coming year's performance. >> given the ostensible inadequacies identified by the ig, why wouldn't we have a little bit less confidence that the compensation programs, bonuses and other compensation given the lack of transparency, lack of clear criteria and policies, lack of written policies, why should we have faith that that's just the ticket, that's what we need to make sure we're getting the right people to manage frank think and freddie? is. >> so it's a fair question, congressman. but the companies themselves disclose the scorecards and the ratings on them. what the ig was referring to was within fhfa, the fh furks a internal review process, these scorecards did not have written procedures as to how that should be done. the ig said we didn't have a process documented, and he's quite right, and i believe that's a proper control system, and we've agreed to put that in place. with regard to the calculations

themselves, this is the ig saying, well, you've delegated to the companies to undertake normal day-to-day operations including calculating pay, but we think with regard to these executives you ought to send an fhfa examiner in there to recheck the calculations that have been done to determine, to determine the pay. ..

does this have to do with distinguishing people who are named executive officers and those that are not and trying to expect privacy rights of people who provided the committee with a great deal of information detailed in the individual executive company and compensation that is being paid. >> would the gentleman yield? >> of course. >> the majority feels you have been generally forthcoming but would you be willing to provide all compensation packages that include bonuses with the names redacted however with if you will numbers that could be referenced when we are going through the skills that. although you are very right, we don't need to know the names of every individual we would appreciate if we could go to compensation levels below the normal 10 k level. that is what the gentleman would like to see. >> we will provide that.

>> i thank the chair. we recognize the gentlelady from new york, miss buerkle. >> thank you to our panelists particularly mr. demarco for being here and lasting this long. i have a few questions. mostly follow-up to the testimony i heard this morning. you mentioned they your testimony and my colleague who left from new york talked-about the need to retain or attract quality employees. that was a justification for these incredible salaries and bonuses but in many instances what we pay people is almost irrelevant. maybe they have a passion for it were uninterested at war they're interested in the greater good. which is it? what should be the motivation for the salaries?

>> those motivations are personal and what i am looking at in terms of overseeing two companies is a need to be concerned that most of those people are concerned with their compensation is but one other difference that makes us not such a clean this or that is to work at fannie mae or freddie mac today, weather executive or secretary, the fundamental risk -- i don't know how long this company will be around or working long term and that is also a very tricky thing for us for conservatives and the ceos to encourage people to stay engaged. >> i would agree with that except for fannie and freddie have the ability -- third quarter losses have gone back to the treasury and made huge requests for additional money so that -- anyway, my thought is we

need to reconsider if it is performance the third quarter losses should be concern to everyone and the american taxpayer. >> i agree with that. this was and the written statement, looking at the corporate score cards and the condition of the company as well as gradual shrinkage taking place at the company. every time if position comes, it is the lower compensation. >> speaking of the corporate scorecard. what do you base the corporate scorecard on? is that based on the have program? >> hampers reflect modifications generally, general loss -- the benefit of not just homeowners

with mortgages but also to reduce losses to taxpayers on troubled mortgages. that is an important element for us. >> i am sure you are aware of the issues with the have program. it is a failed program and not what we should be basing the standard on. [talking over each other] >> i am aware there's a lot of criticism and and certainly the number of modifications is not what the administration projected it would be but i would back out fannie mae and freddie mac had not just undertaken h.a.m.p. modifications but we have been collectively working on loan modification opportunities for homeowners to go well beyond h.a.m.p. which is what is reported h.a.m.p. is that with 800,000 loan modifications. fannie and freddie alone have done just under 1 million permanent loan modifications and

the performance of those modifications has been quite good and lead to reduction in taxpayer losses. we're trying to go beyond h.a.m.p. beyond the limits of h.a.m.p. to offer homeowners a good opportunity respective of the taxpayer. >> i respectfully request you provide -- fare must be a standard compilation of all the standards you are using. if you could submit that appreciate it. in my few seconds that are left many would argue the housing market is the primary reason there was such a financial crisis in 2008. response to that that knee-jerk reaction was to pass dodd-frank which we are hearing from financial institutions, community banks what a difficult and owners and regulatory and reasonable bills this is. and yet fannie and freddie are not included or covered by dodd-frank. probably one of the biggest reasons this crisis occurred was the housing market.

can anyone on the panel explain that to me? why were fannie and freddie left out of the dodd-frank bill. >> i can't explain it but i can say it was a point of some argument in the development or debate regarding dodd-frank. the ability of the administration and the leadership pushing the dodd-frank legislation through the housing market was too unstable and they wanted a different vehicle to focus on housing finance. i say that not to be for or against it but there are plenty who wanted to see fannie and freddie part of the legislation. that is not how the legislative process work. >> thank you. i yield back. >> i think the gentlelady. we recognize the gentlelady from the district of columbia, miss desjarlais. >> mr. demarco. my own confession -- the

profession before i came to the congress already had a bad name when i was a lawyer. i must say i think fannie and freddie have given home ownership of bad name. that is what i am interested in your oversight of your own lawyers. i want to continue -- i was particularly struck by the major law firm you used which new york district court judge, this is really unusual for judge. it may even be a call for someone to go before the ethics committee or the bar, talk about finding falsities contained inside paragraphs inside ten entire position that the firm

had submitted. this was a foreclosure case. the case was federal home loan mortgage corp. and the judge went on to say the misrepresentation here of the material statement was outrageous and the firm had unseated the proper administration of justice. what struck me is the judge said this was not the first time that the firm had been unethical. how could the law firm operate on behalf of fannie and freddie after being sanctioned like that if this was the first time? >> i am not familiar with the particular case you are saying. i can report fannie mae and freddie mac have ceased doing business with this particular law firm. on issues regarding it certainly came to our collective attention

-- >> why was this law firm kept on after being sanctioned? was this considered such to be outstanding for fannie and freddie that you had to have its services? >> i can't speak to the timing. i do know that when this information came to our attention -- >> are you following the firm -- are you following the conduct of the firm? >> we have gone forward from that. fhfa recently directed fannie mae and freddie mac to begin the wind down of their retained attorney networks. law firms around the country are used processed for closures so

this whole approach to doing business this way and direct engagement between freddie mae and -- freddie mac and fannie mae and individual law firm is and a path -- >> that is good news. we understand you had said that the firm would have to me -- i am quoting -- certain minimum uniform criteria. what are those criteria? >> those are the process of being developed. >> could ask for a draft of those criteria when they are completed? when will they be completed? >> there's work actively going on. >> i can't tell you exactly but over the next couple months--we're not just working with fannie and freddie on this but the primary banking agencies because the banking agencies

have been involved in oversight with banks as mortgage servicers have in doing in this area. the law firm actually works for the mortgage servicers so we're trying to get alignment between the standards we believe our approach. here's that bait regulators aligned with us on that so that there is uniformity in the mortgage market with regard to performance expectations and standards for which we are going to hold law firms accountable and so this work is actively under way and what we're hoping for is rather than a disparate set of standards that we can come to one set of standards in which there is better accountability for law firms that are doing foreclosure processing. >> the last thing -- a law firm drives them into further trouble than the american people already find them accountable for. >> will the gentlelady yield? i am trying to understand.

general counsels that you pay effectively 1,000 hours of our respectively. they're working to figure out how to manage what terms. that is why we had to pay instead of $400,000 for general counsel we had to pay $3 million so that they would not know better than this but after the fact they would begin working on standards to do better. >> they have standards written into the contract. they were not identical and with the foreclosure abuses that have been identified, as few firms have done to tarnish the entire industry we are taking appropriate action to remediator that and as a matter of implementing fannie mae and freddie mac as part of the gradual pace in back of the size and complexity of it was my judgment the appropriate step to take was to not have fannie and

freddie continue to maintain this separate relationship with law firms but it was better done and would be better execution of mortgage servicing if it was done through the existing mortgage servicer. >> i thank the gentle lady for yielding and i share the concern that maybe they have reached a better conclusion but interesting that it was government officials who interceded. people who make less than a quarter of a million dollars a year because of failure of $3 million year general counsel and thus so-called private sector. >> the draft the gentleman said was permitted to the ranking member seems important. >> we look forward to seeing it expeditiously. we recognize the chairman of the subcommittee, mr. mchenry from north carolina. >> mr. demarco. has fhfa ever rejected compensation package presented to you?

>> yes. we have had proposals made that said that is not acceptable. >> would you be willing to submit that to the record? >> i will try to find something that appropriate to submit for the record. these are proposals made from the board. i look at them and make determinations. >> has the white house ever been in contact with you about compensation issues? >> under the purchase agreement for treasury support to fannie and freddie, fhfa shall consult the treasury department about executive compensation so this

was done as a consultation, with every executive compensation package, it is send to the treasury department, it is a consultation with the treasury. it is most active in 2009 when we were working with kenneth feinberg who is the -- >> has the white house ever reached out to you? >> i have not had any conversation with the white house regarding executive compensation. >> mr haldeman, has the white house contacted you about executive compensation in your firm? >> they have not contacted me. >> has the treasury? >> no. >> okay. mr. williams. has the white house contacted you about executive compensation at your firm? >> they have not. >> has the treasury? >> they have not.

>> okay. this is interesting because there has been a cry from the president in particular about executive compensation and it is somewhat strange to me that in an area where he could exert influence he has chosen not to. additionally, mr. williams, mr haldeman, it has been mentioned in the press that part of your bonus compensation is tied to your relationship to the h.a.m.p. program the administration has put on. mortgage modification. was reported that 35% of your compensation is tied to when you

get modified through the h.a.m.p. program. is that correct? >> we look at an array of gold under the loss mitigation efforts. we not only look at h.a.m.p. modifications but also a short sale and activities including what we have done to open health centers in many districts and provide counseling to neighbors. h.a.m.p. is one of many metrics that fit into the overall -- >> is that an individual metric or mortgage modification is one of your metrics and h.a.m.p. is within that? >> h.a.m.p. is a modification with a series. one goal with a series of metrics we're looking at. >> what percentage your bonus structure is tied to that? >> the board looks at the totality -- >> i understand the board laid

out these metrics for how you would be compensated. beyond your normal day-to-day compensation if you hit these metrics they would reward you financially. i understand the board created this but you are aware of what that contract will -- what those goals are. are you not? >> correct. >> so what percentage of your bonus compensation deals with mortgage modifications. >> the board evaluates my performance based on the totality of the scorecard. our efforts and credit loss mitigation are an important component of that. they look at the totality of the scorecard. >> i ask an additional minute. >> without objection. >> you are not answering my question. what percentage of your compensation is tied to mortgage modifications?

