. farm lenders. farm lenders would find it very difficult for them to be able to operate to make their farm loans and to be able to hedge the risks that they normally do. the auto dealers who can sell cars only through the benefit of private sector financing. as a result, there will be no choice to pass the costs on for this finance federal government they can get it to the consumers, the very people this

bill is supposed to protect. and it may cut some of them out of getting credit all together. the national federation of independent business, a strong voice for small business, voiced their serious concern over the creation of this new bureaucracy. i'm sure you all have received it, but if you have not, i would urge you to check your mail because the letter from the nfaib to congress says -- "these small businesses had nothing to do with the wall street meltdown and should not be faced with onerous knew and duplicative regulations because of a problem they did not cause. further, as the most recent nfib small business economic trend surveys show small businesses continue to struggle with lost sales and such regulations could make these problems worse. stifling any small business recovery." close quotes. you know what they're saying. we do this, small businesses are going to be even less likely to be able to create jobs.

we have already put too much debt on the federal -- on the federal books. we're threatening to increase our taxes by a tremendous amount, and now we see regulations that are going to interfere with our normal credit operations. that is a cause for concern. this very high unemployment, the stimulus bill didn't touch other than getting more people working for the federal government, which was supposed to bring our unemployment rate down to 8%. is going to continue to fail and fail miserably if we stifle the ability of small business to create jobs. now, the only way to ensure that the cfpb does not unintentionally hurt main street but still protects consumers is to narrow the scope and authority with clear language outlining exactly who this new regulator will regulate and what it will do.

instead of unlimited authority, this new regulator should focus on the shadow banking entities, operating outside of the regulatory framework and preying on vulnerable people. the banks and the savings and loans that issue loans are regulated by government regulators. are the people who are making these large loans like home loans regulated? a lot of areas are not. cfpb could look at those. i have proposed two years ago the mortgage origination commission to make sure that everybody originated mortgages was regulated by some appropriate state agency. well, we haven't done it. we also need to ensure that we're not empowering through this new government agency regulator the same organizations which pushed homeowners at any cost -- homeownership at any cost onto families that could not afford to repay their loans.

this is one of the key problems we had. people who couldn't afford homes were told that they could get them with no down payment. even if they have bad credit. if they didn't have the money to have a home, they were told they could have a home anyhow. these are the people who saw the american dream turn into the american nightmare. these are the people whose houses were foreclosed, their families thrown out, their communities devastated, and ultimately the entire network, not only of america's financial system but the world's financial system brought down by this bad paper. surely, my colleagues would not want to vote for a bill that creates a new government bureaucracy without knowing exactly what the bureaucracy is empowered to do and if it will take on the real bad actors who got us into this mess. the cfpb is a perfect example of how the one-size-fits-all

approach of this hurried legislation will have unintended consequences for those who did not contribute to the financial meltdown. treating community banks like goldman sachs is a mistake and one we cannot afford to make. if we are aware of these unintended consequences now, why won't we correct them now? why do my colleagues want to bring these unintended consequences in the bill closer to being codified into law on the senate floor? now, if you want to have some real consumer protection, i have purchased several homes as we have moved around recently, and i can tell you the best thing we can do for consumer protection is repeal all the laws that require a stack of paper that high that you're supposed to sign saying you have read it and you have got consumer protection, with a very simple one or two-pairnlg form. -- two-page form. i have talked about that before. for people who are not

adequately informed on financial situations, the one thing we found out when i joined with the chairman of the banking committee, senator dodd, in pushing home foreclosure counseling, is we work with agencies that were counseling people who were losing their home to foreclosure. these agencies were crying out, they said we need, we need financial counseling for these people before they get into homes. that's the best way to avoid foreclosure. let's go back to that. i mean, it sounds simple, but it happens to be the thing that would work. i doubt my democratic colleagues intend to pass a bill that will hurt families every time they turn on the light switch and try to heat their home, but that's what this bill in its current form will do. once again, trying to go for the easy one-size-fits-all approach to entities that it does not fit in any way.

the $592 trillion over-the-counter derivatives market needs stronger rules of transparency, the things that will run through wall street. some of these derivatives traded in this market have played a significant role in the recent crisis through products like credit default swaps. i've called these derivatives computer game derivatives. they were so complex, they were something somebody thought up and ran it through a computer. you know what? our regulators fell down on the job. they didn't look at these derivatives. they were not transparent. they were not regulated. some of that is the fault of the regulators who are now scrambling to come in and file suits forgot to do. they are supposed to regulate and make sure that these products that are complicated are fully transparent and related to reality and go to those who are at least

sophisticated. you can't guarantee that they win or lose, but at least know what they are, make sure they are clearly understood by everybody, get the rating agencies to judge them independently, not as captured entities for the people who issue them and will pay the regulator -- pay the rating agency if they get the rating they want. but this is an important distinction between the computer game derivatives or the very sophisticated derivatives that are traded on wall street. you can make good financial arguments for them so long as they are traded on an exchange, the wall street derivatives, so long as somebody is looking at them to make sure there is some integrity in them. but not all derivative accounts pose systemic risks. as a matter of fact, commercial contracts by -- initiated by energy companies, utilities and the agricultural industry are used to manage risks associated with their daily commercial

operation, from cost fluctuations in materials and commodities to foreign currency used in international business. these end users, these commodity hedgers make up less than 3% of the market, and i don't know of any farmer or any farm agency or any utility who caused the crisis on wall street by entering into a long-term supply and purchase contract. there's no reason to make this be traded on an exchange when you have got an ongoing partner. no reason to require collateral to be posted. the end users as they are called do so in order to plan producer pricing so they can provide the least expensive good or service to the consumers possible. costly margin requirements for the end users will be directly passed on to their families. and guess who pays for that. that's us. that's us.

