and from coast to coast. this railroad will be a key reason why this nation can live in a more prosperous position in the future. >> what you are saying is if we have that call, if the country is clear and consistent. >> yes. that message is already getting there. >> in the past amtrak has purchased rail equipment from a company based in canada. as amtrak currently purchasing real equipment or overall service from lombardia? will it do so in the near term? >> yes. we continue to enhance our relationship. a stand that amtrak is still trying to decide on the best strategy for replacing the fleet which was originally provided. one option is to purchase additional cars to the fleet in order to expand capacity along the northeast corner or even

though the new cards would be replaced after just a couple of years along with the original set of feet. how likely is it that amtrak would purchase additional cars before updating of the equipment for the northeast corridor? >> what we really looked at is that the fleet on the northeast corridor naturally covers 121% of the costs so you are making money as compared to other modes and services on the corridor. so we looked at that we can improve the amount of revenue and enhance the writers should if we can extend the number of trains we operated that were like the train sets. so the opportunity is for us to increase our revenues if we can find about five train sets that we could add for high-speed service. certainly the services that you're existing are a proven design and we don't have to spend the time to go through the

testing of an entirely new technology to provide that service. so there is a great trying to find the right were up there is a great opportunity for us to be able to do that but we have not made the decision. we haven't decided that is what we are going to do. >> in my opening statement i talked about the fact i'm glad the administration is not submitting a budget requests the but guarantee amtrak but the request for capital grants is still lower than the real world request by about $500 million. what impact would the administration budget have on your capital investment? >> what available for us to do for the future if funding becomes available, and what i mean is that we have, as every state d.o.t. and every competent operation has a list of projects that need to be done, especially when you have a $5 billion to

$7 billion backlog, just on the northeast corridor, but there are a lot of other projects that could be done. i know senator dorgan may be here talking to me about one in particular in devil's lake, so we have opportunities, should the money become available, to get a job done. >> what about on the operating side? i think that their request is $40 million less than yours. will that have an impact? >> if the question is for us to cut back services, we're looking for a way those services will continue to be provided, but some decisions, for example, i still get messages from those who ride from albany to new york city, asking when are we going to return the cafe car, which we don't have on there any longer. we eliminated that in order to reduce costs, so it impacts us, that it's not as convenient for people to ride the service now as it was before. >> ok. thank you very much.

>> thank you, madam chair. mr. boardman, we just heard testimony that second and third shifts are reducing productivity, and compromising the work that is done. we thought that -- i understood that the $1.3 billion in aasa ra funds were for shovel-ready products. were they not shovel ready, was amtrak not shovel ready, why have you had to take these extraordinary steps, which apparently are more costly, and less productive? >> i think all the projects were shovel ready and i think that the ig did an excellent job looking at the risks for us along the way, but the nine projects that he really looked at, one of them was the diantic ridge, there was a frequency convertor replacement project and the los angeles maintenance facility were the top five that

they were worried about for risk. when you looked at the number of points, when they looked at acquisition, environment, schedule, objectives, technology, size, complexity, financial, human capital, management and fraud, what you wound up with was 10 points for each of the first three that they were word about, nine for the fourth and eight for the fifth and when you look at the 10, what you find is the risk is really environmental and sizing complexity. it's the -- the things that ted and his staff found where we -- it's costing us more, as it does in every capital area, was when you tried to get it done as quickly as we were really trying to get to done, you had to put on the second or third show. >> so that was a mistake, trying to put the time deadline on it, that was a miss thank in terms of cost, productivity, so that is -- that is a signal not to put time lines on it.

i would hope that the request you have would have reasonable time lines, that are achievable, and -- >> absolutely. >> i didn't have anything to do with that bill, so i can't -- i can't speak to that. you mentioned, you're taking a look at different types of funding for amtrak. and you mentioned, high on the priority list, borrowing in the private market. correct me if i'm wrong, if you borrow, that means this budget, this committee's budget will have to pay the interest costs and the debt service every year so that will really be a charge on this budget. are there any dedicated sources of funding that you're looking at outside of putting acela type trains on to generate a profit, making things profitable that will give you the money you

need? -- money you need? >> no. all capital comes from the federal government. >> ok. well, i would urge you to find out ways to emphasize that, what is profitable, and deemphasize that which is not profitable, because we are up against the wall, you probably heard me say earlier. >> none of it is profitable. >> well, but it has to be less costly. >> and that is happening. but it's not -- even if it's less costly though, sir, it doesn't mean we can paw the capital with it. it means we can pay the operating. -- >> well, they come out of the same pot of funds. if you're looking here, doesn't matter whether you call them capital operating, your capital is going to compete with your operating, which is going to compete with ousting. let me turn to mr. alvaz. sort of a two-part question. i know you're new to the office of i.g., we welcome you. in 2009, amtrak outlined a strategic guidance document and

i'd like to know how it is being implemented, and to what extent are amtrak managers or others being held responsible for achieving the key performance indicators that have been developed and are they affecting pay and promotion? >> i'm not sure i can fully hanes that question, but i'll do my best. the strategic guidance identifies the key things that amtrak is trying to achieve. and amtrak has been taking steps under a new performance measurement system, to develop performance measures and goals for its key executives and then to flow those through the system, to subordinates. >> is there any tie-in between bay -- is there any performance bow fuss for those who need it or penalties for those who don't?

>> i'm not sure about a bonus, but i do know that the rating and the pay is going to be tied to those measures. >> all right. mr. bar, welcome. you have -- you have spoken about the problems that apparently came from putting too much money, too many requirements on fra, in other words, you were -- i think i have understood you to say that a bunch of money was dumped on them, with a bunch of requirements, that were empossible to meet, and that's why there have been fame use to achieve what was expected from fra. is that a fair assessment? >> i think the assessment and the point i want to make is looking at fra and what the traditional role really was. it's a small regulatory agency that's been asked to transform into a large grant-making

organization. so not only do they have to issue their hone grants, develop their own internal policies for good solid management and oversight, but they have to oversee a larger grant operation on behalf of amtrak. overlay that with paul of the new safety requirements that came out of the safety act as it relates to positive train control, as it relates to americans with disabilities, and a whole host of other things, that is a big challenge, that's a hugely expanded role, and i think if i had to characterize what it's like, it's like needing to design and implement at the same time. that's very dodi fayed. >> are they able to handle the resources and the demands that they are expecting now, are they able to handle it? >> i think they're on their way. they've requested the fte's, but they're nowhere close to where they need to be.

>> ok. finally, who is going to -- with the d.o.t., ig, amtrak oig, how are you going to relate the roles of the two ig's? >> ok. i can start first. pat and i had discussions about this as well. we're thrilled that he is in place, and can pick up traditionally where we've been focused on some of the amtrak issues. the way i have guess i would divide the responsibilities. i think it laid out pretty well the challenges that fra has before it and i think yourself, mr. senator, indicated this national rail plan is something that needs to be looked at very, very closely. that would be something we would look hat. we would look at all of the other mandates, the requirements, how well they're overseeing project, oversight, and we would hope that the amtrak ig can continue doing with he's doing, look at some of the internal policies, practices, challenges going forward with their new requirement. >> ok.

you got the fra ball, mr. alves, you've got the amtrak ball gentleman gentleman i would like to say -- >> i would like to say a couple of words about this. i agree with what ann is saying and the amtrak ig has some very capable people and has done some very good work. but i think that hour foe campus needs to be -- our foe campus needs to be on the major challenges that amtrak faces and its strategic goals that are outlined if that strategic guidance. and we have put together a new strategic plan that builds on that strategic guidance and basically directs us, our goal is going to be spent much more of our resources addressing the big major issues. and so i think that will fit with what you're looking for. >> thank you for sharing with us. my apologies, madam chair, to you and my colleagues. >> senator lautenberg. >> one of the things that has

been talked about with a degree of frequency, and that is searching for new corridors, where we can bring rail, good quality rail service to these places. where would we -- how would we fund the equipment, the tracks, the infrastructure, when we can't handle the equipment needs for amtrak as it exists, we're talking about other corridors. how is that going to be paid for? >> directed to me, senator? >> yes. >> good to see you. first of all, i think there are a lot of those corridors that we can extend the use of our existing equipment, for example, springfield, mass, to new haven, for example, that's one of the things that's being funded and

certainly there has been a lot of activity about how that will get financed for the future. when we extended the corridor to lynchburg, virginia, we were panel to use equipment that was available, that extended from the northeast corridor to provide that service. but there are areas, as you say, for example, one of the corridors that i think has great promise, is the milwaukee to madison corridor, for example, for the future. that will require the rebuilding of the tracks and it will require additional equipment, and you have a state that's made a strong commitment in regard to that, being wisconsin, and both in terms of equipment that they would buy and pay for, in some cases, on their own, and also applying for and rebuilding the line between milwaukee and madison or at least part of that line, that they own. and i think that's where the key for pria came, that the states would take a leadership role in those corridors for the future, not only with adding packs and

facilities, but also with the equipment. we're there to help them. but they're going of to -- take a role in that process -- going to have to take a role in that process and also use the federal money that's become available. >> the question that arises here, you know, i look at this, and one thing that we all know here, whether we like to look back and talk about all of the years of neglect in investment that we made. i mean, if you compare what amtrak -- what's happened with amtrak on an annual basis, i think it runs something over a billion dollars a year over the -- since the 1970's, when it became amtrak, as we know it. and when you look in other places, and commitments that are

made, $10 billion a year in germany to get high-speed rail going and they did it, and it doesn't do us a lot of good to beat our chest here about that, but the fact of the matter is, this has been a case of sheer neglect on our part to step up to the plate, so when you look at these amounts of money, this isn't something that is coming in out of the blue. it's trying to make up for some lost time. >> well said, sir. >> and you know, when we look at, for instance, -- i want to ask a couple questions about the equipment. you were -- you pretty well gave an endorsement to the continuation of buying bombardier equipment. and how about the maintenance costs for bombardier. how about the durability of the equipment, because i've heard

chatting around that -- the maintenance costs right now are outrageously high, is that not true? that's because the equipment was over -- it's been overworked or -- >> well, right now, and i don't mean to interrupt you, right now, we're actually rebuilding them at the mid-life, it's 10 years, so the cost right now is somewhat higher. we expect these train sets to last the 20 years. one of the things we did with the fleet plan was we began to recognize that there was a commercial life, then there was a useful life. there were no manufacturers, other than bombardier in the united states that really build the heavy duty, long-lasting inner city rail cars in the united states. so we really had to have a spec, i'm kind of mixing terms here, but we really had to have a spec that was heavy duty for the future that would drive a domestic manufacturing. part of the reason that we're

committed to bombardier is because we're committed to bombardier. we have 20 train sets out there that are operating, and i want to get things done and keep things moving and i truly believe, right to my core, that we're sitting on the precipice of huge increases again in fuel costs, and our need to deliver for hour nation, and for the community, is going to mean that we need to move faster. somebody said, asked the question earlier, how long does it take to get these cars in here? three years. maybe if we push them two years. we are at $80 a barrel. we're going to be headed to 100, at least by some estimates and many beyond that. it's when that happens, that you begin to see a total breakdown in the aviation business model for short distance, and thoser the -- those are the kinds of things that railroads can provide in the most efficient manner, so i don't want to say that we have to buy bombardier for the high-speed rail sets,

