quorum call:

a senator: mr. president? the presiding officer: the senator from oregon. mr. wyden: i ask unanimous consent to vacate the quorum call, mr. president. the presiding officer: without objection. mr. wyden: mr. president, there certainly is a lot of discussion, and understandably so, about the fact that so often there really aren't bipartisan efforts here in the united states senate on major issues. you can turn on practically any talk show in america, and the constant refrain is they're just not working together down there. the democrats and republicans can't find common ground and in many instances aren't even trying. the issue that's before the senate right now shows that's certainly not the case. we all understand how important this immigration issue is. it's an economic issue. it's a justice issue. it affects scores and scores of communities across the country.

and for many months now, here in the senate four democrats and four republicans hour after hour after hour have sought to come together in a bipartisan way to tackle a major issue. now i certainly don't support every single provision in the bill, and i'm sure that's the case for most senators. but i think that in terms of its large implications, this is an extraordinarily important effort. the immigration system is broken. our country knows that it needs to be fixed. and what this shows is you can find some common ground, really address principled bipartisanship, not just bipartisanship for the sake of patting yourself on the back, but bipartisanship in terms of actually showing that values that are important to both sides

of the aisle can be addressed and at the same time the senate can come together, work together and in fact pass a law, actually succeed in the business that we're sent here to do, which is to pass legislation. i particularly want to commend three on our side of the aisle who i have worked on these and many other issues: chairman leahy, senator schumer, and of course our majority leader. they have constantly put the focus on trying to show that senators are going to have a chance to be heard on this issue. we've had a lot of debate on it. they had literally scores and scores of amendments in the judiciary committee. we've had a lot of debate here on the floor of the united states senate. chairman leahy, senator schumer, senator reid have all indicated that senators are going to have an extensive opportunity to be heard. but, yes, when there is a bipartisan bill produced by four

democratic leaders and four republican leaders, those three have been resolute in saying we're actually going to get it in front of the senate. and i commend them for their very important work. now in addition to making it clear that i think bipartisanship is valuable, i do want to highlight for a moment three amendments that i hope i will be able to make pending and that we'll be able to get votes on. and in particular, i'm troubled by the fact that the bill as written waives our country's environmental laws in order to secure the border. and i'm of the view that strengthening our immigration system should not come at the cost of throwing our environmental laws aside. these are bedrock principles with respect to protecting our environment, our public lands,

and our natural resources. and i and seven other colleagues here in the senate have introduced an amendment that would strike several of the unnecessary provisions in the bill that thwart the rule of law and ensure as we go forward with the very important security agenda and securing the border that as i've indicated, we don't do long-term damage to our environment that may take generations to recover from if at all. if you're talking about waiving the laws that protect our public resources -- and i know the distinguished president of the senate cares a great deal about these issues -- you ought to waive those laws only where there is compelling evidence that it's necessary, and even then it ought to be done in a narrow and targeted way.

so, my first amendment that i hope i'll be able to get pending and hope to be able to offer, mr. president, is amendment 1543. it would allow the secretary of homeland security to work with the department of interior and department of agriculture, local landowners, state and indian tribes to determine if any negative impacts can be mitigated. this means that if in order to secure the border there is damage to important environmental concerns -- private property, public lands, tribal lands -- the secretary could take action to reduce that damage. so if, for example, the wall on the border causes unintended flooding in a city, the secretary would be able to look at measures such as new infrastructure, dikes or drainage systems to prevent flooding. if a road has to be built through a wetland or the habitat

of an endangered species, the secretary would have the authority to restore wetlands or conserve habitat for the species elsewhere. and all i want understood, mr. president, is that the department has testified -- the secretary, secretary napolitano has testified several times before the congress, including recent testimony before the judiciary committee, that the department of homeland security does not need these blanket authorities to waive the environmental laws. they have not requested blanket authorities, mr. president, to waive the environmental laws. and i think the secretary's view in this regard speaks volumes to the need to carefulfully review legislation, so as to make sure that when you're talking about a matter of such enormous concern,

and really also setting a precedent, mr. president, that we think through how to ensure that we provide the security that the american people want and at the same time if we're talking about waiving environmental laws, at least we provide the authority to the department to mitigate the damages in doing that, particularly given the fact that the department has not sought the authority in the first place. they didn't seek the authority in the first place. let's at least give them the authority to mitigate the damages. now, another amendment that i seek to offer is amendment 1544. that would simply sunset the provision to waive the environmental laws when what's called the second trigger in the legislation is met and there has

been considerable interest in the committee with respect to sunset authority, a provision to do that in one additional area, i think we ought to make sure that we sunset the provision the way the environmental laws when the second trigger is met. and finally, i hope to be able to offer amendment 1545 which creates the definition for physical tactical infrastructure in the waiver of all the environmental laws. the amendment would define it as road vehicles, life bridges and towers for technology and surveillance. so, again, what we're talking about, mr. president, is not getting rid of the waiver. i understand that that isn't going to happen. but let's at least mitigate these damages that i think are a

very real threat. and let us set forward some unambiguous terms that relate to how this waiver is going to be used. these are amendments, in my view, that improve the bill, mr. president. they don't take away any of the authorities that are granted in this bill. but they are going to ensure that private property, public lands, our environmental values are also going to be a priority while allowing the border to be secured as quickly as possible. so, mr. president, in wrapping up, let me say again for all those who may be following this debate that have been skeptical about whether there was enough goodwill to do anything bipartisan, you tphoerbgs haoerbgs i think the united states senate in a bipartisan way with a pretty significant vote next week -- i will not

join the parlor debates about speculating how many senators will vote for the bill, but i believe it is going to be a very substantial majority. it will in fact be a pw-bt law that is passed -- be a bipartisan law that is passed in response to a significant issue. not just some kind of issue du jour that may have come up in the past few days and all of a sudden a few senators get interested and we come to the floor. this is a major, substantive issue that has gone on and on and tackled in a bipartisan way, first by eight senators that have been willing to stick their neck out and get a fair amount of flak as you usually do when you try to work in a bipartisan way, but also to acknowledge particularly on our side of the aisle chairman leahy, senator schumer and leader reid who have really tirelessly focused on trying to make sure that senators would have a chance to be heard and have done so.

and i commend them for that effort, and only conclude today by way of saying, mr. president, i think the three amendments that i seek to make pending and get votes on will deal with another important issue. the bill as written waives the environmental laws in order to secure the border. and i and a number of other senators would like at a minimum to make sure that the department of homeland security has the legal authority to mitigate the damage associated with that waiver wherever possible. and we think it is particularly important that those provisions that would mitigate the damages be allowed since the secretary has actually testified she doesn't need those authorities in the first place. mr. president, with that, i yield the floor.

and i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: quorum call:

quorum call: mr. sessions: mr. president? the presiding officer: the senator from alabama. mr. sessions: i would ask that the quorum call be dispensed with. the presiding officer: without objection. mr. sessions: mr. president, i'm -- as this discussion and debate over the immigration reform has gone on, i've made a number of statements. i think many of them unfortunately have been proven true. i said the bill didn't promise enforcement at the border. now apparently we're waiting again to see where this

amendment comes they claim will dramatically improve enforcement at the border. and we don't -- we haven't seen it yet. maybe it won't appear. but i think they say it would. it was in the newspapers yesterday and said it would fix everything with the bill. well, of course, it will only deal with the border apparently in any significant way, and there are many, many other series flaws in this legislation that simply have to be addressed. i also complained that we had all these secret meetings and groups there and the public interest, the law enforcement interest was excluded. the only people that were there were special interest. and i've talked about that. i talked about the influence of the white house meetings and directing the agenda and how the bill was all written. well, here today's "new york times" has a story about that. i think it's relevant for us to

read because it's further confirmation that we have an elite group of people with special agendas meeting to draft legislation that's going to impact all americans. it's going to impact the entire country. and nobody's speaking up for the average american citizen in any effective way that i can see. they aren't even being thought about. they're talking to pollsters and consultants and political gurus and advocacy groups, open borders groups, low-wage labor groups. all right, here it is. today's "new york times." the headline, "white house offers stealth campaign to support immigration bill." why were they stealthy? why this is secret campaign? apparently so. quote -- "the hide-out" -- the

hideout -- "has no sign on the door but inside dirksen 201 is a spare suite of offices the white house has transformed into its covert immigration war room on capitol hill." dirksen 201. i didn't know that's where they were meeting over there. last night on the floor i said, i wonder where they're meeting plotting all these things. somehow that right now i presume they're plotting this amendment, trying to get more votes and wheeling and dealing and giving louisiana purchases and cornhusker kickbacks, i suppose, to get votes. where is the public interest? meeting secretly over there. covert war room in dirksen. quote -- "strategically located down the hall from the senate judiciary committee" -- our

judiciary committee room is on the second floor, too. and one -- "in one of the city's massive office building, the work space normally reserved for the vice president is now the hub of a stealthy legislative operation run by president oba obama's staff. their goal is to quietly secure passage of the first immigration overhaul in a quarter of a century." so that's where the driving force is coming from. i've been wondering where they've been meeting. now it's -- "the new york times" tells us. quote -- "we are trying hard not to be heavy-handed about what we're doing, said cecelia munoz, the director of the white house domestic policy council and the president's point person on immigration." now, miss munoz, director munoz

is an able person but she's a real -- got an agenda on immigration. she was one of the leaders in la raza a number of years ago and publicly stated that workplace verification, the things this bill claims to have in it, but not very effectively, i'm afraid, and we've never implemented effectively before, but there was a workplace verification plan in the 1986 amnesty bill that was supposed to keep illegal entrance from -- entrants from getting jobs in america. and it was under fierce criticism and basically never worked. miss munoz said that it -- workplace verification would have a -- was discrimination. in other words, to have a policy that would require businesses to provide jobs only to people who

were legally in america is discrimination. and she attacked it and said congress had a moral obligation to repeal that law. and she's the white house -- i just want to say, this is the white house director of the immigration policy. this is not an evenhanded policy that we have. it's being driven by this kind of agenda. it just is. the article goes on to say "six years ago, president george bush publicly sent cabinet secretaries to rome capitol hill buildings daily to try to wu senators for a similar immigration bill, but this time, high-profile help from the white house is an anathema to many republicans who do not want to be seen by constituents as carrying out the will of mr. obama." so republicans are sneaking over

there. maybe somebody out to sit outside the 201 and see how many republicans go in. maybe they're -- so it goes on to say -- quote -- "so while lawmakers from both parties are privately relying on the white house" -- privately relying on the white house, both parties -- "and its agencies to provide technical information to draft the scores of amendments to the immigration bill, few republicans are willing to admit it." why, i would think, you know, they -- i don't know why they wouldn't want to admit that the president is basically drafting this bill and it's president obama's legislation fundamentally. that's been obvious to me but i didn't really have any proof of it until we read "the new york times" today. it goes on to say -- quote -- "so while lawmakers from both parties are privately relying on

the white house to provide technical information, some are so eager to prove that the white house is not pulling the strings that their aides say the administration is not playing any role at all." and they quote mr. alex conner, spokesman for senator rubio to that effect. well, who's writing -- who's involved? the white house or not? pretty clear to me the white house is. it goes on to say this -- quote -- "inside room 201, the administration has gathered a collection of its own congressional lobbyists, policy specialists and experts from an alphabet soup of agencies that will have to put the immigration legislation into effect if it passes. they all moved into the vice president's offices on june 10, setting up laptop computers and

thick binders filled with proposed amendments on an oval conference table." there's no doubt about that. this bunch is prepared. this legislation was put together haphazardly, in my opinion, fundamentally. it's not well written. but everything else about it has been carefully, meticulously planned, with every kind of force that they can bring to bear, money to run ads nationwide, sending people into living rooms in alabama and indiana and illinois saying this is the toughest bill ever. nowhere close to being as tough as the 2007 bill. it's weaker than current law as it lays before us today. they said all this kind of -- and -- and how it's brought in committee, how it's brought to the floor, they've studied every bit of it. they've drafted talking points that they believe are poll

tested. they've got talking points that people want to hear, that we're going to treat compassionately people who are here illegally. americans want to do that. they don't -- they don't want to try to uproot families that have been here years with children here and got deep roots here. but they want the lawlessness to end so they promise that. they've got all kinds of promises in their talking points, but they aren't accurate, as i have pointed out repeatedly. and senator lee said last night, it's not the talking points that becomes law, it's this thousand pages that becomes law. and what impact will it have on the ability of law enforcement to have a lawful system in the future, that's the question? well, what do we know? chris crane, with the i.c.e. -- association of i.c.e. officers, interior enforcement officers, said it will make the situation

worse, not better. the article goes on to say -- quote -- "we have folks who know the senate really well, who know the players, who've been through this before so they know exactly what the senate staff needs." miss munoz said. "we are deeply, deeply engaged." well, maybe miss munoz just couldn't keep her -- keep it to herself. she couldn't keep the secret. the secret was supposed to be, we don't tell anybody president obama's writing the bill because his administration has weakened law enforcement systematically. he has no credibility with the american people on immigration reform, so even though they've been writing it, doing all the staff work and supporting it

continuously, they didn't want anybody to know. but maybe she's getting a little nervous. maybe she and the president are afraid that folks won't know it's their effort and so they couldn't keep it quiet any longer. i don't know. washington's a funny place. it goes on to say in the article, "at one point, many begano and miss escobar and other white house advisors huddled for 45 minutes in the smaller of the two rooms with mr. leahy's top aides working from spreadsheets. they discussed each of the ten amendments that mr. leahy was likely to bring to the floor for a vote that day. when republican amendments are filed, we're trying to decide, can we accept this, can we accept this without some modifications? they're the ones who tell us." "they are the ones who tell us. this is quite doable, said one democratic leadership aide who

requested anonymity to talk about legislative strategy." well, dear, it's very much affirming of the little overheard statement on the hot mike in the judiciary committee when an amendment came up that would have some effect on the gang of eight's bill and they'd all agreed that they would vote down anything that was bad. senator schumer was heard to ask one of his staffers, did the republicans have a pass on this? what was he saying? he was saying, we'll let these republicans vote for this tougher amendment because we've got the votes to kill it anyway. we're going to give them a pass so they -- they don't have to stick with us? and we had multiple references in the committee, members not of the gang of eight saying, well, i'd like to vote for this amendment. i think it's good for america. but i really can't vote for it

because it would upset the gang of eight and all the agreement that they've got. by the way, there's a misunderstanding of these agreements. the agreements are understood by most people to be agreements among the senators but that's not so. they met in exceedingly great length with mr. zuckerberg and the high-tech industry, they met with the agriculture business, the farming interests for large corporate farms, they met with la raza, they met with the immigration lawyers association, they met with groups wanting cheap labor. they met with all of those folks, and each one of them was asked to sign onto the bill. and they wouldn't sign onto the bill until they got language in

it that advocated what they wanted. so they wanted to get their benefits in the bill. and once they got that, one for all, all for one, they signed in blood, we're going to support the bill but don't you change my special interest. so the senators said okay, we got all of you special interests to agree, we all agree, we're not going to accept any substantial change to what you have in the bill. and we'll fight off any amendments. and they can make all the awmplets them about what's good for america, but we've told if you you'll support this bill we're going to give you what you wanted. that's what the deal was all about. and it's not good because the american people are the ones who are not being taken care of in this legislation. so they say -- they discuss in this article, they ask

themselves can we accept this or do we have some conflict out there we can't accept it? the article goes on -- quote -- "mr. obama's political advisors say they are confident he will get the credit he deserves if the bill passes this summer" -- close quote. well, that's a important -- important to them, they want to get credit. they have a political agenda. but what's liable to happen is if the bill passes in its present form, it will do damage to the american working person, families, legal residents, legal immigrants who are here trying to get a better payday and they're -- it could very well be a dangerous to be taking credit for the bill. finally, it concludes this way, "that the white house and

administration officials have been in frequent touch with republican senators as the lawmakers have to come up with dozens of amendments on tighter border security and other parts of the bill they deem insufficient. white house officials declined to name them" -- close quote. they declined to say what republican senators are over there bowing and scraping to try to get their amendments approved it goes on to say finally "mr. bagano's team is planning to remain in dirksen 201 for as long as the immigration bill remains on the senate floor. clan des tine but not completely -- clandestine but not completely invisible" -- close quote. another democratic aide says "people know where to find them. it's like going to the nurse's office. they know where it is." so that's just a complete revelation of what i've been

saying all along, that this is the way this bill has been put together and put together in secret by people not in connection with the american people. they're talking about polling data, special agendas they want to accomplish with the legislation, and somehow we've lost sight of the simple values the american people want to see in an immigration bill. they want to see a lawful system. they want to see those who wait in line be rewarded. they want a system that serves the american interest. a system that emphasizes immigration by people who are most likely to flourish in our society and be able to be successful and not be on welfare and not be on dependence. if we can't accept everybody, why can't we create a system that substantially rewards those who are going to be successful, who are going to pay more in taxes than they'll take out in revenue from the government and help create american wealth.