because all americans will see their costs go up, whenever they turn on their lights, put food on their table and use any form of transportation, whether it be cars, trucks, buses or airplanes. this is a problem that must be fixed. for the purpose of my time on the floor, i won't go into each and every problem i have heard about the bill. i have only been given minutes to speak rather than hours, but the concerns i have outlined are critical. the unintended consequences on which i have shined the light must be stopped. americans do not want another massive flawed bill that will kill more jobs, make it harder to get a home or car loan or make it more expensive to heat their homes. yes, americans are rightfully angry and frustrated about the bad actors on wall street who caused the financial crisis, costing many americans their jobs and even their homes. americans are

rightfully angry and frustrated about the trillions of dollars that the government has committed to rescuing the financial industry when so many of them are still struggling to pay their bills. these are the people i'm hearing from. i agree with the majority of americans who believe it is unfair for bad actors who caused this financial crisis to get bailed out with their tax dollars, with our tax dollars, when there is no bailout for families who lost their savings or jobs. i agree with americans who are rightfully skeptical of the democrats' bill and the rush the majority wants to pass it in. it's no surprise my constituents are skeptical. after all, it's the very few bad actors on wall street who caused the financial crisis are now cheer leading this so-called reform bill. i was stunned when i read the head of the investment bank goldman sachs, mr. blankfein who said -- quote -- "the biggest

beneficiary of reform is wall street itself." the head of goldman sachs said the biggest beneficiary of this reform bill is wall street. did you hear that? everybody who's been looking at goldman sachs -- i also understand citigroup now supports this measure. they are huge wall street players who have had access to the wall street and the majority leader, both houses, to push for all the good things which this bill does for them. they are the ones who have been in there. they are the major contributors. look where the money goes. if you want to say, okay, who's looking for contributions? look at that and see what's in the bill. mr. president, this bill clobbers main street and it glances off of wall street. instead of helping wall street, i want to ensure a bill is passed that will protect main street. while wall street may be

cheerleading this bill, i'm here to ensure this bill represents main street concerns, and what i'm hearing from main street, they are concerned t. doesn't address their concerns. it puts more burdens on them. i would ask you, i would urge you to listen to the folks at home. we need to hold wall street accountable for the havoc wreaked on main street and an act of reform to prevent another financial crisis. this bill is too large, too costly for consumers and would kill job creation at a time when working americans need to be left to do what they do best. and that is succeed. mr. president, my friends on the other side of the aisle can hold vote after vote, but until this bill fixes the problems, i can be sure it is not just goldman sachs, citigroup and the rest of wall street which will benefit. i will continue to force democrats to listen to the concerns of main street america. i would urge you to turn up the hearing and turn down the volume

and listen to what the people in your states are saying. mr. president, i yield the oor,nd i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

mr. specter con. mr. president? the presiding officer: the senator from pennsylvania is recognized. mr. specter: mr. president, i ask unanimous const that further proceedings under the quorum call be terminated. the presiding officer: without objection, so ordered. mr. specter: i thank the distinguished medical -- majority leader for his generous and complimentary comments, as today completes one year since my return to the democratic

party, i have a few observations on what we should do as senato senators, not as democrats or republicans, to tend to the nation's business in these difficult days. partnepartisanship ran high in 5 when republicans chose to use the nuclear option when would, in effect, change the rule to allow 51 votes to cut off filibusters. the so-called gang of 14, a group of centrists from both parties, structured a compromise which confirmed some judicial nominees, rejected others and established a standard that filibusters should not be employed except in -- quote -- "exceptional circumstances." that spirit of compromise, i suggest, should be revisited today. in the threat of a great

depression in february 2009, i refused to join the republican obstructionism and played a key role in the passage of the american recovery and reinvestment act. i am fully aware that my vote put my job on the line. achieving civility and cooperation for the common good in 2010, as it occurred in 2005 with respect to judicial nominations, will require independence and risk taking by senators. senators must be willing to cross the aisle and work with their colleagues even at the peril of disfavor of their own political party. the problems of the country today are too severe, too many americans are out of work, too many americans are fighting and dying on foreign lands for

members of this body to be unwilling to risk their seats for the public good. the stakes for america require that we all do our level best and permit the public to judge us accordingly. at the moment, there is a pressing need for republicans to join with us in reforming wall street to prevent the kind of financial crisis which cost this country 8 million jobs. both sides agree that legislation is necessary. on a motion to proceed which is now pending on this legislation, there is no realistic contention that -- quote -- "extraordinary circumstances" justify a filibuster. once the bill is debated, there will be an opportunity for amendments. 41 republican senators will then have an opportunity to

filibuster whatever legislation evolves before final passage. extraordinary circumstances now call for republicans to join democrats in passing legislation to prevent another economic crisis. i ask consent that this statement be printed in the "congressional record" at the conclusion of the comments by majority leader reid about me, which were in the record this morning. the presiding officer: without objection. mr. specter: i thank the chair. in the absence of any other senator seeking recognition, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

mr. reed: mr. president? the presiding officer: the senator from rhode island. mr. reed: thank you, mr. president. i would ask unanimous consent to dispense with the calling of the quorum. the presing officer: without objection. mr. reed: thank you,

mr. president. yesterday we heard and the nation heard from goldman sachs executives indicating that they had no regrets about the financial crisis, a crisis that's left 8.5 million people in this country without jobs and stripped billion of retirement savings from americans. in fact, the pew institute will release a study that indicates that the financial crisis and recession has already cost u.s. households $100,000 on nanch lost wealth and -- on average in lost wealth and incom income. that is a huge, huge blow for to have families who are struggling to pay for their retirement, pay for their children's education and provide a better life for themselves and for their children. we've seen in the last five quarters, because of this financial crisis associated and connected with the recession, a loss in gross domestic product

of $648 billion less tron projected initially. $648 billion of projected enterprise. the cost of this crisis is something that we should all not only recognize, but commit to preventing in the future. and we also should calculate the costs not just in terms of how well we're doing and executives on wall street are doing pretty well, but how well the average family in this country is doing and how much in terms of wealth their has been diminish if not lost. and based on sound principles and support for small business and for families. you know, one of the major functions of any financial sector in any part of the world is to efficiently allocate

capital. to grow domestic progress and domestic product, not to reduce it. to invest in productive enterprise and employ people, not through various means to undercut companies that are forced to lay off workers that are -- that see incentives and moving offshore. all of this in the last few months has, i think, represented a failure in that basic function of making sure that capital is accumulated and then officially allocated for productive means. so wall street, i think, has a lot to regret about their role. and we have a lot to do to improve the situation, to ensure that the regulatory structure is in place and to have clear rules that will protect families, consumers, and protect the taxpayer. now, this is the third time that

our colleagues on the other side have blocked such efforts to begin the discussion. we recognize this is a complex topic. many, many different parts. credit rating agencies, capital requirements, financial institutions, derivatives. you can go on and on and on. so anyone who implies that they have all the wisdom will find themselves, i think, sadly mistaken. but we have to get on with this bill. because unless we bring this bill to the floor we can't begin to open and talk about the policy issues that people can disagree with. people have different approaches. and ultimately resolve this and create a better regulatory structure and a stronger foundation for our economy. but the last several days this has been, again, say no and the

problem might go away. well, if we continue -- if they continue to say no, the problem will get worse. we're looking across the globe today at a crisis in europe because of greek sovereign debt. it's spiraling, already spanish debt has been downgraded. if we think we're immune from these global currents, both good and bad, we're mistaken. if we don't put in a stronger structure of regulation, it might not be starting on wall street, but the impact on main street could be the same that could be just as devastating. we have to look forward and have to move and the notion that we have all the time in the world and we can just sort of nonchalantly go about our business or in some case if it's a political judgment that it's better just to resist is not serving the people of this nation well. we recognize there are principle differences. let's resolve them, as we do, on

