district. that's a terrible thing when factory is closed and all those workers are told to go home. but the alternative was no general motors at all, and if there had been no general motors at all, then everybody would would have lost their pension. mr. snowbarger began to talk about what would have happened to the pbgc in the general -- if general motors or chrysler plan had terminated. general motors has all by itself a million and a half shareholders. so we have to weigh this against the real world alternatives. >> i understand. you need to understand from our side of the table here is that a whole lot of this looked arbitrary to us, just so you know. i mean, i'm not putting this on you, i'm just saying that's the

way it looked, you need to be aware of that. i just want to -- >> the i appreciate that. >> -- insert something for the record here, mr. chairman. my friend, mr. johnson, inserted into the record an e-mail from greg martin referencing the revisions made by frederick henderson. and i think it's important to identify who the people are. greg martin was an official at gm, frederick henderson was the ceo of gm, and the fact that mr. bloom was on a cc really doesn't prove anything here, i don't think, except that -- other than the fact that gm was in control of gm. the treasury department represented observers having to ask, not able to dictate to gm, and, you know, frankly, i think that's what we found here, that gm throughout the bailout remained under private control. and i, i don't see from this memo which has mr. ratner and

mr. bloom up here as a cc, that this coming from gm officials that this in any way indicates that it was, it was a non-gm officials who were leading the dance. i just want to point that out and, again, i do that because i understand the concerns that my colleagues have, share many of those concerns. i just wanted to correct the record. and i thank the chairman. thank you m. >> and i thank the ranking member. i'm going to allow myself five minutes. mr. bloom, mr. snowbarger, and i think today the most important thing we can understand about this hearing, it's not about democrats or republicans, it's about the american people. and i would think that this hearing is, indeed, essential when we talk about taxpayer dollars being invested. if you could, mr. bloom, there was $50.2 billion in total t.a.r.p. assistance. could you tell me how that was divided up? >> congressman, i'm not familiar with that particular number.

there's 49 and a half is the total assistance to gm. i'm familiar with that number, but i'm not -- i'm trying to be response e to your question. i'm not familiar with the 50.2 number. >> do you know how that was divided up? >> well, the -- again, the rough numbers are that the total assistance provided to general motors was 49 and a half billion. the total assistance provided to chrysler was 12.5 billion. there was 1.5 billion provided to chrysler financial, 17.2 billion provided to general motors acceptance corporation, and there's about 4.1 billion between assistance provided to suppliers and to guarantee warranties. not all of those funds were drawn down, and so the amount of funds that were drawn down is about four billion less than that, but that's roughly total, the total amounts that were at one point allocated to those companies. >> all right.

well, i know quite a bit of money was put in escrow. and as we referenced early, some of the monies that were put in escrow were used to pay down the loan with interest. i'm just going to walk you through something, and i've done this for many, many years, and i'm sure most of the people in the gallery have done the same. when you buy an automobile, there are stipulations put -- >> [inaudible] >> there are stipulations in what we would call putting a deal together. a lot of it has to do with the total amount of money you're going to borrow, and the stipulation in most cases requires some down payment money. and i'm just trying to relate this so that the american people understand this. the down payment money that is required at the time an individual buys a car is usually referred to as cash. and it is truly cash. it's not part of another loan that's structured because that, in fact, does distort the total amount that that car is owed on. and i think what bothers me more

than anything else, we used borrowed money -- taxpayer money -- in order to pay off a loan. it wasn't cash that was paid down, and i don't know that i'm getting that across. and my point is, again, this is for the american people to understand. this truly was a very odd and very strange bankruptcy. and one that is so complicated that in 40 days it could rise from the dead and be on it feet again and be no problem. no problem. that, truly, is, that was a remarkable activity. i know myself that, and i declared bankruptcy. i don't think i'd be given that same opportunity. so the american people really do need to know that this was, in fact, and as the president described it an historic structuring of a loan. but the bottom line is, the bottom line is these are all taxpayer dollars, and i think that's the thing that's the most discouraging. and you made reference early that the new gm, i have

absolutely no idea that the old gm is still in bankruptcy, the new gm is not. general motors has survived. it would have survived in some form having gone through bankruptcy on its own. the old gm is gone forever, and we know that because it did follow a different route and bought into a program that absolutely led it down a road that it could never recover from. it's just difficult to sit here and listen to the premise that general motors in its wisdom was able to eliminate private businessmen, people who had franchises. i was one of them. one of my franchises was taken away. not because i wasn't profitable, not because i wasn't hitting my market share and doing all the things i had to do. i had friends who absolutely not only were they terminated as dealers, they chose to exit as individuals. some people took their own lives because a business was taken from them by a procedure that had absolutely nothing to do

with natural events. so while this may have been historic in the president's way of talking about it, it was absolutely catastrophic for small business people. and i'm not blaming you. but i'm saying the american people better understand that there is something going on right now that makes absolutely no sense to me. i've got to tell you from somebody who was a general motors dealer now for 60 years, general motors never gave me anything. every car, every part, everything i've ever done was purchased with my own money or my family's money. so to sit there -- and i'm not blaming you again. i'm just saying this premise that general motors could not afford its dealers is absolutely ridiculous. we were all on our own. we were living outside that home, and we were supporting our own families. so i think the american people have always believed that they want what's fair. not what's legal because i'm, at 63 years old, i know there's no correlation between what's fair and what's legal. it's absolutely horrendous that

we were absolutely able to do these types of things to individuals who had made such great contributions in their commitments. and if you don't believe that, i would suggest you go into communities and find out dealerships that are no longer there, their names are still on the outfield fences of all the little leagues. they supported the girl scouts, the boy scouts, local bands, everything that was going on in the high schools. these are the guys they go to first. to me, picking and choosing winners and losers is absolutely up to the free market. it is not up to the government. the government made a very serious mistake, and they overstepped their bounds. i do appreciate you being here today. is there -- okay. i will recognize -- >> congressman -- >> for five minutes, please. >> just say one thing, and i would agree with almost everything you said. where i would respectfully disagree is if government had not stepped in, i do not believe general motors would have faced a fate other than a complete liquidation and the elimination of all dealerships who sold general motors cars.

>> but we'll never know. >> well, we won't know, sir. but at the time, i think, we could find no evidence whatsoever that private capital markets financed this company -- >> and i do understand that. but there was bankruptcy that they could go through, a structured bankruptcy. unfortunately, it was taken out of their hands. >> [inaudible] >> no, listen, i've got the tell you, i was there. i walk the walk, and i know people who lost not only their dealerships, but they took another exit, too, and i've got the tell you it was absolutely horrible, and it should never, ever, ever happen again. and at that point i'm going to recognize mr. issa for five minutes. >> i thank the chairman. mr. bloom, i'm just old enough and, unlike the chairman, i wasn't, i wasn't in the car business directly, but i was a supplier to the car business. do you remember cadillac in if new york? remember ever hearing that name, largest cadillac dealer in america? largest limousine provider? victor once challenged general motors by trying to get a

replacement of the president. do you know how general motors fixed that? they paid him twice what his dealership was worth, then handed it to roger penske just to get him out of the business. at that time they didn't have you to do their dirty work, so they simply paid him a lot of runs money to get rid of a thorn in their side who they felt was agitating against, basically, the then-president. do you think at least in some way that general motors had a reason to make selections that had something to do other than with the absolute monetary, hard core dollar and cents best interest when they used you in order to cut their number of dealers? >> congressman, i'm not familiar with the story you have, you have related, so i can't speak to it. >> it's famous enough that i say it knowing roger penske is a dear, wonderful guy that i've raced against, but the bottom line is general motors over the years hated some of their

dealers, loved others, cut all kinds of deals. the difference is they didn't have the government to do it free for them. >> congressman, as i said, i don't have any evidence whatever. i'm not do iting the veracity of your -- i'm not doubting doubtie veracity of your question. >> since we found dealerships that made sense that were cut and others that were preserved, there were huge amounts of mistakes in that decision process. >> i think what we did when we looked over general motors' plan to rationalize their dealer network is we satisfied them ourselves that that the company had acted reasonably. we did not review dealer-by-dealer decisions was we did not want to intervene -- >> so in that case you were vulnerable to whatever their underlying reasons were because you weren't able to audit the legitimacy of something that was ordinarily knot doable? -- not doable? >> we did not think it was

appropriate to put ourself in a position to become the management of the company and decide whether it be a dealership decision or a factory decision. >> let me follow up with a question. i chair this committee, but i also chair the, i also serve on the judiciary committee, and i was there for the revisions to the patent, or there for the patent, but i was there for the revisions to the bankruptcy laws. do you think that what you did in circumventing the bankruptcy laws, what other side would ordinarily have happened in any conventional bankruptcy in bypassing the decisions that could have been made not by you, but by a bankruptcy judge and other trustees, do you think that you set a good precedent for a model for the future, a bad precedent, or do you think you're simply a one-time event? >> i think that two bankruptcy judges have found that we did absolutely nothing to circumvebt the bankruptcy laws. that this was, in fact, an

ordinary course bankruptcy, so i don't think there's any change in the basic status of our nation's bankruptcy laws. >> so you think that maintaining the pensions for union workers while screwing the salary workers was in the ordinary course of what would have happened in any other bankruptcy? isn't it true in any other bankruptcy everybody would have been in the same pot of losing their pensions? they would have been all or nothing? this differentiation has never happened in bankruptcy to my knowledge. has it happened to your knowledge? >> yes, quite a bit, actually. >> oh, really? and your basis is salaried people aren't important, but union workers are? >> no, that's not my basis. companies make decisions, and sometimes that decides that certain unsecured creditors, sometimes like suppliers, sometimes like warranty holders are treated, are treated differently because the company concludes that in order to maintain -- >> i suspect that you'd probably find that bond holders getting a haircut ahead of general creditors is also typical. the gentleman, former chairman, wants a little time, so i'd

yield the remaining time to him. >> mr. burton. >> thank you. i thank the gentleman for yielding. the bankruptcy judge just approved the plan. they didn't actually make any decision on how the funds were to be disseminated. they just approved the overall plan. >> i think what they did, congressman, was determine that the bankruptcy laws of our country had been followed -- >> well, okay. but they made no changes. they just said the bankruptcy laws had been followed -- >> yes. >> -- but they didn't actually make any determination on whether there was fairness or not. i ask unanimous consent for another minute or so. >> i think the determination was that the bankruptcy laws had been followed, that they hadn't been turned on their head or any phrase like that. >> okay. you were on the auto task force, you were part of that. i'm looking here at some notes, and it says in a piece of correspondence have you guys

begun a dialogue with the uaw over your desire to see the hourly plan terminated? at a minimum, this could get messy, and the uaw should probably be brought into the loop. do you know about that comment? >> yeah. i answered a question about that earlier. >> well, answer it again. >> no, i'm happy to, sir. >> okay. >> yeah, i wasn't particularly on that e-mail chain, and given that that has, is part of the litigation, i'm not in a position to comment. >> well, did you say this at a dinner, there was a dinner, and it was reported by david shepardson, washington correspondent for the detroit news, at a farewell dinner of the auto task force held at a mexican restaurant in late july 2009 that you allegedly said i did this all for the unions? >> >> no, i did not say that. >> you didn't say that? >> no, sir. >> so you were misquoted by the -- >> that's correct. >> are well, i'm going to call that guy up and ask him. if you said that, you know that you're under oath here.

