quorum call:

quorum call:

quorum call:

quorum call:

starstart quorum call: quorum call:

mr. harkin: i ask that further

proceedings under the quorum call be dispensed with. officer without objection. mr. harkin: i ask unanimous consent that the senate stand in recess subject too the call of the chair. the presiding officer: is there objection? without objection, so ordered. the senate is in recess subject to the call of the chair.

>> on his final day in the job yesterday, chart start your general neal brodsky discussed findings on the program to stabilize financial markets. his testimony before the house senate lasts about an hour 20 minutes. [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

committee will come to order. today's hearing is entitled as dodd-frank ended too big to fail. this is the inspector general for tariq's last in the job. he has an eventful lifetime and we certainly appreciate your service and you being here on your final day on the job. but as has been tradition for us that committee, we begin by reading the oversight government reform committee mission statement. we exist to secure two fundamental principles. first, america has a right to know the many washington takes

10 minutes well spent and americans deserve an efficient and effective government that works for them. our duty on the oversight government reform committee is to protect these rights. our solemn responsibility is to hold government accountable to taxpayers because taxpayers have a right to know what they get from their government. we will work tirelessly in partisanship was citizen watchdogs to deliver the facts to the american people and bring genuine reform to the federal bureaucracy. this is the mission statement of oversight and government reform committee. it's also similar to the mission statement of inspector generals across their government. today's hearing will explore whether they're just financial institutions will start -- a survey given in the opening statement to muster the time now. today's hearing will explore whether the largest financial institutions are too big to fail despite passage of the dodd-frank act and financial regulations, specifically the ongoing perception that government notes remain an option for poorly managed financial firms. the bottom line is that 2300

pages or over that, dodd-frank is to enter big to fail. as it turns out dramas this reinforced and perpetuate a government intervention and take the economic scales for a few at the expense of growth and competition. and as january 2011 quirkily report to congress, the special inspector general for a t.a.r.p., mr. barofsky outlined concerns with the lasting legacy of too big to fail. the report detailed the unfair competitive advantage of financial institutions at the emplacement government support. through reader access to cheap credit, institutions receive benefits to crowd out smaller competitors. those findings are part by data from the fdic which found a large financial institution in 70 acis points and smaller rivals. this point was not lasting credit rating agencies do not take implicit government backing

into account when reading credit worthiness. this funding advantage is the result of the market perception that certain institutions are just simply too big to fail. dodd-frank codifies openhanded ad hoc dealmaking likely sell a in the financial crisis of 2008. secretary gainer said the special inspector general in december 2010 but in the future we may have to do exceptional things again. and he said this well after the passage of dodd-frank. the combination of cheap money only reinforces the moral hazard that dodd-frank failed to eliminate. and so taking the oath at the table, federal governments give large institutions a special preferred status. last november, voters delivered a very loud message to washington. they don't want their hard-earned tax dollars going to anymore bailouts. the american taxpayer does not want their government in the business of picking winners and

losers. we need to create a lending environment where small businesses can gain access to capital and try them or they can feel confident in the credit market share creating jobs again. by recognizing our government willingness to bill her gestation speak enough and honest conversation about ending today to fail. i'm interested to hear what our first in and second panel have to say about this matter. we'll have the special inspector general for a t.a.r.p. appeared on the second panel, will have a representative from treasury, mr. masted who is the act team under secretary for financial stability. with that, yield the balance of my time to the chairman of the full committee mr. isaac. >> i think the chairman for holding this committee and really miss time. i really just wanted to thank a unique individual in the -- if there is a wall of fame for ig's comment neil, you will be on it. you've done an amazingly good

job. i looked at your op-ed this morning and said darn, he got the title he should've had. it's entitled, where the bill out that ron. so i look forward to hearing your thoughts of dodd-frank and hosts a t.a.r.p. bill, where we should learn from mistakes that probably were inevitable, but due to your hardware, they are very public and we intend to address them one by one. as he talked to academia to teach him to write, i hope you'll consider an invitation to come back here -- exactly that, in imitation where we want your counsel and whatever pharma can be provided. mr. chairman, thank you for holding the hearing, one of many in your series and taking seriously the special committee responsibilities for oversight. again, nobody is more a hero here than a great ig and we have a great ag in front of us. i yield back.