and i want a new generation of high-speed rail that's open and competitive, but right now, in order for us to really move things the way we think weaned to move them, we need the relationships with bombardier and we also need relationships and we are improving our relationships with general electric, for example, that we have over 200 of our diesel locomotives are general locomotives, that they will become longer lasting and we are looking at the new -- >> can we get any acceleration of the speed -- you held out some hope there, which made me glad for a minute, in this environment, that's pretty hard. the fact is that with new equipment, you projected a real shortening of the trip from here to new york, the example that -- >> we believe the time savings

can be improved. >> if the mid-life repairs that you talked about, does that give you the kind of equipment advantage that in any way enhances the amount of time that we have to go on the northeast corridor to get to a destination? >> some, but it doesn't get up up to the speed of the acela and it's not going to improve your handwriting, because we need to have that infrastructure fixed as well. >> we don't do old habits like that. thank you, thank you all. >> thank you, very much. mr. boardman, thank you for being here. and senator lautenberg and i were just talking about the fact that we think you're doing a good job and we were reminiscing with mr. gun, who ran amtrak, who i thought was a superb leader as well, but thanks for sinking your teeth in to this. this is a big challenge, because you've not gotten the money from the congress for capital to do

what's necessary. i was in russia recently, and was on a fast train from moscow to st. petersburg, and i'm thinking, wait a second, why is it there's a fast train with faster and better equipment in russia than here? it makes no sense to me. well, i'm a big supporter of amtrak, i think rail passenger service is an important part of the transportation network and i think congress just has to do better and i know we have some among us in congress who believe we shouldn't do this hat hall. the private sector won't do it, it shouldn't be done. i'm not one of those. i think this is a very important adjunct to america's transportation system. now having said all of that and complimented you sufficiently, let me -- >> devil's lake on your mind, senator? >> mr. swkrao: yes, it is. yes, it is. you mentioned i think that the empire builder is probably one of the most successful long distance trains on the amtrak system. the senator from washington knows that, because that's where the empire bear in minder ends up.

over -- builder ends up. over half a million people get on that train from chicago to seattle, it goes through north dakota and we face a problem. we have chronic lake flooding that's been going on for a dozen years now in what is called devil's lake. dramatic flooding. i think it's the only circumstance other than the great salt lake, where you have a closed basin, we don't quite understand where all of this is going to go, but the lake has increased in height, i think 25 feet now, and it just continues to rise. this year, it's expected to rise again. we have a bridge near church's ferry on a track owned by burlington northern, where amtrak, i believe, slows down to 25 miles per hour in order to go over that bridge, but if the water goes much higher, perhaps another foot and a half, won't unable to go over that bridge and we met in january about that. i'm hoping that quick action can be taken to begin the work to resolve that issue. i don't think up want to avoid

stopping at grand forks, devil's lake, rugby, along the route of the empire builder. you get a lot of traffic in that area. so tell me where we are in your mind and what can we do to fix this, and do it on an urgent basis? >> we've been regular live meeting in regard to this with the state, and with burlington northern and so forth, and nobody has stood up and volunteered to pay for a new bridge, for example, which is perhaps understandable. but it's time. it's time for all the parties to decide what part of this do they need to help pay for and how do we move this forward, so i would propose to you, with your blessing, i hope, that we meet with the state in a more structured way, with our senior folks, to find a way to not only design and engineer, but finance the appropriate bridge that solves this problem for the future.

>> now the track and the bridge among to burlington northern? >> they do. >> and what will the design and engineering costs be? >> you know what. i had it and was supposed to remember it and it's gone, but i can provide that to you. for the record, i think the construction of the bridge was around $60 million, and usually, it's about 10% of that, but i think it was like between $4 million and $6 million to design it and then the more -- maybe more difficult part for the future was we had to replace some rails for the future and maintain it, which brought the whole thing up to maybe in the 100,000, plus or minus category. >> 100 municipal you mean? >> mr -- 100municipal you mean? >> -- 100 million >> 100 million you mean? >> yes. 100 million. >> 100 thousand, senator murray would finance that.

>> well, let me make a suggestion, i wonder if perhaps we shouldn't do a conference call next. my staff has been involved with all of these calls, i mean, we've had some weekly calls, but frankly, nothing is happening. >> yes, sir. >> i mean, nothing constructive is happening and i'm wondering if we shouldn't do a conference call with the c.e.o. of burlington northern, mr. rose, yourself, the governor, the congressional delegation, and in that call, decide who's going to do what and when and how we're going to get this fixed, because i worry very much that we could come up to a time here in just a matter of weeks, when something could persuade the structural issues and others could persuade you that you can't any longer run that amtrak train through grand forks, north dakota, devil's lake north dakota. >> you were very persuasive to me in the meeting we had in january that i would continue to operate. >> well, i tried to be persuasive. but let me suggest -- i'll talk to you following this hearing, why don't we put together a conference call of principals

first, make some judgments there about who is going to do what and when, but ben, you want this -- but again, you want this railroad to run well, you believe in passenger service, as do i, and i think the chairman of this subcommittee has very strong feelings about it. you just heard senator lautenberg, nobody has been stronger than senator lautenberg, you have very strong support of the vice-president's office, we watched him as a senator, spent a lot of time on amtrak as well, so i really want you to succeed. we need to find a way to get enough capital into this rail passenger system, so that you can make decisions in intermediate and longer term. that's the only way we're going to get to where we want to be and need to be to have a healthy rail passenger system that works well. so let me again, madam chairman, thank you for the time, and i'll

look forward to talking to you, either late today, mr. boardman or tomorrow. >> yes, sir, senator. >> we'll set up that call. >> thank you very much. >> thank you. >> thank you very much. i have one final area, and that is in physical therapist calmics year 2010, amtrak committed to spending $144 million on station improvements to bring their rail system into compliance with the a.d.a. the original budget request for 2011 included $281 million for the second year of its five year plan for a.d.a. compliance, but today, amtrak is lowering that estimate, i understand, by $50 million, because of difficulty getting the money out the door this year and i understand that part of that is due to the fact that you don't own all the facilities. but i wanted to ask you today, mr. boardman, if you still believed that amtrak will be able to bring all of its stations into compliance with a.d.a. within the next five years? >> i don't know that we can.

i'm not happy with my organization that reduced the amount from the $181 million down to the 131 and i don't yet have the answers from them, as to what we're going to do to make that five year dead behind. if we have to drop it, $50 million right this minute, for me to testify to you that we can deliver it in five years, i don't think would be the appropriate thing for me to do. >> well, i just want you to know this is a high priority for me, it's about people's civil rights and it's not going to get fitzroy easier in the next five years, so i'm going to continue to press you on this. >> yes, ma'am. >> with that, i don't believe we have any other members that have questions so i want to thank all of our witnesses for testimony and i will recess this hearing until may 6th at 9:30 a.m. at that time we'll be taking testimony from hud secretary donovan and d.o.t. secretary lahood on the administration's fiscal year 2011 budget request related to community, liveability and sustainability. >> thank you. >> thank you very much.

[inaudible conversations] [inaudible conversations] >> the u.s. senate is about to gavel into resume debate on the revised financial regulations

bill. the new version was filed yesterday. senators will be offering amendments to the measure and discussing its provisions but no votes today. the next round of votes is expected to begin tuesday. the house is not in session today. live senate coverage now here on c-span2. the chaplain, dr. barry black, will lead the senate in prayer. the chaplain: let us pray. eternal spirit, hope of the souls that seek you, strength of the souls that find you, accept our praise today.

lord, we thank you for the things that can't be shaken and for the guiding lights of spiritual truths that no wind of change can ever blow out. refresh the faith of our senators that life's tensions may not break their spirits. make them ever faithful to each challenging duty, loyal to every high claim, and responsive to the human needs of our suffering world. may they face the toils of this day with honest dealing and

clear thinking knowing that all faithful service will be rewarded by you. we pray in your holy name. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington d.c., april 30, 2010. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable mark r. warner,

a senator from the commonwealth of virginia, to perform the duties of the chair. signed: robert c. byrd, presidet pro tempore. mr. reid: mr. president? the presiding officer: the majority leader. mr. reid: following leader remarks the senate will resume consideration of s. 3217, wall street reform legislation. there will be no roll call votes today. mr. president, i'm anxious to see how the debate goes forward on this bill. it's a most important bill, the bill before the senate places strict new regulations to stop wall street's reckless gambling. there will be no more taxpayer bailouts, and that's no bailouts ever. ends too big to fail, puts a new cop on the beat and puts consumers on control with information that's in plain english. let me repeat, mr. president: the legislation before this body holds wall street accountable, ends taxpayer bailouts, guarantees that taxpayers will never again be forced to bail out reckless wall street firms

by creating a safe way to liquidate failed firms without taxpayer money. ends too big to fail, strict new capital leverage requirements to prevent firms from growing too big to fail. brings sunlight and transparency to shadowy markets where wall street executives make gambles that threaten our entire economy. that will no longer exist. raines in c.e.o. pay. it protects community banks, creates clarity and accountability and protects the dual banking system that supports community banks. it protects consumers in many different ways. in effect, it puts a new cop on the beat, creates an independent agency with broad authority to monitor firms and intervenes to protect consumers. it guarantees clear information in plain english. it ensures consumers get the information they need to shop for mortgages, credit cards and other financial products they can read and understand. there will be no more abusive practices. it protects consumers from

hidden fees, abusive terms and deceptive practices. and, in effect, mr. president, protects against the bernie madoff-type scams. reforms and strengthens the s.e.c.'s ability to enforce security laws. this is a good piece of legislation. i know that there are republicans and democrats who want to improve this in the way they feel this is appropriate. i hope the debate will be civil. i hope that we can have limited time on these amendments, as the republican leader said yesterday. i look forward to that debate. it should be -- it is one of the most important issues to come before this body in a long time. i hope that we can complete it in a time that's appropriate, mr. president. we have so much more to do here, and we've been prevented basically this week from getting to this bill by the minority, and i hope that in the future they'll recognize that there are other things to do in this body that are of extreme importance to our country. we're going to have a name from

the president in the next few weeks. i assume that's the case, so that we can begin work on someone to replace justice stevens. we've got to do something with energy. there are just many things we have to do, including our normal housekeeping appropriations bill. we have to make sure that tax extenders, expiring provisions, we take care of that. that expires at the end of may. so we have a lot of work to do, mr. president. we have made some commitment to do something with small business jobs, and we -- i explained to one republican senator who said that they wanted to move to that, and i've explained the longer you hold up on us moving to legislation, the more difficult it will be to get some of the things you want to do. so this has been really difficult. we moved to this financial reform bill last thursday, and here it is friday, and we just got on it yesterday t.'s been a

tremendous waste of our time. the presiding officer: under the previous order, leadership time is reserved and the senate will resume consideration of s. 3217 which the clerk will report. the clerk will call the roll. the clerk will report the measure. the clerk: s. 3217, a bill to promote the financial stability of the united states by improving accountability and transparency in the financial system, and so forth and for other purposes. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from tennessee. mr. corker:r. pside, i ask unanimous consent that the quorum call be dispensed. the presiding officer: without objection. mr. corker: thank you. mr. president, i know there will be a number of people today talking about regulatory reform. it's my hope -- and i know the senator from virginia and i have worked on a number of issues together in order to create a bill that we think is solid and will stand the test of time, and i hope that spirit continues on. one of the things that many members have been talking about here on the floor is the size of institutions that we have in this country. there have been some movements to arbitrarily decide what size an institution in this country ought to be. and i think, i think everybody's