the floor through debate, through discussion, and through a vote. and let's move on. we have a lot of work to do. and the underlying bill that senator dodd has brought to the floor already incorporates so many of these despaired views in, i think, a very sensible way. let me say for the record that legislation like this has been pending for months and months and months. the president will recognize, because he participated with me in the first markup last november where senator dodd brought a bill to the floor -- to the committee, opened it up to amendment and is quite clear that it was -- there was going to be no serious discussion. and, in fact, our colleagues on the other side said we need more time. we want to participate with you. and i think it was done with great sincerity. and senator dodd entertained those proposals for months from november until just a few weeks ago we were working collaboratively and creatively

to try to bridge our gaps and bring a bill to the floor. well, finally, and somewhat in ex aspiration, senator dodd concluded it was leading nowhere if not to more delay and denial. and so we had a committee markup. again, an opportunity for our colleagues on the other side to bring forward their proposal, their ideas in a markup where we would be able to consider their views, vote on them and then move that to the floor, but it was a prefunctory session. they had concluded that, no, they were not quite ready to offer their proposals, their ideas and to engage in the business of legislation. and so now the bill is before us months after we started the process, months after we entertained and encorp. rated proposals made by our colleagues because they're very good proposals. it was senator corker and senator warner who has done an

outstanding job who structured the issue of resolution, so there would be an upfront fund so that financial institutions and not taxpayers would pay for the failure of a financial institution. and, yet, when that bill was brought to the are floor, or we attempted to do it, that provision -- that bipartisan provision was singled out for, shall we say, criticism, if not, ridicule as a perpetual bailout. it's a bailout bill. it was a misrepresentation of the bill. and it, frankly, contradicted the whole effort -- the whole bipartisan effort to come up with something that both sides could support. but this bill incorporates so many different ideas and aspects that have been shared. in fact, i -- it was interesting in the leadup to this floor consideration so many times on both sides of the aisle people would say routinely on what we agree on 80% of the bill.

i think if you have 80% of the bill agreed to, at least conceptually, you're probably ready to bring the bill up for debate and vote. and, yet, again, the republican side refuses to do that. they think -- assume, i guess, that they have a lot of time. as you look around the globe at crises in europe, at the stock market falling dramatically yesterday because of europe, i think we have to move aggressively to protect american families, and that means getting the bill on the floor and voting for it. this bill will make changes that are urgently necessary. again, the issue of too big to fail through the extraordinary effort, painstaking effort, the hours of discussions of senator warner and senator corker, there was a proposal for resolution that effectively end the too big to fail. in fact, sheila bair who is the chairwoman of the fdic, someone

who has been chairing the fdic with distinction for several years said it virtually eliminates the possibility of a taxpayer bailout so that's part of it. strengthening consumer protection. i mean, there has been, i think, an unfortunate generalization that consumer protections are bad for business. frankly, we should have discovered in the last several months that good consumer protections are very, very good for business. many of those consumer laws which would have protected people seeking mortgages which were ignored or exempted would have, i think, improved dramatically the mortgage situation, swro improved business, -- would have improved business, would have made the overriding issue of efficient capital easier. but when you have very little

protection for consumers, they are at the mercy of those who are looking to make a quick buck. not one was watching out for them. but not only that, the individual mortgage didn't have anything as they say, any skin in the game they sent it to the securitization process, someone wrapped it up into a big mortgage-backed security, someone else wrapped it up into collateral debt obligation and someone wrapped that into synthetic collateral debt obligation an sold it all. not a lot of efficient allocation of capital productive means, but a lot of means for bankers and banker people and mortgage brokers. at the very beginning good consumer protections would have been an effective way to mitigate some of that damage. they're in this bill. we are attempting to eliminate

huge gaps in loopholes in financial regulation. in our -- and our regulatory scheme has grown-up many, many years, in fact, through the life of this country. and so we have a national bank authority that was created in the 1860's. we have an office of thrift supervision created because of thrift institutions. we have the fdic created in the 1930's by franklin roosevelt as a result of the depression and need to ensure -- insure products. and we have a security deposit created in the wilson administration. all of them have a dual piece of the action. and all of them have been routinely used in what is termed as regulatory arbitrage to move to the favorable position for

your business which may not be favorable for the economy. some of the big mortgage collectors that ultimately collapsed were regulated by the office of comptroller agency and then decided they would have a better opportunity at o.t.c. and then finally elsewhere. you know, hit and run i think was probably the business plan. we can stop that. and so this bill takes a strong step forward, consolidating the supervision by consolidating the office of comptroller currency and office of supervision. by limiting the supervision of the federal reserve over countless number of small banks and concentrating their efforts at the big institutions where their expertise and focus should make a difference. this is a huge improvement over what the present system is. and, yet, our colleagues are not recognizing the need to improve and the need to move forward.

we are engaged through senator lincoln and senator dodd with derivatives legislation, which the first time recognizes and regulates those derivatives. there was a great debate here in the 1990's, and through that debate, derivatives were left unregulated. today we recognize we have to put them back under regulatory supervision. and the legislation creates the steps, the architecture which goes a long way to prevent some of the problems that we've seen. it requires reporting all derivative transaction to a data repository which the regulators will maintain. so they can see firsthand in realtime what's happening out there. is there a big buildup in greek debt? are there huge positions in collateral default swaps on -- on greek bonds? they can at least get a macro sense of what's happening.

and then with limited exceptions all derivatives have to be clear on a clearing platform. and what that does, it takes away from the bilateral nature of a transaction. someone says, i'll sell you insurance on this interest rate for a fee. you give me the fee, et cetera, that's bilateral. if one of these parties is unable to carry out its obligations, the transaction fails. in a clear platform, there's a central party that assumes the risk of one of the parties failing. it's a mutual -- mutualization, really, of risk. and it's a step forward. but we have to step even further than that. we have to push as many of these trades on to a trading platform. not just clearing it and holding collateral, but actually pricing it because of the complexity of some of these products unless there's a market, no one knows the real value. on a trading platform there is a market value and people can market because basically someone

will buy it, that's the value. so we have to do that. and this legislation goes a long way to doing that. with respect to credit rating agencies, one of the great failures was the credit rating agency. all of these exotic mortgage products that collapsed in value most of them were rated investment grade, aa, aaa, bbb-plus, according to whatever the rating is, and, yet, they failed. part of it was because of the -- the way credit rating agencies operated. senator levin has conducted recently some very good hearings on this. the familiarity between the investment bankers bringing the product to the street and the raters, the interconnectness. the failure to have the appropriate checks on the models that raters were using. an independent risk analysis within the rating agency that's

