siege because of the local and national economy. >> absolutely. >> okay. >> we have, obviously, concerns. we've listened carefully to state and local governments, um, and their concerns about money market funds. it's really come from two perspectives. one is that they use them as cash management vehicles, and they need a stable value product to do that which is one reason we have an option for capital which would allow the product to stay a stable value product their other concern is whether money market funds will continue to exist and buy municipal securities. i would note that only about 10% of the total municipal securities, um, are held by money market funds. it's a larger percentage for very short-term paper. but, um, you know, there's -- i believe money market funds will continue to exist, they will continue to invest in municipal securities. but if a municipal treasurer can't bear the risk, the loss of

even a penny, a share in their cash management account, one has to wonder whether a money market fund really is the right place for them to be in the first instance because they do have that risk if the fund breaks a buck. >> thank you, mr. chairman. >> senator toomey. >> thank you, mr. chairman. i, too, would like to thank you for having this hearing, the ranking member as well. this certainly is a very, very important topic, and i appreciate the chance to have this discussion. my first question, thank you, madam chairman, for being with us today. in a footnote on the first page of your testimony, you acknowledge that the views of your testimony are your views -- >> that's right. >> -- and not the views of the commission. is it fair to say that the views that you have expressed, in fact, do not represent the majority of the commission? >> senator, i guess i wouldn't say that. i mean, clearly, they have not, um, joined me in this testimony, a majority -- the commission as a whole hasn't. um, i think that, um, some would

tell you that they still have open minds and they want to engage with the document from the staff when it's circulated, see what the proposals are, see what the cost benefit and other analyses are. but you were right that some of them have expressed their views that nothing more needs to be done, that the 2010 reforms were sufficient. but -- >> okay. >> i am hopeful that we will have the debate that i think we these to have. >> i'll go out on a limb. it seems to me that there's a majority on the commission that does not share your view on this. but we, we'll see how this develops. i also want to make the point that the disclosure that there were 300 instances in which there was some voluntary support succeeded in getting some sensational stories written. but the fact that it came without the accompanying analysis and without the accompanying data so that people really can't evaluate it is pretty unfortunate because i've

seen articles in which people leap to conclusions that may not be supported by the data. and i'd like to drill down a little bit into this topic since you have raised this and seem to be making this an important basis for suggesting that we need some really extraordinary new regulations. the boston federal reserve bank recently cited that there were 41 -- 47 instances of direct support between 2007 and 2010. in a recent speech, federal reserve governor tarullo referred to incidences between 1999 and 2003. moody's reported in 2010 there were 181 cases between 1980 and august '09. my first question is, is everybody using the same definition of what constitutes support? >> they may not be, and they may not also be looking at the entire universe of money market funds. >> right. okay. so could you tell us what is the definite you've used to define an instance of this voluntary

support that gets you to the count of 300? >> yes. we have used, i believe, a pretty conservative evaluation. looking at those instances where money market funds came to the staff of the sec and sought authority to, essentially, violate the affiliated transaction rules by making a contribution to the fund. um, we have generally talked about it, um, as being buying out distressed paper, entering into a capital support agreement or a letter of credit. we did not count renewals, capital support agreements, and we didn't count other types of potential contributions. >> okay. so a credit agreement is, essentially, a conditional support. if that was never drawn on, does it still count towards the 300? >> yes. because it still shows up as a liability on the balance sheet. >> okay. but it was, but there was no credit event that occurred, there was no adverse outcome for the fund, it was simply an arrangement that was made and was never use inside that case.

another question, do you distinguish between significant and de minimis amounts of support? >> no, and i don't actually think that it's necessarily relevant to distinguish between them. if a fund is going to break the buck, it's going to break the buck. and capital support is there, it contributes to the understanding -- . >> well, if it's a de minimis arrangement, then it's not clear that the consequence would be breaking the buck. but let me ask another question. in the event that a sponsor had an agreement to purchase securities and the security's actually paid in full, would that still count as one of these inens saws -- instances? >> yes, it would. >> okay. how about the number of instances since the 2010, precisely how many of the 900 occurred -- 300 occurred after the new regulations were imposed in the 2010? >> my understanding is since 2010 there have been three sponsor-support occasions that were necessary because of a downgrade of a foreign bank. i believe it was a norwegian

bank. >> but, um, it's very hard for us to evaluate when you say "necessary" without concern i mean, we just went through a number of examples in which support is defined in ways that certainly wouldn't suggest to me or, i think, to many people that there was any real danger that -- and my concern is that this is the impression that is being created, that these are all instances about which we should be concerned when, in fact, it sounds as though many of them are not terribly disturbing. >> senator, i'm more than happy to provide the background information to you, but i think it's also important to note that money market funds come to us and ask us for the authority to enter into these arrangements. so these are not generated by the sec, these are -- >> no, i understand they're heavily regulated, and they're forced to come to you for permission to do many things. but that doesn't mean the things are necessarily disturbing or evidence that there's a problem here. so you'll give us public release

of all the data and the analysis that accompanied it. when do you expect we'd be able to get a chance to look at that? >> i would endeavor to get it to you as quickly as possible in the next couple weeks? next couple weeks. >> okay. i just, i just would like to make the general point and just wrap up my time, um, your testimony which i read closely, in my view you're portraying an industry that's extremely vulnerable, that has all these risks of runs. and i really find that extraordinary in light of the actual history. when you think of the way this industry has thrived for decades that have seen so many extraordinary events, serious recessions, bouts of inflation, the crash of the s&l industry, all kinds of devastating natural disasters, 9/11, all the while prior to the financial crisis of '08 there were thousands of bank failures, individual years in which hundreds of banks failed.

and during all that time one money market fund broke the buck. there was no run. there was no contagion. and investors got 96 cents out of every dollar. then along comes the financial crisis, it's the worst since the great depression. investment banks go down in smoke, commercial banks crumble. an entire industry is wiped out. the big wire house broker dealers no longer exist, all either being forced to be bought or convert their charter. and while the entire financial services sector is virtually collapsing and seizing up, the panic that seized this whole sector did, in fact, effect some of the money market funds somewhat. one of them broke the buck, extraordinary measures were taken, i understand all that. and then you impose new regulates, liquidity, maturity, credit enhancement, more transparency. and since then we've had another round of real stresses, another, you know, an ongoing, terrible recession, european credit crisis, considerable redemption

pressure and not a single problem in this whole industry. no one gets in this trouble. and now without having had a chance to look at this data that you cite and citing the very characteristics that have been in place from the very first day of this industry, you're telling us that this is a very vulnerable industry, and there's great threats of a run and using that to justify regulations that i think threaten the very existence of this industry. >> senator menendez? [laughter] >> thank you, mr. chairman. madam chair, thank you for your service. i want -- i'm not sure which analysis are you referring to that you're going to make public? because i had a line of questioning about your analysis process. >> sure. i was asked by senator shelby and senator toomey to provide background on the 300 o decisions -- 300 occasions where

there's been capital provided to the -- >> okay. so my question is have you at the sec studied the impact of the sec's 2010 changes on money markets? >> yes, we have. and in the release if we publish one laying out potential further reforms, we would, of course, lay that full analysis out. but i will tell you we believe the 2010 reforms worked extremely well for what they were designed to do which is to provide sufficient -- assure that there is sufficiently quid fit in money market funds to meet heavy redemptions. and as we saw through the summer in europe when there was a period of extraordinary redemptions, they performed very well. but even that period, that three week period from june 14th on, um, about $100 billion was withdrawn from money market funds. that compares to $300 billion withdrawn from money market funds in just a few days after reserve broke the buck. so i guess i would disagree that there was no run. there was clearly a run in 2008,

and the goal here is to draw, is to not demonize an industry. as i said, this is an industry that has performed very well -- >> i don't want to spend my time with you answering senator toomey. >> i'm sorry. i apologize. [laughter] >> i understand you want to do that, but that's good for presidential debates. [laughter] let me ask you this, can -- are you going to release the impact of the 2010 changes before you move on to your next set of reforms? i mean, i think some of us would like to know what, in essence, those 2007 changes -- 2010 changes did before you move on to a next set of reforms to get a sense here of the impact. for example, you know, how much have they reduced systemic risks, the 2010 reforms? you know, have they reduced systemic risks, and if so, by how much? >> we could certainly to that. and as the chairman has said, the record will be open for a period after the hearing, we could proview id that in the form of a response on the

record. >> okay. let me ask you this. have you done an analysis of your proposed reforms that are coming down the pike that you can share with us? >> well, that would be in the form of a proposed rule recommendation with lots of alternatives and options and lots of questions. but that would include a complete cost benefit analysis of the proposed options, floating net asset value or capital buffer with restrictions. also a cost benefit analysis compared to what the costs are of a run to our economy and all the alternatives, where money might flow if it were to flow out of money market funds as a result of any reforms. so we have quite, um, a detailed cost benefit and economic analysis in the proposing relief. >> in that analysis are you going to define the reforms both on safety and soundness, but also on whether investors will be willing to invest in these funs?

>> yes. we would look at what the competitive impacts might be of any reforms. >> and do you believe, i have heard some criticism that there's not a wide enough array of options being considered. >> well, i would say that, um, as you might recall the president's working group, um, in 2010, i believe, published a report that laid out, oh, more than half a dozen, i believe, options for reform including capital and floating nav, but also a liquidity facility converting money market funds into special purpose banks, um, and there were four or five, um, other recommendations there. >> well, i'm concerned about the net asset value of fluctuation, and that is one that i think is problematic. and i think we've written to the commission along with others expressing that view. how much would capital buffers cost, and how much would they reduce systemic risks?