frustrated by what occurred a couple of years ago, and there's a lot of ideas that are coming forth to try to prevent the same types of things that occurred a couple years ago and even a year ago from happening again. what i hope people will keep in mind is that the reason that our large financial institutions are the size that they are is because we have companies in this country that need large institutions in order to be competitive. and i'd like to start out first with the fact that obviously if you're a large company in this country and you're doing business throughout the country, what you want to ensure is that you have a financial institution that covers the entire geographic map of our country, that you want to be able to do business in every state in this country in a way that's easy, a way that allows to you do what you do in a very competitive way. and then i think we have to remember, especially as we

continue to talk about other countries and the tremendous growth that has taken place, for instance, in countries like china and other places, that we live in a global environment, mr. president. in that global environment, some of the great companies that have been founded here in this country need the ability to operate around the world and to do so in a way that continues to create great american jobs. and and so we need to have a banking system in this country where we have institutions that have the ability to operate throughout our country and then we need the ability for these institutions also to be able to compete on a global basis. and so what that means is we have large, highly complex institutions that are able to do all those things necessary for these companies to be able to compete. and so i hope as people look at arbitrary downsizings, as people

look at lines of business that banks can or cannot be involved in, that we take into account that of the ten largest financial institutions in the world -- let me start with the five. the top five financial institutions in the world, a place where our companies have to compete, we have not one bank -- not one -- in that category. so here we are, we have the largest gross domestic product in the world, the most competitive business environment in the world, and we do not have one institution that ranks in the top five in the world. as a matter of fact, if you take it on down to the top ten, we only have two financial institutions, two banks that are in the top ten and they're towards the bottom that have ranking. so i hope as people -- i know there's a lot of populism and it sounds -- it sounds really great that we're diagnose to take on wall street, but --

that we're going to take on wall street, but i think what we need to remember is we may be taking on the heartland. there are companies across this country that depend upon the ability to -- for instance, if you're -- if you're in indiana or ohio or someplace like that and you're -- you're making some product out of metals, you probably want to know, if you have some long-term contracts, that you have the ability to hedge that -- the risk of metals going up. or if you're dealing with another contrac country, where e a lot of shipments going there, you want the ability to know that if you're selling it for what you think is a u.s. dollar, that that u.s. dollar stays constant by having currency swaps and those kinds of things. so, you know, one of the great things about america when we talk about the american dream is that people in this country have the ability, like the senator from virginia -- there's no better example -- no better example. the senator from virginia had a dream. he realized early on, i think he started with maybe $5,000 and

might have lost that very quickly i think and then had to reload again and figure out a way with small amounts of money to create a great company and he did that, and he did it over and over and over again. and the reason he was able to do that was in this country, we have the ability to bring capital together around entrepreneurs. you don't have to be born in this country with a silver spoon in your mouth. i know that i started exactly the same way, with $8,000 when i was 25 years old. you have the ability in this country to have a dream and to accumulate ways, build around that dream with capital formation that creates jobs. and, you know, this debate's interesting and i know people can score political points and it's, again, great to take on wall street. but what we've got to be careful of in this debate is that we're

not cutting our nose off to spite our face. the fact is that what makes this country great is all the -- all the companies across this country that people got up this morning and went to work and some entrepreneur had an idea, built a company and now it's employing people, which i know all of us realize is probably the most important thing for all of us to care about is that heads of households in this country have the ability to -- to raise their children, to pay for their education, to do the kind of things that improve our standard of living. so, mr. president, i'm a little concerned, as i hear night after night after night people coming down to this floor and they're -- they're bashing wall street. by the way, there's some things certainly that need to be corrected, and i know that the senator from connecticut is trying to do that with portions of his bill. i know that the senator from virginia and i have worked on portions of a bill that we hope will do that. but i think just arbitrarily

saying that we're going to create a system in this country of small banks, banks that don't have the ability to -- to aid companies that deal around this world so that we as a country can be globally competitive, mr. president, that concerns me. and i hope that, again, in the name of political points we will stop much of this discussion. and, mr. president, i hope that we'll all come to our senses -- well, i shouldn't have said that. everybody has strong opinions and that was a misstatement by me. i hope that we will look at the end results of our actions and what that may mean to the good people of this country who get up every day and work hard and depend upon -- depend upon -- those people who are willing to take risk for their families to be able to put food on their table, to educate their kids and to -- to live a life here in america that we can all be proud of. i see the senator from connecticut. i know there's no one else here on the floor.

i'll actually pause for a second. this may be the second longest speech i've ever given on the floor so i'll stop and take my breath. but i yield the floor, mr. president, if that's already, to the senator from connecticut. mr. dodd: i'm delighted to see my good friend and colleague from tennessee, mr. president, here. the presiding officer: the senator from connecticut. mr. dodd: let me just say there's not a thing the senator from tennessee has just said, and i've listened to his remarks, that i disagree with. in fact, i agree with what he said. i happy to mentality and that attitude will prevail in the coming week or two that we're going to be engaged in this discussion. i was thinking, hearing you talking, i was reading an article the other day and it's the same point the senator from tennessee was making and that is that of the 50 largest banks in the world, four of them are located here in the united states, five are located in our neighbor to the north, in cana canada. canada has a much smaller economy. obviously a smaller country than we do. didn't suffer any of the difficulties that we've gone through during the last couple of years and during this economic crisis. they had a downerturn. i don't mean to say it was --

they had a downturn. i don't mean to say it was all working beautifully for them, but nonetheless, they did not have the problems within their financial structures that we have had here. despite the fact that they have actually one of those 50 largest banks, have one more than we do in that category. paul crewing man, who -- paul krugman, who i don't always agree with, of the "new york times," has written about this point as well. i don't know if my colleague from tennessee has seen his articles. size is important and that may be one way of looking at all of this, but it really is excessive risk, it's a question of whether or not there's proper regulation of activities, it's leverage, it's capital requirements, it's liquidity, all all of these other factors -- it's all of these other factors, the ones we're trying to keep an eye on here. because size then can become a problem, but size may not be the only issue. you maybe a small institution here engaging in the marketing of products that put the system at risk. so we need to get focused on exactly what are the issues we're trying to address in all of this, and that's what we've tried to do with this. and again, my compliments to

both the presiding officer and the senator from tennessee for their tireless work. and the senator from tennessee knows he and i worked, spent a lot of time talking about all of this as well. a lot of what's in this bill is a reflection of your labors. i went back and i realized it's not exactly everything he wants but i think it's 90%, 95% of what we're talking about, and my hope is in the coming days here we can try and close whatever concerns and gaps people have that don't do any underlying damage to the overall thrust of what we're trying to improve. i want to pick up on a second point though, as well, because i think it's very, very important. i've said the three goals i have in this bill -- i hope all of us have in this bill -- someone to try and close the -- one is to try and close the gaps where we have this unregulated part of our economy that went kind of wild out there and that caused so much of the difficulties we've been going through and our country's been going through. so to the extent we can do that, recognize that it's not our job to regulate. i always say the two things we don't do very well in this institution is, one, to set accounting standards and necessarily write regulations. that's not within our pay grade here to try and do all of that.

we try to focus on institutions that have that responsibility and then demand the accountability. but i clearly want to see us plug in those gaps that we don't have shadow economies operating that can put us at risk. secondly is to try and see if we can't create -- and again, there's always some danger in trying to do this, but again, i commend both of my colleagues because they've really been the principal advocates of this -- some sort of of an early radar warning system. i don't know how perfectly it could work, how well it can work, but at least the idea that people are kind of with a series of eyes that brink a different per -- bring a different perspective to all this are kind of keeping an eye out to the greeces, the shanghais, because of what happens here. because we live in that global economy, as my colleague from tennessee has just articulated, so that we can at least when this next crisis comes -- and it will come certain as i'm standing here, maybe long after all of us have gone from here, there will be another economic crisis, some bubble someplace, the question is can we identify it early enough before it metastasizes, i use that work, into the rest of the economy or

globally. for instance, greece, today it's the downgrading of their debt that all of a sudden caused the euro to decline and europe finds itself once again on the precipice of economic disaster spilling potentially over to the rest of the world. so that's the second point of the bill. but the third point is equally important and that is to make sure that in our -- in our determination to satisfy point one and point two, we don't end up scrapping gling a financial system -- strangling a financial system so that the creativity, the innovation, the flow of credit and capital that are critical for job creation, wealth creation and economic growth are going to be there. now, that's a very difficult sense of balance to maintain. no one's ever gotten it absolutely right. it's always one side or the other seems to be dominating the other. but those are my three goals, in a sense, here to make sure that we satisfy those first two while simultaneously not making -- making sure we don't end up making it more difficult for that kind of innovation and creativity to spring forward. so it's exactly as the senator

from virginia and the senator from tennessee and many others, because they had an idea, they had imagination, they had determination to go out and to create an idea, to see an idea that would put people to work, solve problems for people, whether it's a medical device or a prescription drug or creating a new widget that improves the efficiencies of how we function as a country, all sorts of ideas that have been the -- the wellspring of what's made unique such in america -- made america such a unique place in the world, particularly i particulae 20th century. so before we begin this whole amendment process, i want to repeat this as many times as i can, those are the goals. i believe they're shared goals that we all have here, and obviously there's debate about whether or not certain advance those goals. and i believe honest people can disagree about how to do that. and our job here, which is the hardest thing in the world. i'm speaking here about a former governor and a former mayor,

they've come out of the executive side of government where it's often frustrating, it must be, to be sitting in a body of 98 other people who also, in a sense, executives, we're all coequals here and to bring our ideas and to try and then forge out of a body such as this of a hundred people some clear, focused vision of how to achieve those goals. but that's the challenge we have here in the coming weeks to do that. and, again, i'm very grateful to both of you for the contribution you've made. and i say that with -- with complete sincerity and appreciation for the efforts. and -- and this can be, i hope, a -- a good, honest discussion and debate. hopefully we can agree on some things. others may just have to have -- go out and have that debate and those votes and see where it lies and not try to bind the place up and filibusters and other things. it's not an unlimited debate. we don't have unlimited time, obviously, to do it but we can i think spend the next couple of weeks here to really try and get this focused in a way that we can come out. and, again, not solve every problem. we're not going to -- this bill doesn't take on every imaginable

financial institution and issue out in the -- out in the count country, but we think it focuses on some of these critical ones that are -- that are important. so i appreciate my colleague from tennessee coming over and sharing his thoughts. and, again, i -- i agree with him and our goals here. that's my point. mr. corker: mr. president? the presiding officer: the senator from tennessee. mr. corker: i appreciate so much the comments from the senator from connecticut. and, you know, i'd just like to sort of summarize the way i see things today. i, first of all, would say that i think last week or over the last short period of time anyway, probably the lowest point in my senate career of three years and four months, just hearing all the rhetoric on both sides of the aisle, candidly, about this bill and i continue to hear it, unfortunately, in the evenings from this floor. you know, the fact is that this is a serious issue and it's complex and there's a lot of substantive issues that need to be addressed, and i guess the

thing that -- that frustrates me most about this body -- it has nothing to do with having been a mayor or business person, it's the outlandish things that people can say on both sides of the aisle just to try and cut herds out of americans so americans who -- who are busy raising their families or doing what they do on a daily basis and, candidly, what we're doing here is just a long way away and they hear pieces of it, just to sort of divide our country up. and i do hope that on this bill we can focus more on the facts and we'll see if that occurs. it would certainly be the first in a long time if that were to occur, but i hope that happens. mr. president, as i look at this bill, first of all, on the too-big-to-fail piece, my sense is that the senator from connecticut is going to work with the senator from alabama and pretty well fix that over the course of this weekend. i have a feeling a managers' amendment's coming forth, and there will be people both sides of the aisle that think a

