>> not just capitalization, but probably coptures every ipo company. .. and governance of the company. that's where the savings are going to be. i don't think we'll see any savings from investment banking

fees or from anything else. and does that, you know, for the investing public with the initial investors and ongoing investors, does that make sense? >> the investment banking fees are substantial for ipos, and it would be nice if we did find ways to reduce that. in terms of the compliance cost, you know, a company that is doing a billion dollars in sales, whose market cap of 700, which is the upper limit, can really afford to comply with sarbanes-oxley. >> you can find the rest of this hearing online as we take your live now to the senate floor american progress in washington, d.c. for comments by the president and ceo of the export-import bank, fred hochberg. >> we will be discussing a new and annual competitive, competitiveness report the bank puts it. here at us and we believe the

best way to revitalize u.s. economy is through policies and investments that create that and ensure everyone can participate in as we look at changes in u.s. economy over the last several years, exports have been a key driver of growth. and so, fred's work to do exports has been central to the bright spot that we are seeing in the u.s. economy. today, the u.s. economics position is, however, being challenged like never before. the driving force for our economy is being squeezed at u.s. companies and workers are finding it harder and harder to maintain and exceed levels of prosperity that americans traditionally enjoyed. one of the key managed in which we do competitiveness is by making sure u.s. businesses, large and small, get more access to foreign markets. they can compete on an even playing field. we are seeing challenges in the world. china, with its derived state

capitalism, and it's investments that it is making, are ensuring that we may not see a level playing field. and so that's why, again, the work of the ex-im bank has been so central to provide that level a playing field for u.s. competitors, u.s. companies that are trying to compete on the global scale. in addition to being chairman of the u.s., for u.s. exporters, we are lucky to have the chairman, we are lucky to have chairman harkin berkshire because he's also a vigorous champion, key investment of unit state. ensuring that we are competitive over the long-term. and ensuring that we have investment in education, higher education, health care. he's been focused overall making sure american companies and our economy can compete. we are excited to have fred hochberg here. he is, has long expertise in economic matters. he ran the new school, and he

also was, randy small business administration and the clinton administration. he's been a fierce advocate or ensuring that american companies and the american economy can compete in the global economy. and we are lucky to have him here. [applause] >> well, thank you. neera, i want to thank you and the entire c.a.p. team for hosting the can, and i wanted to take a minute to reflect on what c.a.p. actually stands for. center for american progress. so, it really talks about our purpose as a people, our competitiveness as a country, and our ability to really create a middle class jobs over the next decade, and beyond. in all of this rests on

america's ability to sell more of what we make around the world. 95% of the world's consumers live beyond our borders. in vibrant, middle-classes are emerging in country after country. take china, for example. there are 250 million middle-class people right now. and by 2020, it is projected to have over 600 million with the purchasing power rifling the american middle class. so it should be clear to all of us that exports must be a prime driver of american growth for years to. of course, other countries have reached a similar conclusion. foreign competition and america's desired export rockets is tough, and getting tougher, every day. which is why president obama has relentlessly focused on

strengthening american exports and manufacturing. and fundamental to that effort is the export-import bank. at ex-im, we have a pretty simple goal, to help grow american exports and jobs, and the jobs they create. we do it by providing exports for american companies selling into foreign markets, where financing isn't readily available, or available at competitive terms. as we did last year, ex-im is releasing its annual competitiveness report. and it has findings that are a wakeup call to everyone, everyone in this room, in this city, and, indeed, america. this is the report. there are copies outside to let me actually take a moment to thank in particular i see in the audience alice albright, jim prince, piper, isabel, and their entire team for putting this remarkable report together. it's a report that is mandated

by congress to assess our competitiveness against other export credit agencies, or tcas around the world. specifically, the 34 advanced economies in the organization for economic cooperation development, or the oecd. and on this report card, we made the honorable. last year at ex-im's third consecutive year of record-breaking activity. we provided just under $33 billion worth of exports support to over 3600 american companies. we finance airplanes the ethiopia, power plants in turkey, locomotives to kazakhstan. all of those exports created good paying jobs for american workers. and for the first time in five years we did a higher volume of loans than any other eca in the g7. now, i'd like to take, because it is also brilliant and the work they do here today, we had

a little bit of help. the european debt crisis and also threes higher capital requirements made lenders skittish about providing loans. result, ex-im often stepped into the breach and finance more u.s. exports and jobs. by year-end we supported 290,000 jobs at zero cost to the u.s. taxpayer. that's the good news. ex-im got good report card. school is out. it is june, after all, time to wrap it up for the summer. not so fast. because the most striking finding of the report is not what ex-im did, it's what the rest of the world was doing. the international export finance landscape is changing dramatically, and not in ways that necessarily benefit the united states. and today, i want to discuss those changes and suggest to prescriptions how america can

respond. number one, we need to build a broader framework for export finance that includes more countries and more transparency. secondly, we need to reorganize the trade functions within the u.s. government, which president obama called for last year. in developing this report, we looked beyond oecd regulatory export reef finance which is the work ex-im and most of our competitors have a hand in since 1970. the oecd countries establish a framework to keep export finance in the background, but also out of the shadows. the oecd wanted to make export finance transparent, and to ensure that companies want business because they make great products. not because they were supported by cut rate, or one on financing. this framework was effective for decades. but our report clearly notes that it is showing its age.

for the first time this year, ex-im sent 18 -- sent a team of endless around the world to mumbai, rio, beijing and many other stops in between. we interviewed buyers, clients, banks, lenders and other transcendent about the challenging and changing nature of international export finance. what did we find? we found a steady increase in the amount of eca financing that is happening both underground and in the dark. we found an increase use of unregulated oecd programs like direct investment, and untied financing. as was a growing presence of ecas in brazil, india and china, which are not part of the current export credit guidelines. what do i mean by unregulated export finance? i mean official forms of finance that advance medium to longer

term national interest. when ex-im provides finance, when ex-im provides financing, we consider whether it is necessary to close the sale of the u.s. product. but countries operating outside the oecd framework can offer financing to promote a number of long-term national interests such as increasing access to natural resources, future inbound investments, or creating a better overall environment for certain national champions. for example, canada's export credit agencies delivered $100 million to columbia's ago patrol, with the understanding that canadian companies were getting a first look at future investment and procurement decisions. cordwood japan delivered $200 million to india to finance clean energy projects, with the expectation more japanese technologies would be used in india.

it's a wink and a nod. finance now, for future benefits. this is happening more and more. our report found that unregulated government export finance exceeds all export finance activity in the g7 combined. let me repeat that. all report -- our report found on regular financing exceeded all export of the g7 combined. roughly $100 billion in unregulated oecd export financing, and an additional 60 billion from other countries but my guess is it is still to know. because the second is so okay, i know it has only scratched the surface. -- is okay. it is like the wild west. the rules are loosely followed, if at all. our research showed the oecd regulate financing is dropped from two-thirds to one-third of export finance in the last

decade. and it's continuing to fall. that's why united states is working to build a new international architecture, to bring what is activity into flight. to reduce trade destroying export finance that credulous efficient and less stable international trading system. when president obama and vice president xi met in 2012, they directed the u.s. and china to begin work on a new rule space and transparent framework. since then we've expanded on working groups to include other countries and meetings have been quote on this, unscripted and productive. that's diplomatic speech for making progress. leveling the playing field for companies. the plan is for an agreement to be reached by the end of 2014. and it's critically important to american workers and businesses that would create this framework. because the conditions that allowed ex-im to have such a powerful impact last year are

transient to the rapid rise for exports is not. for the foreseeable future, our economic competitors will strongly support their companies and industries that serve their national strategic interest. they will continue to try and create their own national champions. this is the new order of things. how america responds to this new order will determine if we create the millions of middle-class jobs our nation will need in years ahead. by? -- why? because growing exports is essential to future growth and job creation. that's a fact. president obama knows that, and so does every ceo of every major company, and virtually every small business owner that i need. mckinsey report that america needs to pay 21 million new jobs by 2020 to once again achieved full employment.

that will require robust economic growth, and the only thing we can get growth is for places. consumer, business and government spending, and exports. the first three without question are facing big headwinds. exports where the growth is an increasingly where the jobs are, too. exports already supports some 10 million american jobs. the type of skills, good paying jobs we need more of that. and america needs, and america needs to once again become the top export in the world. we need to reclaim the position we gave up a decade ago, first to germany, and then to china. i don't say this as some feel-good nostalgia. with the size of our economy and the challenges we face, it is unacceptable to be in third place. america is a top producer of goods and services in the world. we simply must sell more of them

overseas. and we can. if we keep building on the success of the recent trade agreements with colombia, south korea and panama, if we stick to the vision of president obama's national export initiative which gives our companies more of the financing and other tools they need to compete abroad, then we can lead again. doing more exporting is a no-brainer. in fact, america doubled our exports in the last decade. and president obama wants to double them again in half the time. but our economic competitors have reins to. they've been focusing them on growing the exports. they are not standing still. in the last decade, china's exports goods have grown sixfold. brazilian exports have tripled. that didn't happen on its own. our competitors are strategic. china and other countries would single landed me focus on

outcomes. they identified businesses and industries with growth potential and put significant resources behind them. america on the other hand took a largely reactive transactional hands-off approach to the maintenance of our long run trade prospects. we have such huge domestic market so long that exports frankly were an afterthought. we didn't need to have a real plan to grow our exports. we made great products and had little competition. we were complacent and our complacency went beyond exports. four years, the u.s. underinvested in education, infrastructure, research and development, i'm the of the foundation of economic competitiveness. fortunately, president obama has been working to rebuild this foundation since the first day he entered office. and it's just in time. look around the world right now.

europe struggling through historic debt crisis, and mostly in recession. brazil, india and china starting to slow down after use of breakneck growth. many emerging countries have to grow at seven are 8% a year just to tread water. china alone is working to create 45 million jobs over the next four years. russia needs to create 25 million jobs in the next decade, more than doubling their current workforce. believe me, china and other countries will not be shy about using any tool as much as they can, for as long as they can to put their people to work. sovereign wealth fund, state directed capital, they will leverage every single one in attempts to outcompete us. and it won't be long before they have an opportunity to do so. our report found that many international buyers think countries like china are but

three to five years away from reaching parity with the u.s. on some high value goods and services. they are already getting closer with industrialized equipment. and airplanes and avionics, then avoid export and huge source of american jobs, could well be next. brazil already has a first rate regional aircraft business. china will still be coming to market with the. >> caller: 919 that will try to compete directly with boeing and airlines. so what do we do? a few weeks ago, cuyahoga, you heard the president's agenda for more competitive and prosperous america. one that continually innovates and develops cutting edge products and services from aircraft to i.t. to farm equipment. so i'd like to close today with a few prescriptions for the export and by extension export finance element of that agenda.

first, america needs to lead the world in developing a new framework for international export finance. in developing that framework, ex-im must be firm, first and foremost retained a muscular presence around the world. we need to keep supporting small businesses and fast-growing american industries like renewable energy, medical devices and construction equipment. that's exactly what we are doing. i just returned yesterday from russia, where ex-im signed a $1 billion financed statement with the largest bank, to boost exports of aircraft, farm equipment, energy equipment, and other goods and services. and, in fact, eximbank is once again on track to have a fourth consecutive record-breaking year of financing. if america demonstrates, we can do whatever it takes to ensure that our companies compete on a level playing field, others want a lot more incentives to join a

rules-based framework. that's what we're working to achieve by 2014. the date set by president obama and vice president xi. if we fail, international export finance will start to resemble the cluster of car dealerships. what each american flag, where there -- [inaudible] signs that say no interest financing, no money down, cashback. as every car dealer knows, car buyer can you can only give away so much before you undercut yourself. that's what we need to avoid with export finance. we can't have a race to the bottom to see you can offer the most cut-rate financing, and we can't have export finance and used to secretly encouraged competitive advantage. because in the end, we all lose, and it's not sustainable. but if we get everyone playing by the same rules, adhering to

the same standard, we will get more efficiency, stability, and innovation. we just want everything above board. more transparency, you know what everyone is actually doing and you stand a better chance of eliminating -- export finance altogether. that is the goal virtually everyone in congress can agree upon. here's a second thing. we get our own house in order. congress can make it easier to reorganize america's trade related agency. they can give president obama a fast-track authority to submit a bureau organization plan for up or down vote by congress. the president made this request last year, and he was basically reinstate the third that presidents have enjoyed for better part of 50 years, from franklin d. roosevelt to ronald reagan. america's trade stance has often been reactive instead of

proactive. because responsibility is confused across too many different agencies. other countries are more strategic. for example, many foreign export credit agencies effectively have their own domestic version of ex-im, ustr, opec, ita, sba, and all are under one roof. they take that out for that suit, pour into one big pot, and offer a customer oriented entry point to their customers business. there really needs to be a healthy debate about what configuration will ultimately work in the united states. but congress needs to act and give president obama the authority to make our government more streamlined, more effective, and more responsive to the needs of its citizens. these two prescriptions, building a better export finance framework worldwide, and a more streamlined trade apparatus at home are achievable. and they are urgent.

but the specific change require a more deep-seated change in the what washington thinks by the international trade. as you all know, ex-im came to a bruising we authorization fight with congress. in the end, he rallied by partisan support to provide american companies and its workers with the export finance support they need. the debate in congress wasn't just about ex-im. we were a proxy for a bigger fight about how rigorously our government should promote u.s. business interests around the world. and i have to say, i don't get it. ..

have what it takes to win in the global economy. they can go head to head with any company in the world. but they can't go head to head with another country bricking all kinds of financing resources both visible and hidden to support their own companies. president obama is right. we need a government that will fight for economic interest around the world and create more american jobs at home. probusiness means protrade, which means proexports and projobs. and that means supporting and spending partnership between business and government to grow

our economy. there really is no time to wait. it's time to get to work and thank you for inviting me here today. [applause] >> i will moderate a few questions. i think it's excellent. i'm going again, we'll have questions and i'll ask a few questions in the beginning and we'd love to have people identify themselves. get to the questions in a minute. you raise the whole specter of the ex-im bank reauthorization. you know in the questions are raised about the government's full of exports. you talked a little bit about the role of state directed capital essentially. so in the conflict between the two visions, i guess the question i have is i can

understand the arguments against state directive capital, if against ex-im bank if the world had no other state directive capital expenditures. if we were facing europe everywhere. but then we're now facing countries like china in which they are morphing the way they do state directive capital. as you reference. do you think we'll have these fights annually or we'll continually have a fight around the sets of issues. or do you think that because of the arguments that really brought by bipartisan support, the blogger concern amongst members of the tea party around having any effort at the federal level to support capital. those arguments have been changed fundamentally. >> the good news is -- we not annual. that's good news.

the bad news is, i think that's still a big debate in the country. i think it's a debate we're going see played out in the next five or six months moving into november. is there a role for government. what is the role for government to help build the economy and create jobs and how american companies compete overseases. the models that changed. it's not the european model. the european trading partners are finding or operating in ways that are legal outside of the o -- that help foster the country and the national champions businesses. so we have to face up to the reality and that's not part of the romantic view of how business operates in the country. that's the reality of the world throughout. >> dpifn that reality, should we change? should we add more, i mean, i know you discuss the need for framework. if companies -- if countries

aren't following the rules of transparency already should we become more nationalist in our policy. should we tie our national interest to the decisions more like other countries are? >> at the threat of sounding un-american, i think we should. let me say this, we have a very -- under president obama a muscular ex-im bank. the congress approved $140 billion. the best way we can lead the rest of the world to a better framework is come with full forest. we're not going to retreat, we're not going to backoff, we're going to keep meeting the competition and supporting mesh cheaps. we have a lot of to do so. by doing so we're more likely in the end to get a better border framework. we stand firm. and not back off. we have to more rigorous and robust. if we do that right, we can

probably get to a point where everybody backs off little bit. >> you said in the past when you see countries acting unfairly grow to the extra mile. can you give us an example. >> one example i talked about last year unregretly the transsanction hasn't completed yet. pakistan are looking to buy locomotives. they made the purchase, china offers finance that was outside of the realm. oecd. we made a decision the administration that we would match china's financing be able to provide -- we give the pakistan government if you buy american awe motives. it's up to ge an caterpillar. the quality and the servicer. we made sure we get the exact same financing offer. and so right now pakistan is still reviewing that proposal.