>> i am answering your question. by compensation is tied to our performance against all the goals and objectives and we are evaluated -- i am evaluated based on how the company does against each of those metrics. the board doesn't assign specific waiting to each individual metric. >> more of a feeling. if you are laid out this metric in your 2009-10 pay, gold number one is your performance to help in the housing recovery, mortgage modifications. goal number 2, interestingly enough is to protect taxpayers. goal number 3 was to measure, that did -- manage and reduce enterprise risks more effectively. interesting quarter how this is to be done with the intent to

repay the taxpayers'. you don't have any waiting to this? if you had zero mortgage modifications that you save the taxpayers a few more dollars you could get the same bonus you currently get? >> if i had not performed all the bowls then i would be held accountable for that. >> the chair would like -- we have a second round. >> this is very important. i ask unanimous consent for the record. the august 31st politico article fannie and freddie dole out big bonuses. >> without objection. we now will start our second round. i am sorry. jackie, i am getting new glasses. before i recognize the gentlelady from california it is the intent of the chair to finish including the second round by 1:00 sharp so if

members start showing up here i assure you are will attempt to reach them all but i will not keep you passed the 1:00. we now recognize the gentlelady from california way down there, way down here. >> thank you, witnesses, for appearing here today. we're talking about accountability. my understanding is mr. demarco makes determinations on the salaries of the ceo of fannie and freddie based on the firm's. do you agree with that? >> yes. >> let me ask mr. williams, at a senate hearing yesterday it was disclosed that fannie failed to contact 60% of all borrowers from loan modification. how would you rate your

performance on that? >> congresswoman, i am not familiar with the facts but we manage our services, our servicers are ultimately responsible for reaching out to the borrowers. we have taken -- undertaken a number of efforts to shore our servicers are held accountable. we have increased -- >> mr. williams, 60% is not accountable. what i am asking you to do through the chair is go back and determine whether or not 60% of your bar worse have not been contacted for loan modification. mr haldeman, it was disclosed yesterday and the senate hearing that 80% of your borrowers, not 60% of that 80% of your borrowers were not contacted for loan modification. are you familiar with that? >> what period of time is that

statistic? >> i don't think it matters. the fact that 80% of the bar with have not been notified is inapt. >> for any period of time the reason to inquire about time period is to see how far in the past that was and whether we're making progress in terms of contract and overtime. >> it is within this year. >> i am sorry. i am not familiar with what was said in the senate but i find these numbers hard to believe. >> with you upon reviewing that provide this information to the committee so that we can assess your performance based on that kind of information? >> absolutely. >> mr. demarco, you have been at a number of meetings that have been scheduled. the gentleman from maryland, mr.

cummings, and we made progress over the last meeting. we already know the h.a.m.p. program only reached twenty-seven million homeowners. there are eleven million underwater with their loan that you provided in relation that would suggest three million of those homeowners fall under fannie or freddie. based on the proposal the president suggested where if these are homeowners who have been paying their mortgages on time with the exception of one in the last year they put it back and refinance their loans for whatever percentage is now which is close to 4%. that was very good. we have not heard from you since. i would like to know what is happening with that program. >> i am pleased to answer that. fannie mae and freddie mac don't have to be underwater mortgages. that is closer to the h.a.r.p.

eligible universe. we had very healthy discussions regarding the h.a.r.p. program and the opportunity to assist borrowers that have a mortgage and loan guaranteed by fannie mae or freddie mac to refinance. when i made the announcement regarding changes to the h.a.r.p. program we said we would have the directive to servicers which is people who served mortgages and originate for fannie and freddie. we have a detailed guidance regarding h.a.r.p. by number -- november 15th. that was yesterday afternoon. now the mortgage community, the letters out there have the updated guidance with regard to how the h.a.r.p. program is working and what the changes are and what it means operationally for them. as of today's they have that information and should be gearing gupta implement the changes to the h.a.r.p. program. >> so you can go to any of the big five that are all of whom in the h.a.r.p. program and ask

them to refinance their loans and if one won't do another one will because the servicers will just make money off of this. correct? >> trying to encourage servicers to reach out to borrowers to let them know this opportunity is available to them. different institutions need different amounts of time to make the operational changes implement the new program but they have known it was coming and the big ones have been all geared up and looking forward to participating. they might be ready at different time periods by expect in the near future there up and running. >> are yield back. >> i think the gentlelady and recognize myself for the second round. are brought up the subject of general tells. mr. demarco -- i will do it this way. mr. williams, what were your legal fees in 2010? outside legal fees? >> i have to check on that and

get back to you. >> mr haldeman. original what were your outside legal fees? >> i have to get back to you. >> mr. demarco. how much are they spending an outside counsel all sorts? >> not off of the top of my head. >> is it fair to say all these lawsuits that justified a $2.9 million compensation package for mr. nordstrom was to manage various lawsuits? question is are these lawsuits being done by his observation or are they done by outside counsel or do you spend $1,000 an hour if he works 3,000 billable hours during the year? do you spend that much to hire outside counsel? >> it is a team effort. >> how much is it? >> bostrom is no wonder employed by freddie mac.

>> the mr acropolis at $2.6 million is not that different. when i hear a team effort i think great. i go to baseball and football games. i am not asking what the whole roster got paid. i am asking -- i don't know if he is the quarterback for the coach but the question is if i go to major fortune 500 corporations with huge patent portfolios pursuing constantly. and they pay a quarter as much or half the amount including stock bonuses. very seldom are they going to get 2 fully 6 but more importantly, i see some sort of direct relation. what i heard earlier is they got -- you guys got swamped in how to administer the job because this was so unique. $2.9 million is a pretty good chunk of money. isn't it enough to get some of the finest former u.s. attorneys to make $160,000 a year who know about suits and litigation?

we have a former u.s. attorney who is a member of this committee and i believe when he went from being a u.s. attorney to be a congressman he got a small pay raise getting to $174,000. your salary seems to be sufficient to keep you overseeing people who make more than ten times would you make. .. >> mr. williams, had he done everything you can do to quickly sell and get back enhance the people who will maintain homes, or to rent to people who can

afford to pay the rent on the homes even if they are the existing, current debtor? >> congressman, we have expansive reo operation that we run. we are constantly looking to move properties. we first rehabilitate the property. we look to preserve the community through the execution. we also work with communities and we more important, we focus on people who want to come in and own the home because that's the best thing you can do for the neighborhood. >> but isn't it true by the time you do a liquidation sale of a home it is typically been in foreclosure, and often unoccupied or even occupied by not the original owners but by somebody they sublet to or someone who simply squatted for year or more, and the home is devalued considerably because of that intervening period? >> we tried to take over the properties as quickly as possible when they go through foreclosure.

much of what we're also dealing with today is the fact that properties are staying in foreclosure for extended period of times which ends up addressing the property. >> had become to congress for poor relief so you can foreclose more expeditiously, or in fact even convert a homeowner who clearly cannot and is not making payments into a tenant? >> congressman, we ask we do have a 10 in place program, which we're renting that properties to about 10,000 borrowers. spent 10,000 out of millions of? >> out of millions spent the question i asked you, maybe i'll go to mr. haldeman because you guys are slightly different in your organizations, do you need, can congress give you greater authority so that, in fact, these sort of expeditious conversions will cause less loss of asset to the community? mr. cummings and i come from very different communities. minds more suburban. is is more urban. the one thing we know is no

matter where our foreclose property is, the entire neighborhood suffers during that entire period but it's not just the asset that the taxpayer is losing on. do you have all the tools, 10,000 rentals into a million homes doesn't sound like the two is working very well. mr. haldeman, do you have all the tools you need so these homes are occupied, maintained, and as productive as possible, regardless of whether not the current debtor is able to make payment? >> mr. chairman, we have worked with cheney and with fhfa on a servicer alignment initiative which i think is going to allow us to more effectively with the problem that you're talking about. that is, have increased pressure on her servicers to do some of the things you're speaking of. >> mr. williams? didn't mean to cut you off. >> two other points. one, the foreclosure laws are state laws. and so if congress is willing to

act, take responsibly for what are currently state laws, that would be one thing. second thing that i would highlight is, we are working with both fhfa and freddie mac on opportunities to further expand reo opportunity, for rental. >> mr. demarco? you don't get paid as much but you're welcome to give a full answer. >> thank you, mr. chairman. it has been a challenge for me as conservator to look at the difficulties that you were talking about, properties that are unoccupied or where there is a squatter. mr. williams point, part of the difficulty is these are governed by state law, and there's some states that have foreclosure processes and foreclosure requirements that are designed to protect the borrower, but at the same token it is imposing greater losses on the investor in these mortgages because it is such a time-consuming and costly process to move these properties through foreclosure, even if the

property has been abandoned or has a squatter sitting in it. it still come in some states, is an enormous length of time to move that through foreclosure to get the property back into the mom -- marketplace. i do believe that is a problem and is not being addressed. >> i'm going to be cognizant and overuse my time even on the second run, but i will tell you on behalf of this committee, if you will bring to us, if you will, the bad actors, the one that you believe, the states are hurting you, not help you, and thus hurting the taxpayer, i very strong believer of the tenth amendment. but when it comes to federal preemption, look, we give the state a lot of money and if we're looking at the very several programs that are helping their citizens, we have every right to say this money will not be as available to, and i'll take north carolina guess i the member present, north carolina, we do to look him in this program is not going to be

unveiled in north carolina unless north carolina gives us the tools to get a reasonable opportunity to, in fact, rehabilitate this. and i would say for one, even in my home state of california, given the choice of not getting the federal dollars or making changes as to freddie and fannie and fha underwritten homes, they would make changes necessary to help your we've never been asked. and so i would help that you would really look, use your general counsels, some of those 3000 hours, and please give to us where the problems are because we are the committee that happens to also on intergovernmental relations, all of the state come all the cities are, in fact, within our portfolio to try to help them help you and help all of us. >> thank you, mr. chairman. i will have the team followed up with you. i will say the state of california has one of the faster processes and i believe that's actually help certain markets in california to recover better and faster. >> thank you. recognize the ranking member.