resolution mechanism isn't appropriate. i realize that. and there will be a push towards bankruptcy, which i know the senator from virginia and i really wanted to -- to strengthen in big ways. there's some committee issues that sort of keep that from happening as elegantly as it might happen, but i sure hope that we'll do everything we can to strengthen the bankruptcy laws so that the default position for a major company is to go into bankruptcy. okay? i mean, that's what -- that's the way our country works when a company fails. but in some cases, i do believe there's a need for a resolution mechanism, and my sense is that the senator from connecticut and the senator from alabama will come to terms over the next several days with ways of ensuring that there aren't those gaps -- i think there are a few, you know, look, the administration gets a little involved in a bill and they want to create some flexibility. you know? i understand that. and if i were on their side, i would want to do the same, you know, give -- hey, i'll take the power and we'll solve everything and we need to sort of close that up so that the things that

we intend to happen actually happen in this bill. and my sense is you all are going to fix that over the weekend. so then we have the issue of -- of the derivatives, and i think all of us want to see derivatives cleared. there have been some issues i know that came forth out of the ag committee, this 106 issue i think is -- is something that i think my friends on the other side of the aisle are going to figure out a way to solve and get back in the box. and i look forward to the debate that you-all have amongst each other doing that. that will be actually humorous to watch. but i think that will get i think the senator from virginia and the senator from connecticut and the senator from arkansas will figure out a way to get that one back in the tube, if you will. and so, you know, the derivatives issue, my sense is we'll get to a place that probably works. i know judd gregg and jack reed really, really smart guys on both sides of the aisle, have worked on this. i know that their work at some point will -- will bear some

fruit. i know saxby chambliss and blanche lincoln have worked heavily on it. i think we're going to get that right. so, mr. president, at the end of the day, i think we know the issue that -- that probably is going to divide this group if we don't work it out. i'm talking about this senate body. and that is the consumer protection piece. and, look, i -- i want to see consumer protection take place. i do. i know the senator from connecticut knows i was serious about trying to resolve that issue in march. it's my hope that we can come to terms on that. it's my hope that we can create a balance, an appropriate balance, so that the consumer protection piece is in balance with prudential regulation and for people who don't do this on a daily basis, these people that make sure that our banking system is safe and sound, that our financial institutions aren't at risk because of what -- of rules and those kinds

of things. hopefully we can get that in balance. i don't know if the senator from connecticut wishes to -- to speak to this, but that's the one issue that i know has a lot of people concerned. i think many of us are concerned about an agency that, as it's written today, i don't think has appropriate checks and balances. and with the wrong kind of leadership over time could end up being something very different even than possibly the senator from connecticut intends for it to be today. and i hope that, again, over the course of this debate we have the ability to deal with consumer protection in a way that achieves that balance where people across this country that wake up on a daily basis, that aren't necessarily directly involved in the financial industry have no fears of this sort of reaching out and becoming unnecessarily involved in what they're doing. but that's the one issue. and i know the senator from connecticut realizes that.

i will digress slightly. i know you referred to canada and the large institutions that canada has. a much smaller g.d.p. one of the reasons they did not get into the same difficulties we had as a country is they have underwriting mechanisms there that really determine what is appropriate for people to do as it relates to borrowing for their homes. their underwriting standards are very different than exist in this country. i know the senator from connecticut has an approach to it. the 5% risk retention with securitizations. i have a little different approach to it and feel like that we shouldn't be securitizing loans in the first place that are written to people that can't pay them back. i mean, i'd like to get at the very base of this issue and i hope that over the course of this debate we'll figure out a way to merge what the senator from connecticut has proposed and maybe some -- some wreel underwriting -- some real

underwriting so that when the loans are written in the first place and end up getting spread across our country, we've made sure that these loans are written in such a way that we know the people who have taken out these mortgages can pay them back. and, again, that's why canada -- canada had no issues whatsoever as it related to this because in their country, they have different underwriting standards. people there actually put down 15%, generally speaking, when they purchase their homes. i know that we don't want to be prescriptive, overly prescriptive, in this body. but i would hope that the senator from virginia and the senator from connecticut and all of us could sit down and figure out a way to address that in a slightly different way. but, candidly, as it relates to issues, i -- it's hard for me to believe that we'd have a financial regulation bill and not address that, okay?, the underwriting piece. but the issue again, as the senator from connecticut mentioned, we're not going to deal with everything, we cannot deal with everything. we know that we've got to come back around very soon and deal with fannie and freddie.

i -- i hate it that we're not dealing with that now, and i think all of us would like to be dealing with that now. the fact is that at some point we ought to come back around and deal with that and we'll have another bite at the appear toll try to deal with many of -- apple to try to deal with many of these issues when that idea is taken up. but back to consumer protection. i think that as a body we have a chance to pass something out that's a serious piece of legislation -- serious piece of legislation -- that a lot of thought has gone into, a lot of hearings have been -- have taken place. we have a chance to pass a serious piece of legislation in this body with potentially an overwhelming vote if we can just figure out a way on the consumer protection piece to come together. and i think that the senator from connecticut knows where most republicans would like to be on that issue. if you look at a 10 scale, if

you will, i think where republicans would like to be, or at least many ropes this side of the aisle -- many republicans on this side of the aisle, is an 8 on a 10 scale for people who think that consumer protection is "the" issue. and it just seems to me that as a body, instead of trying to score political points and say, you know, if you -- if you vote against this bill, you're voting for wall street, which is ludicrous, i think all of us care -- you know, i've got to tell you, i have a thing every tuesday called tennessee tuesday and people come up and the senator from tennessee, senator alexander, and i greet people from -- from pennsylvania up here every tuesday. i got to tell you, there's not any wall street bankers there. they're community bankers and credit unions who come up here to see us. those are the folks that i think most of us care about as it relates to constituents in our state. and i know this -- these

provisions that are in consumer protection, those are the things that scare them most about what that might become down the road. and so, again, instead of making this "if you're with us, you're against wall street; if you're against us, you're for wall street," i hope that what we'll do is at some point -- and i know these bills all sort of have a life and they ebb and flow and there's a time maybe when these kinds of -- of negotiations can take place in a serious way, but i hope that what we'll do instead of dividing this body over an issue that we all care about, what we can do is unite this body by maybe figuring out a way to merge that issue a little bit more fully there. i realize that there's a way that a bill can pass out of this body on a 62-vote margin. i realize that that's possible. that there will be a couple of folks that might have different sensibilities about particular issues and things that things. i realize that. but, mr. president, as a

tribute, actually, to the senator from connecticut, who's been here many, many years, who is leaving this body at the end of this term i would hope that what we do is figure out a way to have an 85-vote bill and come together -- come together -- on this one issue that i think ultimately has the potential to divide us and then have a piece of legislation that leaves this body on a party-line vote almost. maybe it doesn't even leave because it's so divisive. but leaves on a party-line vote that i don't think -- i don't think this country respects much. i think they're over that and i think they'd like to see us work in a way that solves things together. mr. president, i'm getting ready to yield the floor because i'm beginning to talk way, way too long. but i thank the senator from virginia. i thank the senator from connecticut. i hope that just within this body we're able to do something

that seeks the appropriate balance and seeks to do something that truly is a bipartisan compromise that will stand e testf time. i yield the floor. the esing officer: the senator from connecticut. mr. dodd: mr. president, again, i want to thank my friend and colleague from tennessee for his comments and thoughts. i won't address each and every point but i would like to just make a couple of suggestions. one, again, i -- i think for most people i've worked with over the years, many of whom have long since left this chamber since the day i arrived here in january of 1981, it i is -- i believe people believe this about me. i never chaired a committee before 36 months ago, 37 months ago, despite being here for 30 years. i had the wonderful privilege of sitting next to some people who had very, very long longevity, both politically and healthwise. so i had the wonderful experience of being a junior member for virtually my entire service here. and only about 37, 38 months ago became the chairman of a major committee for the first time, the banking committee. it was the departure of my great

friend, paul sarbanes, who is now retired. the elevation of joe biden to the vice presidency and the passing of my best friend in this chamber, ted kennedy, that created an opportunity for me for the first time in a quarter sent troy actually chair a committee. -- century to actually chair a committee. but i've management bills, either as a subcommittee chairman or on other matters, and in every single instance, in every single instance except for one or two, i've always had a republican party in what i've done. kid bond and i did family and medical leave along with dan coats of indiana. orrin hatch and i wrote family legislation 20 years ago here. mitch mcconnell and i did the help america vote act together. lamar alexander and i did premature birth and infant screening. i can go down a long list without exception. i don't have a republican partner here, and again, i think it's a reflection of the times we're in. and t isn'and people would say t

exactly what i would like but then sit down and help manage something through and at that point getting the best of what we k. the circumstances in which we live, the times in which we're in. and so my hope is over these coming weeks, while i don't have a partner yet in all of this, i'm certainly reaching out to the best i can to people say, come along. again, if you're looking for perfection, if one side wants to just totally dominate the other, obviously you don't get that. but my experience with some success over the years, including in our own committee in the last 37 months, we've had 42 measures come out of the banking committee. 37 of those 42 measures are the law of the land today here because richard shelby and i have been able to work together with others on a wide range of issues, by the way, from transit security to terrorism and risk insurance, port security, a lot of major bills in a way. iran sanctions legislation and the like. 10 i'm hopeful that will happen here -- so i'm hopeful that will happen here in the next couple of weeks and so i am reaching out it people so that will be the process. let me mention specifically a couple of things.

i agree with my colleague, i hope we can resolve the issue on the derivatives issue. i commend blanche lincoln for her efforts. and chuck grassley, by the way, the only bipartisan proposal that's on the table right now is the one that she forged and managed to get some bipartisan support for that. so i commend my colleague from arkansas for her work on that committee. and it's going to involve all of us here to come up with some answers on derivatives. in fact, my friend from tennessee would love to sit in that chair of his and have a good laugh as we end up having a battle on that. you're going to be involved in that, whether you like it or not, in resolving. and on the issue of too big to fail, you too, the presiding officer and the senator from tennessee what done about 95% of the work. and there are some issues here that we're going to try to work through in the next couple of days and present to our colleagues what we believe is a fair resolution that will deal with those issues, tha that will guarantee i hope once and for all about whether or not anything in this bill is dined to per pitch wait the

too-big-to-fail concept -- perpetuate the too-big-to-fail concept. let me address the issue of the underwriting issue. of course we've written -- the federal reserve has now written underwriting standards, at long last, by the way. having been around in 1994 when we passed the legislation mandating the federal reserve to promulgate regulations against deceptive and fraudulent practices in the residential mortgage market, they never promulgated one in all of those years. so we ended up in this unregulated part of the economy, again, where a lot of these brokers and others were out there luring people in to complicated matter. and again, all of us have been through it. i get a kick out of this, having owned several homes in connecticut, two actually over the last 30 years and one home here, we've all been to those closings. and when we sit down across that table and there's usually a stack of papers with tabs on them and someone who's represented the buyer and the seller is telling to us sign. and i have yet to meet anybody, whether it's a banker, a lawyer, a senator or congressman who reads awful the details in those