>> i think the chairman and yield five minutes to the ranking member, mr. quigley and by prior agreements, he will share his time with the full committee ranking member as well. >> thank you, mr. chairman for this meeting. and again i'd like to thank our guest today, mr. barofsky for his work at t.a.r.p. we appreciate all you've done for us. one of the lessons of the crisis of the government bears to much risk and taxpayers are that huge losses. more importantly, firms pursue the taxpayers will cover losses and those firms have incentive to take you at your risk. these overleveraged firms grow inside and can become too big to fail. in fact, passing all the risk on the taxpayers who would not allow a financial collapse. t.a.r.p. is passed by congress and signed by president bush averted a catastrophe. although t.a.r.p. end up as a

net profit for taxpayers, we should not minimize the fact to expose taxpayers to an acceptable losses. today we must continue to safeguard our financial system against collapse. t.a.r.p. did not create too big to fail, they did reinforce it. the dodd-frank lot is an attempt to rollback perverse incentives that cause firms to become too big to fail and establish stronger credential and closing loopholes of excessive risk-taking. he will oversee all financial firms that are systemically important. it creates a special resolution at 34 feeling firms to an bailouts and imposed losses on shareholders. resolution authority success or failure will be judged on whether the market perceives it as a credible alternative bailout. does the market be a resolution authority an alternative to bailout? it's my understanding implementation for dodd-frank is in its early stages. i'm hopeful it will be

predictable, credible and orderly process for reminding feeling financial firms come addressing the too big to fail problems even more important today than before the crisis. in 1999 the u.s. banking institutions control banking industry assets. today they control 52% to banking asset. to fix this problem, we need to ensure that dodd-frank is successfully implemented. i look for to testimony and yield the balance of her time in the ranking member of the full committee. >> thank you gentleman for yielding and i think the chairman for calling the hearing this morning. unfortunately today's hearing represents tragically missed opportunity in the majority's refusal to grant barney frank to testify before the subcommittee is the chairman of the house financial services committee throughout the drafting of the financial regulatory reform legislation and the current ranking member monitoring

implementation. representative frank six her teeth in the matters before us today is unparalleled. we would have benefited greatly from -- if were able to hear. despite the subcommittee's process i thank witnesses for appearing before us today. i'm particularly recognizing the special inspector general barofsky and i to commend you for a job well done. i went to thank you for working with me and the many times i've busted you to do reports and look into things, i really do appreciate it. the tireless work has enabled us to better fulfill our role in ensuring effective government oversight of the t.a.r.p. program and again i thank you. in the wake of the two dozen eight financial crisis, we enacted dodd-frank in order to set into a place of robust regulatory structures to and too big to fail. according to the fdic, chairwoman sheila bair had no

requirements under dodd-frank injured the largest financial come needs can be wound down and orderly fashion without taxpayer costs. under title two of the dodd-frank that, there are no more bailouts. however, as chairwoman bear has said and mr. solomon another's, dodd-frank will not work unless we have regulators with the resources they need to make full use of these new regulatory authorities. frankly come the budget proposed by the new majority would effectively cripple the regulators and we drastically cut the budget of our agencies charge for carrying out this important regulation will be paving the way for the next financial collapse and we will never be rid of entities that are in fact too big to fail. i trust that mr. barofsky will, donna and the whole issue of the need to make sure that these agencies are properly funded.

i'm looking forward to the hearing from today's witnesses and again, mr. barofsky, i went to thank you for a you've done. i know you're moving on to academia, but i know that many students will benefit from what you have to say in what you learned we hope to return to government soon. may god bless you and i yield back. >> well, i think the full committee ranking member in response to requests to have testify in the financial services commission you. he's a member of five subcommittees on that committee. he's been chairman of the financial services for the previous four years and ranking member and as everything you speak about his father the past today it's the implementation of dodd-frank and whether or not that it offended the culture of too big to fail or whether or

not it's profiting. so we have two panels today. one is the special inspector general who oversees the program. the second panel is the treasury department and they can, in essence, the full panel to themselves. in essence, we are giving the minority a full panel. and so usually that's praise, but i certainly understand it may not be. but our first witness today is mr. neil barofsky, outgoing inspector general for the troubled asset relief program. prior to assuming his position in u.s. treasury, mr. barofsky as a prosecutor in the united states attorneys office of the southern district of new york for more than eight years. mr. barofsky's last day is today. i know his stuff is behind them are not violating. i think they are sad to see you go, mr. barofsky that we certainly appreciate service to