>> one clarification. the chairman asked for agreements, with regard to cessation of agreements and certain information. and i just want to make sure that we are talking about those executives named in the sec filing come is that i? >> i believe that's what we are talking about. >> number two, you know, a lot of these, you mentioned with regard to those law firms deal with foreclosures, i think he said to firms have given the rest of them a bad name. is that what you said? >> i said a few. >> more than two. >> no, i did not say to. i said a few firms in the industry have given the entire industry a bad name. >> and what, other than changing

the lawyer network system, has anything been done to bring any kind of punishment to these guys? let me tell you something. and my other life i used to represent lawyers, and for some of the stuff lawyers have been in, people would be lawyers, would be suspended from the practice of law and not disbarred. and i find it interesting, they keep working for us. and i just don't understand it. and i just wonder whether we underestimate what they have been doing. this hole robo-signing stuff is, we created a quote normal end of quote, and that's not normal. it's not supposed to be normal. i could go on and on and on. i was just wondering, have there

been any efforts to punish these folks? >> well, mr. cummings, i'm not an expert in this but my general awareness is that this would be something that would be done by state bar associations. what's been puzzling to me, i'm not aware of hardly any department or state disciplinary action has been taken against law firms. maybe people behind me that no more, but that, in their realm we have certainly been working with state attorney general's on this issue there and as you well know, state attorney general's have been taking an awful close and long looked at the foreclosure processing issues both by services and by law from. >> if you have something on that, mr. williams? >> i was going to echo that point, congressman, that we been cooperating whenever we find these situations with state attorney general's and local council on these matters. >> did you have something, mr. haldeman? >> i have nothing to add.

>> last but not least, let me say this. i know that there have been some that have said that you all probably felt a little uncomfortable being here, but i've got to tell you, i don't have any sympathy. because of the people that i face every night when i go home. in my blog in baltimore -- my block in baltimore. i have 30 houses, seven or eight of them in foreclosure. and those were, were my neighbors. and we see it over and over again. i just think that, i just think that there's more that we can do. i just believe it. and i really wonder sometimes whether the president even knows how significant this problem is.

and i say that with all due respect. sometimes i wonder whether he has the information available to understand how many americans are drowning. we just had naca in baltimore, 16,000 trying to get the mortgages modified. 16,000. so i just hope that when you go back to your drawing boards, you know, i can't wish i could just hang out in the boardroom and just whisper in your ear is constantly reminding you of people are suffering and he needed some urgency. and they don't feel like they are getting it. i know what you're saying, but when you have people like the man that i talked to yesterday

who comes home, and all his stuff is out on the corner, and it's about christmas time and thanksgiving and he doesn't know where he is going to go. listening to people who make $7 million in two years, who is supposed have something to do with this flight and helping him out of it, doesn't give him much relief. you know, he can't afford, he can afford a house. he can't even afford a turkey. so, i hope that you will keep that human element in mind. and we look forward to, going to be meeting with you again, not the committee, but our group of legislators with mr. demarco hopefully within the next two or three weeks. >> okay. >> thank you very much. >> thank you, mr. cummings. >> i recognize myself.

now, mr. williams, i ended with you and how you deferred compensation is calculated. him and reading the politico article on this, it's not clear if it is fannie or freddie for this compensation package works this way. so mr. haldeman? >> so, we have a scorecard which is weighted into broad categories, broad categories such as financial results, mission, technology and infrastructure, and there are weightings attached to those large categories. and they are in the order, on the order of four or five of them in a category weighting is typically 20-30%.

and hamp would be as a point under one of those larger categories, and there are not weightings attached to a support. so it is a little bit difficult to be too precise about the percentage weightings for just hamp modifications. >> but is one of the broader sections of mortgage modification? >> it would be mission or supporting the housing market, that kind of language. and subpoints under that would be all of the tools that we have to try to be supportive of the housing market, including modification. >> what other than modification would be in the subcategory? >> it would be refinancing, and within that, hard refinancing and traditional refinancings. there'll be traditional modifications and hamp modifications. it could be affordable housing goals, those all could be subpoints. >> but largely, that nation

piece is largely modification? >> that would be a big piece of it, but it certainly would be a significant piece of it that our board would be looking at. it's not precisely waited, but because of the attention, afforded that in the press, i'm sure our board looks very closely at the numbers of modifications that are done. >> so that mission peace, what percentage of your deferred compensation comes from that? >> i don't recall the precise number, but it would, and it does vary from year to year, but it would typically be a number like 25%. >> but, you know, at the beginning of your the board will measure you against this scorecard? >> yes. >> is that similar for your organization? >> yes, congressman. >> and so, and is it a similar form as mr. haldeman described, his scorecard similar to your scorecard? >> i have not looked at freddie mac's scorecard, but we do have

a scorecard -- >> if you listen to the gentleman's -- >> i've never seen the scorecard. we look at very similar priorities. ensuring that we are doing everything we can to manage credit losses and all the other activities related to our financial results that we control. and then also making sure that we continue to address all the, improve the risk of the company. >> and our mortgage modifications are part of the scorecard? >> yes, they are a part of that. >> is hamp a part of that as well speak was hamp modifications and administering the program for treasury are one piece of the scorecard. >> thank you. that's much more forthcoming than the last exchange we had, and i appreciate that. mr. demarco, you outlined this in a written statement about the scorecard, corporate scorecards. back in march the ig said that

fhfa didn't have a written policy on how to handle that. your testimony today, it sounds like that critique, you have incorporated, and now there's a solid policies by which to judge the scorecard? >> to clarify, i've committed to the ig this will be completed by the end of this calendar year, the work is actually going on now. >> okay. thank you, and thank you for clarifying. and i do appreciate that. now, the additional question would be, wouldn't public -- will you make public that policy? >> well, i certainly couldn't. >> the question is not -- [talking over each other] >> i will make it public. it's an intro procedure for how we would go about the internal review. >> okay. mr. haldeman, we make your

scorecard public for your institution? >> i can see no reason why -- >> and would have to be reported in the 10? anyway. these are publicly disclose. >> right. and user-friendly format. the fanny 10-k and we have three broad goals, now lost in my stack of papers. here it is. it's very unclear in a couple of pages in the 10-k, which make this -- >> if i may, i will work to make sure that we have greater clarity and transparency with regard to the scorecards going forward. >> i appreciate that, but simply to have the heads of the two institutions you are overseeing, i mentioned you as a human shield earlier today, my intention is not in this questioning for you to throw yourself in front of this question. i appreciate your willingness to do this.

it is more of a soldier like a sacrifice. i appreciate it, but with massive losses, we want to be able to understand at the beginning of the year how you will be judged and what success looks like. spent its erasable request and i'm happy to do it subject to the approval of a regular. we are regulated organization, and i'd like to check those things with a regular before doing -- >> nicely done. who says vicious politics on the hill? mr. williams? >> we disclose our goals in accordance with the sec rules. we also disclose in accordance with sec rules how individuals perform, we provide a scorecard to mr. demarco and will work with him on how he wants to handle that going forward. >> mr. demarco has outlined he would like to see housing finance reform, as would i, and i've been in congress since 2005 trying to articulate that. and it still has not happened.

the administration has not taken the lead. the president is not taking elite. the president complained about compensation packages but two large entities where he could have a direct, a larger indirect say, he tends to make speeches rather than actual consultation. mr. williams, mr. haldeman, there are discussions about fannie and freddie's loss is going forward. mr. williams, at what point will your institution be able to repay the taxpayers for this extraordinary support? >> congressman, i do not venture a timeframe in which we would do that. we are very focused on our credit losses, as you've seen probably from the conservatives report, the activities we've undertaken by reducing future expectations around this area. we will continue to focus on this, but bear in mind much of what we're dealing with is also driven by a state of the economy, unemployment, and declining home prices.

>> mr. williams? mr. haldeman? >> as you know, congressman, we do pay a 10% preferred dividend out our outstanding draw, which for freddie mac is a approximate $70 billion, so our annual preferred dividend is $7 billion. i think the best place to go to get an answer to your question is detail analysis put out by fhfa, which looks at both enterprises going forward, and under different scenarios makes projection as to the amount of drop it will be required going forward. >> so you don't have any planning purposes in your institution that outlines when this could have been? >> we do, and -- >> could you give me that? >> our numbers and playing with severe to fhfa and were made part of the document they put out. >> you're not willing to say what year it is? >> i can't recall from the document. >> mr. williams, what you will fannie have repay the treasury? >> congressman, as you know with

a 10% dividend on the amount that is drawn will never fully be able to pay back the amount that is due to the treasury. this is why the director has highlighted the need to move forward. >> mr. demarco, what year will be gses be able to repay the taxpayers for this extraordinary support? >> i do not believe they would be -- they will repay the taxpayers. >> ever? >> well, unless we keep this conservatorship going, to my children and beyond, know. i would hope that conservatorships and before then. >> okay. at what point, mr. haldeman wouldn't venture a guess, but at what point will freddie be able to repay the extraordinary support? >> mr. chairman, i don't believe either company will repay the ex ord and support involved. >> i said that before. i just, i look at the current financials of the company, the

fact that we are shrinking the retained for those of the company, looking at expenses that are there including the dividend, which is paid to the treasury department for that which is already borrowed, and i don't have a timeline looking forward where i can point to and say, by this year this will be repaid. and i do hope that we have moved beyond the conservatorships in the relatively near future so we will not get them repaid before then. >> so if we just left this as it is currently structured, we could be back here having the same hearing in five years? >> no, i think it will look quite different in five years. i believe the book of business that we've been taking on since conservatorship is a profitable book of business to the taxpayer, and i believe as we finish washing through that mortgages that were originate in the '05-'08 three, that will eventually, we will move past

that and the remaining book of business, the new book of business will be profitable to the companies. and so i believe that's one of our fundamental obligations with the companies in conservatorship is to ensure the new business we're doing is profitable. that's not going to be profitable enough to be reaping this amount of money. >> what year do you think that would be? >> i believe our projections, it's going to keep and on house prices -- >> at a lot of different things. >> we believe by the end of next year we will have moved through a good chunk of most of what's left with the audit in the previous book spent i certainly appreciate and appreciate your willingness to answer questions today. mr. demarco, i've referred to as a human shield a number of times. i said above financial services and this committee, you have been very forthright. we understand a difficult situation that's been thrust upon you. we do appreciate your career of service, to the federal government. mr. haldeman, mr. williams, we certainly appreciate your

willingness to had a very challenging institutions. we do. the concern here today is the extraordinary taxpayer support, and the fact that in essence what to do nationalize entities. we also have aig, for instance, but we have to nationalize entities here, and that is where your compensation becomes a question for the taxpayers. otherwise if you're a private institution, we've had these hearings before with private institutions. that's not the proper purview of those, me, for instance, that as a taxpayer judiciary. however, because of the nature of entities that is what these concerns. and we understand are patriotic americans. we are not questioning your patriotism by any means, but we are questioning whether or not this is an appropriate type of condensation, level of compensation with to nationalize

entities. into for being here today. i certainly appreciate your willingness and your time, and with that is committee stands adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> for those who say, my friends, for those who say that we are rushing this issue of

civil rights, i say to them, we are 172 years late. for those who say, for those who say that this bill of rights program is an infringement on states' rights, i say this, the time has arrived in america for the democratic party to get out of the shadows of states' rights and walk forthrightly into the bright sunshine of human rights. [applause] >> hubert humphrey spoke those words nearly 20 years before changing the 1954 civil rights bill into law. the two-term mayor of minneapolis and longtime u.s. senator was vice president under lyndon johnson, and later ran for president in 1968 and lost. we will look at his influence on american politics this week on c-span series "the contenders." from the minnesota historical society, st. paul, live friday at 8 p.m. eastern.