so that's the kind we can step forward and say, we'll make sure that we're not going -- we don't anybody in the united states to lose a sale because someone else get them cut-rate financing and we can't match it. >> i have one last question. there's been a lot of press recently you reference it about slowing down in countries like china, india, perhaps brazil. we've had rapid growth in the exports which has been one of the areas as i said, a broight spot for us. do you see that slowing down or do think that our country companies will be able to continue to do well even as these markets decline a bit. >> we've had great tail winds because of those emerging economies. they're still growing. they're not growing as rapidly. there's a lot of business to be done out there. it's going to be much more

competitive. as i said i returned from russia. they want to create 25,000 jobs. they only have 17 million today. there is the intense competitive pressure from the u.s. companies when i was in saint peterrers berg the last two days. companies such as gm, see see see -- see monos fighting for orderers. there's business to be done. if you think about the world economy with globally we have terrible infrastructure. terrible infrastructure globally. and we have a lot of frankly, unethical business practice a lot of corruption and lack of transparency. the world economy is still going. if we can mix the infrastructure we can be moving. i think there's a lot of opportunities for companies. it's going to be in the

intensely competitive situation to get those. >> are you looking at emerging markets like africa you haven't had as much focus as they have? >> we have, actually, one of the vice chair head to africa portfolio. last year we financed about 7 to 8% of all exports in africa about four to five times the intensity we do bloablly. last year we did a ton of financing to africa and already this year we've exceeded that number we've done more than the prior year. it was the all-time high. i think africa is growing it is the fastest growing region until the world. the other strong area for us has been latin america. columbia has been growing rapidly. even if brazil is slowing a little bit. columbus is growing. we had the portfolio mexico still the largest portfolio

globally. turkey we have one of the directors in turkey. turkey has been strong. last year we financed about 20% of all exports. in some of the key markets x m is vital toward making and closing the sales. >> in places like africa there has been a discussion about china using its economic policy and economic power to meet the long-term foreign policy goals. do you see that as an avenue us to discuss over the long-term. >> and china very much negotiates for the natural resources by making the infrastructure investments. in africa. in some ways, maybe controversial. i think that china focus on africa has been a great wake up call for american companies. it did shine a light. there was a lot of business to be done there. and these economies want -- the governments have more and more stalt.

technology is changing the rapids. >> they're bootlegging. >> exactly. eni think that -- it's a strong market for power. it's a strong market for farming equipment, construction equipment, and frankly, air transportation. that's two big a continent all connected by rail. all transcription is increasely strong market. >> let's turn turn to the audience. if you identify yourself. we're going take mix get reporters and other people. he said it, not me. go ahead. >> my name is matt from north side inside u.s. trade. i want to go back to what you talked about in the comments about the international framework for the new international framework at the u.s. is working on with china. i don't understand you said in diplomatic speech you're making progress. i wonder if you could give us a

little more sense of you know what you're working on with china i understand that initially you were working on a work plan and were supposed to meet, i think next month, perhaps to work on that. i was wondering for you could give a little bit more sense behalf is the discussion is right now and how far are you away from getting to the point where you can actually launch these negotiations? and also, in that, you mentioned that other countries are involved in the talks. are those members of members who are currently in oecd agreement or do you have other countries that you flag in the speech, india, and brazil specifically is there any indication they're interested in participating in the initiative? finally . >> i have to write this down. finally, the so called practice

that the partners are engaging in that go above and beyond the current agreement. is that something you plan to address in the new international framework? do you want sort of new disciplines or agreements on those? >> let me see if i can get the questions right. president obama invites president xi met in february and said we're directing the respectives governments to create a framework by 2014. we're working at that. and the conversations were open transparent and unscripted. which is a big step forward. it they were a big step forward. they were real. what we're doing now is mapping. what do we mean belong-term, short term, infrastructure and how we define some of those things. first in the definitional phase. how far -- where are we close together far apart? china is including other members oecd hoping to be part of the

conversation. begin to say what's a framework we can agree upon. the oecd worked for many years started in 1978. why say it's showing the age, it's probably because not everybody is in it. and two, there's a lot of financing that's going around it. so the question is, we'd like them to be as broad and embarrassing as we can. we'd like as many people into the at the present time. china is the secondest large economy in the world. the largest exporter of good. it's not tangible for them not to be a part. that's what the foundation of what we're doing. brazil is a part of the oecd when it comes to aircraft. we made some progress there. i think we have to see what the next steps are. >> nothing -- not nearly as specific as what we have with china.

[inaudible] >> i'm nelson i'm asking my question and my capacity as chair of the x m advisory board. >> is that fair, really? [laughter] >> gets a lot of credit as chair of the board. he spearheaded with the effort with the advisory committee. i thanked him personally and the representation into a very cohesive letter that we sent to congress. thank you, nelson. i'll take the question. [inaudible] >> my question has to do with what the findings in the advisory committee letter is is which is at front of the report. it has to do with the small business. you talked about the way other countries manage to package their services to their own businesses in the way that is ease to use. you have identified, we have identified outreach to small business in area where the bank needs to continue given the importance of small business in the economy.

looking forward, how do you see the bank reaching to out to that support constituency and helping them create the jobs that the bowing and the -- beauings and the ge and others get ahead of. >> small business at the center of president obama's strategy for export and the economy. and i worked at fba on the president clinton side. you never know, that's part of the reason president obama wanted to covet the x m is bring that perspective to it. we did $6 billion of loans guarantees and financing to small business last year. that's up 90% over the last few years. it's not enough. it's the hardest part of the area to go forward in. when i was in russia we talked about the small and medium sized enterprises. we have something called g11 which is the g7.

there's great interest in small business but candily i haven't seen another country doing much more than the service to be honest with you. so i think one of the great hidden advantages we have in the country is the dies asterisk community. one of the directors is going to be meeting with the community in indonesia in los angeles. finding ways we have other people from small business who started a -- friends or relatives back in indonesia or egypt or other parts of the world is one real way we can gross small business and actually a good international diplomacy to that. in our case, we're trying to get more small business find more banks that will lent to them. we announce a new product called -- which is a direct loan from the x m bank to small business from up to half a million dollars. president announced that in february.

it's hard to find any bank in the country who makes to a loan for half a million dollars. the cost is too high. we take it upon ourself. we make the loan and working with banks on that. once the company gets a loan for half a million dollars and get to grow. they want to do business with them then. >> over here. >> mr. chairman i'm with bloomberg news. followup on one of the previous questions. you mention that a lot of unregularred activities happening with the oecd countries. until there's a framework in place, does the u.s. engage in unregulated finance to compete with international competitors. secondly, you said that chiewn and china and the u.s. are working on the framework. it's one of the beneficiaries. what incentive do they have to get it right if they're benefiting from this?

>> i am unaware of any loan programs we do unregulated nature by the u.s. government. that's not how we operate, you know. in the united states government, when aig -- it's to help build education, health care and so forth. it's no the the u.s. commercial and sales efforts. and that's different than the way of the world operates. our ises much more about helping that particular country. we don't operate in that way. it's not how we operate. the incentive for china is one there's more and more pressure from the g20 president obama made that clear other members of the g20 made it. and secondly, it ultimately becomes uncompetitive. it becomes too costly to try and run those kinds of sort of below market financing schemes and cut-rate and one-off deals.

there is a -- may not be immediate as my example of the car dealership. we can't afford. it's not stannel. so i think that china is coming to the understanding they're looking at growth rates moderatedded in china, take looking at -- [inaudible] and so they're looking to also become as part of the wto it is like the u.n. for commercial interest, business interest economic interest. and i think they're looking to find a way farred forward. it's something president obama has been a strong advocate and relentless and focused on that. >> we'll take questions in back. >> john nelson with wall street. we were strategic partners in europe milano. appreciate it. got back from los angeles working with the federal reserve bank in better leverage federal

credit enhancement programs. it was $1.4 billion of stimulus credits. $169 million went to california. they're having a hard time getting it out. we came up with a way of leveraging special platforms of support credit enhancement in the los angeles region. don't the other nations have sovereign credit programs that could be enhanced with other impact investors like that. there could be a broadening of credits internationally and might be able to show those how they could be enhanced with credit support programs. >> i'm not familiar with the specific to the program you mentioned. but clearly it's in the united states' interest. i think it's been central to all advocate city in europe trying to get more mous $, more -- muscular and a greater stem los to great growth around the world. we're in a growth deaf suggestion. -- deficit.

i was in business twenty years. it coffers a lot of sins. you can afford to do a lot of things can 0 go wrong and work out sales cover that up. we need to -- once we get faster growth, we can that's -- you're not going to save your way to a better economy. it can't work that way. >> the woman in back. back corner. >> hi my name is nichole with the cr club. you talked about transparently internationally. i want to ask you about transparency within the u.s. the bank does not disclose the companies involved in projects you're looking at financing. the amounts of money exactly what is being financed for the project until after the deal have been approved. through the process, we've seen the bank finance over $8 00

million for the plant in india. the company reliance industries had not finished the land ak situation. there are lawsuits over the coal aloutment. there is an ongoing coal crises and the project in south africa appar tide contracts meant that low loan rates were guarantee to industry. the price was being paid for by people who could barely afford electricity and the rates were going up. even here in the places like pennsylvania and west virginia . >> my question for you is when will see the type of transparency in the process domestically and mach sure that renewable projects helping build the industries and help e people are being financed other than these coal projects that are

damaging both to communities but communities here in the u.s. >> thanks. >> let me try and answer that question. we made our large environmentally sensitive project. they go through two votes. the base on the environment -- and subsequent vote that after that that is made on the project finance. in those large projects, two you happened to mention go through a two-step process. it's mandated by our transparent environmental policy which i will tell you is the only one in the entire world that is fully transparent. ready not one of the training partners has at transparent environmental policy like we do. we candidly -- we could argue a disadvantage. we publish all of this in advance of proving any project

whether it's not the case whether it's china, japan, germany, people inside and outside the oecd. in the case of those two projects, we went through with them. they have a portfolio approach to the renewable energy in both places. we're not supporting coal plants that could be environmentally above the target level of 850 units of carbon per. which only is supercritical plans and only in countries where we've seen such as south dakota africa which has been -- south africa which has been citing as the best long-term portfolio and environmentally sensitive program. renewable energy, coal. we're looking at we're going support a country that is making a genuine effort and plan to have a balance energy policeman and we want to be a part of that.

and many of these cases, the two you happen to cite, they're being build anyway. we have a choice. we can build with them american equipment and services or engineering. they're going to be built one way or another. i believe the choice is with our technology and engineering than be more environmentally sound and will keep the jobs here in america. >>ic we have time for one more question over here. mike is coming to you. >> hello. my name is larry. management consultant. what do you see as at endeering principal american values you leverage to build a constituency for your programs here bipartisan or otherwise and how do those play into the international competitiveness that you're trying to foster? >> i think if i understand your

question. we are guided and the x m bank was started by fdr in 1934 about creating jobs. we are not a national interest export credit agency. i'll give an example of canada and italy are two good examples. if it is built by canadians or eye italian it's good enough. we require it to be built in america in the u.s. we're looking to create jobs here at home. our values system or what guides us in makes decisions at e embank is -- ex-im bank necessary to close the deal. is it creating jobs here at home? let me tell you, give you an exarchal -- example we financed a solar powerplant to india. created good jobs here in the united states. created 600 jobs in india to build and installthe soar

powerplant and 200 jobs to maintain the powerplant. that's a very strong statement because we're not only creating jobs here at home. and in india it makes a welcome country to export products and services to. we're not sending workers where they're not only going to do the exports and take all the jobs in the country where the exports are being destined for. we're creating good jobs in the form of economy that is heavying to build the economies as well. >> a great ending to a great discussion. thank you so much for come for the report and for the work in leading manufacturing. thank you. [applause] [inaudible conversations]

[inaudible conversations] in the supreme court is ever issue a number of decisions today it did not announce the ruling on the health care law. that decision is expected thursday on the court's last day for the term. today the court struck down much of arizona's immigration law

allowing one part to go forward that's the requirement of police check the status of someone they suspected in the country illegally. and in a another ruling today, the justices overturned montana's law that limited corporate spending on political campaigns. you can share your thoughts about the ruling with us at c-span facebook page. facebook.com/c-span. and the u.s. senate gavels in at 2:00 eastern today. senates will debate a bill to continue the federal flood insurance program. at k5u 30 senators volt on moving an fda user bill forward. it lets the agency collect fees to pay for the aprowfl process on prescription drugs. live coverage of the senate here on c-span2. the communique or its with deputy -- human rights and low before. he talks about the status of internet freedom abroad. it airs tonight at 8:00

eastern. washington journal continues the spotlight on magazines wednesday former bank of america president. he's written an article on harvard business review on how to improve the banking industry. you can find the link to the article c spain.org and talk with her live wednesday morning at 9:15 eastern on the companion networking c-span. >> when did clean energy become a dirty word? what is wrong with clean energy. you can believe what you want about our existing energy sources. but why couldn't you also believe there's an opportunity for clean energy? >> i think we need to create demand in the next five to ten years for renewable to offset all the advantages that fossil fuels have had. i don't think it's clearly happening on the basis. it would be more effect i have if was a federal policy. >> consumed in mobility as well as healthing our homes and

officers -- offices. and natural gas. north america is the only continent why we don't have wide spread vehicles -- there's a ton of people out there that natural vehicle cars or trucks are more likely to burst into flames during a crash. >> developing alternative energy sources including wind and biofuels were all part of the next generation energy to rum. watch the conversation online at c-span video library. >> georgia republican senator says he has a plan for getting rid of home mortgage companies fannie may and freddie mac. he presented the plan ton a conference on veterans housing issues. his remarks are about an hour. >> don't be shy. filter forward. some of the best seats are up front.

good morning. very good! i'm e than handledman with the national housing conference. and match of nhc. i want to welcome you annual policy coming home, framing the housing challenges. for those not familiar with nhc, i know many of you are. i see many friendly faces here today. we along with our research affiliate, the center for housing policy are the united voice for house. national nonprofit that brings together a wide range of housing stakeholders for profit, nonprofit, public sector, private sector. all around the country. around the common goal of making sure that all in america have access to safe, decent, and affordable housing. i want to give a very special thanks this morning to the home

depot to foundation who is the sponsor but one of the honorees from last night's housing person of the year. i see fred right there. if you want to raise your hand. say hello to everyone. [applause] i want to thank do a special thank you to nhc's board our policy committee, and our many partners in the housing and veteran affairs world who have with their support and advice helped to make today come about. we are very grateful for all of that. and hopeful for the strong part ensureships -- partnerships that are being forged to address the housing needs of those who have served. because today really is about our veterans and their housing needs. as those who have served come home, they are facing some of the same housing challenges that

all in america face. some of them face imminent foreclosure, some needed essential home repairs or retrovisits to make their homes assessable. some are struggling to find an affordable rental home in a good neighborhood. ores have underwater mortgages. and some are homeless and will need a lot of ongoing help and support to get back on the feet. so nhc and the center aimed to empower the housing commune toy join with the veterans community to meet the challenges by creating space for discussion like today by identifying solution, and developing new policy responses. so after today, you should look for ongoing engeorgiament, there's a fact sheet in the pact. it's one of the first ones for the year as well as research briefs to come. there are be a veteran housing -- coming this summer.

and you will see convenings of veterans and housing organizations together in the ongoing engage. ment. veterans are a important community among the many who have the serious housing needs. our goal is to support the groups with the long standing commitment in the area and extensive expertise so we can share our strength. truly, we are stronger together to meet these challenges. so you have an agenda in your pact you will have speaker bios. my introduction will be belief. we going to start this morning with deputy secretary wt scott gal -- goule. he is a veteran of the u.s. navy. i would invite him up to speak to with our welcome and thanks.