things -- reads all of the details in those things. we sort of resume whoever's representing our interests has protected us there. well imagine an awful lot of people in the country who lack even the understanding or the financial literacy to even appreciate what they would read. but clearly, underwriting standards are important. how do you achieve that? one is, of course, for the first time one of the things that community banks like about our bill is -- is that we're going to have -- we're not going to have that unregulated part of the economy so they're going to play the same rules. and that's been unfair to those who have been regulated do the job. i can't speak for of community bankerbankers in tennessee or virginia, but committee tell now my state of connecticut, i fore-- but i can tell you in my state of connecticut, i forget the numbers but it's so infannities mall, the number of subprime lending that went on within my community banks. and i assume that's pretty true nationwide based on the evidence i've heard over the years -- over the last number of months. so we need to get that -- that unregulated shadow economy regulated. we also know what's happened. and securitization, the different between canada and the

united states and europe and ourselves is we have had a deep, deep appreciation for the ability of the average american to buy a home because we've understood how much that meant to people. the idea that they can have their own home, it's been the greatest source of wealth creation for most americans, that acquisition of equity in a piece of property that would ultimately provide a source of revenue to help educate your children, provide a cushion in your retirement. it stabilizes familes, stabilizes neighborhoods and communities. just look at neighborhoods where you have renting and where you have people who have a financial interest in that property in which they live and the differences are huge. so we're different. i mean, i know in europe and elsewhere, they -- if you get five-year loans and so forth. we're the only country in the world, only one, that provides a 30-year fixed-rate mortgage for people. it's been a remarkable, remarkable tool to provide

stability and wealth creation for people. now, other countries don't do that. i certainly believe you've got to have underwriting standards. you've got to have them. the question is: how do you get them and what is the standard in because, as my friend points out, and he's absolutely right about this, having that 15% or 20% may be absolutely critical under one set of circumstances. for someone else, it may not be necessary. you may actually have a zero down. again, based on the fico scores and other factors that are there, to apply one standard over and over. what we want is underwriting standards that will take into consideration the ability of that borrower to meet those obligations, that they understand what they're getting into. the security glaiftion the real estate market -- the securitization of the real estate market has provided a source of capital and liquidity that has allowed for further expansion of homeownership. so i'm not opposed to securitization at all. its the question of whether or not it can be done response bliss, the rating agencies that brand these bundled products of being aaa or aa and whether or not the institutions are actually marketing products that

they're going to be concerned about what happens to them. and we've all know what's occurred for a lot of the unregulated brokers, you recall we had those hearings in which they -- i showed their web site where the first rule of the broker was, convince the borrower. you're their financial advisor. and, of course, we've learned they were anything but in many cases their financial advisor. they're being paid rather quickly. the banks that are writing the mortgages hold on to them on average eight to ten weeks. that's the expansion time on average. so then eventually at the end of that eight or ten weeks, they've bundled these together and sold them off so they're out of the game. they've been paid. so the broker's paid, the bank's paid and some unexpecting investor has just acquired something that has a brand on it, aaa, aa. and feel pretty good. home mortgages have been a pretty reliable investment over the years, people pay their mortgages. and because no one was really sitting there insisting that we look at whether or not that borrower can afford to do this under these circumstances, whether the fully indexed price or all these other teasey rates

and things that went on -- teaser rates and things that went on in there. and having someone there that will be accountable because one, we're going to keep an eye on you, there's a cop on the beat looking at the broker saying you've got to do this right. and saying to the institutions out there you're going to one, either put up some skin in the game, because i know if you've got skin in the game you're going to pay more attention to what you're doing. you're not going to expose yourselves to losses if you've got some skin in that game. or -- or, and this is where i think we need to come together on this, or meet some standard here of an underwriting standard. you make the choice. you don't want to do that, fine. put some money on the table because i want you to have to bear some loss if that thing goes out the door and you've allowed it to happen here because you decided you didn't care. but i'd prefer to have the underwriting standard. that's one option i'm looking at here. i invite my colleague to look at it as well as a way to marriage these ideas of getting good underwriting standards but in

the absence of which we might have a good ability to move forward. i raise that as one thought. on the consumer side of this equation, a lot more gets made of these issues for the very reason my friend from tennessee worries about it. i find people sort of pumping up politically, trying to fire up people because they've got other motives on all of this. i'm fully aware that people can demagogue on the issue of what we're trying to do here. what i'm trying to do with this bill is say for the first time in the history of our country seven agencies have a consumer protection responsibility and virtually all of them failed at it because it isn't a priority. there's always something else that comes in that takes a priority position, including those who have prudential responsibilities of safety and soundness. and i acknowledge that safety and soundness is critical. i'm also painfully aware that for quite a bit of time between 2003 and 2007, people were suggesting -- and 2005.

people were saying our institutions are safe and sound. what are you talking about? i said how do you know that? look at how much money they're making. it's safe and sound, when in fact it was rotting from within because of the very things my colleagues talked about: lack of underwriting standards, people were pushing this stuff out the door, unregulated sections of this economy running wild without cops on the beat whatsoever. it was hardly safe and sound because no one was watching out what was happening at the most fundamental level -- the most fundamental level, that person who picks out a home for their family. they pick out the color of their rooms. it's hardly a level playing field. the overwhelming majority of americans, hardly a level playing field. again, when you're kpao*euted about it -- excited about it, you're convinced this is the right thing for your family, you

get lured into these deals. we all have to be responsible about this. dan akaka of our committee has spent a lot of time talking about financial literacy. we tried to include provisionness here to raise that level of financial literacy. my colleagues know i have two very young children, an eight-year-old and five-year-old. my eight-year-old is in the second grade in a public school here in the district. trying to get them to start talking about math classes in the context of early on about how to balance a checkbook and doing additions and subtractions so they can understand financial responsibilities at an early age. i don't discount that moral responsibility, that financial responsibility that people have. that's where a lot of this begins. all we're trying to do here is to say that average citizen has an advocate in all that process here. that when these matters are out there -- we saw what happened with the credit card industry, gouging people right and left. that bill passed 90-5 on the floor of this chamber trying to

do something about that issue. i just worry that sometimes people grab on though these ideas and say the sky is falling. what a dreadful thing we may do here when that's hardly the intention at all. i am prepared to listen to ideas on how we can make this work better. but i don't want someone to exaggerate what this means and then suggest somehow the whole bill should fall because we're maybe trying to do a little more here in this area of protecting people who have very little protections out there. very little protections in that world today. and i'm not talking about, you know, what happens at some -- at the community bank hell. in fact, the -- the community bank level. by providing regulatory coverage is important here. it isn't federal regulators. if you're a financial institution with assets of less than10 billion -- i am -- i only have one in connecticut.

your cop is that local involvement here. it's not the federal government, some national consumer protection agency jumping all over you here. it's going to be done at a local level. again, we'll have to watch it and see how it works. i would think we'd be remiss in this bill here if we didn't end up with something that says to the american consumer what do i get out of this? lastly i say this: i don't like the bark -- the bashing that goes on. i realize sometimes that happens. there is something my colleague said at the outset of his remarks, the idea that we want to provide that capital, that credit for that person with an idea that someone wants to expand a plant, to add to this, we need to have a wall street that helps that out. too much of this was too circular. it was all happening within a closed circulatory system where very little of that capital was moving out. it was basically staying inside and people figuring out how to scam it in a way, by making bets

for and against things here, their wealth increased. but very little of it got out to that mechanism, that person you're talking about out there. maybe that person you went to was a young man at 25 who took a chance on you and said that man has a good idea, i'm going to get behind him. that's what wall street ought to be doing. that's the idea we ought to have more of, where a person with a good idea can come through the door. it happens in venture capital, in equity markets. i know my colleague in virginia can attest to that, what happens with angel investors. we're going to fix that part bill. i spoke with our colleague from missouri, kit bond, and we'll have amendments here so that venture capitalist who thinks you have a good idea can get behind it. but too much of wall street gave up on that. they know customers coming in the door, as we know them here,

and it got so self-absorbed with its own capacity to generate wealth for itself that it lost sight of what this was supposed to all be about. that's what makes people so furious and angry. and after we did all of this stuff -- and, again, i thank my colleague from tennessee. this is probably not something he wants to be thanked for. but having been charged as he was involved, i'll never forget as long as i live that meeting we had, he was included on the first floor of this building to sit down and figure out how to do this thing in the fall of 2008, to put us back in a position where we didn't find a financial meltdown and collapse. we'll never know the answer taos whether that would have happened or not. but when you've got pretty important people coming to us and saying you're on the brink of that, you've got to respond, and we did so. and we did write something here that i think made a difference. but the ability to come together and get that job done, to move us away from that; and then to

watch after we stabilized these institutions and really kept them on their feet, provided the kind of security and predictability to turn around and just sort of almost disregard all of that, to get into these silly arguments about how much of a bonus i can take in the midst of everyone else suffering terribly was where this arrogance comes in that people got irate about in the country. it was are the notion somehow about having done this, having written that check for $700 billion to stabilize and provide the certainty, for at least as much as we could, that we wouldn't collapse as a economy, you would have thought for a moment for a couple of years that leaders of this institution would say thank you, america, thank you average joe taxpayer out there, you kept this country alive because you stood up and made that choice. and we thank you for doing that. and by the way, for the next few years here, we're going to take a few hits ourselves, self-imposed. we're not going to take bonuses of millions of dollars because

you stabilized us. we're going to go to work figuring out how we can do a better job doing exactly what bob corker and mark warner did. they got someone who stood behind them, grew a business, employed people, created wealth, created jobs in our country. i don't remember one voice saying that during all of this. not one did they stand up and say, you know what, thank you, america. thank you, america for writing that check, to help us stabilize our economy. it was the arrogance of it that drove people to distraction. so i don't disagree with my colleague. we need to move on in this debate. but it's also important to understand what happened here and why people are so angry and so upset. jobs have been lost. lives have been ruined, absolutely ruined because of what happened over the last 18 months and actually a bit before then. and they're never going to get it back again. they're never going to get it back. that retirement income is gone. that home has been lost. that job has disappeared. and so they're never going to get back on their feet again.

and when they turn around and see someone saying, i'm sorry, that's the way life is and hope one day things will get better four. we say why not a consumer protection people to help people out, key an eye -- keep an eye on things so you don't get taken to the cleaners. maybe it's part of our job to do that. i don't want to try and create a situation that takes small businesses and others -- i know there's been a lot of talk about that. that's not our intention. if there is language here that makes it clear that is not our intention at all, i want to do it. too often sometimes we get insulateed from what's happening out there. understand that level. those tea party people and so forth, many of them, before i decided not to run again, were at every event i was there, there were stickers everywhere. it certainly hurt to have people say that about me after 30 years in service. but on the other hand, i understand it too.

it wasn't about me personally necessarily. they were deeply upset and frustrated. they're not bad people. maybe some of them are, frankly are dangerous elements. i worry about that. but i've got a feeling there are a lot of people nodding their heads sitting and watching them on their tv and reading about them in the papers are going i kind of feel that way too. i'm not going to join in some crazy demonstration out there saying things about people but i feel that way too. and i think we have to acknowledge that in all of this. they're not democrats, not republicans. they probably don't think about their political affiliation every day. but they wonder if anybody's watching out for them. who cares about me? when these debates happen out here and people talk about systemic risks and defensive alternatives and current default swaps, what are you talking about? i don't understand what you're talking about. i presume it's important, but how does that affect me?