this bill claims to do that, but it's nowhere close to the canadian bill which has about 70% of the people there or 60% plus of the people being immigrated into canada come on a merit-based system. but this bill will be no more than 15%, maybe closer to 10% actually but they claim it's a big move in that direction. and there's been further evidence on who wrote the bill. i'll just mention this article, june 13 in "the miami herald," it's about ms. leon fresco, a very talented staff person here who works for senator schumer who apparently has become the top person writing the bill. mr. fresco is from miami originally and apparently a man of talent and ability. but he's a key guy that's actually writing the bill. who's writing the bill? not senator mccain and senator

graham are trying to befd america -- defend america, help to decide what to do in syria and libya. chuck schumer is doing the democratic campaigns. people are busy here. who is actually writing the bill? mr. fresco, now 35, the article says, led the brutal negotiation sessions some of which lasted until 2:00 a.m. with staffers of the so-called gang of eight bipartisan team. staffers of the gang of eight bipartisan team. he orchestrated several of the most delicate compromises, including the final and most difficult agreement between the labor and business interests which allowed both democrats and republicans to claim victory. and it was his hands on the keyboard drafting passages of the original 844-page bill that the group ratified. now a thousand pages.

quote -- "he put in the longest of all the longest areas said the negotiator for jeff flake of arizona, he was the one that everyone called. he the one the republicans called when they were mad about how things were going, morris said and he was -- he was the one the democrats were mad at. quote -- "as most often is the case in washington, the most significant work on the deal happened behind the closed doors away from the cameras. senators gave -- this is important for us all to understand, how legislation is drafted, especially when it gets this big and this complicated and attempts to be comprehensive on a matter as broad and as important and complex as immigration. quote -- "senators gave their

negotiators principles to follow, a framework, compromises they could and could not accept, and then sent them off to find a solution on matters that have plagued the nation for decades." that's the way it's worked. turned it over to the staff. and so when i ask my good friend and i really respect his ability and his skill, senator schumer, how many people would be admitted into america if the bill passed, i asked him at the judiciary committee, he wouldn't say. i don't know that he knew. i had estimated it would be over 30 million. absolutely confident that was correct. and c.b.o. in this past week has said it would be 30 million in the first ten years. three times the number of people given legal status in america in the next ten years over what the law says should be.

under the current law it should be a million a year, ten million over ten. if this bill is passed, 30 million over ten will receive legal status and put on a permanent path to citizenship. i mean a permanent path to citizenship. they may not get it within ten years but they're close to it and on the path to it and many of them will have received citizenship. probably three million will have received citizenship within ten years. within five years. so it goes on to say senator schumer's good staff person, mr. fresco, set the group's agenda and really went about driving the bill. so this impression that somehow it was a coming together of the

interested people without a real agenda, seeking to fix our immigration system isn't exactly correct in my view. now, my friend, karl rove, from the center for american progress or something like that, raised a bunch of money for crossroads to run ads in the last election that was supposed to elect mr. romney, didn't do so well, carl, sorry about that, wish you'd been more effective, i think if mr. romney had looked the american people in the eye and said one thing, he might have been elected. and i'm sure mr. rove advised him not to do this. if he had just simply said we are going to treat compassionately the people that are in our country a long time,

who are here illegally and we're going to work out something for them, but if you elect me president, we're going to have a lawful system of immigration that is enforced, we are going to end the lawlessness and we're going to serve the national interest. if you elect me, that's what's going to happen. just might have been that mr. romney would have been elected president. but the crew, the crossroad guys that go to the country clubs and drink with each other and plot and think they know something about politics and haven't been out talking to real people in decades, they thought they knew better, and they've been telling us all how we're supposed to do this and what good politics is. i think good politics is serving the american people's legitimate interest. and we got to ask will this impact people's wages? well, it will impact them in a way businesses like because the wages will go down.

so the employers will get to hire more people at less wages. and will unemployment if this bill passes go up or will more people be unemployed? unemployment's going up if this bill passes. what about g.d.p.? well, of course you have 30 million new people in the country, you're going to have some increase in g.d.p., but per person will g.d.p. per person go up or down? it goes down. and that means wages will go down. and this is what i've been saying, professor borjas at harvard and professor hero, professor matloff and others have been saying this repeatedly and the congressional budget office just asserted that. the congressional budget office said if this bill passes, unemployment goes up, wages goes down, g.d.p. per capita goes down.

what professor borjas said was yes, certain businesses will profit. they will get the benefit of increased g.d.p., but the working person will see their wages decline. and the poorer person will have the most decline. so i don't think this can be defended economically. but the fat cats who fund american crossroads i'm sure see it differently. obviously, they do. now, mr. rove said this in his op-ed recently last week or so, "it's important that republicans avoid calling a pathway to citizenship amnesty." well, thank you, mr. rove. i appreciate that advice. i've known karl since college. we were friends in college. i think he's one of the most

talented people i know but i'm not taking his advice about this matter. i'm still meeting with average american people every week. he said republicans shouldn't use the word "amnesty." don't call this pathway to citizenship amnesty. well, you can call it amnesty, i think. he says amnesty is the forgiveness of wrongdoing without penalty, something president reagan avoided and signed into law with the 1986 immigration reform and control act. the law essentially told those here illegally that if they had arrived in the united states prior to 1982 and wanted to become citizens, simply raise your right hand, close quote. so he says reagan didn't do that, and that they had a much weaker plan than this one. this one has penalties.

this bill is -- has penalties in it. he says it would have -- they must paid $2,000 in fines, $500 when they surface, $500 when they want to remain in america after six years and $1,000 when they eventually apply for a green card ten years later. so that's $2,000 to be paid over ten years. this is a big fine that's going to be paid. under the 1987 law, the fine was, i believe, about six minimum, maximum $8,000 per person. so this bill much weaker on fines and penalties than the 2008 bill. this bill is much weaker. these fines are just token fines, about $18 a month total.

that's the penalty you're paying to be given a guaranteed pathway to citizenship. i just would say it's certainly not a very big penalty. but it's kind of interesting, ed meese, a great attorney general, friend of ronald reagan, wrote a letter to the "wall street journal" to respond to mr. mr. rove's recollection of ronald reagan's amnesty bill. i think he was attorney general at that time. if not, he assumes was -- i believe he was attorney general at that time, and before that, he was one of president reagan's closest a. advicors from california, and was very knowledge about how the legal and prosecutorial system worked.

he said this, and i quote -- "i recalled the 1986 immigration act really differently. karl rove's recollection of the 1986 immigration reform and control act is, shall we say, highly selective. that law, he writes, essentially told those here illegally that if they had arrived in the united states prior to 1982 and wanted to become citizens, simply raise your hand." that's what karl rove said. mr. meese goes on to say -- "mr. rove asserts that the gang of eight bill is different because it has plenty of penalties and hurdles for those here illegally who seek citizenship. well, i was there in 1986. i read that bill carefully. we did that back then, and i can tell you that mr. rove's blithe description of the bill is way off the mark.

the 1986 act didn't turn illegal aliens into citizens on the spot. it granted temporary resident status only for those who could prove they had resided continuously in america for five years. close quote. well, let me say what this bill does. if you could prove in 1986 you had been here for five years, then you could stay even though you had entered illegally. this bill says if you entered the united states illegally d.c. 31 of 2011, 18 months ago, you're put on a path, guaranteed path to citizenship and given immediate legal status, and you don't have to prove you have a job, you have ever had a job, you don't have to prove you have family here, roots here or any connection here. mr. meese goes on to say --

"after 18 months" -- he is referring to the 1986 law -- "their status could be upgraded to permanent residency and only after another five years could they become citizen." and this bill delays citizenship further because when you become a citizen, you're entitled to all the welfare programs, and the government -- and the sponsors of the bill really felt they wanted to push citizenship out so they could say that immigrants won't receive welfare, it won't impact the treasury in the first ten years of the bill, and we normally score costs to the government over ten years, so they moved it outside the ten-year window. mr. meese goes on to say -- "but the advancement to citizenship was not automatic. immigrants had to satisfy various requirements along the way. they had to pay application fees, learn to speak english, understand civics, pass a medical exam and register for military selective service,

those with convictions for misdemeanors -- felony or misdemeanors were ineligible. that's pretty much the penalties in the gang of eight. today they call that a road map to citizenship. ronald reagan called it amnesty. apparently, reagan himself called the bill in 1986 amnesty. he didn't try to deny that. the 1986 reform also had supposedly rigorous border security and immigration law enforcement provisions. so how did that pan out? one day, reagan signed comprehensive reform into law, and only one thing changed. millions of unlawful immigrants gained legal status. the promised crackdowns on security and enforcement never happened, only the amnesty prevailed. close quote. so that's what we are afraid is

going to happen with this bill. so similar, isn't it, in the way they have laid it out. since 1986 amnesty, mr. meese says a number of illegal immigrants have quadrupled. that should teach congress a very important lesson. amnesty bends the rule of law, and bending the rule of law to reach a comprehensive deal winds up provoking the wholesale breaking of law. it encourages millions more to risk entering the country illegally in the hope that one day they, too, might receive amnesty. on legislation as important as this, lawmakers must take the time to read the bill, not rely on others' characterization of what it says. we can't have congress -- quote -- pass a bill to find out what's in it." that's what the former attorney general of the united states

said, and that's what -- he served ronald reagan and he was there actively when that happened, when that bill passed the last time. it's very similar to what senator grassley, who is here in the senate, said happened, why he can't vote for this bill today. i believe there has been far too little discussion about the most important value of this bill, the most important result, and that is what will be the impact on the american people, whose interests are we serving? as one witness before the judiciary committee a number of years ago said, you tell me what you want. if it's to serve the interest of people here illegally and those who want to come here, i can

tell you how to do that. let them come. it tends to be in their interests. both personal safety is better in america than most places in the world. the opportunity to make money is better. the welfare benefits of social security safety net is stronger here. so it's their benefit to become an american. we know that. if you want to serve the national interest of america, then we can talk about that. i can tell you some principles you should include in your bill if you want to do that. and of course, one of the things he talked about was a merit-based system where you try to identify the people who have the skills educationally and academically and the language proficiency that would allow them to have the best chance to succeed. so we haven't talked about that amount. we need to be asking what will be the impact on the american people, and that is undiscussed

in any serious way, and it does not appear that the gang of eight ever sat down with the nation's leading economist who studied these issues, because there are various principles that are crystal clear as we analyze these issues from an economic standpoint. pier -- peer-review studies, not one-age often edz by some part-time economist opining to advance the agenda of this administration or this legislation. those are not the kind of things we need to be relying on. that's just talking points. they are just putting talking points out. what do real economists who have actually studied department of labor statistics, what do they say? and that's not been discussed. indeed, our sponsors of the bill won't even tell us how many people will be admitted under this bill. we have had to get those data from studying the language and

talking to experts, and now this week finally the c.b.o. score. and let me be frank. the reality is the -- the cold reality is i think this, that the top union man, he was involved as his designees were to bless the bill finally, and he eventually did so, placing his goal of citizenship for millions who have entered the country illegally over the welfare of american workers. i'm afraid that's what he did. he decided political advancement for labor interest was more important than the impact it had on american workers today. and the business interest, what do they figure?

you read the business pages, they are always talking about wages. wages going up, wages going down. for a businessman, wages going down is good news. wages going up, bad news. what should senators see, what is the goal of american -- for the american people. wages to go up, wages to go down. unemployment, do we want it to go up. therefore make it more labor available. resulting inevitably in lower wages. or do we want unemployment to go down? so more american people are finding jobs. do we want a tight labor market or do we want a loose labor market? what is the public policy that the congress of the united states should be advocating. i understand what the business guys would want. they want more great workers out there. they want to have ten of them apply for every job. they want to pick the very best one, and they want to pay as low

a wage as they can pay and still get that good worker. that's free market. i -- i tend to favor free market. i believe in that. but nobody can ever suggest that bringing in large amounts of foreign labor doesn't create more labor in the united states and inevitably reduce wages, and the congressional budget office found that, and professor borjas and others have found that. it's just indisputable. so mr. zuckerberg and the group out there in the west in silicon valley and in the agribusiness groups that want to continue to move this forward, they have their interest in getting workers at the lowest price. i asked the other day if mr. zuckerberg would put clearly on his web site, his facebook actual job openings and the

salaries that he would pay, i think he would find a lot more american workers than he -- he says he can find. i don't believe he's got to hire so many people from abroad to come over, work for three years, go back to their home countries and provide basically a large supply of low-wage labor for these jobs. maybe i'm wrong. maybe mr. zuckerberg would try it to clearly put it out there, he might find that in this time of high unemployment with college graduates wondering where their next job is going to be, he might find he's got some pretty good job appear -- applications out there. and larasa, they want advocacy and citizenship. they are the advocacy group. they are not interested in borders. they are not interested in sovereignty issues. they are interested simply in being able to have everybody come, it seems to me, from their agenda, and they're against

enforcement. miss moonose, a top advisor for obama, said a number of years ago when she was at larasa, it was immoral to have work enforcement. so the person who is supposed to be in charge of all this believes that requiring a business only to hire people who are here lawfully, that that's immoral, and she demanded that the law be changed. this is the status we're in today. we need to understand the forces that are at work. and then a lot on the far left, they want to have a north american union. that's not talked about much now, but in 2007, it was out there. and you have an open borders crowd, a survival of the fittest crowd. these people that just believe that, well, you bring in more people. some think i'm going to end up on the top and i will get

cheaper wages and i will do fine and i'm not worried about other folks, whether their wages go up or not, the vast majority of american citizens. i'm just not worried about that. i'm going to end up on top. it doesn't worry me. we're going to make more money if we have more people here. i don't think that's a healthy approach. national review, the great conservative organ, national review, wrote a recent editorial and made this observation that caught my attention because i've been thinking a lot about it lately. it said we are a nation -- a nation with an economy that we want to see do well. ear not an economy with a nation , a nation creates a binding series of interests, and we call on our citizens to

go fight wars and their children go fight wars and put their lives on the line for the nation. and they serve our country. and the country owes them certain protections and a chance to be successful and a chance to be able to make a decent wage with a health care plan, with a retirement plan so they can take care of their families ta, take -- families, take care of their families and send them to college. a nation has those obligations and to simply say millions can come to our country illegally, millions can come legally in levels that jeopardize the working majority, perhaps, of american citizens that pulls down their salaries, allows them not to prosper, is difficult for me to understand how it can be justified. i don't see how we can justify

that. i'm not against immigration. we do a million people a year in this country. i think that's about right. we need to shift it some so we are getting people who have a better chance to succeed in america, and we need to end the illegal flow, and then we could see perhaps a little tightening of the job market, and maybe we'd see some wages start going up for a change. wages have been dropping consistently since 1999. and this bill, according to the congressional budget office, will drive down wages more over the next decade than if it hadn't passed. so i think we have a responsibility as national leaders not to radicalize some survival of the fittest,

utterly open borders, theory of american law and policy. i don't think that's right. so, you know, you got the conservative establishment, some of them are the business crowd and my good friend karl rove and we just disagree on this, i love karl, he is so smart and so committed to america. i just think he doesn't get this correctly. he's rubbing shoulders and elbows with folks who have different agendas and haven't thought through the impact on the american citizen. the only interest that's being ignored in this whole process, it seems to me, is the public interest. the interest of the american people, middle class, who are struggling today. so these special groups have this had their special interests heard. they've been meeting in secret, they got the gang of eight to

agree, they got the gang of eight to accept what they wanted and they've agreed to put up money, they've agreed to advocate for the legislation, and keep pushing for it. but where were the law enforcement officers? where were the good folks that represent the working people of america? so the missing interest throughout this process has been the people's interest. so i look forward to seeing, now we're at 1:00, if we're going to get a special amendment that's going to fix things. but actually i don't think the sponsor of this amendment claims it fixes everything. it doesn't have anything to do with the fundamental issues i just talked about, about the ability of the nation to prosper, to take care of its citizens in and effective way. this amendment doesn't deal with that in any effective way. we'll see what it concludes,

whether it makes the situation better. we're going to look past the talking points, we're going to look to the actual language of this amendment, that it now 1:05 we have not seen but we thought we'd see last night at 6:00. i thank the chair and would yield the floor. and reserve the balance of the time and note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

quorum call:

quorum call:

the presiding officer: the majority leader. mr. reid: i ask unanimous consent the call of the quorum be terminated. the presiding officer: without objection. mr. leahy: mr. president? the presiding officer: the senator from vermont. mr. leahy: i understand the leahy amendment number 1183 is now pending, is that correct? the presiding officer: that is correct. mr. leahy: mr. president, i modify my amendment with the changes i have at the desk. the presiding officer: the senator has that right. the amendment is so modified. mr. leahy: mr. president, i yield the floor.