[applause] >> good morning. we got a carried away. i met a lot of great people coming in. senator isaacson at the doorway and lots of folks making the way here. i apologize for being here. thanks for the mercifully short introduction. senator, a privilege to share this morning's events with you. thank you for the staunch advocate city for american's veterans. mark johnston my colleague, good to see you again. let he take a moment to greet members of the veterans home less and rental housing panel. we have nan president of the national alliance and homelessness, john president and national coalition for homeless veterans. patrick shareton, senior vp volunteers of america and are san hagty president of community

solutions. i want to thank the housing conference for inviting me to the discussion today about quality, affordable housing for america's veterans and the efforts being taken to address a related challenge had which is homelessness itself. before i begin on behalf of secretary and the department of veterans affair. i want to congratulate this year's honorees for the tremendous achievements and ensuring safe housing for our nation's warriors. affordable homes with access to health care and other va services. they are the hope depot foundation, operation home front, involve fears of america -- volunteers of america, cloud break development and u.s. vets. kelly, are you here? kelly is here. good. jim knots? okay. michael kink? king. i see pete pointing them out.

tim cant well and steven. >> look at the great initiatives. they boil down to an insight and passion for doing the work. we appreciate all that you do for america's vrns. we know there's a that laps in the world that we can't control. we can't prevent an extreme weather, for example, or stall an earthquake or i think in some cases even fix the europe sovereign debt crisis. when it comes to housing here at home. when it comes to homeless and hungry leaving on the streets, i believe we can exert an element of control and be change agencies. we only need look to thed a have casey of the national housing conference an the array of like-minded organization who whose work across accrues to the basic american need of affordable housing whether urban or suburban rural. affordable housing support strong communities. build the communities that relive in.

it strengthens or notion's quality of life and improves local, regional and health. it's doing the part in the mix. in the slowly recovery economy a a frag m housing market. we get that. va offers veterans the only zero down payment home mortgage plan in america. today there are over 1.8 million americans in living in a home performed with a va loan. at 2.25% we maintain the lowest foreclosure rate of any financial institution in the country. even sew, tough times have demanded tough action. in 2010, we were able to help 66,000 veterans avoid foreclosure on the va home loans. the next year in 2011, we increased number of saves as away call them, to nearly 73,000. that translated to 83% of

veterans who were in default not losing their home. over the past three years web we stepped in to present more than 176,000 veterans from foreclosure. we will continue to press hard and to support every veteran pursuing the american dream and help every single veteran who is struggling to keep that dream alive. the bottom line is veterans can't buy homes, keep homes if they don't have a job. they're facing tough obstacles to get the employment. in the economy slow to recover, worst since the great description, unemployment rates improving but not as fast as we like and stiff job competition. we're worried that folks who look to a veteran and see them in an interview context are wondering where they have a john rambo on the hand. we want to assure them they do

not. and so, our reach extended to other critical aspects of post service life. education, employment are high priority issue. they go hand and hand with personal financial stability and contribute to the national economic well being. we are 400,000 veterans on college in the new old gi. do we have anybody old enough for the old gi bill? outstanding. my dad was there. fought in world war ii and korea. went to school, i'm told that none of that money was used to buy cold beer as a undergraduate. and then, congress in the wisdom basically said we're going do it again. the most successful social program in the history returned. $7 for every one spent. we're doing it again for the african -- afghan vets.

we launched veterans retraining assistance program. to provide skulls and training unemployed veterans between the ages of 35 and 60. if we combine all of the va other educational programs, we have more than 920,000 veterans in the family members enrolled in some type of virginia sponsored college -- va i say some family members if you have been in service for the period of time after 9/11, and you have a child that you need to put through college, you can transfer that benefit to him or her. that $30,000 or $40,000 a year over the four-year period goes to the child. you want to see the veteran do that but that's their heart and conscious. we have youngsters who are enjoying the benefit as well. our goal is straightforward. as president obama has said veterans veterans are crowcial to our economy and we need to

find them jobs. we are exerting a full-court press to did that. this past january here in washington, d.c., we had an event we had 4100 jobs available in a single place. the washington convention center. that's 41,000 jobs companies there they want to fill. they interviewed 3600 on the spot and made 500 tentive offers in the two and a half day period of the event. for those who have familiarity with a job fair, that's six times the level of acceptance in a normal civilian job fair. and next week, in detroit michigan, we're going to take that model and expand it. we have 24,000 jobs available in detroit next tuesday and thursday. and not only have we combined coaching résume building and the like, but we have also bringing in 500 procurment decision

makers. 500 from 16 different agencies across government who the buyers. you're not talk together small and disadvantaged unite expert. you're talking to the person who say they have a product or service and i'm here to get you in engaged in a competitive process and be able to make that connection. and a third aspect we brought all our services together one big horseshoe table and if you have a medical issue that you need evaluated literally private exam rooms, physicians onsight. we'll go back and you might be missing the dd214 or the eligibility for loan program. you request go through the whole horseshoe and get to the end of it. we have to offer. i remember being struck at the washington conference center several months ago now. and a youngster came in off the street, a veteran had the id. had been a trigger puller, if

you'll forget the expression. the guy had been in the infantry out on the front line in afghanistan. and the guy came up and was in a t-shirt and and said i'm here to interview for the job. in the one interaction, i realitied again how much work we have to do to make sure that people are job ready. did not have a résume, really didn't understands how the process went. graduated from high school right into the service spent four years there at the gonzo station right living in the tent overseas. and four years later, age 22 you bring them back into washington, d.c., with a traffic and the lights and the, you know, how you're going to get a job. and so we have really retrenched and redefined our employment programs around veterans talks to veterans let me walk you through this process. let me translate your skills into civilian speak.

let me help you with that job process. let me get you set up. let's bring employers who want to hire you. one company is bringing 500 jobs. and the jobs are good ones. range from blue collar to white collar. we have the auto companies there. it's quite an event. please do take note of that. we will be joined out there with representatives from the first lady's joining forces initiative. we have the u.s. chamber of commerce there. hiring our heros program. we actually only paid 25% of the bill to put on the jobs conference. so the private sector is picking up the 75%. it's a great example of leveraging. we of course, have hiring managers from the federal government as well bringing 4,000 jobs to the site with a veteran's preference which means you can go in and hire them fairly quickly. we'll be onsight. -- on site. it's going to be a heck of a

three-day period. we're working to make sure hat open house i mentioned is providing a full service experience for our veterans. you all remember the movie, fourth of july" a long time ago. it spoke to an era you couldn't go to the va and expect to have good service. it is a different va. it is in the top cortile of health care performancers in the country. we are the largest direct health care system in the nation. in the '90s it sifted to a approach which as managers and leaders is quantity tiffly oriented quality health care. we have a very, very different va that we're bringing to the table to offer health care to our veterans. we all know that for a lot of americans, the slide from home to homeless is a slippery slope. even for the 1% of americans who are veterans.

highly disciplined, highly motivated, they go from a leading edge performance in special operations, and on the tip of the sphere to a year later being homeless. what's wrong with that picture? how did we fail them? highly discipline and motivated. they have the can-do spirit somewhere in there. we have to reach in and get it back. and yet, when they are return home, a small but significant percentage of them end up homeless. they suffered depression, substance abuse, outsized percentage of joblessness. all the factors that contribute to homelessness in this country, the world's richest country on any given night tens of thousands of veterans are sleeping on the streets we see them here in washington, d.c. i know i do when i go out in the winter to perform the point time count.

homeless near thousand homes i stood, and near thousand tables pined and wanted for food. now in concert with our sister agencies, va has taken the lead in challenging that and it started at top. nearly two years ago president obama told our country's veterans we won't be satisfied until every veteran who has fought for america has a home in america. and under my bosses' leadership we moved out smartly to make good on that pledge and together we set and ambitious goal. a crazy goal, a wildly out of bounds goal in washington, d.c. we said we would end veterans' homelessness by 2015. for those who haven't lived in washington, d.c., for awhile. you know it's a sin. you set a measurable outcome a time phased it. and it would be so easy to say

it's an aspiration or something we're going do in the future, but the president and secretary shinseki are going it end. we're holding ourselves accountable for moving down that line to zero. about the president and congress have stepped forward to get the job done. we had in 2009 $376 million at our disposal. we have billionings of dollars on the health care side. rescue were underfunded. we moved to $1 billion in 2012. the budget request is for $1.3 billion. we know that commitment and compassion with not issue measured in term of the dollar to the system. acorred a -- it is not the same thing as results. and here the results that we have so far. in 2009, the estimated number of homeless veterans was something around 107,000.

by 2011, the number was down to 67,000. what we believe announce will announce later this year is a count that takes us below 60,000. and that will keep us on track for the next data point goal of 35,000 by the end of 2013, as we work to end the rescue phase of homelessness in 2015 on target. now, ending veterans homelessness has many facets. it's literally a test of all the va has to offer our outreach efforts, our health care and mental services, our housing programs, our claims and educational benefits with our hiring initiatives as i've tried to argue. and our challenges is two-fold it's to rescue the vshes who are already homeless. and it doesn't make any sense to let it happen. we have to prevent the at-risk from sliding down the slope i

mentioned. what we're try -- here briefly are some of the programs that va has specifically in-housing. we have a grant. that helps provide over 14, 700 housing beds and services through partnerships with 600 community based projects nationwide. our goal is to return veterans to independent living and employment as soon as possible. our enhances program makes long-term leases available to public and private organizations such as homeless providers to use under performing va property. believe it or not, we have 65,000 buildings, 165 million square feet of space, and 33,000 acres of land in the va. simple idea someone had it. and it was look, if we have

unused land. maybe we could advantage a housing partner at ngo or standard local government to use that property. we'll get them a long-term lease. it gives them a financial value. they build a property and take a rent. we'd be happy to condition on seeing vshes housed in the facility. in 2011, we provided 11,000 housing units for veterans and families and survivors. using that method. in 2009, we launched the building utilization review and repurposing initiative to reuse vacant va land. if i have a vacant building and a chain link fence around it and somebody to walk through fire prevention. it's $1 to $4 a square foot. i have to pay that out of the public. why not use that property and transfer it. you have to have money to get up

to standard. it's a way to do that and through that method we added another 43,000 -- 4300 we also have a wonderful partnership with hud. and it's called the va hod voucher program. it remains the nuclear weapon in the arsenal it's flexible, responsive, it moves homeless veterans and families into permanent housing quickly. here's how it works. it provide hogging assistance vowfers they low -- privately owned housing at the same time we do is wrap around that individual now in a home the intensive clinical and support services that would actually keep them there. since 2008, hud has made 37,500 vouchers of available that were

fully funded about 10,000 each year and annual cost of $75 million a pop. 5,000 veterans have vouchers and waiting to find the house. there's a little bit of delay. in the president's 2013 budget request, there's an additional 75 million for another block of 10,000 hod vouchers. -- hud vouchers. it'll bring the total to 48,000 and great news as we drive down the numbers of homeless veteranses by ramping up the powerful tool that we. we're grateful to hud in the capped environment when they're making that at the same statement they're taking their program down to help us out. we're also working to leverage new technology that can better direct resources. this one is a lot of fun. three weeks ago, did an

announcement with the singer john bonn vowy. all bonn owe i have and the -- we were on the secretary of stage and announcing the winners of the competition. check it out. you have a smartphone? of course you do. anybody have an app for starbucks? i do. you punch in your location and all the starbucks come up. we the had the idea what if you were standing on the corner of third and you saw someone who was homeless and had an app you could enter your location and it would tell you where the nearest hot meal and beds were. we didn't have any money to do that. we decided to find some dollars and create a competition a nationwide competition. went out to the developers around the country and said we'll give you a $10,000 price if you can solve the problem. i'm an old ibm executive.

we charge money for the software we used to develop. i what would it dos do something like that. hundreds of thousands of dollars. five teams developed five apps that met all the criteria in three weeks. one was two guys in mcdonald before they left for a camping trip. [laughter] developed this application. it was fantastic. now, they're all competing together and checking so on -- there will be a gran prize winner that gets $25,000. for 5eu7d ,000 for cost and with a wonderful contribution of john bonn bon jovi. it is amazing example of how innovate and use technology. what we had to do on the government side was hang the data outside. describe the tagging system and the interface standards to be able it get to that.

it's a strategic use of data. it's the public data. make it available to everybody and now the application developers can use that. so in august, we'll have the final results of that contest. now there's -- all the irish proverb my mom use to say this. it's the shelter of each other that people live. and i think those words frame the operating paradigm being brought to the bear on the issue of homelessness. i get to sit up here and stand and talk about what va has done. i have no illusion about how the problem is really getting solved. it's national, it's community organizations, it's neighborhooded a have. it's faith-based groups. like my church who does the work. we share in a common purpose. and we're ensuring that our former defenders are provided

one of the most basic human needs for shelter and safety. and the truth of the matter is, there's no one agency in government can do that. and no one private sector organization that can do it all. part ensureships and collaborations are absolutely essential to achieving results in the 21st century. we have to look at the housing heroers of the conference to confirm the power of partnerships. we are trying to end homelessness. we are working to prevent and end it. we're making good progress in the effort. i think it says a lot about who we are. about about the commitment of each of you here today. in closing, let me extend my tank thanks and graduations to the 2012 housing honorees. and to the national hogging

housing conference. you're here to talk about and work on that. i want to thank you for the opportunity speak here to you today. thank you. [applause] thank you very much mr. deputy secretary. it is a pleasure to have the va here and demonstrating strong partnership with hud and all of us in addressing the challenges we face. now, i have the pleasure of introducing senator johnny isaacson from georgia. he has been serving from 2004. has been a thoughtful and vocal champion of housing and veterans. you have a long bio in the packet. nothing substitutes for listen together man himself. thank you very much.