going to look at these models not for the benefit of who's paying for it, but for the propriety and correctness of the model. that's what's in this legislation. but we have done something else, too. we have inserted language that will allow someone who has invested their savings, most likely on behalf of a pensioneer or someone else, their savings, and if they see the collapse, they can at least go to court and make the case they should find out what went on. today, these cases are routinely dismissed before any can question the rating. our legislation would allow them to get beyond the pleading stage, but it would also give the rating agencies an affirmative defense. they would have to factually check their models. they would actually have to look at some of these mortgages. and frankly, you know, this might be "20/20" -- this might

be 20-20 hindsight, but if someone drove out to those counties in florida where there are all these exotic mortgages and no one seemed to be living there and the communities were deteriorating, i think they would check pretty quickly their rating. that appears not to have been done. hedge funds, other private pools of capital, they are for the first time regulated. they would have to register with the s.e.c. so that large pools, the dock pools they call them of money that could influence systemically are now at least subject to registration, notifying of the size of their pool and other basic information. well, we have had months of opportunities to share additional thoughts and work together, to amend the bill in committee which was not done, but more importantly to begin today. in fact, we should have began last week, this issue of finally passing a senate bill that

responds to the crisis we saw, that bills are a stronger foundation for the financial expansion that protects consumers and taxpayers, and also leads to the increase in the wealth of families not to a dramatic decrease in the decline we have witnessed because of some of these forces at work today in the marketplace, on wall street, which still have to be addressed. now, there will be proposals that come up that are be a attempt to weaken some of -- that are an amendment to weaken some of these provisions, particularly with respect to consumer protections. again, i think it flows from a false logic that if it's good for consumers, it's bad for business. actually, i always thought in small town business the customer was always right. you please the customer. make sure you provide a value for your product.

made sure that he or she could come back because they were happy and satisfied. apparently, that old-fashioned rule has been tossed out, but that old-fashioned rule i think has to be re-established. now, we have seen as a way to deflect attention from the need for reform and the need to move this legislation misrepresentations about the bill. i mention one. it's a bailout bill. well, that i think has been dropped because it was transapparently misleading and indeed this bailout mechanism was a bipartisan product of two of our distinguished colleagues, senator warner and senator corker. now where the old standby it's going to hurt business. i'll tell you what has hurt business has been the behavior

on wall street. i can recall several years ago where there was a study by the mckenzie company that said if we did not loosen further the already, i think, lax rules, that we would lose all the securities business. all of wall street would go to anchor other places, that we would lose thousands of jobs. guess what? they have lost, unfortunately, thousands of jobs there, and it wasn't because regulation was too stringent. it's because it was too lax. again, if there is any case to be maded for business, it's irrational allocation of capital, lax rules with respect to consumers, a market driven not by value but by

compensation. not by long-term growth but by short-term profits. that is what cost every american $100,000, at least every family. so if we move purposefully and with the input of our colleagues, which is already accepted, we can establish a framework where businesses begin to grow again. so i reject the argument that what we're doing will hurt. in fact, this uncertainty of whether we'll have this reform or that reform continue i think at least to a degree to impede capital formation, to impede investments in the country. when there are rules, clear rules of the road, then the economy will again begin to pick up as it's beginning to pick up for other reasons. now, if we don't take up this bill, work on it and pass the legislation, who wins? well, i tell you who wins. it's the big banks that have

survived this crisis today who are reporting record profits. what are they making their money on? giving loans to small business men and women across america? investing in municipalities? no, they are making huge profits in trading. of betting in some respects on how the economy is going to do. well, that's -- that's fine, but we need a situation in which capital is dedicated to growth and to investment in productivity. the speculators will continue to reap billions in profits. i'm sure that there are very clever or several clever people who are doing quite well over the demise of sovereign wealth in greece that have taken short positions on greek bonds and are doing -- making a lot of money. that's not helping us and it's not helping the country and indeed it's not helping our trading partners across the globe. that unchecked will continue.

the opaque and unregulated market that i just referred to in derivatives, $600 trillion notional lapse, trillion dollars. when you talk to people about clearing of derivatives, it's not billions, no, it's trillions of dollars. that market is unregulated, and if it goes the wrong way quickly, the consequences can be devastating. we have seen that in the mortgage crisis. so we have to move. we have to move at every level, not just the big bank but we have to provide appropriate regulation for the people in terms of the mortgage industry so that those abuses and mortgage will be corrected. we have to go ahead and look at payday lenders which have 900%

interest that are stripping people of their hard-won resources. we have to look at the credit card companies. we have passed legislation but we have to look at what they are doing. now, those people, payday lenders and the mortgage brokers that can operate, continue to operate with impunity, the big banks, et cetera, they win. who loses? well, consumers lose. paying the excessive rates, seeing their homes devalue, all of that. so we have to, i think, stand up and start the work of legislating. the status quo is no longer affordable, and the notion that we will never see another crisis is, i think, undercut by looking around. if there is not today some steady hands at the tiller in europe in terms of the european community and their financial arrangements, the cascading

effect of greece to spain to ireland, et cetera, could be another problem we have to deal with. we have lots of work to do, and the longer we delay, the more we are neglecting the real needs of our constituents. mr. president, i would urge on the next vote we get down to business. mr. president, i would notice the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

quorum call:

mr. nelson: mr. president, i ask that the quorum call be lifted. the presiding officer: without objection. mr. nelson: mr. president, i ask consent to speak on the motion to proceed up to 30 minutes. the presiding officer: without objection. mr. nelson: mr. president, we have now voted three times -- once on monday, second time on tuesday, a third time today, just merely trying to get to the wall street financial reform bill. and each time we have been blocked from being able to proceed on a motion to proceed because we can't muster 60 votes to cut off the debate just to get to the bill. the republican leadership remains united in opposition to

bringing up the bill, and for the life of me -- especially at a time in which we have just seen a display of extraordinarily intense, shall we say, arrogance on the part of executives at a major wall street firm in the way that they conducted themselves in front of senator carl levin's investigation subcommittee yesterday in a hearing. i mean, it's rather extraordinary that the republican leadership is not letting us come up with the bill, so we can get it out here, discuss it, and amend it. and this senator has a number of amendments that i would like to, as we say, perfect the banking

committee's bill. but we can't even get to that. i don't know what is the thinking of the republican leadership that they would do this. and especially in light of the fact that the american people, they want some changes with the way that investments are handled on wall street, and they want to see some movement. they want to see some action. and so when we attempt to bring up a comprehensive bill to reform wall street and the reckless practices that nearly brought down the global economy, we're prevented from having a free and open debate on the bill, and we're prevented from perfecting that bill with