>> i'm fully aware. >> you made no comment like that at all. >> no, sir. >> >> yeah. well, mr. chairman, we'll check that out. i'm going to call this reporter, and we'll just see what he said. the oh thing is -- other thing is, though, you did see the graph, and you did see how the salaried employees were treated as opposed to the union workers. >> i did. >> you did. and you were involved in that decision making process. >> no, i was not. >> who was involved in the decision? >> general motors came forward with a plan. as i said, i'm not in a position to comment on the particulars of the delphi situation, but like as in be all the aspects of this bankruptcy, general motors came forward with a plan about how they thought best to reorganize themselves. we, we looked into that plan -- >> and the auto task force had nothing to do with that? >> no, i said, no, we had very much to do with it -- >> but you can't comment because it's in litigation. >> this particular question i'm not a position to talk about. i'd be delighted to talk with

you about the treatment of other stakeholders, about other groups, other aspects of the bankruptcy. happy to talk with you about that whatever length you'd like. >> the other employees weren't treated all that badly. the uaw was treated extremely well, some of the others were treated less well, but the salaried employees really got screwed. >> i think -- >> and if you're on the auto task force and had anything to do with that, you ought to be ashamed of that. that's terrible. those people should never have been treated like that. thank you, mr. chairman. >> all right. thank the member. and just one minute, mr. bloom, and we're going to be finished here. we've had references to the fact that it was the board of directors, general motors' board of directors that made these decisions. >> let me try to be more accurate. what i said was we were involved in putting a new board of directors in after the bankruptcy. >> okay. >> during the runup to the bankruptcy, it was the management. there was a board of directors, but it was the gm management. >> could you, if you could, because i know you know the

answer to this. >> yeah. >> under the old gm, how was that board of directors determined? >> >> under the shareholders. >> and under the new gm -- >> the original board -- >> no. >> the original board of the new gm was put forward by the treasury department -- >> okay. so to say really the decisions were not made by the treasury department, these were all folks that were appointed, in fact, by the administration. >> we were the largest shareholder. >> i understand, i understand. >> but i think the distinction i was trying to make, congressman, was that as employees of the administration, we did not make these decisions. after the bankruptcy we entrusted a group of independent men and women -- >> and i understand that. but i also know that the appointments came out of the administration. you and i both know that. >> absolutely. >> with having said that, there's a huge difference between a shareholder, the old gm that was elected by shareholders, the board of directors, and the new gm

because the way you divvied up the company, you established who the board of directors would be. so it wasn't really done the same way as it had been done in the past. i think it's important to be honest about it. i am going to recognize the ranking member for one minute. >> just briefly, and i thank the gentleman for yielding. this question about whether or not the government controls gm's decision, that's the focal point here, and the points that the chair just made, mr. kelly made, the relationship between the new board, decision makers that results in a lot of dealers closing, that -- i see that as a legitimate line of questioning. but one of the things it does not establish and i just want to say this for the record is that mr. bloom himself had anything to do with it. and you kind of indicated that when you were charging the, on behalf of those who lost their dealerships that it's not necessarily that mr. bloom had anything to do with it, but i think the chair is well taken in

probing further how those decisions were made. i think public has a right to know. i think the public has a right no to know. thank you, mr. chairman. thank you. >> and with that, i'm going to thank the panel. mr. bloom, thank you very much. mr. snowbarger, thank you very much. we are going to recess for one minute, and then we have a final panel after that. thanks so much. [inaudible conversations]

[inaudible conversations] >> want to welcome our second panel of witnesses. again i apologize for the day's schedule. all your great wisdom is only going to get to a couple members of congress. there's so many different things at this hour, but we really want to get this hearing in. we first have the associate director of the herr berth a -- herbert a. stifle institute. dr. thomas kokin -- did i get it right? that means i didn't get it right. you're being kind. from mit, and ms. dalmea. thank you for being here. if you were here earlier, the custom of the committee is to swear everyone in.

so if you'd please stand, raise your right hand. do you solemnly swear or affirm that the testimony you're about to give to this committee will be the truth, the whole truth and nothing but the truth? mr. eye kinison, you're up first. >> good afternoon, chairman jordan, ranking member kucinich and members of the subcommittee, i'm associate director of the center for trade policy stulds at the cato institute. since 2009 i have followed closely the auto company bailouts and bankruptcies, and i'm grateful for the opportunity to share my concerns regarding the lasting implications. the views i have today are my own. with help from some pundits and various media outlets, the administration is pitching the narrative that the auto bailouts were successful. the evidence in the support of that conclusion seem to be limited to the fact that gm's been profitable over the last five quarters and that chrysler has repaid much of its debt to the u.s. treasury. but it is to whitewash, one, the

deversion of funds from the troubled asset relief program by two administrations for purposes unauthorized by congress, two, the looting and redistribution of claims against gm's and chrysler's assets from shareholders to pensioners, three, the unprecedented encroachment by the executive branch into the finest details of the bankruptcy process to orchestrate what experts describe as sham sales, four, the cost of denying ford and the other more deserving automakers the spoils of competition, five, the costs of insulating irresponsible actorsing such as the united auto workers from the outcomes of an apolitical bankruptcy proceeding, six, the diminution of u.s. moral authority to counsel foreign governments against similar market interventions and, certain, the lingering uncertainty about the direction of policy under the current administration that pervades the business environment to this very day. i think if president wants to take credit for saving the auto industry, he should also take responsibility for the regime uncertainty that has persisted during his administration since

much of that uncertainty which is manifest in weak business investment and hiring flows from lessons learned from the auto intervention. acceptance of the pronouncement of auto bailout success demands willful ignorance. if proper judgment is to be passed, then all of the bailout's costs and benefits must be considered. otherwise calling the bailout a success is like applauding the recovery of a drunken driver after an accident while ignoring the condition of the family he severely maimed. the lasting implications will depend whether or not if bailout is considered a success. the thresholds will be lowered and americans will have to judge even more bailouts in be the future. the lasting implications will be less destructive because the threshold will be higher. on that score contrary to what the administration would have the public believe, gauging the success of the gm bailout requires consideration of more than just the ratio of finances

recouped over financial outlays. there are numerous other costs that don't factor into that equation. if bailout is considered a success, some of the lasting implications likely will include the following: one, an increase in government interventions and bailouts of politically important entities, two, fear mongering will be considered an effective technique to stifle debate and enable a stampede toward the politically expedient outcomes, three, americans will be more willing to extend powers without serious objection to the executive branch that we would not extend in the absence of a perceived crisis, four, a greater diversion of productive assets is likely to occur from productive assets to political ends such as resources for research and development engineering to lobbying and lawyering, five, a greater uncertainty to the business climate as the rule of law is weakened and higher risk premiums are assigned to u.s. economic activity, less prudent decision making from ford motor company, for example, knowing that it has banked it bailout. a greater push for the administration for a comprehensive national industrial policy and less

aversion to subsidization of chosen industries abroad. the objection to the auto bailout was not that the federal government wouldn't be able to martial adequate resources to help gm, the concerns were about the undermining of the rule of law, the property confiscations, the politically-driven decisions and the distortions of market signals. any verdict must take these crucial considerations into account. gm's recent profits speak only to the fact that politicians committed more than $50 billion to the task of subsidizing and reconfiguring gm. with debts expunged, cash infused, ownership reconstituted, sales rebates underwritten all in the midst of a recovery and u.s. auto demand, only the most incompetent operations could fail to make profits, but taxpayers are still short a minimum of $10-20 billion depending on the price of shares of gm will fetch. that is a lot of public money in the balance. nevertheless, the administration

should divest as soon as possible without regard to the stock price. keeping the government's tent calls around a large -- tent cls will deter market-driven decisions possibly keeping the breaks in the recovery. yes, there will be a significant loss to the taxpayers, but the right lesson to learn is that government interventions carry real economic costs, only some of which are readily measurable. thank you. >> thank you, mr. ikenson, we appreciate the great points you made in your testimony. again, just so you know, obviously, your testimony will be part of the record. we will get that to each member so they can hear your good, your good words. i do have to leave here in a couple minutes, i'm going to preside for mr. gump's testimony and then congressman kelly will take over for our last two witnesses. mr. gump, you're recognized for five minutes. >> thank you. members of the committee, thank you for the opportunity to represent the thousands of delphi retirees who were mistreated by the obama

administration during its intervention in the auto industry, particularly in respect to the remaking of general motors. i know you've had an opportunity to read my written testimony, so i'll summarize quickly, and i want to start off by saying i'm not a lawyer, i'm an engineer. i'll do the best i can, but you have to understand that i may not be able to get all the -- all of it right. from the time candidate obama said if a company goes bankrupt, the workers need to be our top priority, not an afterthought to the weekly radio address by vice president biden when he said we're focused on making sure that if you work hard, play by the rule, you'll be able to get ahead and retire with dignity and security, we've learned that talk is cheap in this town, and action and determination to do what is right is hard to come by. in this situation a purposeful decision was made to create a government that was commercially-minded instead of being bound by the precepts of our constitution such as due process and equal protection.

decisions were discriminatory and politically motivated, were made behind closed doors out of sight of any supervisory board or committee, and for the last two years the records of those decisions have been protected and fiercely guarded by both the pbgc and the treasury. the only explanation so far was that there was no commercial necessity to do anything for those people. in reality, it was done for the expediency of gm's bankruptcy exit, not for the benefit of the people of the country. a quick chronology would include the fact that gm was forced into chapter 11 bankruptcy by the administration. delphi, a gm spin-off, had already been in bankruptcy for several years but remained a major supplier to gm and so was needed in order for gm to be able to survive. because delphi had not made contributions to their pension plans, the pbgc had placed liens, so the treasury cut a deal with gm, the pbgc and delphi such that the pbgc gave up in favor of equity position

in delphi a one-time $70 million payment from gm and a $3 million unsecured claim. thus, gm could keep their major supplier, but the participants in the pension plan lost a great deal. .. >> thus denying us the opportunity to be represented or

follow any kind of due process. simply put, our decades of effort for the company were considered to be valueless for the administration so they kicked us to the curb while taking good care of the supporters at the representing take. short administration and unprecedented involvement from the respected retirees that could not protect themselves was political, illegal, unethical, and immoral. they had the ability to treat every worker in a fair and equitable manner. they still can. they refused then and still continue to do so. the long-term effects of the decision are horrendous indeed. a study included the national consequences every year. $1.6 billion of economic activity has been lost and will continue to be lost every year for the next two decades or more. clearly in violation of the requirement of t.a.r.p.. thousands of retirees have completely lost their futures.

they will struggle to survive at or near the poverty level for the rest of their lives. they lost health care insurance results in many not being able to pay mortgages or put their kids through college. they have to compete for the same nonexistent jobs. she has to deal with several other issues, including a husband that's fighting a debilitating disease. she and others in the same situation. others have seen their homes foreclosured, had to declare personal bankruptcy, some have seen their families break up or worse. this is simply shameful. and it must be corrected. we need your help to bring true transparency for the issue to reveal the records of agreements that helped some but excluded others. we need your help to receive a fair settlement for the retirees, especially on the

salary, who depended on our company and government to live up to the promises made. we're here because the administration believed we were too weak to fight back. but this is an issue of right and wrong, it's not democrat or republican or administration versus legislature. we must not allow a precedent that allowed the united states government to classify citizens based on their perception of political strength to stand, nor should we allow an unprecedented step to be done -- excuse me -- in such a nontransparent manner. we will stand on this side of right and we will fight. that is why we are here. and we need your help to win. >> thank you, mr. gump. doctor? >> thank you, mr. chairman. and members of the committee, thank you for the opportunity to testify today. i'm going to make tree points in my testimony. first, government actions to restructure general motors and chrystler through controlled

bankruptcy processes were essential to and successful in saves between one and three million jobs ab voiding a second grade depression and providing the pressure and opportunity for the u.s. firms to reemerge as world class competitors in the global auto industry. two, support of the unions with ongoing relationship with gm during the restructuring process was critical to the survival of the companies and to the entire u.s. automobile industry. further support and cooperation between the company and the union are essential for gm, as well as for other auto industry companies for building sustainable jobs and enterprises. three, the specific top up provisions governing delphi hourly workers negotiated as part of the agreement governing the creation of delphi in 1999 and again in the retruckturing negotiations during the delphi initial bankruptcy proceedings in 2006. to retrospectively signal out

and reanything on the provision during the 2008 and 2009 restructuring and bankruptcy processes would have materially harmed the ongoing relationship between the union and company and would have jeopardized the industry restructuring and rebuilding process. let me expand on these points a bit. the combined actions of the bush and obama administration support the restructuring of the auto industry is likely to be assessed by historians as one the most important and effective steps taken during that perilless time to avoid the great recession from ascending into a great depression. the 1.3 million jobs saved in 2009 were probably expanded in subsequent years. the actions also avoided setting off a cast -- cascading set of cost to local and government

budgets which would have resulted in uninsurance loss, losses in gdp that would have in turn reduced revenues of state governments between 15 and $48 billion and reduced federal revenues of between somewhere between 59 and $170 billion. the combined effects of the loans and the structural adjustments and the additional concessions from workers and creditors, the leadership changes that were put in place, and in case of chrystler, the joint venture with fiat has now positioned the automobile industry to reemerge as a world class competitor. for the first time in a decade, the three companies are reporting profits, expanding capacity, hiring workers, and collectively gaining market share. i emphasize the effects of these actions on the entire automobile triin the u.s.