spent the c-span.org homepage is now easier to use. the new design features 11 video choices making it easier for you to watch today's events live and recorded. there's a section to access our most popular series of programs like "washington journal," booktv, american history tv and "the contenders." we've added a handy channel finder so you can quickly find where to watch our c-span networks on cable or sat let systems across the country. at the all new c-span.org. >> the senate convenes in a few moments and you'll be in morning business for an hour. at 11 a.m. decent senators continue work on the 2012 defense programs bill. it contains $21 billion in spending cuts and members of the armed services committee came to an agreement with the white house over how to handle suspected terrorists. the bill now says the president determines whether a suspect would remain in civilian custody or be transferred to the

military. it's possible later today the senate could take up the minibus spending bill after it is expected passage in the house. that covers 20 oh spending for agriculture, commerce, justice, science, transportation and housing programs. and a continuing resolution to keep the other programs funded by congress completes work on spending bills. now live senate coverage 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 god, let your peace that passes understanding be felt on capitol hill. remove distracting priorities

from the minds of our senators, leading them to focus on the things that really matter. take away disturbing doubts, providing them with certitude regarding your providential power and purpose. eradicate false ambition, as you make them content to serve you where they are and as they are. in a special way, guide the supercommittee in its challenging work. and, lord, as we enter a season of gratitude, make us truly thankful.

we pray in your strong 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, november 17, 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 f the chair. signed: daniel k. inouye, president pro tempore. the presiding officer: the majority leader is recognized.

mr. reid: following leader remarks, the senate will be in morning business for one hour, the republicans will control the first half and the majority will control the final half. following morning business, the senate will begin consideration of s. 1867, the defense -- the department of defense authorization bill. we expect to receive the conference report to accompany h.r. 2112, the agriculture, c.j.s., and transportation appropriations bill, which also contains the c.r. relating to today's session. the information i've gotten from the house that could change, as iisthat it will be late. i've spoken with senator levin earlier today. it appears that we'll have to be in session to work some of that bill tomorrow, so we may not be able to complete the conference report and the continuing resolution today. we'll see what develops as the day goes on. this week the nonpartisan congressional budget office, known as the watchdog of the

senate, confirmed that -- confirmed what we've been saying for months, that the so-called republicans' jobs plan isn't much of a plan an wouldn't create any jobs. the congressional budget office report analyzed the different approaches to spur economic growth proposed by both parties. among the top job creators were democratic proposals to extend unemployment benefits and cut taxes. the study concluded that the effects of the changes the republicans propose would be negligible, at best, and at worst could actually lower economic growth and slow hiring. although their plan would have no positive effect on our economy, the republicans want to gut the safeguards that saved hundreds of thousands of lives just last year alone. although their plan could potentially slow economic growth, they want to gut the

safeguards that save american companies and consumers $1.3 trillion each year by increasing productivity and reducing medical bills. the nonpartisan experts agree this is not the road to recovery. they also agree with democrats that putting money back in the pockets of middle-class families and small businesses with tax credits and refunds, by extending unemployment benefits is the most efficient way to get americans working again and turn our economy around. families that have more money to spend will pump it back into the economy. businesses that have more money to spend will hire new workers. in a time when we need to conserve every dollar and get the most bang for the buck, these proposals do more with less. as we continue to discuss ways to combat high unemployment in the coming months, i ask my republican colleagues to remember that not all proposals are created equal. when we consider our next jobs bill in december, our republican friends will once again face a choice: they can cling to ideological proposals we know won't work or they can join forces with

democrats to pass proposals we know will create jobs. irhope the republicans, mr. president -- i hope the republicans, mr. president, prove to be more interested in et going result than in getting their way. -- more interested in getting results than in getting their way. mr. mcconnell: mr. president? the presiding officer: the republican leader is recognized. mr. mcconnell: over the past few weeks i have repeatedly come to the floor to highlight the good work that republicans have done in identifying jobs legislation that the two parties can actually agree on. at last count house republicans had passed 22 jobs bills that were designed not only to incentivize the private sector but were also designed to attract strong, bipartisan support. in other words, house republicans have been designing jobs legislation that could actually pass. they have been legislating with an eye towards making a difference instead of just

making a point. and so i've been encourage the democratic majority here in the senate to follow the house's lead, take up these bipartisan jobs bills, pass them here in the senate and send them to the president for his signature. that i would we'd actually be helping to create jobs and we'd send a message to the american people that we can actually do something many of them think we don't do enough of around here, and that's work together. so this morning i'd like to call on my democratic colleagues once again to take me up on the offer. once we get back from thanksgiving, let's take up these bipartisan bills that have already passed the house, pass them here in the senate and send them down to the president for his signature. we've showed we can do it last week when we worked together to pass senator brown's 3% withholding bill and senator murray's veterans bill. in fact, yesterday the house passed this legislation 422-0. sending it to the white house

for the president's signature. so i'd like to call on the president this morning to invite senator brown down to the white house for the signing ceremony, which would show the american people that cooperation is indeed possible when the senate focuses on bipartisan job-creation solutions. so let's continue to build up the momentum and do more. many of the bipartisan house-passed bills already have companion or similar legislation here in the senate. there's no reason we can't start to take them up as conge as we get back -- as soon as we get back. therthere's a lot we could do. yesterday i height add bill by senator collins, the e.p.a. regulatory relief act. it's got strong support from both republicans and democrats right here in the senate. including 12 democratic cosponsors. let's pass it. the house-passed version of this bill passed overwhelmingly. it got more than 40 democratic

votes, is supported by more than 300 business groups including the american forest and paper association, the national association of manufacturing, the u.s. chamber of commerce, the national federation of independent business, and the business round table. according to one estimate, this bill could save more than 200,000 jobs and provide greater certainty for businesses that are asking us for it. the e.p.a. has asked for more time. both parties support it. let's pass it. and then once we pass that bill, we should tank the four other bipartisan house-passed bills i highlighted last week. these four bills would help businesses raise capital, expand their businesses, and create more jobs. they all passed with bipartisan support over in the house. we've got bipartisan companion or similar legislation right here in the senate. what's the holdup? let's pass these bills, too.

there's the small company capital formation act, cosponsored by senators tester and toomey. it's companion legislation got 183 votes in the house. let's pass t there's the community bank resource improvement act cosponsored by senator hutchison and pryor. it's companion legislation in the house got 184 democrats. let's take it up and pass it. there's the private company flexibility and growth act, cosponsored by senators toomey and carper. let's pass it. there's the democratickization access to capital act sponsored by senator scott brown, a similar bill in the house passed with 407 votes, including 169 democrats. let's pass it. there's the access to capital for job creators act cosponsored by senator thune. it passed the house with 413 votes, including 175 democrats. let's pass it.

and we shouldn't stop there. as i see it there's no reason we shouldn't take up ever one of these bipartisan bills that have already passed the house once we get back and pass them one by one. they all passed the house on a bipartisan basis. they'll help the private sector create jobs. there's no good reason we shouldn't take all these bills up and pass them right here in the senate. because if we can't pass jobs legislation that we all agree on, then what are we going to pass? this should be a lay-up. the republican house has done its job. it's time for the senate to act. let's do what the american people expect us to do. let's take up these jobs bills when we return, pass them, and he send them down to the president for his signature. let's do the work we were sent here to do. mr. president, i yield the floor.

the presiding officer: under the previous order, the leadership time is reserved. under the previous order, the senate will be in a period of morning business for one hour, with senators permitted to speak therein for up to ten minutes each, with the time equally divided and controlled between the two leaders or their designees, with the republicans controlling the first half and the majority controlling the final half.

quorum call:

the presiding officer: the senator from alabama is recognized. session i would ask that the quorum call -- tproeup there is currently no quorum call. the s*egs senate is in session. mr. sessions: i thank the president. once again we find ourselves in a too familiar position: secret meetings over the financial future of our country are being held as we head toward the final hours, really final minutes has been the pattern around here, of an agreement that will be produced for us and expected to be passed by a committee of 12.

it's less than a week until the deadline, and no language has been made public. and the american people should be able to make their voice heard before the committee votes, because the truth is once that vote happens, there will be no opportunity to change their product. it will be up or down. the train will have left the station. and the bill will hopefully or maybe will be a good bill that can pass. but we won't have any opportunity to amend it. that's not the way congress was set up to work. i just happened to catch this morning a statement by former secretary of defense under president bush and president obama, robert gates. and this is the statement he made in an interview: "i think, frankly, the creation of this super committee was a complete

abdication of responsibility on the part of congress. it basically says this is too hard for us. give us a brac. give us a package where all i have to do is vote it up or vote it down, and i don't have to take any personal responsibility for the tough decisions." so now we're left with this sword of damocles hanging over the government, hanging over defense. and if these cuts are automatically made, i think the results for our national security will be a catastrophe." that's what the former secretary of defense said recently. admiral mullen, when asked about this in response i asked him on the armed services committee, the chairman of the joint chiefs said -- quote -- "if this sequester takes place, it has a good chance of breaking us and putting us in a position not to keep faith with this

all-volunteer force that has fought two wars. it will impose a heavy penalty on developing equipment for the future. it will haul us out." close quote. one of the reasons i'm here this morning is to issue a warning and call attention to some matters that i believe are important. people will make many promises about what this deal will be about, if it passes and they reach an agreement. hopefully they'll reach an agreement that's one that can be honestly defended and we'll all be happy to vote for. but what we've seen so far indicates that secret deals, while they remain secret, are promoted to be far better than they are when you begin to see what's really in them. the devil will always be in the details. yesterday on the floor i spoke about the budget control act's disaster funding gimmick.