>> well, it depends on, obviously, how you structure, excuse me, a capital buffer. we think, i think that a small, quite small capital buffer coupled with limitations or fees on redemptions would permit, um, you to have a small buffer and, um, yet require redeeming shareholders bear the loss, some of the loss, some of the costs of their redemptions. at the same time, the small buffer would allow you to have fluctuations that could be absorbed on a day-to-day basis. so we will try to cost out, um n our release what the cost of capital would be. >> but right now you can't tell us how much that would reduce systemic risks, what you're proposing? >> well, i think that's part of our analysis, but i think, um, a capital buffer would allow the money market fund to maintain the stable value as it does today but support it through the absorption of relatively small

mark-to-market losses that occur without breaking the buck. >> are senator crapo. >> thank you, mr. chairman. chairman schapiro, i want to follow up a little bit on senator menendez's questions about the analysis you've made. it's my understanding that if money market funds were forced to float their net asset value, there's a great concern about the fact that the flow of hundreds of billions of dollars of both corporate and municipal financing would be severely disrupted. have you or your staff undertaken any studies as to how the reforms that you have floated might effect the ability of investors to continue to use money market funds as an effective cash management tool? >> absolutely, it's part of our analysis, the impact on governments' use of money market funds forecast management. and we understand that many of them operate under legal requirements to utilize a stable value product. um, that's one reason we're proposing alternatives. if you need to use a stable

value product, then there's a capital alternative, um, that would allow the product -- the money market fund to still price at a dollar. but we will look at the cost implications for municipalities of both the cash management aspect of money market funds, but also their capacity to buy state and local paper. >> but at this point have you reached any conclusions as to what kind of disruption might be caused in the economy if you, in the development of capital in this context? >> well, we have, obviously, had conversations with, um, state and local governments. we held a round table, excuse me, last year where we had participation from, um, state and local governments talking about the issues, talking about their concerns, will they need to have additional staff, will they have to change their programs -- >> and what conclusions have you come up with from those conversations? >> well, part of our release is to seek specific economic data about what those cost would be and then be able to compare those costs against the costs of

the potential for a run that freezes must money market funds, suspends redemptions and gives them no access whatsoever to their cash management vehicle. >> okay. in april a committee of the international organization of securities commissions issued a report on the money market funds that included proposals to float the net asset value or imposed other variety of capital buffers. three of the five sec commissioners issued a, i think, a rare statement that said that that report does not reflect the views and input of a majority of the commission. my question is, who at the sec did provide the input on this report, and were the three dissenting commissioners consulted? >> the, um, the staff, um, works with iokco on -- iosco committee that was dealing with these issues. the commissioners did disagree with the conclusions. those disagreements were registered at the highest

levels. the paper was published prematurely, quite honestly, before the sec through a genuine screw up in the process at iosco. before the commission was able to register that there was not a majority of the commission's support. but i should emphasize this was a consultative staff paper seeking comment on a broad range of potential options. >> all right, thank you. professor james engel from georgetown university makes the point that it's extremely important to distinguish between a destabilizing run and an orderly walk. in a run, apparently, as he says the funds are forced to sell assets at potentially distressed prices, potentially destabilizing money markets. in a walk the funds can be used in the normal cash flow, in a normal cash flow manner from maturing assets to meet redemptions. are you focusing on that kind of distinction? do you agree with that distinction in the first place, and do you think that the reforms you're talking about

properly take into account that kind of distinction? >> i think the reforms do take into account the kind of distinction. our concern is the propensity to run. our concern is not to keep money market funds in business to limit people's ability to withdraw and move their money from fund to fund. but our concern is the destabilizing run such as we saw in 2008, um, and we're very focused on that. we've had a number of our staff look at professor angel's report. i think it contains conjectures and, frankly, qualitative statements but not the quantitative data and analysis we would expect to include with our reform proposals. >> so you do agree with the distinction that there is a difference between a run and an orderly walk as the term has been used? >> i think when a fund breaks the buck, it's very hard to have an orderly walk because a fund is likely to suspend redemptions which just freezes everybody in place including people who need access to their funds for cash

management purposes, payrolls, tuitions, mortgage payments. um, and so my concern is about the potential to break the buck because of the brittleness of the $1 value and that leading to a run. >> thank you. >> senator warner. >> thank you, mr. chairman. let me also thank you and the ranking member for holding this hearing. i wallet to, um, go back to some of the comments that senator reed and senator toomey made. you know, i chair, chairman schapiro, your concern that if you've got to have an intervention and whether that intervention is de minimis or large if it's breaking the buck, it has the potential of starting an unraveling. the interesting thing, though, is that, you know, when we look at the fsoc, normally we go after the largest systemic important institutions. my sense is, and i'm anxious to see the data as well, that the largest money market funds are probably the safest in terms of

shoring up if they get into this gray area, and it really is the smallest, the smaller ones, the ones on the fringe that may be providing the most threat to the system. and i guess this, again, goes back to -- i want to comment a little bit more about senator reed's questions about, and i know there's not an equivalency of some type of stress test or analysis. could you speak to that a little bit more? >> sure. i think, um, excuse me, i think the importance -- the stress test is an interesting idea. stress test with respect to the capacity to provide capital. i think the problem is if there's going to be capital support, it ought to be explicit capital support. investors ought to be able to know it will be there when it is needed, not be left to wonder whether the sponsor is still capable and willing to provide that support. and i think that's why my view is that we need to move forward

with a rule that would require either a floating net asset value or, um, a capital buffer coupled with some kind of redemption fee or limitation in order to insure that, um, those who redeem early are bearing some of the -- >> no differentiation between those money market funds who have had long, stable relations, no -- everybody would be in the same pot, right? >> well, i think, um -- >> and with the capital buffer, if we're going to go with the capital buffer, would the capital buffer be for a lehman-style collapse, or would the capital buffer be just kind of in the normal course to have a small reserve here so that if there was something that kind of got you near that de minimis cushion? >> i think -- >> or would that with part of the review and analysis? >> that's certainly part of the analysis, but the reserve fund was about a $62 billion fund. not a household name, i don't believe. they held only about 1.3% of

their assets were in lehman paper, $875 million -- 785 million investment. when they broke the buck, yes, admittedly, it was in a time of general crisis in the economy. but it spread rapidly to many, many other money market funds. and if you read former secretary paulson's book, he talks about really standing on the edge of the cliff, hearing from money market fund managers who just didn't know, um, what was going to happen to them because redemptions were going through the roof. and if they were going to have to sell securities in order to meet redemptions into this very depressed market, they were going to create this spiraling down, um, that would be very, very difficult to stop which is why treasury did step in and to the tune of more than $3 trillion guarantee all money market funds. >> but if you had to put a capital buffer to be in place for that level of potential contagion, wouldn't you potentially really disrupt this

whole business? >> i think a capital buffer to contain that level would be prohibitively expensive and probably doesn't make sense which is why you could have a much smaller capital buffer if it's coupled with some kinds of limitations on redemptions so that at least the losses are born by all redeemers, not just those who are left at the end of the day. >> but, again, your notion here on these reforms would be system wide, not with some analysis of those funds that are graded stronger versus those who are more on the periphery. >> i think, i think it needs to be explicit. i think investors need to understand will the capital be there, or will it not be there. and the capital buffer or nav buffer has that benefit to it. just to assume that because a fund never had to bail or support its, a sponsor never had

to support its money market fund in the past means it never will in the future would be concerning to me because -- >> one last question. is there any sense of since you've seen improvements since the 2010 reforms, are there, have you looked at other things in terms of additionally quid fit requirements as opposed to some of the reforms -- other ways to get at this protection without looking at the two options you've looked at so far? >> we have. as i said, the president's working group published a paper that laid out lots of different options, converting these to bank products as special purpose banks. two-tiered money market funds structure where you would have tighter restrictions on a stable value fund and less tight on a floating weight fund. there were several other alternatives. we took comment on those, we also held a round table on those. i think, and we're open, and i should say this adamantly, we're open to continuing to discuss options. we have had lots of very constructive conversations with

industry, but i think we have to get at the structural weakness, um, and i'm not sure just enhancedly liquidity requirements would get us there. but, again, if we can put a release out, we can have this discussion in far more concrete and specific terms with some economic analysis to accompany it. >> senator bennett. >> thank you, mr. chairman, and thank you and the ranking member for having the hearing and, madam chairman, it's nice to see you again. thank you for your service. you know, i've actually lived this as a former school superintendent. i've seen the huge importance of money market funds to school districts and to municipalities. both for cash management, but also for financing. and i also saw the challenges that arise when there is a run. and, um, and it's hair-raising.