because of the high degree of interdependence that exists across assemblers, suppliers, and dealers. the effect of the largest firm, in this case general motors entering a bankruptcy without a debtor in possession financing would have produced at best a long and certain retruckturing process and at first the of liquidation of the company. either of the outcomes would have set off a chain reaction that would have likely brought down a significant number of automobile suppliers and significantly harmed other assembly firms and even more dealers than were already harmed across the country. indeed, it's the interdependence across these ma josh assemblers and suppliers that has grown over the years as more output has been outsourced to the supplier base. in 1980, it was about 1.2 to 1. where jobs from the supplier base to the assemblers existed. in 2008, this had grown to 3.5

to 1. moreover, most of these suppliers provide opponents to multiple assemblers. delphi, for example, is the sole source supplier of cockpits for vehicles in mercedes plant in alabama. if delphi had been forced into liquidation mercedes production would have been shut down. this is only one the examples. ford in particular would have been put at risk in the extended and certain outcome because it outsources a higher proportion of it's components to outside suppliers than does chrystler or gm. instead, not only avoided bankruptcy but it used it's time gained in the past several years to build a very strong partnership with the uaw that will serve as a model for the industry in years ahead. let me speak to the role of the uaw in this city. the survival of the gm and chrystler, through these processes require the support of the uaw and other key unions

with other ongoing relationships with the companies. moreover, more these companies to prosper and build sustainable jobs and enterprises in the future, labor management relations will need to continue to be transformed. that transformation process that began prior to the crisis. this involves not only deep economic concessions by the work force, it also involves joint union management efforts to work together to put -- to improve quality on the shop floor to improve the quality of the negotiations process, and to engage in consultation and information sharing processes at the highest levels of the companies and the unions. in 2007 negotiations, prior to this crisis, all three of the major companies in the united states and the uaw agree to restructure and lower the cost of health care of pensions for current and retired employees and cut wages and starting salaries in ways that matched or came close to matching their

major competitors. each of these companies to varying degrees has also been working to engage the workers in building the kind of knowledge-based work system that foster innovation, productivity, and quality improvements. years of research and evidence and experience has demonstrated that to these companies and to the union that they need to work together as partners in leading and sustaining this kind of transformation. finally, this issue of the top off is worth some commentary. the ua -- it needs to be put in their historic context. the uaw negotiated provisions to protect it's members pensions in 1999 when delphi was severed off as a significant company. they recognized there was significant risk that delphi might not survive. as a responsible union, it negotiated a number of contingency provisions to protect the members and preretiree benefits.

these negotiations and subsequent ones that took place when delphi was forced to declare bankruptcy in 2006 involved multiple issues, multiple tradeoffs, economic concessions, and sacrifices by all of the stakeholders, current workers, salary workers, future employees -- >> i'm going to ask you to -- >> i will finish in 30 seconds. to signal out one provision for the top out clause without considering the overall package and tradeoffs would be inappropriate and highly counterproductive. moreover, there is a well established provision in the bankruptcy code of honoring contracts of suppliers and other stakeholders with critical ongoing relationships with the company. this is exactly the case here. i will finally -- i will close with one comment and that is this statement has nothing to say about the question of fairness to the salary employees. as an individual, as a

professor, who studies and works with all members and all segments of the labor force, i find it very upsetting that the salary workers were left out of the process. my testimony has nothing to say about the fairness or unfairness of that other than what i've just referred to. >> thank you. thank you very much. mrs. dalmia. >> thanks for having me here. i'm a senior analyst at reason foundation, a nonprofit think tank. i've lived in the metro detroit area. i think i'm the only one in the panel that lives in michigan and written about the auto industry. as a homeowners in the area my fate is tied to that of the auto industry, i'm among the regions hundreds of thousands of homeowners who are rooting for the big treat. i don't think the 95 billion or taxpayers have spent to pay large gm and chrystler has positioned them for future

success. taxpayers stand to lose 28 to $34 billion. beyond that there are four hidden cost that will plague the u.s. economy in the years and decades to come. i'll address each briefly. the first is the most unfortunate aspect of the bailout is it has completelyunder mined the rule in law in bankruptcy. one the main arguments for the bailout was that gm and chrystler didn't have the cash on hand, nor could they raise it from financial markets to finance a chapter 11 bankruptcy. hence if the government did not step in and bail out the companies, they would face liquidation. many experts doubt that liquidation was a plausible scenario for gm. if it was, there was an argument for the government to guarantee the loan amount to private lenders which would have been a lot less than the bailout amount and then let long standing bankruptcy law determine how

much of the loss the various stakeholders, unions, lenders, shareholders would have to suffer. instead the administration essentially wrote it's own bankruptcy laws as it went allock, -- went along, throwing out long-established precedent. normally they are paid back on a priority basis in bankruptcy proceedings. but the government who put unions who are regarded as low priority unsecured creditors ahead of them. the process was riddled with my rad -- myriad examples of bankruptcy law. it signals to future lenders that should the loan money to private companies, they can't count on the standing rule of law to protect them. additionally the other big unintended hidden cost of the bailout is the opportunity cost. one the ironies of the bailout that it constitutes a missed opportunity, not a second chance for gm and chrystler.

at best, it has prepared these companies to compete with industry leaders of yesterday, rather than those of tomorrow. american auto makers have been losing market share to foreign competitors even before the current recession began and one big reason was that uncompetitive label costs. bankruptcy should have been an opportunity for them to significantly rationalize the obligation, clean up the balance sheet, and start afresh. gm and chrystler cost are comparable to toyota which is $56 an hour. but toyota no longer sets the industry good. smaller asian phones who labor cost are $40 an hour do. it is an question whether they can compete with kia. also it did not get legacy costs, something it would have. without the bailout, the companies would have carried on

in some form, but they would have looked different than what they do. they further entrenched the status quo in the auto industry. the third big problem that it has unleased a systemic moral hazard that will fundamentally weaken america's market based economy. in the two weeks prior to the bailout, gm had accrued $70 billion in losses thanks to the bloat the operation that supported $8,000. it a mass of debt, yet no cash on hand for product development or whether the rainy day. by contrast, in the two years, ford laid off workers, sold money losing brands, and mortgaged all of its assets, to build $25 billion in reserve that it invested in product development and for use in economic downturn. but the bailout rewarded gm irresponsible, reckless behavior

and penalized ford's forward-looking one. any company that's too big to fail or meshed in the broader economy or major employee will wonder whether it makes more sense to save for economic downturn, or hold out as taxpayer assistance. just as the wall street bailout became justification for auto bailout, the auto bailout will become justification for future bailouts. and the other reason is the increased finance of government companies. the bailouts are not identify to those returning the company to profitability. it was inevitable there would be politically mettling. the wall street journal has documented what a huge role politics played in determining which and how many dealerships the company would shutter.

there are many other examples. the bailout has opened the door for a kind of direct government and private business that makes a mockery of the constitutional scheme of limited powers. ultimately, this might be the most damaging legacy of the bailout. >> all right. thank you for your testimony. what does -- grant myself five minutes. mr. ikenson, would you do me a favor and walk through the metrics of the successful government intervention in the free market? i'm trying to understand. because in the real world, there's a different way of defining success. if you could tell me at the end of the day the total taxpayer investment versus the total loss? >> i believe there was $50 billion invested in gm. and that doesn't count some of the tax exemptions that's been granted, there's about $12 to $14 billion in tax exemptions granted to the company to offset

losses. it was on an unorthodox provision given what transpired with gm. gm also is getting gmac was kept afloat to the tune of about $12 million to help promote the sales of gm cars. my understanding is there a tax credit to purchasers of the chevy volt. the numbers that the public has grabbed ahead is $50 billion. but i think it's more than that. in november, there was an ipo, and 23 -- i think $23 billion was raised. leaving taxpayers on the hook for about $27 billion. and the government -- the gm still -- the government holds about 500 million shares of gm. in order to be made hole financially for the first $50 billion, the price of gm's stock needs to be $53 or the average price for selling 500 million.

this morning it's $30. it's been hovering, the reason it's not going to appreciate substantially any time soon is because the market knows the largest shareholders wants to dump about 500 million. that's keeping downward pressure on the value. so i think it's a safe bet that taxpayers will be stiffed about 10 to $20 billion on that. those are just the financial cost. the other cost in which shikha described, in terms of ruling the law, spoiling the competition to ford and honda and hyundai, those are other costs. they are plenty more difficult to observe those costs which are unseen and need to be factored into it. >> if you could the total figure that come up with?

>> right now, i'm assuming there's going to be a sale of gm and the average price in the 30s. taxpayers are out $12 billion there, then the tax exemption, $12-14 billion. some of that is a direct hit on taxpayers, not all of it, then the gmac $17 million to my knowledge has not been paid back. if you have a pencil. >> i do. i'm up to 41. pretty similar, serious money. >> yeah, that's right. >> and the $7500 tax credit for purchases of volts. i don't know where general electric is going to get it's major tax credit there on the hook for $50,000. i think jeff told the president he could buy 50,000 of these volts. it's a lot of money. >> i'm a chevrolet dealer, the

main purchasers are not the american public. i would suggest or submit to anybody if it takes $7500 of taxpayer money to make that car viable, there's probably not a car you want in the market. i have a bad habit of only guying cars from general motors that i can sell and make a profit on. which is an unusual concept in washington, by the way. >> mr. chairman, may i -- >> just one minute, doctor. i do find it unusual that we're going through the pains of the dodd-frank, and i have a lot of friends in the small banks. can you imagine any bank being able to walk away from a $41 billion loss and say, you know, it was a great invest many. only in this beltway do we come up with these types of metrics. it's astounding to say that with a straight face. as far as the american car company recovery, are we also taking credit for the disaster

in japan? because a lot of those cars would have sold here, had they been able to be produced. i think that we are really making a very unstable argument for the recovery process. dr. kochan, you wanted to make a comment? >> thank you, mr. chairman. the $41 billion is a good number to use as the total cost. but you have to balance that against two thinks. first just the numbers on the low end of the savings of unemployment insurance and other government expenditures, the loss of revenue that would have resulted to state and local governments, and to the federal government at the low end of all of those estimates from three different sources comes to $82 billion. so you get really a one to two. >> your premise is based on the ideas that general motors would have failed completely. i don't -- >> a long -- >> see i don't know -- >> a long unstructured bankruptcy would have had

substantial costs. >> yeah. >> and that's the low end. the liquidation costs would have been a factor of about five more than that. that's liquidation. this is only a long, unstructured -- >> i understand. >> now the second thing that has to be considered here, and you know this as an experienced person in the industry, that the cascading effects across the industry would have been devastating, not only your dealership, but many, many others, not only delphi, but many other suppliers. not only gm, chrystler, ford's ceo testified that he would see his company at risk. you have to take an industry perspective here. >> i agree with my colleagues on the panel. we're not in the business of saving specific companies. we're not business of protecting the american economy. >> i understand. >> jobs, communities and the future of the economy. and that's what was at risk --