over ten years the cumulative cost of this gimmick will be about $140 billion to the treasury, including interest. and just a few words tucked into a bill -- and people didn't understand that disaster gimmick; it came out at the 11th hour into the final agreement, and people voted on it without fully understanding what it meant. so just a few words can dramatically alter the future fiscal situation of our country. and the record of broken promises is long, improvident promises about what a bill would do. many deals have been proposed that have promised serious spending cuts a and minimal tax increases only for the reverse to be actually true. let me run down a brief list. the president's budget he submitted earlier this year, he said -- quote -- "it does not add to our debt."

clearly one of the most dramatic, erroneous, blatantly false statements ever issued by a president of the united states. the reality is that that budget would double the debt of the united states in ten years. that budget would have, as its lowest-single annual deficit, according to c.b.o., an annual deficit of $740, with deficits in the years eight, nine, and ten up to $1 trillion again. an increased spend be -- it increased spending, it increased tassmenttaxes, and it increasedt morse than if we did nothing, the president's budget did. the senate democrats talk about a budget i call a phantom budget. we haven't had one in the senate for 932 days, so they talked about a budget, and they made some claims. we never saw it in detail, never saw the details. but they claim to have $2

trillion in spending cuts and $2 trillion in tax hikes. $1 of tax hikes for every dollar of spendin spending cuts. the president earlier this year acknowledged that he should have $3 of spending cuts for every $1 of tax increases. of course that's been abandoned now. but the reality was that that phantom budget that was talked about but never produced, but an outline was produced, actually had, we think, $2 in tax hikes for every $1 in spending cuts. then senator reid, during the effort to raise the debt limit, his revised proposal claimed a $2.4 trillion in deficit reduction, and the reality www.that they were counting -- and the reality was that they were counting $1.1 trillion in

savings from war costs, because the c.b.o. assumes the war costs will be the same for ten years, but it was never going to be the same for ten years. we're always going to bring the war costs down, as soon as we possibly could. it is a phony claim that you cut $1 million in spending and reduce spending -- a $1 trillion, excuse me. we've been on a steadfast path to reduce. the president's subcommittee proposal that he submit to this committee of 12 claims $2 in cuts for every $1 in taxes. but the reality is that, as we see it, there's no real cuts and 100% of the reduction will come from taxes, more taxes, more spending, more debt so far. so if this committee proposes a

solution and asks us to vote for it, here are some things we should look for and not be happy with if they're in the bill: the pattern has been, i just would say for the promoters of these agreements, to spin them to sound better than they really are. one of the things we should look out for are claims of spending reductions that occur by setting a cap on war spending, as i indicated. the money was never going to be spent. some are claiming $1 trillion in savings from that. that should not be counted. another thing we would look at are front-loaded promises -- front-loaded revenue increases, tax increases, that are current

now along with back-loaded promises of spending cuts in the future, in the out years. then they claim these savings. but the pattern around here is that once a tax increase is passed, it's there. but a promise of a spending cut in the future, very often it does not become a reality. we know that. that's the pattern that's put news such a desperate financial condition today. just that kind of activity. so whatever happens this time, this cannot be part of the process. we need to watch for a plan that would rely on directions to standing committees in the house and senate to at some point in the future produce legislation

that might reduce entitlement spending and/or would raise revenue. these committees have not done -- followed through on that in the past, and the supercommittee's directions to them, we have to know, are not likely to occur based on history around here. that's the historic reality, just directing a committee to raise taxes or cut spending does not at all mean that they're going to do it. another thing we need to watch out for is if the committee makes unrealistic cuts to programs without reforming those programs. like the current assumed annual cuts that are in law today to health care providers, doctors, and hospitals, to quut their -- to cut their reimbursement rat rates. congress knows we can't go

forward with those cuts and they have been avoided every year by finding money -- borrowing money -- to pay to avoid serious cuts to our providers that indeed if not paid they'll quit doing medicare and medicaid work. doctors don't have to do that. this is just at a point you can't cut providers anymore. another thing we need to watch out for is a plan that assumes unrealistic changes to the congressional budget office baseline. one of the things is to assert an overly optimistic economic growth projections for the next ten years. more and more we're hearing that coming out of this recession is going to be a long, tough, slow slog, and if you want to spend more money, you claim you've got a budget that improves our financial situation, one way to

do it is just assume more growth than is actually going to occur, that the experts don't believe will actually occur. if you do that, that's phony accounting. it may look your -- your numbers may look better today, but not as the years go by. and that's the kind of thinking that's got us in the deep debt hole we're in today. another thing to watch out for is the claim that interest savings derived from tax increases by reducing the deficit are a spending cut. interest expense -- and it's substantial for our country -- interest expense is a by-product of spending and taxes. if you drive up debt, your interest payment will go up. if you raise taxes and reduce the deficit, then interest rates drop, you can't count the interest reduction as a spending

cut. that's not cutting any real spending. that's just avoiding a future interest growth that would have occurred if you haven't done it. so i don't think we should count, and we news not count, interest -- and we must not count, interest reductions either from tax increases or spending increases really as a spending cut. i'd also like to talk about the defense cuts briefly. majority leader reid said this just yesterday, i believe it was. quote -- "if this committee, the subcommittee, fails to act, sequestration" -- that is, automatic cuts -- "are going to go forward," he says. "democrats are not going it take an unfair, unrealistic load directed toward domestic discretionary spending and take it away from the military." in other words, take the cuts away from the military. the automatic cuts that would

fall on the military, which are, as admiral mullen, the current joint chief said, would hollow us out. these automatic cuts are odd. they are protected from any cuts -- the surging food stamp program. any cuts are prohibited against the medicaid program. but the defense department, which has already taken $489 billion in cuts, is facing another $600 billion in cuts. it would be a 120% net reduction -- it would be a 20% net reduction in defense of the next ten years, i mean from current spending level, not projected increases. it would be the most severe hammering of the defense department while protecting other programs from any cuts. it is not legitimate. yet the majority leader is pushing back and saying, this is perfectly legitimate. and he's not going to have cuts in discretionary spending.

he wants them to fall on the military. the majority leader's comments suggest that defense increases have increased faster than domestic discretionary spending. but nothing could be further from the truth. from fiscal year 2008 through 2011, the defense budget increased its base budget by just 10%, and only 84% over ten years, while education spending surgsurged 67% in the last -- 2008-2011. the presiding officer: the time has expired. mr. sessions: i ask to have one additional minute. the presiding officer: without objection. mr. sessions: mr. president, we're at an historic poin point. i believe that this congress has taken a great risk in turning

over to a committee of 12 this responsibility. it's going to be difficult for them to reach an agreement. if they don't, damaging sequestration could occur. if they do reach an agreement, we've got to be sure it's an honest agreement that actually achieves what they promise, which is a minimum of $1.1 trillion in deficit reduction. we really need $4 trillion, as every expert has said, over ten years in savings to begin to put this country on the right path. we're nowhere close to that. and i really feel like that the country is going to have to take some tough medicine. i hope the committee can help us get there. i do not approve of the process, but hopefully it'll work and maybe we won't repeat it in the future. i thank the chair and would yield the floor.

mr. reed: mr. president? the presiding officer: the senator from rhode island. mr. reed: mr. president, i rise today about a crucial challenge facing our nation. 14 million americans are looking for work. 6 million have been unemployed for more than six months, and the average length of unemployment is 40 weeks, the longest average in more than 60 years. these are dire circumstances. they must be changed. and we know how to do it. we know how to address our immediate unemployment crisis. we must enact policies that will put americans back to work and strengthen our economy. and congress can start by passing the americans jobs act. the american jobs act is a blueprint for boosting our economy. it contains policies that most americans and virtually all economists agree to government should do in order to help our economy grow.

it would provide relief to the middle class, it would help small businesses grow and hire, it would invest in our nation's bridges and roads and schools, help stablize our housing market and provide aid to states so that teachers and first responders can stay on their jobs. and congress must also renew basic policies such as federal unemployment compensation programs. thafbg a lifeline to the unemployed -- that have been a lifeline to the unemployed throughout this nation. if we do not extend unemployment benefits by the end of the year, two million americans will lose benefits by february 2012. this would be disastrous for them, for local businesses that depend upon people being able to still go and get a cup of coffee or go out and buy the essentials of life. states who depend on, again, that type of economic activity

in our national economy. and this is why i join so many of my colleagues to introduce the emergency unemployment extension act. if federal budget for unemployment is not extended the economy could lose billions of dollars in economic activity, endangering up to 560,000 jobs nationwide. in my state, the estimate would be 23,000 jobs could be lost. simply because we would shrink, again, demand, as people who are relying on just getting by with an unemployment check no longer even have that, those few dollars to get by on. these proposals should be nonpartisan. in the past they have garnered democratic and republican support. unfortunately, in the midst of the deepest and longest unemployment crisis our nation has faced since the great depression, too many of my republican colleagues have

chosen simply to delay and to deny the reality of millions of americans who are looking for work, underemployed. in january 2008, before the unemployment crisis took hold the tphoeut rate was -- the unemployment rate was 5%. it peaked in october of 2009. this massive, sudden drop in employment was precipitated by one of the worst crises we've seen in the history of the country. this crisis is caused by excessive risk taking by financial institutions, hra*bgz hra*bgz and lax regulation. the unemployment rate has trend downward but not fast enough.