what i want to know is anybody in this place going to write anybody here so when that person in that bank is taking advantage of me, someone is standing up for me, gives me a shot so i don't end up in the ruinous position some of the other people did in this country when we were going through a safe and sound period according to the prudential were anything but safe and sound. all this. i'm willing to listen to ideas. anyone who claims they have all the wisdom, i get nervous about people who think that way. and we're not going to write something here that is going to necessarily satisfy everybody, but hopefully we can do something that makes this sense. i didn't intend to talk this long, but that point of not losing sight of our job here, it is about big companies that sell all over the that. and being able to have some big financial institution they can stay with and compete in a global economy. but in our interest in satisfying that, let's not

forget, let's not forget that person who's not a big company and not a big corporation, is just going to work every day, trying to raise their family, trying to make sure if someone gets sick they'll be okay, they can retire with dignity and some security, maybe buy that home, maybe take that vacation; not looking for much out there. and just want to know in this debate, in all of this bill here that got my name on it, in fact the only name on it is my name on it at this point. out of the 100 of us here, there's only one name on it here. i'll be the last one to say there's nothing biblical. it's our best toast try to address some issues. i'll guarantee you there are some flaws in here. we'll find out some don't work well as the author intended. but is there something in here that speaks to that individual out there who's not a banker, who's not a wall street guy, who's not a big corporation?

he's just a consumer in the country, and they'd like to know we've got them in mind. that's really the only point i want to make. i yield the floor. mr. corker: mr. president? the presiding officer: the senator from kentucky. mr. corker: i enjoyed listening to the comments of the senator from connecticut. i can certainly share with him, i know ways of changing more than one name being on this. tphoeu idea -- i know some of the ideas he said he's open to, i know i have and some of my other colleagues have. i actually think in a short amount of time, to be candid, you could change this bill to have numerous names on it. i hope we have the ability to talk about some of those over the course of the next several days. apparently it's not quite time for that. but i do want to mention the issue of wall street and talk about public relations. there's no question that after what occurred, many of the folks on wall street could have used a public relations firm to help

them. i mean, no question the bonuses and things that we saw after americans basically through taxpayer moneys made sure they survived, no doubt that created a backlash. as a matter of fact, the senator from virginia and i are working on an amendment that would say that if this ever happens again and we have to take one of these firms through a resolution, which is part of the dodd bill right now, that the bonuses and other types of things in recent years would all be clawed back; that you cannot make huge sums of money, take your company down the tube and do things to america in that way without paying a price. and we're working on something that i think is balanced and appropriate; hopefully not populace, just something that's thoughtful that if somebody takes something down and wreaks havoc on this country. it makes us have to use this mechanism. i think that's something appropriate that we need to look at. i'll also say that back in the

fall of 2008, had the resolution mechanism been in place that we talked about, that still has some imperfections, and i realize you and senator shelby are going to fix this weekend, but had that been in place that meeting might not have occurred because we would have had a way to deal with some of the contagion that exists when a company goes down. i want to go back, you talked about the groups out, when you were throughout connecticut who were upset with you. i would say to the senator, it's not those issues maybe that you alluded to that made them so angry and made me angry. i think it's the huge expansion of government that they're seeing take place. it's this huge role that washington is beginning to play in their lives. and as we look at this consumer protection title that you addressed a minute ago, the big guys on wall street don't care about that. this is not something that's

going to affect the big guys on wall street. they have staffs and they have reams of people that have the ability to deal with these kind of consumer laws. those are not the people that are coming into our office. it's the -- the smaller, the medium-sized folks that really don't have the ability -- don't have the ability -- to deal with these in the same way. and if -- if -- if the senator from connecticut would be willing to sit down and talk about ways of ensuring that americans shouldn't fear that this organization over time becomes way involved in their lives, which i think is stoking most of the anger that we're seeing across the country today, i think and rightfully so, if there's a way of achieving a balance where, in essence, consumers are protected -- and you know, i know the senator from connecticut knows well that i'm all for working on streamlining, pulling these agencies together and making sure that we have a voice that's

out there deal with that issue, if there's a way of doing that, i think the senator from connecticut would find that this body would come together i think very, very quickly. look, there are a few issues, 106, maybe the volcker language ought to be modified just a little bit. sometimes we -- we do best around here when we study things before we take action. i know that americans might be snokd we actually did that -- might be shocked if we actually did that. but, you know, if we could moderated just a couple of things, i'm talking about just a few sentences, and then look at consumer protection in a way that is balanced and doesn't stoke that anger, that rightful anger that exists across our country with a government just taking a bigger and bigger role in people's lives unnecessarily, if we could fix that -- and i think -- i think we can. that's the thing that -- that i think frustrates me. i think we can do that, then i think we will have appropriately dealt with the resolution, we

will have appropriately dealt with derivatives, i know with a few changes and they need to take place and i think both sides know what they are, we will have a bill, we'll have a bill that i think will stand the test of time and we'll have a bill that i think americans will embrace and i don't think it will do the -- and i think it will do the things that we've set out to do. i know we've had a long colloquy, if you will. i thank the senator from connecticut for indulging with me here, the senator from virginia, who i talked to prior to coming to the floor. i happy to in some form or fashion, we're able to deal with some of these concerns to ensure consumers are protected, to ensure that dri derivatives are clear and we don't end up with an a.i.g. situation where hugely money bag, you haven't been settling up on a daily basis, and that we deal with an issue that when a company in this country fails, they fail. i have to tell you, that's the thing that tennesseans care b. they don't understand when a business in bradley county or a

business in shelby county, that may be a mom-and-pop operation, or maybe it's even bigger, when they fail, they're out of business. and in this country, when they see these large institutions on wall street fail and they don't go out of business, they consider that to be morally wrong, a moral hazard and something that they want fixed. i know that we'll get this right in this bill it passes, i home. i hope we can deal with these other issues appropriately. i yield the floor. mr. dodd: mr. president? the presiding officer: the senator from connecticut. mr. dodd: i'm going to move on to another subject matter. i appreciate the thoughts again of my colleague from tennessee on this. just one quick observation about something my friend said, and it goes back to this issue that wall street could have used a public relations firm. in a sense, that's the -- that's the essence of the problem. when you've got to hire a public relations firm, when you don't understand this, your then there's something more fundamentally wrong here. i mean, you don't need to hire a public relations firm f. you're sitting there take multi,

multimillion-dollar bonuses and 8 million people have lost their jobs and homes are in foreclosure, in no small measure because of the problems you've created out there, i don't know why you need a public relations operation. where's the sense of decency and ethics and morality that says, you know, country just, the american average citizen made it possible for this institution that i am running to stay alive? and if i've got to insist they hire public relations firms to get it, we're in deeper trouble than i could imagine. that's usually the answer not only for people on wall street but for too many people in the business we're in. whurntion things go wrong, hire a public relations firm. just stand up and telethe truth. it might not be a bad idea. they always say it's the best defense on these matters. so i say that. i know my colleague doesn't -- i presume he shares my view on this thing, they shouldn't have needed a public relations operation to do it but i couldn't resist responding because i think if that's what people thought about them, you would have thought a good look in the mirror and -- and said to themselves, you know, why are people angry and what can we do to help get us back on our feet? and that's what -- that's what's

going on out there. so i think that my colleague. i didn't mean to dwell on that point. mr. corker: obviously, mr. president, i was being humorous in talking about that. the fact is, you're right. i think the senator from virginia and i both know that in our businesses, we were the last ones to be paid. everyone else was dealt with and all of our obligations were dealt with first, and i agree with the senator from connecticut, something certainly went awry after the company had -- the country had basically made these companies whole and it appeared to me that obviously the conduct was very unseemly. so i agree with the senator from connecticut and yield the floor. mr. dodd: i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

mr. webb: mr. president, i understand there is an amendment pending that is not appropriate.

are we in a quorum call? i ask unanimous consent to -- an a quorum. the presiding officer: a quorum call is in effect. mr. webb: i understand there is an amendment pending that is not appropriate to set aside if i call up an amendment. is that correct? the presiding officer: an amendment is pending, will require consent to set aside. mr. webb: having discussed this with the chairman, it says preference not to set the pending amendment aside. is that correct? mr. dodd: it is correct, yes. mr. webb: all right. well, i assume there would be no objection if i spoke about the

amendment that i have introduced, amendment number 3736. mr. dodd: none what sever. mr. webb: i thank the chairman on that. mr. president, i introduced this amendment earlier on another piece of legislation on which it was not considered germane. i understand there may be some procedural issues with raising it in this particular piece of legislation, but i think it's an amendment that congress needs to pass and that the american people need to have. it's one shot windfall profits tax on a very appropriately designed group of executives who benefit enormously from the contributions that the american taxpayers made in order to bail out the economy as opposed to

bailing out banks specifically. and i will address this amendment in detail in a moment. but before i do, i would like to point out, as i have every april 30 since i have been in the united states senate, that today is the day now 35 years ago that south vietnam fell to a communist offensive, and the vietnam war officially ended. april 30, 1975, has a very unique meaning among vietnamese and the 2 million americans of vietnamese descent in this country. it's almost as strong as the way many people feel in this country about b, c and a-d, a clear

demarcation line among an effort made for many years to assist an incipient democracy in south vietnam from coming under a different form of government, just as clearly as we attempted to assist south korea from coming under a form of government that today we see in north korea. and just as clearly as we spent many years and much national treasure preserving the democratic principles in west germany after the cold war began, with the hope and the eventual result of the unification of that country. this is not a time, all these years later, to debate the merits of the american involvement in vietnam. i'm one who is very proud to have served in that war as a united states marine. i still believe strongly in what we attempted to do.

we've heard from some of the real great thinkers of our generation, asian thinkers such as minister li qun yu of singapore that the attempt of the united states to staunch the flow of communism in vietnam allowed the other countries in southeast asia, singapore strongly among them, but a number of the other countries in southeast asia, to build governmental systems and free market economies that eventually have had a dramatic impact in that part of the world. today we see organizations like asean, ten nations of southeast asia having begun to come together and think with commonality about free market principles, different sorts of governments and these sorts of things. a great deal of that did come out of the position that the united states took during the vietnam war.

this war is not taught in american schools. it goes by so fast in school systems that sometimes it's dealt within a matter of an hour or two. the contributions of our men and women in vietnam and in the military are generally dismissed or downplayed. we put 2.7 million american military people into that country against a very, very capable enemy. we fought for years. we lost 58,000 americans on the battlefield. we lost another 300,000 wounded. the united states marine corps lost more total casualties in vietnam than even in world war

ii. they lost three times as many combat ted in korea, five times as many combat dead as in world war i. and the experience, because of the division in this country, went right past the american populace. it's still not plugged into the comprehension, the quality of the service and the quality against a very highly capable enemy of the results that we brought onto the battlefield, as measured by the standards that our leaders placed upon us. 1.4 million communist soldier soldiers -- soldiers -- died in this war by the -- by the admission of the hanoi government in 1995, not by these arguments about whether body counts coming from the battlefield were inflated or not. 1.4 million soldiers. this was a brutal war. the aftermath of the war is almost never discussed here in

this country. it's as if everything ended in 1975. a million south vietnamese, the cream of south vietnam's young leadership, were put into reeducation camps. 240,000 of them died -- excuse me, 240,000 of them remained in those camps for longer than four years. an estimated 56,000 died. another million vietnamese jumped into the sea, followed by others, including my wife's family on this day 35 years ago. her family was on a boat, having escaped from north vietnam in 1954 and then from south vietnam 1975, facing unknown futures. the soviet union gained a strong foothold, which did not really expire until the soviet union expired. they were putting into place a command economy and basically a stalinist system.