but i think we need to be really cautious about this because i think the costs are potentially very real and very large for municipalities, for school districts, for local government, and there's been a lot of general talk about that today. i wonder, have you done specific analysis yet on the potential costs to these local governments? >> excuse me. our release will talk about, um, to the extent we have data on the potential costs to municipalities and state issue issueers as well as on them and their capacity as using these vehicles for cash management. but we will also seek additional data and input on those very issues. look, we recognize this is not a costless prop cig by any mean -- proposition by any means, but i spent time with a number of members from colorado in particular but other states after reserve broke the buck and i was brand new at the sec

frantic because their local governments could not access their accounts at reserve -- >> i was there. and i know it. and, um, and so i, having lived it, i've seen it. and still i'm deeply worried about, um, the unintended consequences that might arise here because what i know in our case is that the financing we were able to do, um, dramatically improved the conditions for kids in the denver public schools who, um, for the first time actually in our history are seeing resources added back to their classrooms while districts around us are having to cut back. and had the transaction not been one that we could have done, that wouldn't be the case today. so i, i guess my plea is one for as you go forward is one for precision and for paying very close attention to what effect this might have on liquidity at

the local level. not for the municipalities themselves, not for the school districts themselves, but for the people that we serve in those places. >> absolutely. we recognize that these are incredibly valuable tools, and our goal is to make them stronger and better able to withstand. >> and i wanted to ask a question that i heard a little earlier maybe in a different way. it's a hard one, sort of, because it asks you to look back. but if you look back to, you know, had the dodd-frank law been in place and had the 2010 reforms been in effect four years ago, what do you think the likelihood is that the reserve fund would have broken the buck? is it possible that requirements under dodd-frank would have reduced the likelihood that lehman brothers in which the reserve fund was heavily invested would have been in such terrible shape? with the liquidity requirements and the improved standards in the 2010 reforms have affected the wherewithal under such

circumstances? >> i don't know that the 2010 amendments would have been enough. i think they have been very valuable, i think they have contributed to the resiliency of money market funds, but they don't address a sudden credit event that causes a loss which is what we had in reserve when lehman declared bankruptcy and the paper was valued at zero. those reforms, while they require more liquidity, they require shorter maturities, they require higher quality, they don't address the sudden credit event. they really don't address or alter the incentive a shareholder has to run if they even fear losses because there's no penalty to getting out quick. um, there's a real penalty to hanging around potentially. um, i don't think they address the unfair results that can occur when a sophisticated institutional investor gets out quickly and losses are concentrated with retail investors or retail investors are left in a frozen fund and can't access, um, their liquidity. so i think, um -- i don't think

they would have been enough, um, and that's really why we're here today. .. the national association for investment companies. mr. christopher donahue is the president, ceo and director of federated invstors.

mr. bradley fox is vice president and treasurer of safeway it and finally we have with us professor david scharfstein, president of finance and banking at harvard business school. because we are running short on time, we are going to move right to questions of our second panel. each of our witnesses statements will be submitted for the record. i will ask the clerk to put five minutes on the clock for each members questions. first, professor scharfstein, please describe the causes of the run on money funds on september 2008 and the reasons why the 2010 reforms you recommend further reforms to preserve financial stability. >> thank you, senator.

the run on the money funds in september 2008 was triggered by the failure of lehman brothers. actually, in the months, india actually leading up to the failure of lehman brothers, recent research shows that not just the reserve primary fund, but a whole host of other funds were, took the opportunity to increase risk in their portfolios. there were stresses in those markets at the time, increase yields on various forms of paper that was issued by financial institutions, and those funds increased, not all, but quite a few increased the risk of their portfolios. and so there was a lot of exposure to risky paper in those funds. and so when lehman failed, there was a run on the reserve primary

fund. institutional investors, basically by institutional investors, not retail investors, pulled their funds, pulled their funds out. the 2010 reforms are desirable. they go some of the way, but i would say that they are not enough. and i think if you look at the recent experience with the european sovereign debt crisis, what we saw was a similar event that happened, not as extreme. the run was not as quick. it was more -- what we saw the was again funds increasing the risk and their exposure to eurozone banks, and when the crisis escalated last summer, what we saw was large withdrawals from those funds. those head implications for the foreign banks -- those head implications for the foreign banks which had main users of

the money funds are they are the main issuers into the money funds, the foreign banks. and that created a dollar funding problem for them which spilled over and i think has affected the ability of those banks to make loans to u.s. firms and other companies that need dollar funding. i do also say the liquidity requirements, as part of that fund, also kind of get, our cross purposes with other efforts that are in place to try to get u.s. banks to fund themselves anymore long-term basis. if you require money funds to hold short-term paper, that means that banks are going to be issued more short-term paper, and part of what we're trying to do is get banks to fund themselves anymore stable way as well. >> ms. kopp and mr. fox, what impacts have the 2010 sec reforms had on users of money market funds, such as state

governments and companies? ms. kopp, please begin. [inaudible] >> states and local governments, and i am here representing 13 organizations of states, local municipal governments, use money market funds for liquidity, or money management as well as refinancing. and the fact is the increased tightening of the credit standards, the shortening of the duration, the enhanced disclosure of having, on the website, the total portfolio, has made a more possible for us to compare the sites, to compare the funds and to go where we have to go. but as you know, we use these funds were daily liquidity, for managing our money. and that is our main concern. it has made it simpler.

we think they have been very important. we think there hasn't been a lot of time since 2010 to measure all of the impact, but what the professor called a trot and the senator calls a walk, both i think our testament to the fact that we have not had runs. >> mr. fox, what are your views? >> i would agree as well. i think the money market funds have been extremely efficient. allocators of capital from investors to borrowers in the corporate marketplace. some 40% of all corporate commercial paper is purchased by two e-7 money market funds. the improvements and reforms from 2010 in liquidity, safety and transparency of the enhanced the role that they played in the marketplace, and i think that is

shown with the fact that there are $900 billion invested currently in prime money market funds to seven prime money funds. so they have proven very resilient in the face of very serious global market turmoil from the european debt crisis. >> senator shelby. >> thank you, mr. chairman. i'll direct this question to mr. stevens and mr. donohue. some have argued that a product that seeks to maintain a stable net asset value, while investing in instruments that can decline in value is essentially maintaining -- is the staple net asset value money market fund a fiction? mr. stevens. >> if not, why not? >> it is clearly not.

we've actually done considerable amounts of empirical analysis of the variability of funds, net asset value per share, over extended period of time. the degree to which they fluctuate is really quite marginal. you can look at it carried to stress but you can look out over long periods of time. >> does it depend on what you're investing in? >> well, we invest, you're absolutely right. we invest only in the shortest, highest quality paper that is available. >> and that's for protection, is in its? >> that's why, under the structural 2a-7, permit a funds to keep their net asset value per share with a great deal of precision around 1 dollar. >> esther dardinger, do you have any comment? >> we had a hearing back in the sec in the late '70s on this exact subject. and it was the same issues and the same question to the sec in

effect is looking for a redo here. but the reason that the nav is solid and not a gimmick or whatever is precisely because of the portfolios and the credit work to hold to maturity, and all of the enhancements that were added in 2010, like know your customer. so it is a solid thing that has done a great thing for the american public. >> ms. kopp and mr. fox, have the disclosure requirements improved your ability to manage cash? and what your ability to manage cash, which is very important, be further improved if the information was provided in real-time or near real-time? >> well, if you are talking, senator, of going to a floating rate, talk about real-time, let me just make it clear that first of all, throughout the company they're all laws and ordinances, particularly with local governments that require equal value vehicle. so they would have to change all of those laws to pull out, or pull out their money and lastly,

the general, agf o. a, which met the local finance people met in chicago, and it was a clear, clear consensus almost unanimous, that they were sent to be forced to mount. a, because of the law. and b, because their accounting system don't allow them to go to that, the system. so they would have to go to banks because, which are less transparent and -- >> do you agree with that, mr. fox? >> i think from a system standpoint it will be very difficult to monitor a floating net asset by from money market funds and corporations would simply not use them as investment vehicles. the transparency from the 2010 reforms has been very helpful. we look at these portfolios. we understand where they are in custody, and we are comfortable with the stable 1 dollar net

asset value. >> i will direct this first to usher sharpstein. what should be done -- professor sharpstein. what should be done on other taxpayer fund industry, is it more capital, and how much capital? >> i would say it is more capital. i think the proper lens. i think it should be more capital. i think that's the proper lens to look at this through. you know, there was extraordinary support for these funds during the crisis. and the treasury guaranteed. you know, caliber in the exact amount of capital is difficult. i don't think it's going to be nearly as costly as people say. in fact if the industry is correct and it isn't that much risk in the funds, then having a subordinated share class, as has

been proposed, should really not be very costly at all. >> is the bigger the fund, the larger the fund, the less likelihood of visiting the taxpayers? >> so -- >> in other words, a lot of small, you've got a lot of small money market funds that operate everywhere, and some of them operate very well. but any time of crisis, to the big ones as it will have more potential to save themselves another? >> well, certainly sponsor support, unicom is important. that can be helpful. but i think clear capital set aside in advance -- >> what would you suggest about capital? do you have a figure in my? we're talking about a lot of money out there. >> that's right. i think if you have subordinated share class, i don't see that as being particularly costly.