thank you very much. it's han nor to be here today. i want to pay tribute for the national housing counsel. i was in the real estate business for 33 years. selling residential houses and building and renting and working with veterans because i started out right next to diamond air force business making the va loans in 1968. it means a lot to me. i want to pay tribute to the home depot foundation and company. the commitment to the veterans and housing are on unparallel to the united states. and the first lady is here today liz blake who was honored last night he's the first lady of home depot. he's the first lady of has habitat for humanitarian -- in

doing everything they can to make an investment to protect the families when the employees are called up and activated. they help take care of the family and home. when the guy comes back or the lady comes back from service, the job is. there they preserve the accommodation they are getting. liz, i don't i know you deserve the award and recognition you got last night. [inaudible] kelly easy on the eyes too been i met her earlier too. [laughter] good to see you, kelly. [inaudible] >> liz is the beth. best. [applause] the secretary gould said two things that i want to close with. there are are two words he mentioned in his speech are the key to solving the housing problems we face in america not just for the more than but for the american people. one of them is jobs. jobs solve a lot of problems

because when jobs with income comes the ability to pay the monthly payment and monthly payment gives you the chance to build equity. number one, jobs is job one. it's very important to focus on that. number two, you mention the word partnership. i can't think of a better toward describe what we need to turn around the housing market in the united states. not just for veterans but for all more americans. think about patter inships and working together. they did a remarkable job in the last six years since i've been on the veterans' committee reaching out and helping them make the transition to veteran stratus. veterans who have va loans have an -- in the va. i know, from being in the business for years no lender wants to forclose on any anybody's house. the worse are the those who

forclose. they write them down and forget about them. they want people to stay in the housing. at lot of americans are affray to go to the lender and say i have a problem. is there a way we can work it out. the va an the veteran service organization are doing a great job of reaching tout veterans when they get in trouble, bring had them in and working with them and the lender the va is govern tow to work out the loan so the veteran stays in the house. the foreclosure elevate lower. and their turn arounds are greater. the -- to keep the veteran in the home and work with the lender that has the loan that va is guaranteed to . . ..

proposed a solution for the problem occurred in the mortgage market in the united states of america. aside from fha and va the principal source of mortgage money and the country was freddie mac and fannie mae. they guaranteed securitize and wrap loans presidential mortgage. mortgage. when they came under tremendous pressure, and i mean tremendous pressure, and a subprime crisis, freddie and fannie went under a lot of the rest and they became a wounded brand. and now are any conservatorship.

demarco to a great job and quite frankly they're not the agency they really need to be. they aren't because the politics but there's got to be something to replace freddie and fannie. everybody says get rid of them. if you get rid of them didn't have anything to back them up. people forget that after, when the depression it, thanks got out of business of making loans. we pass laws to encourage savings and loans to be created and we gave them a preference against banks and interest so they could make loans. but after the 1986 tax act, the savings and loans went under because we had the rtc. they went down. what has replaced them? freddie mac and fannie mae. as freddie mac and fannie mae leave, there's nothing left to so quickly i want to do what my recommendation is because i think it brings liquidity to mortgage market will bring about jobs, improve home sales, help access affordability not just to veterans by to all americans. yes, freddie and fannie made a bad mistake. they securitize subprime loans but that was a mistake forced on

them by congress the congress to freddie and fannie to own up to 30% of its paper in a formal housing which the market and wall street determined to be subprime borrowers. so b., c. and d. credits targeting prime loans and they start defaulting when the economy went in to at&t's get called against freddie and fannie. freddie and fannie lost $171 billion. that's the problem that we're never going to correct and resurrect but it's a problem to solve within the agency i propose which is a mortgage finance agency. whose goal is to guaranteed securitize and rapid residential mortgages phase themselves out over a ten-year period of time. but freddie and fannie in from conservatorship to receivership, like a structured bankruptcy and wind and then, open the mortgage finance agency we shall make an jim keet and securitize qualified residential mortgages. the recession in america that began in 2006 and a still going on today was not a recession of

over lending. it was underwriting. we made bad loans to bad borrowers. people who were not prepared to be homeowners. when they foreclose on we had a christian of difficulties in the housing market. what is a qualified residential mortgage? you have to have at least 5% down payment. you have to buy private mortgage insurance on the amount of the loan from 70% to 95%. and supplement insurance from 50 to 70% some half the obligation of the taxpayer is already insured and backstopped when you make the olympic secondly the borrower has an income that demonstrates they can make the payment. borrower asked of a credit to demonstrate they are a responsible creditor. they have to have an appraisal. they have to title insurance to search the title to guarantee it is good. in other words, go back to the old-fashioned days of putting money down, having a job, having good credit, that way when you securitize wrapping guaranteed loans as a federal agency your

securitizing and rapid loans that aren't going to get foreclose on, that will be repaid. but one of the requirements of the mortgage finance agency will be for nfa to have a ten-year plan from its inception to privatize. that is possible in the same way that was done in catastrophic insurance in great britain will you take the guaranteed fees that are collected at the close, you put us guaranteed fees into a catastrophic sinking fund, it becomes the first backstopped to protect the american taxpayer from having to pay to guarantee of alone. that is a brief description of a way to take us where we are now, which is a lack of liquidity in the mortgage market, to where we need to become and that's a privatize guaranteed agency that works. it has to be a transitional bridge. i'm going to do again to be a partner with other members of the senate and the house create an agency that can bring us more liquidity to residential lending in america. you have been very gracious to me today. the host dan is telling me my time is a. my glasses are gone. i think that's what that says. i'm not sure.

if you want me to take a question i will particularly to sit down and shut up, i will do that. does anybody have a question? yes, sir? >> senator isakson, your proposal for qualified residential mortgage was 5%, we're having a discussion today with a statistician from a regulatory standpoint. how is that going? i know you've been very engaging trying to get the administrations time -- [inaudible] spent i appreciate the question that i appreciate all your commitment to the mortgage industry in america. government is doing right now in houston where government always done when as a problem over here, the pendulum goes way over here. the fdic and the comptroller of the currency and the federal reserve, came up last year and circulated a rule that set a qualified residential mortgage mentioned to put down 20%. if you put out less than 20%, the lender has to retain 5% risk

retention into the loan is paid off. talk about not having any mortgage money. you wouldn't have any mortgage money in america from mainstream america with that type of requirement, which brought about my creation of this second way to go about doing business. my proposal is like having 50% down because they can tour is protected to 50% of valley of the property. but fortunately they pulled the rollback and extended the comment period and then when it ended in august, they pulled back and they don't have a commentary anymore but it is sitting out there in limbo. every time i come up and have somebody that is thoughtful enough to ask that question, i'd all of you to run into anybody at fdic, or hear anyone talk about 21% out as the minimum down payment for housing, you are talking some is talked about at a competent effect on our recession, a company effect on housing for years to come. so i appreciate the question and i think will be means underwriting. it doesn't is assuming down payment. >> one more question. if anybody has one.

>> if not i want to thank you for having me and congratulations on a great conference. [applause] >> thank you very much senator isakson. the issue of mortgage finance reform is one that nhc has been working on for several years, and we appreciate your energy and focus on it. it's essential for housing moving forward. it is now my pleasure to introduce mark w. johnson, the acting assistant secretary for community planning and development at the department of housing and urban development. before his most recent position, he had a long history of government service in spring think communities, particularly as hud's deputy assistant sector for special needs so he knows this area very well. so i would like to welcome him up here to address us. [applause]

>> and good morning. it's great to be here. i was very impressed with remarks we heard today. i've had the chance to work with scott gould where hud and the are real partners in a lot of giveaways on trying to in veterans homelessness by 2015. as you can tell he's a very hands-on guide who really has set a goal and is really trying to get there in every way possible. and it's really inspiring frankly to work with him, with he and others in the va. also, was quite impressed with the knowledge of our senator here in terms of his knowledge on housing. lastly i want to thank national housing conference for holding this symposium, especially the session that will follow us really key policy relevant issues. once near and dear to my heart, homelessness. i wanted to spend a few minutes talking about two different topics that hud is involved in, and i'm choosing to that are at

opposite ends of the spectrum. won his homeownership and is homelessness. on the homeownership side i would want to focus in on the recent servicing agreement that you made heard about in the press, but may not know all the details on. it really has historic settlement between a number of different federal agencies and state partners. that resulted in providing $25 billion in relief. this came about because of a lot of unfair lending practices in this country about mortgage servicing, and it has been duty of those funds, the $25 billion, will be going to homeowners that really got messed over, frankly, in a lot of different ways. many of whom were veterans. so i want to highlight some of the things in this agreement that are particularly relevant to our veterans. and service members. and i have four or five hours like to share. the first is payment of lost

equity plus interest. in addition to that, up to $170,000 in additional compensation. full refund for those who requested help but were still charged excessive interest. short sale agreements and wafers are being provided to those who had to sell their homes at a loss due to military orders that forced the relocation. i live very close to quantico, and i see this all the time in terms of families having to relocate, having no idea that that was going to happen, and they just purchase their own home. i think that will be a great relief to many service members around the world. and the last one would be come as i'll mention but there are others, that directly relate to servicemembers and veterans is the foreclosure protection for servicemembers that have been receiving hospital, fire imminent danger pay, even after their initial foreclosure notice. so there is a lot of protection in place on the servicing agreement that go particularly to servicemembers and veterans.

and now would like to spend the remainder of my time talking about the other end of the spectrum, and as we all know with absolute shame for men and women to risk their lives for us in iraq, in afghanistan and earlier engagement, only to come home and to literally have no home whatsoever. and if you're living on the streets or in their cars. that's one reason why secretary donovan from hud has been arm in arm with secretary shinseki at the va in tiny ways to literally and veterans homelessness by 2015. it's very complex. when i was listening to deputy secretary gould, he identified a number of different interventions, and because of have the chance to work with va for a while, i'm familiar with intervention. just like the va, hud has interventions because we realize there is no single, simple solution to ending federal homelessness or homelessness in

general. one of the key things that really does matter that's harder to measure used key working relationships. and i certainly have seen, for instance, between hud nba, while we have worked there for a long, long time to do what i've seen in the last three or four years has been phenomenal in terms of really a great read engagement around this program that scott gould talked about, the housing program. it was reignited as a program in 2008, thanks to the leadership of senator murray, and i had the chance of being on a small team, about 20 years ago to create hud, there was two or three of us from hud and about three people from the va that that we can do better engines of using main resources with other agencies to resolve veterans homelessness. it meant a -- it has been a fantastic success. when i look around government there are very few examples that i've ever seen and had been intimate from us 30 years we

have two agencies that actually can work together well and co-administer a single program. that's not easy to do. i can certainly attest to that but it certainly brings added value that you can never get by just relying on one entity to try to do everything because it may not be good at everything and that is certainly the case of providing housing and services to homeless people. to date, ascot indicated, there are about 40,000 vouchers out there, and it's made a huge difference in large part because the vast majority of those vouchers have been going to people that are chronically homeless. that is people are out on the street or shoulders or expenditures of time who have disabilities and a permanent solution will never get off the streets, and, frankly, cost communities excellent amounts of funds to i saw a said that was written up in the journal of medicine for seattle that found a cost of $50,000 to do nothing for homeless person in the city. because they're bouncing around from shelters and hospitals and

jails. and at the end of the year they are still out there. and so the city of seattle and cities across the country incur exorbitant cost in letting this failure continue. as opposed to providing a real solution that frankly costs less in providing housing and services to end that person's homeless problem, so they can focus been on employment and other facets of their lives. of course it's important to be focusing on people that are currently homeless. it's also vitally important to try to get out how to prevent. the senate against senator murray provided great leadership in saying let's figure out through demonstration what we can learn to better prevent homelessness for veterans just now returning from the war. so we selected five different sites, very diverse sites, sites that represent different military department so it's not just the army are just the marines, for instance. and sites that have large numbers of returning soldiers. and we are going to learn

something. it's a very tough thing we are learning to prevent homelessness. to really know who is at imminent risk of literally going from housing going to the street. we hope to learn more in this demonstration, about halfway through now. one of the lesser for the a lot from is the recovery act program called the homelessness prevention and rapid rehousing program. it's the most exciting program. i've worked on it many, many years because it tries brand-new things. it tried homelessness prevention. and for me, more substantively it provided rapid rehousing which was a concept that when you something about. we have been doing it should with it that we'd never gone to scale on. it's a concept of saying if somebody is homeless, let's immediately stop at stake and move them into their own apartments, provide rent, utility assistance, minimal services, and let's see how this works. we are just ending is, frankly. it's been going on for nearly three years, and city after city

after city that i've talked to find that about 90% of all the homeless persons they've been serving did not fall back into homelessness once they got the short term assistance. this assistance can be three, six, nine, 12 months. so it's not an expensive intervention. it doesn't take an enormous amount of services, but he seems to be having incredible, great success. that's one of the examples i want to get about we need to be thinking creatively about using different interventions because budgets are tight. we have been essentially flat funded at hud, about 1.9 billion for three years in a row. so we are having to dig deeper into thinking how can we move the needle i'm ending homelessness over all, in a particular veteran homelessness by 2015, if we don't have a lot of new resources. and if doing things like being smart about how we use to transfer program, more creative using resources like rapid rehousing, and then tracking the performance over time to ensure

that we're actually getting the outcomes that we are expecting. one of the great examples of innovation is coming from the private secretary, common ground, you'll hear a little bit later today in a symposium session, has done some neat things about saying, in dixie and other cities, hud-vash frankly has not been working as well as it should be. it's taking a lot of time to use of a voucher to new york city was taking 275 days to housing veteran. that's ridiculous. but the problem was that there's a lot involved. you've got local public housing agency. you've got local va. you've got local stakeholders. you have federal requirements, and so they did it to camp. and a couple cities to begin with, in l.a. and new york city to begin. i went to the one in new york city, and it was fascinating. they took away our chairs we couldn't sit down until we solve the problem. after a couple of hours, you are really thinking quickly because you want to rest.

throughout the whole day it was like that. we were looking at every step that new york city was using, and there was something like, i think it was 90 steps to house a single homeless person. between the va and the local housing authority come back and forth and back and forth. we realized after standing up for a number of hours we could quickly eliminate a lot of these problems. and so new york city now has a plan in place where they're going to get it down to 76 days. it will be a 70% reduction. los angeles is going to have an 82% reduction from 168 days to 30. it's that kind of creative thinking that a group like common ground who partners with the va and hud make this happen is going to make this happen. so we just recently had three regional sessions with many cities coming from around the country to reduce this incredibly long lease of the hud-vash so we can house veterans and much, much quicker way. it also takes great contributions like we've heard already, heard last night at the

data, about the home depot foundation. really stepping up and think about how they can assert themselves through their expertise and their interests to make real difference for veterans in this country, including homeless veterans. and, obviously, it takes a huge commitment i nonprofits have been in this from the beginning frankly to help solve these problems. and using creative ways and focusing on outcomes to make sure we're getting the outcomes we need. so we can prove to congress, but more important to ourselves, that we can do this in a very smart way. so in closing, i wanted to end with a personal story. as i was coming into this conference today, i take a train. i live about an hour south of here and i'm taking the train, i get off the train and i see collide, who is a homeless veteran, vietnam era, who lives underneath the train bridge. i have been engaging in for probably four months now, trying to see if we get him a fascist voucher. and outreach workers, company,

and i will show up and clyde is still there. what is going on? why are you still here? and he sang well, you know, there's just situations but it will all work out. so that i called the caseworker and he said he refuses to get in the car to go to the interview. so we can't get him to housing. we can't getting the housing authority. we can't get him to get a social cities footsteps because he won't get in the car. it's a powerful reminder to me that we solve this problem one person at a time by looking at what they need, and figure out how to make that a solution. because he will get housing one day, but we can't give up on him. he served our country for years, and they are too many clyde's out there. there are 76,000 homeless veterans today on the streets for emergency shelters. so i thank you because i know many of you are working on that day in and day out to help reduce the number of trend once we have in this country, and thank you very much.