your government that you've rendered the last two and a half years. we know it's been busy, then challenging and you put more hours into government service than you'll ever be paid for. so we appreciate your service to your government and in the interest of openness. so with that ominous policy of the committee all witnesses be sworn in to testify. if you please rise and raise your right hand. do solemnly swear or affirm the testimony you're about to receive well -- about to get will be the whole truth and nothing but the truth. thank you. the witness answered in the affirmative. thank you, mr. barofsky. now we'll give you an opportunity for your opening statement. your written testimony will be entered into the record, but we like to give you the opportunity to stay within your mind. >> ranking member quickly, chairman issa, thank you for your comments and the opportunity to appear before you

today. it's a privilege and honor to testify before the subcommittee on this i final day of special inspector general. it's hard to believe two and half years ago there was no such thing as t.a.r.p., said karp, 87th two subcommittee. we've seen an outpouring of government funds to the financial industry teetering on the brink of collapse accompanied by historic oversight. the emergency economic stabilization act which of course created t.a.r.p. also created said karp and i'm proud to say since our inception in december 2008 we've made great progress to fulfilling goals set forth by congress. by the numbers alone, we've issued nine quarterly report, 1300, secured civil or criminal charges against more than 15 individuals. they've been convicted of t.a.r.p. related fraud

investigation that help assist the recovery of more than $700 million making sure sigtarp is an agency that will more than pay for itself. we help bring transparency to a program desperately need. treasury through t.a.r.p. it promises to wall street and main street. unfortunately, its track record has been mixed. it fulfilled its promises to wall street is reflected in the returns and profitability of the nation's largest banks. unfortunately it has failed to live up to some of its promises to main street. first, the promise to restore landing. such an important part of any economic recovery has gone unfulfilled. when treasury gave out hundreds of billions of dollars to banks, it did so without any policy in place to accomplish that goal. without any strings to require

incentives for it. not surprisingly credit continued to contract throughout the financial crisis. they preserve homeownership. the bark and the treasury sec with congress to get t.a.r.p. past. the original promise to modify up to $700 in mortgages that treasury was to purchase under t.a.r.p. testified within weeks after issa was passed was replaced with the commodification of 4 million mortgages for struggling homeowners. that problem, too, has been essentially cast aside, replaced with the cold stark reality of a failed program that was poorly designed, poorly managed, poorly executed and will come nowhere close to living up to the original promise.

finally, after secretary paulson and secretary geithner they would not let their largest banks fail and demonstrated they were ready, willing and able to use t.a.r.p. funds to accomplish that, we're left with the financial system and largest banks that are bigger, more concentrated and even more dangerous to the system than before the crisis. we were then promise to regulatory reform the era of big notes that and. the promise that looks like it too may very well go on that. it was not withstanding the passage of dodd-frank. financial markets still perceive that the united states government will bail out the largest banks and credit rating agencies and explicitly given higher ratings to those things based on the assumption that should they hit the racks again they will come to the rescue. as for the execution of dodd-frank, he still remains theoretically possible that it

will address the problems are too big to fail. treasury and regulators were certainly given the broad powers and authority to take on the largest banks. these are the same regulators whose incompetence and lack of foresight was described by the financial crisis in korea is the cause of the financial crisis. while chairman sheila bair stands has a strong advocate for using the tools of dodd-frank to either shrink or simplify the most complex financial institutions is necessary, she also appears to standalone browser turned quickly winds down. without to mandate and quick action, i'm afraid this promise to will be broken with potentially devastating consequences. mr. chairman, ranking member, thank you for the opportunity to be here today. i also went to thank you and the chairman of the full committee and ranking member of the full committee for strong support over the years.