adopting amendments. now, i guess the alternative to this, since we can't do it out here in the normal legislative process -- i guess what the republican leadership is talking about is they want to do this in the back room behind closed doors, outside of the sunshine. they want to have a deal cut before it comes in order to avoid an open and free debate to reform the financial system. well, why do they want to do this? well, it seems to me common sense would tell us it's because they wnts to water down the bill. they want -- they want to water down the bill. they want to water it down to the very point at which the wall

street that we're trying to tighten the screws in order to better regulate them and prevent the near-financial meltdown that we had, they want to water it down before they will sign off on a final compromise, and that's why they're blocking the motion to proceed to get to the bill. does this tactic sound familiar? it's the exact kind of backroom wheeling and dealing that the american people have come to resent. and the only difference between now and decades ago, it used to be in the old days that it was in the smoke-filled back rooms. now at least there's not a lot of tobacco that's being consumed in those back rooms, and what's

similar is that the special interests are still calling the shots. so my plea is, let's break this filibuster, let's get a bill in front of the senate so that it can be in the full light of the glare of the headlights and the cameras. let's get it in front of the american people, and then let's let the legislative process work its will, as we amend the bill. now, listen to some of the arguments. the republican leadership, over and over and over, have said that the banking committee bill guarantees future bailouts.

well, that's just not true. it might be a good sound bite, but it's simply untrue. the banking committee bill puts an end to the promise of future bailouts. the republican leadership attacks the $50 billion resolution fund created in the bill -- now, this senator is not convinced that we need that fu fund, and i'm certainly not convinced that it's going to survive the debate on the floor, but we ought to have some honest debate about that particular provision. the fund is paid for in the banking committee bill directly from the coffers of the largest banks, and the fund acts, the way it's devised by the banking committee, acts as a buffer to

protect taxpayers, so that if there is another breakup -- another potential meltdown, that the funds there already funded by the banks, so the taxpayers don't have to go in and do the rescue operation like we've done in the past. under the baipging committee bill, the -- under the banking committee bill, the fund can only be used to liquidate a financial institution to break it up. in short, it is a funeral tax. it's a funeral tax on the largest banks, not the taxpayers. the $50 billion fund in that banking committee bill only gets tapped to pay for their funeral expenses. so here we're ...

the american people hear the republican leadership talk about all of this. it's a red herring. the american people want action, and here we are stuck in procedural gridlock, and the only winners, guess who they a are? as we sit here trying to break a filibuster on monday, again tuesday, again today, shortly after noon, the only winners are the wall street bankers who have mastered the art of using the broken financial regulatory system to almost bring down the country's finances by deceiving investors and, therefore, ultimately to save our system, to milk the american taxpayer. one of the major beneficiaries of the current system,

mr. president, is the credit rating agencies. a subject matter that the senator from minnesota, who sits in the presiding officer's chair now, has some familiarity and will be offering an amendment. and this senator is going to join him in that amendment. credit rating agencies, something that normally is just down in the weeds because it's so complicated, these are private companies that assess the credit worthiness of various types of debt instruments, such as bonds and mortgage-backed securities as well as the issuerissuers -- rating the issf

those instruments. and what they do is they typically assign a letter grade that is designed to convey the risk of default. and there are three major credit rating agencies on wall street. there's moodies, there's standards & poor's and there's fitch ratings. and for most of the last century, the rating agencies were paid by investors who subscribed to their services. and why did they do that? because it made sense, because investors were the ones that were investing their money, and they were the consumers of the ratings. they wanted the best information regarding the risk that they would have in that investment.

well, unfortunately, in the 1970's, all of this changed. and the business model flipped, and the rating agencies began charge the issuers of the bond -- began charging the issuers of the bonds, not the people who were seeking to know if it was a good credit risk in order to put their money; it was reversed. it was the very issuers of the credit who, rather than the investors who were charging for their services. and so beginning in the 1970's, rating agencies began to be paid by the very same people who had a vested interest in receiving a high investment grade. now, just think about that.

the very issuers of the bonds who wanted people to invest their money in these bonds needed a high credit rating on that bond in order to get people to invest. and if they could be rated at triple-a, as opposed to d, people were much more willing to put their money into this instrument. well, talk about a conflict of interest. now the issuers of the bonds, who have an interest in a high triple-a rating go out and hire the services of the credit rating agencies. mr. president, did you ever hear

the old adage, "he who pays the piper calls the tune?" well, those who were going to pay the piper were going to call what that tune was. if you think -- if you're paying the bill to the credit rating agency that you have a better chance of getting a triple-a rating than a lower rating? of course you do. and that is a walking conflict of interest. how could we avoid -- how could we allow this unavoidable conflict of interest to exist and allow it to exist since the 1970's is unfathomable and unbelievable. and yet that's the way it is. credit rating agencies failed miserably in the run-up to the

financial crisis. and it sure looks like, looking backward, that they put profits ahead of professionalism. they failed to detect the severe deterioration in lending standards that began in the late-1990's. they failed to review all available information about the loans on which the securities they were rating were based. the conflict of interest in their business model gave the rating agencies an enormous incentive to overlook problems in mortgage-backed security markets. and in 2006, congress passed the credit rating agency reform act. i put that in quotes. the credit rating agency reform

act. the bill was written it senate by the -- the bill was written in the senate by the republican leadership, and it had the full signoff of the credit rating industry. so here's what the bill did. 2006, it standardized the process for registering rating agencies and it gave the s.e.c. some new oversight powers over rating agencies, and at the same time, however, this so-called reform act prohibited the s.e.c. from regula regulating -- quotee substance of credit ratings or the procedures and methodologies by which any rating agency determines credit ratings." it gutted the ability to

double-check credit rating agencies. and furthermore, to add insult to injury, the act also clarified that it creates no private right of action. so if a party invested in a particular financial instrument because that credit rating was high and it turned out to be a dog and they lost lots of min mine -- they lost lots of money, they had no private right of action through the courts. no wonder the industry supported that legislation back in 2006. the bill, written by the republican leadership, took away the -- any power of federal regulators that they might have had to crack down on the baseless credit ratings that

were fueling the boom in subprime lending. and to make matters worse, the bill made it clear that it was not empowering the private sector to hold the credit rating agencies liable for their ratings. well, the bill that we hope one day at some hour to get to the floor so we can start working on it, it does some important things to improve credit rating agencies. it requires these agencies to disclose their methodologies and their ratings track record. wouldn't you think you would want to know their track record if you're going to invest a lot of money based on their aaa rating? it requires agencies to consider information in their ratings that comes from outside sources. but when it comes to addressing

the fundamental conflict of interest in the credit rating agency business model, this bill coming out here on the floor falls short. it would require the rating agencies to separate ratings activities from their sales and marketing activities. and that's like saying that my left arm has no idea what my right arm is doing. and in reality, it's the brain in your head that controls both the right arm and the left arm and no one is proposing to chop off the head. so we have to deal with this conflict of interest and we're going to, and here's what we're going to do. and we're going to do this with the help of the presiding president of the senate.