when i first started going back to vietnam in 1991, the system was extremely rigid and could only be called a stalinist system. but the other piece of this, which a number of people in this country -- and i count myself among them -- have worked assiduously for decades to bring about is the healing of that war here, in vietnam between the 2 million people of vietnamese descent here in this country and the existing forces in vietnam. this has been a very arduous and successful for the most part process. when i look at the vietnam of today -- and i've spent a great deal of time there not only during the war but afterwards, -

i'm very optimistic. i've always believed, in in my younger days as a marine, that vietnam was one of the four or five most important countries to the united states when we look at our relations in asia. and this is evolving, and the country, as our trade relations have evolved, as our contacts have evolved and as the trust level has evolved, our countries are i think working very well together to assure the stability of this region. so i feel compelled to make these points on a day that has such a -- an impact on vietnamese around the world and to say that i'm hopeful that with the progress that we have made over the past several years, that we can achieve the objectives that we once were

trying to achieve on the battlefield, a strong relationship with a country whose government would become more open and more mature, with a people who have a tremendous level of not on newership and energy, and in the end a relationship that can assure greater stability in east asia and southeast asia. mr. president, i would now like to turn to my amendment. i would like to emphasize that this is a very carefully drafted amendment. it's one shot, not a continuing windfall profits tax, which i don't generally agree with. it's a one-shot amendment designed to give the american taxpayers a place on the upside of the recovery of the financial system that they, quiek frankly, enabled -- quite frankly, enabled. you can understand the anger in

this country when you look at the results of this hearing the other day that senator levin chaired and you -- you hear the, in many cases, the irresponsible behavior of some of the executives in the financial sector that brought about the difficulty that brought about our entire economic system. this amendment is very simple t. would provide a one-time 50% tax on boney thawses are abov -- boe above $50,000 of any initial bonus paid to executives at fannie mae, freddie mac or financial institutions that received a minimum of $5 billion in a tarp program. it is only for income that was generated through work in 2009 and compensated in 2010. as again, this is a one-shot matter of fairness to balance out the rewards that these financial institutions received

which were enabled by the contributions of the american taxpayers. particularly in the tarp program. we've had estimates that this amendment would recover for our economic system somewhere in the neighborhood of a minimum of $3.5 billion and potentially as high as $10 billion on 13 companies on bonuses in excess of $400,000 after all the other compensation paid. that's the kind of money that has been paid to these executives. and, again, i need to emphasize that the american taxpayer did not create the economic crisis. they were required to bail out the people who did create it, and they deserve to share in the upside, because these are the rewards that they themselves enabled. paul krugman, who's a nobel prize-winning economist, wrote in july of 2008 about his concern at the very inception of this economic crisis that we were moving toward a tendency in this country to socialize risk

and individualize reward. in other words, whenever we create a situation where there's an economic challenge, the american taxpayer at large is expected to absorb the risk, but when the reward comes in, only the executives, the people who were managing the financial system, are able to actually get the reward. this particular reward is a one-shot -- this one-shot tax proposal has come about largely as the result of government interverntion as a result of working people -- intervention, as a result of working people having to put their money forward in order to bail out a financial system that went wrong. and as a result, i believe as a matter of equity, the reward should be shared with the taxpayers who made it possible. when i first started thinking about doing this, i actually was drawn to an article that was written in the "financial times"

which pointed out by -- this actually was last november in the "financial times," and this was written by martin wolfe, who's a conservative economist. and here you see i think the logic and the equity of moving forward with this type of a windfall profits tax. when you have paul krugman, who's known as a liberal economist, nobel prize winner, and martin wolfe, who's a conservative economist who writes for the "financial times" agreeing on a principle, you really need to stop and think about it. martin wolfe, in this article, said -- and i'm going to just read a few excerpts from that article -- "windfall transactions a ghastly idea, so why do i now find the idea of a windfall tax so appealing? well, this time it looks different. first, all the institutions making exceptional profits do so because they are beneficiaries of unlimited state insurance for themselves and their counterparts.

second, the profits being made today are in large part the fruit of the free money provided by the central bank, an arm of the state. third, the case for generous is to restore the financial so and so the economy to health. it is not to enrich bankers. fourth, ordinary people" -- and we need to think about this when you look at the impact, the incredible anger that is in this country after incidents such as the hearings this week -- "ordinary people can accept that risk takers receive huge rewards, but such rewards for those who have been rescued by the state and bear substantial responsibility for the crisis are surely intolerable. our taxpayers, our working people rescued a financial system that was on the verge of collapse because of massive acts of bad judgment and greed by the

very companies that are now reaping huge bonuses from the government's intervention. it's not too much to ask those who have been so fully compensated and who have received in excess of a $400,000 bonus on top of their compensation, that they pay a one-time tax and share that excess on top of their $400,000 bonus with the people who rescued them. mr. president, i yield the floor. mr. akaka: mr. president? the presiding officer: the senator from hawaii. mr. akaka: mr. president, it is timely that we have started to consider the financial services modernization legislation during

april. this is a month that we have designated as financial literacy month. there are three vital components to financial literacy: educati education, consumer protection, and economic empowerment. h.r. 3217, the wall street reform bill, includes the central provisions in all three of these areas for consumers and investors. i have worked extensively with the chairman of the banking committee and other members of the committee to ensure that the bill includes essential education, consumer protection and economic empowerment provisions. and, mr. president, i appreciate all of the great leadership and

work done by our chairman, chris dodd, and his efficient and effective and hard-working staff to develop this legislation so important to working families. with regard to education, the legislation creates an office of financial literacy within the consumer financial protection bureau. the financial literacy office is tasked with developing and implementing initiatives to educate and empower consumers. a strategy to improve the financial literacy among consumers that includes measurable goals and benchmarks and must be developed without question. the administrator of the bureau will also become vice chairman of the financial literally and education commission.

this will ensure a meaningful commission in the commission -- this will ensure a meaningful participation in the commission. the legislation also requires the securities and exchange commission financial literacy study to be conducted. the s.a.c. will be required to develop and invest in financial literacy strategy intended to bring about positive behavioral change among investors. a second key component of financial literacy is consumer protection. this legislation creates a regulatory structure to ensure greater emphasis by regulators on investor and consumer protection. the failure of regulators to protect consumers contributed significantly to this financial crisis. the prospective home buyers were

directed into mortgage products that had risks, had costs that they could not understand nor afford. the consumer financial protection bureau will have the ability to restrict predatory financial products and unfair business practices in order to prevent unscrupulous financial service providers from taking advantage of consumers. mr. president, we also strengthen the ability of the s.e.c. to better represent the interests of retail investors. my proposal to create an investor advocate within the s.e.c. is in the bill. the investor advocate is tasked with assisting retail investors to resolve significant problems with the s.e.c. or the self-regulatory organizations.

the investor advocate's mission includes identifying areas where investors would benefit from changes in commission or s.r.o. policies and problems that investors have with financial service providers and investment products. the investor advocate will recommend policy changes to the commission and congress in the interest of investors. the creation of the office of investor advocate has widespread support from consumer, labor, and industry organizations. mr. president, we worked to include in the legislation clarified authority for the s.e.c. to effectively require disclosures prior to the sale of financial products and services. working families depend on the

mutual fund investments and other financial products to pay for their children's education, prepare for retirement, and attain other financial goals. this provision will ensure that working families have the relevant and useful information they need when they are making decisions that determine their future financial condition. mr. president, this legislation also addresses remittance consumer protections. working families often send substantial portions of their earnings to family members living abroad. in my home state of hawaii, many of my constituents remit money to their family members living in the philippines. consumers can have serious problems with their remittance transactions, such as being

overcharged or not having their money reach the intended recipient. remittances are not currently regulated under federal law, and state laws provide inadequate consumer protections. the bill will modify the electronic fund transfer act to establish remittance consumer protections. it will require simple disclosures about the costs of sending remittances to be provided to the consumer prior to and after the transaction. the complaint and error resolution processes for remittance transactions would be established. mr. president, the third component of the financial literacy is economic empowerment. senator kohl and i developed title 12 of the legislation which is intended to increase

access to mainstream financial institutions for the banked and underbanked. mainstreamainmainstream financil institutions are critical to empowerment. banks and credit unions provide alternatives to high-cost and often predatory financial service providers such as check cashers and payday lenders. unfortunately, approximately one in four families are unbanked or underbanked. many of these families are low- and moderate-income families that cannot afford to have their earnings diminished by reliance on these high-cost and often predatory financial services. unbanked families aren't able to securely save for education

expenses, a down payment on a first home, or other future financial needs. underbanked consumers rely on nontraditional credit that often has extraordinarily high interest rates. regular checking accounts may be too expensive for some consumers unable to maintain minimum balances or afford monthly fees. poor credit histories may also limit their ability to open accounts. more must be done to promote product development, outreach, and financial education opportunities intended to empower consumers. title 12 authorizes programs intended to assist low- and moderate-income individual indis establish bank or credit union accounts and encourage greater

use of mainstream financial services. mr. president, title 12 will also encourage the development of smaller affordable loans as an alternative to more costly payday loans. payday loans often have outrageously high interest rates. payday loan flipping often leads to instances where the fees paid for a payday loan well exceeds the principal borrowed. this creates a cycle of debt that is really hard to break. there is a greate great need for working families to have access to affordable small loans. this legislation would encourage banks and credit unions to develop consumer friendly payday loan alternatives. consumers who l.a. pl apply fore

loans would be provided financial literacy and educational opportunities. i am proud of the credit unions in hawaii that have worked to develop payday loan alternatives to meet the needs of their members, particularly for our military families that have traditionally been exploited by payday lending. the national credit union administration has provided assistance to develop these small consumer friendly loans. more working families need access to affordable small loans. this program will encourage mainstream financial service providers to develop affordable small loan products. i also appreciate the work done by senator menendez and his staff to authorize financial education economic empowerment grants intended to provide

opportunities that economically -- for vulnerable families. mr. president, this bill is not about the last financial crisis. this legislation is about creating a more fair financial system that better educates, protects, and empowers consumers and investors. the emergency actions that had to be done in the fall of 2008 brought with it an obligation to create a financial regulatory system that is more helpful to working families. this legislation fulfills that obligation and will help improve the lives of so many people in our country by educating, protecting, and empowering

consumers and investors. thank you, mr. president. i yield back the balance of my time. a senator: mr. president? the presiding officer: the senator from connecticut. mr. dodd: mr. president, before he leaves the floor, i want to commend our friend and colleague from hawaii. i've had the privilege and pleasure of knowing senator akaka for a long time, and he is consistent, mr. president, in his issue cluster, if you will -- he obviously has issues to deal with in his state. but i've new england known another individual who is -- but i've never known another individual who's been as dogged to see to it that people would get the clear, understandable information, the ability to learn more about their own financial activities, that literacy that he has consistently talked about for such a long time. there are other accomplishments he's achieved, but he is a wonderful member of our committee. he's made a significant contribution to this bill. his -- this bill could bear his name on it as having contributed

a major portion of the effort we're trying to achieve. and i want to thank him for that. we've got a ways to go now on the floor in the debates that come here, but i'm very grateful to him for his consistent support, his ideas he's brought to the product we have before us and to thank him on behalf not only of his colleagues but on behalf of the american people. he may represent one state, but his language here affects every state and every person in it, and that's a significant contribution, and i thank you for if. mr. akaka: well thank you, very muchvery much, mr. chairmal for your great leadership. mr. dodd: i didn't get a chance to thank senator werks and to commend him for his great service. every year he comes to the floor and takes a moment out to talk about the conflict in vietnam, where he played such a significant role, in the fall of saigon. we're grateful to him for his