i sigtarp we would not have been able to accomplish nearly any of our goals or accomplishments if it wasn't for the strong continuous and above all bipartisan support from congress. if we retrieve support from one side or the other, it would not have nearly the impact that your uniform support. i want to thank the incredible women who work at sigtarp for their sacrifices, commitment. they demonstrate all the good that is in federal workers and it's truly been my privilege and honor to get to work with them for the last two plus years. so i thank you in the door to answering any questions you may have. >> thank you for your testimony. i recognize myself for five minutes. to initially start the question, you mentioned in your report to your editorial today in "the new york times" that the object is of t.a.r.p. have been shifted

dramatically in the two and a half years since the creation of the program. it's not evolving, but it seems like if they fail to meet metrics they have set for themselves that they changed the metrics. can you elaborate on this? it happens far too often with this program that would make goal wasn't meant, rather than do what you expected a good government program, which is to acknowledge -- you have a goal, set for the plan or policy to achieve the goal and measure performance against the goal and if you're not performing, you change the program to make necessary programs to accomplish the goal. far too often in t.a.r.p., it's been said a goal to adopt no policy to achieve the goal, basically ignore it and try not to be incredibly transparent about progress towards the goal. when you don't meet the goal, rather than change the program, change the goal and then declare mission accomplished program a success and move on.

i have been with the housing program certainly had a lot of the main street goals, which is basically been written out recently and testify in front of the congressional oversight the official talked about these incredibly important mainstreet goals on why t.a.r.p. got past. it just needs to be taken into account. those are some of the broken promises be discussed in the op-ed in our reports. >> to go further on this, there's been a discussion in recent days that t.a.r.p. has been a success for the taxpayers, that in dollars and cents terms, it hasn't been a huge negative. what are the negatives? what is the legacy of those, of t.a.r.p. and our unprecedented intervention and more? >> is the number of areas where t.a.r.p. fell short. first of course are the goals

that were part of the bargain we just discussed. and there is a cost to not reading your mainstream goals. one of those costs has been impact on government credibility in the bottom line is people don't trust their government be a part of the reason they don't trust government today is because of the bailout, because of the failure to meet goals and because of mismanagement of the program. secondly, one of t.a.r.p.'s legacy is too big to fail problem. as i noted before when the secretary so the markets were not going to let these banks fail, this is insurmountable and one of the positive aspects of t.a.r.p., which was preventing a collapse. it really exacerbated the problem is too big to fail. it was no longer implicitly. it was explicit as it could be. the whole reason why t.a.r.p. contributed to avoiding the economic collapse was because of the promise were not going to let these institutions fail. and that has had the unintended consequences of the problem is getting bigger and bigger, more

concentrated. imagine now a statistical data that they are able to better money more cheaply, access to credit market, axis capital market. in right now there are more systemically different than they were before referred to know what the reason there's fewer and they're bigger than ever. that's a real legacy. >> has dodd-frank prevented that from continuing quite >> dodd-frank was not a magic wand. it gave treasuring regulatory power and authorities didn't change the status quo. they gave one possible task that the regulators could choose to use to potentially accomplish the goal, but the bill itself is just that. a bill. unfortunately, based on america's perception, they are very much unconvinced that it will be used in the effective way that he would need to be used in order to really address too big to fail. >> in the design of the bill, does that leave wide openings for bailouts to continue?

>> technically under the letter of the and there's some dispute about what the meaning of all this is, it does state that in certain language that bailouts will pass. but you know, that sort of ignores reality and the reality is we talk about too big to fail, often with the site of the fact of what the words mean and that really means what they say, whether there is a law in the books are not a lot in the book, if we have a repeat of the financial crisis, it not going to matter what the law on the books is because it's failure is not an option. you can't let this banks fail it happens. it doesn't matter what your political ideology, personal ideology. it will have devastating consequences, great depression, r. mike in income and no passion of the point is much like with t.a.r.p., whoever happens to be president at the time and controlling congress at the time

has to go and rescue banks. it's not a moral question. that is way too big to fail means. selecting people can argue whether certain interpretations and portions of dodd-frank give certain degree of discretion as to which creditors possibly give 100 cents on the dollar and which don't, which is subject to be whether provisions that you could point to and say okay this doesn't mean an orderly bankruptcy and gives a suggestion the banks continue in the form of a bailout, whether funded by the industry or elsewhere. it's almost on besides the point because if you have to be to fail banks, and so going to put aside it will be right back where we were in 2008. >> so in a sense, it codifies the status quo quote >> unless and until treasuring regulators whose power they have under dodd-frank -- and a lot of powers they had before dodd-frank and went unused.