we're going to offer an amendment that would establish a clearinghouse to randomly assign rating assignments with rating issuers and as simple as that, we can end the conflict of interest in the credit rating industry if randomly it's going to be assigned among companies that rate issuers of financial instruments. and secondly, this senator is going to offer an amendment to require the rating agencies to monitor, to review, and to update their credit ratings after the initial issuance of their credit rating so that it doesn't become stale. they're going to have to continue to look at it, to review it, to update it, to

publish it. and the rating agencies should not be able to walk away from a rating after its been issued, it's going to be fresh. and the rating agencies ought to conduct continued surveillance of these securities and update them along the line. now, the credit rating agency reform is just one of the many areas that the senate needs to debate, but as long as the republican leadership continues to prevent the bill from coming to the floor, this broken system remains in place. the wall street bankers win and the american public loses. let me give you some examples. you remember the name a.i.g.?

it was this goliath organization that started out as an insurance company. it became this huge financial institution. the core product of this company was its insurance. and it was deemed too big to fail at the time of the near meltdown of our financial syst system. this is back in the fall of 20 2008. and it was deemed that when we passed the troubled assets relief program, tarp, that money had to go into this big goliath organization all the way to the tune of about $80 billion of taxpayer money as i last recall, and it may be a lot more than that, mr. president. well, guess what they do?

they had already issued, if effect, an insurance policy that had a fancy name. it was called a credit default swap, and what it was, was an insurance policy against some of the companies if their investments went bad. that's not bad. but what happened was that when the american taxpayer dollars went in to save a.i.g., a.i.g. took those taxpayer dollars and turned around and paid off those insurance policies a hundred cents on the dollar. is that fair when folks like some of these folks that have been in the news recently, like

goldman sachs, got paid off to the tune of $13 billion instead of going in and negotiating a lower payoff since it was taxpayer money? well, we -- we ought to change that. and i think we will, if we can ever get to the bill, if the republican leadership will ever allow us to get to the bill. or let's take another example. what about these same insurance policies called credit default swaps and let's say that had the same set of circumstances with a.i.g. occur but a.i.g. had not been bailed out by the american taxpayer and, instead, had gone into bankruptcy.

and a.i.g. in this example, hypothetical example, had a lot of creditors that would get in line under the bankrupt law -- under the bankruptcy law to get whatever they could but oh, no, these insurance policies called credit default swaps would be exempt from the bankruptcy laws. they would get paid off in full first instead of having to get in line with all the other creditors under the bankruptcy law. well, that's not right. this senator is going to have an amendment to the bankruptcy -- to the banking committee's bill to correct that. there's no reason that those insurance policies should be ahead of the line of everybody else in the case of bankruptcy.

well, let's look. are we pleased about the executive compensation of some of these folks that have nearly caused the financial collapse of our country? when taxpayer money through the tarp system was bailing out these institutions, whether it be directly, like into a.i.g., or directly into a place like bank of america, or whether it was indirectly coming through these credit default swaps that were getting paid off 100 cents on the dollar that i just described through the conduit of a.i.g. what was happening to the compensation of those executives? were they still getting bonuses? were they still getting high salaries?

were they having to tighten up their belts when, in fact, their financial institutions were kept alive by the american taxpayer bailing them out? no, we didn't see that tightening of the belt. we did not see any evidence of humility. we didn't see any evidence of appreciation. but instead, we saw arrogance displayed through huge bonuses that were being given with a total disregard for the american people's sacrifice of putting their hard-earned taxpayer dollars in to save those financial institutions. so, mr. president, i think you will see that once we get out here on the floor that, in fact, we are going to get a number of

amendments, including this senator's amendment on a limitation not on executive compensation but a limitation on the ability to deduct from their tax liability excessive executive compensation and a tie of that excessive executive compensation to, in fact, performance for that company who pays their salary. we're going to see that. and sooner or later, mr. president, we, in fact, are going to get to the bill, even though the republican leadership continues to try to obstruct and delay, because sooner or later, the american people are going to

have their way, and they clearly want wall street financial reform. mr. president, i yield the flo floor. mrs. hutchison: mr. president? the presiding officer: the senator from texas. mrs. hutchison: mr. president, i rise today to speak on the financial regulatory reform and particularly the affect of the dodd proposal which came out of the banking committee, on which i sit, that we have been voting on cloture on for this whole week. i have heard the senators from the other side talk about delay. the republicans are delaying this bill. and i've heard them for the last week say it's because we're siding with wall street, republicans are siding with wall street. well, you know, that's odd to me, mr. president, because it's the wall street big banks that are for this bill -- for this bill.

it is citigroup, it is goldman sachs that are in support of this bill. they are publicly supporting the bill. it is the community banks that are flooding by office and the offices of my colleagues. it is the community banks that had nothing to do with the financial meltdown that are hugely concerned with this bill. that is the issue. the groups that are opposing dodd's bill are the national federation of independent business. that's the small businesses of our country. the u.s. chamber of commerce. the americans for tax reform. the americans for limited government. freedom works. the national taxpayer union. the united states automobile association. we have had auto dealers in our offices all week who are very concerned about not being able to get credit from the little banks and the ability to finance the buying of automobiles. it is the built officers

association that had concerns with this bill. the national council of farmer cooperatives. the farm credit council. the national association of home builders. the fertilizer institute. mr. president, this is a bill that is going to affect our economy. so many of the groups that i have just named are the groups that are giving jobs in our country that we want to encourage to create more jobs, not discourage in a time like this. so yes, republicans have been trying to have input on this bill. there has not been any republican input at all. and, mr. president, if we have learned one thing as republicans in the vast majority in the senate, it is that we know what it's like to be completely shut out. we were completely shut out of the health care debate. we had amendments offered day after day after day. well, the process worked.