the unemployment rate has hovered around 9%. the fact remains it is still not generating enough jobs. as we saw with the most recent unemployment report, businesses are hiring despite strong headwinds, particularly the economic dangers from europe. in october, the economy added 80,000 jobs. the unemployment rate came down from 9.1% to 9%. that is the right direction, but not the right speed, not the right momentum, not the right response to this crisis. the economy still has 6.6 million fewer jobs than at the beginning of the 2007 recession. and the rate of job growth is, as i said, simply just too slow. adding 80,000 jobs keeps us a bit afloat but it doesn't allow us to have the momentum to move

the economy forward, which we need. if we continue to see sluggish job growth with an average 125,000 payroll jobs added per month -- and that's the pace this year -- it will take us an additional 52 months -- not weeks -- 52 months just to get back to the prerecession levels of payroll employment f. we pick up job growth, added 200,000 jobs per month, which is, again, exceeding the current pace but not the kind of spectacular pace we need, it still will take an additional 33 months to get back to pre-bush recession level employment. this persistently high unemployment rate, the anemic growth has correctly been described as a national crisis. but more important than the finding of economists and those who are studying the policy effects of this is the damage

that this crisis is inflicting upon the families and communities of america. combined with the fact that middle-class families have not seen a real increase in their family income in ten years and now they've seen this fantastic unemployment, this is a double whammy. at the same time some essentials like food and fuel become more expensive. we cannot, i think, overstate the difficulty that so many families are seeing. ten years effectively without any real growth in their income, increased prices in essentials, and a job market that is weak at best. although slightly improving. and that's why what we have to do here is literally get americans back to work. give them not only the resources but the confidence that the days ahead will be much better.

and this crisis requires our full attention of congress and action. not just discussion. we cannot afford further inaction. we cannot again indulge in a period of time where we were paying -- borrowing to pay for two major conflicts. i note my predecessor was talking about the military budget. we have fought since 2001, two major conflicts in iraq and afghanistan, and we have not raised the revenue to support those efforts. we've put them on the backs of future generations of americans and the backs of americans today who are facing this job crisis. we've got to work -- put people to work to end this crisis. unfortunately, i fear that, as

i've said before, many of my republican colleagues are simply engaged in delay which might be politically expedient, but it's not helping the families of america. economists, those who are studying this economy both national and international, have been emphatic that we have to put policies in place to get people back to work. and many of these policies are encapsulated in the american jobs act, which has been repeatedly rejected by my colleagues on the other side. they voted down two parts of the bill that we pulled out. one, the teachers and first responders back to work act that would have created or protected 40,000 education jobs, kept thousands of police and firefighters on the job, helped local communities struggle, as they are struggling to keep afloat. they also rejected the rebuild america jobs act which would have made an immediate investment of $50 billion in our

highways, transit systems, railways and aviation infrastructure. i don't know of any american in any part of this country that does not get the idea that we have to begin and continue to reinvest in our infrastructure. every american can point to a bridge that's failing. they can point to congestion on the highways. they can point to projects that are so necessary not only for the long-term productivity of this country but for their neighbors. we're asking the wealthiest americans to pay for these initiatives. no longer are we going to put it on the backs of future generations as we have, a decade of foreign conflicts and other programs like the medicare part-d expansion. we're trying to be fiscally

responsible not only to propose ways to put people to work, but also to pay for those measures now. and that is what my colleagues object to. now, they seem to be more concerned about that 1% that's talked about than the rest of america that needs work, not just directly but their community needs the work so that they can prosper along with their neighbors. all this delay has been accompanied by their proposals, but their proposals seem to rely upon the austerity. we'll just have to cut more and more and more. but this single-minded focus on austerity i don't think is going to lead to the kind of growth we need. in fact, there are many analysts and economists who argue that austerity measures are being

suggested, are counterproductive to growing the economy, that in fact they lead to higher unemployment and lower wages. for example, a recent i.m.f. study talking about the consequences of pursuing an agenda focused on austerity found that an austerity program that curbed the deficit by 1% of g.d.p. reduces real incomes by about .6% and raises unemployment by .5%. so the notion that we can simply cut our way to employment growth is not substantiated by fair-minded analysis. for example, again, gus fortu r*e of moody analytics examined the proposal offered by mccain and paul and said the propose wouldn't address the current weakness in the short term and in fact would be harmful. the congressional budget office looked at a broad range of policies from both parties, have

concluded that reducing taxes on business income and repatriation of foreign income are the most ineffective and inefficient tools for growing jobs and that that these two measures seem to lead the list of promotes on the other side of the aisle. the idea of providing more tax breaks to corporations and the wealthy will create jobs is not supported by the record. bush-era tax breaks for the wealthiest resulted in mediocre growth for our economy and declining wages for middle class over the period 2001 to 2008-2009. instead of bringing forth or supporting issues that will actually put americans to work, my colleagues on this side just want to reframe the issue. they want to talk about burdensome regulations. and this argument doesn't stand up also.

since 2007 -- the presiding officer: the senator has used ten minutes. mr. reed: i will request unanimous consent for an additional two minutes. let me conclude by making a point which i think is very important because this notion of just simply striking away all the regulations and we'll have this miraculous growth in employment is not substa*pbgs stan khaeut bid careful -- substantiated by careful analysis. among the reasons an employer can cite for layoffs is -- quote -- "government regulation." the data shows that government regulation accounted for a minuscule .2% of layoffs. these are the managers and leaders of these companies checking the box as to what's causing them to lay off people. instead employers cite a lack of demand as a reason for 39% of

the layoffs from 2008 to 2010. indeed, if regulations are driving unemployment, you would expect to see job losses and high employment rates in sectors of the economy where regulation has increased, like the financial service sector. however, in the financial service sector, the unemployment rate is much lower than the national average. in fact, it's at 5.8%. and meanwhile, domestic financial firms have posted extraordinary record proftsz in the first -- profits in the first two quarters of 2011. this notion that it will solve our problems is not substantiated by the evidence we're collecting. what we need to do is put people back to work. the programs in the american jobs act will do that. mr. president, i would hope that that would be recognized, accepted and we could move quickly to pass it. with that, mr. president, i will yield the floor.

mr. brown: mr. president? the presiding officer: the senator from ohio. mr. brown: thank you, mr. president. i ask unanimous consent to speak up to ten minutes as if in morning business. the presiding officer: without objection. mr. brown: thank you. mr. president, i, first of all, appreciate senator reed's comments about the state of this economy and what the super committee is doing and the direction we need to go on all of these tax issues and all of these spending issues. he's so right. mr. president, we know -- we know several things about social security. we know it's been around for 75 years. we know that if we do things right here, it will be around for another 75 years. we know that it makes a huge difference in the lives of our citizens and our constituents in oregon, ohio, rhode island and all over this country. we know that about more than half of people in my state get more than half of their income -- or more than half of seniors in my state who are on

social security get more than half their income from social security. and it plays such an important role in their lives. we also know, mr. president, that until recently there was not a cost-of-living adjustment for seniors. we know that over the last two years, even though the president and the majority in the senate, the democrats in the senate and the house voted $250 onetime payment to seniors to help them deal with the increase in cost of their health care, except for that, mr. president, we know that social security beneficiaries in this country didn't get a cost-of-living adjustment for two years. and we also know, mr. president -- and the presiding officer from oregon is working with senator mikulski from maryland and me on legislation to fix this -- we also know that the cost-of-living adjustment is pure and simple, understatement, because the cost of living adjustment seniors usually get never quite enough to keep up with their expenses, but it's

based on the cost of living for a working person, for someone in his 50's or 40's or in her 30's or 20's, someone who is working full time, and their cost of living, their cost-of-living increase is different from a senior's cost-of-living increase because if you're seven years old, you're much more likely to have high health care costs than if you're 30 years. when we figure historically in this country, we do consumer price index w wages, cpiw. based on a 30, 40 or 50 years old, their cost of living. we're not basing it on a senior citizen's cost of living who consumes, if you will, much higher health care, who has much higher health care costs. that's what the legislation we're working on, c.p.i.-e, consumer price index for the elderly, reflecting their real costs. why should seniors'

cost-of-living adjustment be based on a 30-year-old's cost of living instead of a 7 70-year-old's cost of living. we know that conservative politicians in this institution want to change the consumer price index the other way and make it even smaller. you know, two years in a row there was no increase, no cola, no consumer price index increase, no extra dollars to keep up with burgeoning health care costs for seniors. there are people in this institution, many of whom who have never really supported social security to begin with all that much, frankly, to be honest, who want to see a smaller cost-of-living adjustment, something called chained c.p.i. and i won't go into the deabout how it works but it's basically saying to seniors, whatever you're spending money on, if you're buying apples, for instance, then you could buy

bananas because -- my staff says bananas are cheaper. we had an argument about that whether they're cheaper per weight or not. but, under this chained c.p.i. that some conservative think tanks, some drug company funded, i assume came up with this idea, well, you can pay less for things because you can do substitutions of food from beef to chicken or from apples to bananas or from something to something and save money. well, most seniors have already begun -- they've already made those substitutions in their buying habits because they're already squeezed because the cost-of-living adjustment hasn't really kept up with their health care costs. so instead of, mr. president -- and i'll wrap up -- instead of our moving to reduce the cost-of-living adjustment, going to this chained consumer price index, consigne chained c.p.i.,d

move away p.i.-w to c.p.i.-e based on what people's health care costs are as they health care costs go up. it will be several hundred dollars in the monthly benefit that a senior receives. let me give you those numbers and then i'll wrap up, mr. president. for the average person who retired in 1985, that person would get about an $887 increase if it was the way that senator merkley and senator menendez and i want to change social security. that c.p.i. -- that increase would then go up a little bit over time, so that seniors would in fact be able to keep up with their health care costs. that's -- that's the importance of this change. that's the importance of our legislation, mr. president. we can't go the other way, c.p.i. chain. the last point i'll make is that conservatives that don't much like social security, these

conservatives -- some of them are presidential candidates, i might add -- they will say we can't afford this. well, mr. president, the budget deficit is not because of social security. it is a bunch of whole other things. social security is not part of this budget deficit. we know how to do minor things to fix social security long term and take care of seniors and their health care needs and their increased costs. mr. president, i yield the floor and suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from oregon is recognized. mr. merkley: i ask that the quorum call be sended. -- be ended. the presiding officer: without objection. mr. merkley: i am pleased to rise to support adoption of the consumer price index for social security that would accurately reflect the costs that our senior citizens actually face. i am delighted to join senator brown of ohio, who is presiding

in this effort along with senator mikulski of maryland. social security is a promise, a bond between our government and our senior citizens. our senior citizens have worked hard their whole life and paid into social security every step of the way. they expect that social security will be there for them when they retire. over the past few years, i've heard from many oregon seniors who are making ends meet on a fixed income, and they tell me, why is it that we're not getting a cost-of-living adjustment, a cola, because our costs are rising? they've been deeply disturbed to know that with these fixed incomes and these rising costs, that they're being squeezed in the middle. and i explained to them in these

town halls that it's because the cola is calculated not on what seniors face and their costs but upon what a broad cross-section of working people face, and they tell me, well, you know, senator, that's different than the costs we face. we're at a different point in our life. health care becomes a huge component, and i can tell you they tell me -- "i can tell you, senator, health care costs are not going down." so, some in this chamber are coming forward with a proposal that would make things even harder for our seniors. it would use a new calculation, not this standard cross-section of america cola that we're currently using, but what is referred to as a chained c.p.i.