[applause] >> do we have time for a couple of questions? >> yes, here. >> good morning. [inaudible] >> that's a local community or the housing authority who has the voucher, should pay that payment standard of the community in which the housing is located, is that correct? >> there is -- [inaudible] it varies by the cost of housing in the community, so, yes. >> what would you suggest that one view, if one is working with the housing authority who issued the payments for the community in which the housing is --

>> i would talk to mark after this session. [laughter] >> thank you. >> to questions, what is the contingency plan, a new congress decides to cut funding to hud for vash of vouchers? and secondly, when the program is put in place, was there any thought of how the furniture would be donated for homeless vouchers? >> okay, good questions. in terms of the first question, my experience over my career has been that homelessness has never been a partisan issue. it doesn't matter who's in the white house or who is in the congress. for various reasons, everybody wants to end homelessness. the vash program was created

under republican administration, franco. so i don't go be a partisan issue. i think you'll be an issue, frankly, of the lack of resources, if it comes to the point where we won't be getting any more vash resources going for. the congress agreed about six years ago we need it about 60,000 vouchers to end the problem of chronic homelessness among veterans. we are essentially there was 2013 level. so we realized that if we're going to be requesting funding in 2014 and perhaps beyond, with god has a very strong rationale about how those research needed to be targeted the most chronically needed peace. entrance of your second question on furnishings, we have been approaching philanthropy groups to see if they can help out. the most thing of seen other in terms of furnishings was i was visiting salt lake city, utah, about a year ago. i was visiting a whole bunch of different homeless projects including a beautiful project near the airport of salt lake city. i saw that everyone had the same

kind of furniture. it was nice, wood furniture and it had cabinets, beds and had kitchen tables, chairs et cetera. then we left the project and went to another project, which was for the chronically homeless can it wasn't at all focused on veterans. they were some veterans there and they had the same furniture but everywhere i went they had the same furniture. it was actually a church in that community that had donated all of the furniture for all of the homeless facilities. there's a lot out that that is going on. there's a lot more that frankly could be going on, if we but ask at the local level but i really do believe that to be the case. one remaining question. yes? >> thank you. this is not so much a question as a thank you. thank you to your efforts and mr. goals efforts and those who help the veterans. my little program has asked --

since january and one of them was five years homeless, another one over the last three years was approximately 15 years homelessness. and a lot of what you said about not having ib, needing just, you, people to do -- these are for these people to help them get the first debt. and then the connections to va, or to hud. so thank you. >> congratulations to you. thank you very much. [applause] >> the supreme court issued a number of opinions today, but not on the 2010 health care law. they may release more opinions on thursday. today, justices struck down a montana law limiting corporate campaign spending by a 5-4 vote. and the court struck down key

parts of arizona's immigration law in reaction to his obama said he is pleased with the decision even though it leaves intact a provision requiring police to check immigration status of people they stop for other violations. arizona's governor calls a decision a victory. jan brewer promised police will be held accountable if the law is used in the way that violates an individual's civil rights. let us know what you think about the decision on our facebook page. you'll find at facebook.com/cspan. and the supreme court issued, tonight, a discussion about internet freedom abroad. that would be on the communicative. we will hear from the deputy assistant secretary of state for democracy, human rights and labor. that's tonight at 8 p.m. eastern time here on c-span2. and c-span's morning program "washington journal" continues its spotlight on magazine series. wednesday with a former president of bank of america. she wrote an article for harvard

business review on how to improve the banking industry, and you can find a link to the article at our webpage, c-span.org. we will talk with her life wednesday morning at 9:15 a.m. eastern on our companion network, c-span. >> sunday, award-winning author and historian david pietrusza is our guest on booktv's "in depth." his passion for u.s. presidents and the great american pastime, baseball, has resulted in a dozen books. join us live with your calls, e-mails and tweets for david pietrusza sunday at noon eastern on booktv's "in depth" on c-span2. >> we welcome you to the missouri governor's mansion. >> the first governor was

mr. brown. here we have a photograph of him and his wife and his children what is interesting is the fact that his granddaughter, margaret brown, wrote a book which is a very favorite of many of the schoolchildren that on here in missouri but all over the united states. >> july 7 and 8th, booktv and american history tv explore the heritage and delivery culture of missouri state capitol, jefferson city. with c-span's local content vehicles and american history tv inside the governor's mansion. spent it was the governors stewart that the story says he wrote his horse out the front steps of the mansion, into the dining room and proceeded to feed his horse boats out of this plate warmer as part of the sideboard. now, the comment was that he probably should not be feeding his horse in the governor's mansion, and his comment to them was, i have had to feed more people in this home with

probably less manners than my horse has. >> watch for booktv and american history tv in jefferson city, missouri, july 7 and 8th on c-span2 and three. >> we did clean energy become a dirty word? i mean, what is wrong with clean energy? you can believe what you want about our existing energy sources but why couldn't you also believe that there is an opportunity for clean energy? >> i think we need to create demand in the next five to 10 years for renewables to offset all of the advantages that fossil fuels have had, and i think it is clear happening in the state-by-state basis. it would be more effective if it was federal policy. >> three times as much of our energy is consumed in mobility as it is heating our homes and offices. and natural gas, north america is he a continent where we don't have widespread vehicles coming off the assembly line that can use natural gas. there's a ton of people out of the also believe compressed

natural vehicle, cars, trucks, are more likely to burst into flames during a crash. >> developing alternative energy sources including wind and biofuels were all part of a next-generation energy forum hosted by the atlantic magazine. watch their conversations online at the c-span video library. >> and the u.s. senate is about to gavel in. they will debate a bill today that will continue the federal flood insurance program. and at 5:30 p.m. each and i'm a vote scheduled to move forward on an fta user fee. it lets the agency collect fees to pay for its approval process on prescription drugs and medical devices. on the other side of the capital, the house is not in legislative session today. they will be in for brief pro forma session and return to legislative business tomorrow. now live coverage for you now from the floor of the senate here on c-span2. the presiding officer: the

senate will come to order. the chaplain, dr. barry black, will lead the senate in prayer. the chaplain: let us pray. eternal spirit, we are overwhelmed by your majesty and grateful for your indescribable love. but we are also overwhelmed by our inadequacies, our failures, and our mistakes. forgive us for the misusing of the talents and abilities you have given us. help us to cut through our preoccupation with ourselves and become more fully involved in fulfilling your purposes. today, set the hearts of our

senators upon new paths, as they acknowledge that no peace is possible outside of your will. lord, guide them to produce creative legislation that will fulfill your will on earth. we pray in your sacred name. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate.

the clerk: washington, d.c, june 25, 2012. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable christopher a. coons, a senator from the state of delaware, to perform the duties of the chai. signed: daniel k. inouye, president pro tempore. mr. reid: mr. president? the presiding officer: the majority leader. mr. reid: we're now considering the motion to proceed to the flood insurance. that's postcloture. we'll begin consideration of that bill today. at 5:30 there will be a cloture vote on the motion to concur in the house message with respect to s. 3187, which is the food and drug administration, extremely important bill. our work has been completed 0en that. we should be okay tonight and have that as something we can look to as having accomplished this week. we also need to complete work on student loans, flood insurance, and transportation this week. we have lots to do and a very short time to do t

mr. president, today the supreme court correctly struck down the vast majority of the mean-spirited arizona law. that's of course the immigration law. while i agree with the court's provision to eliminate three troubling provisions of arizona's flawed law, there were actually four provision provisie they were held unconstitutional. one was hundred held. i am concerned about the section they upheld that i'm surprised they did, but they did. they just upheld a measure to hold pay from checks if they success expect. keep its papers place and system of immigration checks by racial profiling. it gives arizona officials free rein -- anyone they suspect of being in arizona without documentation. as long as this provision remains, innocent american citizens are in danger of being

detained by frills they carry immigration papers with them at all times. it is reassuring that the court left the door open. i just say to you, mr. president, and anyone within the sound of my voice, someone with my skin color or yours, i don't think you're going to be carrying your immigration papers with you every place you go. but if you're in arizona and you speak with a little bit of an accent our your skin color is brown, you better have your papers with you. that's unfortunate. it's reassuring that the court, though, left the door hope to further court challenges of this very unsound provision. i'm optimistic that once that portion of the law is implemented, it will be discarded. laws that legalize discrimination are not compatible with laws and traditions of equal rights.

so it is disturbing, mr. president, that mitt romney has called the constitution of the arizona law -- sorry, mr. president. so it is disturbing that mitt romney that is called the unconstitutional arizona law a model for immigration reform. anyone who thinks such an unconstitutional law should serve as a model, their national reform is clearly outside the mainstream and the united states supreme court agreed with that today. today's partial victory affirms the obama administration ras right to challenge this law. and it is a radio minder that the fix rests with congress. instead of allowing 50 states to have 50 different enforcement mechanisms, we need a national solution that continues to secure the border, punishes unscrupulous employers who exploit immigrants and undercut american wages, and requires 11 million people who are

undocumented register with the government, pay fines and taxes, learn english, work, pay taxes, stay out of trouble and about to the end of the line to legalize their status. democrats are ready for that challenge and we have been willing to craft a commonsense legal solution to this for a long time, one that's fair, tough, and practical. as i've indicated, mr. president, we have been ready do this for years. we have tried on a few occasions. the problem now and has been republicans won't vote for immigration reform. simple as that. we've tried. the first step would be to pass the dream act, which would create a pathway to citizen hispanic for children brought to the country through no fault of their own. if upstanding young people stay oust trouble and work hard in high school, they should have the chance to serve their country in the military go to college and work toward citizenship. unfortunately, mitt romney said

he would veto that. that's the dream act. president obama took decisive action. his directive will protect 800,000 young people and focus law enforcement resources where they belong -- on deporting criminals. as we all know, it is not a permanent solution. but president obama's decision was necessary, precisely because republicans have so far refused to work with democrats on a solution. congress must consider a long-term resolution to protect the dreamers and tackle complex immigration reform that addresses all 11 million undocumented people living in this country. but that will take cooperation from our republican colleagues, and that hasn't been forthcoming. mr. president, this week we have a lot to accomplish. getting it all dong before the july 4 holiday will also take cooperation. by friday, the senate must pass

flood insurance legislation, allow millions of americans to close on new properties; we must send to president obama a bill to ease drug shortages. that's the f.d.a. bill. we need to protect 3 million jobs. and the deadline to stop student loan rates from troubling for 7 million students looms at the end of this week as well. i'm putting my colleagues on notice, mr. president, the senate will stay as long as we have to, into the weekend if next to complete this substantial workload. we hope there will be cooperation, not only in this body but also in the house of representatives. i alert everyone, that we have a lot to do. exsteamly important pieces of legislation, and we've got to complete them before we leave here this week. what is the business of the day, mr. president? the presiding officer: under the previous order, the leadership is time is reserved. under the previous order, the senate will resume consideration of the motion to proceed to

s. 1940, which the clerk will report. the clerk: motion to proceed to s. 1940, a gill to amend the national flood insurance act of 1968, and so forth and for other purposes. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

quorum call:

quorum call:

the presiding officer: the senator from iowa. mr. grassley: i ask that the quorum call be suspended. the presiding officer: without objection. mr. grassley: mr. president, since the victory of the socialist candidate for the president of france, opponents of fiscal responsibility have

found renewed vigor for post-spending ideology, more stimulus, as we call it mere in this country, and there is interest in this country also maybe in more fiscal stimulus. the new french president talked about choosing growth over austerity. many liberal pundits and politicians on this side of the atlantic have now begun to echo this call. when you put it that way, it barely sounds like a choice at all. the term "austerity" sounds so severe, but almost everybody agrees that economic growth is good. just what is this austerity all about? in europe, austerity is often used to describe an attempt to

reduce budget deficits by reining in unsustainable spending. in in this country, we more often talk about fiscal responsibility. for europeans into oh have grown accustomed to general raws social benefits, even modest reforms to government programs are apparently cause to take to the streets and demonstrate. but for the millions of americans who still believe in limited government and who do not feel entitled to programs or benefits paid for by the earnings of others, there's nothing austere about government spending within its means. so then what about the other aspect. it, growth? the implication of the supposed choice between growth and us a is that we must accept irresponsible levels of spending in order to have that economic growth. obviously, this is absurd, but

political convenient economic theory was summed up by market thatcher as -- quote -- "the more you spend, the richer you get." that doesn't meet the commonsense test in the midwest of america. it was the rationale behind president obama's massive $800 billion stimulus bill. the bill looked suspiciously like a grab bag of pent-up democrat spending priorities but we were told all of this spending was necessary to keep unemployment below 8%. of course, as we all know, unemployment soon soared well above 8% and it has never dipped below 8% now three years later. i would say to all of those

across the atlantic in a europe -- in europe calling for new stimulus spending, we tried it, and it didn't work. not only it didn't work, but it made things worse. all of that government spending crowded out private-sector activity that would have helped the recovery and settled our economy -- saddled our economy and our children with even more debt. conversely, reining in government spending will unleash the power of free enterprise to create wealth and grow our economy in ways that no government central planner can ever accomplish. despite the clear results of the most recent american experience with stimulus spending, liberal pundits are now blaming europe's current economic troubles on efforts to reduce government spending. they say that savage cuts by

pro-austerity governments in countries like britain, france, and spain have actually damaged their economies. so just how deep did these countries of europe actually cut? spain increased spending after the recession started, then implemented some modest cuts, but is still spending more than it did before the recession. britain and france have continued to increase spending. so much, then, for savage spending cuts. it defies common sense, but as you know in this town smaller increases in spending than previously planned can qualify somehow as a cut in spending. however, to most americans cutting spending actually means

spending less than you were the year before. the fact that there have been no serious spending cuts in these supposedly pro-austerity countries is enough to dismiss the accusations that spending cuts are the cause of europe's troubles. but there's another part of the story that is too often ignored. governments that talk about the needs to reduce deficits but are too timid to enact necessary spending cuts invariably turn to tax increases. for instance, since the recession started, britain has raised the top marginal income tax rate as well as increasing capital gains tax, the national insurance tax, and the value added tax. spain has enacted hikes in

personal income tax and property taxes and seems to be planning even more taxes. this year, the spanish government is looking to address its deficit with a $19.2 billion package of spending reductions paired with another $16 billion worth of tax increases. of course, to us here in the united states that sounds a lot like what democrats have been calling a balanced approach. and so it is. just like giving a patient an equal dose of medicine and poison would be a balanced approach. however, across europe there has been a lot of -- a lot more emphasis on the poison of tax increases than on the medicine of spending cuts. in fact, while government spending across the entire european union fell by just

c2.6 billion between 2010 and 2011, taxes rose by a staggering c235 billion. so while critics of austerity are flat-out wrong to blame the lodge mythical spending cuts for europe's economic troubles, they may have stumbled onto something. to the extent that as territory really means big tax increases rather than serious spending cuts, i think it identifies a big part of europe's fiscal and economic problems. these facts notwithstanding, if i couldn't point to an example where economic growth resulted from spending restraint, my arguments would ring hollow. i would sound like those radical intellectuals who still refuse to accept that marxism has been

totally discredited morally and economically by claiming it has never truly been tried. however, what i am talking about has been tried. there are plenty of examples where bold leadership to dramatically rein in government spending has resulted in economic growth. there's actually a prime example right in europe and in the euro area -- estonia. in response to the 2008 economic crisis, estonia's free enterprise oriented government focused on real spending cuts, including major structurural forms. astone why ya cut private-sector wages, raised the peninsula age and reformed health benefits. when it comes to taxes, estonia already had a low flat tax and didn't raise rates. while there was an increase in the value added tax, the

overwhelming emphasis was on spending cuts. as a result the estonian economy grew at 7.6% last year, and it happens that estonia is the only country in the euro zone with an actual budget surplus and the country has a national debt that is only 6% of g.d.p. now, can you imagine that? a debt of only 6% g.d.p. moreover, estonia had an especially deep hole to climb out of. the estonian economy was devastated by global financial crisis. it contracted by 18%, which is more than greece has. nevertheless, estonia's economy is well on the way back to prerecession levels. i should add that in response to the spending cuts, estonians didn't riot in the streets.