i mostly use those authorities, were in the status quo or slightly worse than the status quo because this was not aimed, maybe you have a chance of convincing markets. right now markets are looking at dodd-frank and rejecting it. that's not to say that dodd-frank doesn't do some good things that help limit the increase in capital requirements, which is important around the edges. the vocal role, although a lot of exceptions that may defeat at all helpful to help limit certain areas of potential risk. the big-ticket question were talking about today is doesn't fall too big to fail? the answer is not yet. by all indications what's happening from at the direction of span, i'm not entirely optimistic that it will. >> thank you for your testimony. i recognized mr. quigley. >> thank you, mr. chairman. not that they disagree, i want

to understand it better. as you advocate in your testimony today and editorial comment certainly ms. bair implementation to react to the response to that about today to fail and if i could quote, there is no reasonable way of sufficiently reducing their size and complexity without jeopardizing their independent. large european and asian banks will gobble them up, pushing the too big to fail risk overseas and outside our control, putting banks than its eyes hoping they will be any less risk-taking in the financial system. it will mean the risk-taking will go elsewhere in the financial system, where it is harder to monitor and regulate. think hedge funds, and quote. what would your response to that beat? >> that seems almost be like in embracing a too big to fail. >> is the correct? >> i don't think is correct.

this is very similar to a different argument that's been advanced. our largest things that they're not at the size and scope that they are, they're not going to be able to compete their larger european banks. essentially what that means, if we break that down, what it means is okay, other countries guarantee banks in those tanks have an advantage. unless we guarantee our banks, our banks will not be able to compete with other banks. that is essentially what it comes down to. so really the question become, do you believe the government should subsidize them guarantee our largest financial institutions or do you believe we should allow -- we should be true to capitalist ideals about these things compete without an economic subsidy come a very significant subsidy they receive. and sure, there's number of doomsday scenarios one could posit that if we use the tools of dodd-frank him were true to the idea of ending too big to fail, but it may actually result in banks that are not as profitable as they are today.

>> there are all sorts of incidences in which unfair trade practices, for example, by other countries to put our capitalistic ideals that we as. and you don't see that as a possibility in the banking industry? >> i think it's a possibility, but there's other ways to do with policy concerns rather than embracing the idea we should be effectively granting our largest bank as a subsidy and essentially putting them on the books. there's very little difference when you compare where we were on the lead up to the financial crisis in fannie mae and freddie mac. it's the same type of guarantee, the same type of distortions on the market. in many ways, we could very well have that exact situation. sure, maybe our banks are able to leave short-term profits because they were able to compete with other banks about subsidies, but i'm going to take

the other side. i'll say we're in the subsidy in the simplest security over time. we're going to be healthier and better banking system. this is what chairman ben bernanke said recently. >> how do you protect our banks in the meantime from unfair practices of their competition if it might exist? >> again, there is constant interaction >> i don't think you need to like too big to fail or embrace it to be concerned about the potential risk. >> the treasury department has four offices dedicated to dealing with foreign countries and foreign regulators to the g20. there are mechanisms to deal with. >> we are leaving that to go back live to the senate. the senate is coming back after resizing. will have more debate now on a small business bill. continuing programs for start up funds for small technology and research firms. the managers hope to have a final vote on the bill by the end of the week.

quorum call:

quorum call:

quorum call:

mr. reid: mr. president in. the presiding officer: the majority leader. mr. reid: i ask unanimous consent that the call of the quorum be terminated. the presiding officer: without objection. mr. reid: i ask unanimous consent that at 11:00 a.m. on tuesday, that the senate proceed to consideration of calendar number 16, h.r. 4, that the only amendment in order to the bill be an amendment to be offered by senator menendez, there be up to 60 minutes of debate equally divided between the leaders or designees prior to the menendez amendment. that no amendments be in order prior to the vote and upon disposition of the amendment the bill be read a third time and the senate proceed to vote on passage of the bill as amended. if amended the amendment and the bill be subject to a 60-vote