and that chained c.p.i. says, well, if the price of this goes up, you can buy that. and actually, what it does is go the wrong direction in terms of accurately reflecting the costs that our seniors face in retirement. if you take someone who is 65 today and you look down the road, by the time they are 75, this chained c.p.i. would cost them $560 per year. roughly a month's rent. by the time the average 85-year-old is -- has their payment calculated, the chained w.p.i. would cost them $485 a year. the average 95-year-old, $1,300 a year. at a time when americans are paying less than ever before, it

is simply wrong to shift costs onto our seniors and most vulnerablvulnerable in our soci. therthere's an alternative, the c.p.i.-e, the consumer price index for our seniors or elderly. i prefer to think of it as the c.p.i.-e for "experience," our most experienced citizens face different costs than the rest of us and the c.p.i.-e would track legislation based on the basket of goods those seniors 65 or older are purchasing. it is a fairer way to calculate the benefits for our sns. if their costs are rising slower than the overall costs for society, it would reflect that. if their costs are rising higher than the overall pace of inflation, then that would be reflected. either way, it's fair. we have to ensure that we are

keeping our promise to our senior citizens in a way that accurately reflects the reality of living in this country. this bill -- or the c.p.i.-e, or the consumer price index for the experienced -- is the combest way t -- is the best way to do that. mr. president, i yield the floor. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

mr. reid: mr. president? the presiding officer: the majority leader is recognized. mr. reid: i ask unanimous consent the call of the quorum be terminated. the presiding officer: without objection, so ordered. mr. reid: has the bill of the day been reported? the presiding officer: morning business is closed. under the previous order the senate will proceed to the consideration of s. 1867 which the clerk will report. the clerk: calendar number 230, s. 1867, a bill to authorize appropriations for fiscal year 2012 for military activities for the department of defense, for military construction, and so forth and for other purposes. mr. reid: mr. president? the presiding officer: the majority leader is recognized. mr. reid: the republican leader is on the floor. he's going to offer an amendment. the one on this side is not ready. there's been an agreement. i ask unanimous consent that senator mcconnell be allowed to lay down his amendment when the one on the democratic side is laid down, which will be momentarily, that it would be considered the first amendment in order. mr. mcconnell: mr. president?

i send an amendment to the desk and ask its immediate consideration consideration. the clerk: the senator from kentucky, mr. mcconnell -- mr. mcconnell: i ask unanimous consent reading be dispensed with. the presiding officer: without objection, so ordered. mr. mcconnell: i'm offering this amendment on behalf of the senator from illinois, nor mark kirk -- senator mark kirk, because the time has come for our country to sanction the central bank of iran. it has become commonplace for political leaders to state an iranian regime with nuclear weapons is unacceptable. president obama has stated that an iranian regime armed with a nuclear weapon is unacceptable. unfortunately, the iranian regime has not been deterred from conducting activities relevant to the development of such an explosive device. the report of the iaea of november 8, 2011, makes clear that iran has worked on the development of an indigenous design of a nuclear weapon, including the testing of

components, and that iran has yet to answer all of the iaea's questions concerning the military dimensions of iran's nuclear program. last month the world learned of the quds force plot to assassinate the ambassador of saudi arabia to the united states. iran remains undeterred, and the united states is left with fewer options of dealing with iranian nuclear program as time elapses. this amendment by senator mark kirk from illinois, would add to the current sanctions against iran by targeting the central bank of that country. this, in my judgment, is one of the few remaining actions short of an embargo of iranian shipping and military intervention to slow or end the iranian nuclear program. it is worth supporting and pursuing. mr. president, i yield the floor. the presiding officer: the senior senator from michigan is

recognized. mr. levin: mr. president, on behalf of the senate armed services committee, i'm pleased to bring s. 1867, the national defense authorization act for fiscal year 2012, to the senate floor. the armed services committee approved the bill by a unanimous 26-0 vote. this is the 50th consecutive year that our committee has reported a defense authorization act. every previous bill has been enacted into law. i want to thank all the members and the staff of the senate armed services committee for the commitment that they've shown to the best interests of our men and women in uniform as we have developed this legislation. every year we take on tough issues and we work through them on a bipartisan basis, consistent with the traditions of our committee. i want to particularly thank senator mccain, our ranking

minority member, for his strong support throughout the process. the unanimous committee vote in favor of this legislation would not have been possible without his cooperation and support. we were delayed in getting this year's bill to the senate floor by two issues that have arisen since the time that the armed services committee approved the first version of this bill, s. 1253 in late june. first, congress enacted the budget control act of 2011, which mandated deep reductions in discretionary spending, including defense spending. the initial bill reported by the armed services committee would have cut the president's budget request for national defense programs by more than $6 billion. the budget control act which was adopted after our initial bill was reported, requires an

additional $21 billion in reductions. second, the administration and others expressed misgivings about the detainee provisions in the initial bill. although the provisions in our initial bill represented a bipartisan compromise, it was approved by the committee on a 25-1 vote. many of these concerns were based on misinterpretations of the language in that bill.nonetd to address these concerns. first, relative to the additional $21 billion in budget cuts, we consulted closely with the department of defense before identifying these cuts. we believe that the reductions that we decided upon can be accomplished without an adverse impact on our troops or their

vital missions and without significant increase in risk to our national security. the committee report, which accompanied the initial bill, senate report 112-26, did not address these cuts but is otherwise applicable to this bill as well. so the new cuts are not addressed in that senate report because these new reductions came after that senate report was made. and for this reason, i ask that a summary of the cuts be included in the record immediately following my statement. the presiding officer: without objection. mr. levin: i unanimous consent. the presiding officer: without objection, so ordered. mr. levin: second, the new bill would modify the detainee provisions to address concerns and misconceptions about the provisions in our initial bill.

in particular, the new bill, first, modifies section 1031 of the bill, was requested by the administration, to assure that the provision which provides a statutory basis for the detention of individuals captured in the course of hostilities conducted pursuant to the 2001 authorization for use of military force, the aumf, to make sure that those provisions and that statutory basis is consistent with the existing authority that has been upheld in the courts and neither limits nor expands the scope of the activities authorized by the aumf. it also modifies sections 1033 and 1034 of the bill, as requested by the administration,

to impose one-year restrictions rather than permanent limitations on the transfer of gitmo detainees to foreign countries and on the use of department of defense funds to build facilities in the united states to house detainees who are currently at gitmo. we were unable to agree to the administration proposal to strike section 1032, the provision that requires military detention of certain al qaeda terrorists subject to a national security waiver. we did, however, adopt a number of changes to the provision. in particular, we modified the provision so that it clarifies that the president gets to decide who makes determinations of coverage, how they are made, and when they are made, ensuring that executive branch officials

will have flexibility to keep any covered detainee in civilian custody or to transfer any covered detainee for civilian trial at any time. second, we clarify that there is no interruption of ongoing surveillance and intelligence-gathering activities or of ongoing law enforcement interrogation sessions. there have been misstatements, misimpressions, misinterpretations of the provisions of our bill relative to those issues. we clarify them to make sure that it is clearly understood by this body and by the american people that it will be the -- repeating, it is the executive branch, determined by the president, by people that he appoints who will make determinations of coverage, how they are made, when they are made, so that it ensures the

flexibility that the executive branch wants to keep any covered detainee in civilian custody or to transfer any covered detainee for civilian trial at any time. it's been suggested that ongoing surveillance and intelligence-gathering activity by law enforcement people would be interrupted, that their interrogation might be interrupted. it is very explicitly clear in this bill that there is no such interruption, there is no such interrogation session interruption or surveillance interruption or intelligence-gathering activities interrupted. the process to make sure that that doesn't happen is in the president's hands. the administration's review --

the administration official's review the draft copy of this legislation recommended additional changes. we were able to accommodate those recommendations except for the administration request that the provision apply only to detainees who are captured overseas. and there is hay a good reason for that. but even here the difference is relatively modest, because the provision already excludes all u.s. citizens. it also excludes lawful residents of the united states, except to the extent permitted by the constitution. the only covered persons left are those who are illegally in this country or who arrive at tourists or on some other short-tershort-term basis, and a small remaining category, but an important one, because it includes the terrorist who

clandestinely arrives in the united states with the objective of attacking military oa or othr targets here. contrary to some statements that i've seen in the press, the detainee provisions in our bill do not include new authority for the permanent detention of suspected terrorists. rather, the bill uses language provided by the administration to quodify existing authority that was adopted by both the bush administration and the obama administration and that has been upheld in the federal courts. moreover, the bill requires for the first time that any detainee who will be held in long-term military custody anywhere in the world would have access to a process that includes a military judge and a military lawyer.

i want to repeat that, mr. president. for the first time, this bill provides that in determining a detainee's status, that that detainee will have access to a lawyer and to a military judge. that is not the case now. nor would the bill preclude the trial of terrorists in civilian courts, as some have erroneously asserted. as a matter of fact, mr. president, it's the contrary. the bill expressly authorizes the transfer of any military detainee for trial in the civilian courts at any time.