instead, they reelected their government. also while estonia is the most impressive example, a similar story also holds true for other baltic countries like latd have a and lith -- latvia and lithuania. perhaps their unhappy experience of soviet domination has made them skeptical of big-government solutions to problems. it's possible that the unique history of the baltic countries makes it easier for them to break the spending addiction, but that doesn't mean that it can't be done here. in fact, i'll give you an example that is much closer to home -- canada. in the 1990's, canada was facing the same problem the united states is now. it suffered a recession, had a looming debt crisis, the canadian government's response was to dramatically cut

spending. again, i'm not talking about slowing the rate of growth but actual spending cuts. in just two years starting in 1995, total noninterest spending fell 10%. canadian federal spending as a share of g.d.p. dropped from 22% in 1995 to 15% ten years, 11 years later. canada's federal debt was at 68% of g.d.p. in 1995, and it's down to just 34% today. now, a lesson for america, compare that to our national debt, which is more than 70% of g.d.p. like estonia, the overwhelming emphasis in canada was on spending cuts rather than tax

increases. moreover, these cuts included structural reforms. canada's government fixed its version of social security, which is the third rail of american politics, as we say here. unlike social security, the canadian pension plan is solvent for the foreseeable future. now, what's really interesting is that these reforms were not implemented by some right-winged ideologues. these reforms all implemented by the canadian liberal party which is a center-left party like america's dpems. however, when president bush -- democrats. however, when president bush suggested fixing social security upon his reelection, the issue was relentlessly demagogued by democrats in congress. more recently, when paul ryan unveiled a plan to save medicare

rather than present alternative ideas, liberal groups depicted him in political advertisements pushing grandmother off of a cliff. if our democrats had shown the same leadership the canadian liberals did, we would be in a lot better economic shape right now. instead, what we get from the other side of the aisle is demands for more stimulus spending about and head-in-the-stand denial about the impending -- economic recovery after a downturn. in fact, a 2009 paper by two harvard economists alberto alicia and sylvia ardenia reviewed 107 examples of fiscal

adjustments in industrialized countries between 1970 and the year 2007. they found that statistically tatax cuts are more likely to increase growth than spending. they also found that spending cuts without tax increases are more likely to reduce defendant and debt than increase taxes. the historical record is clear. we know what path leads to economic growth and prosperity. however, that is not an easy path to follow. unlike the have-your-cake-and-eat-it-too philosophy, that says more government spending will somehow make us all richer you the real road to recovery requires real leadership and less spending.

earlier in my comments, i mentioned a statement by margaret thatcher's contempt for stimulus ideology. when she took of course, britain was in deep debt and known as "the sick man of europe." in fact, britain had been forced to go to the i.m.f. for a bailout and was regularly rocked by massive strikes. in many ways it was the greece of the 1970's. when thatcher began make the difficult decisions necessary to reduce and rescue the british economy, many people, including some of her own party, pleaded for her to return to the big spending policies of previous british governments. her response is applicable to our country today as it was to

britain back then. i'd like to quote margaret thatcher. i'll end with this quote: "if spending money like water was the answer to our country's problems, we would have no problems now. if ever a nation had spent, spent, spent and spent again, ours has. today that dream is over. all of that money has got us nowhere, but it still has to come from somewhere. those who urge us to relax the squeeze, to spend yet more money indiscriminately in the belief that it will help the unemployed and the small businessman are not being kind or compassionate or caring. they are not the friends of the unemployed or the small business. they are asking us to do again the very thing that caused the

problem in the first place." end of margaret thatcher quote. i'll leave with this proposition china, can congress learn from the experiences of estonia, canada, and britain's thatcher? if we can, we can turn this u.s. economy around, and the economy and yobs jobs is the issue of this presidential campaign season. mr. president, let me ask somebody if they can shake their head, is there anybody else waiting to get the floor? because i'd like to take another three minutes i if i could on another issue. mr. president, skilled that my remarks that i'm going to make now be placed in the record when we -- where we do the debate on the f.d.a. bill.

the presiding officer: without objection. mr. grassley: mr. president, two years ago a constituent of mine named david rosga committed suicide shortly after smoking a product called k-24, a synthetic form of marijuana. a week before he passed away, david had graduated from indinal high school. he was looking forward to attending university of northern iowa that fall. david and his friends spent the week after graduation going to parties and celebrating their achievements. some of david's friends heard about k-2 from some other trends who were home from college. these friends were told that if you smoked this product like marijuana, you could get high. david and his friends were about to go to a concert and thought

smoking k-2 before would be nothing but harmless fun. however, shortly after smoking k-2, david became highly agitated and terrified. his friends tried to calm him down, but once he appeared calmer, he decided to go home instead of going out with them. tragically, david took his own life shortly after returning home, only about 90 minutes after smoking k-2 for the first time. the only chemicals in his system at the time of his death were those that comprised k-2. david's tragic death is one of the first in what has been a rapidly growing drug abuse trend. in the past two years the availability and popularity of synthetic drugs like k-2, spice, bath salts, and 2-ce has

exploded. these drugs are labeled and disguised as legitimate products to circumvent the law. they're easily purchased online, at gas stations, in shopping malls, and in other novelty stores. poison control centers are reporting sky-rocketing cases of calls and visits resulting from synthetic drug use. the physical effects assorted with this use include increased agitation, elevated heart rates and blood pressure, hallucinations and seizures. a number of people across the country have acted violently while under the influence of the drug, dying or injuring others, and even themselves. just a few weeks ago a man in miami, florida, attacked a

homeless man and ate nearly half of his face before police to shoot him to stop him. two weeks ago police in upstate new york tasered a woman who was choking her 3-year-old son after smoking bath salts. this underscores the fact that congress must take action to stop these drugs from causing further damage to our society. i introduced the david mitchell rasga act a year ago last march to ban the drug that comprised k-2. my colleagues senator schumer also joined me to ban these compounds. today our separate bills are included as part of house and senate agreement on the f.d.a. user fee bill we'll be voting on

shortly. i want to thank all who have worked very hard to get my bill as well as other bills banning sympathetic drugs through congress. and i especially want to thank mike and jan rasga, the parents of david, and their family for their tireless effort to prevent more tragedy from befalling families. this legislation will drastically help to remove these.sons from the store shelves and protect our.young from becoming more victims. you urge my colleagues to support cloture on this bill. i yield the floor. and i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

ms. mikulski: mr. president? sproeup the senator from maryland. -- the presiding officer: the senator from maryland. ms. mikulski: i ask that the

call of the quorum be vacated. the presiding officer: without objection. ms. mikulski: mr. president, what is the pending business? the presiding officer: the motion to proceed to s. 1940. ms. mikulski: thank you, mr. president. i rise in support of voting for cloture on the bill and wish to speak for such time as i may consume. the presiding officer: the senator is recognized. ms. mikulski: mr. president, really, we've just exchanged some parliamentary lingo to essentially say we're going to vote shortly to see if we can vote to pass the food and drug administration safety renovation act and doing it without a filibuster. i hope that we can vote for cloture not to muzzle, not to have a gag rule, but so that we can move expeditiously on this bill. every single member here should be proud of what we've accomplished in this f.d.a. safety innovation act.

for we've accomplished three major objectives. number one, if the legislation is passed and it's a conference agreement between the house and the senate, if we pass this, we will be able to move pharmaceuticals, biotech products and medical devices into clinical practice faster and yet maintaining our ethical standards around public safety. the second thing that we can demonstrate is that we can work together and that we can govern. this is the result certainly in the senate of working on both sides of the aisle, and now with the house through the conference report we show that we can work between the senate and the house. in this time of prickly politics, political posturing, when more gets said than gets done, this is today we can show

we not only can pass legislation, but legislation that makes a difference in people's lives and do it in a way that, yes, we will have a regulatory framework with something that businesses cooperated in so we'll have regulation without strangulation. we'll have regulation that acts in the interest of public safety but does not stifle, shackle, or impede good business practices. wow, isn't this what we've been talking about? so i'm very proud of having been a member of the health, education, labor committee that worked on this bill. and i'm very proud of the fact that f.d.a. is in my state. in a nutshell, we're passing something called pdufa and other ufa's.

pdufa stands for the prescription drug user fee act. there will be others we will talk about which rethraoeut biouse -- relate to biouser fees and generics. this bill was originally enacted in 1992, and the reason for that was at that time there was an unduly long wait for patients to have access to new medicines and new medical devices. it often took close to three years to even really review a drug application. so congress went to work with then-president bill clinton to say where the pharmacy could agree -- that, first of all, they would pay user fees to support f.d.a.'s drug review program. it is a true public-private partnership, for when we look at the funding for f.d.a., the people who make pharmaceuticals,

biotech and medical devices pay 60% of the f.d.a. budget. that's $712 million. the remainder comes from federal appropriations, 40%, $473 million. so there is a partnership between those businesses that profit -- and we want them to do so without profiteering -- and at the same time government pays its share. you know, since 1992, this legislation has been an enormous success. more than 1,500 new medicines have been approved. related to cancer, infectious disease, cardiovascular disease. it's decreased review times from more than -- over three years to a year and a few months now. in order to make sure that we

have got the right perspective, we not only held excellent hearings in the senate, but i went out to my own state. i'm so proud of my state. we are the home of life sciences. we have n.i.h. there that does such great, incredible basic research. we have actually f.d.a. that reviews food safety and drug safety. and at the same time, we're the home to a robust group of biotech companies. i want to listen -- i went to listen to those biotech companies. i said to them tell me how your government is helping you. tell me how your government is impeding you. tell me where you want your government to get out of the way and where do you need a more muscular government? well, we heard quite a bit from them. the first thing that they told me is they need a food and drug administration, because when they are approved for public safety and efficacy in the united states of america, they

can sell their products anywhere in the world, and it means often countries, small countries, countries with modest means with limited geep, they know they can never afford an f.d.a., they know if the united states of america says it's okay for their citizens, any other country in the world knows it's okay for theirs. so it's very good to be able to export these products with confidence and reliability. this is fantastic in their mind. second, they say they did need more help from f.d.a. not only to expedite, but they wanted better communication. they also needed to be able to incentivize for those rare diseases that we often hear about where there are small markets with big investment to achieve in it. they outline the fact that they

needed to be viewed not in an adversarial way but a collaborative way. well, thanks to business sitting down with f.d.a. and business sitting down with members of congress, we have been able to do exactly that. we have approved efficiency, predictability, the regulatory environment, at the same time insisting on safety and efficacy. this is going to be great for patients. millions of americans rely on drugs and biologics and on medical devices. if we're going to improve health care and rein in the cost of health care, we have got to use drugs, biotech products and medical device that is improve lives and extend lives. if we fail to authorize this legislation, we are going to be in big trouble. how are we going to be in big trouble? well, first of all, we will have to give notices to f.d.a. that they are going to be laid off.

that means we would have to send out notices in july telling 4,000 people, look, we know you're the best and the brightest and we want you to have integrity as well as regulatory sensibility and a great deal of scientific competence, but we couldn't get our act together, so you're going to be laid off. hello. we want these people out there helping america be able to provide health care in a way that's safe and has efficacy. if we don't act, again, as i said, thousands of f.d.a. people will be here. and it's not about government. if those people are laid off, it means every single drug that is now in the pipeline, its review process will come to a halt. so we're hurting patients, thousands of people who need

either new drugs, new ways of helping them, whether it's with that dreaded c word like cancer or diabetes that takes so much of our national budget to manage chronic illness. and what about the breakthroughs when this epidemic of alzheimer's that we have and autism. we need all the help that we can develop, and if america's going to continue to be america the exceptional, we have got to do an exceptionally good job of making sure we produce some of the newest and most reliable drugs, biotech and medical devices. this is why i think we have good legislation. is it sever? no. but is it pretty close to it for what business and government and providers, doctors themselves say we need? absolutely. so i urge my colleagues really

today when we vote on this motion to proceed on the cloture, that we really move -- we have in mind not that you are democrat or republican. we think of all those people that we talk to every day in town hall meetings, out there with diners that say, you know, my little boy has leukemia. my mother has breast cancer. my dear father who stood up for me is facing the ravages of alzheimer's. we need breakthroughs. we need help. and then for our private sector that really can go global and create jobs in this country and well-being in other countries around the world, we have got to be able to do it. and i'm also pleased that this bill combats drug shortages, improves the safety of the drug supply chain and makes permanent those special considerations that require the children's needs have been met in both

medical devices and prescriptions, either in terms of dosage or that which actually fits them. so, mr. president, i am going to come to the floor to lay this out. i'm very proud of f.d.a. and i'm very proud of the congress, senator harkin and senator enzi who really pulled us together. we have got the right legislative framework. now let's act and do it in a way that we can all be proud of. mr. president, i yield the floor and note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

quorum call:

mr. harkin: mr. president? the presiding officer: the senator from iowa. mr. harkin: mr. president, i ask further proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. harkin: i ask unanimous consent that bill mcconhad a, lindley love, tiffany monrel of my staff be granted floor privileges for the duration of today's ppropriation. the presiding officer: without objection. mr. harkin: after many months of bipartisan negotiation, i have high hopes that the senate will vote to invoke cloture on the house message to accompany the food and drug administration safety and innovation act of 2012. i am pleased to report that it is the product of excellent bipartisan collaboration on the health, education, labor, and pensions committee which i chair. the house passes the f.d.a. safety and innovation act

unanimously last week. now it is our turn to do our part. the backbone of this legislation is the user fee agreements that f.d.a. has negotiated with the industry. i might just add, mr. president, that this bill passed this chamber about three weeks ago on a vote of 96-1. so it has strong bipartisan support. a sizable part of f.d.a.'s budget comes from user fees that industry agrees to pay to allow f.d.a. to review product applications. we need to authorize f.d.a. to implement those agreements if we want to keep f.d.a. running at full steam, which is critical to preserving jobs at both the agency and in the industry. and to ensuring that f.d.a. has the resources to get safe medical products to patients quickly. i want to be clear, mr. president, these agreements affect all of us by helping maintain and create jobs in our home states. for example, in my state, these agreements will support our burgeoning bioscience sector which saw employment grow by

4.5% between 2007 and 2008. implementation of these agreements will continue to foster biomedical innovation and job both if all of our states. the bill before us reauthorizes the prescription drug user fee agreement and the medical device user fee agreement, both commonly known as pdufa and mdufa, which will continue and improve the agency's ability to speed market access to prescription drugs and medical devices while ensuring patient safety. and again i just might add that, again be, upper most, foremost, first is patient safety. that doesn't mean we can't do things in a better manner, get products more readily available, speed up the process, if we have the personnel and the equipment to do so. and that's why this bill is so important. it provides that type of support so that we can hire more people,

to make sure that we get these products to patients quickly but to make sure that they are safe. the bill also authorizes a new generic drug user fee agreement which is expected to slash review times to a third of the current levels, from 30 month s to months. drastically improving the speed with which generic products are made available to patients. the new generic user fee agreement will generate significant savings for patients and our health care system. in the last decade alone, from 2001 to 2010, the use of generic drugs saved the health care system more thank $.1 million. this agreement will ensure that we continue to see these savings and that patients have access to cheaper drugs. this bill also authorizes the new biosimilar user fee

agreement. this chart kind of shows again some of the savings that we'll gret this. the use of generic drugs has saved over $931 billion in the last decade. $158 billion just in 2010 alone. so we can see that the better able -- the better we are able to get generic drugs approved and in the pipeline -- again, safely -- the better off we're all going to be and the more money that not only will we save as individuals but our entire health care system will save. that's almost $1 trillion over just the last ten years. these agreements, again, as i say, are vital to f.d.a.'s ability to do its job, vital to the stability of the medical products industry and most importantly to the patients who are the primary beneficiaries of this collaboration between f.d.a. and the industry.