mr. reid: i have a second-degree amendment, mr. president, it is at the desk. the presiding officer: the clerk will report. the clerk: the senator from nevada, mr. reid, proposes an amendment numbered 1551, to amendment numbered 1183, as modified. mr. reid: i have an amendment to the underlying bill at the desk. the presiding officer: the clerk will report. mr. reid: mr. president, let's see here. second-degree amendment, we've taken care of that, is that right? the presiding officer: yes, sir. mr. reid: cloture motion at the desk with respect to the amendment, that's also at the desk, is that right? the presiding officer: it is. the clerk will report the cloture motion. the clerk: cloture motion, we the undersigned senators in accordance with with the provisions of rule 22 of the standing rules of the senate hereby move to bring to a close the debate on the leahy amendment numbered 1183 as modified to s. 744, a bill to provide for comprehensive immigration reform, and for other purposes, signed by 17

senators as follows -- reid of nevada, leahy -- mr. reid: i ask unanimous consent the reading of the names be waived, mr. president. the presiding officer: without objection. mr. reid: i now ask for the yeas and nays on my amendment. the presiding officer: is there a sufficient second? mr. reid: mr. president? in the rush of things here, i'm getting ahead of myself. there is an amendment to the underlying bill which is at the desk. the presiding officer: the clerk will report. the clerk: the senator from nevada, mr. reid, proposes an amendment numbered 1552 to the language proposed to be stricken by the reported committee substitute amendment to s. 744. mr. reid: and on that i ask for the yeas and nays. the presiding officer: is there a sufficient second? it appears that there is. mr. reid: i have a second-degree amendment that i would ask --

the presiding officer: the yeas and nays are ordered. mr. reid: thank you, mr. president. i have a second-degree amendment at the desk. the presiding officer: the clerk will report. the clerk: the senator from nevada, mr. reid, proposes an amendment numbered 1553 to amendment numbered 1552. mr. reid: i have a motion to recommit the bill with instructions. the presiding officer: the clerk will report the motion. the clerk: the senator from nevada, mr. reid, moves to recommit the bill to the committee on the judiciary with instructions to report back forthwith with an amendment numbered 1554. mr. reid: i ask for the yeas and nays on my motion. the presiding officer: is there a sufficient second? there appears to be. the yeas and nays are ordered. mr. reid: i have an amendment to the instructions that have been filed. the presiding officer: the clerk will report. the clerk: the senator from nevada, mr. reid, proposes an amendment numbered 1555 to the instructions of the motion to recommit. mr. reid: i ask for the yeas and nays on that amendment. the presiding officer: is there

a sufficient second? it appears there is. the yeas and nays are ordered. mr. reid: i have a second-degree amendment at the desk. the presiding officer: the clerk will report. the clerk: the senator from nevada, mr. reid, proposes an amendment numbered 1556, to amendment numbered 1555. mr. reid: mr. president, i ask unanimous consent that the mandatory quorum required under rule 22 be waived and that the vote on the motion to invoke cloture on the leahy amendment as modified occur at 5:30 p.m. monday, june 24. the presiding officer: is there objection? without objection, so ordered.y mr. reid: mr. president, first of all i commend the chairman of the judiciary committee, plr leahy for his modified amendment. senator leahy has moved this bill from the beginning and certainly we all look with pride at what was done in the judiciary committee in marking up this bill. and he was here last night late on the floor. he's a proud son of vermont and

rightfully so. mr. president, i thank profuse ly the chairman of the subcommittee on immigration, senator charles schumer, who has been the quarterback, the leader of the gang of eight. the gang of eight under his direction negotiated the basis for this bill and it's now the pending leahy amendment. this amendment will put to rest any remaining credible concerns about the border, about border security. as senator mccain said yesterday, and i quote, "if they can't accept these provisions, then border security is not their problem" -- close quote. i think all the members of the gang of eight, schumer, ebb durbin, menendez, mccain, graham, rubio, and flake, i think it really speaks volumes, mr. president, that lindsey

graham stepped out even though he has a reelection effort that faces him, it was an act of courage. as it was with all senators but especially i want to focus attention on him as i have just done. i thank senators corker and hoeven for their yeoman's work, working with the gang of eight to come up with the product that we have. the product that we have now is the work of the gang of eight and the gang of eight of two -- gang of two with their friends. i've always been impressed with bob corker, i told him about that earlier today, since he stepped foot in this body, he's wanted to legislate. and for a lot of reasons, he hasn't been able to do that. but here is legislation at its best. he was mayor of a city, as a result of that he understands on any level of government compromise is the way we get things done.

i always refer to senator hoeven as governor hoeven. i think it's remarkable that he's here with the background that he has. he, too, understand how important it is to work to get things done. his experience is more than just being part of a legislature, it's working with a legislative body. so i admire the work both these fine men with have done. but for them, weep couldn't have gotten this done. now, mr. president, these senators have charted a path to a broad bipartisan vote on this measure. they've followed the model that we have use -- done too infrequently in this body, violence against women, marketplace fairness, the farm bill, but next week we're going to add immigration as another example of how to get things done. and i hope it portends well for the future of this august body that we all so love, but have

been disappointed in in recent years. but even with this broad bipartisan support, these broad bipartisan majorities that we have, and this package that is a wonderful product, there are still a few who continue to take the no prisoners opposition to any cooperation. we worked late into the night last night on a potential unanimous consent agreement to allow for processing amendments. i've got senators over here who want to offer amendments. they have ideas, how to improve this bill. we've heard from some of the republicans that they also want to offer amendments. we should be able to do that, mr. president. now, as i've indicated to the two republican senators, corker and hoeven, there is still an opportunity to do that. we're going to continue to try

to work before we finish this legislation to allow people to offer amendments. now, frankly, mr. president, most of them won't pass but that's not the point. they should be able to offer an amendment. and i hope we can come up with a list of amendments to move forward with this body. we're going to move forward with the legislation regardless but it would be nice if people who are elected to this body have the opportunity to offer some amendments. so we're going to continue to work on that. but we haven't been able to overcome the objections of a small minority of senators. the opposition of this small group is not going to stop this bill from moving forward. and that's why i've taken steps this morning to set in motion a process to bring this measure to finality within the next --

within the next week. so the senate will vote monday evening on the motion to invoke cloture on the leahy border security amendment. we'll continue to work to get a unanimous consent agreement to help process legislation. but barring any further agreement the senate will vote on cloture on the committee substitute early wednesday and cloture he cloture on the bill on thursday. we'll finish the bill, i repeat, before recess. now, mr. president, in the annals of history and there has been a lot of stuff go through through this body over the 230-plus years we've been a country but when those history books are written, this legislation, this legislation, we're going to pass in this body in one week, it's historic. what we have done here is good for our country in so many different ways. as the congressional budget office demonstrated a couple of days ago, it will be the largest boost to our economy

that we've seen in a long, long time. up to almost a trillion dollars, mr. president, to reduce the debt. and in the process we're going to increase the security of this great nation. now, mr. president, i've indicated that chuck schumer is the subcommittee chair. who did he replace? ted kennedy. ted kennedy tried so hard to get something. he was chairman of this subcommittee for decades. so ted kennedy, i'm sure, is going to wait till next friday but he's going to smile at all of us because this is a remarkably good piece of work, something he tried to do for a long time. this country, mr. president, is a nation of immigrants. i know everybody is in a hurry but i have to say just a couple more things.

my wonderful wife is here in america today because her father came here from russia. he and his people were persecuted. he came here. he came here as israel goldfarb. that was his name. he like a a lot of immigrants, changed his name. i only knew him as earl gold. but, mr. president, i don't know what he accomplished in his short life. he died as a young man. but one thing did he accomplish, he fathered my wife. my wonderful wife. an only child. and as a result of that, i have five wonderful children, 16 grandchildren. that's what immigration is all about. that's why this country of ours

has found immigration as a source of vitality, not a burden. this is what has been part of america's genius, different than any other country. that's our destiny. i'm very proud of this body. a senator: mr. president? the presiding officer: the senator from vermont. mr. leahy: mr. president, i appreciate the comments of the distinguished majority leader and i will be speaking further on this matter later this week -- or this coming week. i thank him and everybody who worked with him for getting us here. you know, i'm reminded legislating is about making tough choices. it's not about standing on the sidelines and complaining you can't get a perfect solution enacted. i've been privileged to serve in this great body for 38 years because of the trust of the people of vermont. and in my time here, those 38 years, i've rarely seen such commitment to an issue that i've

seen over the last six months to comprehensive immigration reform. i think of the dozens of witnesses to came before the judiciary committeering like jose antonio vargas who called on the senate to achieve bipartisan immigration reform. i think of the hours we spent, republicans and democrats alike, in the judiciary committee considering amendments and debating this bill. and what was initially a proposal from the gang of eight became through an extensive committee process the product of a group of 18. and since the bill was reported to the senate floor, bipartisan talks have continued. the circle of members supporting it has continued to grow. i want to speak next week more about those members, but i hope my friend and neighbor from new york, senator schumer, won't be embarrassed when i mention something very few people know about him. he has a 10 pointed -- 10-pound

battery on his cell phone. it's the only way he could keep making those scawls to harass us and nudge us and move us at all hours of the day and night. so i just give away that secret. that's the way he's able to do it. that and the fact he hasn't slept for several weeks. now, senators have been negotiating for days, late into the night trying to gain more republican support for this important immigration reform legislation. senators hoeven and corker have put together an aggressive package that will add new republican support to our bipartisan effort and for that progress, i'm grateful. now, it is an understatement to say this is not the amendment i would have drafted.

even some of the cosponsors might not have. i'm disappointed in many parts of it. the modification to the leahy amendment before us reads like a christmas wish list for halliburton. i'm sure there are federal contracting firms high-fiving at the prospect of all the spending demanded by some of our friends on the other side of this amendment. services, technology, hardware mandated by this package is combined with about -- the thing that bothers me an inspickable -- inexplicable waiver of many of our normal contracting rules. that is a potential we must watch out for for waste and fraud. you know, it's astounding we have not learned the hard lessons we learned in iraq. all of us should remember the disgraceful conduct demonstrated by some private companies in iraq, companies who will now be seeking contracts here, which was uncovered by the work of the special inspector general for iraq.

i believe all my friends, both republicans and democrats, on this floor will join with me saying these border provisions are going to require significant congressional oversight, and i add oversight of the inspectors general is when the inspectors general looked into iraq, that's when we found out what was going on. i worry that many of my friends talk about border security, the high cost of these projects absent from the discussion, but we talk about programs that help children who live near the poverty line or people who need medical research for what otherwise would be an incurable disease, then suddenly fiscal concerns are paramount. i think that we hear too much about spending money on the border, on one border, rather than coming up with a comprehensive solution that takes pressure off that border. in this package is border security on steroids. some are calling it a surge,

the military reference makes sense because it is going to militarize hundreds of american communities in the southwest. but with the border surge -- i say this as a compliment to my friends on the other side of the aisle -- comes additional republican support for the rest of the essential pieces to reunite families, to provide a path to citizenship for millions , spur significant job growth in our country and that i do support and i thank all the senators, both republicans and democrats, helping bringing that about. one of the reasons i stayed as chairman of the senate judiciary committee is because of this once-in-a-generation chance to truly reform our immigration system. it's a tragic problem that calls out for a comprehensive solution. there are too many people, too many families kept apart because of our broken immigration system. there are too many people living in the shadows that should be

allowed to join -- gain their citizenship. we cannot fail. we owe it to them, to people like jose and gabby and so many others to get legislation passed. so i do not agree with any of the border demands, i will support this modification, and, because making tough choices is better than not making progress towards passage of this critical bill. again i applaud -- in fact, i don't want anyone to mistake what i'm saying, will there are many, many areas where democrats and republicans have come together that i do applaud. i yield the floor. the presiding officer: the senator from north dakota. mr. hoeven: thank you, mr. president. we have now filed the hoeven-corker border security amendment. i believe that the first order of business for immigration reform is to secure the border. americans want immigration reform. of that there is no doubt, but they want us to get it right and

that means first and foremost securing the border. i want to thank the distinguished senator from the great state of tennessee for his ceaseless efforts and untiring work to really craft an amendment that puts border security first. that's exactly what we have worked to do, and i also want to thank the cosponsors that we have been able to bring on board for this effort. they include senator john mccain, senator lindsey graham, senator marco rubio, senator jeff flake, senator kelly ayotte, senator dean heller, senator orrin hatch, senator lisa murkowski, senator mark kirk, but also on a bipartisan basis, we have democrat senators as well. senator joe manchin, senator pryor, senator mark begich, senator donnelly. we want to thank all of these cosponsors that show this is a bipartisan effort to secure the border as a first step in

comprehensive immigration reform. that is what this is all about. we provide five significant criteria. some have called them triggers, requirements, conditions that must be met to ensure the border is secure before there are any green cards, before illegal immigrants can get to a permanent legal status, a green card status, we have tough requirements that must be met to ensure the border is secure. first and foremost, it's a comprehensive southern border security plan. it's $3.2 billion worth of technology, planes, unmanned aircraft, sensors, all on the border, spelled out in this legislation that ensures that we have a secure border. that must be met before there are any green cards, and that's where we start. in addition, 20,000 more border patrol agents on the border to

not only detect people trying to come across but to turn them back. 700 miles of fencing on the border. these are things that republicans have repeatedly asked as part of securing the border, we have put them right in the bill. in addition, we have to have a mandatory national everify system in place and operating so that we enforce workplace law, so we not only have a secure border but we take away the incentive to come here illegally because you won't be able to get a job. that combined with a guest worker program that works means then when people come, they come legally and they go back home. and finally, we have an citron entry-exit system at all of the international airports and seaports. all of those things must be met before legal permanent resident status, before green card status. this is about securing the border first. again, i want to particularly

thank my distinguished colleague from tennessee, senator corker, for all his hard efforts, as well as all of our cosponsors on this legislation. we are reaching out to everybody, and we want to work together on a bipartisan basis. this is about securing the border first and doing comprehensive immigration reform and doing it right. and with that, i would like to yield the floor and again note the tremendous efforts of my distinguished colleague, the senator from tennessee. the presiding officer: the senator from tennessee. mr. corker: thank you, mr. president. i want to reciprocate and talk about the wonderful leadership the senator from north dakota has provided. i have enjoyed working with him. i have enjoyed his foresight, his rationality, his reasoning, his common sense, all of the traits that he displayed as governor of the great state of north dakota, and i want to thank him for the friendship and

for the opportunity to work on a piece of legislation that candidly i'm more proud to have done what i have done over the last week than anything i've done since i have been in the united states senate, so i want to thank you for that. i think -- i would just ask the people -- i know we have had a lot of people on the floor that have criticized this legislation without reading it. i know it's been called a magic amendment. i would just say to people that care about border security -- and obviously numbers of people on our side of the aisle care deeply about that -- to read the bill. i want to thank the majority leader for his leadership in this effort, for his comments earlier. by filing cloture today on this amendment, it's going to give everybody in this body and in the nation to read this piece of legislation for 75 hours before the cloture vote occurs. so, mr. leader, i thank you for the process that you have put in place and for your comments. i want to thank the senator from

new york. my last call last night at 12:33 was with him, and my first call early, early this morning was with him. i want to thank him for the way that he has worked with us to try to -- to work through republican sensibilities so that we have a bill that not only meets the needs of the democratic side of the aisle, but we have a bill that meets the needs of the republican side of the aisle, which is why we all came here. i want to thank him for his leadership and his earnest efforts in this regard. and i want to say that i believe -- and we were talking about this earlier -- i believe we do have a historic opportunity to deal with the issues of security that many of our citizens across the country care about, but at the same time allow 11 million people to come out of the shadows and work in the light and be a part of this great, great nation in the way

that has dignity and respect. so i want to thank all involved. i want to again turn to the senator from north dakota and thank him for his relentless efforts over the last nine days, tell him that i look forward to helping cause this to go across the finish line, and i know this is just the beginning. there are going to be some trials and tribulations, and there is going to be a lot of controversy, i understand that, but i think all of us came here to solve the big, big problems of our nation, and to me that's a privilege, it's an honor and certainly it's been an honor to work with you, and with that, i yield the floor to the distinguished senator from new york. the presiding officer: the senator from new york. mr. schumer: thank you, and i want to thank my colleague from tennessee for his hard work, his diligence. one of the hallmarks of a truly outstanding legislator is the ability to walk in the other person's shoes. it's something that we should all try to do, to see why the other side thinks differently than you and come to meet

somewhere in the middle. that is what my good friend from tennessee has done throughout the years he has been in the senate, and he's had no finer moment, i completely agree, than this strong effort on immigration reform. i want to say the same about my colleague from north dakota. i know for both of you this is not easy, this is courageous, and you're doing the right thing for your country. and with that, there is a great deal of satisfaction. i want to thank our great leader his steadfast, quiet style helps us get through just about anything in this body. he is my friend and he is a great leader. i'm proud to serve under him. i want to thank the chairman of our committee as well for his steadfast leadership. and the other seven members of the gang of eight, we have come to become friends. we have argued with each other, we have bonded with each other, but most of all we are united in this effort to make our nation

better by fixing our broken immigration system. it's a wacky system. it turns away people who will create jobs and lets people across the border who will take away american jobs. it makes no sense. and, mr. president, we are now ready to move forward further with this amendment. the bipartisanship of comprehensive immigration reform launched in january continues to sail forward with the acceptance by the gang of eight of this hoeven-corker amendment. let's make no mistake about it. nothing in this amendment or the bill satisfies anyone completely, but together the amendment in the bill provide a sturdy craft that will weather the upcoming storms we face and get us finally to our long-desired port, comprehensive

immigration reform signed into law. it's easy, mr. president, to focus on things for people to focus on things they don't like in this bill, and that is what has sunk effort after effort after effort. instead, i urge all my colleagues from the most liberal to the most conservative, from the most democratic to the most republican, to look at the so many positive thing in this amendment and this bill. the american people have told us over and over again that they will be fair and accept commonsense solutions for the 11 million living in the shadows and for future immigration reform if they're convinced there won't be wave after wave of future illegal legislation immigration, and that is just what this bill does. that's why it's a turning point. this amendment, the offering of this amendment is a turning

point. we've always known there would be large numbers of democrats to support final passage of this bill in the senate, but this amendment gives us the real chance of getting a very significant number of our republican colleagues. i believe a large bipartisan vote in this body will change the dynamic in the house to make them far more amenable to passing immigration reform. i believe a large bipartisan vote in this body will wake up our colleagues on the other side in the house, ask them to live up to their responsibility to fix our broken immigration system for the good of the country. hopefully as congressmen, look how their senators voted. they will be influenced by it and take the same kind of courageous stand that the senators from tennessee, north carolina, north dakota, rather,

and many others have taken. mr. president, there have been three main objections to comprehensive immigration reform as we have moved forward. first, that the process wasn't going to be open. second, that it was going to cost the taxpayers a lot of money, and third, that it would not close down our borders. i believe with this amendment we answer all three resoundingly. on the first, the fact that we need an open process. this process has been tremendously, completely, transparently open. the bill was filed way in advance of the committee -- of the committee markup of the bill. amendment after amendment was debated and debated and debated.