service to the nation and we're a better chamber because of jim webb's presence here and the knowledge and understanding he brings. i know the presiding officer is his colleague from virginia, apreeshtz the relationship you have with him -- appreciates the relationship you have with him and the difference he's made in the senate by being here. he's offered an idea as well for this financial reform package, one that i'm very sympathetic to. there are some constitutional issues we have with tax measures that have to originate on the house side rather than the senate side, under the constitution. and i know my colleague from virginia is probably aware of him. but, nevertheless, his idea has some merit, and when he brings it up, we'll have a chance to talk about it. i see my colleague from north dakota who is here with some thoughts, and i'm going to yield the floor. mr. dorgan: mr. president? the presiding officer: the senator from north dakota. mr. dorgan: mr. president, i wanted to, in a few minutes, talk about the start treaty, but before i do that i want to engage in some discussion with

the senator from connecticut about financial reform. and even as i do -- and i'll do that briefly -- i wanted to say, not many members of the senate understand how much time and effort the senator from connecticut has put into this product of financial reform, wall street reform, as it's called. and i, for one, really very much appreciate the work that's been done. i think there's a lot in the bill that's been brought to the floor by senator dodd that is commendable and that is right on point. there are some areas where i perhaps will want to offer suggestions, maybe the senator would agree with hi them, maybe not. but i want to say as a starting point, i'm really pleased that we have the bill on the floor now, especially for debate, open for amendment next week, and i hope we keep it on the floor and improve it in areas where it can be improved, make modifications where necessary, but in the end be able to vote for a piece of legislation that will allow us to tell the american people, we understand what happened and we

we've tried to take steps to make sure it will not happen again. one of the areas where i will offer an amendment -- and i understand it will be a controversial amendment -- is on the issue of too big to fail. my colleague from connecticut and others on the banking committee have constructed one approach on too big to fail, and i will be supportive of that approach, but i do think that the too-big-to-fail issue really at its root is if you're too big to fail from my starntion you're too big. -- from my standpoint, you're too big. i come down on the side of one-fourth of the governors of federal reserve board who have said this and many others. i come down on the side of who say, if you're too big to fail, you are too big. and i think that the council that is established under this legislation ought to at that point once designated a company that has become too big to fail, that is too big to fail, that causes a moral hazard and an unaccepacceptable threat and had

arksd i think divestiture is in order for that portion of the company that puts this country at risk. that's a different approach than is used by the committee but an approach that i think is still credible, an approach that's been described by chairman -- former chairman of the federal reserve board greenspan, by three members of the federal reserve board saying there ought to be divestiture. so that will be one of the amendments that i will offer next week and have a discussion. i just think again what has happened leading up to and since the near-collapse of our economy as a result of unbelievable activities at the top of our financial food chain, the largest financial enterprises have actually become much, much, much larger because of actions of the federal government, among other things, to encourage them to become larger. so i think an appropriate amendment is for us to have a real discussion, shouldn't we

decide if you're too big to fail, you're just too big. mr. dodd: my colleague, i don't need to interrupt. mr. dorgan: i'd be happy to yield. mr. dodd: let me mention a couple of things. it may not be the full satisfaction of everyone. one of the powers this systemic risk council will have is the power to breakup large financial institutions. it is not one of the first things they would do, but it is a power which resides in our bill to do that. i couldn't agree more with my colleague about the excessive risk that the institutions have taken. there is a distinction there. i always think it's more on what risks do these institutions pose? do they have capital standards? leverage standards? liquidity standards that are in place. we were talking earlier about the 10 largest financial institutions in the world, the united states has one. the top 50, five are in canada, a state that my colleague is more familiar with than most, boardering the state.

we have four. they have very few financial problems during this crisis not because of the size of the institution, so much, as they're far better regulated as the risks they consume. so the point is a very sound one my colleague is making and that is to make sure that we're not seeing our system exposed to the kind of actions that can bring it down. i wanted to at least mention to him that we do have a power to divest and we are really trying to work on that issue of excessive risk and i appreciate his comments. mr. dorgan: the point the senator from connecticut made is so important is effective regulatory authority. if you don't have regulations that work or regulators that care, what happens is what happened to us in the last couple of years, you have a buldup of substantially risk effectively allowing some just to gamble rather than just invest. so we desperately need

regulatory ability and regulators who care. the council in the underlying bill is allowed to go toward divest truer, but not required -- divesture, but not required. i will have an amendment that will require, simply saying this, if we have a category designed as -- as described as too big to fail, meaning this is too large an organization to be allowed to fail, which, in my lexicon is no-fault capitalism, if you're at a size of too big to fail, you pose a moral hazard, a grave threat and risk to this country if you were to fail, then i say do as we have done on some other occasions. we broke up standard oil into 26 parts and it turns out the value of the parts were substantially greater than the value of the whole and turned out to be a wonderful thing.

we decided to break up at&t and for other reasons. i'm not rushing to break anybody up. my point is this, if we're thinking about creating that that creates additional substantial risk in the economy in the future, we should do something to take care of those kinds of risks if the risk is too big to fail. i would like to get rid of the category too big to fail. the federal reserve board has had such a category for a long time. we have always known if you're too big to fail, you rat a significant advantage to virtually every other financial institution. because they can do business, they can take risks, but they can fail. but if you're too big to fail in competing with them, guess what, you have a safety net. and so my amendment will be simply if you get to that point where this council judges you to be too big to fail without substantial great risks to this country's he economy, then i think divesture that is sufficient to get the institution back to an area where it is not too big to fail,

divesture would be in the public interest. so -- and my legislation would require divesture. i would say to the senator from connecticut the other amendment i will be offering is one that is also perhaps controversial and that is on the issue of naked credit default swaps or what some people call synthetic credit default swaps. they've been described, and i think accurately so, as betting and wagering rather than investing. i heard the description from the bankers about why they are useful in dealing with risk and so on. but it is not useful from my perspective to have the largest financial institutions collecting fees for the purpose of arranging wagers. you know, there are places to make wagers in this country if you call the wager simply gambling, las vegas and atlantic city come to mind. but with respect to credit default swaps, which is a new

term in the discussion these days, especially in the last couple of years, naked -- credit default swaps themselves represent insuring against a bond default. a naked credit default swap means you have have no insurable interest. you are betting against an bond issue even if neither of you own a bond. when mr. pearlstein wrote a kol number "the washington post", and he said why should be -- there be allowed more insurance against bonds than there are bonds? and i read a piece in england they tried to categorize this, what percent of the credit default swaps were synthetic or naked? that is, having no insurable interest? and the answer was 80%. think about that, about 80% of the naked credit default swaps have no insurable interest on anything. it's just a way to wager and so

i believe that's a category that ought not be allowed and i would offer an amendment on that and i recognize that also may be a controversial issue, but one, nonetheless, i think is important. and let me finally say and nobody knows this better than the chairman of the committee, i think it's important that we have a productive sector in this country to produce things, to produce things that might have a label that says made in america and i think it's important to have a financial sector. because you can't produce without finance. and production is necessary for finance as well. so if you look at a couple of hundred of years of economic history, you will find that in some cases for decades production has the upper hand and finance is out here sort of moving at the beckon call of production. in other areas the financing industry has the upper hand and you see it move back and forth. we've been through the last couple of decades where finance has the upper hand in this country and has really been calling the shots.

and i -- i think it's critically important to have a system of finance in america, and that system includes, yes, investment banks, it includes fdic insurance banks and venture capital funds and a wide array of financial institutions. we desperately need that. we can't have an economy that grows without it. but it's very important that that financial system be one that has proper regulation, effective regulation so that we don't see it spin out of control as we have seen in the last 10 or 15 years. in 1994, now that's 15 1/2 years ago, i wrote the cover story for the "washington" monthly magazine and the cover of the story was "very risky business." i took the title of a movie back then. "very risky business." and that article 15 1/2 years ago was about the risk of derivatives, at that time it w

was $18 billion or $28 billion value of derivatives out in the economy, i talked about the risks those derivatives posed to trading on their own proprietary accounts on derivatives. so it is not as if i just discovered this issue. with senator feinstein and others, i have been on the floor talking about the need to regulate derivatives and hedge fundle. we have been speck tack -- hedge funds. we have been spectacularly uneffective with that. but now at long, long last with the opportunity to come to the floor and the opportunity to have a wide open debate with lots of amendments, a lot of us believe if we are successful here, and i believe we can be, we'll do something that has great merit for the future and stability of this country's economy. again, i know there's a lot of language about banking and investment banking out there, i used some of it perhaps that is

hot language. some of it is well deserved by a lot of people who made a lot of money as they steered this country's economy into the ditch. let it be known that we need a financial system in this country that works in order to finance production. all of us want the same thing. we want fought this country back on track and expand the economy and create jobs once again. that's the purpts of all of this. one -- purpose of all of this. one final point because i used to teach a bit of economics in college. i always described to students that the economy is not like some engine room on the ship of state where you get done in the engine room and you find the right dials, nobodies and -- knobs and gauges, that if you push the right one, the ship will move forward. it is not at all. it is about confidence. if the american people are confidence, they do things that manifest the confidence. they buy a new suit of clothes, buy a house, buy a car, take a trip, they do things that manifest the future of the

economy. if they're not confident, they do exactly the opposite and that contracts the economy. that's why this legislation is going to go a long way to saying to the american people you can have confidence that this sort of thing is not going to happen to this country men. that's the precursor to allowing us to see an economy that expands because people have some confidence in the future again. but, again, i started by saying thank it out senator from connecticut. i say, again, there's a lot of work that's gone into this. it's not a perfect bill. there will be much of it that's controversial. i'm going to offer a couple of controversial amendments. in the end i hope that we will all work together to accomplish a couple of things for our economy, and that is the opportunity for more economic growth an expansion and more hope and opportunity for american families. mr. president, unless the senator from connecticut has something else -- all right. let me, mr. president, ask consent at this moment to speak entermorning business. i came to want to speak about the start treaty. and i won't be speaking at great

length, but i do want to talk for just a bit on the start treaty. let me ask to speak in morning business for as much time as i may consume. the presiding officer: without objection. mr. dorgan: mr. president, yesterday there was a hearing here in the united states senate on the strategic arms reduction treaty that we have negotiated with russia. and we had testimony -- i wasn't on that committee, but there was testimony by a dr. james schlesinger and dr. william perry, two of the veteran arms control experts who came to the foreign relations committee and say they support the strategic arms reduction treaty with russia. mr. president, i was in russia a couple of weeks ago and had an opportunity to tour a number of sites in russia that we are actually funding here from the united states on the global threat initiative, a reduction in the global threats, in a

partnership we have with russia in a number of areas including the nunn-lugar law, the nunn-lugar program. and i have long supported the cooperative threat reduction called nunn-lugar named after two of my colleagues, senator sam nunn and senator richard lugar. in the early 1990's they wrote legislation to work with the russians and other former soviet states to deactivate nuclear weapons and destroy delivery systems. mr. president, i wanted to -- to show a couple of photographs and, if i might by consent, show something i had in my desk drawer for some long while in the senate. and i ask consent to do that. this is a photograph of a blackjack russian bomber being dismantled. and this is the wing strut from that bomber. i have a picture sawed off from

the bomber's wing strut in my desk simply because it was given to me and i thought it was so significant that the wing of a soviet bomber that used to carry nuclear weapons to threaten our country, part of that wing is now in my senate desk not because we shot the russian bomber down, it's because we actually provided the funding to saw the wings off and destroy the bomber. that, i think, is success. and, mr. president, this is a photograph of a missile silo in the ukraine. and i have in my desk, as well, a hinge. and this hinge came from that missile silo. and that missile silo health an ss-18 missile with a nuclear warhead aimed at the united states of america. where that missile silo once existed with a missleea