after months of negotiation, f.d.a. and the industry have crafted win-win agreements that they stand behind. they've done their job. now it is time for us to do ours. mr. president, it's absolutely imperative that we authorize these user fee agreements before they expire. if we don't, f.d.a. will lose 60% of its medical device budget. it have to lay off nearly 2,000 employees. that's why it's so critical for us to do this at this time. to be sure, the expiration doesn't happen until late this summer. but f.d.a. has told us that if they don't get this reauthorization done, they will have to start sending out pink slips at the beginning of july. that's why it's so imperative for us to pass this this week and send it to the president for his signature so that they will not have -- for his signature so that they will not have to go

through that process of sending out pink slips. but you can see how important this is, that if this were to happen, it would have devastating consequences for patients whose health and lives depend on new medical treatments. we can't let that happen and that's why for more than a year i worked closely with my colleague, the ranking member of the help committee, senator enzi, and other members of the help committee. our aim to be to ensure in addition to the user fee agreements, the other provisions in this legislation are also the product of consensus bipartisan policy-making. we have used bipartisan working groups to ensure that we had inner put in our members and the stakeholder groups at large on the other titles of this women of this is quite remarkable. we don't see much of it in this congress these days. but we have had great, great cooperation from all members of our committee on both sides of the aisle. this legislation has benefited from all of the diverse input

from senators on both side of the aisle, industry stakeholders, consumer groups, patient groups. more recently from our colleagues in the house. the f.d.a. safety and innovation act is the result of concerted efforts to define our common interests and these efforts will directly benefit patients in the biomedical industry. the bill modernizes f.d.a. authority in several critical ways. it authorizes key user fee agreements to assure timely approval of medical products. it streamlines the device approval process. it modernizes f.d.a. posts global drug supply chain authority. and that's so important. it spurs innovation and incentivizes joint development for life-threatening conditions. it reauthorizes and improves incentives for pediatric health care. it helps prevent and mitigate drug shortages and it increases f.d.a.'s accountability and

transparency. it addresses a broad array of critical issues we face in today's economy, and it's imperative our regulatory system keeps pace with and adapts to technological and scientific advances and that patient protections remain strong in this era of dynamic change. keeping pace with the ever-changing biomedical landscape is precisely the aim of the f.d.a. safety and innovation act. this bill injects greater transparency into the device approval process. it bolsters f.d.a.'s ability to help u.s. manufacturers create innovative and safe devices while enhancing f.d.a.'s ability to determine how devices perform in the real world and to take appropriate measures to protect patients. the bill also reauthorizes and improves incentives for pediatric trials. it creates incentives for the development of new antibiotics. it authorizes new drugs to help expedite the approval of

important lifesaving drugs and devices, again, without sacrificing safety. in addition, the bill also helps address the national crisis of the prescription drug shortages. over the past several years hospitals across the country and in my home state of iowa have experienced an increasing number of shortages of life-sustaining prescription drugs. the shortages directly threaten the public health by denying patients access to medications that are indispensable to their care. this bill requires all manufacturers of certain drugs to notify f.d.a. if they expect a manufacturing disruption that could lead to a shortage. becauseif f.d.a. is aware, the y can work with manufacturers and other providers to find other ways to get patients the drugs that they need. this bill also addresses drug shortages by explicitly allowing f.d.a. to expedite drug establishment inspections and application reviews when needed

to help prevent or mitigate a shortage. it establishes an f.d.a. drug shortage task force to develop a strategic plan to address drug shortages and to improve communication and outreach to stakeholders preparing for drug shortages. another significant advance in the f.d.a. bill is the much-needed modernization of their authority to ensure the safety of drug products coming into the u.s. from abroad. this bill, number one, allows f.d.a. to prioritize inspections of both domestic and foreign firms based on the risks that they present to patient safety. it requires importers to demonstrate that certain high-risk drugs are safe and compliant before they can be imported in the united states. it requires manufacturer ability and oversight of the quality and compliance of drug producers and suppliers. it enhances penalties for adult rating and counterfeiting drugs.

it allows f.d.a. to detain noncompliant drugs in u.s. commerce to prevent them from reaching patients. it permits f.d.a. to destroy certain illegal drugs at the border instead of releasing them back into commerce. and it clarifies f.d.a.'s authority to address criminal conduct that occurs abroad and threatens the safety of u.s. consumers. an important point to remember about the importance of these safety provisions is that weaknesses in our pharmaceutical supply chain affect the health of american businesses. u.s. companies that source and manufacture drugs in this country should not be placed at a competitive disadvantage by foreign firms that operate with less oversight and sell substandard ingredients into this country at reduced prices. this bill will help ensure that businesses operate on a level playing field by holding foreign actors to the same high standards as those in the u.s.

the last policy provision i'll highlight is a mix of device and drug authorities that together can fairly be described as the most significant advance for patients of orphan and rare diseases since the orphan drug act was passed nearly 30 years ago. in addition to the significant resources that will be devoted to rare diseases under the prescription drug user fee agreement itself, this bill, number one, expands accelerating approval pathway to therapies for rare and very rare diseases. and instructs f.d.a. to weigh the rarity of a disease as a factor in its approval process. next, it directs resources to promising therapies for medical needs which will receive the new breakthrough designation. next, it requires f.d.a. to consult with outside experts on rare diseases. next, it refocuses on pediatric rare diseases by requiring a strategic plan regarding pediatric rare diseases and creating a pilot program to

incentivize new therapies for pediatric rare diseases. next, it helps make devices for rare diseases more available by modernizing provisions relating to custom devices and making it easier for companies to make profits on stkaoeuss -- on diseases. it changes the rules to make it easier for f.d.a. to fill panels which have contracts with medicines with rare diseases. i'm proud of the opportunities this panel will represent. not only does this bill support the biomedical industry and help patients get the medical products they need, it also reduces the deficit. according to the congressional budget office, this legislation would reduce the budget deficit by more than $311 million in the next decade. so what we have here is not only good policy but it's fiscally

responsible contributing to deficit reduction. mr. president, as i have said over a year of diligent bipartisan work has gone into this legislation before us today. no democrats nor republicans got everything they wanted in this bill. we sought out consensus measures and where we could not achieve consensus, we did not allow our differences to distract us from the goal of producing a bill everyone could support. as a result, this is a true bipartisan bill and it is broadly supported by the patients, groups and industry. in fact, it has huge, wide support from both medical associations but also from consumers groups and also manufacturers throughout the entire country. broad base of support. in fact it's unique because it does, it has the full support of manufacturers of the pharmaceutical industry, device

manufacturers of the f.d.a. itself, and patients groups, people who are concerned about patient safety, cost and availability of drugs and devices. it has a broad base of support. the f.d.a. safety and innovation act before us that we'll be voting on in just a little while authorizes the important f.d.a. user fee agreements. it modernizes our regulatory system to ensure safety and to foster innovation in the medical product industry. our bipartisan work has produced an excellent bill. we cannot allow unrelated, i repeat unrelated, partisan disagreements on presidential election-year politics to interfere or to keep us from completing our job. i will say it again, we must pass this vital legislation now. it is critically important to the agency, to the industry and, most importantly, to the

patients that we get this done. let us come together to pass this legislation. let's have a resounding vote on cloture. hopefully we won't have to use up the 30 hours and we can get to passage of this bill very rapidly so that we can get it down to the president for his signature. mr. president, with that, i yield the floor. a senator: mr. president? the presiding officer: the senator from utah. a senator: mr. president, i rise today to express my support for the minority leader's decision to invoke the long-standing senate tradition known as the leahy-thurmond rule. mr. lee: pursuant to this tradition and this precedent, the senate will cease confirming nominees to the federal court of appeals until after the presidential election in november. many of my colleagues from the other side of the aisle have previously affirmed the propriety of this rule and enforced its standard. for example, in the last year the bush administration, the

majority leader noted that -- quote -- "in a presidential election year, it is always very tough for judges. that is the way it has been for a long time and that is why we have the thurmond rule." the chairman of the judiciary committee, who has cited the thurmond rule more frequently than any other senator has likewise state that had -- quote -- "in a presidential-election year, after spring no judges go through except by the consent of the republican and democratic leader." statements from several of my democratic colleagues likewise "n" firm that it is proper to invoke the leahy thurmond rule at this point in a presidential election year. in 2008, for example, one of my colleagues on the judiciary committee argued that for federal appeals court nominees, once it comes to june, generally everything stops in an election year. indeed, on june 12 of that same year, another judiciary committee colleague stated that

the senate was -- quote -- "way past the time of the thurmond rule." now history, mr. president, further confirms the propriety of invoking the leahy-thurmond rule at this time. it is extremely rare for the senate to confirm an appeals court nominee after june of a presidential election year. in fact, it has happened only once in almost two decades when in 2000 the republican-controlled senate confirmed one of president clinton's nominees. it is simply not true as comments from some of my colleagues have implied that in recent presidential election years we have confirmed appellate court nominees in july, august, or september. moreover, this year we have already confirmed five of president obama's federal please court nominees. this incidentally is the same number of appeals court nominees that the senate confirmed in

2008, *t most recent -- the most recent presidential year on record. in 2004 the senate confirmed only four such nominees. indeed, dating back over 100 years from president william howard taft to president obama, the senate has confirmed an average of just four appeals court nominees during presidential election years. this year we've already exceeded the historical average and confirmed five of president obama's appeals court nominees. there is no reason to depart further from the historical norm and confirm additional nominees. the suggestion by some that application of the leahy-thurmond rule somehow affects court vacancies deemed judicial emergencies are false and indeed recklessly so. of the four judicial emergencies on the federal court of appeals, president obama has nominated only one individual, and because

that nomination who was so recent, even absent leahy-thurmond rule, that nominee would not be scheduled for a vote any time soon. i would also remind my colleagues that democrats enforced the leahy-thurmond rule in june 2008 during a time there was twice as many judicial emergencies in the circuit courts as there are right now. the overall vacancy rate on our circuit courts was much higher in june 2004 when president bush was in the final year of his term, yet democrats did not hesitate to block several qualified appellate court nominees in the months leading up to the 2004 presidential election. enforcement of the leahy-thurmond rule does not currently apply to judicial -- to district court nominees. this year the senate has already confirmed 23 of president obama's district court nominees, many more than were confirmed

during comparable years during the bush presidency or the clinton presidency, and we will continue to confirm more qualified nominees. application of the leahy-thurmond rule beginning now will thus not implicate any district court judicial emergencies. the urgency for such vacancies lies not in the senate, which to this day has acted responsibly on the nominees, but with president obama, who to this day has failed to nominate individuals for many of these seats. there are, i would add, other good reasons in addition to the tradition and historical precedent to enforce the leahy-thurmond rule now rather than waiting longer to do so. doing so now prevents a particular president from packing the courts at the end of his term by appointing influential life-tenure appellate court judges whose

service will span numerous other presidential administrations. the leahy-thurmond rule also ensures that presidential politics during an election season will not overshadow or interfere with the senate's advice and consent rule on such judicial nominees. the last point bears special emphasis. the constitution assigns to the senate the right and the duty to consent to the president's judicial and executive branch nominees. it is essential for the constitution's separation of powers that the senate protect its necessary and legitimate role in the nominations process against encroachment by the executive branch of government. earlier this year, we witnessed a troubling demonstration of what can happen when the president violates the constitution's separation of powers and tramples on the senate's rightful prerogatives in the advice and consent

process. on january 4, 2012, at a time when the senate was conducting brief sessions, approximately every 72 hours, president obama nonetheless bypassed the senate and unilaterally appointed four significant executive branch nominees. by asserting the power to make recess appointments, even when the senate, according to its own rules, was not in recess, the president simply ignored the senate's legitimate constitutional right to advise and consent to nominees made by the president. president obama's unconstitutional appointments cut to the very heart of our constitution's separation of powers and the institutional prerogatives that rightfully belong right here in this body. accordingly, since the time of those appointments, i have sought to protect the senate's interest by opposing president obama's judicial nominees.

i have made clear that i would do the same were a republican president to make similarly unconstitutional appointments under the recess appointment clause. as the chairman of the senate judiciary committee noted at a recent judiciary committee hearing, i have stated my concern with president obama's unconstitutional recess appointments very clearly, but i have also been, in his words, extremely responsible in my opposition and have not entered the work of the senate -- have not hindered the work of the senate. in light of president obama's unconstitutional appointments, it is all the more proper that we invoke the leahy-thurmond rule now. i agree with the ranking member of the senate judiciary committee that we should have invoked that rule back in january at the time of the unconstitutional appointments. by enforcing the leahy-thurmond rule now, we will demonstrate for the historical record that the senate did not acquiesce in president obama's

unconstitutional recess appointments, and instead we took action to protect the senate's institutional prerogatives. when we have done so, i will again be in a position to vote in favor of qualified consensus district court nominees, but i will always remain vigilant in seeking to protect the senate against unconstitutional encroachment by the executive branch. as members of this body, we have an institutional responsibility to safeguard the senate's essential advice and consent role and to confirm only those nominees who are properly qualified to serve in the positions for which they have been rightfully nominated. thank you, mr. president. i yield the floor. mr. durbin: mr. president? the presiding officer: the senator from illinois. mr. durbin: thank you, mr. president. i ask consent to speak in morning business. the presiding officer: without objection. mr. durbin: mr. president, today the united states supreme court announced its decision on s.b.