many amendments were accepted, many from the other side, many were rejected, but it was an open process and the leader has endeavored to make that process be open on this -- on the floor as well. some others -- some of whom have actually complained about the lack of openness of the process have delayed our ability to offer amendments, but hopefully that will end soon. the second objection that will cost money. that was successfully debunked this week by the c.b.o. report on this bill. it said three things. it said first, it will reduce the deficit by $175 billion this decade and another $700 billion in the next decade. there is a lot more deficit reduction in this immigration reform bill than many other bills that we have voted for whose specific goal is deficit

reduction. second, it will grow our economy. imagine, it's almost like an elixir. g.d.p. grows over 3% this decade and another 5% in the next decade. what we have struggled to do to get even a quarter as much growth with programs that either spend money or cut taxes, but the vitality of humanity, particularly the humanity that wishes to risk all and come to america, is perhaps the greatest economic engine of them all, and the c.b.o. recognizes what that would do. and third, it will create jobs. at a time when we worry about the future job market, we worry about the ratio of retirees to those who are working, this bill is the best antidote. and finally, on the border, there is no bill tougher on the

border, there is no proposal tougher on the border than this one. we create a virtual human fence. there are enough border agents here to be on guard from san diego, california, to brownsville, texas, 24 hours a day, seven days a week, 365 days a year, that they will only be a thousand feet apart for every minute the clock ticks. no one -- no one will be able to cross the border with that number of people on the border. it is a virtual human fence. and many have asked just for that to protect the border. so, these have been the three major objections. we have answered them all resoundingly. we have answered the fact that the process may not be open by making it transparent and open.

we have answered the view that it will cost money by showing it will save money. and we have answered the view that the border will not be secured by the addition of the hoeven-corker amendment. there's only one other objection. these three objections -- lack of openness in the process, costing the government money, not closing the border -- are the stated objections. there's only one other objection. it's usually unstated. and that is the earned path to citizenship. if portions of this bill were voted on separately, most of our colleagues who oppose the bill would vote for them. they would certainly vote for more border protection. they would certainly vote for deficit reduction. they would certainly vote for a

future immigration flow that creates jobs. so why are they voting against it? they simply don't believe in a path to citizenship. now that's fine, but it ought to be stated. the beauty of the corker amendment -- the corker-hoeven amendment, the beauty of the corker-hoeven amendment is it rips bare the real objection. it is no longer border security. it is i don't want a path to citizenship that some might profess. so let's debate it on that issue. and, by the way, mr. president, it's no mistake, no accident that the house wants to do pieces individually. because they don't believe in a path to citizenship, those who profess that. but mark our words here today, no bill -- no bill -- on immigration reform will be

signed into law by the president without a path to citizenship. it can be an earned path. it can be a tough path. it can be a difficult path, but it is a real path. and it is essential for any immigration reform. so those who think that they can get pieces of this bill without comprehensive reform are sadly, sadly mistaken. so in conclusion, mr. president, we're just about halfway through our process. we still have a long road to go. the good ship s.s. immigration reform will weather many more storms, but the addition of corker-hoeven gives us a new mast, new wind in our sails. and i am confident if we stay

united together, democrats and republicans of good will, we will see before the end of this year comprehensive immigration reform signed into law by the president of the united states. i yield the floor. mr. reid: mr. president? the presiding officer: the majority leader. mr. reid: before my friend leaves, you know, i studied legislation. i have worked on this matter for many, many years. as the leader, i've directed moore floor attention -- directed more floor attention to this than any other issue. so i understand the bill quite well. but the one thing i want to make sure before my friend from new york leaves the floor is this: i always thought we could pass the bill. i told my friend that. but no one, no one, 100 senators; no one other than the senator from new york thought we could get 70 votes. i doubted he could get 70 votes.

he knows i doubted that. no one in this body thought we could get 68, 72 votes except him. and so, i have watched a lot of things on this floor. i've been here -- i've been in congress 31 years. not as long as the senator from new york but i've been in the senate as long as he is. and for the vision to see this could take place is remarkable. and i so admire his ability to hang tight when everyone was saying leave this alone. just get a bill passed. and he wasn't satisfied with that. that was not good enough. because senator schumer alone -- alone -- no one. if there's somebody that i missed, he can tell me about that. but i don't know of anyone that agreed with him.

so, mr. subcommittee chair, thank you for a vision. but for this big vote that we're going to have, i'm not sure we could have gotten it done. perhaps, but this is a pathway to satisfying the demands of this country, the demands of this country. what is in this legislation is agreed on by the vast majority of democrats, vast majority of republicans and a vast majority of independents. so thank you for your vision. mr. schumer: i thank the leader for his very kind words. he's a kind man as well as a strong man. being my friend and for being a great leader i would add one addendum. there were others who thought i could help put together a proposal that would get 70 votes. and we're not there yet. we're climbing each day but we're not there yet. but i think we will get there. those are my staff, who i thank.

the presiding officer: the clerk will call the roll. quorum call:

mr. reid: i ask unanimous consent to terminate the quorum call. the presiding officer: without objection. mr. reid: i ask consent we proceed to a period of morning business for senators and that we be allowed to speak for up to ten minutes each. the presiding officer: without objection. mr. reid: i ask unanimous consent that at a time to be determined by me in consultation with senator mcconnell the senate proceed to executive session to consider calendar 179, that there be 30 minutes for debate equally divided in the usual form, that following the use or yielding back of that time the senate proceed to vote with no intervening action or debate on the nomination, the motion to reconsider be considered made and laid on the table, with no intervening action or debate, and no further motion be in order and any related statements be printed in the record and that president obama be immediately notified of the senate's action and the senate resume legislative session. the presiding officer: without objection. mr. reid: i ask unanimous consent at a time to be determined by me in consultation

with the republican leader the senate proceed to executive session to consider calendar number 180, that there be 30 minutes for debate equally divided in the usual form. following the use or yielding back of time the senate proceed to vote with no intervening action or debate on the nomination, motion to reconsider be considered made and laid on the table with no intervening action or debate, and that no further statements -- no further motions be in order, any related statements be printed in the record, that the president be immediately notified of the senate's action and the senate resume legislative session. the presiding officer: without objection. mr. reid: i ask unanimous consent to proceed to s. res. 181. the presiding officer: the clerk will report. the clerk: senate resolution 181, recognizing the specific tenial of west virginia and -- sesquicentennial of west virginia and commemorating its people, history and culture. the presiding officer: without objection, the senate will proceed to the measure. mr. reid: i ask unanimous consent the resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid on the table with no intervening action or debate. the presiding officer: without objection.

mr. reid: i ask unanimous consent we proceed to s. res. 182. the presiding officer: the clerk will report. the clerk: senate resolution 182, congratulating the american dental hygienist association and so forth. the presiding officer: without objection, the senate will proceed to the measure. mr. reid: i ask unanimous consent the resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid on the table with no intervening action or debate. the presiding officer: without objection. mr. reid: mr. president, i ask unanimous consent that when the senate completes it's business today, it adjourn until 12:00 noon, on monday, june 24. that following the prayer and pledge, the morning hour be deemed expired, the journal of proceedings be approved to date, and the time for the two leaders be reserved for their use later in the day. and that following any leader remarks, the senate resume consideration of the immigration bill and that the time until 5:30 be equally divided and controlled between the two managers or their designees. that the filing deadline for second-degree amendments to the leahy amendment 1183, as modified, be 4:00 p.m. on monday.

the presiding officer: without objection. mr. reid: so, mr. president, at 5:30 on monday, there will be a cloture vote on the leahy amendment. if there's no further business to come before the senate, i ask that it be -- that it adjourn under the previous order. the presiding officer: the senate stands adjourned until senate stands adjourned until

>> you can order online at c-span.org/shop. >> vice president biden was on capitol hill recently to honor abolitionist and statesman frederick douglass at a statue dedication ceremony at the u.s. capitol. frederick douglass lived in washington, d.c. for 23 years and was an advocate for congressional voting rights for those living in the district of columbia. you can see the ceremony saturday night eight eastern on c-span. >> when you talk about

transparency, you're going to give up something. you are going to be giving signals to our adversaries as to what our capabilities are. the more specific you get about the program, the more specific you get about the oversight, the more specific you get about the capabilities and the successes, to that extent you have people sitting around saying okay, now i understand what can be done with our numbers in yemen and indian estates and consequently i'm going to find another way to communicate. i'm going to keep that in my mind. so there is a price to be paid for the transparency. where that line is drawn in terms of identifying what our capabilities are is out of our hands. he chose to do one way, we will do it that way but there's a price to be paid for that transparency. >> this weekend on c-span, outgoing fbi director robert more makes his last scheduled appearance before the senate judiciary committee saturday at 10 a.m. eastern. on c-span2's booktv, books in

issues in the news. and sunday at 10 come immigration stories on on c-span3's american history to be. interviews with key house judiciary committee staff investigate whether there were grounds to impeach president richard nixon sunday at three. >> as the league would march north you would write to davis, and they sensed the time had come. it looks like we have a chance, because vicksburg had not been settled yet, folks. this is me. in fact, june. grant had tried an assault. this is our chance to maybe hit them again on free soil, when a victory that will bring a lincoln administration to the negotiation table. davis was so taken by the idf in a sense, you and i probably too strong, but he formed a three-man commission that would negotiate with a lincoln

government upon a confederate victory in pennsylvania. so when lee went north, he went north to settle it. >> the 150 anniversary of the battle of gettysburg live all day coverage from gettysburg national military park sunday june 30 starting at 9:30 a.m. eastern on american history tv on c-span3. >> british primary should david cameron is back in the house of commons after hosting the g8 summit in northern ireland. during this week's question time, he answered questions on the g8 summit. european trade deal and the progress made in humanitarian aid to sure you. this is about a half hour. >> questions to the prime minister. mr. damien hines. >> number one, mr. speaker,. >> thank you, mr. speaker. this morning ziad in meetings with ministerial colleagues and others and in addition to

meetings i shall of further such meetings today. i will also be make an announcement about the new minister join the government. at the interview stephen green, former chair of hsbc will be standing down as trade minister. after doing a superb job refocusing the governments efforts in key export markets. i can announce today that in livingston for the past five years chief executiv executive n a bridge with successful businesses will take on this vital role. i believe he will bring huge talent to a vital national effort. >> with the primers agreed on many people's an excellent schools, benefiting from outstanding teaching from inspirational teachers, not all of whom are necessary been to teacher college because i think marvel friend make makes an impt pointer to our many good teachers in our schools who have been through the former processes. i do this week without another new another new policy from the party opposite. banning all such teachers from such schools.

as ever, although i been busy, mr. speaker, i but a careful look at this policy. and i note that there are teachers, people who teach, including those on the benches of the party opposite. the honorable member, a renowned historian teaches in his local comprehensive schools. he's going to be banned. and, of course, there is the former member for south shields who enjoys doing that as well. i think this policy, another shambles, is another example of brotherly love of. [shouting] >> mr. ed miliband. [shouting] >> mr. speaker, following the parliamentary commission on banking, can the prime minister confirm that he supports his important recommendations on bonuses and criminal penalties? if you use the banking bill to implement them? >> yes, i do support both those measures. obviously, we need to take time to read this excellent report, and i commend my honorable

friend the member for the excellent job he has done. but penalizing including criminal penalties against bankers who behave responsibility i say yes, and also making sure that banks who are in receipt of taxpayers money, that you can claw back and abandon bonuses, i say yes, to. >> on the specific issues of criminal penalties on colletti supports the proposal but will he just confirmed for the house on this important issue the government will put down the appropriate amendments to the banking bill which is currently going through parliament to make sure it gets on the statute book as soon as possible? >> we will be using that bill to take these important steps. the key thing is we have that opportunity. first of all because we said there should be a parliamentary inquiry that could be done rapidly rather than a public inquiry that he supported, if we had done that we would just about be getting going with the inquiry. instead of that we have a good

inquiry, could result in the castro legislation, too. >> ed miliband. >> is to be clear, if the government doesn't put down the criminal penalties, we will in the banking bill and we will make sure they happen. now, i think the prime minister praises, praises the parliamentary commission on banking. but let's to turn to one of his recognitions from last year's report. it said the government should legislate for a general power to break up the banks. breaking up high risk a senior banking from high street banks. we think it's right. the commission think it's right that the government is so far refusing to implement the part-time chancellors trying to give advice to the prime minister. [laughter] week -- we, we think it's right, we think it's right. the commission thinks it's right to the government has so far refused to implement without a recommendation. why isn't the government doing its? >> first of all, i would rather

listen to my chancellor and listen to his neighbor, the shadow chancellor. [laughter] because we remember his advice, 125% mortgages. that's fine. a knighthood for fred goodwin, that's fine. the biggest banking bus in british history, that's fine. he was a city minister when all of this went wrong. and it's this government that is cling optimistic as they say, we wouldn't have these results without this inquiry commissioned by this government. we wouldn't be able to legislate if we didn't have the excellent banking bill provided by this government, and in terms of this question, we are putting a ring fence around retail banks. something that in 13 years of a labour government although they were both in the treasury, they never got round to it. >> ed miliband. >> i do say to the prime minister we're really not going to take lectures from the guy who was -- from the guy -- [shouting] from the guy who is the advice

on black wednesday in 1992. [shouting] >> and he had no answer to the question about retail and investment banking. now maybe, maybe he can do better on this issue. on the issue of bonuses, on the issue of -- [shouting] on the issue of bonuses, on the issue of bonuses on the banks, mr. speaker, last week's awareness figures showed the bonuses in business and financial services this april was 64% higher than a year ago. why does the prime minister think that its? >> bank bonuses are about one-fifth of what they were when he was sitting in the treasury. they have been going down not up. and if he wants to discuss this issue of banking, perhaps he would reflect on the fact that the other city minister, that labour had in the time of office, lower to minors, had this to say today. the government of which i was a member certainly has to take some culpability for the fact

the registry oversight of the banks was not as effective as it should be. he goes on. he says to do otherwise would be to pull the wool over the eyes of the electorate. perhaps the next time he gets to that dispatch box he will apologize for the mess that they made. >> he's asking questions and preparing for opposition, mr. speaker. now let's talk about what people were saying in 2008. because we all remember the speeches, don't we, mr. speaker? and conservative economic strategy march 2008, david cameron. and i quote, as a free market to buy conviction, will not surprise you to hear me say that a significant part of the problems the last decade have been too much regulation. [shouting] there you have a. there you have it, mr. speaker, he was wanting less regulation. and delicious go back to the