>> i appreciate the model that you are speaking of. i think there would have been some survival at general motors for some level. a lot of this is purely academic. >> no, it is not purely academic. >> mr. -- >> mr. chairman, let me finish. >> i'll come back to you. ms. dalmia. >> just to put it in context, toyota lost 2.5% of the market share between january and may. out of that 1.4% of the market share has been picked up by hyundai and kia and our auto makers, the big three have picked up .8 out of which is bulk is by ford, the nonbailout company. so the $80 billion or however much we have spent has gone to protect about .4 or 5% of the market share of gm and chrystler. i find it hard to believe that chrystler -- that gm would not have survivalled to capture that

kind of market share at this stage in the game, you know, when car sales has been going up also bit. these are all counterfactual, i agree with dan if we are going to credit gm and chrystler for saving jobs, then we also need to take the cost of the economy of the jobs lost. the very fact that the uaw pension and wages has been protected more than at the competitive level suggests that we have fewer jobs in the economy because there are more worker cost of the workers is really quite high. if we were paying them a little less, we might have had more jobs, in fact. >> yes, i can appreciate that. as i said earlier, the whole purpose of the hearing today was for the american public to understand. there's an argument on both sides. i do understand it. but i do think a lot of what we're talking about, and a lot of things i don't understand, we're willing to say that's something that we can write off. maybe somebody can explain to me

why is this unrecoverable. the delphi losses? i know as independent, i'm responsible for the whole amount. >> i'm sorry, you are asking -- >> well, we are saying -- we are giving that we're willing to write off. >> i don't anyone is willing. i think mr. ikenson explained it. the real issue would be if the stock value rising to the level to recoop the full investment. then you would get it. we can't control the stock market. that's where the losses come. i think the direct loans has been paid and there was a debate about whether the dollars came from. >> i understand that. >> the loans will be repaid or have been repaid. it's the loss on the direct investment may come if -- if the current value of the stock stays the same. i think that's the situation. >> i would go back to the original purpose of the hearing

today that was to talk about the government injecting itself into a free market. again, making -- whether we determined right or wrong as the american people to determine. was there money spent properly, in the right way, at the end of the day, did it do what it was supposed to do. a lot of it it -- there's diffeg opinions on both sides. i can appreciate that. i do know one thing at the end of the day, every single penny came out of the taxpayers wallet. and that's my main concern. i just have to undying belief that free markets really do determine where we are going to end up and things are going to rise and fall depending on conditions which we don't have the ability to do. there's nothing more dangerous than trying to project and figure out what the future is going to do. things do change. and they change very rapidly. and i know in the automobile business what looks like a really smart move one day can turn around very quickly. a little thing like katrina

blows in off of the coast. all of the sudden gasoline that's $2.39 goes to $4.09 in a market that's stable. there's unforeseen things in the future. the question does come down to the investment in taxpayer dollars and the benefit. there's something on both sides. having said that, i really do appreciate you appearing here. in the future, i would appreciate also if you weigh in and let us know. because it's really important to the american people to understand the process and how the government does make decisions and the consequences of those decisions. i want to thank you for appearing. with that, we are going to adjourn. thank you. [gavel] >> the senate is about to gavel in for the day. on the agenda today, continued work on a bill designed to

reduce the number of executive branch positions requiring senate confirmation. at noon, they will take votes on two amendments, the vitter amendment which would eliminate white house positions that many republicans refer to as czars and the demint amendment which would provide for the continued confirmation of the head of the bureau of justice statistics. live coverage of the senate here on c-span2. the presiding officer: the senate will come to order. the chaplain dr. barry black will lead the senate in prayer. the chaplain: let us pray. eternal savior,

creator of the world, give us this day a sense of your majesty. fill our lawmakers with faith in your power to help them solve the pressing problems of our time. lord, enable them to meet their responsibilities with courage and optimism, looking always to you as a guardian and guide. when life's pressures overwhelm, give them patience and the joy of experiencing your peace and love. we pray in your wonderful 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., june 23, 2011. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable tom udall, a senator from the state of new mexico, to perform the duties of the chair. signed: daniel k. inouye, president pro tempore. mr. reid: i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: mr. mcconnell:

mr. president? the presiding officer: the republican leader is recognized. mr. mcconnell: i ask that further proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. mcconnell: people in my hometown of louisville, kentucky, are still recovering this morning from a series of storms and possible tornadoes last night that inflicted considerable damage across the city, including at the historic churchill downs racetrack, home of the kentucky derby. more than 600 louisvilleians are without power early this morning after thousands lost power yesterday. the storms did their worst at churchill downs in south louisville where there were reports of funnel clouds and some barns were destroyed, sending many horses running loose. in many parts of the city, there were downed power lines. the storms also did considerable damage near my alma mater, the university of louisville, and the jefferson town area. the national weather service plans to be in louisville today

to sur fay the damage and to determine if the city was indeed struck by tornadoes. the town is bracing itself for another round of severe weather with severe thunderstorms, high winds and even hail in the forecast for today. luckily, it appears so far that only property was damaged and no lives were lost or people injured. the horses are all okay, too, for that matter, which is extremely important to us in kentucky. we're thinking of those who have been affected by these storms and will continue to keep a close eye on the city of louisville and make sure people have everything they need to clean up and to rebuild. now, mr. president, on another matter, this morning, i'd like to address what i view to be a worrisome development in connection with the ongoing debt limit talks, but first i think it's important to remind ourselves what the purpose of

these talks is. from the very beginning, the goal has been clear to come up with a series and significant plan for reducing the deficit as a condition for any agreement to raise the limit. without such a plan, we're told america could very quickly face an economic calamity of historic proportions, at a time when millions of americans are still trying to recover from the last one. as one of the major credit agencies recently put it, the rating outlook of the u.s. will depend on the outcome of negotiations on deficit reduction. a credible agreement on substantial deficit reduction would support a continued stable outlook. lack of such an agreement would prompt moody's to change its outlook to negative on the aaa rating.

now, mr. president, this is serious stuff, and many of us have been hoping for and working toward a serious bipartisan solution, a plan that would convince the american people, the markets and the world that america is capable of getting its fiscal house in order. and let's be clear about something else here. we all know what such a plan would look like. everyone, including the president, knows that we cannot rein in our debt without a reform of long-term entitlements. cannot be done. and everyone knows that any serious plan would have to be in the trillions to get the job done. that's why even the democratic chairman of the budget committee said this week that he wouldn't even support a plan that proposed to cut less than than $4 trillion over the next ten years. and that's also why it's so concerning to many of us that some have begun to suggest a different goal for these talks. over the past several days, some have suggested in various news

stories that the real goal of these talks is to device a plan that satisfies one side by reducing the debt and satisfies the other side by raising taxes. the suggestion here is that all -- this is all just some quid pro quo exercise between the two parties. this is a dangerous trend and it is wrong, and i think it's important that we dispel it. the central issue in these talks, as every serious person knows, is our nation's massive deficit and debt, and the disastrous long-term consequences for jobs and the economy that would result if we do absolutely nothing about it. we have this problem for one very understandable reason -- the government spends too much. the way to solve it is to spend less. it's mystifying, really, that at the 11th hour, some would now propose tax hikes as a condition

to any agreement. it's mystifying not only because of the absurdity of proposing a tax hike as a way to help the economy and create jobs, it's mystifying above all because we know quite well that a tax hike would never make it through congress. not because of republican opposition but because of republican and democratic opposition. we have already had the votes to prove it. six months ago, democrats couldn't even muster enough votes to pass a tax hike on upper income americans when they had 59 seats in the senate. 59 seats in the senate and a 40-seat majority in the house and a democrat in the white house. couldn't get that done six months ago. less than two weeks later, right after that effort to raise taxes that they couldn't get done, they voted almost 4-1 in favor of keeping the current tax rates in place. now, mr. president, that was when the democrats had a huge

majority in the senate, a huge majority in the house and the president of the united states, they couldn't raise taxes. so there is one of two things going on here. either someone on the other side has forgotten that there is strong bipartisan, bipartisan opposition in congress to raising taxes or someone involved is acting in bad faith. we have known from the beginning that tax hikes would be a poison pill to any deficit reduction proposal. a poison pill to any deficit reduction proposal. those who are proposing them now either know this or they need to realize it very quickly. that's to say nothing of those who are now proposing more spending as a solution to our debt crisis. this isn't just mystifying. it's absolutely farcical. i mean, most americans had to wonder if they were dreaming this morning when they saw this headline -- quote -- "democrats call for new spending in u.s. debt deal."

it's unbelievable. more spending as a solution to the debt crisis? what planet are they on? all of which gets at the larger issue in this whole debate. and i'm here referring to the continuing silence of the one person who matters most to its outcome. for weeks, lawmakers have worked around the clock to hammer out a plan that would help us avert a crisis we all know is coming. remember admiral mullen, the chairman of the joint chiefs of staff, said when asked what our biggest national security threat was, he said our debt. erskine bowles, bill clinton's chief of staff, cochairman of the deficit reduction commission called it the most predictable

crisis in american history. we all know this crisis is coming, and knowing at some point the president will have to sign on to some solution. so it's worth asking where in the world has president obama been for the last month? where is he? what does he propose? what is he willing to do to reduce the debt? and to avoid this crisis, this building on his -- this crisis that's building on his watch? he's the one in charge. i think most americans think it's about time he started acting like it. it's not enough for the president to step in front of a microphone every once in a while and say a few words that somebody hands him to say about the jobs situation and our

economy. americans want to see that he's actually doing something about it. what they see instead is more bad economic news every day, a gathering crisis that threatens to make current problems even worse and a president who is either unwilling, unwilling or unable to recognize that our nation's economy is in very serious trouble. he's the president. he needs to lead. he needs to show that he recognizes the problem. he needs to do something about it. we're not in the majority. we can't sign anything into law.

that is the president's job. that's his job. yet, until now he stood in the background. he has acted as if it's not his problem. well, it is his problem. this is his problem to solve. america is waiting. i yield the floor. mr. reid: mr. president? the presiding officer: the majority leader is recognized. mr. reid: following any leader remarks, the senate will be in a period of morning business until 11:30 today, with the majority controlling the first half, republicans controlling the final half.

following morning business, the senate will resume consideration of the presidential appointment efficiency and streamlining act, with 30 minutes of debate on the vitter amendment regarding czars and the demint amendment regarding bureau of justice statistics. at approximately 12:00 p.m., there will be two roll call votes in relation to the vitter and demint amendments. we're looking at that now. a number of senators have a problem with two votes. we may only have one. we don't have that worked out yet. we'll notify all senators when we do. we'll have a number of roll call votes right after the noon hour today. starting around 2:00. some other votes are expected. mr. president, for the last month or six weeks, the vice president of the united states, joe biden, served in this body for 36 years and who has been assigned by the president of the

united states to work with people who have been assigned by me, senator mcconnell, the minority leader in the house, and the speaker, to meet with senator biden to work out problems that we have facing our country with this huge debt. senator biden has been working very, very hard on this. numerous meetings with this group of people that we assigned. progress is being made. whether it is enough progress is -- remains to be seen. but, mr. president, the president of the united states gets up early every morning. he gets an intelligence report about what's going on around the world. a lot of things going on around the world that he has to keep his eye on. and that's an understatement. we've had many issues that have come about this month that he's had to focus on. no one can suggest in any way that the president is not

engaged in what is going on in the cufnlt he is briefed at least once a day by the vice president as to these negotiations. he's following that. most every day he meets with his advisors as to what should be done next. i think it is unfair to say that. i think it is fair to look at history, mr. president. when george bush became president following that time of eight years of president clinton, he was given at his desk in the white house reports that showed there was about a $7 trillion surplus over the next ten years. hwe had developed over the years of president clinton a number of years. one was the paygo rules. we made sure if there was a new program that we couldn't pay

for, we'd take money from another program to take care of the new program. there was a time of economic vie brans in this country that we'd never seen before. president bush got rid of the paygo rules and decided to do everything on credit, everything on credit. two unfunded wars. they're now approaching $2 trillion in costs, none of which is paid for, money that we borrowed from saudi arabia, china, and other countries. we gave through president bush huge tax cuts that have been declared by most writers around the country to be unfair. paraphrasing what some people believe is the richest man in the world, warren buffet, who says that it's really unfair

that he pays less taxes percentage weis than his secretary. -- percentagewise than his sefnlgt so this $7 trillion surplus that we had over ten years, the bush administration wiped that out with all of these wars unpaid for and these taxes and other things that were done. when president obama became president, there had been 8 million jobs lost. he found himself in a big hole. now, i think one of the things we should do is stop denigrating the economy of our country. is it vibrant and strong, it is improving. so for my friend to say -- my friend and counterpart, the republican leader, to say the only place we can solve the problems of this country is just basically cut domestic programs