>> mr. donahue? >> yeah, that just won't work. the math will work -- won't work. we have a $2.5 trillion industry. if you say 3% of capital, that's $75 billion of capital. i don't know where you're going to get $75 billion of capital. but assuming you can that demand a return on capital. our cost of capital is like 11%. let's used into its easier numbers. that means you've got to earn seven and a half billion dollars to pay for the 75 billion. where are you going to earn that? from the two and a half trillion dollars in interest. that's 30 basis points. in today's weight it doesn't work. we as an adviser in good times have revenues of 15 basis points. so the numbers just don't work. >> i understand to some extent the interest of people and the use of money market funds, you know. it works well.

but i also, sitting up here as a senator, want to make sure that the taxpayers don't have to be allowed anybody. we've done that. we've been down that road. that is a doubt -- a bad go to go down as you on the. >> the best part of dodd-frank is the part that says you're not allowed to get insurance thing for money funds which we didn't ask for and we didn't want. >> thank you. >> senator reed. >> thank you. mr. donahue, implicit and a lot of the questions and in the operation of the funds is that the funds are prepared and have the capacity to come at least on a temporary basis, go off and maintain the dollar and 80. is that a fair assumption? >> the way i would put it is because of the construct of their portfolio, they're able to maintain a 1 dollar nav. but if they blow a credit and it's a franchise issue, then in isn't going to be 1 dollar nav. and then you're going to have

the suspension of redemption and the orderly liquidation of the fund. but notice, you do not have a run because you suspend the retention, the people don't want to you have an orderly liquidation which is not what happened in the reserve? which was improved in the 2010th amendments. >> here's the situation. you have a prominent fund that miscalculates our in the cases of the experience in 2008, where held assets, reserve assets of lehman which are rated aaa 24 hours before they went bankrupt. so, you know, they looked pretty good. and because of the notoriety and also i think because of the assumption that people have got a lot of mutual funds are basically sort of, you know, their portfolios are fairly similar, that there was this run. your presumption would be that

any situation, which might happen, that one fund could break the buck, stop retentions, -- retentions, and i would have no spillover effect on the funds come is that the redemption? >> no, what i'm saying is because of the 2010th amendments you would have a run in the fund that breaks the buck because you got this other --.com was have is the 20002010 and thin mints is that you have more cash in the system, we are required to maintain 30% when 15% when and if one is maintaining about 40. ya transparency which is what the questions you've been asking already, people know what is in the portfolio. they know whether you have the stuff, and we have a know your customer requirement which means you have to know who's coming and who's going out. but more important than that, the key is do you have liquidity in the system. the problem in '08 was there was no liquidity in the system. when there was a deviation of net asset value in 94, there was

no harm, no foul. why? because there was liquid in the system and things could work out. but when the marketplace was shut down you have a problem. >> at here, again, i think senator shelby's comments go right to the heart of what our job is. we have to contemplate, particularly after a week, so far removed from the day-to-day practice, that there is a possibility given all these rules that there could be a liquidity problem in the overall system, not emanating from what you are doing, but take a case where european ranking system, where political and economic problems collide and liquidity is start freezing up, then it's not the question of how much liquidity you're holding. you just can't get access to a sufficient liquidity to redeem. is that a possibility? >> that is a possibility. and specifically it is addressed by congress in dodd-frank, which

directs the fed as soon as practicable, i don't think it has been practical yet, there's a post cannot with rules and regulations to govern emergency landing that is supposed to quote, add money and liquidity to the financial system, not allowed to aid in individual company or failing financial company. and it has to be done anyway where they don't lose money, and it has to be exited quickly. ps, that's exactly what they did with the aml cf with money funds back at that time. >> but that essentially, getting to sort of what this all might rest on, is the federal reserve stepping in and declaring that this is, we know they can't do it for an individual company, but that the potential impacts of a failing fund could trigger failures in other well-run funds, therefore with stepping in and using federal resources for support, is that passionate i just i forget which the assumption underlying -- >> senator, if i might.

what chairman schapiro's testimony in five sets to look at, all 300 of those events through the lens of what happened september 2008. it is true, reserve at a contagion effect on other money market funds, but it had that effect in the context of a raging epidemic in the banking system. and looking at it from a point of view of 2008, you can also look at from a point of view 1994. that's the only other time a fund broke a dollar. actually money fund assets grew that month, and the world beyond. it did have a knock on effect. so i would invite you, i would invite you to scrutinize what it is likely, particularly with enormous natural liquidity in these funds today, primary funds have to pay $600 billion in assets that they can liquidate within a week to meet retentions. whether we have done what the industry thinks we have to address any reasonable term the kind of crisis that we might

need, and senator shelby, i agree with you without any prospect of are going to the taxpayer again, although taxpayers pay nothing on that guaranteed program and they made a billion and a quarter. >> again, i think your point is extremely well taken. we can't ignore and 94, but we can't ignore 2008. we have to look at both. we have to assess a probability. and then we also have to i think growth as a tried to do, and thank you, mr. donahue, you have been extreme helpful, pro bono the underlying assumptions if we get into and out eight? because in 94 situation, in the market, sort of move forward on their own and we just winked and nodded approval you. but in the only situation we have to be very careful of probably one of the assumptions. getting back to senator shelby's point is one assumption that, worst, worst, worst case, .0001 probability, the fed has this

authority to come in now and move resources, at least with death on the table. i think it has to be acknowledged. >> the fed has on numerous occasions taken steps to make sure the commercial paper markets in the united states our function effectively. >> i just want to make sure that we all understand that is explicit. it's not implicit, because down the road if the fed does take a move like this, you know, i think we all want to have the fed, well, we knew they had that authority and this is not one of these unauthorized bailouts. but thank you. your testimony is extremely helpful. >> thank you, mr. chairman. i'd like to direct several questions to mr. donahue. thanks to all of you for being here today. but the first question would be in response to chairman schapiro's points. one of the central argument that she seems to be making is that the past incidences in which sponsors provide some degree of voluntary support to their money

funds means that these funds are not as safe as they appear. i think that's one of are central arguments to could you respond to that premise? >> yes, center. we create a lot of buzz. i'm one of 13 kids, i had eight of my own, and we create a lot of children, too. you are% over -- you are forever supporting to the itu support funds, and look at any other kind product, people are supporting the product to what are they doing? they're making independent voluntary marketplace analysis and judgments about what to do with the product. so i don't know anything about the 300, 200, none of that really matters. what matters is that you have good solid people decide whether or not and what to do to help shareholders. and i think that what the support shows is the inherent resiliency of the fund. when you $2.6 trillion in these funds with no interest and lots of regulatory abuse, that's really and a congressman. it's because that people want the cash management system.

and if you talk about support in terms of what was done, the chairman was talking about, how about the support that every single one is doing, 100%, on waiting investment advisory fees in order to keep the funds going during these low interest times. so i look at support at something that is not unlike having a family. you burst the fund. what he going to do about keeping it going? we also merged funds out of existence. we buy of the funds and put them out of existence. but over all, we are trying to enhance the relationship with the client, some of whom are at this table, in the way they deal in the marketplace. >> so is it fair to say in many instances, many of the instances that she is citing, are really manifestations of the strength of an industry rather than weakness? >> they are manifestations of the strength and they are manifestations of the judgment people make about why to do something. for example, there may be a

reputational guess you. customers may be somewhat uncomfortable with the name even though it will pay off on time and info. there may be questions that you want to improve things, so they could a lot of reasons. you have individual customers you're trying to deal with. and so, there are a lot of reasons, other than you had to buy the lehman paper out for doing that. and there are different elements to it. but i think it shows a strong dynamism in the industry to be able to see the variety of move that people have made to support these strong products. >> same question i have also for mr. donahue, is some have suggested that having a fixed net asset value is somehow an unfair to investors because investors don't really understand, and they think that this is really akin to a bank deposit and a guaranteed thing. that strikes me as a rather surprising argument, but it appears weekly. i think a very asian on that in

chairman schapiro's testimony, what is your reaction to that? >> we have 5000 institutional clients and millions of individual investors behind it. most of our institutional investors deal with us in one again. i assure you they understand what a money market fund is. and if there was any good thing to come out of reserve fund, which there really wasn't, the one good thing was they realize that the investors for the loss and there was no bailout of a money fund. so people understand it. fidelity's run a good survey of the retail base and said they understand what the lay of the land is. and i think one of the things about all this regulatory noise on money funds has done is we emphasized what we put on the front page of every prospectus and every inch report that these things are not guaranteed, they're not backed by the fdic, and you may lose money. spent thanks very much, mr. chairman. i would just like to ask unanimous consent to submit for the record a statement from the

financial services institute. >> without objection. >> thank you very much. >> mr. chairman, could i just out on the up of many of the investors we do represent millions. we do read the prospectus and we know what an investment, it's not a savings account, and the reforms of 2010 and expensive 2008 i think has brought that home very clearly. so i think this, treating a sort of like children is really not appropriate. >> senator menendez. >> thank you, mr. chairman. i want them it's only question for all of you but the vote is going to expire so let me concentrate on two, mr. donahue, that you raise in your testimony, which caught my attention as i was reading it. i'm going to give you the headings and i'd like you to give me though why you make that proposition. on page 11 use the reforms currently under consideration are fundamentally at odds with the nature of money market funds to the shareholders. why? >> excuse me. my staff has informed me that we

all need to meet on the floor for the first vote. because of this -- if they have more questions for our witnesses, they can submit them for the record. i apologize that we are unable to finish. i want to thank our witnesses for their thoughtful testimony today, and their cooperation in answering important questions that my colleagues would be sending them. this hearing is adjourned. [inaudible conversations]

>> [inaudible conversations] >> 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 weeds for david pietrusza, sunday at noon eastern on booktv's "in depth" on c-span2. >> in the u.s. senate today more debate on a bill to continue food and drug administration user fees on prescription drug reviews and approval.

they also cover medical devices and will be expanded to include generic drugs. at 11:30 a.m. fusion centers will turn toward federal district judge nomination in florida. a vote on that is set for noon easter. centers will break at 1230 pm for their weekly party fund. live coverage now of the u.s. 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. gracious god, you have been faithful to help us when we have lifted our hearts in prayer. thank you for your providential care of this legislative body.