question about bonuses because the reality is that bonuses are up 64% in april in the city. why? because he's got the top rate of income tax from 50 to 45 p. so people took their bonuses in april and got a massive tax cut as a result. when the prime minister gets up to respond, will he confirm that 64% figure and the people are getting a massive tax cut as result of his decision? >> first of all the naked and the figures. in 201213, city bonuses will be 85% lower than they were in 2007 and eight when those two were advising or working in the last government with the responsibility for regulating the city. and it doesn't matter what he says, he cannot get over the fact that they have presided over the boom and bust, the collapse of the banks, the

failure to regulate. .. business lending is still falling, bonuses are rising and while ordinary families are suffering. >> just another display. they had 13 years to sort out this problem and did absolutely

nothing. it is this government is interested the banking bill. this government has put the bank of england in charge of regulating credit in our own economy and what we ought to be getting from him is an apology and a thank you for clearing up the mess they left. >> may i say to the prime minister one should be grateful. [laughter] may i commend him for being the first conservative prime minister ever to commit a referendum on europe for leading a government that has some more than any other government to tackle welfare dependency to reduce immigration and bring economies thereby showing that one can be conservative, popular and right at the same time. >> can i think my friend for his

question and can lie on behalf of everyone in the house congratulate him on his -- he served in this house for many decades, and he also served in the vital role of overseeing the public accounts committee which does such important work in our parliamentary system. what he says about the referendum i would urge all colleagues to come to the house on july 5th and vote for this bill. >> is the prime minister proud of the fact that 300,000 more children have been pushed into poverty? >> we have protected the poorest in the country by increasing the child tax credits but the most important thing we can do to tackle is to get more people into work. there are now more people in work in our country than any time in our history, and in his own area in the midwest -- mant

times they are not 6,000 it is worth remembering even during the boom years, private sector in the med plans went down. >> i'm sure the prime minister wants to join every member of the house wishing them look for the championship that starts monday. but looking to the future does he back the program which is over 16,000 schools including the constituency to help find a future home grown and home trained championed. >> i think my honorable friend is absolutely right to raise this. first leche congratulate him for his excellent victory the other weekend at queens club and wish the other players well for the wimbledon tournament. we should commend them for the work they are doing to try to make tennis much more of a mass

participation sport. i see it in the school my children go to where more tennis is being taught and played and is still has a long way to go and the tennis is as the asian have to satisfy sport england and all of the funding bodies that they are doing everything they can to make this a mass participation sport. >> when according to the sunday times just 1,000 of our richer citizens have increased their wealth since the financial crash by 190 billion pounds while everyone else on average has been forced to take a 6 percent cut in incomes and his policy of enriching the perpetrators and punishing the victims the very opposite of the one nation britain. >> first of all the richest in the country are going to pay a higher percentage of income tax under this government than they did under the last government. he sat in that government and he had the opportunity to do something about it.

but all the time he was the minister the tax was actually lower than it is going to be under this government. >> and in maine. estimate does my honorable friend agree with me that if a community is obliged to take a specific piece of infrastructure that should be for the payments and compensations that is for the national in important piece of structure on welfare change. >> i think my friend makes an important point and that is why section one of six agreements exist. i think we need to keep this area under active review for instance the view how we are going to handle fracking and shale gas and we need to make sure the communities feel the real benefit of things that benefit the economy overall. >> thank you mr. speaker. on monday the report showed a portion of students in the state schools and the elite universities is now lower than a decade ago.

meanwhile the project hero is secretly considering lifting. after 9,000-pound division fees does the prime minister thinks such another breach of faith is likely to encourage students from less wealthy background to apply to the university or to discourage them? >> i will make two points to the honorable gentleman. the first is the number of children with a disadvantaged backgrounds coming to the university is higher than it has ever been so that is a good step forward. but the second thing is if we want to get children from disadvantaged backgrounds into the university's we should be supporting things like that program and free schools. now, we saw in the announcement this week they are now saying that they support free schools. that's great. the problem is they went on to say they are not going to allow any more of them. and then they said this, quite extraordinary, they said what we will have is new programs like really good teaching academy is, like the peter heineman school in east london.

they want more school like that. there is only one problem, that school is a free school. but the complete shamble. >> thank you mr. speaker. can i ask what discussions he has held with the colleagues to amend the priorities and the environment agency to recognize the failure on the need to protect farmland in the constituency from flooding. >> i do have conversations about this issue with the secretary of state for farming and the food and the world affairs. as i announced in the house last week, he will be bringing forward the proposal to make sure that the insurance scheme, the protected households in danger of flooding is renewed coming and we also need to make sure that we protect farmland the way the honorable lady says not least of which the population is rising in the demand for food production is going to be increased and we

should make sure that we have a good level of food security in the country. >> mr. speaker, the government to a million children out of poverty. the figures released recently showed that the children in the country now live in poverty. in my constituency, one in three is living in poverty compared to the one in ten in his constituency. what is he going to do about it? scaap i would have to say to the gentleman, the problem in the last government's legacy is because he left a massive debt burden and a deficit this government has had to take action to deal with it. as i said, the best way -- >> i didn't leave a burden and we will concentrate on the policies of the government -- order. nothing further required. >> whatever the long-term benefits of the high-speed rail, the project is already causing serious worry for tens of thousands of homeowners along

the route to give urgent attention and consideration to the possibility of introducing the property bond to remove that right. >> i know my honorable friend is concerned about this issue and i know that it's right that he stands up for his constituents and others have discussed this issue with me. first we should remain committed because it will connect or cities and communities and actually bring many benefits particularly to the north of england as it is billed out, but we should look at the compensation schemes available, and we are consulting and listening to the idea of the property bond. >> thank you mr. speaker. in his statement following the murder a month ago, the prime minister announced the setting of the government task force on tackling extremism and said we will also look at new ways to support communities as they come together to take a united stand against all forms of extremism in which our diverse communities have been working hard to do

that can we tell what progress is being made and specifically what ways he envisioned emerging the supporting communities such as ours. >> can i commend the gentleman for all the action he's taken and i saw for myself how strongly that community has come together to absolutely decry what happened, but to build a stronger future. the task force has met and the papers and ideas have been commissioned. one particular idea we are looking at is something i heard which is rare for instance communities want to come together to try to drive extremist groups out of particular mosques or islamic centers. they often need help in putting with legal advice. so that is one of the specific ideas that the action of the task force should cover the waterfront from everything we do right across our communities.

the role of women in the developing world the water and sanitation, business and all other matters that affect the of fenestration will my honorable friend to get positive interest in the agenda and the quality bill. >> i will study my honorable friend is bill closely and it's not the one that everyone might -- >> let's learn more about the bill. >> i will certainly study the bill. not necessarily the bill we don't expect him to reduce but it sounds like an absolutely excellent idea chairing i want to make sure that gender equality was put right up there in the replacement for the

millennium deval met goals. they might have extra ideas how to bring this to light. the primm minister stated the spending round would result in any increase in child poverty. a rose by 300,000 is still rising. >> we did make a specific decision and the spending round to increase the child tax credit to protect the poorest families in the country but we have had an inheritance of such appalling levels of debt that it's been difficult and painful to deal with but let me repeat the point that the best way to get people out of poverty is to see an plame to grow and in the part of the country that she represents employment has risen by 6,000

this quarter. it's risen by 50,000 since the reelection and unemployment is down 60,000. those are all life chances, jobs and chances to get on that people didn't have under the last government. >> could i welcome my honorable friend's leadership to prevent the horrors of syria turning into a regional humanitarian catastrophe. and could i urge him to pursue further the support for lebanon and jordan to the very fragile neighboring states and especially urged him to go further with this support while providing the lebanese army which is the only cost confessional organization in the area of the potential stabilizing force. >> well, first of all, what he said about the g8, we did make good progress on syria

particularly support on humanitarian aid where $1.5 million extra was pledged for was $1.5 billion actually was pledged for what is now becoming one of the worst humanitarian crisis we have seen in recent years is absolutely right we need to support the neighboring states and we should pay tribute to the lebanese army that plays a very important role and we do fund its activity in some of the border posts. >> in response to my honorable friend referred several times in this question time the prime minister has said the best way of tackling poverty is to get people into work and i agree but would he explain this? why is it that two-thirds of the children in poverty today come from families where there is at least one adult and why is that figure rising? >> the point i made to the gentleman is work is the best answer for taking people out of poverty.

of course we should continue with tax credits that we do and indeed one of the decisions we made when we came to the office was to stop the nonsense of tax credits going to people and putting the members of this house of commons earning 50,000 pounds or more a year. so we are focusing back on the people needed the most and yes, we've seen in the west midlands an extra 66,000 people in work. >> a few weeks ago nine pediatricians wrote the the quality commission expressing serious safety concerns. since then, prime minister, the managers have acted in an intimidating manner. though the prime minister will not be made against the doctors the managers implement the safety concerns. >> as we have discussed before in the house there should always be safeguards for people who whistle-blower and for people who tell the truth about problems.

and also i would make the point that we have completely overhauled what was and the report proves it was a totally dysfunctional organization that we inherited. >> thank you mr. speaker. thousands of young people across the country including many from like a message to the constituency would be graduating from university and looking forward to getting their first step on the latter. unfortunately for many of them, the only option would be a long-term unpaid internship that requires them to work for free. will the prime minister therefore make sure that the national minimum wage regulations are rigorously enforced to put an end to the exploitation of our young people >> it is a difficult area to get right because we all know from our own experiences that some short-term internships, work experience can be very valuable for people taking part.

but on the other hand, what we shouldn't have are the intern's instead of workers to the minimum wage. that is the balance we have to get right and i commend you of the important work she's doing. >> thank you mr. speaker. it is the best in the country outside of london. the recent decision by the secretary of state means more uncertainty for the families in the constituency. what assurances can the prime minister give for the future of this unit? >> i don't think the secretary of state had any choice but to begin the whole process of looking at safe and sustainable children's hospitals including southampton which shares my constituencies. i quite understand people's frustration about the time this is taking but it's important to make sure we get the decision right.

>> the government's own research shows there is a link between women as sex objects in the media and greater acceptance. that being the case will you join me to get our own house in order calling on the authorities to stop this from being available on the parliamentary state and will he have a word with his commander rupert murdoch while he's at. >> i'm glad she got her a question asked after the dazzling t-shirt she was wearing kitfield to catch mr. speaker's eye. i think it's important that we can read all newspaper of the parliamentary including the son. >> mr. marcus jones. >> i welcome the pri minister's leadership getting the g8 to agree on tackling the corporate tax avoidance.

will life and confirmed he will not be offering a corporate tax avoidance service as the opposite? >> my friend makes an important point which is we achieve progress on tax transparency and tax evasion and aggressive tax avoidance but isn't it sad that while we were doing that, the party opposite is still offering tax avoidance to its donors and they haven't paid back the 700,000 that the ago. let me remind the leader of the party what he said if everyone approach is some of these companies approach the tax affairs we wouldn't have a called service for education systems and he has to put his hand in his pocket and give the money back. >> thank you mr. speaker. i wrote to you on the eighth of may but i haven't received a reply. can i ask of you had any discussions with crosby about

the standard packaging of cigarettes or the minimum price per unit of alcohol. >> lyndon crosby has never lobbied me on anything. the only opinions and interested in or how we destroy the credibility of the labor party of which he has considerable expertise. i have to say he isn't doing as good of a job as the party opposite. >> thank you. last year he intervened in the case of look-see may who is being confirmed as the daughter of private daniel who died in active service in afghanistan. the fiancee and family are in the gallery today. the whole situation wouldn't have of risen if they had kept samples of dna of the active

soldiers to be are we making progress on this? >> my friend thinks a point and standing up for his constituents the way he did. what i would like to do this convene a meeting of the minister so i can get back to him with the best answer on the action we can take to stop these problems happening in the future. >> thank you mr. speaker. the number of families in temporary accommodations rose by 5,000 in the last year. can the prime minister explain why? >> we need to build more houses in our country and that is exactly what the government is doing. we are building more social houses and private houses and reforming the housing benefit so we can better use the money. the question is for the party opposite. they spent weeks and weeks complaining about the removal of the subsidy. i don't know whether anyone else has noticed the don't ask

questions about it anymore. is that because they haven't got a clue about whether they would restore it? >> with an estimated 10 billion-pound a boost to the economy does my honorable friend agreed a free trade agreement with the united states represents a prize for britain and for europe? >> my honorable friend is absolutely right. i think it is good news this free trade agreement has been launched. it will now take many months of difficult and painful negotiations. it's a hugely complicated problem because we want it to cover all sorts of areas like public procurement and not just manufactured goods but it's good that it is getting going because this could mean millions of jobs in europe and benefits for us here in the u.k..

>> under the subject of giving money back which he just referred to in respect of the labor party, will he now explain to the house why when he had a windfall he decided to write down his mortgage at nottinghill instead of the mortgage of the one he was claiming from the allowance in the house of commons >> with the gentleman needs to do is concentrate on the problem on his front bench because what i have to say is they are going to get a question of the 700,000 pounds the urge in the british taxpayer.

when you talk about

transparency to the american public, there is -- you are going to give something up. you won't be giving signals else to what the capabilities are. the more specific you get about the program and the more specific about the oversight, the more specific you get about the capabilities and the success to that extent you have people sitting around saying okay malae understand what can be done with our members in yemen and the united states and you aren't going to find another way to communicate. there is a price to be paid for that transparency. where the line is drawn in terms of identifying what our capabilities are is out of our hands. you tell us to do it one way but there is a price to be paid for that transparency.

>> first ladies have a capacity to personify if they choose and this is a pattern in american women in politics, famous and not there are two things. one is that there are one minute, of real people who do things but then there is also a secondary capacity of being a personifying charismatic figure. i think many first ladies have realized this thing was sort of larger than life and that is something dollied figured out so she becomes a figurehead for her administration and makes the white house into a symbol and fosters the attachment to the capitol city and this is happening in 1808 she doesn't

know this but 1,814th, the british are going to burn the capitol city of all this work she put into helping the public identified with this house that they called the white house is going to pay off because it is going to give a surge of nationalism are now the war world. representative from the aarp national consumer center, national council on aging and the national reverse mortgage lenders association testified on the house this week on the pros and cons of the reverse mortgage market. this hearing is about an hour

>> good morning. this hearing of the subcommittee on housing and transportation community development will come to order to the thank you for being here today to help us address the long-term sustainability of the reverse mortgages and better understand their impact on the mutual mortgage insurance fund. the bottom line from my perspective and where i come from is certainly for the people of my state of new jersey is about protecting seniors. we all see television commercials reporting first mortgages and we all know that they are becoming increasingly popular and rightfully so and because of declining home values and longer life, alone life than expected there are concerns about the portfolio that could

lead the fha to draw on the treasury to fund the mutual mortgage insurance fund. in the 1980's the need to provide housing assistance on individuals aged became an important issue and congress responded with the creation of the home-equity conversion mortgage as part of the development act of 1987. the goal was to allow them to place to have the option of remaining in their homes and pay for expenses they may not otherwise have been able to afford. it's an important financing tool for seniors and in my view is a good program but is always someone seems willing to game the system and to get profit to read too many seniors found themselves answer some of these questions. how do we get a handle on this problem and what can we do to ensure they are able to age in place what can we do to promote

long-term sustainability. in november the fha released its immutable mortgage report showing a shortfall in the program, the legislative authority to about the mortgage lender and reforms to improve mahlon performance in the fha reverse mortgage program. financial assessments of the borrowers, tax and insurance set aside when necessary limiting the rall ed origination to the mandatory obligations. one of the challenges hud has faced in managing the program is to move swiftly in the dramatic changes that could enhance the security and a financial performance. under the current law, changes to the program would have to go through the rule making progress and could take up to two years to be implemented. it seems to me we simply do not have the time to wait for this

program. we have to give the fha the authority to modify the program through the lenders that could be implemented in a matter of months, not years. because hud ensures them the cost to taxpayers has also grown potentially forcing hud to scrap the program so congress must act now to reintroduce for 69 malae when the fha to produce the reforms given the authority in the mortgage lender to reduce the amount of money borrowed to the sustainable levels of financial assistance to determine if a hecm is affordable to prevent foreclosures. i firmly believe giving fha the authority to make these much needed changes will expedite the fha's ability to ensure long-term sustainability for the reverse mortgages and i hope our panelists will address this issue. we'll understand there is more

work to be done to address the issue on the reverse mortgages i believe we must pass the legislation to begin the the date. with that, let me welcome our first hearing. my distinguished ranking member i look forward to working with him on these remarks and we will proceed with the panel. >> i look forward to working with you on this and other issues as well in the subcommittee and the full banking committee on the senate floor for calling the subcommittee to discuss the home-equity conversion mortgage program. for generations americans have had the impression home ownership is the financial cornerstone of our society. a 30 year fixed year to become fixed-rate mortgage, and yet an american's ability to expedite the wealth they have accumulated in their health may be damaged if steps aren't taken to improve the program. since the first reverse mortgage

program was made more than 50 years ago in a fair way kansas, american seniors have utilized the program and it's clear that it is a very popular program. it is critical with the potential tremendous strain that the hecm program has placed on the insurance fund is addressed in a meaningful way. when fha operates in a safe and viable manner many deserving borrowers get the assistance they need to make their dream a reality. that assistance is jeopardized by the financial status of the mortgage insurance fund and the role the hecm has played in that function. i think you're right the conversation is critical and we need to make certain not only is homeownership possible for americans but the value in the equity in the home can be accessed without tremendous exposure on the part of the american taxpayer. i look forward to hearing the testimony from the witnesses and thank you for the opportunity.