significantly -- we know we're to have to do a better job of balancing the budget because the deck of cards that were given to president obama -- and we're doing our very best to do that. but the one interesting thing that my friend failed to mention, as he talked about the bowles-simpson debt reduction program, is they said, among other things, of course we have to make significant cuts in domestic discretionary spending, in defense, in mandatory programs. they looked at some of the work we need to do with entitlements. but they also said there had to be something done with revenue. my friend ignores what they said about that. and the other thing that they said -- that is, bowles-simpson, together with the people who are on that commission, a number of appointments i made to that

commission -- they said, yes, we need to do some cutting, but these next few years we have to spend some money to create jobs. and we lair no a hear not a wory republican colleagues about creating jobs. the house of representatives, all they do is flex their muscles on things they want to eliminate. but the one thing they don't talk about is creating jobs, not a word. now, mr. president, this week my republican colleagues killed their fourth jobs bill this ye year. the proven economic development reauthorization legislation was commonsense legislation with a proven track record for spurring innovation and hiring by private companies. because for every dollar we spend as the government, $7 came back in return from the private sector. and they killed our fourth jobs bill this year. it seems republicans don't care about putting americans back to

work. they don't even pay lip service to the issue. americans have said they care more about creating jobs than anything else. in fact, yesterday the junior senator from tennessee, a republican, said right here on the senate floor that this effort to create and protect, as we did the last few years, 314,000 jobs was -- quote -- "nothing of importance." that's a direct quote. i'm confident that 14 million americans out of work today, including many from tennessee and every other state in our country, would disagree with the senator from tennessee. he also went on to say, this junior nor from tennessee, i repeat a republican, went on to say that this worthy legislation, our fourth jobs bill of this congress, was nothing more than an attempt -- quote -- "to kill time." so he said that it's an attempt

to kill time. he went on also, i rearnghts to sa-- i went on also, i repeat to say that it was unpor unimporta. republicans may consider it to be a waste of time. but democrats disagree and americans disagree. and we all -- and we're not going to stop fighting to put americans back to work until we get our economy back on track. we can't solve our problems without helping jobs be created. congress has no more important task than creating jobs. there's no better way for us to spend our time. there's no issue more important than job development. this legislation, which again would have supported is 300,000 working jobs as it did the last five years, is an important part of that effort. but, mr. president, don't take my word for it. the junior senator from tennessee said this about the economic development administration just two years ago. this is what he said prior to

his saying that it was a waste of time, prior to his saying that it wasn't of importance. here's what he said, this is a direct quote less than two years ago: quote -- "in the midst of an economic crisis, projects like these are just the kind of things that will renew confidence and reinvying va rei- reinvigorate private investment in the area." that's what he said. he said we need funds to protect jobs and support economic growth. why didn't he then vote that way? no wonder the junior republican senator from tennessee had such high prayhigh praise for the pr. e.d.a. supported 7,000 jobs in tennessee. but in support of his previous support, he voted to kill this worthy legislation anyway. he's not the only republican whose words don't match their actions. his counterpart, the senior

,,

bill tha. mr. president, i ask unanimous consent to display a chart with a picture that may be a little larger than normal. the presiding officer: without objection. mr. akaka: as a former educator, i understand the critical role of education, not just to the life of a young person but also to the future of a culture and a community. for too long the native people of this country have lived with

a substandard education system that lacks cultural relevance and is burdened with administrative challenges and severe underfunding. three major reports by the federal government on native education since 1928 have demonstrated little, if any, improvement in the education of native people in the past 80 years. this ailing system is the result of some of the waist education outcomes in the country. on average, in the states with the highest native populations, the graduation rates for native students are lower than the graduation rates for all other racial ethnic groups, hovering well below 50%. we can no longer tolerate this,

especially because our federal government has a unique trust obligation to provide a quality education to its native people. native languages and cultures are the roots of all native peoples and to cut those roots is to inherently harm the native peoples. the c the comprehensive legislation i'm introducing today puts forth a new vision of native education, one that is grounded in culture, language and local community control. the bill provides for many new access opportunities for tribes to be partners in their own education system and paves the way for innovative language and culture based instruction programs. additionally, it provides much

stronger accountability by agencies to native communities for the administration of the children's education. provisions of this bill are the result of consultation and input with a wide range of american indian and alaska native and native hawaiian stakeholders. the introduction of this bill is only the beginning of a dialogue about this new vision of native education. we will continue to work with our native stakeholders to improve this bill and ensure that it builds strong roots and meets the unique needs of our native students. i urge my colleagues to join me in supporting the passage of this legislation. mr. president, i ask unanimous consent that the text of the bill be printed in the record.

the presiding officer: without objection. mr. akaka: and, mr. president, i i introduced the college life act yesterday, which stands for college literacy and finance and economics. my bill is a response to the dire need in our country for greater financial literacy among young adults. financial literacy is an empowering skill. those who have a sound understanding of personal finance and economics are better prepared for the pivotal moments in life where decisions about money must be made. for many of us, financial independence begins during or immediately after college and brings with it new opportunities and challenges.

as young adults, we make choices about purchasing a car and buying with credit cards instead of cash. from then on, financial choices increase in cost and magnitude. the financial decisions we make as young adults determine whether we go through life on sound financial footing. given the tremendous importance of my -- an early childhood financial choices and actions, it is troubling how unprepared young adults are for these challenges. too few students have opportunities to learn about personal finance or economics before they enter college. a recent survey by the council for economic education found that only 21 states require

students to take a class in economics as a requirement for graduation. only 13 states require a course in personal finance. furthermore, parents are often unreliable sources of financial education because many are financially illiterate themselves. even as we acknowledge widespread financial illiteracy among young adults, we allow students in high education to take on alarming levels of debt during college. borrowing to pay for school has become the norm. two out of every three students receive some type of financial aid at for-profit colleges. 96% of students borrow to pay for school. when students graduate, they have significant debt with the

median debt level being over over $23,000. meanwhile, the average student credit card balance rose from around $1,400 in 2002 to $2,000 today. given what we know about the lack of student financial literacy, this is not surprising. mr. president, the increase in federal education and lending and student debt can be interpreted positively. i'm happy to see young people going to college in numbers that i never managed when i graduated from the university of hawaii in 1952. college is still a steppingstone on the path to becoming future leaders. however, for millions of others today, college simply and rightfully represents the opportunity for better lives for themselves and their families,

but the rising cost of education is a reality that we must address. mr. president, the college life act begins to address this void in young adult financial education. it would provide financial literacy counseling to all college students who take out federal educational loans when they begin and leave school. first disbursement of a student loan and departure from schools are two-timely opportunities for young adults to learn the importance of responsible financial behavior without those lessons coming at their own expense. financial literacy counseling under the college life act would teach the five financial education core competencies, and they are earning, spending, saving, borrowing and

protection. college life act financial literacy counseling would complement existing loan counseling requirements. i want to thank congresswoman sheila jackson-lee for joining me as a house sponsor of this bill. i also want to thank my colleague, senator harkin, for lending his expertise in the area of student debt in higher education, including at-profit colleges. i call on my colleagues to join me in support of the college life act and other efforts to improve financial literacy in america. mr. president, i also have a longer statement and ask unanimous consent that it be printed in the record. the presiding officer: without objection. mr. akaka: thank you, mr. president. i yield the floor.

mr. bennet: mr. president? the presiding officer: the senator from colorado is recognized. mr. bennet: thank you, mr. president. i rise today to implore my colleagues and implore the negotiators that are working on this budget issue to come to a comprehensive solution that meaningfully addresses our deficit and our debt. mr. president, if you -- if all you knew about our politics was what you see on the television at night, you would think that we were committed to an endless stream of invective, of name calling, of division, that we had absolutely no interest or desire to solve the nation's problems or solve the nation's challenges, and you would be right sort of to give up all hope that we could actually honor the heritage of our parents and our grandparents and make sure that we are not the first generation of americans to leave less opportunity, not more to our kids and our grandkids. that's what you might think if all you knew about our country

was what you saw on the tv at night. fortunately, i have had the privilege, as has everybody in this body, to travel my state and to learn that actually the american people are nowhere near as divided as washington, d.c. or as what you see on the television at night. in fact, we share an awful lot in common in my state of colorado, whether we're republicans or democrats, independents, and part of that is because we're going through the worst -- coming out of the worst recession since the great depression. by the end of the discussion i was having during the campaign over the last couple of years, there were about four things that people thought might be a good idea. they thought it would be good to have an economy in this country where median family income was actually rising instead of falling, that we were creating jobs in the united states instead of shipping them overseas. they thought it would be a good idea if our energy policy did not require us to send billions of dollars a week to the persian gulf to buy oil. they thought it would be a good idea and as a former school

superintendent, i agree with them, a good idea if we were educating our kids for the 21st century. and they thought it would be a good idea if we actually were willing to make some hard choices to deal with our debt and our deficit. and there is a lot of disagreement around here that i don't really understand, but in colorado, the way they would like us to do that is that they would like to see a comprehensive plan that materially addresses the problem. they know we can't solve it overnight, but they would like to see us materially address the problem. they want to know that we're all in it together. they are not interested in the washington game of whose ox is going to get gored. they want to know we're all in it together. they want to know that all of us have something to contribute to solving this problem. they emphatically want it to be bipartisan, which is good because we have a divided congress now and it needs to be bipartisan to get this work done, and the reason is that they don't trust either party's go it alone strategy on this. they are right, i think, to

believe that we're better off compromising on a set of comprehensive proposals than continuing to fight. i would add a corollary to it which is that whatever we do, better satisfy the capital markets that their paper is worth what they have paid for it because if they are unsatisfied, we're going to be in an interest rate environment that is going to make all of the discussions that we have had about cuts seem trivial in terms of effect on our deficit and our debt. and then i come here and we have these phony conversations about solving the problem. we had a discussion, mr. president, you will remember, about whether we ought to shut the government down. i did the math on the bid and the ask spread that divided the two parties over whether we were going to shut the government down, and that math equaled about four cents on the $20 meal at applebee's. it is like you and me, mr. president, fighting over that four cents because we couldn't figure out how to pay the bill. it would be like the city of

alamosa in my state in the valley where ken salazar, my predecessor, came from. it would be like the mayor saying we can't agree on on $20,000, so we're going to shut the government down, we'll not pick up your trash, we'll not educate your kids. the american people should know that was what that debate was about. now we come to the debt ceiling debate where people are saying we're not going to vote to raise the debt ceiling, and somebody in the town hall said to me the other day, michael, don't you know that me and my neighbor are having to figure out how to pay as we go? we're having to figure out how to pull in our purse strings to make sure that we can afford to do what we need to do? and i said i absolutely agree with you. they said well, why aren't you guys showing the same restraint? i said we need to show the same restraint, but it's -- that's not about the debt ceiling. the debt ceiling is about bills we have already in-- incurred. it's not about cutting up your credit card. it would be great if it were. that's not what it's about. it's not about saying i got a

cable bill this month and i'm just not going to pay it. i got my mortgage bill this month and i'm just not going to pay it. that's not fiscally responsible. in fact, do you know what happens to people who do that? their interest rates go up, because lenders say to you you're not a good risk because you didn't pay your mortgage on time. you're not a good risk because you didn't pay your cable bill on time. that's what our lenders are going to say to the federal government federal of the unites if we're willing to jeopardize the full faith and credit of the united states. it's just irresponsible, fiscally irresponsible, politically irresponsible for us to do that. now, in this context, we are having a debate about dealing with the fact that we now have a a $1.5 trillion deficit and a a $15 trillion debt. by the way, i would settle on the debt ceiling, at least this senator would settle for raising it just the amount that the ryan plan would increase our debt. i would be happy to -- the ryan

plan, which is the house republican plan, raises the debt by about $5.4 trillion. everybody over there voted for it. a lot of people over here voted for it implicitly. therefore, they are suggesting the debt -- the debt ceiling ought to be raised by at least that amount, and i would be happy to support that or cosponsor that. but what i really would like us to do is come together in a comprehensive way. mike jones from nebraska and i circulated a letter on march 15. mr. president, i'd like to enter that into the record. the presiding officer: without objection. mr. bennet: we sent it around to people. it was a letter where the president said that specifically -- quote -- "we hope that the discussion will include discretionary spending cuts, entitlement changes and tax reform." a comprehensive plan. 64 senators signed that letter. that's a majority, more than a majority of the senate. it's more than the 60-vote threshold necessary to pass legislation around here. a majority of republicans and a majority of democrats