an amendment that eliminated that authority was defeated in the armed services committee on a bipartisan 19-7 vote during the markup of the initial bill. the bill would not require the interruption of ongoing surveillance operations or ongoing law enforcement interrogations of suspected terrorists, as some have incorrectly asserted. the opposite is the case. as i have said, because we have included language in the bill that specifically precludes those possibilities. the bill also provides that the president, not congress, will decide who makes determinations of whether a detained person is in the narrow class covered and the president will decide how and when these determinations are made. the bill would not require that al qaeda terrorists who are captured on american soil be

transferred to military custody, because it includes an easy effectuated national security waiver. with this waiver authority, executive branch officials may keep any detainee in civilian custody or move any detainee to civilian custody if they choose to do so. the provision provides the executive branch flexibility to choose the most appropriate course of action for al qaeda terrorists whom we capture, including detention and civilian custody. that was the intent of the original language, and it has been clarified in the bill before us. i recognize that the administration remains unsatisfied with this provision. we've gone a long way to address their concerns. now, what about the dollar provisions in this bill? the bill that we bring to the floor today would authorize $662

billion for national defense programs, $27 billion less than the president's budget request and $43 billion less than the amount appropriated for fiscal year 2011. i'm pleased that we were able to find these savings without reducing our strong commitment to the mis men and women of our armed forces without you understand yining their ability to -- without undermining their ability to accomplish their missions. every budget must be closely examined to identify savings and the department of defense budget is no exception. this bill contains many important provisions that will improve the quality of life of our men and women in uniform, provide needed support and assistance to our troops on the battlefield, and make the investments that we need to meet the challenges of the 21st

century and provide for needed reforms and the management of the department of defense. first and foremost, the bill before us continues the increases in compensation and quality of life that our servicemen and women and their families deserve, as they face the hardships imposed by continuing military operations around the world. for example, the bill would authorize a 1.6% across-the-board pay raise for all military personnel and extended over 30 types of bonuses, special pays aimed at encourage enlistment, reenlistment and continued service by active duty and reserve military personnel. the bill provides that annual increases in tricare prime enrollment fees in future years will not exceed the percentage

increase in retirement pay. the bill authorizes $30 million in supplemental impact aid and related education programs for the children of service members. the bill authorizes service secretaries to carry out programs that provide service members with job training and employment skills training to help prepare them for the transition to private-sector employment, and it authorizes the service secretaries to waive maximum age limitations to enable certain highly qualified enlisted members who served in iraq or afghanistan to enter the military service academy. the bill also includes important funding and authorities needed to provide our troops the equipment and support that they

will continue to need as long as they remain on the battlefield in iraq and afghanistan. for example, the bill fully funds the president's request for $3.2 billion for the development, testing, production, and sustainment of the m wrap vehicles and the new m-wrap you will of all-terrain vehicles which are needed to protect our troops against i.e.d. the bill authorizes $11.2 billion to train and equip the after fan national army and afghan police. the funding level recommended by the commander of the u.s. central command, after consultation with the commander of u.s. and coalition forces in afghanistan. the purpose here is to grow the capabilities of those afghan security forces, to prepare them to take over increased responsibilitieresponsibility fs security as we begin reductions in u.s. forces.

the bill provides $400 million for the commanders tion emergency response program in afghanistan and $400 million for the afghanistan infrastructure fund that supports projects that enhance the counterinsurgency campaign. the bill extends the authority of the department of defense to conduct a program for the reintegration of former insurgent fighters into afghan society. the bill establishes a new joint urgent operational needs fund to allow the department to rapidly field new systems in response to urgent operational needs identified on the battlefield. it provides the central command, centcom commander contract authorities needed to stop the flow of moneys to persons

opposing u.s. forces in afghanistan. the bill contains a number of provisions that will help improve the management of the department of defense and other federal agencies. for example, the bill would address shortcomings in the department of defense's management of operating and support costs which are estimated to constitute 70% of the life cycle costs of major weapons systems. the bill freezes d.o.d. spending on contract services at fiscal year 2010 levels and requires the department of defense to take a number of commonsense steps to achieve savings in this area. the bill adds $32 million for the department of defense's corrosion prevention and control, requires implementation of recommendations of a recently congressionally mandated report on corrosion control, on the f-22 and f-35 programs. the bill improves the management

of defense business systems by strengthening the authority of the department of defense's chief management officers in the investment review process and ensures that this process covers existing systems as well as new ones. the bill adds $43 million to enable the department of defense i.g. to provide more effective oversight and to help identify waste, fraud and abuse in defense programs, especially in the area of procurement. in light of the budget constraints that we face this year, the committee worked hard to keep funding increases of any kind to a minimum. we added the following items: $66 million for unfunded requirements identified by military leaders. $90 million for investments in programs like the d.o.d. i.g. and corrosion control that have high pay back rates.

$66 million for critical investments in intelligence and cybersecurity improvements. $497 million for increased funding needed to ensure the efficient execution of ongoing department of defense programs. and $270 million for a handful of broad-based competitive programs needed to help us keep the leadership in military technology. i continue to believe that it would be wrong for us to give up the power of the purse given the congress and the -- given to congress and the constitution. i don't believe the executive branch has a monopoly on good ideas. in fact, i think we are more often receptive to creative new ideas that can lead to advances in the national defense than the defense bureaucracy is. nonetheless, there are no earmarks in this bill. finally, i would like to discuss four major issues in the bill

that were the subject of extended discussion and debate in the course of our markup this year. first, this bill includes provisions that would require sound planning and justification before we spend more money for marine corps realignment from okinawa to guam and on tour normalization in korea. these provisions follow detailed oversight that senators webb, mccain and i have conducted over the past years. in particular, the bill prohibits the expenditure of funds for marine corps realignment from okinawa to guam until we receive an updated force lay down and a master plan detailing construction costs and schedule of all projects necessary to carry it out. the bill requires department of defense to study moving marine corps aviation assets currently at marine corps air station

futema to kadima air base and the feasibility of relocating some or all air force assets currently at kadima air base rather than building a replacement facility at camp scwab that is unrealistic. the bill prohibits the obligation of funds for tour normalization on the korean peninsula until the secretary of the army provides congress with a master plan, including all costs and schedule projections, to complete the program and the director of cost assessment and program evaluation performs an analysis of alternatives justifying the operational need. the department of defense's current plans for okinawa, guam and korea were developed years ago in a different fiscal environment and are projected to cost billions of dollars more than anticipated.

at the time of tight budgets, we owe it to the department of defense and to the taxpayers to insist on a close examination and strong justification before we proceed. second, the committee adopted an amendment to strike all funding for the medium extended air defense system, meads. in february the department of defense announced that after investing more than $1.5 billion in the meads program, the program remained at high risk and additional funding needed to field the system was unaffordable. however, the department declined to terminate the program because the memorandum of understanding with our allies on which the program is based commits us to continue funding even if we withdraw from the program. for this reason, the department requested over $400 million in funding for the continued

development of a system that it has no intention of fielding. the committee amendment eliminates this funding. we recognize that under the memorandum of understanding, our decision not to fund this program could require the united states to pay for a program in which it is no longer participating. however, the committee concluded that the course proposed by the department is untenable and that the department should explore all options with our allies before continuing to fund a program which we no longer need. third, our committee members share both a deep concern about the rising cost of the joint strike fighter program on which we are now projected to spend more than $1 trillion, which includes operation and sustainment costs, and a strong belief that the department of defense must take stronger action to contain these costs. the committee unanimously

adopted an amendment requiring that the next j.s.f. contract be entered on a fixed-price basis and that the contractor assume full responsibility for all costs above the target costs specified in the contract. this amendment puts the contractor on notice that we have lost patience with continued overruns on the program. we're determined to protect the taxpayer from further cost increases without unnecessarily jeopardizing the heavy investment that we've already made in the program by prematurely terminating the program. and senator mccain has taken really the active lead in this effort and it's a very critically important effort for our taxpayers. finally, the bill includes a bipartisan compromise regarding detainee matters, as i've made reference to before, a provision

which addresses a series of important issues that relates to detainees. it's worth summarizing the detainee-related provisions in the bill. first, the bipartisan compromise would codify the military's existing detention authority as stated by both the administration of president bush and the administration of president obama and approved by the courts. second, the bill would require military detention for a core group of detainees who are part of al qaeda or an associated force that acts in coordination with or pursuant to the direction of al qaeda and who participate in planning or carrying out attacks or attempted attacks against the

united states or its coalition partners. that is a defined core group of detainees. this provision includes a national security waiver and includes language expressly authorizing the transfer of detainees for trial in civilian courts. it continues, the conditions on the transfer of gitmo detainees to foreign countries, including certification requirements to be met before a transfer may take place. contrary to what some have said, this provision does not prohibit transfers from gitmo. in fact, it is less restrictive of such transfers. and legislation passed in the last congress and signed by the president. in particular, this year's

provision includes a national security waiver that is designed to address concerns expressed by the secretary of defense about a similar restriction which was included in last year's authorization and appropriation act. the bill contains the same limitation on the use of department of defense funds to build facilities in the united states, ho to us gitmo detainees that has been included in past authorization and appropriation acts. this provision applies only to department of defense funds. it does not prohibit the use of department of justice funds that might be needed in connection for the transfer, for the purpose of a criminal trial. and it does not prohibit the closure of gitmo. the provisions require the department of defense to issue procedures addressing ambiguities in the review process established for gitmo detainees. the provision clarifies but does

not overturn the executive order issued by the president earlier this year. the provisions require the department of defense to establish procedures for determining the status of detainees, including, as i indicated before for the first time, a military judge and a military lawyer for a detainee who will be held in long-term military custody. the bill clarifies procedures for guilty pleas and trials by military commission. this provision would require a separate trial on the penalty with a unanimous verdict needed to impose the death penalty. so while a death penalty could be imposed by a commission, the detainee would have no assurance of that result. those are the detainees who want that assurance so that they can make themselves marytrs. as i've already indicated, these provisions have been

substantially modified as a result of extensive discussion with administration officials. we did not make every change requested by the administration but we adopted many of them, probably most of them, and made additional changes to address specific concerns raised by administration officials. mr. president, as we are here today, we have over 96,000 u.s. soldiers, sailors, airmen and marines on the ground in afghanistan with 23,000 more remaining in iraq. while there are issues on which we may disagree, we all know that we must provide our troops with the support that they need as long as they remain in harm's way. senate action on the national defense authorization bill for fiscal year 2012 will improve the quality of life of our men and women in uniform and will give them the tools that they need to remain the most effective fighting force in the

world. most important of all, it will send an important message that we as a nation stand behind them and appreciate their service. so we look forward to working with our colleagues to promptly pass this important legislation. and as i yield the floor again, i want to thank senator mccain, all the members of our committee for their hard work on this bill. our staffs for their extraordinary capability. and again, i want to thank personally senator mccain for everything that he has done to make it possible for us to get to the floor at this time. i yield the floor. excuse me, mr. president. mr. president, i now ... mr. president, pursuant to a unanimous consent request which was previously entered into on this matter,