threshold, the motion to reconsider be laid on the table with no intervening action or debate. the presiding officer: without objection, so ordered. mr. reid: mr. president, i ask unanimous consent on monday april 4th, 2011, the senate proceed to executive nomination to -- executive session that there be an hour of the guy upon the use or yielding back of time the senate proceed to vote with no intervening action or debate on calendar number 42, the motion to reconsider be laid on the table, with no intervening action or debate, no further motions be in order, any related statements be printed in the record, that the president be notified of the senate's action and senate resume legislative session. the presiding officer: without objection, so ordered. mr. reid: mr. president, i ask unanimous consent that the senate proceed to the immediate consideration en bloc of the following resolutions submitted

earlier today, s. res. 120, 121, 122, and 123. the presiding officer: without objection, the senate will proceed en bloc. mr. reid: thank you very much. i ask consent that the resolution be aced greed to, the preamble be agreed to -- i ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid on the table en bloc with no intervening action or debate and any statements related to this -- these matters be printed in the record at the appropriate place as if read. the presiding officer: without objection, so ordered. mr. reid: there are two bills at the desk due for the first reading, mr. president. the presiding officer: the clerk will report. the clerk: s. 706, a bill to estimate stimulate the economy, produce domestic energy and create no jobs to the taxpayers and without borrowing money from our foreign governments for which our children and grandchildren will be

responsible, h.r. 471, an act to reauthorize the d.c. scholarship program and for other purposes. mr. reid: mr. president, i ask for the second reading of these two matters en bloc, but i object to my own request. the presiding officer: the objection is -- the bills will be heard -- will be read on the next legislative day. mr. reid: mr. president, i ask unanimous consent that when the senate completes its business today, it adjourn until 2:00 p.m. on monday, april 4, following the prayer and pledge, the journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved until later in the day, and that the senate proceed to morning business until 4:30 p.m. with senators permitted to speak for up to 10 minutes each. i further ask following morning business, the senate proceed to executive session under the previous order. the presiding officer: without objection. mr. reid: senators should expect the first roll call vote at 5:30

in connection with calendar number 342, jimmy v.rana to be circuit judge. we were able to reach an agreement to vote in relation to h.r. 1099, senators should be -- should expect two roll call votes tuesday prior to the caucus meetings. if there's no further business to come before the senate, i ask that it adjourn under the previous order. the presiding officer: the senate will stand adjourned until 2:00 p.m. on monday until 2:00 p.m. on monday

senna minority leader mitch mcconnell said today that other than joblessness, spending and debt is the single biggest issue in the u.s.. he announced today that all 47 republican senators have co-sponsored a consensus balanced budget amendment to the u.s. constitution which requires a balanced federal budget. this is 30 minutes. >> [inaudible conversations] good afternoon everyone is this working?

good afternoon, everyone. i think we all know other than joblessness, the single biggest issue in the country these days is spending and debt and all 47 republican senators have come together behind a constitutional amendment to require a balanced budget in order to give us the fiscal discipline to do the job that we need to do, the same job every family in america does, by making sure we don't live beyond our means. a number of senators have taken the lead on this issue. the person who has sort of been out there on this issue for many years and was the leader with we came within one vote of passing this with in 1997 was senator hatch, and i want to call on him first, and he will then bring to the podium those who have been the leaders on this issue and actually everybody has played a role in this. we have a unanimous view this

particular constitutional amendment would be the right thing for the country. senator hatch. >> thank you. in 1997 when we brought the balanced budget amendment at that time, our deficit was $100 million. today it's 16 times that. our total national debt was around $5 trillion. today it's over $14 trillion headed towards $20 trillion. the spending was a reasonable area of spending against the gdp. today we are at about 69% and according to the cbo if the president's budget is followed we are going to hit probably 90% of gdp which would make us similar to greece and that is if the president's budget figures are right.