1070, the controversial arizona immigration law. the court, including conservative justices anthony kennedy and john roberts, agreed with the obama administration that a state cannot set up its own immigration enforcement system. as a result, the supreme court today struck down several parts of the arizona law, including the provision that would have made it a crime in arizona to be an undocumented immigrant and the provision that would have required legal immigrants to carry documents proving their legal status at all times. the supreme court is right. states do not have the right under the constitution to enact immigration laws that contradict federal law. many of my colleagues on the other side of the aisle strongly criticized the obama administration for even challenging the arizona immigration law. there was even an amendment offered to try to block the justice department from pursuing the litigation that was brought

to the supreme court. fortunately, the vast majority of democrats joined by two republicans, senators johanns and voinovich, blocked that amendment. now the supreme court, including chief justice roberts and justice kennedy, has sided with the obama administration in holding the vast majority of the arizona law unconstitutional. i am troubled that the supreme court upheld one of the provisions in that law in arizona, section 2-b, which requires arizona police officers to check the immigration status of suspected undocumented immigrants. but it's important to understand that court decision on that section is a narrow one. the only question before the court was whether that section, 2-b, was preempted by federal immigration law. the court said it is open to future challengeses once the law goes into effect -- challenges once the law goes into effect

and this provision could still be held unconstitutional like the other provisions in the arizona law. according to law enforcement experts, section 2-b is likely to encourage profiling which would violate the equal protection clause of the 14th amendment to the constitution. specifically, section 2-b requires police officers to check the immigration status of any individual with whom they have lawful contact if they have -- quote -- "reasonable u.s.s. pigs" that the -- reasonable suspicion "that the person is an undocumented immigrant. so what is the basis for a reasonable suspicion that the person they pulled over is, in fact, an undocumented immigrant? well, the guidance on the law issued in the state of arizona says that police officers should consider things such as how a person is dressed or their ability to communicate in english. earlier this year, i held a hearing on racial profiling in my subcommittee, the judiciary committee on constitution, civil rights and human rights. it was the first hearing on racial profiling since before

9/11. one of the witnesses at my hearing was ron davis. he is the chief of police in east palo alto, california. chief davis, along with 16 other law enforcement officials and the major cities chiefs of police association filed a brief in the arizona case. the police chiefs say, and i quote -- "the statutory standard of unreasonable suspicion of unlawful presence in the united states will as a practical matter produce a focus on minorities and specifically latinos." end of quote. two former arizona attorneys general joined by 42 other former state attorneys general filed an an ameek -- amicuk brief and said application of the law in the arizona court requires racial profiling, end of quote. i agree with these law enforcement experts. i'm confident that section 2-b will eventually be struck down as the other two provisions were in the arizona law.

arizona law is the wrong approach for america. it is amazing to me how this nation of immigrants of which we are all part of the family has struggled for so long to deal with the whole issue of immigration. i think it is wrong to treat people like criminals simply because of their immigration status, and it's not right to make criminals of people who literally go to work every day cooking our food, cleaning our rooms and caring in nursing homes for our children, day care centers for our children, nursing homes and our parents and grandparents. here's the reality. treating immigrants like criminals will not help combat illegal immigration. law enforcement doesn't have the time or the resources to prosecute and incarcerate every undocumented immigrant among the ten million or 11 million in this country. making undocumented immigrants into criminals simply drives them into the shadows. that's why the arizona association of chiefs of police opposes the arizona law considered by the court today.

they say it will make it more difficult for them to make arizona a safe place. immigrants are less likely to cooperate with the police if they fear they are going to get arrested for even trying to help. instead of measures that harm law enforcement and promote racial profiling, low-income the arizona immigration law, we need practical solutions to fix a broken immigration system. that case was before the supreme court. the court made its decision today because this body, the senate and the house, have failed to accept their responsibility. we have a responsibility if, in fact, immigration is a federal issue for a federal response, and we failed. now, the first step we should take in passing comprehensive immigration reform is to pass the dream act, legislation that would allow a select group of immigrant students who grew newspaper this country to earn citizenship, either by attending college or serving in the military.

russell pierce is the author of the arizona immigration law. he had this to say about the dream act, and i quote -- "the dream act is one of the greatest legislative threats to america's sovereignty, national security and economic future." end of quote. well, i see it differently. so do many others, including general colin powell, former defense secretary robert gates. they support the dream act because it would make america a stronger country by giving these talented immigrants the chance to serve in the military and contribute to the future of america. the best way to understand the problems with the arizona immigration law and the need for the dream act and comprehensive immigration law is to hear the stories of some of the immigrant students who would be eligible for the dream act. they call themselves dreamers. almost every week in the session, i come to the floor of the senate to tell the story of one of these young people. over the years, i have told stories of several dreamers from the state of arizona.

under the arizona law, these young people would be targets for prosecution and incarceration. under the dream act, they would be future citizens who could make america and arizona stronger. today i want to introduce one of them to you from arizona. her name is angelica hernandez. she was brought to phoenix, arizona, when she was 9 years old. she started school in the fourth grade. by the time she reached the sixth grade, angelica no longer took english as a second language. she was proficient in the language of english. at carl hayden high school in phoenix, arizona, angelica served in junior rotc and was president of the national honor society. she became a dedicated member of the school's robotics club where she found her true love, engineering. angelica graduated from high school with a 4.5 g.p.a. in 2007 and was named outstanding young woman of the year for district seven in phoenix.

last year, angelica hernandez graduated from arizona state university -- see her holding her graduation certificate here here -- as the outstanding senior in the mechanical engineering department with a 4.1 g.p.a. under the arizona immigration law, angelica hernandez would be a target for prosecution and incarceration. under the dream act, she would be a future citizen and engineer who could contribute her talents to making this a better country. what a choice. to take this woman who has spent virtually her entire life, as she remembers it, in america, attending our schools, excelling in those schools, being acknowledged as one of the better students, her ambition takes her to a great university, arizona state university where she graduates at the top of her class in mechanical engineering and some would say now is the perfect time to tell her to leave america.

i think they're wrong. angelica hernandez and people like her will make this a better country. unlike the arizona immigration law, the dream act is a practical solution to a broken immigration system. the arizona law would harm law enforcement and encourage profiling. the dream act would make america stronger. now, president obama understands this. that's why he challenged the arizona law, taking the case to the supreme court. that's why earlier this month, i salute the president for announcing his administration will no longer deport people just like angelica hernandez who would be eligible for the dream act. i strongly support president obama's courage and his decision as one of the most historic humanitarian moments of our time. his decision will give these young immigrants the chance to finally come out of the shadows and be part of the only country they have ever called home. it was the right thing to do. these students didn't make the decision to come to this country.

angelica was brought here at the age of 9. it is not the american way to punish children for the wrongdoing of their parents. president obama's new deportation policy will make america better by giving these talented immigrants the chance to contribute. studies have found the dream act students will literally boost the american economy during their working lives. this policy is also clearly legal. throughout our history, the government has decided who to prosecute and who not to prosecute based on law enforcement priorities and available resources. past administrations of both political parties have used their authority to stop deportation of low priority cases. the courts have recognized that. listen to what the supreme court said today in the arizona immigration law case -- "a principal feature of the removal system is the broad discretion exercised by immigrants officials, discretion in the enforcement of immigration law embraces immediate human concerns." end of quote.

the president's plan is smart and realistic. the department of homeland security has to set priorities. it's not amnesty. simply a decision to focus limited government resources on those who have committed serious crimes and are a threat to public safety, not the dream act students. compare president obama's approach with the presidential candidate from another party. he said the arizona law was a -- quote -- "model" -- close quote for the rest of america. that other presidential party candidate has promised if he is elected president, he will veto the dream act and he's refused to say whether he would even maintain or reskinned president -- rescind president obama's order banning the deportation of dream act students. that's the wrong approach for america. the administration's new policy on the dream act is only temporary, i understand that. the burden is still on us in the senate and the house to do something about the many thousands of students across america just like this dynamic

young lady in arizona who simply want a chance to be part of america and its future. our first step, pass the dream act. do it and do it now. justice kennedy wrote in his opinion today "the history of the united states is made in part the stories, talents and lasting contributions of those who crossed oceans and deserts to come here" -- end of quote. justice kennedy is right. congress congress should reform our immigration laws to welcome those who crossed the oceans and deserts to revitalize this nation of immigrants. i yield the floor. the presiding officer: the senator from arizona. mr. mccain: i came to the floor to discuss another issue, but since my friend from illinois, who i share many of his comments about, i have to comment. the fact is that the irony of the supreme court decision today is that the supreme court said that it is a federal responsibility to ensure our

borders and not one of the -- not the state's responsibility. the irony of all this is that the state of arizona acted because the federal government wouldn't act because our borders were broken, because the people in the southern part of our state were living in fear, that a rancher was killed by someone who had crossed our border illegally, that the flow of drugs guided by people on mountaintops today, guiding drug runners across our border in arizona following up to phoenix where drugs, phoenix, arizona, where drugs are distributed all over this nation. $887 million was wasted on a contract for 5, quote, virtual fence. coyotes who bring these people across and treat them in the most abottom enable fashion where they are taken up and put into drop houses where they're kept in the worst kind of conditions and held for ransom. because the federal government would not secure our borders,

then the state of arizona felt they had to act because people in the southern part of our state and even other parts of our state were living in fear. they were living in fear because of the drug dealers who were coming across, because of the coyotes, and the mistreatment of the people that they were bringing. of course we want to address the issue of children who were born here but we also have an obligation to have our borders secured. i repeat today, i say to my friend from illinois, there are people sitting on mountaintops hired by the drug cartels that are guiding the drug runners across our border up to phoenix and you can ask the d.e.a. and these drugs are distributed throughout the country from phoenix, arizona. people are killed, people are murdered, the violence on the other side of the border threatens every day from spilling over to our side of the border, and so i hope as a result of this decision that the administration will get serious

about actually securing our border. and everyone, -- everyone agrees, every expert agrees because of the work done in california and texas that it has funneled up through the state of arizona and have there been improvements? of course there have been improvements. is it still going on? as long as you have guides on mountaintops guiding drug dealers all the way up to phoenix, arizona, we haven't got a secure border, and that's what the people of arizona not only want but they also deserve. i will go on to the dream act and the fact that we do -- and, by the way, mitt romy ni agrees we should -- romney agrees we have to deal with this as well as the plight of the children brought here illegally but i would point out to my friend part of the dream act proposed by the senator from illinois is two years service in the military. we don't sign people up for two years. we sign them up for four years.

that's just one area -- we sign up a few, but average citizens in order to get a path to a green card and a path to citizenship sign up for four years. that's one of the roars that needs to be worked out. there will be a lot of conversation about this, but i believe that people who live inside of our country, no matter whether it be in arizona or illinois, deserve the right to live in safe environment. and the people who live in the southern part of our state do not have that right and i hope that we can get our border secure, move forward with comprehensive immigration which, by the way, the then-senator obama was one of the key reasons why it failed because he wanted to sunset the guest worker program, and that's a fact, you can look it up, i say to my friend from illinois, although it was killed by people on this side, it was also a broken promise on the part of

then-senator obama who said he wouldn't vote for an amendment, he assured senator kennedy and me he wouldn't vote for an amendment that impaired the progress of comprehensive reform at that time. mr. president, i want to change the subject now. i look forward to having further discussions with the senator from illinois as we will move forward, sooner or later, with comprehensive immigration reform, which is absolutely needed, and i look forward to engaging in that again, but we also have to assure the security of all of our citizens and stop the flow of drugs across our southern border, which is killing our young americans. and, by the way, i'd say to the senator from illinois, the price of an ounce of cocaine on the street of chicago today is not one penny higher than it was ten years ago which means we are not restricting the flow of drugs coming into our country as we all know, the majority of it comes across from -- across our southern border, the majority of it. mr. president, later this week

the supreme court will issue a ruling on the health care bill designed and negotiated by the white house -- i forgot one other thing. then-senator obama, i would remind my friend from illinois, promised in the campaign of 2008 that immigration reform would be his first priority. the senator had 60 votes over here and overwhelming majority in the house of representatives during the first two years of the obama administration. i never saw a proposal come to the united states senate for comprehensive immigration reform. now, the dream act did, comim immigration reform, no. that's what then-senator obama promised. go ahead, please. i yield -- i ask unanimous consent for a colloquy between myself and the senator from illinois. mr. durbin: let me say the senator from arizona is my friend and that are -- there are many things we've worked on together and i respect him very much. he knows as i do that the dream act was called, the first part, we thought the

introductory, maybe the easiest part of immigration reform, it was stopped by a republican filibuster. republican filibuster. mr. mccain: i don't dispute that point i say to my friend from illinois. there was no comprehensive immigration reform proposal that came over from the white house or from the democrats as was promised by then-senator obama when running for the presidency. that's a fact. mr. durbin: i would say to the senator from arizona as part of this colloquy we thought that would be the first step. we couldn't get past the first step because of republican filibuster. mr. mccain: i wish then that maybe president obama or senator obama when running for president said but first i'm coming over with the dream act. he didn't. he said my first act will be comprehensive immigration reform. it was invited over to the white house in the year 2009. we talked about comprehensive immigration reform. i said i will await a proposal from the administration on comprehensive immigration reform. my phone never rang. mr. durbin: i say to the senator

from arizona perhaps the day will come in our lifetime when we can see that and you and i can work on it again as we once good did before. i look forward to that. mr. mccain: i look forward to that and i want to say there has been no passionate 56d cat -- advocate in the united states senate than the senator from illinois. i admire him for his compassion and concern about young people about whose lives as he well described need to have assurance for their future since it's clearly a compelling humanitarian situation. i thank my friend from illinois for it. mr. president, later this week the supreme court will issue its ruling on the health care bill designed and negotiated by the white house and rammed through congress during president obama's first year in office when the economy was near its weakest. instead of focusing on recovery and persistent unemployment the president and the majority controlling congress squandered the opportunity and force tind popular and potentially unconstitutional legislation on the american people.

today we're going to vote on final passage of the rec rec on sield f.d.a. user fee bill. during senate consideration of this bill, i 06rd an amendment to allow safe drug importation from legitimate canadian pharmacies but the pharmaceutical industry spread misleading and inaccurate information about the amendment as they have done time and time again. as i said then, there is no greater example of the influence of special interests on this body than the failure to enact a not -- an amendment that would have allowed from canadian pharmacies who are legitimate pharmacies that people could purchase their much-needed medications at sometimes of a half -- sometimes half the cost of what it is in the united states of america. i'm embarrassed to this day that nine of my republican colleagues voted against it. i don't know if there was a sweetheart deal to protect phrma at the expense of

patients. but we do know phrma was protected by the white house and senate democrats from provisions they didn't like in obamacare only after they offered up advertising exchange for more accommodating policies. from's a recent house policy and energy committee investigation, it is revealed that phrma had a deal with white house. i might point out then-senator obama supported drug importation and this, my friends, is what happened. this is how "the new york times" described the scenario as the deal that was done in exchange for reportedly $150 million in advertising to support obamacare. this is from "the new york times." they describe the scenario. june 8, 2012. "after weeks of quiet talks, drug industry lobbyists were growing nervous. if they were to cut a deal with the white house on overhauling

the health care they needed to be thiewr president obama would stop a proposal by his liberal allies intended to bring down medicine prices. on june 3, 2009, one of the lobbyists emailed nancy ann gapali. she sent a message back reassuring the lobbyists although mr. obama was overseas, she wrote, she and other topicialses, quote, made a decision based on how constructive you guys are have been to oppose importation not to the bill, unquote. just like that mr. obama's staff abandoned their support for reimportation of prescription drugs and solidified a growing compact with an industry he had veil emphasize fied on the campaign trail the year before. a president who had once promised to air negotiations on c-span cut a closed-door deal with a powerful pharmaceutical

lobbying signaling a loss of innocence or a triumph of cynicism. still, what be distinguishes the obama industry deal he had so strongly rejected that sort of business as usual. ironically, candidate obama sang a different tune on the campaign trail in tbait 2008. quote, i don't want to learn how to play the game better. i want to put and end to the game playing, the "new york times" article continued. the emails which the house committee obtained from phrma and other groups. phrma is a lobbying group for the pharmaceutical industry. document a tumultuous negotiation at times, transactional. i continue to quote from "the new york times" article. in the end the white house got the support it needed to pass its priority but industry emerged satisfied as well. -- quote -- "we got a deal"-- unquote wrote brian hall, senior haven't of the pharmaceutical group. in july, the white house made

clear it wanted supportive ads using the same characters the industry used to defeat mr. clinton's proposal 15 years earlier. -- quote ---- quoterahm asked fe ads through a third party." in may, the white house was upset that the industry had not signed on to a joint statement. one industry official wrote that they should sign -- quote -- "rahm is already furious. the ire will be turned on us." the emails detail negotiations with phrma, the drug company members, the american medical association, aarp, hospital association, unions and many more. members of the alliance all participated because they thought they were getting something more valuable. revenue to their organization or membership, because the federal government was going to force everyone into some form of government designed health insurance coverage. and what they were going to have to spend on