>> let me welcome and introduce the panelist. dr. trawinski at the policy institute is an economist and expert on the bond market. odette willamson zabel law center where she holds the initiative. ramsey alwin on the council beijing and peter bell is the ceo of the reverse mortgage lender association. thank you for being here. i want to ask you to more or less summarize your testimony in about five minutes or so. your testimony will be included without objection and we will start with dr. trawinski. >> chairman mendez thank you for the opportunity to testify on behalf of aarp on the long-term sustainability of the reverse mortgages and hecm's impact on the mutual mortgage insurance

fund pivoted as the largest nonprofit non-partisan membership organization representing people age 50 and older, aarp advocates policies that enhance and protect the economic security of older americans to aarp has a history of involvement with the equity conversion mortgage program. throughout the life of the program, we've continued to advocate for consumer protections to develop policy recommendations to address the changes in the market. we are honored to be here today to present our views. the fact that the fund may require appropriation from congress in fiscal year 2013 is a serious matter. there is a sharp decline in the house prices combined with a large number of loans originated in the height of the market, higher loan proceeds and the mortgage insurance premiums that existed previously, the fund

experienced a major shock. hud has reduced the principal limits in 2009 and again in 2010 and also by raising up-front mortgage insurance premiums on the standard product and ongoing premiums on both standard products. it is important to understand making changes to the current program will shore up the fund going forward but the changes are unlikely to eliminate the losses from the loans made in the past. we suggest the following steps be taken to streamline the program and the fund. a tax and insurance defaults must be addressed. nearly 10% of the loans were in technical default for nonpayment of property taxes and or homeowners insurance as of 2012. given that the defaults have been a problem since the beginning of the program and that this problem has been well-documented for over a

decade, irresolution while not in the emergency is long overdue. they support the use of the financial assessments to examine a ability to pay property charges an ongoing expenses. however we do not believe credit scores should be part of the financial assessment. rather, the determination should be whether they have the ability to meet their obligations and this should be determined after taking the cash flow from the potential mortgage into consideration. we believe the public should have the opportunity to comment on the specifics of proposed changes during the normal rule making process to ensure they contain adequate consumer protections and are reasonable. aarp recommend hud be available to review the program and report to congress. hud failed to act to address

program's problems in a timely manner. we believe regular evaluation and reporting to congress will provide hud the needed encouragement to address problems that will ultimately protect the program and tax payers. regulations are needed to ensure consumers receive eight loan that is suited to their needs and to that end the consumer financial protection bureau should promulgate the suitability rules. in the current environment lenders are permitted to recommend any product without regard to the needs of the objectives of the bar. lenders have also been able to control access to products in the marketplace without having to provide complete information regarding product of the the the the end loan types to consumers. by the time consumers reach a housing counselor they've already made a decision about which loan to pursue. consumers need more information up front about the full range of products that are available.

hud should conduct a study on hecm fraga to determine its problems and should develop stronger consumer protection for the borrowers who engage in hecm for purchase transactions. finally, 8rp urges the consumer financial protection bureau to conduct a study on the appropriate marketing of the fha reverse mortgages. recent changes in the marketing of the mortgages indicate a shift from advocating the use as a tool to help americans age and place to a financial planning tool to be used as a type of investment portfolio insurance and investment values fall or to put it another way, to hedge their portfolios. another suggested uses the means to finance the delay and filing for social security benefits. hear consumers are encouraged to leverage their homes to be able to collect higher social security benefits later. a risky strategy at best.

aarp supports making changes to the program to ensure its long-term sustainability and protect the borrower in the tax payer. we believe the program changes should occur through the regular public rulemaking process. consumers, sticklers and the general public deserve to have the opportunity to provide comments on proposed rules. aarp supports the continuation of the program and we look forward to working with congress and other stakeholders to ensure older americans can tap their equity with government insured reverse mortgage loans that enhance the devotee. thank you for the opportunity to share a rp views and i would be happy to answer any questions. thank you. ms. willamson? >> mr. chapman, ranking member and members of the subcommittee, thank you for the opportunity to testify regarding the long-term sustainability of the reverse

mortgages and hecm's impact on the mortgage insurance fund. we offered our testimony on behalf of our low-income clients. reverse mortgages can enhance the economic security of older homeowners especially those that lack sufficient incomes to meet their needs. the very purpose of the program as outlined by the statute is to reduce the effect of economic hardship caused by the increasing cost of health care and housing and to provide subsistence needs at a time of reduced income. when used as designed reverse mortgages allow the home owners to age in place and remain in their community in definitely until the need skilled care or other housing. reverse mortgages, however, are expensive when compared to other options. the costs and terms are not

easily understood by even the most sophisticated consumer. the challenges that consumers face in the reverse mortgage market have only increased in the past few years as the long-term costs have increased and the range of options offered have become more complex. thousands of older homeowners have taken out reverse mortgages that are not suitable to meet their needs. many face premature because they do not have sufficient resources to pay for taxes and insurance to maintain the property or to meet unexpected expenses. the long-term sustainability of the reverse mortgages and the hecm program will depend on how we address the risks posed by the marketing and the sale of the complex financial products to all americans. strong protections for consumers are essential to minimize the risk of default and fraud.

we support efforts to fully fund and strengthen the quality and content of the counseling that is provided. however, counseling alone is not adequate to protect consumers. without additional protections, the older homeowners the program is designed to help will be harmed and the hecm program will be destabilized and weekend. hud stated that it will take actions in the near and long term to ensure consumers are protected and able to sustain their reverse mortgages and to better protect the fund. we support the efforts in this regard and urge even more action to better protect consumers in the marketplace. specifically, we recommend hud future borrowers are able to afford property taxes and insurance on an ongoing basis and that existing homeowners facing the people are given a better opportunity to save their

homes. in addition, protection must be added to the program to prevent the eve fiction with a spouse. these are often the younger spouse of the owner title on the mortgage. protecting the owner from whom the program was designed will strengthen the economic value of the program and stop the depletion of resources from the fund. in conclusion we believe reverse mortgages provide a benefit to many of the older homeowners struggling to meet their daily expenses. however the mortgages are complex and subject to abuse and stronger measures are needed to protect consumers from stabilize the program and prevent further depletion of the fund. thank you. i look forward to your questions. >> chairman menendez, esteemed members of the subcommittee, my fellow witnesses and guests on behalf of the national council

on aging i appreciate the opportunity to testify today. ncoa as an organization whose mission is to improve the health and economic security of millions of older adults especially those who are vulnerable and disadvantaged. the hecm product is a tool for retirement planning with the right consumer protections and comprehensive counseling it can be a lifeline for some older adults' allowing them to age in place with dignity. today i'm here to talk about important ways to sustain and improve the hecm program and require counseling. if i may i would like to start by sharing a note from one of ncoa's hecm clients. after completing the session today there was a sigh of relief and i told my son it feels good to have someone advocating for me instead of for the company. understand so much more after speaking with you. i absolutely agree that reverse mortgages are not for everyone. but after listening today to you after all of my research i think

i am a good candidate to get my remarks are grounded in the research and experience as a counseling intermediary assisting older homeowners like a mother and a widow. there are three issues i will discuss. first as you examine hecm comer remember was designed for the seniors of modest incomes many of whom are underserved by the financial industry. we estimate that about 44% of the reverse mortgage borrowers have income below 200% of the federal poverty level or roughly $23,000 annually for a single individual. changes shouldn't come at the expense of seniors of modest means for whom the program was originally designed to get as people live longer there is an increasing responsibility to plan for the future financial security and home equity is a part of the solution.

it's not whether to tap the asset but when and how. older homeowners considering the loan many of whom are divorced do so for many reasons including additional income to plan ahead for emergencies and pay for the home repairs or improvements to the u.n. used wisely they can help people stay independent and the longer. second, the counseling is critical to the product liability. access to the unbiased counseling ensures consumers are protected. ncoa has been a hud approved hecm counseling for six years and we view our role to be of utmost importance. growing numbers of older homeowners will need guidance on reverse mortgages so we urge you to adequately fund the counseling. >> additional support for research using the data collected through the counseling process will help strengthen consumer protections and reduce the risk of the loan defaults.

as the generation ages and the age for the reverse mortgage declines, we know that they are becoming a part of retirement planning. of course they must meet their obligations including paying the property taxes and insurance however it will be important to ensure changes to the programs such as financial assessments contact center and set aside or limitations on the up front draw do not become overly restrictive come hecm remains a viable option for the incomes for whom the program was originally designed. third, increasing the strength and sustainability of hecm requires counselor training. as policy changes impacting industry, adequate time and resources for the counselor training must be considered. hud has made important improvements strengthening the consumer protections however they made it easy for the benefits by requiring hecm

counselors a benefit check up screening. this has helped identify over $378 million worth of annual benefits for seniors hoping some dever or avoid altogether. for those who have difficulties paying property taxes or insurance the benefits to will screens 160 tax programs across the country and also screened for the prescription drug, you to become food and transportation assistance. the average borrower has 5,000 others of the annual reoccurring benefits. the long-term viability of the hecm program will be enhanced and the balanced approach that insurers' strong oversight but also supports continued collaborative research and development. we need strong consumer protections but also want to give the holder homeowner their financial needs. we think senator menendez for

his leadership and the introduction of s. 69 which would give the tools it needs to act quickly to ensure that we continue on the right path. thank you again for the opportunity to share ncoa's research into hecm and the older homeowners who consider the loans. i welcome the opportunity to answer any questions you may have. >> thank you very much. mr. bell. >> mr. chairman, ranking member, thank you. the issues surrounding the reverse mortgages bring a question into consideration. how we finance longevity. most americans have an adequate savings. the bipartisan policy commission noted recently older homeowners have at least 55% of their net worth tied up in equity and it's a critical tool for utilizing the equity. i was asked to address five topics in five minutes so i'm going to roll through them quickly. programmatic changes. the complex economic environment the past few years has had a significant impact on how they utilize reverse mortgages.

individuals approaching found themselves unexpectedly out of the jobs prematurely increasing mortgage payments they can no longer afford as a result hecm will pay off the mortgage and eliminate the payments preserving ability to sustain themselves and homes. the strategy helped some ants also caused stress to the program. the combination of a profound lump-sum. when coupled with the diminished in value, the program has experienced new stresses previously unforeseen as a result of the confluence of factors. number two, the need to address and improve the consumer protections, the program has several important consumer protections inherent in its design to any borrower must go through counseling session prior to the formal a petition to the lender. the program also has other consumer protections including the required disclosures and limits on of these. that being said, three changes that they would like to implement financial assessment,

principal limit restrictions and tax set-asides would not only protect the fund but also provide another level of the safeguard for consumers. the provisions might preclude some from obtaining hecm forcing them to make it difficult decision to new build of their home, however the changes are designed to eliminate the are worse -- borrowers who are less likely to have an experience. the benefits of hecm loans to seniors able to feige in place. america faces a crisis. by 2013 there will be 72 million adults, 65 and older accounting for 19% of the population. social security replaces only 40% of the retirement earnings and most americans have inadequate savings to sustain themselves and it is growing in duration as longevity increases. in some cases they utilize to pay off an existing mortgage freeing up cash used for monthly pence used for other expenses. other homeowners are establishing lines of credit as

a standby reserve for expenses they might have trouble paying otherwise. some make improvements designed to create an environment which they can age in place and some choose to receive payments to supplement their other income on an ongoing basis. member for, the impact of hecm on the mutual insurance fund and potential changes to protect taxpayers. the program was the product and the design did a tremendous job in developing a helpful and flexible product. the department should be commended for this. what could be foreseen when was conceived was the deep drop in the home values that recently occurred with widespread loss of jobs. this occurrence lead to an increase in the number of borrowers utilizing the program in emergency situations. to deal with the stress, hud would like to implement the changes, first financial assessment of applicants. this would be a form of underwriting assessing each applicant to ascertain the

prospective borrower has sufficient resources to meet their obligation while having enough money left over to cover to normal living expenses. second, the principal element utilization restriction. hecm clones perform best when they are joined down over a long period of time. unfortunately the factors the past few years have resulted in a disproportionate number of borrowers drawing down available funds at closing. this results in the balance is growing larger than over time to read a principal limit utilization restriction will allow borrowers to only joined in effect closing to pay off existing loans plus the cost associated with obtaining some modest stipend for the current expenses and they believe this is a sensible change the would lead to a higher degree of success among the borrowers and reduce the risk to the fund. third, set aside the taxes and insurance to help avoid situations where borrowers were unable to pay in the future, the fha is planning to implement a requirement for the set aside at

some of the proceeds. the set aside is essentially the reverse mortgage equivalent of escrow in a forward market. five, other opportunities to improve the home-equity mortgage can ensure long-term sustainability for the program consumers and the fund. the changes in the program under consideration should address the shortcomings that have been identified. the challenges the changes must be made by full regulatory development process typically takes a year and a half or more to complete. the most productive action congress can take right now is to provide the authority to make changes on an expeditious basis so it has the ability to respond in real time as it observes trends in the economy and patterns among the borrowers and lenders. the house passed a bipartisan bill to do this and senator menendez, your bill would do the same. some are concerned with investing too much with fha by granting them the ability to make program changes in lieu of regulations. i do not share this concern.

i've worked on the issues for nearly 15 years now and have always found the apartment to be responsible steward of the program. they've collected feedback and consulted with stakeholders before modifying any procedures. i have no reason to doubt such responsible leadership would continue if hud is given the authority to fine tune as the economic conditions and performance require them to do so. thank you for the opportunity to appear and more importantly for your support of the program over the years to i appreciate the opportunity to be here. >> thank you very much. let's start with exploring some of the issues. no more items of conversion and items of diversion in terms of the views. so let me try to see where maybe those differences might be approached and if they are possible. clearly this is an important

program because the aging of america and the explosion of the number of individuals who would clearly be looked to use the equity in their home as a continuing security for themselves to be able to age in place is a value in our society so we need to get it right. in that respect, it has been brought to the congress attention and some of you mentioned it in support and some of you i think mentioned it in opposition so i would like to slash adel level that that assessing the hecm finances may help them provide better product options although it may keep some households from receiving access through what is a very popular program. how can hud and of lenders develop an assessment framework that balances hud's issues to

the fair access to the borrowers. what should be some of the factors that should be address when assessing the ability to pay that back or to afford a hecm loan and by open and to anybody on the panel that wants to refer to it. >> basically we are talking about creating a new type of underwriting that is different than the forward mortgage underwriting. when you look at this the income coming in and the payments and you basically see whether it is in the ratio that is acceptable that isn't consuming the monthly income but when we are dealing with the ty cherry is it's a different picture. there might just be assets. what we are looking at isn't an income underwriting the cash flow underwriting and the

concept that is emerging is what we've referred to as a residual cash flow analysis where we start with the sources of income so there might be social security, there might be pension and income from employment still. then we look at the assets which are presumed to be spent down in a straight line basis over the expected life of the bar were using the same life spanned used in the disclosure which is a requirement of the hecm program and then we had the funds that would be available from the reverse mortgage so that is the cash flow coming in. from that, we would look at the cost for the taxes and insurance and what we are left with is a reasonable cash flow to the question becomes is that a believable amount, can someone live on that amount that is left and cover their other expenses? that would be a subjective

decision if we left it open from each lender to make that decision. so our recommendation is there is a standard for this an underwriting that has been used for many years and it puts out an amount of income that is required or what expenses are for various squadrons of the country so we would use that as the remainder so if the balance after doing -- if you take the income and the assets and deduct the property charges, is the amount left consistent with what the va says that someone needs to live in that part of the country and if it is, we can make the loan and if not, we need to dig further. ..

the average individual borrower going through counseling and identifies about $5,000 worth of annual reoccurring public and private community benefit. if you factor those benefits into the equation of what they have available to ensure the

sustainability, i think we would adequately address and remain viable for modest income individuals. >> i don't know if anyone wants to opine on this. it is only senator moran and i at this point. we will extend the time a little bit. >> i am sure i just wanted to comment on the support using the residual income test of the va with one key distinction to what has been said crier. and that is, we would look at actual benefits that the homeowner receives, not theoretical. so even though they may qualify for a particular program, that does not mean that after the application that there will actually receive that benefit, so if they do get that benefit then, of course storage should be considered. >> let me ask almost of the reverse mortgage loans, the

insurance provider by fha on these loans protect lenders from losses. the fha actuarial review says that without the loss protection provided by fha insurance lenders would need to increase interest rates or reduce the amount of equity borrowers can access in order to cover the financial risk proposed by reverse mortgages. what would be the impact on senior borrowers of the fha lost protection. >> yes, we did have a fledgling, but growing proprietary reverse mortgage market before the crash in property values a few years ago. there were some very good, attractive products that report to market. however, they self insured, so to speak, but doing a much more conservative loan to value. a lower loan to value works well

with a higher value all, but if you apply a lower limit of value to the lower value homes that we do under the program, you're really not coming up to the net benefit to pay off the existing indebtedness that people typically have on their properties. therefore you are unable to service them. so the proprietary market really serves homeowners' with elms that have values approaching a million dollars increase. in some cases perhaps $800,000, but for the most part it serve the higher end of the market. and you just don't get enough benefit with enough security to entice investors if you -- if you don't go conservatively under loan to value. >> senator. >> german, thinking. how many lenders are in the reverse mortgage business? is this a wide group of businesses of lenders?