recognizing what is blindingly obvious to the american people, which is that we need a comprehensive plan because the math doesn't work otherwise. and we need people at this point of good will to come together and say, we need this we're not going to be able to -- we understand that we're not going to be able to solve this problem if we continue to fight with each other. we're not going to be able to solve this if we continue to pretend that there's some magical mathematics out there. and people ask me sometimes what they can do to help with this discussion. and what i say to them is, they ought to be holding the people in this body to the same standard that they hold our local officials back in colorado to that superintendent or mayor who never in their wildest dreams would think they'd phony

up the math, or sorry we're going to destroy our credit rating so you end up spending more on interest than on the services that you care b our job is to fix this profnlt it is going to take people on both sides of the aisle to think differently about what's poabl possible. my own view that the deficit and debt commission gave us a road map here. it was a bipartisan group. the final result got the vote of dick durbin, one of the most liberal members of the democratic party, and tom coburn signed on to a plan that said, let's take a quarter of it from discretionary spending, a quarter of it from entitlements, a quarter of it from interest savings and let's get a quarter from tax real estat reform. that sounds about right to me. if we could produce a plan that satisfies the test that i mentioned earlier -- and i could go back to the town halls of

colorado. i guarantee you that when people would say is thank you for finally working together, thank you for producing something that's credible. let's now move on to the other business in this country to make sure we can compete and win in the 21st century. so i would say that i hope to the extent that anybody sling to the floor today that they would think again about the importance of using this moment to create a comprehensive plan to figure out what the compromises are i for one am happy towork with anybody on either side of the aisle to make sure we get this done. i see that the chairman of our budget committee is here, mr. president, and i want to thank him for his efforts on the debt and deficit commission amends also for the work that he's been -- and also for the work that he's been doing with the gang of six trying to produce a comprehensive plan that actually addresses the problems. with that, i yeefd. thank you, mr. president. the presiding officer: the senator from north dakota is

recognized. mr. conrad: i want to thank the senator from colorado for his remarks and for his leadership. he has been right on point with respect to what has to be done in this country to get the debt threat under control. and make no mistake, we do face a debt threat of ominous proportions. yesterday the congressional budget office again warned us, debt crisis looms absent major policy changes. and if you go to the end of this article that was from the associated press, mr. andrew tai lerks respected writer, c.b.o. says the debt increases the probability of a fiscal crisis in which investors lose faith in u.s. bonds and force policy-makers to make drastic spending cuts or tax hikes. mr. president, that is where we are headed. if we do not respond. and it is going to require a bipartisan response, republicans

and democrats, because republicans control the house of representatives, democrats control the u.s. senate, and there is a democrat in the white house. so when republicans, as i just heard on this floor, blame it all on the president, that's not going to work. that's not going to work. because republicans can block anything in this chamber and republicans control the house of representatives, so guess what? they're going to have to join democrats and be responsible, and being responsible means doing some things that are tough. republicans and democrats are going to have to do some things that are tough. why? because we're borrowing 40 cents of every dollar we spend. mr. president, that cannot be continued much longer. mr. president, if you look at the historic relationship between spending and revenue, here it is going back to 1950.

the red line is the spending line. the green line is the revenue line. and what you see is spending as a share of national income is the highest it has been in 60 years. revenue is the lowest it has been in 60 years. when i hear my republican friends say this is just a spending problem. it is in part a spend problem. spending is the highest it's been in 60 years or very close to t but revenue is the lowest it's been in 60 years. so let's get real. let's get o honest. this is a spend problem and a revenue problem. it is the difference between the two that leads to record deficits and a debt that is spiraling out of control. here's what the head of our armed forces said, the head of

our armed forces, admiral mike mullen, chairman of the joint chiefs, last year at about this time. "our national debt is our biggest national security threat." colleagues, are you listening? are you listening? we are moving at warp speed toward a fiscal crisis. nobody can tell us when it will happen. what everyone is telling us is that it will happen. mr. president, here's where we are. this is the gross debt of the united states. we're now the end of this year going to be over 100% of our gross domestic product. that is going to be the gross debt of the united states, all the bills that we owe. and this line, this black line, is the 90% threshold line. why does that matter? because, mr. president, we have just had the definitive economic study done on deficits and debt

and economic growth. it was done by professor carmen reinhart at the university of maryland -- no longer there, but she was at university of maryland -- and ken rogoff. "we examine the experiences of 44 countries spanning up to two centuries of data on central government debt, inflation, and growth. our main findings is that across both advanced countries and emerging markets, high deb debt/g.d.p. levels (90 where) are associated with notably lower growth outcomes" for the future. so this isn't just about numbers on a page. this is about the future economic prospects of our nation. a failure to act will consign us to a more limited future. fewer jobs, less economic growth, less economic activity,

a weaker position for the united states in the world. that's where we are headed, and we have been warned repeatedly. here's the s&p, the major rating agency, "signals top credit rate something in danger, stoking political battle on deficit." "u.s. warned on debt load." so, mr. president, nobody in this chamber, nobody across the capitol in the house of representatives can claim they didn't know what was coming. we have been warned, and we have been warned repeatedly. what happens if we don't act and there is a reaction in the interest rate environment for the united states debt? i'd remind my colleagues, a one percent interespercent increaset

will add $1.3 trillion i to the debt in the next ten years. so people say, we're just not going to extend the debt. we're not going to extend the debt limit of the united states. you know what happens? the creditors say, oh, really? well, we're not going lend you more money then. you know what happens then? interest rates go up in order to attract other lenders. and wha what happens? every one percent increase in the interest rates adds $1. 3 trillion to the debt in just ten years. here is the remarks of ten of the previous chairs of the president's council of economic

advisors. headline "unsustainable budget threatens nation." this is their conclusion. the top economic advisors to former presidents, democrats and republicans, the previous ten unanimously said this: "there are many issues on which we don't agree, yet we find ourselves in remarkable unanimity about the long-run federal budget deficit. it is a severe threat that calls for serious and prompt action. we all strongly support prompt consideration of the fiscal commission's proposals. the unsustainable long-run budget outlook is a growing threat to our well-being, further stalemate and i action would be irresponsible." mr. president, i served on that commission. there were 18 of us. 11 of us agreed to the recommendations. five democrats, five

republicans, and one independent. that proposal would have reduced the debt from what it would otherwise be by over $4 trilli trillion. mr. president, five democrats, five republicans, and one independent -- 11 of the 18 agreed to support the recommendations, and we cut spending, we cut domestic non-defense spending, we cut defense spending, we took on the entitlements, and, yes, we raised revenue by $1 trillion over the next ten years, not by raising tax rates. in fact, we cut tax rates, but we still got more revenue because we expanded the tax base by reducing tax expenditures that are now running $1.1 trillion a year.

over the next ten years, the tax expenditures of this country are going to be $15 trillion. let me repeat that. the tax expenditures in this country over the next ten years, special loopholes, deductions, exclusions, all of the gimmicks that are in the code, $15 trillion. mr. president, not only did the fiscal commission come up with a recommendation of about $4 trillion, every other bipartisan group that has been made a recommendation has called for debt reduction of about $4 trillion over the next ten years from what it would otherwise be. the fiscal commission, the bipartisan policy center, the american enterprise institute, the center for american progress, the heritage foundation, the roosevelt institute -- all of them saying, we need to get this debt down.

mr. president, here's where we're headed, according to the congressional budget office. this is not the gross debt. this is the publicly held defnlts it's headed for 233% of the gross domestic product if we pail to act. if instead we adopt the commission proposal, you can see we'd actually work the debt do down, the publicly held debt, to 30% of g.d.p. mr. president, every part of the budget has to be scrutinized and has to generate savings. here's what's happened to defense spending since 1997. it has gone straight up from $254 billion a year to $688 billion a year. mr. president, secretary of defense gates said this. "... the budget of the pentagon

almost doubled during the last decade. but our capabilities didn't particularly expand. a lot of that money went into infrastructure and overhead and, frankly, i think a culture that had an open checkbook." mr. president, i think he got it right. and when we look at this growing debt, where did it come from? "the washington post" just had this report on may 1. "the biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. together, the economy and tax bills enacted under former president george bush and to lears extent by president obama, wiped out $6.3 trillion in anticipated revenue. that's nearly half of the $12.7 trillion swing from projected surpluses to real debt."

mr. president, if we look back on the five times we've balanced the budget in the last 30 years -- 40 years, revenue has been close to 20% of g.d.p. 19.7% in 1969. 19.9% in 1998. 19.8% in 1999 20.6% in 2000. 19.5% in 2001. where is revenue today? 14.5% of g.d.p. and our friends across the aisle say it is only a spending problem? let's get real. it is a spending problem and it is a revenue problem. let's be honest with the american people. mr. president, martin feldstein, the distinguished conservative economist, said this -- "cutting tax expenditures is really the

best way to reduce government spending. eliminating tax expenditures does not increase marginal tax rates or reduce the reward for saving, investment or risk-taking. it would also increase overall economic efficiency by removing incentives that distort private spending decisions. and eliminating or consolidating the large number of overlapping tax-based subsidies would also greatly simplify tax filing. in short, cutting tax expenditures is not at all like other ways of raising revenue." mr. president, mr. bernanke, the chairman of the federal reserve, has said this, and i will conclude on this point. "acting now to develop a credible program to reduce future deficits would not only enhance economic growth and stability in the long run, but could also yield substantial near-term benefits in terms of lower long-term interest rates and increased consumer and

business confidence." mr. president, this is a defining moment for our country, a defining moment. we can either continue to run headlong toward a debt crisis or we can join together, republicans and democrats, in a comprehensive plan to get our debt under control. that will require a comprehensive plan, one that addresses spending. spending must be reduced, but it needs to be reduced when this economy is stronger. that's what every one of these bipartisan commissions has concluded. yes, spending has got to be cut but not right this minute. it's got to be part of a plan that assures it will be cut, and

it's got to be every part of spending. domestic discretionary spending, defense spending. yes, the entitlements have to be right sized, and we have got to have additional revenue. given the fact, the simple fact revenue is the lowest it has been in 60 years as a share of our g.d.p. far lower than it has been in every one of the five years we have balanced the budget out of the last 40. mr. president, i urge my colleagues on both sides, on both sides. now is the time for principled compromise. now is the time to come together to put in place a plan that deals with this debt threat. fundamentally and assuredly. we have got that opportunity.

we should not let this opportunity slip by. i thank the chair and yield the floor.

a senator: mr. president?