we simply can't live with that. can you imagine that we passed that amendment and we left one vote i thought we had 67 have that time, and one person didn't and we lost by one vote, but had we passed we wouldn't be in the terrible fiscal distress we are in today and we would have had to have make tough choices just like every family has to make in balancing their budget and living within their means, and like most of us would agree that this government is incapable of living within its means, and we have to go to this extent in order to get things done. so we are following this balanced budget amendment, all 47 republicans on board and then we will work with colleagues on the other side to see what we can do to get them on board and hopefully we can pass this amendment and get our country into a fiscal situation that really works. i have a lot more i could say

that i'm going to stop at that and call on senator lee and then after senator lee, senator cornyn and then senator to me and i will call on others after that. senator lee. estimate at the end of the this is an issue in either democratic or republican, liberal or conservative. this issue, the mounting debt potentially threatens every federal program, every federal expenditure known to man. by the end of this decade if we continue to spin that the current rate it is likely that we will be spending of about a trillion dollars a year just on interest on the national debt and to put it in perspective of course this is substantially more than we spend on social security in an entire year and medicare and medicaid combined. it's substantially more than we spend on the national defence in an entire year so regardless whether you are concerned about protecting our ability to defend

ourselves against foreign aggressors or on the other hand you are most concerned about protecting entitlement spending you should be concerned about perpetual reckless runaway deficit spending, and that's what this amendment would put an end to once and for all, thereby protecting all those programs. again, programs that are important both to liberals and conservatives alike. this is a time when we have to address the difficult question that arises from the fact that perpetual deficit spending brings about a particularly pernicious form of taxation without representation. one group of elected legislators spends money and fame people who are not yet born or not yet voting age have to pay off the debt left by the group of legislators. we fought a war mackall for taxation without representation and we won that. we need to abandon this pernicious practice once and for all and that's what this does. i am very grateful to my colleagues, senator hatch,

senator cornyn, senator kyl and so many others who helped us with this command to the minority leader, mitch mcconnell, who is shown so much leadership in getting our party and senate behind us. >> november 2nd of last year the american people sent a clear message to all of us whether again as mike said whether republicans, democrats or independents that they are sick and tired of the reckless spending and unsustainable debt, and they wanted us to act together hopefully on a bipartisan basis. it's the only way it's going to get done, to address the problem, and we can do it and this amendment is one way to do that. in 1997 as senator hatch said when they came within one vote of passing the balanced budget amendment there were 11 democrats and joined republicans than, and i hope now that we've got in an amendment that 47 of

us agree to we will be reaching out to our democratic colleagues to see if they got the message we got out and clear on the verge of a second. we are accountable and responsible to the american people for what we do. we usually have those determinations weather we've been good stewards and whether we've done with the expect of us we find out in an election, so i think this is a great opportunity to work together. i hope both sides of the ogle will come together, pass this amendment and go to the states where 30 states would have to ratify and then within five years the balanced budget amendment would be implemented. >> i would like to start by saying a quick thank you to senator hatch and cornyn on the one hand and senator lee and koschel. these two groups have produced very thoughtful alternative ideas on how we might reach a

balanced budget amendment and through a lot of hard work, we all came to an agreement on a consensus product that i think is a great product, and importantly has the universal support of the republican conference and to that and i want to thank leader mcconnell for having the wisdom to seize the opportunity to unite the conference behind this important idea. it's important for many reasons i want to touch on just one and that is an absolutely convinced as i think many economists are that we cannot have the economic recovery we need and we cannot have the job growth we badly need as long as we have this disaster this fiscal deficit looming over our economy. and getting our fiscal house in order, getting the balanced budget is an absolutely necessary precondition for the strong economic growth and job creation frankly we were sent here to accomplish. so i share the hope some of my

colleagues have alluded to, the hope that there will be a large number of democratic colleagues who will join with us, every single republican and pass an amendment to the constitution that we badly need the will provide the fiscal straitjacket we need to get our fiscal house in order. >> thanks. i was a freshman congressman back in 1997 when the senate had this vote the last time and field by one vote senator hatch mentioned and have it passed it would have passed in the house of representatives. i can't help but think how much better the country would be today 14 years later if we had enacted a balanced budget amendment back then because since that time we've seen dramatic growth in government, a dramatic increase in spending and debt and today it threatens the country on a little like we've never seen before, so much so the chairman of the trend chiefs of staff admiral mike mahlon calls the national debt the greatest threat to america's national security. i think that speaks volumes.