>> there are roughly, i believe, about 1200 companies who have originated alone in the best year so. however, the of large majority of them have done a handful of loans. and probably the top 40 lenders in the market probably account for upwards of 50%. >> the primary business of those lenders? >> it is a makes. some are specialized companies that focus on serving seniors in their communities. others are banks, credit unions, mortgage companies that offer in our a product's, because they do have some plans to unknown it would be beneficial, they choose to make those available. >> out as a typical senior access this program? what is their entree into the her resonating of the loan? >> a very good question. to entry points. they could start by talking to a lender.

they may read an article in the newspaper. a macy and and on television. they may talk to people. they may be referred by somebody at a senior center. and they will go in and talk to a lender first. other times some people do go directly to a counselor first. a lender can explain to somebody hal a low marks and can take some preliminary information from them to show them how it might work in their case. but we are not allowed to actually take and process a formal application, nor are we allowed to have the prospective borrower incur any expenses until they go out to counseling and meet with an independent counselor at a hud approved counseling organization, complete counseling and return to the lender with a gun sites designed by both the counselor and then when the prospective buyer or basic police signs that a certificate themselves, then

they turn it to the lender, and that can begin the process. >> interrupt you if i may. that means that every borrower, every single borrower has to have first counseling before they could ever -- >> before they can formally apply and before they could actually be subject to any expenses whatsoever. and then once they have been through counseling, if they choose to go ahead they return to the lender. the turn of a counseling certificate, and at that point to an appraisal was done because everything is based on the value of the property, prior to that there is no exact -- you know, there is no knowledge of exactly how much money will be available. it is pretty much a hypothetical at that point. based upon some statistical analysis of what the property's value is. but until they come back from the counseling, we do not -- we are not able to incur the expense of the formal appraisal to really give them a formal oppose all and then have them make the full application.

>> our other witnesses, the indication by mr. bell was that some people see a counselor first. how does that relationship develop? >> so, as the only national high the certified intermediary providing counseling, we work very closely with area agencies on aging, triple a's, and aging in disability resource centers, adr see, and our goal is to get the word out about it early and often to insure that the product is not an emergency crisis management tool. so our area agencies are not aging, and our adr see are out in the community, that is needed planning and coordinating agency in the community as a released aging services and supports. they're providing elder americans across the country support a regular basis. through their outreach efforts they talk with their vulnerable older adults about the range of public and private economic assistance options to. and so we try to get them to

engage older adults early to have a conversation about what it is, when it means for their economic security, and when and how they might in fuse it into their financial planning. more often than not, those that come to our area agencies on aging to receive counseling have already been touched by a borrower. but our goal -- >> lender? >> street -- excuse me, by lender. our goal is to provide basic coverage so that individuals can learn about the tool before they're test islander. >> and would a senior citizen in kansas have an option of discussing this with somebody at the area agency on aging, somebody, if you went to your community bank across our state, would somebody be aired said describe this mortgage, or is it more likely that -- my assumption is that you see that

on television. you get something in the mail. what do you do about this? the typical senior pick up the telephone? and never pay attention. i assume there is an 800 number that you call. >> if lenders are required to share affirmations on all nine national intermediaries provided . in see l.a. has a 1-800 number. we also have information on our website. when a lender touches a potential borrower they are encouraged to inform them of all of their counseling options. >> again, i don't mean to have you dominate the answers to my questions, but what are the underwriting standards? why is a loan made to someone who is unable or unwilling to pay for their insurance on their home or taxes? is it that its starts out that they're capable? coming, the analysis done by the lender indicates that the payments will be made for taxes

and insurance but financial conditions change? >> this. that is often the case of what we find on the tax and insurance defaults. of that universe of loans and defaults now, one-third of them are tax defaults, one-third are insurance defaults, and one-third are a combination of the two. the insurance defaults tend to be in places like florida after hurricane season when insurers have either dropped plans, dropped out of the market, or significantly raise insurance rates, the flood areas of the midwest. so oftentimes we find the insurance defaults are a function of them having an inability to obtain the assurance. not necessarily through any willfulness to do it. the taxes, we are attempting -- most lenders to take a look at their history paying their taxes and if there has been problems

in the past, then they may choose step pass on that particular bark. but if they have been paying them all along, then there is no reason to determine that they might not be able to pay them, particularly since the financial situation should presumably be enhanced as a result of getting the current mortgage payment that they have a gun and rid of. >> the average amount of the amount -- the average amount advance under a reverse mortgage? >> really it varies. will we start with -- the technicals, "glastonbury three-star with a concept that we call a maximum amount which is essentially the value of the property at the time of the loan is made. everything is calculated off of that. it is also the largest amount that fha will end up paying a claim. that is where fha liability is, you know, that is the maximum error allowed to pay. and then from now we have what is called a principal limit

factor, which is a percentage of that value that is available to the individual bar or. and that comes from a table that hide it provides, the same at every lender, and what the table as is, down one side it has every possible interest-rate, five, five and 18, five in the quarter, five and 3/8, and across the top of every age, 62, 63, 64. so what that table gives us is the percentage of value that would be available to a borrower of a certain age at the particular interest rate that is being used to underwrite the loan. that is the amount that is available to them in the gross amount. from that they may have the fees for the loan deducted, and that leaves the amount that is available, and then they can either say, i want to take it all, want to setup as a line of credit. want to take six months of payments or any combination thereof. >> i may have missed this. is there a maximum amount that had guarantees? >> that will provide -- allow it

to be underwritten against the lesser of the actual value, the property, or the fha national loan limit of 6255. so the home is worth 400,000, the loan is based upon 400,000. as the maximum amount, and they're is a percentage of that value. tom is worth $700,000 in it is based upon the 65. >> the 65 is the maximum. >> that is the top, and that is a temporary limit was set in place by the stimulus. that is 150 percent of what the limit had been otherwise at four under $17,000. >> thank you. >> thank you. >> just a couple of final questions. to follow up on the senators' questions about taxes and insurance, why would it not make sense, since this seems to be collectively the most significant element of the fault, why would it not make sense that include, just as they

made a typical mortgage and taxes and insurance, seniors don't find themselves at the end of the day hit with this challenge? >> well, the major differences, we're not collecting mortgage payments on a monthly basis. afford a mortgage you're paying the taxes and insurance as part of the monthly payments. there would be a significant cost to putting that in place, and it raises a number of other issues. a collection of it would have a cost. >> yes. the borrower fails to pay their tax insurance, that is a default situation. the lender is required to do a few things at that point. a lender is required to advance the taxes on behalf of the bar or to cover the property with insurance on behalf of the bar or. and to notify the borrower that

has done so and has been to get in touch with the servicer that is creating a repair plan, and also, the lenders required to go at that point to hide and request permission to accelerate , and other words, to call loan due as payable because that is a default. to move to an escrow we are collecting 112 reach month, if a borrower pays january and february and this is the march payment, where are we? what does that mean? april in a pair of payment, they may pay to. soon, they miss again. so there is a lot of questions about how we handle defaults, how you work those situations. the reverse mortgage counterpart to to an escrow, rather than paying income is what we call a set aside. we do set aside for other things. for instance, if the appraisal says that the home is not up to the minimum standards and it says that there are $15,000 of repairs required, we set aside some of the funds that would be

available, and the owner can only use those funds to make those repairs. so what is being discussed is a set aside for taxes and insurance. still remains to be seen whether you would do that for what is the expected life of a lot entirely. of course, if you do that you're reducing the benefit to the borrower, and it may not get enough money to more you do that for a two-year or three-year time frame so that if they fail to pay, at least you have some other resource to work with well you try to mitigate the situation. so rather than collecting in escrow, the reverse mortgage equivalents is basically work with the funds available through a set aside. glaxo added you feel about the idea of a set aside? >> again, is a reasonable proposition to insure and protect all stakeholders involved, but, of course, we want consideration for those are eligible and then rolled and property tax relief programs. is more economical to stay in the home, to utilize it as a part of your broader economic

security portfolio. but for those that are eligible and then rolled in property-tax relief, we would want to make sure that that is a part of the set aside formula. we would also support having a set aside, especially for the homeowners who do not have enough residual in count on a going forward basis to pay the property charges. we would support that as well. >> we support the concept of the set aside for taxes and homeowners insurance, but we also have to understand that some of the highest defaults of loans are in, for instance, queens, new york, where the property taxes are extremely. so, there is a balance. you're going to set aside taxes, you may eliminate the loan proceeds entirely depending upon how you structure that. that is why we leave that proposals to change things like that ensuring public input.

>> now, obviously i interrupted. i just want to make it crystal clear that every bar to arrest the first go to counseling. in your testimony, why you support counseling, you also said, that is not enough to protect seniors. could you underline the you mean by that? >> absolutely. one of the -- in our work with reverse mortgages we actually conducted the survey last august the survey was sent to thousands of other advocates nationwide. we receive responses from well over 100 reverse mortgage counselors, and other advocates, some consumers as well. and one of the trends that we noted from those responses is that there is tremendous pressure from lenders when consumers walk-in. on a variety of issues, some of which we have highlighted in our

testimony today. one of them is the pressure to remove the often the younger spouse from the title to the house so that the older spouse can get a larger amount of proceeds. those homeowners are inundated with pressure from lenders and other originators to see that this is a good idea. they hardly ever understand that the risk of doing that is that when the sponsor on the mortgage sties the younger spouse would be evicted. our responses to that survey, number of counselors noted that homeowners are counseled. and if they follow up with the homeowner to a three months later they are often times surprised that the homeowners express, for example, intend to take out an adjustable rate or exercise their adjustable-rate option. instead they win with a fixed rate option.

they are surprised that the homeowners later on are not able to keep up with their property taxes and insurance. so while we think that strong and effective counseling is definitely necessary, we think that that is not enough, and that there should be more substantive protections added to the program to protect consumers in every aspect of the lending process. >> any other views on that issue? >> there is a status by the counseling for the financial entity to which is a required aspect of the counseling. the counseling as a 200 plus page protocol that is required. financial interview jewel was implemented recently. a very robust questionnaire. sentence is to inform, and it asks questions in regard to the potential borrowers intense, and then there is a 60 day follow-up that counselors are required to conduct to see what the outcome was. anzio a we believe if we take a

closer look, spend some time coming through that data, that that could inform some of the risk indicators in regard to the default, so i would really encourage, as we move forward, a closer look and some of the data collected through counseling, crossed walking it with some of the default data so that we can begin to develop a data driven understanding of the risk factors. >> so, -- >> on the issue of the spouse, i'd like to follow up on something that ms. williamson said. her indication is that this is something that lenders are leading borrowers into inappropriately. the issue of the non borrowing spouse is the subject of a lawsuit right now that is being handled via the a rp foundation on behalf of a couple of plaintiffs. we -- our organization has filed and -- an amicus brief on this. and we have spent quite a bit of

research on it. we have filed along with our brief a number of affidavits from borrowers who have basically come out and said that they have done this for any number of reasons, that they have decided to remove his bows from title. often times it is because one member of the couple is under the eligible age, under 62 years old, but they still are facing foreclosure on their current mortgage and the only way that they can get the reverse mortgages to remove title to be able to stay in. other times they need a larger amount of money for one reason or another. mib asperity in ages. sixty-six and 72. there is a considerably larger amount of money available at age 72 than if you include the 66 year-old. so this is a conscious decision that gets made in a number of cases for purposes of generating a larger amount of money. we don't take it lightly. lenders to offer the most part, do not like doing this.

we urge prospective borrowers that are doing is to discuss it thoroughly with their counselors. we generally have disclosures that they sign, acknowledging it, and in some cases we even, besides the disclosure, says we all know when you close a mortgage he signed tons of papers, and you really knows what they say. we have them write a hand-written note explaining that they're doing this and why. refiled examples of all those along with a legal brief. so it is at tough issue because there are a lot of reasons that people do it. it is not necessarily a sinister thing that goes on within the industry. >> which brings me to one of three last questions. counseling seems to be obviously not only a necessity in order to qualify, but important. do we have enough resources for counseling for people in the country? >> unbiased counseling is essential. and we are unique in that the counseling is required.

we need adequate funding to be appropriated to ensure that we have no cost, low cost available counselling for all consumers. the current marketplace, it really is a mixed results in that some of the counseling intermediaries do charge. you get what you pay for. they charge at various rates, anywhere from $125 down sub $75. a counseling session that is intended to be quite comprehensive and robust. our counselors are very proud of the fact that there counseling sessions often take 90 minutes or more to go over the full range of issues and implications . the reality is, with limited amounts of housing counseling dollars over the past several years capacity has shrunk and therefore some of the counseling intermediaries must charge, and that does have implications. >> yes. >> i just wanted to weigh in on

the housing counseling issue from a different perspective. housing counselors are not allowed to give advice or make recommendations to a borrowers. the role is solely to educate. and so this creates a someone on a level playing field in that lenders have the ability to recommend and suggest and say whether there would like to the borrower, but the councilors are restricted in that regard. so it is important to understand , counseling is a vital tool, but the counselors hands are tied as to what they're able to say to a borrower. >> but if they give them a 90-minute session in which you talk about the range of considerations that you should have, it is pretty, i would think, pretty significant because if we were to use your terms, you know, and tie the hands of counselors we also have to worry about a counselor or counselors who would want to

lead a potential borrower to a certain product. >> right. i mean -- >> it is a makes. >> it is a makes. >> my final two questions, anyone is welcome to answer it. as the housing market rebounds, is that going to take on some of the pressure or create greater opportunity? because obviously you have reference several times that part of the challenge has been a housing market that has lost value. as the housing market rebounds, what does that mean for this program? >> well, certainly recovery in housing values help shore up the value of the fund. you know, it relies solely on the future value of the property for repayment. unlike afford a mortgage where there are payments coming in every month in the balance going down, and a reverse mortgage there is no payment and the balance is going up. so, to the extent that the home

appreciates over time, you have a greater commission. you have greater, higher collateral. so, of course to rising home values will put the fund and a much stronger position. >> finally, from any of the panelists, and i say this -- i have my own idea of what this is, and i think it is pretty universal, but since we're developing a record year, why is a program like this a good public policy? what does it mean, for example, all of us collectively as the government to allow people to age in place verses may be end up having said seat either public housing or a nursing home or in assisted living facility in which the government obviously many times will contribute. anybody want to pursue that? >> it really is an example of a public-private success.

the fha insurance provides a protection for all stakeholders. the ability to allow modest income individuals, the orderly drawdown on that home-equity to supplement their fixed-income allows them to age in their own, as most seniors desire. often it staves off or avoids institutional care which often has implications for spend down and medicaid, so it is a very cost-efficient solution that allows our seniors to stay in their homes, stay in their community, mixing public and private support. >> senator. >> is the only recourse on a reverse mortgage loan the equity in town? there is no personal liability upon the death or departure of the person from their home? >> that is correct. it is a non recourse loan. >> and i did not get an answer to the average rate -- i'm sorry, the average amount of air

reverse mortgage. but what is the cost of a reverse mortgage as compared to the cost of a traditional mortgage? five borrow $100,000 on my home or i am i see your and getting in advance of $100,000 in a reverse mortgage transaction, the interest rates in parable? ready original -- origination costs similar? >> yes, they are comparable. the reverse mortgage and forward market -- mortgage will have similar costs associated. there is an origination fee, which is formulaic. the formula set by the congress with a maximum of $6,000. it is 2% for the first $200,000 of value, and 1 percent of the balance of the value with a cap of 6,000 series of $400,000 loan would be the max. and then there are your normal cost for appraisal, title, and

then there is interest on alone, and the interest rate, depending upon what type of loan people choose will be more or less comparable to what they are run for it to afford mortgages. >> interest rate fixed or variable? >> the consumer has a choice. historically they have all been variable, and fannie mae was the investor, and they acquired all of those loans and held in a portfolio. as they receive the mandate from congress to begin reducing their assets they backed away from the reverse mortgage business. and they stepped up to the plate and put a program in place, h in b.s., hackamore is back security. the program paved the way for offering fixed rates, which seniors by and large seem to want to get. you know, people who remember the 80's -- i know i closed on my home in september of 1981. my first mortgage was 16 and 5/8 percent.