open the eyes and hearts of our lawmakers so that they will know and do your will. lord, guide them in the way they should go, providing them with wisdom to solve challenging problems by depending on your guidance. help them to think of each other as fellow americans seeking your best for our nation rather than enemy parties seeking to defeat each other. replace distrust of each other with a deep commitment to creative compromise. 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 26, 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 coons, a senator from the state of delaware, to perform the duties of the chair. signed: daniel k. inouye, president pro tempore. '{*}'{*}{*}{*}{*}{*} the presiding officer: the majority leader. mr. reid: we're currently considering the motion to concur on the house message to accompany the f.d.a. bill postcloture. we hope to work something out on that that we can move to it early evening. the first hour of debate this

morning will be equally divided and controlled with republicans controlling the first half and the majority controlling the final half. at 11:30 the senate will proceed to executive session to consider the nomination of robin rosenbaum to be a district judge for the southern district of florida. at noon there will be a roll call vote on confirmation of the rosenbaum nomination. we're going to recess today from 12:30 to 2:15 as we normally do on tuesdays for our weekly caucus meetings. at 2:15 there will be 6 thours and 15 -- 6 hours and 15 minutes remaining on the motion to concur with the house message with respect to the f.d.a. bill. we hope a significant amount of time will be yielded back and we can complete action on the bill today. there is a briefing at 5:00. all-senators briefing. we're going to continue that -- that time will run. we're not going to recess during that period of time. it will be in the classified

room down in the visitors' center. mr. president, we've accomplished a lot. everyone knows how grateful i am to senators stabenow and roberts for working their way and our way through that very difficult farm bill. we're watching very closely the great work of senator boxer, senator inhofe and the finance committee, the commerce committee, the banking committee in helping us work through the highway bill. there is a possibility that we can get that bill done, i think chances today are better than 50-50 that we can get a bill done. but we're still looking at speaker boehner to help us get that over the finish line. so we will see what happens on that. mr. president, we have, as i've indicated, the f.d.a. bill; we'll complete that tonight. that's a very important accomplishment for us. we have the student loan issue

that we're working on that. we hope to get that done soon. i think there's a general feeling that we've worked out a compromise on that that's acceptable with the help of senator baucus and senator harkin and others. jack reed, of course, has led the charge on that for some time. i've talked about the highway bill; we need to get that done. mr. president, the remaining issue is flood insurance. and we are doing fine on flood insurance except i'm told last night that one of the republican senators wants to offer an amendment -- listen to this one -- wants to offer an amendment on when life begins. i think some of this stuff is just -- i have been very patient working with my republican colleagues in allowing relevant amendments on issues, and sometimes we even do nonrelevant

amendments. but really on flood insurance? are we going to have to start dealing as we did with the highway bill for weeks and weeks with contraception? now we have another person wants to deal with when life begins. i don't understand what this is all about, but i want everyone to know this flood insurance bill is extremely important. the big pushers of this bill are republican senators, veteran republican senators, and they had better work on their side of the aisle because i am not going to put up with that on the flood insurance. i can be condemned by outside sources. my friends can say let them have a vote on it. there will not be a vote on that on flood insurance. we'll either do flood insurance with amendments dealing with flood insurance or we won't do it. we'll have an extension. after all the work that's been put on this bill, this is ridiculous that somebody says i'm not going to let this bill go forward unless i have a vote on when life begins.

i am not going to do that, and i think i speak for the majority of senators. now, if the republicans won't stand up to the person that's going to do that, i'm not going to. i have tried my best to deal with these issues that have nothing to do with the piece of legislation. with the end of the month staring us in the face, we have so many important things we have to do. student loans will be tkpubld -- doubled if we don't get it done. the f.d.a. bill, it will create all kinds of problems if we don't get it done. i think this is outlandish. let somebody if they feel really moved upon to talk about when life begins, have them come give a speech here. would the chair announce the business for the day. the presiding officer: under the previous order, the leadership time is reserved. the clerk will report the pending business. the clerk: notion concur in the house amendment to s. 3187,

an act to concur on the food, drug and cosmetic act, and so forth and for other purposes. the presiding officer: under the previous order the time will be equally controlled by the leaders or their designees with the republicans controlling the first half and the majority controlling the final half. the clerk will call the roll. quorum call:

quorum call:

a senator: mr. president? the presiding officer: the senator from kansas. mr. moran: i ask the quorum call be lifted. the presiding officer: without objection. mr. moran: i ask to be recognized to address the senate. mr. president, thank you very much for the opportunity to be here this morning. we have got a lot of news in washington, d.c., and across the country over the last few days. a decision from the supreme court regarding immigration laws in arizona. we're expecting and anticipating a decision by the supreme court later this week in regard to the affordable care act. front and center are issues that are important to the country. we were successful last week

in -- in approving here on the senate floor a so-called farm bill with a agricultural bill, again, that has an impact upon many in our nation. i want to make certain that we don't lose sight of what remains in my view that should be front and center. all the things that people ask government to do and all the things they want to accomplish in their own lives can only occur if there is a good and growing economy in the united states. and so while i certainly wouldn't call any other issues that we're addressing here a distraction, they are all important, i want to make certain that my colleagues understand that we have to come together to make certain that americans, individuals across our country can access a job, can feel secure in the job they already have and can have the sense that they have of future where they are employed or if there is a need for change in job, that that opportunity

exists. job creation is something that the federal government can't do in and of itself, but what decisions, the decisions we make here very much affect whether or not the private sector can have the level of confidence in the general economy, a regulatory environment, a tax code that is con due sieve for the private sector, creating jobs in the united states economy. and this matter certainly from my point of view as a member of the united states senate in that with job growth, with a growing economy, we are better able to pay down our national debt. in my view, if we're going to get what i consider the most serious circumstance that our country faces today, the deficit and the debt, if we're going to get it under control, i -- i don't foresee how that happens without a good, growing economy putting americans to work. and of course from the

individual's point of view, it's important, it's a component of our lives, something that's important to us that we figure out how we earn a living, put food on our family's table, save for our kids' education, save for our own retirement, and so while the issues that are being addressed here in the senate and across the country and across the street at the united states supreme court matter so much, we ought -- we must not, cannot lose sight of the fact that we have got to create an environment where jobs are front and center. and of course, we know the economic statistics today, the unemployment rate, 8.2%, has been above 8% now for a long time. the presiding officer this morning here in the senate and i have introduced legislation that the primary function of which is to create an entrepreneurial environment that start-up companies can grow and prosper and in the process put people to work. it is about growth that i think that we need to continue to

focus on, and i very much appreciate the opportunity of working in a manner with the senator from delaware, senator coons, and others to see that we do that. the topic i want to specifically address this morning. i was reading the wawrnl last week, and this article caught my attention. for economic growth, in communities across kansas, the state i represent, we're going to have to have strong community banks. the article that the "wall street journal" included in -- that i want to speak about, at least briefly this morning, is is -- the headline is small banks put up for sale sign, and the content of the article is very much about how small banks are now selling to other banks, and the primary reason this article focuses on the reason that that's happening, a growing number of tiny community banks are deciding it's time to put up

the for sale sign. many executives of these small lenders are frustrated by costly new regulations. it talks about a bank in iowa, in ohio, in texas, talks about a number of banks in which the bank -- the individuals who own the bank never had an intention of selling. this was their livelihood. this is what they expected to pass on to the next generation, to the next set of stockholders, but because of the regulatory environment, the article quotes these bankers as talking about how it's no longer any fun. a 66-year-old c.e.o. is quoted as saying -- quote -- "i don't want to bank anymore. i run around trying to react to regulations, and frankly that's no fun." and so why this is important, certainly important for the people who own and run a bank, but it matters in communities across my state that there is access to a local lender, a relatively small financial institution that knows its customers, that the farmer, the

rancher, the small business person has the opportunity to develop a personal relationship with the individual that they're borrowing money from. and i know from my own circumstances of growing up and living in rural kansas that the likelihood of being able to get a loan from the community bank, the banker think know who knows you and knows your ability, your creditworthiness, your trust worthiness, that's a pretty special relationship that we have got to be very careful we do not lose. if you're trying to borrow money from somebody you don't know, it's a different circumstance. and so i want to highlight once again this regulatory environment, not just for banks but for all businesses in which the decisions are being made we're not expanding. in this case, we're selling. and the reality is that has consequences to every american, to every american family. job creation is going to be improved whenever we have a regulatory environment that encourages economic growth, not

discourages it, at a regulatory environment that is certain. so much, particularly again in the financial services industry with banks and other financial lenders, the uncertainty that exists in large part because of the package of dodd-frank and now its implementation, the uncertainty of whether or not more regulations are coming and what those regulations are going to say and do. they certainly can drive up the cost. we certainly want to protect consumers. we operate in many instances in a regulated environment, but these regulations need common sense and need to take into account the specific circumstances, particularly of a small bank. my small banks in kansas had virtually nothing to do with the financial debacle of 2008, and yet they are burdened with the responsibility of complying with a huge new set of regulations that resulted from the efforts to address the financial crisis of 2008. in fact, this article again

points out that the board meeting at this small bank, the binder of information delivered to the bank's board before the last monthly meeting included 419 pages of information to be reviewed. banks more and more are having to put people on the payroll to try to comply. compliance officers as compared to those kind of circumstances in which the bank is making loans. so the cost of doing business, the cost of credit increases, and the access to credit diminished, again diminishing the chances for job creation. one of those items under dodd-frank was the creation of the consumer financial protection bureau, and i -- this hit me while i was visiting one of my banks at home in kansas. they told me the cfpb had called and said they were sending -- i think the number was 12 exercise and two lawyers to come spend more than a month in this small bank, examining the bank.