the presiding officer: the senator from south dakota is recognized. mr. thune: are we in a quorum call? the presiding officer: we are not. mr. thune: mr. president, i would ask unanimous consent to enter into a colloquy with my republican colleagues for up to 20 minutes. the presiding officer: without objection, so ordered. mr. thune: mr. president, as we all know, the most important issues facing our country today are the economy, job creation, the national debt and excessive government spending. one of the things that is having a huge effect on job creation and the economy right now is regulation. the administration continues to overreach and overstep in the implementation of dozens of new regulations, be it the e.p.a.'s regulating greenhouse gases or the d.o.t.'s recent proposal that would require commercial driver's licenses for farmers who drive tractors. and these oversteps have real consequences in the form of jobs. take, for instance, mr. thomas clemens from youngsville, louisiana, who is testifying today in front of the senate health, education, labor and

pensions committee. mr. clemens is a small business owner since 2008. he owns oil field c.n.c. machining with his wife and they produce metal parts and systems for offshore oil rigs. his run-in with our overreaching administration started after the tragic 2010 b.p. oil spill with the president's decision in may of 2010 to enact a six-month moratorium on new oil drilling in the gulf. his business continues to struggle today because of the department of interior's decision to slow walk new drilling permits. before these actions, he had a thriving small business that not only provided for his family but also for his employees. today they are barely staying afloat and will likely close unless the administration changes course and actually begins taking steps toward recovery instead of just continued rhetoric. another big drag on the economy is the amount of spending and debt. just yesterday, the congressional budget office released their long-term budget

outlook. this was certainly sobering reading. they pointed out that under the alternative fiscal scenario in 2024, interest costs, social security and major health spending would exceed all of the revenue coming in to the government. the need for action is clear. the congressional budget office states that these levels of debt cause incomes to be -- will cause incomes to be between 7% and 18% lower in 2035 than they would be otherwise. another study by economists reinhart and rogoff found that a debt -- i would emphasize, mr. president, that we are presently at 95%, but countries with a debt to g.d.p. level greater than 90% grow at one percentage point less than they would otherwise. in other words, when you're carrying this kind of a debt load, 90% to g.d.p. for a sustained period of time, you're

bleeding about 1% of economic growth every single year. as we know from the president's own economic advisors, a 1% reduction, 1% drop in growth translates into about a million lost jobs. now, one of the places that we see that have been really hard hit in our country by the downturn is the state of ohio. my colleague from ohio, senator portman, is here and i would be interested perhaps in hearing from him on whether he has seen the evidence of the recovery that's promised by the administration or does his economy in ohio still reflect an economy that's held back by excessive regulation, debt and spending. i would be interested in the senator from ohio's perspective on that particular subject. mr. portman: first of all, i thank my colleague from south dakota for -- thank you, mr. president. i thank my colleague from south dakota for coming to the floor today to talk about the economy

and jobs. it's clearly the top issue on the minds of folks in ohio. no, the ohio economy is still hurting. we're not creating the jobs we hope to create. if you look at it nationally, there are now 14 million americans who are out of work and more than a million want to work but have given up hoog for work. you know, when you look at what's going on out there, you add the 8.5 million americans who are getting by with part-time jobs, even though they would like to work full time, that's about 23 million americans suffering from the lack of the full-time job that they want. so this unemployment issue continues to be the number-one issue in ohio and nationally we have got to address it. you talked a little today about some of the ways that we need to approach it including the regulatory overreach and its impact on jobs and small businesses, but let me talk about even a deeper concern in ohio, and that's the length of time people have been out of

work. the average unemployment now is 40 weeks. that's about nine months. it's nine months of stress, nine months of uncertainty, nine months of wondering how to make ends meet. this is, i'm told, the worst statistic in terms of length of being unemployed that we have had since the records were kept. so it is not just about the terrible unemployment numbers. it's a fact that when you have been out that long, you lose some of your job skills, you have a gap in your resume, it's harder to get a job. this is not what was promised, by the way. if you look at what the president and his economists promised when the stimulus was passed, they said that unemployment today would be about 6.7%. instead, it's over 9%, 9.1%. so it hasn't worked. the president has called it a bump in the road. i unfortunately think it's a lot more than that. the chairman of the federal reserve talked about this yesterday, that he is very concerned now about some of the economic projections he thinks

that we are -- projections. he thinks that we are not in as good of shape as even the projections which are not very optimistic show. 1.8% which was the growth in the first quarter. at this point in the last deep recession we had, the growth was 7%. on the spending side, this chart is interesting because it shows federal spending as a percent of the economy, which as we all know has gone up significantly, and part of that is because of the stimulus package and then the unemployment rate. and unfortunately, when you look at this, there has not been an increase in spending and a decrease in unemployment. there has been a decrease in spending and an increase in unemployment. so i think this simple notion that you can't spend your way to prosperity, which is a commonsense notion that most americans agree with, has been proven to be true, unfortunately. the stimulus package did not lead to the kind of progress the president and his team predicted, and we're all paying the price for it. so instead we need to approach

it in a different way. again, as you mentioned earlier, senator thune, part of the answer to this is dealing with the regulations, dealing with our tax system, dealing with these high energy costs, dealing with the high health care costs which do impact employment, getting the economy back on track through smart pro-growth policies. i know that you also have done a lot of thinking about how do we get out of this mess that we're in instead of the spending, but i don't know if you have any thoughts on what you think about what the debt and the spending is doing to our economy. you mentioned the rogoff and reinhart study showing that our economy would be growing much faster than it is now but for this big overhang of deficit and spending and debt, but i wanted to know, senator, if you had some additional thoughts on that. mr. thune: i want to say to my colleague from ohio -- and i appreciate just his observations regarding his state, which is a pivotal state when it comes to whether or not we are going to see the economy recover.

obviously, a state that feels the impact right away when you -- you have a down economy and job losses and all the -- the negative things that go with that. and so i appreciate his perspective on it, and obviously i wish i could say that this administration and their policies had made the situation better. unfortunately, the evidence overwhelmingly points to the president and his policies making this situation worse and much worse. for example, as you mentioned, non-defense discretionary spending, which is the part of the spending that the president has to sign into law every year, went up 24% since took office. which is an astounding amount particularly when you consider the fact that inflation at that time -- over that time period was about 2%. o. so government spending was growing at about 10 times the rate of inflation. what's even more amaze something that this doesn't include the

increases in discretionary spending attributable to the stimulus. the stimulus is about $1 trillion of spending that is -- that has the senator from ohio pointed out was supposed to bring the spending down. there is no correlation between additional spend and job creation. i think we've demonstrated that. that spending level does not include the spendle on the cash for clunkers program. it doesn't include unoff set increases in spend on mandatory programs that have been signed into law like medicaid, trade adjustment assistance, and it doesn't include a variety of different spending increases that the president has fought for but so far been unsuccessful in passion. because of this exorbitant spending, we are now at a point where literally 40 cents out of every dollar that the federal government spends is borrowed. while most people would look at this situation and say it is time to do something about it to improve the situation, the

president clearly punted. over the medium and the long term, his proposed budget makes the situation even worse. in fact the proposed fiscal year 2012 budget would spend -- this was the president's proposal -- would spend $46 trillion over the te ten-year time periods, ad $9.47 trillion to the debt and raise taxes by $1.6 trillion. so their prescription continues to be more spending, more borrowing, and higher taxes. so the question is, i think, is this helping our hurting our economy? if you look at a recent bloomberg poll, it found that americans think that the debt is a major reason why our unemployment rate is so high. so the answer from the american people is clear. and i guess what i would ask of my colleague from ohio -- and he and i have worked together on some ideas on how we can get the economy growing again and create an environment conducive to job

growth -- clearly getting spending under control here is a huge factor in that, and he's pontsed -- pointed out, there are lots of -- there are lots of research out there that demonstrates the connectivity between spending and debt and the economy. i would simply add, too, the rating agencies have all weighed in on this -- standard & poor's, moody's, finch. they said, if it led to a downgrade in our credit rating -- lots of things about spend and debt clearly have a profound and negative impact on our ability to grow the economy and create jobs. but i'm interested in the senator from ohio has been a great leader on getting out there in front and talking about things, real solutions that would lead to job creation in this cufnlt and i'd be interested in hearing his thoughts about some of the things we might be able to do that clearly are not being done today and frankly things that i

hope would be contrary to policies being put forward by this administration which are costing us jobs. mr. portman: yo you're right. there are a number of things that can be done. there is no reason this can't be done on a bipartisan basis. i just left a hearing where we talked about regulations, its impact on the economy. today the cost of regulations to the economy, hitting particularly small businesses, is about $1.75 trillion. that's more than the i.r.s. collects in income taxes. and there were democrats and like talking about proposals, concerned about the administration's continued regulations. if you look at the facts there are more and more regulations that have a bigger and bigger impact. here in washington it's tough to get this under control without change the law, in my view. so we need to have a better process in the agencies to force them to look at cost-benefit analysis, to force them to use the least costly, least burdensome alternative.

i talked about some legislation that we introduced in that area today. so there are some things we have to do. to your point about the impact of this debt and deficit on the job front, you're absolutely right. and this poll you talked about where 65% of americans think the debt and deficit is a major factor in high unemployment, they're right. the study you talked about said that if the debt gets past 90% of our comirks it's stivmented to cost about a million jobs. here is where we're today 2010, 93%. we're a now at about 100%. we'll be at 112% next year. this is what's happening. we're going into exactly that period where our debt is bigger than our whole economy. and this study by the way is based on looking at countries all around the world who have gone through this experience, including countries in europe that are going through this now, and seeing wha what the impact n jobs.

talked about repletions a second ago. that's certainly one of them. my hope is that this senate can vote on sensible regulatory reform and soon. the story you told earlier about the oil and gas industry, we see this played out all over. recent proposed regulations from the e.p.a. on emissions from power plants in terms of mercury, all of us want clean air. the question is how do you regulate? these particular regulations, very onerous are going to have a big impact on jobs in my state. there is a study coming out a couple weeks ago saying it will result in thousands of jobs lost and a few power plants being shut down and electricity costs increasing 10% to 15% in our state. we can't afford that. we want to keep our costs down. there's more than that. there's the tax code. we should again as a body here and in the house and the administration reform our tax code to make it simpler, to make it more progrowth, and it can be done. economists across the spectrum say, look, this current code is

a mess. it doesn't work because you're encouraging businesses to make investments, allocate their resources based on some tax-motivated reason rather than a business reason. by getting rid of the preamps in the code, sort of clearing out the code, you could, as happened in 1986, get more economic growth through the tax code simplification and reform. so this is something that i think the time is here. the president's fiscal commission recommended this when they said, how do you look at the next 20 or 30 years and come up with a way to deal with this deficit and debt. they said, you have got to have economic growth as part of it. part of what they recommended was tax reform. making our workforce more competitive. today we do spend money at the federal level on workforce development and yet it's not spend very officiately. so there's some organizations that do it better than others. we should take those practices and apply them generally. there are now nine different agencies and departments that are engaged in looking at how to

improve our workforce for the 21st century. it is a federal program that when it connects directly with businesses works. when if doesn't it doesn't work well. there's all kinds of opportunities to reform that program. this should be bipartisan. i hear about what's working, what's not working. flexibility is the key thing i hear. these federal programs have a lot of red tape and bureaucracy attached to them. we also need 0 to open up markets for our products. every other country is engaged in it. we've been taking a back seed. this is why we need to be much more aggressive to forcing our countries to open their markets to us. if we don't do that, we don't have access to 95% of the consumers in the world. the president says if you just were to pass these three trade agreements out there you would

create 350,000 new jobs. that's something we ought to do. somehow we can't seem to get through the process of getting these agreements, thee three relatively small ones that we've already done, through the process. we need to do that and do that right now because of this economic crisis that we face of unemployment and long-term unemployment. this would really help in combination with a more competitive workforce. on energy, another part of our seven-part plan, we've got to use our own resources. natural gas in places like ohio and the dakotas -- south and north dakota -- have a lost natural gas untapped. we have a lost technology to use. we need to use that and use it now and we can help us get less dependent on foreign oil, a dangerous dependency we have now. and finally, health care costs.