people remember and often afraid. even though in this situation it may be more advantageous for the bar or to get that. however, here's the catch. to get a fixed rate the borrower has to agree to take down all of the funds up front. it is a closed-end loan. they take the money at once. they can pay back any time, but they cannot borrow out again. is not an open bin credit. is a closed-end. and the reason for that is, if i am a lender, if you come to me and say to my what my whole $250,000 i am entitled to today, i know my cost of funds. i could give that to you, but if you say i am entitled to 50 and one to take 50 today and that will come back at some unknown point in the future for some amount of it, i cannot make a loan like that on a fixed rate on today's interest-rate. so if you want the line of credit option, it needs to be variable rate, whereas if you want the fixed-rate then you have to take it all out up

front, and that is part of the issue we're dealing with right now. consumers are drawn to that. the execution is better, providing revenue to the investor, to the originator, and as a result of the investor demands for those products, there is an ability to waive all of the fees for the borrower, so the $6,000 our origination fee that we discussed, perhaps even the up-front mortgage insurance premium is repaid in the current market. if someone was to take a fixed rate folderol of them may find that they don't have to pay any of those fees. >> almost all of the reverse mortgage is paid at the time of death? as compared to five or departure from your home as compared to somebody prepaying and loan? >> no, i don't know the cause this -- they tend to stay in their homes longer than they have historically is because it

is harder or have been harder until last couple of months to sell homes. historically -- and as many ended in a mobility event or move out, as did in the mortality of men to my death. and finally, are these loans -- two questions. one, can you make errors mortgage without the fha backing? the banks do that? is that legally permissible? >> estimate is legally permissible. as i said, there had been a proprietary market emerging -- my guess is we will begin to see a return later this year or as we get into 2014, assuming that home price stabilization continues. >> finally, the states regulate these mortgages? >> yes. many states do have state laws that are laid on top of federal laws. >> thank you. >> well, let me thank all of our

witnesses for plenty -- pretty good, complete review of the issues related. i think this is an important public policy option and one that we need to preserve and enhance. we look forward to looking at the houses, legislation. ours has a little bit more specificity about some of it, but the opportunity to move toward may be one that we want to answer. the record will remain open for two additional days if anyone wishes to submit any questions for the record. and this hearing is adjourned. book tv -- [inaudible conversations] [inaudible conversations] >> an agreement to increase fencing, patrols, and high-tech monitoring along the u.s.-mexico border was formally unveil today in the senate. an amendment to the immigration bill. before leaving for the weekend

alabama republican jeff session spoke against what is called the border surge amendment. >> so, we have this amendment. we were told that we would have it last night at 6:00 p.m. we were on site to have a series of amendments last night voted on. some important amendments to be voted on. and we were getting ready to do that. all of a sudden there was an announcement that an agreement had been reached and a new bill had been offered. new amendment. this amendment got to spend more money than ever, and nobody now had any right to complain about the immigration bill. 744. we had it fixed. and those amendments evaporated. no votes were cast on the. actually, the night before and a

tentative agreement had been reached on as many as 16. and that would have been and i start to begin to discuss and allow people to point out that there is a weakness in the bill and propose a solution to fix it. as the way legislation is supposed to help. you bring forth an amendment and say this bill lacks this. this amendment in the bill is wrong. i have a fix for it. this is my offer. this is my amendment. that is the wake of legislation should be processed in the amendment, and that was all stopped. so we waited 6:00, 7:00, 8:00, 9:00, 10:00. i think it was 1030 when we departed. still no magic amendment that is going to fix every problem with the legislation. no magic amendment. now, here we are 11:00 and we still have not seen it. frankly, i would like to read it i am going to read it.

we read this one. it did not do what the sponsors said. they had a good talking points. i could have voted for the talking points. i like what they said basically in the talking points. but it was not in the bill. that's the problem. >> the senate will continue debate on the immigration bill on monday at noon eastern. they will vote on whether to move the voters surge amendment forward. a final vote on the immigration bill possible what the end of next week. live senate coverage here.

[inaudible conversations] [inaudible conversations] >> of this subcommittee will come to order. army did hear from the two public members of the border trustees in a federal supplementary insurance trust fund on their 2013 report analysis regarding the current dire status of the medicare program. it is important to understand the financial health and viability of the medicare program if we are to insure that

the program is solvent and available to our seniors as well as future generations of americans. author george r. martin wrote most men would rather deny a hard truth than face a. i worry that when it comes to medicare that is true for too many in washington today. if medicare is just fine, as some claim, then why the medicare trustees issue in medicare funding morning was seventh straight year. if there is no problem that needs action now, then why are the assets and the trust fund shrinking by 15% from the projections made just five years ago. and if sincere concerns about medicare's financial condition are summarily dismissed as alarmist rhetoric by some members of congress, the mike and medicare pays medical bills for seniors and 13 short years? today now member of congress can honestly look at 52-year-old

americans and assure them that medicare will be there for them when they retire because the trustees report has just confirmed it. that is not just fine. for those who continue to stick their head in the sand where hope is the denial of reality, they shirk from their responsibility to act to save medicare now. here is yet another wake-up call. the 2013 trustees' report continues to make it abundantly clear that medicare financial future is in trouble. americans all over the country and across generations are paying into a program that we, as the congress, cannot promise they will receive benefits for. if we simply face reality and come together, we can act now, this year, to take the first real steps to make sure our citizens received the medical care they deserve and have paid into when they need it the most.

a couple of years of reduced health care spending within the recession solves the problem, do the math. the number of people medicare double the past 35 years, and it is going to double in size again. no one credible has proven the reduced health care spending will last, even the medicare trustees did not attempt to make that claim, and they are not alone. the independent actuaries of the center for medicare and medicaid services again publisher of the called an alternative scenario. in their full scenario they assume that congress will prevent, schedule cuts and revision provider payments and repeal the heavy handed independent advisory board causing medicare spending as a percentage of our economy is skyrocket. the trustee report ending the alternative scenario for prompt attention to medicare severe financial problems. as we will hear from our witnesses, we should continue to push and now was the time to

act. the sooner we make changes, the better the program structure and the less drastic changes will live to be. my hope is that this hearing will help my colleagues on both sides of the aisle continue to understand the extent of the financial problem that pushes us to work toward a bipartisan common sense solution. we cannot wish this problem will wait. medicare is going broke too quickly. no amount of positioning for political gain is going to change that fact. the medicare board of trustees urged us as congress to take prompt legislative action and recognize the projections and this year's report continued to demonstrate the need for timely challenges. don't you that you added years of solvency as a significant reprieve. why should congress of the white house? our witnesses here today we will further explain the extent of medicare financial difficulties

as we were to deliver on this. common sense dictates set we act now included in the record without objection. i now recognize ranking member of mcdermott for his opening statement. >> thank you very much, mr. chairman. i want to welcome the doctor. a permanent fixture in there during something. it's good to see you here today. the public witnesses. and thank you for your service says being willing to sit on a commission like this. i believe it has been a couple of years since we have seen you before the committee. i look forward to hearing your thoughts about what is going on. and from the past.

my colleague, this hearing has usually been a hearing where there has been continual harping on medicare suppose it dire finances and scaring the public into believing that medicare is going bankrupt and that we will be there for you when you get to a certain age. every generation has been subjected to that since i have been in congress. it is not going to be year. when i looked outside this morning as i got up, i can assure you, the sky is not falling. the latest trustees' report projects two additional years of solvency, 2026, and that is pretty healthy by historical standards -- standards. the affordable care act is improving conditions. projected medicare spending is down from where it was said before the passage of a see a. before a see a we were projected spending 11 and a half percent

of gdp in 2018. i don't know who can believe we know anything about 22, but people sit around and make those projections and is almost a 50 percent cut. the long term 75-year deficit has also improved, dropping over two and a half%. that is a 72% decline. so, you are seeing that things seem to be getting better. no, if you believe those predictions, the guys you want to believe them, i guess. i am a little dubious about who will know will happen in 75 years, but the hca is resulting in a historically low health care spending rates. per capita medicare spending is only. 4% in 2012. that is less than one-half of

1%. national expenditures grew only 3% in 2011. the third straight year of slower growth. these rates are expected to remain low through the decade. it is not just a one time occurrence. rates are a result of what has catalyze throughout the country. providers and insurers have gotten the message loud and clear that they need to transform into high-value, efficient providers if they want to compete in the health care system of small. welcome all of us, my colleagues from playing chicken little. i would like to remind them, that repealing the dca, 37 times. they're singular goal for the last three years would actually put the program on a worse financial footing. the latest steps from the actuaries say that repeal would

shorten solvency by eight years. it would also include the beneficiary process and eliminate benefit improvements such as free preventive care and closure of the party bullet hole. so rather than using this year's trustees' report to invoke panic and fear, rather let's use it to justify shifting costs or justifying crossing the beneficiaries and undermining the program in the name of solvency. i challenge my colleagues to think better -- bigger. let's think about how to ensure medicare is a proficient program that provides a quality program. while i support improvements to the medicare program, no program designed in 1964 could possibly be adequate for today. there is just no way you can do that. i reject the calls to slash the program to save it. it was not made today get the beginning. let's give the ec a the chance

to work. after all, the sky is not going to fall. i think that the committee has to look at what you present to us and decide how we actually implemented the efficiency that is in the ac a because it will affect medicare as it affects everything. the delivery of care and the way we pay for it is going to change over the next few years. it is changing, in part, by the fact we have actually put a see a in motion -- aca in motion. i will yield back the balance of my time. >> we will hear from two witnesses. both public trustees on social security and medicare boards of trustees. thank you both for being here today and look forward to your testimony. you're both recognized for five minutes for the purposes of providing your remarks. >> thank you, mr. chairman, ranking member, members of the

subcommittee. it is, as always, a great honor to appear before you to discuss the findings of the medicare trustees' report. by mutual agreement i'm going to present in my oral remarks the primary financial projections of the medicare trustees' report and leave it to his testimony to discuss some of the recent revelations of the longer-term outlook. the first point i would make in my or marks is simply that medicare finances are complex. the program has to trust funds, and their finance in different ways. each year there is naturally a high degree of public attention for the date depletion a hospital insurance trust fund which is important to the data and is appropriate there be such attention, but that is just one piece of a larger mosaic of medicare programs financing. medicare as a supplemental medicare -- supplementary medical insurance trust fund which has larger expenditures, and that is constructed so that it can never go insolvent by

design and is basically given whenever general revenue it needs of the general fund in order to maintain payments. financing strains on the side of medicare that are manifested in the dated trust fund depletion, but are manifested in the form of rising premiums and rising pressure on the general budget. in fact, we are showing such rising pressure. under our current projections -- in 2013 we are expecting $5,904,000,000,000 in total medicare expenditures. that is about three nap percent of our growth -- gross domestic product. in the 20 thirties', by mid 2035 ers expecting total program cost to be five and a half percentage gdp. thereafter we are expecting continued increases go into economic output, but moderating a little bit to get about six and a half percentage gdp by 27. the primary driver of this cost growth, of course, is the

demographics. a lot of baby boomers coming of the benefit rolls. health care contemplation plays an important role in this relatively more important later in the evaluation, although in the near term their graphics of a larger. under current projections as have been noted, we are projecting that the hospital insurance trust fund will be depleted in 2026, two years later than projected last year. my colleague will explain some of the reasons for our recent changes in the outlook. here are my remarks. i will note that medicare finances are very much on the knife's edge over the next several years. we are starting with less than one year's worth of benefit payments in the hospital insurance trust fund. and so our 2026 projection depends to a great degree on whether annual tax income and outgoing benefit expenditures will be almost exactly balanced of the next several years. projections are off and long-term projections are subject to uncertainty, that 2026 could move a few years in

either direction. the last point i will make is simply that for various reasons total costs are likely to be hiring practice them we're showing in the report. the most obvious is simply the sustainable growth rate formula for physician payments. we are obliged to project what happens under current law and under current law there would be a 25 percent reduction and physician payments at the beginning of next year. historically congress intended to override these. we assume that that pattern continues in cost will be higher than we are currently projecting by our estimates. a little bit more than 10 percent of a long term. there are some who argue that cost will be higher than current projections for other reasons, and those are rigid in some of the technicals of how we make our projections. i will try to explain these without getting too far into the weeds, but basically our projections for medicare cost growth is very highly dependent upon our projections for health care cost growth in the body -- the broader economy which determines the input cost at

providers report to medicare. and what we do when our long-term projections assume a certain level of deceleration and national health care cost growth. the reason has to do with the historical elastase city of medical cost growth as a function of price growth. as health care takes up a larger and larger share of our economy and absorbs more of each of our pocketbooks, the pressure in the direction of further increase is lessened. that or not the case who would get to the point where our economy sur's nothing in health care. we assume a certain level of deceleration going forward. when you overlay on top of that the ambitious cost constraints, we have projections to have per capita expenditures more rapid and gdp growth in the near term but less than gdp growth in the long term.

so there are some people look at our projections and say we do not think it is possible. and i think lawmakers would permit expenditures to be less than per-capita gdp growth and we expect we cannot predict the future actions of lawmakers, but will we do say is we show the main projections that current law and then also provide alternative scenarios to assume that some of these scenarios are overridden. in conclusion -- i know when that time -- a complicated program in which financial strains have complications that include projected completion of the trust fund. we're showing the cost of rising markets of the next couple of decades primarily the demographics and costs are likely to be at least as high as the currently projected the historical pattern rights continue. in our report we said that under our current projections legislation will be needed to prevent financing shortfalls caused will insurance trust fund and we will address rising by reserve pressures arising from medicare smi. the sooner says liz liz in is not to the more likely to produce substantial long-term

savings of less potential disruption for beneficiaries. thank you. >> thank you. >> i appreciate the opportunity to appear before you today. my colleague has already covered the trustees latest projections and basic operations of medicare, and i am going test for a a bit in part in response to the op-ed that was in last week's "washington post" about the credibility of medicare's long-term projections. what i was going to talk about is the implications that the slowdown in overall health care spending will have or could have on the medicare program future financial situation. as you know, both medicare beneficiaries spending and

private sector per-capita spending has slowed considerably over last few years. the latest trustees' report projected that the year in which the trust fund will be depleted has been pushed out two years from 2020 for until 2026 which is good news but does not suggest that the cost curve has been banned in a sustainable way and we can relax. even though i count myself among those who think that much of the spending slowdown is structural in nature, i believe that the fundamental financial challenge facing medicare and the need for further cost restraint and reform remain largely unchanged from where they were a year or two ago. the slowdown in per capita national spending has been going on for the better part of a decade. probably the biggest thing of -- biggest single factor is spending the slowdown is the economic weakness of the past five years. this has reduced the ability of many workers and families to afford health care. what is less recognized is that it has also had an effect on medicare beneficiaries to

experience a sharp declines in the value of their iras and retirements and reduced interest income from their cds and bonds. in addition, they went to years without social security cola. the fact that relatively few major new technologies and blockbuster drugs have been introduced of the past three years is a second factor that has contributed to the slowdown. policy changes at the state and federal level and take some credit. the final factor is the change that has taken place in the attitudes and focus of leaders in the health care sector. in contrast, there is now widespread appreciation among these leaders that health care can be provided without concern for its cost and the efficiency with which it is delivered. as a result of this attitudinal shift hostels, opposition groups and insurers, and employers have initiated a number of projects

designed to moderate cost growth. whether the spending slowdown will continue as an open question. the reasons to be cautiously optimistic, there are also reasons for concern. prime among these, of course, is the possibility of breakthroughs in genomics science, nanotechnology, stem cell research, and other cutting edge technologies that could lead to an explosion that a new and expensive interventions. the increased market power that providers may gain from a consolidated integrated high quality care as was envisioned on the health reform is also a threat -- potential threat to the continuation of the spending slowdown. some might ask what the future pace of growth of overall health care spending as much relevance for medicare because medicare has administered non market-based prices and does not negotiate with providers when it sets other costs related program parameters.

notwithstanding these differences, medicare cannot set its own course with respect to future growth independent of what is happening in the rest of the health care marketplace. ..