i think that's why this exercise is so important and we work together as republicans to come up with a proposal we would like to put before the senate, before the american people, and hopefully rally them are down and get democrats on board with this because it is high time that washington deal with so many states and families in this country to do it that is balanced budget. south dakota was the first this year to balance its budget and it took hard decisions. the cut on hundred $27 million which in south dakota is a lot. it doesn't sound like a lot out here but they did it the hard way. they need the hard decisions and because we got a balanced budget amendment they are now required to do it. we do it every year. a lot of states to it every year. it's time the federal government did it and it's long overdue if we are going to get this country back on the right track, growing, creating jobs and dealing with this massive problem of spending and debt. >> thank you, warren and all of

you. q4 card to make this a reality and examined the amendment i do think it's solid and would do the job we hope you would do and i congratulate those of you who worked so hard at having unanimous support. we've demonstrated that systemically it seems congress is unable to live within its means. in 97 when the amendment failed by one vote, that was one of the first typecast as a new senator people were saying we were getting our house in order and maybe we didn't need a balanced budget amendment. now we have deficits going that great. chairman of president did commission signed a joint statement before the budget committee and they said this is

the most predictable economic crisis this nation has ever faced, the debt is growing out of control. so i would say that the greatest thing we can do for our economy, the greatest thing we can do to put this country on the path to financial success and growth and vigor this strength in the future is to get our financial house in order. this will do it. i thank those who've worked for it so much, and i do believe it's not a hopeless task. one vote short in 97i believe we can pass it this time. thank all of you who've worked so hard. >> like my colleagues, i want to thank senator hatch for his leadership and for the deals for their leadership. this is a team effort, all 47. i know that you all like to write about the times we had 45 and maybe not, this whole 47 that signed up for this on this

amendment i think that's one thing to consider. second thing, i know some of the people on the department say with a minute this is not going to work. it talks about the state budget has to be a -- they don't have the printing press, they have to be in balance, but they don't have the protection in regards to the national security. in a bit weird war which might be helpful this time around, you can overcome that with 51 votes. so national security is protected. the other thing i would say is that some people that are critical of this say my goodness how long will it take with 48 states to ratify i think that is the proper number. well i want to tell you something, you talk to any state legislature or any governor today and you could rein in federal spending in part that goes for the funding of all of this regulation and all these mandates they have to put up

with they are going to say amen it will be the fastest ratification. read it appeared, long-term. that is exactly what we are after here. so while we may not be successful i don't want to put a wet blanket on this. we can't kick the can down the road to an even number gear and go to 2013 and then bump up against what could be real economic chaos. none of us know in the tip of the spirit is going to hit but if we send a message like this i think will signal the american people we are serious and more especially to the world and the financial community. thank you. >> thank you. spending has been an addiction for congress for many years, and i am very proud of our republican conference for standing together to break the

addiction. and if anyone questions the need for balanced budget amendment, all we have to do is look at the current debate on funding the government for this year. at a time when the whole world recognizes that america is on an economic cliff, the democratic party has yet to even agree to cut this year will we borrow every week. they are not going to join us or show the leadership until the constitution requires that we do it. that's why this balanced budget is so important and that's why we need to have a vote on this balanced budget amendment before there is any debate or vote on the debt ceiling. >> if america as we know it today is going to be saved, it is imperative that this balanced budget amendment to the united states constitution passed. this institution is not capable of living within its means. this is not a partisan issue, it is an american issue and it is

imperative that we do to the federal government what virtually every state has, and that is a requirement that they balance their budget. it works very well in the states. we need it at the federal level. >> senator gramm and them [inaudible] >> this is a historic day for the republican party. we all agree on something and it's a big deal. every end of our party has come to believe that without a balanced budget amendment the constitution is probably not going to happen. and what would it mean? it would mean the political rhetoric gets away to the constitutional mandate. i've come to believe after being here since 1995 that all of the rhetoric in the world is never going to lead to balancing the budget unless something changes pretty soon. and a balanced budget amendment would make us to hear what everybody has to do at home. you can't leave town until you

get the budget balanced. but have to say no to people that maybe your friends you have to tighten their belt and the with entitlements and look at revenue. you would have to do things that people in the real world do everyday. so i hope and pray that we can get some momentum to when they have a constitutional balanced budget amendment to change the way the congress works not just for now but forever and that's needed. >> thank you, senator hatch. before being elected i had the distinction i had the distinction being the governor of the united states for ten years in the state of north dakota to have to balance the budget. families have to balance their budget, businesses have to balance their budgets, cities have to balance their budget, states have to balance their budget, our country needs to balance