again, these are banks that had little to do with the financial collapse of 2008. almost without exception our community banks, certainly in kansas, they didn't make loans to people who were unlikely to repay those loans. they didn't make loans to people who had no ability to repay those loans, and they didn't make loans without getting proper documentation and seeking the necessary creditworthiness of that borrowing before making that decision. and yet, the burden of these regulations falls directly upon them. and while i guess i'm speaking in support of trying to change this for the benefit of the bankers, who this really is to benefit, if we were to change the regulatory environment, who this would make a difference for is the person who wants to borrow money, who wants to buy an automobile, who wants to buy a home, who wants to buy a piece of commercial property, and yet they go to the banks in communities across kansas and are told because of the new regulatory environment, this is a loan that we cannot make. and the consumer protection

financial bureau, which has 12 exercise and two lawyers soon to visit a small bank in kansas and intends to be there for more than a month, the regulations that the consumer financial protection bureau, they haven't even created their regulations yet, so they are out auditing a bank before the regulations are in place, and the -- my reaction when the banker told me this was well, i need to go back to washington, d.c., and see if i can do something. i was thinking through the appropriation process. i happen to be the ranking republican on the appropriations subcommittee for financial institutions, financial services. i thought well, we need to rein in the cfpb through the appropriations process to get them kind of within their sphere of where they belong, in a much more commonsense, less intrusive way. that occurred to me the light bulb went off i don't have that ability. i could be a member of the appropriations committee, i could be a member of the united states senate, i could actually be the lead republican on the

subcommittee that's responsible for financial services, but because the way the cfpb was created, its money is an automatic draft from the federal reserve. so we as members of the senate and congress in general have no input into the level of funding of an agency that is going to have dramatic effect upon the financial institutions of this country and therefore the individuals, the consumers that those financial institutions serve. in addition to that, there is only one person who administrates the program, who is the administrator of the consumer financial protection bureau. unlike the cftc, unlike the s.e.c., where there is a commission or a board in which there is a collective decision made, there is only an administrator. i've introduced legislation, we have had this conversation on the senate floor before and i would encourage my colleagues to look at that legislation that would reformulate the way that the cfpb is -- is managed and

directed and would once again give congress the opportunity to have input into how the cfpb functions. i would never try to explain to americans or to kansans how great congress does its job, but i do know that our ability -- the fact that we're subject to election, the will of the people of america every two years gives us the opportunity to have the people's input into the administration, into the regulatory process that is so burdensome now upon so many businesses, including our financial institutions. my effort here today is to highlight once again that what we do in washington, d.c., in this case particularly what the administration does, what the obama administration does today and what administrations have done in the past in regard to regulations very much has a consequence upon whether or not americans are going to live in a country with a growing economy in which there is a sense of security and people know what to

expect, or whether they are going to live in a country in which the, a business owner, a small business man or woman in kansas or across the country is holding back from hiring employees because they don't know what next is going to come from their own government in regard to regulations that are costly, drive up the cost of being in business and reduces the chances that we have expansion of our economy, which means reduces the chances that americans can have good, solid employment opportunities. i have two daughters graduating from college, one a couple of years ago and one this year. the job market certainly is important to me as a parent, the ability for a young american to find a job and to pursue that job, to be able to afford to pay back the cost of an education is something that we need to seriously take into account. and while we are going to have, i assume, a conversation again here in the senate this week on the cost of borrowing money for students and student loan

interest rates, we ought not to forget that the most important thing we can do to help our students once they graduate is to make sure that the economy is such that employment opportunities are available. it doesn't matter what the interest rate is if you can't find a job. and we need to make certain that we do fulfill our responsibilities to the american people to see that the economy, job creation is front and center for the benefit of every american and for the benefit of our country's deficit that is, it's so important that we create a growing economy. i again would highlight how important it is for us to get the regulations under control and particularly criticize the circumstance in which legislation that does not pass congress somehow takes effect because the executive branch concludes that they can do what we refuse to do by rule or regulation.

it's time for congress to reassert its role and time to make certain in pursuing that role we create an environment in which jobs are front and center and the american people can pursue the american dream -plt mr. president, thank you for the opportunity to address the senate today and i yield the floor. mr. kyl: mr. president? the presiding officer: the senator from arizona. mr. kyl: i didn't hear all the remarks of the senator from kansas but i think what i have to say will follow on directly. i saw a copy of the "newsweek" magazine and a picture of president obama and the title was "the imperial president." the theme of it was this president seems to believe that by executive order or executive action ex-im polydo what he wants to do -- he can simply do what he wants to do. when the president takes the oath to see that the laws of the country are faithfully executed,

that's a requirement of his job. our three-branch government has the legislative branch and president jointly deciding what the law is to be when congress passes laws and the president science them into law -- the president signs them into law and has the president to execute those laws. he doesn't do it personally. he does it with the department of justice. if it's something relating to national parks, the interior department, and so on. but the department of justice has a big role to play in this as does the department of homeland security in respect to immigration laws, because the department of homeland security has now taken over all of the immigration functions and that relates to customs, to issuing visas and of course enforcing the laws against illegal immigration as well. and so it's not up to the secretary of the department of homeland security or the attorney general or the president to decide whether or not to enforce a law of the country. that's their responsibility. and then the supreme court resolves differences about the

meanings of the statutes, their application and whether or not they're constitutional. earlier this week, yesterday the supreme court determined the constutionality of a law that the state of arizona had passed to deal with the problem of illegal immigration in my state of arizona. it's a serious problem there. about half of all the people who cross the border do so in the tucson sector. and the results of that on arizona have been devastating over the years, the damage to the environment, creating forest fires; the problem of the people who try to cross the border in the summer and end up dying in the desert because it is a very harsh environment; the people who are brought across the border by unscrupulous smugglers who badly mistreat them, who hold them hostage from their families in central america who

mistreat them brutally. in many cases the problems of crime law enforcement has to deal with. the hospitalization and medical treatment they are required to receive under the law. all of these things have had a dramatic negative impact on my state as a result of which the state legislature said to the extent that the federal government is not enforcing the law in our state, we will try to help fill that gap in cooperation and coordination with the federal government, and they passed sb-1070. the key feature of that which was this cooperation between law enforcement was upheld by the united states supreme court. now, what has been the obama administration's reaction to that? the obama administration has reacted by saying we don't like your ruling, and, therefore, we're simply not going to cooperate with the state of skwra*z -- the state of arizona as we have been in the past or any other state that has laws like arizona even if you, the

supreme court, says that it's constitutional. now, the petulence and the arrogance of this are something the american people have to judge, but from a law enforcement perspective, this, to me, suggests that the administration is creating some very serious problems. it was one thing for the administration to say as to 800,000 or 900,000 primarily students who came here because their parents brought them here illegally were going to find a way in effect to suspend their deportation so that they can go to school or work here. we're just going to not apply the law to them and it's one thing for the obama administration to say that, which it did last week. it's quite another for it to say, by the way, we're going to treat all the other illegal immigrants here the same way, that 10 million to 12 million people who have been in the united states for a whaoeurblgs who crossed -- for awhile, who

crossed the border some time ago. in effect, that's what the administration has said. even if local law enforcement, like the phoenix police department, sees somebody weaving down the road in the manner of a drunk driver, stops the individuals, determines they are driving while intoxicated, they have the right to then say may i see your driver's license. if the individual cannot produce a arizona driver's license, that is already a violation of arizona today, but if he says here is my card from the mexican embassy, that may be reason for the officer to say maybe you're not here legally. in addition to violating arizona law by driving while intoxicated and not having an arizona driver's license, i have reason to believe you may not be an american citizen. ordinarily that individual, that person's name is called in to a federal data base. i think it's up in vermont or new hampshire. and there is a verification. either the individual is or is not in the united states

legally. then if the person is not here legally and hasn't been convicted or accused of a major crime, they're turned over to immigration and customs enforcement or i.c.e., the part of homeland security that is supposed to take these illegal tkpwrepbts and decide -- illegal immigrants and decide what to do with them. in most cases they are removed from the united states or deported. now the administration is saying we're not going to do that anymore. we don't even want to know whether the individual is an illegal immigrant. we're not going to check and we're not going to allow you access to the data base to check. up to now the phoenix police department or maricopa county sheriff can call that data base and say we have the name of this individual. is that person legal or not. the administration is saying it is not going to allow arizona to check. the presiding officer: the time of the senator has expired. mr. kyl: this is a condition which cannot be allowed to stand, where the administration is not enforcing the laws of the united states, congress is going

to have to take what action we need to take to ensure that the president enforces the law as he is sworn to do. a senator: mr. president? the presiding officer: the senator from north dakota. mr. conrad: mr. president, i rise to answer allegations made by "the washington post" in a front page story in yesterday's edition. here's the story: high-level talks then changes to holdings. first i want to say i have great respect for "the washington post." in many ways "the post" is a national treasure. but even great newspapers make mistakes. and in yesterday's story, they made assumptions that are simply wrong. the story said my wife and i shifted savings in her retirement accounts from mutual funds to lower-risk money market accounts on august 14 of 2007. that is true.

they showed that we made those changes a day after a call from treasury secretary hank paulson to me. that is also true. but their suggestion that the two are related is absolutely false. they have made the same error in logic that we studied in college. the case in faulty logic involved an observer who noted that people were fainting and street pavement was melting. that led the observer to conclude that melting pavement caused people to faint. of course that was wrong. it was 106 degrees outside. the proper conclusion was that heat was causing pavement to melt and people to faint. that error in logic was about causality, and that is precisely the error "the washington post" made in their story with respect to me. what the "washington post"

missed in their graphic -- and to be fair to them, they largely had the correct context in the story. if you read the whole story, it was fairly balanced. what was not balanced was the graphics that accompanied that story. let me show you the graphic. this is from "the washington post" of yesterday. here's a picture of immediate. quite a nice picture. i appreciate that. it says "senator conrad, chairman of the senate budget committee, was in contact with paulson about the nation's economy during the crisis." that's true. they then show a time line with only two points on the time line. they show august 13, secretary paulson called me at 4:30. and they show the next day, august 14, that my wife and i shifted from her retirement accounts, money from mutual funds to lower-risk money market

funds. that's true. what they've not shown on the time line are what was happening in the previous days. so let's go back to the friday before. here's what happened on the friday before. the dow jones industrial average dropped 200 points within minutes of opening -- of the opening bell and closed the day down nearly 400 points. that's not on the time line of "the washington post." if they were going to be fair -- and i don't begrudge them writing the story. i think if i were the editor i would have certainly written the story too. it certainly has an appeal. there are members of congress talking to people in influential positions and then changing their holdings. but to be fair, you've got to provide the context within which those decisions were made. and the context within which my

wife and i made our decisions is pretty clear. the friday before the market drops nearly 400 points. what the "washington post" also didn't put in their time line is their headline on that friday. "credit crunch in u.s. upends global markets." and in that story, the friday before, they showed that in the weeks leading up to our decision to diversify our investments in my wife's retirement account, the market had dropped in two days more than 500 points, leading up then to the friday where the markets dropped almost 400 points. and "the washington post" in their story also didn't put on the time line what the headlines were in their own paper on the weekend leading up to our decision to make these changes. this is just one of the

headlines: "looking for footing on shaky ground," talking about the turmoil that we saw globally. so the truth is that what made my wife and i decide over the weekend to shift some of her retirement accounts from mutual funds to less risky money market accounts was what was happening in the markets themselves. that is what led us to make these decisions. the paulson call was not about markets. notes from my staff indicate that secretary paulson was calling a number of members about the importance of raising the debt ceiling. the secretary of treasury was not calling me to give me stock market tips. he wasn't talking to me about the stock market. he was talking to me about the need for a debt limit increase.

so i want to say clearly and unequivocally to my friends at "the washington post" and anybody who read this story the call from secretary paulson had nothing, had nothing to do with my wife's and my decision over the weekend to shift some of her assets into less risky money market accounts. those decisions had everything to do with what was happening in the marketplace itself which was widely reported even on the pages of "the washington post." and what was happening in the markets was readily available to every investor. we were not shifting my wife's retirement accounts based on some secret inside information. it was -- let me get back to the headlines, if we could. it's "the washington post"."

credit crunch in u.s. upends global markets." stock markets in the two days leading up dropped 500 points. in the days leading up before we made our decision, the market dropped almost 400 points in a day. "the washington post"'s own story. they had a big story. this is the story showing the dow jones industrial average dropped 200 points within minutes of opening and dropped almost 400 points for the day. why didn't they put that -- if they wanted to be fair, why didn't they put that on the timeline? that's what i asked them to do. i didn't ask them not to run the story. i asked them put in the context in which the decisions were made. be fair. so the fact is there is nothing mr. paulson could have said to me about market risk that have been more persuasive than the drop of 400 -- almost 400 points

in the market the previous friday. that provided all the motivation that my wife and i needed, along with the 500-point drop that had occurred several weeks before, that provided all the motivation we needed to make a decision to move some of her retirement assets to lower risk investments. to "the washington post," i respect you, i have had a very good relationship with you for a long period of time, but your story was unfair to my family, it was unfair to me, and fundamentally it was unfair to your readers, because the graphics you supplied with the story failed to provide a full or fair timeline and the full context that led to our decision. in fairness to you, if you read the whole story, much of the context is there but the graphics -- which, of course, is what most people are drawn to -- have none of the context and

don't have a timeline that in any way is fair. finally, i just want to say i'm retiring. this is not going to affect me for the future, but the notion that members of congress should just stick with whatever investment decisions they made when they began investing or be accused of trading on insider information is to me absurd. our trades should be public knowledge, and they are. how did "the washington post" know about these trades? because my wife and i reported each and every one of them in our financial disclosure. so trades of members should be public, absolutely, and they are. "the washington post" and others should monitor for evidence of insider trading, and they do. but they should also provide context to their readers so they can fairly judge if all of us have taken action or any of us

have taken action with our investments that are dishonorable. i have not, and that is the truth. i thank the chair and yield the floor.

a senator: mr. president? the presiding officer: the senator from west virginia. mr. manchin: mr. president, i have four unanimous consent requests for committees to meet during today's session of the senate. they have the approval of the majority and minority leaders. and i ask unanimous consent that these requests be agreed to and that these requests be printed in the record. the presiding officer: without objection. mr. manchin: mr. president, since we first began consideration of the f.d.a. bill, i have stood on this floor again and again to highlight the importance of an amendment i offered to this legislation that is very significant to my fellow west virginians and all americans. this amendment would put tighter controls on drugs containing a substance known as hydrocodone. a highly addictive prescription painkiller that is destroying communities across this country and leaving families devastated by abusive and addiction. it was a proud moment for me when the senate came together across party lines on may 23 and

unanimously adopted my amendment to reclassify hydrocodone as a schedule two substance from a schedule three. in practical terms, this means that those who are using hydrocodone for illegitimate reasons would have a harder time getting their hands on it. i cannot tell you how much this amendment means to the people of west virginia and to every law enforcement group fighting the war on drugs across this nation. who believe very strongly that limiting access to hydrocodone would give them a powerful tool in combating prescription drug abuse, so it pains me to stand here today following last night's vote to move forward with the passage of the f.d.a. bill which did not contain this such an important amendment. mr. president, that is because the influence of special interest groups suppressed the voices of the people, not just in my state of west virginia, but in yours and delaware and all across this country who are begging us to do something about the prescription drug abuse

epidemic. according to the white house office of national drug control policy, prescription drug abuse is the fastest growing drug problem in the united states, and it's claiming the lives of thousands of americans every year. prescription drugs are responsible for about 5% of -- about 75% of all drug-related deaths in the united states and 90% in west virginia. these narcotic painkillers claim the lives of more americans than heroin and cocaine combined. but the groups opposed to my amendment have a huge financial stake in keeping these pills as accessible as possible, and i understand that. that is why my amendment was stripped from the f.d.a. bill that we advanced last night. mr. president, high-powered and well-funded lobbyists may have gotten their victory this time around, but i can assure you i will not give up this fight, as i know many movie i colleagues -- know many of my colleagues won't either. i'm hearing on a daily basis from many of my constituents in west virginia and all around this country who are counting on

us, their elected representatives, to do something about the prescription drug epidemic ravaging their communities. since i offered this amendment, i have heard from so many west virginians who have seen a ray of hope because we might be able to do something about this problem. i won't pretend that it will solve it completely, but it is sure a good step in the right direction. so, mr. president, i am coming to the floor to share the stories of the people of west virginia in the hopes of bringing people together around a solution to this terrible, terrible problem. here is a letter from sheila from charleston who sent me this letter in support of my amendment after losing a close family member. sheila writes -- "please continue to fight the drug companies and pharmacies regarding this issue. our family in the last two months lost a beloved family member to prescription drug overdose. he was a promising young man that lost his life because of addiction to pain medication. our family continues to be devastated, wondering how did this happen? he came from a highly educated

family that was involved in his treatment, and we care deeply for him. his family spent over $100,000 in his recovery, but it was all too easy for him to obtain legal prescriptions. what truly makes it more painful is he was showing signs of overcoming his five-year battle. now, we are not blaming anyone but the system. we know we are each responsible for our own actions. i have thought for years that our health care system is far behind in technology and recordkeeping for doctor shopping and prescription dispensing. please understand i am very much opposed to more government in our personal lives. however, this is much needed in the medical arena. please continue to fight this enormous battle for all of us. mr. president, that letter could have come from your constituents, my constituents, any congressman's home district, from anywhere in this great country. the fact is i don't know a person, whether it be us in the senate, our colleagues in the congress or anywhere in america

that someone hasn't been affected by this abusive of legal prescription drugs used in the wrong manner. it touches everyone's life. it's of epidemic proportion. i have said it before and i will say it again -- i understand that limiting access to illegitimate uses of hydrocodone pills doesn't necessarily fit in the business plan or the model of selling more product, but there are times when even the best business plan can be altered while staying successful, and certainly one of those times is when the health of our country and the public good is at stake. in fact, the huntington herald-dispatch, the second largest newspaper in my state, located right on the border between west virginia and ohio, describes why this amendment is so important. congress is missing out on an opportunity to close the spigot at least partway on the large volumes of commonly abused prescription drugs that flood the country and harm so many americans. mr. president, in 2010, the most

recent year for which data is available, a study showed that there was 28,310 recorded instances of toxics exposure from hydrocodone. the same study showed that 24 million individuals have admitted to abusing hydrocodone drugs for nonmedical purposes. unbelievable. a different study put out by the centers of disease control in november showed that more than 40 people die every day from overdoses involving narcotic pain relievers like hydrocodone. isn't it worth doing something to get the pills out of the wrong hands? my amendment may not have gotten to this bill yesterday, but it's not going to go away, i think we all know that, and i'm determined to see this thing through to the end. mr. president, while the people of west virginia and delaware i know are disappointed in the outcome of the hydrocodone amendment, i do want to highlight one measure that was included in the legislation that

we're both proud about. it's important to me and you and everybody in this body. it would make the sale and distribution of synthetic marijuana and other synthetic substances, which are known as bath salts, illegal by placing them on the list of a schedule one control substance under the controlled substance act. these drugs are also taking a terrible toll on all of our states, and i was proud to cosponsor this provision with my friend, senator schumer. i want to thank senator schumer for his leadership in getting this provision passed. finally, i want to close with one more story from my home state of west virginia as a way to reminded you of what i am fighting for and why. this letter comes from rebecca, a woman who started a group called mothers against prescription drug abuse as a way to deal with the terrible realities that have accompanied her son's five-year battle with prescription drug abuse.

he was a great kid growing up. he played basketball, football and baseball. when he was 14 years old, his team won the state tournament and went all the way to wisconsin to play in the regionals. jamie was always helping others and had such a kind heart. when jamie got out of school, he married his high school sweetheart and was employed in the mines. after that, he just went downhill. he began abusing prescription drugs. for two years, i tried everything to get help for him and tried to get him to stop. things only got worse. he lost his wife, he lost his home, his truck and then his freedom. my story is typical to so many families out there who are struggling with loved ones that are addicted. they just want someone to listen. they need to be able to reach out to someone who understands the nightmare that they go through daily and know that they are not alone. the addict is not the only one who suffers.

the family members carry around guilt, sadness, shame, anger, hopelessness, fear, anxiety and et cetera. i could go on and on about how bad this experience has been for me and how it has not stopped. i will continue to fight prescription drug abuse for as long as i have breath in my body. i will not give up on my son or anyone else who is addicted. things need to change within our system. we cannot continue to allow just anyone to have access to prescription pain medicine. parents need to be educated while their children are still at home. communities need to be aware of crimes, drug dealers and report them. doctors need to stop prescribing pain pills to people on the street and they need to be held accountable. what happened to our medical ethics when people who need pain medicine for awhile are given strong addictive pain medicine to keep coming back to the doctor for refills?

is it greed behind this growing epidemic. doctors profit from the addicts as well as the pharmaceutical companies that make the medicine. we know there is a problem but what are people going to do about it? i'm doing what i can, but it is not enough. will you all please help me? for rebecca and all the other mothers, fathers and sisters and brothers out there who are pleading for help, we owe it to them to get this amendment passed. i want to thank you, mr. president. i yield the floor and notice the absence of a quorum. quorum call:

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quorum call:

mr. leahy: mr. president? the presiding officer: the senator from vermont. mr. leahy: mr. president, i ask consent the call of the quorum be dispensed with. the presiding officer: without objection. mr. leahy: republican efforts to shut down senate confirmations of qualified judicial nominees, nominees who have bipartisan support, nominees that have been honored by republicans and democrats in the judiciary committee, this toefrt shut down the confirmation, that does not help the american people. it hurts the american people. it is a shortsighted policy at a

time when their efforts to slow the confirmation of judges has brought about a judicial vacancy rate that's almost twice what it was at this point in the first term of president bush. one of the reasons we brought down the vacancy rate during president bush's first term for 17 months of the 48 months of this term, i was chairman of the senate judiciary committee. we moved through 1 00 of his nominees. now republicans did beat that record in the 31 months that they were chairing; i think they confirmed 101 or 102. the democrats confirmed president bush's nominees faster than the republicans did, and yet the republicans have done everything to slow up and block president obama's nominees.

judicial vacancies during the last few years have been historically high levels. nearly 1 of every 11 federal judgeships is currently vacant. republican talk of shutting down confirmations for consensus and qualified circuit court nominees is not helping these overburdened federal courts. these are the courts which all americans as taxpayers turn to for justice, their tax dollars are paying for them and they suddenly find there is no judge there. senate republicans are blocking consent to voters who qualify circuit court nominees with strong support. it's hard to see how this new application of the thurmond rule is anything more than another name for the stalling tactics we've already seen for months and years. i've yet to hear a good

explanation of why we can't work together to solve for the american people the problem of judicial vacancies. last week i spoke about the announcement from senate republican leadership they would be shutting down the confirmation process for qualified and consensus circuit court nominees for the rest of the year. as i noted, senate republicans have become the party of "no." no help for the american people, no to jobs, no to the economic recovery, no to justice to provide for judges in our federal courts. i think the american people need to understand that senate republicans are stalling and filibustering judicial nominees even supported by the home state republican senators. two weeks ago we needed to overcome a filibuster to confirm justice andrew hurtz of the arizona supreme court to the

ninth circuit even though he had the strong support of senators kyl and mccain. this time the majority leader has had to file cloture to get an up-or-down vote on judge alberto of florida to the seventh circuit even though he was strongly supported by his republican home state senator. and every single one of these circuit nominees for whom the majority leader was forced to file cloture this year was rated unanimously well qualified by the nonpartisan a.b.a. standard committee of the federal judiciary. that was the highest possible rating you can get. when i hear some senate republicans say they are invoking the so-called thurmond rule and decided they're not going to allow president obama's judicial nominees to be considered, i actually wonder

how the american people are going to be able to tell the difference in what they've scene with this obstruction for the last three and one half years. mr. president, i've been here with president ford, president carter, president reagan, president bush, president clinton, the second president bush and now president obama. and all the other presidents, nobody, republican or democrat, has blocked and stalled judges the way the republicans have president obama's. this whether you've had republicans or democrats in the majority of the senate. i cannot understand why president obama is treated differently than the way we treated president ford, president carter, president

reagan, president george h.w. bush, president clinton, president george w. bush. in the past five presidential election years, for example, senate democrats have never denied an up-or-down vote to any circuit court nominee with a republican president who received bipartisan support in the judiciary committee. but that's what senate republicans are now seeking to do by blocking votes of william kaoeu -- kayatta. in the past five years senate democrats never blocked a vote of any republican nominee of a republican president who received a bipartisan vote in the judiciary committee. what is different about this president that he has to be treated differently than all these other presidents? the personal attacks on me taking quotes out of context, try to repackage their own

actions as if following the thurmond rule or what they seek to dub the leahy rule do nothing to help the american people who are seeking justice in our federal courts. i'm perfectly willing to defend my record. it would be a lot more helpful to republican presidents in the past than the republicans are to this president who somehow is being treated differently. really, what matters is the harm to the american people. republicans are assisting in being a party of no, even when it comes to judicial nominees who are supported by the republican home state senators. as chairman when i served as the ranking member of the judiciary committee, i have worked with the senate republicans to consider judicial nominees well into presidential election years. attempts to make the process more transparent and fair. i have ensured the president consult with home state senators before submitting a nominee. i have opened up what has been a

secretive process to prevent abuses. and all the while, i have protected the rights of the minority of republican senators. if republicans want to talk about the leahy rules, well, those are the practices i have followed, and i have been consistent. i hold hearings at the same pace and of the same procedures, whether the president nominating is a democrat or republican. other senators cannot say that. as chairman of this committee, i steadfastly protected the rights of the minority. i have done so even though i have received criticism from democrats. i have only proceeded with judicial nominations supported by home state senators and that has meant that we are not able to proceed on current nominees from arizona, georgia, nevada and louisiana. i have stopped proceedings on a circuit court nominee from kansas when the kansas

republican senators who had given support to that nominee reversed themselves and withdraw their support. the majority leader requested me to push a nevada nominee through committee, but she didn't have the support of the nevada republican senator so she wasn't able to go through the committee. i will put my record of consistent fairness up against that of any judiciary chairman, especially republicans who have been chairman. so those are the leahy rules. respect of protection for minority rates, increased transparency, consistency in allowing confirmations well into a presidential election year for nominees with bipartisan support. so after today's vote, we need to continue confirming nominees. at a time when judicial vacancies remain historically high for three years, with 30

more vacancies and 30 fewer confirmations at this point of president bush's first term, i would hope the senate republican leadership would reconsider and would work with us on filling these long-standing judicial vacancies to help the american people. we have well qualified consensus nominees with bipartisan support that can fill these vacancies. it's only partisan politics, the tactics of obstruction that stand in the way. i would ask consent that my full statement appear in executive session in connection with the debate of the nomination of robin rosenbaum. and, mr. president, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

quorum call:

mr. nelson: mr. president? the presiding officer: the senator from florida. mr. nelson: ask unanimous consent that the quorum call be called off. the presiding officer: without objection. under the previous order, the senate will proceed to executive session to consider the following nomination which the clerk will report. the clerk: nomination, the judiciary, rock ins. republicans balm of florida to be united

states district court for the southern district of florida. the presiding officer: under the previous order, the time until noon will be equally divided in the usual form. mr. nelson: mr. president? the presiding officer: the senator from florida. mr. nelson: mr. president, our nation faces an alarming judicial vacancy rate. i'm grateful that today we will be voting to confirm u.s. magistrate judge robin rosenbaum to fill a judicial vacancy in the southern district of florida for a federal district judgeship she earned her undergraduate degree at cornell, her law degree from miami. she began her legal career in the u.s. attorney general's honors program, where she worked aes a trial attorney in the federal programs branch of the civil division. she's worked in private practice

in holland & night, as law clerk to judge stanley marcus, united states circuit state judge for the 11th circuit court of appeals, and she's worked as assistant u.s. attorney down in the southern district of florida. our state has a great traditional of bipartisan support for our federal judicial nominees going back a couple of decades, and of course through this judicial nominating commission, she has come forth with their stamp of approval. the two senators from florida agree, and i am happy to recommend her to the senate. and, mr. president, i yield the floor. and, mr. president, i would ask for the yeas and nays.