there are some commonsense things we can do to get health care costs down. including stopping the frivolous lawsuits we all pay for through sensible medical malpractice reform. there are some states that do it well. it should be done on a national level, to get the costs down, allow people to buy insurance across state lines. force the insurance companies to compete for our business. this is all part of a commonsense approach. seven-point plan. get spending under control, reform the tax code, increase jobs through exports, while enforcing our trade agreements, power america's economy with our own energy, and have again sensible solutions to getting costs of health care down which will help create jobs. all of these things are proposals i know that you, senator thiewrntion have been working on, and i appreciate that. i guess i would ask you a question, if you are, as you said, focused on getting at this issue, do you think that we have a problem on the debt and the deficit because of the lack of

revenue through taxation or is it through overspending? do you have any thoughts on that or any suggestions as to how we deal with, again, these historic deficits an debts that we face? mr. thune: well, i would just -- i appreciate -- that was a great prescription, by the way, i think the senator from ohio has hit upon all the issues that are relevant and important if we're going to get the economy roaferg and growing and creating jobs again. and so talking about getting trade deals done and energy policy that relies upon american energy production, keeping taxes and regulations low and common sense when it comes to the area of regulation and getting spend and debt under control -- those are all things that i think are part of a solution that will grow the economy, and i think what i would say to my colleague from ohio, with regard to the issue of 25678in taxing and spe, there are a lot of people who think we can somehow get additional revenues, raise taxes and solve a lot of these

problems. that would be counter to creat creating jobs and growing the economy. if we looked at taxes as a way to deal with the deficit and debt issue, i think most americans believe -- and i believe they are right -- that this is overwhelming lay spending issue. if you look at our 40-year average for spending up until 2008 it was about 20.6% of our g.d.p. and obama's budget would have us spend about 24.3% of g.d.p. and so if you look at what we need -- where we need to focus on, i would say to my colleague, it is clearly in the area of getting spend and debt under control and dealing with that issue as opposed to the issue of revenues. so i look forward to working with him on these issues, and i hope that we can get some policies put in place that will grow the economy and get people in this country back to woncht. the presiding officer: the senator's time has expired. mr. isakson: mr. president? the presiding officer: the

senior senator from georgia is recognized. mr. isakson: how much time remains? the presiding officer: two and a half minutes. mr. isakson: could i ask unanimous consent that that be extend by three minutes. the presiding officer: without objection, so ordered. mr. isakson: thank you, mr. president. i come to the floor to talk about the number-one issue in the united states of america, and that's jobs. also to talk about an admonition i got from my father. he said, always judge a man by his actions, not his words. and i intend to apply that to you as well, him talking to meevment i think all of us should be judged by our actions and not just our words. and i'm very disappointmented in what this administration is doing right now. on the other hand z on the one hand talking about jobs being the most important thing america needs yet every single action is a job killer. let me give you an example. just recently the most recent nominee to be the new commerce secretary of the united states of america is a former director of the boeing aircraft corporation. an aircraft corporation that is now under a suit from the

interim general counsel of the national labor relations board to stop them from opening a new plant that will employ 1,000 people in the state of south carolina, alleging they built the plant in south carolina to strike back at the unions in washington state. when in fact the dream liberian, which is their main airliner, which they're selling and got orders -- tremendous orders for, is being built in washington but they had to expand another plant to et meet the orders. they decided in the interest of the company to have one on the east coast and one on the west coast. they weren't retaliating against anyone. yet the national labor relations board wants to stop 1,000 jobs from on the allegation that it is some type of retribution. the board came out with a new admonition. they are going to change election rules so the new elections instead of taking 38 to 42 days can now have quickie

elections making it much more difficult on mapghts to react to a union vote. all these things are job creerts. i am not here to demagogue yiewngs or demagogue in president. i think fair is faimplet if you say you want to create jobs, don't stop creating jobs. if you say you want the economy to recover, do those things necessary to empower business. the national mediation board is the agency that regulates employment from the standpoint of airlines and railroads. the n.m.b. is 75 years old. for 75 years their rule on a union election in a covered company is that 51% of the number of people employed who would be unionized had to vote for a union to become establishment. summarily, under the new president, that 75-year-old rule was struck to become only a simple majority of the number of people who vote, regardless of how many people are going to be

covered in employment. that was specifically targeted at delta airlines, an atlanta company that became the largest airline in the world, buying northwest and merging the two together. northwest had a union flight attendants. delta did not. delta flight attendants twice rejected unionization. by changing this rule it was specifically targeted to force delta to go from a nonunion shop in flight attendants to a union shofplt even after aggressive change in the law, the flight attendants still voted under the new rule not to unionize. not to be satisfied, the national aviation board filed an action against delta alleging improper activities. i find this very ironic since in the conference committee of which i'm a part of today, we're trying to get a chance for airlines and those covered to be able to have a legal action

against the n.m.b. if they suspect the n.m.b. ruled unfairly. a conference committee report languishes over an issue that would create jobs. my message in coming to the floor is very simple. actions count, woupbts don't really -- words don't really matter. the words don't mean a thing if we're taking words that punish people. it is time for this president, it is time for each of us in the senate, it is time for this administration, it's time for the congress to do what the american people have done, put our shoulder to the grindstone and do things that bring american business back, our economy back and bring jobs back to the greatest country in the face of this earth, the united states of america. and i would note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

morning business is closed. under the previous order, the senate will resume consideration of s. 679, which the clerk will report. the clerk: calendar number 75, s. 679, a bill to reduce the number of executive positions

subject to senate confirmation. the presiding officer: under the previous order, there will be up to 30 minutes of debate with the senator from louisiana, the senator from south carolina, and the senator from nevada or his designee and the senator from kentucky or his designee each controlling 7 1/2 minutes. a senator: mr. president? the presiding officer: the senator from louisiana is recognized. mr. vitter: thank you, mr. president. mr. president, i'd like to close on my czar amendment and encourage strong bipartisan support. mr. president, we have a bill before us about the senate advice and consent process, the senate confirmation process. and inked it would be a -- and i think it would be a tragedy to consider any bill on that subject and not address the biggest issue, the biggest problem with that process that exists now. in fact, and certainly also in the eyes of the american people. and that is the abuse by the executive over several administrations, but culminating in this administration, of

appointing so-called czars as an end run around the u.s. constitution, as an end run around the powers of the senate, the balance of power of advice and consent and confirmation. so, mr. president, my amendment would fix that. it would defund czars and their offices, and it's carefully crafted, it's carefully defined. and it would say that we're not going to allow these czars to operate when they're essentially taking the place and the functions of what should be a senate-confirmed position. again, the language is careful. it's carefully thought out. it's carefully crafted. there are exceptions in the language which are important. i commend all of my colleagues to look at that. but the main point is simple and clear and important. we shouldn't allow any executive, any administration to end run the u.s. constitution,

to end run the senate's important and appropriate role of confirmation advice and consent. so i encourage all of my colleagues to support this amendment. in closing, i want to thank several members who have cosponsored the amendment: senators paul and heller and grassley. and i also want to thank very much senator collins, who's been a leader on this effort as freestanding legislation on the topic, which i support. we have and will consult on this issue until we properly get the job done. mr. president, i reserve the balance of my time. the presiding officer: the senator from maine. ms. collins: i suggest the absence of a quorum. the presiding officer: the clerk will call the roll.

quorum call: ms. collins: mr. president? the presiding officer: the senator from maine is recognized. ms. collins: mr. president, i ask unanimous consent that the quorum be vitiated. the presiding officer: without objection, so ordered. ms. collins: mr. president, i

ask unanimous consent that the quorum be equally allocated to both sides. the presiding officer: without objection, so ordered. ms. collins: thank you, mr. president. and i would suggest the absence of a quorum. the presiding officer: the clerk will call the roll. mr. president?

the presiding officer: the senator from south carolina is recognized. mr. demint: i move the quorum call be suspended.

the presiding officer: without objection, so ordered. mr. demint: thank you, mr. president. i'd like to speak on my amendment which will be voted on in a few minutes. this amendment would strike the director of the bureau of justice statistics from the list of the senate confirmed positions that would be removed from the confirmation process. so i want to explain why this is important because this seems like something that maybe would not be important to pull out from this long list of nominees who no longer need to be confirmed. it's very important that this particular position -- nominees for this position be vetted and confirmed by the senate. it's often said that statistics don't lie, people do, and particularly in this business, we have seen one set of statistics be interpreted and

publicized in totally different ways, and that's why this position is so important. the role that they have is -- is critical, and in a democracy and a free country, one of the most important things to protect is against that risk of the government becoming a propaganda machine, and i just wanted to read here for a second what this particular position does, the bureau of justice statistics be collects, analyzes, publishes and disseminates information on crime, criminal offenders, crime victims and criminal justice operations. very important that this information is acted on by local, state, federal officials, lots of our laws are shaped based on this information.

and statistics are only as valuable as the reputation of the statistician, and that's really what this position is. every member of this body knows how to write a question so that you get the answer you want to get. if we're going to have a bureau of justice statistics at all, don't we want the public to have some level of trust in the data they publish? if we just put some political hack in this position, unfortunately -- and that's happened over administrations of both parties, not necessarily for this position but we know in some positions, it would totally discredit what this person does. so do we want the public to think that they are cooking the books to promote policy ends on issues like gun control or hate crimes or racial profiling, immigration, drug policy and so forth? if we cannot absolutely trust the impartiality of the

management of the bureau, we should abolish it and give the money back to the taxpayers. we know we're $14 trillion in debt, our nation is on the brink of financial collapse, my constituents have no interest in borrowing money from the chinese to fund a bureau to compile crime statistics if we can't trust the numbers. if there is even a hint of bias of a political agenda or of the head of this bureau being friendly to the perspective of whatever party is in the white house, then we should abolish the agency. in the past, those on the right have been suspicious that the bureau of justice statistics has had a bias against gun rights, against first amendments. whether that's true or not, who knows? b.j.s. statistics are used to form policy decisions. if the agency becomes a tool of the party in power, that will no

longer be the case. when james lynch, the nominee for the director of the bureau of justice statistics was asked in his confirmation hearing what the biggest challenge for the bureau of justice statistics moving forward was, he responded. i think the biggest challenges of the bureau of justice statistics moving forward are the perennial challenges to a statistical agency. that is to say to maintain its credibility as an independent federal statistical agency. it's important that we hear that. it's important that americans hear that, and we won't have that opportunity if this position is no longer confirmed. it's not often that you hear a nominee suggest that the number-one challenge he faces in assuming a position is to maintain the credibility and independence of the agency he is about to run. but as dr. lynch said, that is the nature of a statistical agency, and it is precisely the reason why we should not remove

this position from the confirmation process. the questions at the live hearing and the submitted written questions appropriately focused almost sliewfl on this issue of credibility, independence and accountability. how do we protect the director from political influence and tampering by the executive? there was discussion about ways to restructure the office to make it more independent and further reinforce its independent role. there was discussion of moving the director to a six-year term to further reinforce his independence, a proposal that the nominee supports. of course, a six-year term would imply senate confirmation. in every way possible, the committee and the nominee discussed ways to solidify the independence of the position and protect it from political influence. in the context of these discussions, it was once suggested that we remove the position from the confirmation

process. the presiding officer: the senator's time has expired. mr. demint: i ask unanimous consent for five more minutes. two more minutes. the presiding officer: without objection, so ordered. mr. demint: two more minutes. thank you. with all the nominees that are confirmed in the senate with no debate or vote, it would seem that the confirmation process is serving a purpose. first, there are things that happened behind the scenes to vet and review these nominees and their back grounds, but unfortunately as we've seen the president in some cases with what we call czars and other positions and recess appointments have sidestepped that. that has reduced the credibility in these positions. but let me just focus again on this one position. we never want the american government to be accused of being a propaganda machine as we see from governments all over the world.

this one area of statistics where they are disseminating information all over the country that so many respond to needs to be credible and independent, so i would encourage my colleagues to keep this one position in the confirmation process so we'll have an opportunity to make sure that regardless which party is in power, that we have -- we will have a credible, independent voice dealing with these statistics. i thank the president for yielding me a little more time, and i yield back. the presiding officer: the senator from louisiana is recognized. without objection, so ordered. ms. collins: mr. president? the presiding officer: the senator from maine is recognized. ms. collins: mr. president, i just want to indicate my support for the amendment offered by the

senator from louisiana. although it is drafted a little differently than i would have done it, it does address a real problem, and that is when the president, this president or any president creates a new position within the white house that really is duplicative of a cabinet member's responsibilities. when that happens, the result is that we lose our ability to exercise accountability for the policies that that individual comes up with, and let me give you a specific example. e.p.a. is a senate presidential appointee, senate-confirmed position, the administrator of the e.p.a., yet president obama

created a position within the white house where there is essentially an environmental czar, and this individual, carol browner, who has since left, actually negotiated a deal with the automobile industry having to do with emissions. well, the problem with that is it is circumventing the congress' ability to hold accountable the person who is involved in making and coordinating that policy. so what the senator from louisiana is trying to get at is the creation of these unaccountable czars within the white house who are really doing the job that is supposed to be done by a cabinet official, by a

presidentially appointed senate-confirmed official. so i support the amendment and i would yield the floor to senator schumer. mr. schumer: mr. president? the presiding officer: the senior senator from new york is recognized. mr. schumer: thank you, mr. president. before i get into the substance of my remarks, i'd like to ask unanimous consent that notwithstanding the previous order, the vote in relation to the vitter amendment number 4 9 occur at 12:30 and the vote in relation to the demint amendment no 530 occur at -- no 510 occur at 2:00 p.m. the presiding officer: is there objection? the senator from maine. ms. collins: mr. president, i just want to make sure this has been cleared with the senator from south carolina. mr. schumer: it has. ms. collins: thank you. i have no objection. the presiding officer: without objection, so ordered. mr. schumer: it is our intention to set u