not one republican amendment was passed, not one. neither was there one republican vote in the house or senate on this bill, the health care bill. so we have had that experience so this time because we see the dangers in the dodd bill to our economy and the small businesses and the small banks, we are saying we're not going to let this bill go to the floor if we have the power to stop it until we have republican input. because the biggest failure in the bill is that it still allows taxpayer bailouts. that's what's wrong with this bill. that's why republicans are voting not to bring it up yet, because we're trying to change the language in the bill before it comes to the floor to assure that the taxpayers will not have the responsibility to bail out big financial institutions that

take gambles with other people's money. that is the holdup. this bill is not a bill that is favored by community and little banks. it is favored by the big banks. it's favored by goldman sachs and citigroup. so let's be clear about that. as we consider the bill before us, the dodd bill, it should focus on the gaps and holds in regulations that led to our nation's financial crisis from which we have not yet recovered because there are still thousands, hundreds of -- actually millions of people who are unemployed because of that financial crisis. we must end too big to fail. we must end taxpayer bailouts. and that is not done in this bill. that's why republicans are saying stop this bill from

coming to the floor until it does at least one major thing, and that is, to be clear, that we stop too big to fail in this country. putting the big banks in one level of operation and scrutiny and one level of access to the fed, which this bill does. the fed keeps its scrutiny of every bank holding company of $50 billion and more in assets. that's it. all the other banks in our system throughout our country are not allowed access to the federal reserve. they cannot be members of the federal reserve under the dodd bill. that is the major reason that i'm not supporting this bill. in fact, i have an amendment. if this bill comes to the floor, i'm going to offer an amendment

that says that the law today will prevail, and that is that community banks may join the fed, that state banks may join the fed, because if you don't do that, you are going to give the impression that the $50 billion and above banks are in one category, and they are going to be temporary protected, and that means they're going to be able to give lower rates in competition with the community banks because it will be perceived that the risk is less. that's not what we ought to be doing. so i'm going to offer an amendment to the dodd bill which would eliminate that part of the dodd bill that takes away fed access to the community banks. the other reason it's important is that we have regional fed banks. the reason it was set up that way is so that throughout the

country, the federal reserve would be able to make monetary policy with input, with input from kansas city and dallas and houston and san antonio and los angeles and san francisco and san diego, and also minnesota and also wisconsin. that was the concept of the regional fed banks, but if you don't have democrats -- let me just give you an example. the federal reserve bank of dallas which is headed by richard fisher who came to see me last week. he said i would go from regulating about $70 billion in bank assets with all the community bank members that we have in the dallas regional fed to three, three. so is the fed going to listen in washington when they are making the monetary policy to the

kansas city fed chief who completely agrees that we need to keep the access of state and community banks to the fed, for their information as well as the level playing field, so that will be my amendment. community banks did not cause the financial meltdown. in fact, they provided lending and depository services to families and small businesses across texas and across our country, even in the hard times. they were mostly the ones that helped the small businesses get their inventory loans and the help if they -- help that they needed for liquidity. now, a lot of people that i talked to in my home state that i visited in the small businesses and communities felt like nobody was lending, but the big banks certainly weren't. so the community banks are continuing to make credit available much more than the big

banks so that businesses and consumers can invest and create the jobs that will lift our nation into a recovery. don't talk to me about recovery when it's still jobless. that's an oxymoron -- jobless recovery. there are millions of people out there unemployed. is that a recovery? no. jobless recovery should be out of our lexicon. that is wrong, and if we are going to build jobs in this country, it's going to be through small businesses. the big businesses aren't hiring. do you know why the stock market is up right now? it's because the big businesses aren't hiring. they have lowered their costs. yes, they are more profitable because they are working with fewer people. you know, somehow i'm not considering that a success. i think we have to save our community banks, and this bill before us is going to hurt them,

and that is why we're holding it up. i wish i could say that that's the only part of the bill that hurts community banks, but there is another part. it's the consumer financial protection bureau that is created in the dodd bill that will have a new layer of regulations and a new agency-making new regulations that will affect those same community banks that are already fully regulated. we have seen the effect of poor and predatory lending standards in this financial meltdown, and we need reform in that area. americans should understand any and all the terms of a transaction, and they need to be creditworthy.

subprime loans to people who are not creditworthy is not healthy for our economy. we've learned that for sure. but we don't need a new bureaucracy housed in the fed but with no fed oversight, which is sort of a nonsequitur, but that's the way it is in this bill which i hope we can change. but community banks are already regulated. they have all of the regulations. either state banking regulations or the controller with the fdic insuring them, requiring reserves. they are doing their job. the new agency would remove safety and soundness from consumer protection and have unlimited and unchecked rule-writing authority. the legislation does include an exemption which would allow a community bank with less than $10 billion in assets to retain examination from its

prudential regulator or the regulators that they have now. but the exemption is false because community banks will still be subject to the new agency's new rules, pricing and prohibitions, all of which will only serve to curtail consumer credit options. enhancing consumer protections should instead focus on leveraging the experience of agencies that are already in place like the federal trade commission. i'm ranking republican on the commerce committee. i see the work the f.t.c. is doing on a daily basis to stop the unfair and deceptive practices that prey on consumers of financial products and services offered by nonbank entities such as mortgage loan servicers. as an example, in 2009 alone, the f.t.c. and the states working together closely brought more than 200 cases against

firms that peddled phony mortgage modification and foreclosure rescue scams. rather than focusing on too big to fail or the practices of large banks, the dodd bill overreaches and threatens the authority of the f.t.c. to protect consumers of nonbank financial products as it has for many years. the f.t.c. wrote a letter to me as ranking member of commerce and our chairman jay rockefeller and asked for assistance with preserving their consumer protection and enforcement authority. i'm working now with chairman rockefeller. he is very focused on this. i can tell you he's very focused because i talked to him on the telephone yesterday, several times, including at 8:00 last night because he is so concerned that we're not going to fix this bill to make sure that the f.t.c. is not shut off from what it already does, what it already

has in place with a new overlay of a new agency that doesn't have the experience and it would have to have start-up time and more taxpayer dollars. instead, senator rockefeller will have an amendment and i will cosponsor it that will just keep the f.t.c. exactly where it is now, with the enforcement actions against companies that offer nonbank financial products. and i hope that senator dodd will work with us on that amendment. in fact, i'm going to expand it even beyond that and say we should put all of the nonbank regulation into the f.t.c. instead of this new agency that will be another bureaucracy, that will be confusing in many instances to the banks which are already regulated. so i hope that we can do something in this bill that is right in the regulatory area and

particularly the area that caused the financial meltdown which was the nonbank financial institutions, not the banks. the community banks did not have a part in this financial meltdown. so i hope that we can fix this bill when it comes to the floor. now, it appears that the chairman of the banking committee and the ranking republican, senator dodd and senator shelby, have come to an agreement on the language that will tighten and close the loopholes in too big to fail. we're going to hear exactly what that language is in just a few minutes in our republican caucus. that will be very, very good for us to be able to then come to the floor if the democrats will allow republicans to have some input into this bill in the other issues. such as federal trade commission

jurisdiction, the new consumer agency that i think is overreach and overkill, and most certainly to keep the community banks without a competitive disadvantage against the big banks. i want a level playing field because i don't want the community banks to suffer in in country. they are the -- in this country. they are the heart -- they are the lifeblood in the heartland of our country and they are in peril with the bill that is on the floor. so i'm kind of frustrated at hearing some of the speeches on the floor in the last week that have railed against republicans for holding up this bill. you know, sometimes, mr. president, no is right answer because if we bring a bill to this floor and we have no ability to amend it and we don't fix too big to fail, then once

again, like the health care reform bill that was jammed through the senate and the house with no republican support and no input, we will be doing it to our economy and our financial institutions in this country. i hope that we will not do that again. i hope that we will have a bill that we can all agree closes the loopholes in too big to fail so that taxpayers will not be on the hook again for big financial institutions that bet with other people's money on fancy derivatives and all of the hedges that don't make sense that we pro -- sense, that we protect the hedges that do make sense that are used by the end user to keep a budget in place rather than passing big price hikes on to consumers in oil and

commodities. that's what derivatives are supposed to be for. and we don't need to stop that. we just need to know what's in those big derivative issues so that people will have the information and so will the regulators. so we can do this job right. this shouldn't be political. democrats and republicans aren't going to get an advantage for passing a -- a financial regulation bill because most people aren't going to know how it will affect them until it's passed and in place. so why don't we do it right? let's bring the bill to the floor with some key parts that are agreed to and then let's start having amendments. and i'm not saying every republican amendment should pass, but i think it should have a fair hearing, and i think some of them should pass if this bill

is going to pass the test of a true bipartisan bill that will have more than just a partisan vote out of the senate. so, mr. president, i thank you for listening. not that was your choice, but i appreciate it anyway. and i hope that we will do the right thing on this bill. it will affect our financial communities, everybody community in texas, and especially the small businesses and community banks that are going to be the reason that we recover if we do this right. thank you, mr. president, and i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from iowa. a senator: i ask that the calling of the quorum be suspended. the presidin mr. grassley: i would like to speak for 12 minutes as if in morning business. the presiding officer: without objection. mr. grassley: and, mr. president, also at the end of my remarks, i'd like to submit some letters i'm going to refer to for the record. the presiding officer: without objection. mr. grassley: mr. president, last thursday i wrote to secretary geithner asking why the treasury department allowed general motors to use tarp money from a treasury escrow account to repay its multimillion dollar tarp taxpayer loan. this afternoon i received a

response from the treasury department. i'd like to say a few words about the reply and the questions that remain unanswered. last week treasury and general motors announced with press releases and nationwide tv commercials that g.m. are repaid its tarp loans -- quote -- "in full, with interest, ahead of schedule because more customers are buying g.m. vehicles." end of quote. however, the hype does not match the reality. taxpayers have not been repaid in full. far from it. but many billions of tarp dollars remain invested by treasury in general motors, and much of it will never be repaid. the nonpartisan congressional budget office estimates that taxpayers will lose around $30

of dollars on g.m. in addition, the payments that occurred last week did not come from revenue g.m. earned by selling cars despite what was claimed in the tv ads. instead treasury allowed g.m. to use funds in a separate escrow account to pay its tarp debt. the treasury department's response to me today makes a point of saying that g.m. -- quote -- "owns the money in the escrow account" as if that somehow justifies all the hoopla about g.m.'s so-called repayment. well, let's look at how g.m. came to own those escrow funds in the first place. the escrow funds were part of the tarp money treasury paid for

g.m. stock coming out of bankruptcy. the money was supposed to be used by g.m. for expenses, as treasury concedes. treasury had the power to approve or disapprove of g.m.'s use of the money to repay the tarp taxpayer loan. treasury approved and g.m. pretended it was paying the loan back from revenue because business had improved. business may have improved, but that's not how they paid the loan. taking tarp money out of one account to pay back tarp loans in another account is not at all the same as paying off a loan with actual earnings as g.m.'s tv commercial imply that they have done. that is why i call it an elaborate tarp money shuffle.

and nothing in treasury reply -- the letter i received today changes that point. the public would know nothing about the tarp escrow money being the source of the supposed repayment from simply watching the g.m. tv commercials or reading treasury's press release. treasury's letter today says all these details are public knowledge and nothing new. well, that may be technically correct, but it wasn't clearly communicated that way to the average citizen. most americans don't pore through s.e.c. filings and special inspector general reports. the g.m. commercial also did not mention that g.m. could have used the tarp escrow funds to repay a $2.5 billion, 9% loan

that it received from its union health plan as part of the bankruptcy process. the union loan runs until 2017. the tarp loan was at 7% and ran until 2015. now, what sort of money manager would advise you to pay off a lower interest loan before a higher interest loan? g.m. and treasury have still not explained that and i have asked the tarp watchdog, special inspector general neal barosky, to get to the bottom of it. and worse off, g.m. has admitted that it has taken an additiona additional $6 billion tarp money out of the escrow fund just last week with no strings attached.

that money too could have been used to repay the high interest union loan. there are reports that g.m. also applied to the department of energy for a $10 billion, 5% loan to retool its plants to meet fuel economy standards. g.m. seems to be using government money to pay back government money and then asking for more government money at a lower interest rate. it sounds like a plan to refinance g.m.'s government debt with more taxpayer money and not pay it back. g.m. had to ask permission from treasury to use the taxpayer stock investment to pay off the taxpayers' loan. treasury's response to my letter says that -- quote -- "treasury retained approval rights over g.m.'s use of funds from the escrow account in order to

protect the taxpayer." end of quote. well, why didn't they protect the taxpayers then? why would treasury allow g.m. to use its equity investment to pay off the loan when it means giving up the legal right to a 7% rate of return for the taxpayers in exchange for essentially nothing? since the taxpayers has an equity stake in the company, it's true that future growth of g.m. could theoretically make taxpayers whole. but taxpayers already had the equity interest before the latest transaction and didn't get anymore equity as a result of this transaction. another key question is: why would g.m. orchestrate a major media campaign to make the public think this all represents some big accomplishment by g.m.

when the truth is that the taxpayers are still on the hook for billions that may never be recovered? using the taxpayers stock investment in g.m. to reduce its debt to taxpayers is not the same as repaying that debt for money actually earned by selling cars. treasury's reply today does not explain why it approved this transaction. maybe it's a step in the right direction. maybe not. but instead of misleading the american public, we should be clear and up front about what happened. i -- i suggest the absence of a quorum. the presiding officer: the clerk will call the roll.

quorum call: