amend while the committees are working the other to try to come up with legislation that would stand the test of time. i think that is a really bad idea, and i hope that you will reconsider. i think you have already shown tremendous flexibility over the past few days and i appreciate that. we have a chance, look, you look at the health-care debate that is happening, it is not one that is appropriate for this body. it is not. we have a chance in this committee to do something where the american people can at least begin to respect how we conduct business. we have that chance in this committee right now. if we go through this bill wright and act like adults. are we have the chance to just have a -- to just add fuel to the fire, thinking that the

government is on crack, that we do not act like adults. i stand ready. we will be here through the holidays for health care. i will never go home if that is what it takes. i stand ready, and i think my commitment to that has been tested throughout this. . stand ready, and i think my commitment to that has been tested throughout this. i don't think i've ever said anything partisan in this committee. i stand ready over the next however long time it takes, a month, two months, three months, i stand ready to do whatever is necessary to work with the chairman, to work with the ranking committee to come up with something that will stand the test of time and not have some -- stand the test of time and not have some artificial deadline because of some calendar, because of something else that's going on. this is porn and i want to thank you again for creating the kind of tone in this committee that to me brings out the best of the

united states senate. i'm proud to be a part of it. >> thank you senator very much. let me just -- before i turn to senator bahy who is next in our agenda here. that has been my intention. my colleagues know and those who have been in the majority and so forth, you have to begin a process. with e can have a hundred hearings and countless informal gatherings as we've had over the next year, there's always going to be subject matters that don't get as much attention as others. with other responsibilities we all share as members of the united states senate, and so my intention, having this opening statements today and trying to seat a framework is because it's voces us to be here and begin that process. other items take on our agenda. we don't end up with empty space. it gets filled. i have to drive this in a way to allow us to get the work done. that's my experience the only

way it happens. strike together balance between having an agenda and also being flexible enough so that you're not trying to get something done for the sake of a schedule. but by having a schedule it pro voerks the discussion that gets the results that my friend from tennessee talked about. that's always the conflict and how you manage both those goals. but my intention is to produce the best bill we can. i think most of my colleagues know in in this committee i speak to virtually every member of this committee all the time and listen to their advice an counsel. i welcome the comments of my friend from tennessee. my intention is to proceed along those lines. but again, we have to sense that there is that real desire to put something together, too. we all know sometimes there are folks who don't necessarily have -- they make a good speech, but when it comes down to really doing it, sometimes it gets harder. that offer is out there, it has been there. it remains open.

i'm anxious for my colleagues to take advantage of the offer to sit down and do this. and i have no doubt about my commitment of my colleague from tennessee's determination to do that as well as i'm determined to do that as well. senator shelby has said it before. i've said it before. this committee never do anything as important as what we're confronted with here in my view. it has been almost 80 years since a committee of this has taken on. the reason is frankly there was never the motivation of doing it. you couldn't have had 50 hearings on this subject matter four years ago. it took a crisis like we're in to get it done. the danger is if we -- i'm not suggesting warp speed here. i think my colleagues appreciate this, all the sudden things get better. and then we think that problem is over with and let's get on to the next issue. we miss the moment of getting something done. that's always a difficult moment.

i don't know if any of us know exactly when we're in it. if we act too quickly you can make huge mistakes. you wait too long, you can miss the steps. many people have called for these changes for decades. there have been recommendations from republican and democratic administrations much along these lines, not exactly, but in a similar vein. no one has wanted to take it on because it was always something else, and things seem to be going pretty wrel. at least that was the sense of it. i think now we appreciate the moment. the we is can we in this moment that we're in, and it will never be perfect. i suspect at the end of it even if we achieve 23-0 vote on a bill, the suggestion that we won't have any questions about what we've done, wheel be in uncharted waters. inevitably a committee will reconvene and make modifications. i'm not insulted by it. that's normally how it works.

so i appreciate very much my friend from tennessee's counsel and advice. he knows i appreciate it and i welcome it. it's my intention to proceed very much along those lines. senator bahy. >> thank you, mr. chairman. i have a prepared statement i'd like to submit for the record so that all those in the room who are sitting on the edge of their chairs looking for my detailed opinions can avail themselves of that and the 99.9% who are not, won't have to listen to me read the statement. >> part of the record. >> great. mr. chairman, i'd like to begin by addressing your comments and my friend, senator corker's comments. bob, i guess the best thing i can say to you is i have questions about parts of the bill, too. is the sound system -- i'm getting a little --. i got that thing so i could communicate with my kids. i don't think that's going to be

necessary at this particular moment. thank you, mr. chairman. bob, i've got some questions, too. i think we need to work our way through this. as the chairman indicated, this is not scripture we're starting off with here. it's a work in progress, a working draft. i know you and senator warner have been working on some of these things across the aisle. you and i had a very good exchange on some of the energy issues you referenced and ended up agreeing even though we had reservations, ended up thinking on balance it was worth going forward with. so i hope we can replicate that process here. i'm going to compliment the chairman for reaching out in spite of the fact that there's still a lot of work to do. you've had extensive conversations with senator shelby and your staff with his staff. and so, bob, if you've got issues, come see the chairman, come see senator warner, come see me. let's see if we can't grow the area of consensus and common ground through dialogue as i think everybody recognizes at some point the sincerity of the effort will have to be evaluated. the genuineness.

but if we don't try we're not going to succeed. i agree very strongly with what you said and what the chairman said which is for something like this, this should not be a partisan exercise or ideological exercise. it ought to be what works for the american people, the financial marks and the economy, and that's all that matters. this is a practical undertaking. this is the beginning, let's work on it and see how far we can get. hopefully at the end of the day we can come together. if we can't, we'll have given it our best shot. i want you to know there are several of us, the chairman included, who begin with with pro preconceived notions on what will work here. i want to thank the chairman for embracing those comments about the need to try and forge consensus and continue this dialogue for as long as productively as we can. mr. chairman, i say two things in the interest of moving the hearing along. the way i'm going to evaluate all this is try to strike the right balance by two not necessarily competing, but

occasionally competing concerns. in um p ber one is the need to inha tan a sense of urgency. to avoid a repetition of this near-death experience we had to go through, brought on by excessive risk taking in the marketplace. risk taking that was decoupled from baring the consequences of that risk taking. that's where we really got into trouble. it started all the way with the appraisers of mortgages, the extenders of mortgages, the repackaging of mortgages, rating agencies, wall street selling these things off, the derivative markets. you can go down the line. there has to be accountability and consequences. we cannot afford to have a business as usual -- about a year ago in this committee when we were first focusing on this, i expressed the concern that once the crisis had ebbed, people would have a tendency to go back to business as usual. the forces of reform would abate. all the different interests would be circling this place

saying you can't do this, you can't do that. we can't afford that. there's a palpable sense of outrage, at least in my state. we had to do -- both the bush administration, obama administration, members of congress on both sides of the aisle, in the moment of congress we had to do some repugnant things because we had no alternative. and we didn't do them to bail out the elites on wall street. we did them because the consequences to main street and everyday people would have been terribly adverse. so let's put ourselves in a position of having to do that kind of thing again. that's why i think we need to be forward leaning in this area and be willing to entertain some new ways of doing things so we don't alienate the american people by not learning the lessons of the crisis. so that's one issue that i have in my mind. the second issue, and i think this will find some resonance with members on other side of the aisle and perhaps on our side of the aisle, i think we have to have a healthy degree of mod stay about the efficiency and efficacy of government. i don't think we need to replace the marketplace as the most efficient allocator of capital

with government. there are unintended consequences potentially from doing that kind of thing, i think we need to explore those potential consequences in great detail before we move down that road. that should not keep us from acting. but at the same time simply having a larger government for its own sake is not a place we want to go. we need intelligent, efficient regulation to prevent a reputation of this problem. and yet go no further than is absolutely necessary. otherwise we end up harming capital formation, business formation, job creation which is the preeminent challenge facing our country today. those are the competing concerns i have in my mind. that's the balance i hope to strike. and a healthy dialogue across the aisle. and hopefully eventually as much consensus achievement as possible. i think it's the best chance to get there. i want to thank you for your leadership, senator shelby, the hard working staffs on both sides for their leadership. let's keep at it. >> thank you very much, senator. all the opening statements will

be on the web. we'll put them up so if you want them included, we'll make sure they're included so the public can read them as well. senator greg. mr. chairman, thank you for your sincere and aggressive effort to try to address the issues of the financial crisis and for your leadership last fall. i thank senator shelby for his opening statement which i identify with in considerable -- to a-degree. i believe very strongly that our purpose here should be to develop a regulatory structure which maintains one of the unique advantages that america has which is the fact that we are able to develop capital and credit in a way that allows people who want to go out and take risks and create jobs to get that capital and credit. that's something that no other nation has yet been able to replicate at the levels that we

have been able to do it as a nation. and we have to be careful that responding to a dries sis which had a lot of underlying causes, that we don't fundamentally harm that unique advantage that america has. and so i guess that's how i come at this. so let's look at the causes that cause this crisis. we were all there on the front line when it collapsed on us. primarily it was real estate. it was a real estate bubble. now, i've been through three of these in my professional experien experience, once as a bank attorney for a small bank in new hampshire, once as governor of new hampshire when five of my seven largest banks failed and this time. in p every instance a real estate bubble is a function of the fact that there's a disconnect between underwriting and responsibility. loans are made to people who can't pay them back or loans are made on asset values that don't equal the value of the

underlying loan or a combination of both. and that became in this instance the basic generator of the problem. accelerated by the fact that everything got securitized, sub divided and sped out into the negligenter world, across. so if we're going to address this issue, i think we ought to start there. if we're going to talk about what caused this problem, we ought to start there and recognize that however we address the issue of regulation, we should be addressing what created a speculative bubble in real estate. it comes at two levels, first at the underwriting level. and i think congress has to bare a huge responsibility here, congress. you mentioned that there was a profound irresponsibility between wall street and main street or on wall street that

affected main street. i'm not sure of the phraseology. there was a profound responsibility right here in the congress. we drove an attitude that basically said everybody in america, even if the you can't afford it and even if the value of the home you're buying isn't there, should have a home. we used the gses to do it. and as a very practical matter we should bedb%ãáãpã nobody behind the insurance. i have some issues about the mechanics but i think we could come up with the correct structure there and i've got the thoughts on how to do that. the second thing that -- that we're trying to address in this bill is the fact that there was shopping for the weakest

regulator. , and we know that. and that was a.i.g. and -- so there's an attempt to consolidate and create a potential regulator. and there is this attempt to strip the fed of its responsibilities in the area of holding companies and in the area of active oversight of -- of major entities. and this all gets interest the question of too big to fail. my concern this this arena is that big is not necessarily bad. i mean, there's an attitude around here that if you're big, you're bad. actually, if you're big and properly capitalized, and you have intelligent and thoughtful management, that -- that deals with underwriting threats, not only is it notted about but it gives america a competitive edge. there are a lot of firms that deliver an international quality to our capacity to expand as a face. it allows our people to go overseas and use their facilities and that basically brings resources into the united

states through financial services. as and use r es ha ca gs resources in the united states through financial services that are helping our nation be more prosperous and are creating jobs here in the united states, significant amounts of jobs, both on main street and around -- and for people working in large companies. and so i think we need to be careful that we don't follow the course i'm seeing on the house side. the kanjorski amendment dealt with yesterday on the house side was an exercise in european politics where there was some belief that a group of thoug thoughtful people can choose winners and losers in the marketplace that are still doing well, that aren't at risk, and decide how those winners and losers should be structured. well, where does that stop? is coca-cola, should they be broken up under the house bill? walmart maybe because they don't

have a union should be broken up under the house bill? i mean this is -- this is undermining the american advantage, especially relative to our european neighbors. so we have to be careful that we don't attract ourselves to the concept that big is bad. yes, we have a problem. if a company has failed, it should fail. and that's just the way american and free enterprise should work. so we have to address that. but we have to be careful we don't overreact in this area. secondly, the fed. the fed has become sort of the natural whipping boy for populist politics today. i understand that. it's been that way since even before the fed was created. william jennings bryant was probably anticipating a fed when he was doing his "cross of gold" speeches. henry wallace, right up through our whole exercise of american

politics. that's there because it's deemed secretive. the simple fact is the fed serves a very unique and special function of maintaining the value of our currency, of keeping inflation under control, and to the extent it can effect it, of helping us be an employed economy. but we've got to be careful that we don't overreact again in dealing with the fed. it is a unique strength which we have as a nation, that we have an independent agency which is not subject to the whims of the politics of the day in the way we manage our monetary policy. and i do think they make a very legitimate case, that the at least in the larger undertakings in the world of finance, they need to know what's going on in order to do monetary policy well. so i think we should be concerned about that. the philosophical issue here is on the consumer side, how you deal with the consumer protection. i sense that there's an

attitude, well, let's just check the box of consumer protection by setting up an agency which says we're going to protect the consumer. my guess is that that will be counterproductive to the consumer. i suspect that once you decouple the regulator who has safety and soundness as a primary concern from protecting the consumer, you're basically going to create an atmosphere inherently in conflict and will inevitably restrict credit to consumers through excessive bureaucracy and through conflict between the two events. i think senator shelby has it right. we should raise the responsibility for consumer protection to a level that is at least equal to safety and soundness amongst the regulators, however we structure the regulators, whether it's a prudential regulator or a series. otherwise i think we're going to undermine in the end the availability of credit to people who deserve credit. that really concerns me.

i also don't think this should be a trial bar exercise. the repeal of stoneridge case, overturning that is i think a failure, and there are other things in here which worry me about what's going on relative to expanding litigation for the sake of litigation that doesn't really lead to a more efficient mark and does not lead to more capital and credit being developed. in the end, we just have to be very careful about what we do here. we know the problem that caused this event. we do not know what the next problem is that's going to cause the next event. there's a wonderful book called "bubbles." ist goes through all the bubbles starting with the south sea bubble, the tulip bubble, right up louisiana purchase bubble, all of them. and basically they essentially said -- the conclusion of this

book is, one, it's driven by real estate, or two -- speculation, or two coming to the conclusion enmass, not one person, that a technology has been developed that's going to change the law of common sense. and people start investing as if common sense doesn't apply oovps. to address that type of situation, a financial structure, in order to survive that, has to have as its regulatory center the flexibility to deal with the uninspected, the flexibility to deal with the unintended event. and so i think we've got to be very careful that we don't set up a straight jacket of regulatory oversight which causes, a, that we lose our competitive position as a nation in the area of capital formation and in the area of availability of credit and, b, does not allow our regulators in the future when they confront an event which we can't possibly anticipate, to not have the wherewithal, the resources and the regulatory authority to take action to correct it.

so, mr. chairman, again, i look forward to working with you. i want to associate myself with all the comments around here about the fact that you've been open, aggressive in soliciting views, and that this committee has a tremendous history of being bipartisan in trying to get things done, to answer problems rather than address political solutions. thank you. >> thank you very much, senator gregg. senator menendez. >> thank you, mr. chairman. let me join my colleagues in commending you for the incredibly hard work that you have done and perseverance you've had in holding over 50 hearings along with the ranking member over the last year alone. this is not a passing fancy that this legislation is -- that you propose has come to. it's come through a thoughtful, in depth and prolonged process. and certainly for your bold leadership in seeking a long

overdue, common sense regulatory reform. now, let me state from the outset, i may have a few issues with the package that you have. but i know what we attempt to do here is strike the right balance. we don't want the pendulum to swing too far that we can, in essence, stifle economic growth. but i do agree very strongly, mr. chairman, that we need to have regulatory reform or we are destined to relive sant anna's lament that those who, in fact, forget the past, and it's not a too distant past, but some are willing to for ge get it rather quickly -- are destined to relive it. the nation cannot afford for us to relive what we've come through to date. in my view it's time to corral the wall street bulls, some of them who saw red and ran wild with america's money. better accountability and reform of the sec and other regulatory

agencies will finally slap a padlock on the gate to protect american families from another stampede of greed and over indulgence that in many ways cost them their jobs and trampled this economy into the ground. your legislation seeks to prevent that from ever hang again. the creation of a consumer financial protection agency would protect consumers from hidden sees, abusive terms, deceptive practices. a new, independent agency with a board of regulators would be in power to find abuses in the system before they metastasize and could require companies that threaten the economy to divest some of their holdings. tough new rules for france parn see and accountability from investment advisors, financial broexers and credit rating agencies that would protect investors an businesses. provisions that impose new capital and leverage requirements would prevent large, complex financial conglomerates from bringing the system to its knees.

they would require industry to provide its own capital injections, update the fed's lender of last resort authority. all of these provisions i believe send a loud, clear message to struggling families in new jersey, and for that fact across the country. families who lost their homes, their jobs, their businesses, their health care and what little investments they might have had that someone will be watching out for them. it let's them know that someone is looking out for their interests. so, mr. chairman, your proposed regulatory reform i believe seeks to do exactly that. they will let families in my state and every state know that hopefully there won't be another bernie madoff, that it will not take 16 years for regulators to recognize a ponzi scheme when it often was right in front of them, that there will be

effective financial regulators and strong, independent inspectors. that average, hard working families will not be taken advantage of again. you know, during this process, so many families i've spoken to in new jersey tell me the same story. they assumed government regulators were on the job when they were told by unscrupulous mortgage lenders congratulations, you qualify for a mortgage, no money down. we'll get you an adjustable rate interest but you'll never see the adjustment, the property will increase, just sign here. thousands did, mr. chairman. they signed on the dotted line believing it had to be legitimate. the sad truth is that it was unekt cal, perhaps, but largely legal and unregulated. hard working families with very little financial background were in many cases unwit dingily

lured into overextending themselves oovps. i've heard from so many families when their only thought was, isn't it great? we qualify. and they assumed they did, that their credit was good enough that the lenders said it was so. they assumed the government would not have allowed either banks or financial institutions to lend them money if they did not think they could pay it back. they did not know their mortgages, their loans were being bundled, sold and resold to hedge funds and international investment firms with no regard for them, their investment, their ability to pay back their loans or their ability to stay in their homes. now those families are facing foreclosure. many are facing bankruptcy. they are struggling in no small part because others were allowed to take bigger and bigger risks with their money, often securityizing their mortgages into large pacts, not fully knowing the true credit value of

those securities. and to add insult to injury, mr. chairman, they see those who bought these mortgages in many cases, those deemed too big to fail, be able to collect millions in bailout money. and they often come up to me and say, you know, when i make a mistake, i've got to pay for my mistakes. and yet, when it seems that these institutions make mistakes because they're too big to fail, i have to also pay for their mistakes. so i think the american people are really too big to fail. and it's time we give them the protection they need. now, the business of business may be the bottom line. but i think ha the business of government is to bth protect people and hard working families who ask nothing for man a level playing field to ensure a regulatory environment that tells us what's inbound and out of bound. i believe in a free market, but there is a difference between a

free market and a free-for-all market. an essential part of this economic recovery must be the knowledge that we can never let the system run wild over main street, that there will be i that previous administrations that think all we need to do is get government off our backs and the private sector will take care of us. they're right, the private sector when not shown the appropriate boundaries, and with a cop asleep at the switch, took care of themselves, at expense of millions of family as cross the country.

it is time for transparency and-time to increase the enenforcement budget at the s.d.c. f our markets-based economy to run smoothly >> these are necessary reforms. there are some areas where i have suggestions as we move forward, mr. chairman as well as some additional investor protection that i'm interested in, beyond what your legislation called for and i'll look forward to working with you, to even make this legislation even better. we look forward to working with you and members of the committee, to -- to make sure that we don't relive the past. because we have learned from it. and we deal with it accordingly.

thank you, mr. chairman for your leadership and look forward to working with you on this most important problem. se we hav d a al acco let me use this moment, to talk to staff members here, to see if we could accommodate people. and senator grabow. >> thank you so much, mr. chairman. i want to begin my remarks by kind of setting how i view the process we're going through right now. in the, in the debate we're having in the congress right now over health care, i believe we're considering changes to the -- to our country.

they're potentially the most significant changes that i will ever see as a member of congress. they're certainly the most significant types of changes and impacts on our country that i've seen so far in my service here. and -- i -- i have a hard time actually even describing how -- how comprehensive i believe that change in america will be if we adopt that legislation that is now put forward. and i have a similar feeling about the legislation that we're dealing with in terms of the financial reg tore system. the legislation that we are talking about here today, whether it be your proposed discussion, draft, or simi the broader issue of the concepts before us with regard to proposals with regard to regulatory restructure of the financial word and the financial system in our country. they're so prod that they will literally change america. and depending on what we do. in very major ways.

as the chairman knows, i have been concerned long before the credit crunch and crisis, i have been concerned about the need for financial regulatory reform in our country. in fact as when -- when we were the majority, i was the chairman of the subcommittee that brought forward the last major financial regulatory reform bill that we handled, and we worked closely together. i have been very concerned even before the credit crunch and the crises that we faced in the last two -- year or two about america rees competitiveness in capital markets globally. and -- what the policies of the united states government were doing, with regard to -- to making up more or less competitive and have been the chairman for a number of years of the republican task force on capital markets. chairman for a number of years of the republican task force on capital markets. there are very serious issues

that we face in addition to those that were brought to our a tension as a result of the credit crisis and the mortgage crisis and the other economic concerns that have come up in just the last 10 to 20 months. so i completely agree that we need to be working aggressively and in a focused way on making sure that our financial regulatory system in america makes us the most competitive nation that we can be. that's what will be best for us and our constituents, the consumers in our country. that makes america the cutting edge and the leading nation in terms of world financial markets. and i recognize that there are other markets that are today' mernling, that in past years simply did not have the capacity to be strong competitors in capital markets and that we now see, whether it be in london and europe or shanghai or india and other places, we are seeing the

development of very strong, aggressive competitors for our business. and in addition to the focus that we need to have on the immediate crisis that america is facing with regard to our credit system and with regard to the financial regulatory structure that we have, i think we need to have an equally strong focus on america's competitive nature in capital markets. we need to focus on those kinds of issues that will make us strong. and in that regard, i have strong concerns about the legislation that has been brought forward because, as i see it, we have a proposal that will -- about a 1200 page proposal that creates three new agencies and fundamentally al ters, fundamentally alters the way capital is and accessed in united states and will have major impact on our economy, on job creation and on the cost of

capital, on innovation and on entrepreneurship and we simply have to bet it right. this is, if you can even capture it, this is far bigger than just the mortgage crisis and the credit crisis that we are going through today. and we must give it the attention and the fairness and the process that it needs to get it right. there are a number of concerns that my colleagues have already raised with the bill, i won't get go into them in detail but i will discuss some of them. perhaps, i think the core for the immediate need that we are focuseded on is developing the resolution authority in the right way and making sure that we develop a resolution authority that does not institutionalize too big to fail. while, we all in congress agree that we need to end too big to fail, we've been very careful, we have to be very careful that by setting up a formal mechanism to handle nonbank failures of

bank failures instead of using the current bankruptcy process that we're not increasing moral hazard by expanding the safety net and role of the federal government in the economy. because certain companies were not allowed to fail, the moral hazard problem that we we face in this country has gotten worse. it's going to be very difficult to repair this credibility. and when push comes to shove, the government has shown so far that it doesn't get it. from my perspective. as i understand the language in the bill, the authority that will be granted to the resolution authority in the process is extremely broad. it could be used for institutions, very broadly across this country as widely as general motors and chrysler to cit and any other number of circumstances that we've already seen faced in our country. but again, as i understand the proposal, once the government acts, there is no limit, there is no limit on the amount of

fund i funding that can be provided and there is no requirement that the institution must be liquidated. what that means is that when he literally be creating a circumstance in which we increase the potential for u.s. government and taxpayer interventions in the private sector when a company is failing with no limit to what the federal taxpayer can be asked to provide an no requirement that there will be a liquidation of the failing company. that, i believe, is a mistake, a huge mistake in development of a resolution authority. once creditors realize that the government still has this broad authority, there will be an increased hazard that there will be a rush to become those that are too big to fail, to become those that have the implicit government guarantee because those companies will have haven additional advantage in the marketplace with that implicit government guarantee. we must be careful to avoid

that. one of the priorities of this legislation to be to re-establish the principle that we have a market that will allow companies to fail. now, i recognize that we need to have a process in place so that we can avoid some of the very difficult and dangerous consequences of a large institution fail iing and we ne to be able to provide a way to just, as our bankruptcy courts do in many other contexts today to allow that transition to occur. but we need to make sure that we allow that, not only allow, but require that that transition occurs when a company is failing. otherwise, we will continue to see circumstances like we saw with fannie mae and freddie mac, which by the way i also believed we failed to deal with the in the legislation and should and we will see basically a continuation of the concerns that many of us share now i t.a.r.p. i believe we should act on how to handle and resolve t.a.r.p. in this legislation as well.

let me shift for a minute to the consu consumer protection issue, with regard to consumer protection, i am one of those who believes it is a mistake to sever consumer protection from prudential regulation. it's clear that the practices in our financial markets and failures in our regulatory system played key roles in both sparking the crisis and magnifying its severity. in my opinion, we need to strengthen the link and the coordination between prudential supervision and consumer protection rather than severing it. the scope of this issue also is broad. and it could be one of those circumstances in which as senator gregg indicated the unintended consequence if we get this wrong could be that we will actually cause a restriction of acts is to credit to consumers across this country at the very time they need to have a better ability to access that credit in ways that are safe and sound. i do, also agree that we want to

make sure that we protect our dual banking system and i'm concerned about some of the provisions that senator shelby has raised with regard to the question of whether our dual banking system will be preserved adequately in the legislation. mr. chairman, i've got a number of others here, derivative, we haven't had a lot of talk about derivatives here today, but that's obviously one of the key issues we need to deal with. i'm concerned that by creating this new regulatory structure that we see, we will have unclear effects that create burdensome and duplicative requirements for financial institutions and end users of derivatives under a framework that would be administered by two separate agencies that are traditionally at odds with each other on many occasions. if we're not careful we'll be responsible for creating a disincentive for financial markets in this country to work and significantly increase financing and hedge costs for business and end users we would, in that case, likely be chasing

business overseas and imposing tremendous liquidity strains on financial institutions and market participants increasing -- or i should say reduce our competitiveness in markets globally. there are a number of others, i'm going move to a conclusion at this point, mr. chairman, but i think the fact that we have so much -- this is so important and we have so many major issues on the table here we need to get right, requires us to have a process where we work through it and take the time to work through it. i believe that we can find common ground on a tremendous number of these issue areas. i think that this issue, actually is different than the health care debate where it's been extremely difficult for us to find common ground between the two parties. and this one, although there will be some big divisions, there are also going to be a number of areas, in fact, maybe

the majority of the areas where we can find the ability to work forward in ways that we will all have confidence in as we do this. confidence that we've got it right and that we are actually helping to restore america's competitiveness globally. done properly, reform will increase consumer protection and prudential protection, it will enhance our ability to manage systemic risk and end the too big to fail hazard, river h risk in the united states and facilitate capital formation processes that are so necessary for job creation and american competitiveness and that's what i think we ought to set as our ultimate objective here. i'm very concerned as senator corker indicated that the deadlines we're facing right now for development of amendments is just unachievable. i mean there are so many complicated corrections and discussions that need to be held with regard to the current discussion draft that to have the specific amendment language ready within just less than a week or about a half a week is

just too short a time. so i encourage the chairman as you have done throughout this process to work with us closely and to provide the flex ibibili for us to find that common @'4n >> we'll break and i apologize to my colleagues. i hope we get to everyone. and then convene after the 2:30 vote, probably closer to 3:00 senator shelby & will be here. i immediate to be away for a few minutes. i apologize to my colleagues that i'm not here with your comments. i appreciate your indulgeance in

that matter. and i thank you for that. >> thank you, mr. chairman and for you your patience and i just wanted to comment that the chairman sat in this committee with murkly and gregg and others during the he will education labor markup in the same room and showed great patience and focus as we were doing another historical, obviously historical piece of legislation here. thank you for your leadership as we move forward on this legislation, that is good lks, and it takes us in the right direction. appreciate that. beyond the specific financial markets and institutional issues. this bill is about who we are as a nation. one of my constituents, sherry from toledo, ohio captured the essence of the debate. she wrote the economic situation is not just a financial crisis but a crisis of integrity. she had seen her government, the legislative and executive branch over the last decade, weaken the rules of -- weaken the regulatory structure, and --

that protected american taxpayers and the american financial system and she had seen the executive branch, appoint regulators that were fa too closely aligned to the firms for which they were supposed to regulate. now she sees a government, which is -- she sees leaders in wall street, she sees leaders in wall street who -- who almost brought down our financial institutions and our financial system and that she sees a government, and they bail those financial institutions out. and then she sees, these financial services leaders and executives taking huge bonuses. so, this legislation is a moral issue, an issue that really does tell us who we are as a people. when hard working people in my state, people who play by the rules, people from galy to garrettsville and mansfield to middletown. people are robbed of the american dream, the question we face is how should we respond? ohio are robbed of ca

are we policy makers, that work in the best interest of our citizens no matter what they vote for. are we men and women that pay lip service to every day americans and then really pay attention to special interests. and we need to fix a regulatory system. they want to know whose side are we on. one key to effective reform, is to fit discreet problems, some financial institutions played a significant role in the financial crisis, we obviously should not paint them with the

same broad brush. most banks surely community banks are prime example played by the rules are not to blame. for those institution that is contribute mightily to the current turmoil we face, it is time for them to face the music. and the chairman's bill creates a consumer financial protection agency, establishes an agency, oversees risk and sets up a regime that would get rid of the notion too big to fail and reforms the derivatives market. and we need to put the focus back on the wall street consumer and we need to do it now. and with the systematic risk agency, there will be a new sheriff in town, to police not just the size but the interconnectedness of major financial institutions. and this gets at the -- at the too big to fail problem. if we don't address that we play as well set the egg timer and wait for the next financial crisis to hit.

you can't treat huge corporations whose actions that reverberate throughout the system, the same you do small companies. the bill would bring the multi-trillion dollar market of risky transactions out of the shadows and into the light of day and requiring more contracts to be cleared and traded on exchanges. and the american people are counting on us to do the right thing. people like carla from lautenville to 15 miles from where i grew up and wrote to me asking, when we're going to prevent the next crisis and what are we doing to do this. we have an obligation to karla and all americans. that obligation to promote a strong flexible and vibrant system, one that fuels our economy, with -- with flowing credit, without turning on consumers or collapsing on the weight of its own recklessness. a system with checks and balances that makes collapse unlikely and the prevention of

collapse foolproof. it is my hope i can answer carol soon and tell her we have done what we to prevent the next crisis and we did it in the right way. >> i agrees this is a vitely important matter. but i'm sad that the way it is developing so far, is a huge missed opportunity. and i hope we can still change that. but do i think the way it is developing, it is a huge missed opportunity in at least two ways, first of all senator crapo and others have said, this is an issue where we could effectively come together, at least on many, many of the issues involved and

craft a good sensible bipartisan solution. but this bill is not an attempt to do that. and this marketup process is not an attempt to do that. clearly this is all teed up, the draft bill and the marketup, to be a purely partisan process. i think that's a shame. there are a lot of issues in the complaining and the senate which -- do develop into partisan debates and health care is one of them. and -- and that play be unavoidable given very different points of view. it is completely avoidable, here. and -- and in -- on the whole host of issues, maybe in the everyone involved, but on most of them a whole host of them. we could come together and have a strong sensible, bipartisan result but this process so far is not leading there. and i'm also disappointed with

this process, and how it -- it is progressing because it is an opportunity, should be an opportunity, to fix the problems that led to the horrible crisis, we have lived through recently. and many arts of the bill are not that in my opinion. and many parts of this bill large parts of the bill instead follow the advice of rahm emmanual, the statement that we're not going to let a good crisis go to waste. and i truly believe many parts of this bill are about using the financial crisis to dramatically expand federal government power, and intervention and regulation, of a large part of our economy. and in the let a good crisis go to waste. so again, that's a loss -- lost opportunity of truly focusing on the problems that led us -- to this crisis and fixing those, not -- not using the crisis as an excuse to -- to pursue a

partisan jen that. i obviously have -- several significant reservations about the bill, at least nine and let me list those, briefly. and first of all, my -- my main and biggest reservation is exactly the same as senator crapo's. he laid it out extremely clearly. my goal in this sort of bill is to replace too big to fail with an effective resolution mechanism that insures that failed institutions are done away with in an order my way, in a nondisruptive way. and the language in this bill -- institutionalized too big to fail. it makes permanent too big to fail. and my goal in this bill, was to end tarp and move on to a fundamentally different sort of resolution framework. and this bill -- continues tarp,

in fact in its essence in the current language, it makes permanent that approach. and to me, that's exactly the wrong direction to move in. and secondly, in creating this new consumer finance protection agency, i think again, and we're not solving one of the problems that led to the crisis and we're institutionalizing it. because, this would be -- a major new agency, a very powerful new agency, and -- focused on a -- on a mill consumer-oriented agenda, but completely divorced from safety and soundness. and to me that sounds familiar. it sounds like fannie mae and freddie mac and sounds like the excesses of the community reinvestment act. that's not the only cause of the crisis we have lived through in the last year, but it was a major cause of this crisis.

and so again, rather than fixing that, we're institutionalizing that by having an extreme my powerful new agency, with a politically driven consumer agenda but one that is completely divorced and institutionly divorced from safety and soundness. number three, i'm very concerned that -- this bill continues to shroud the federal reserve in secrecy and doesn't properly bring the light of day to the federal reserve through broad based audits and the like. and i strongly support that sort of audit regime. number four, i think we don't adequately protect smaller institutions or the dual banking system. that's pretty darn unfortunate and pretty ironic, given the history of the last year. and broad brush, the institutions, that brought us to crisis, g. did as well, but the

financial institutions that bratt us to crisis were all on the very large end of the spectrum. broadly speaking, smaller community banks were not big culprits, and a big cause of the crisis, they certainly wrt in louisiana where we still rank among the states who are on the good end of the spectrum in terms of foreclosures and that didn't participate in the subprime mess and the like. and yet, even given that history. we're giving further advantage, to the big institutions and further disadvantage to the smaller institutions. and not adequately protecting the tule banking system. and number five, the bill, it doesn't address a huge problem, which i mentioned earlier, which was -- part of the crisis, not all of it, but part of it. and which is a problem, at fannie mae and freddie mac. we don't even have a section in

the bill, about fannie mae and freddie mac. that's the huge elephant in the room, which isn't even talked about and in the bill, and -- or by the majority side. i believe that's a grave mistake. six, the bill also -- doesn't traci huge problems at the federal housing administration. and their capital reserves have dipped below, well below, the 2% statutory requirement and f.h.a. doesn't seem motivated to do something serious to address that. and i've said this once, i'll say it again. i'll keep saying it. the f.h.a. is a ticking final bomb that on its present course will require another taxpayer bailout. and we should avoid that, and in the just wait for that bomb to explode. seven, title eight on payment and clearing and settlement supervision is particularly confusing and grans prod powers

and seems to undo everything that the bill does in the derivatives title by allowing the federal reserve board to determine position, limits. soive concerns in that area of the bill. and eight, the bill is filled with -- with gifts to the trial bar, which don't protect consumers, which don't protect financial markets, but do enhance the bank accounts of the trial bar, just as an example. section 984 creates a knew private right of action. and that for al gations of aiding and abetting, the securities exchange act and nine, i'm deeply concerned about the s.e.c.'s self-funding provisions. particularly give n how poorly the s.e.c. has performed in its oversight role in many areas, including the stanford case, which -- so affects my quaints in louisiana. don't get me wrong, the s.e.c.

absolutely needs adequate robust funding. but these -- these self-funding provisions, which take power away from congress and grant huge self-funding authority, and the s.e.c. is in the the way to do it. and in chosing, mr. chairman, let me get back to my first and fundamental concern. n @ @ @ is @ @ @ @ @ @ @ @ @ @ @ @ @ @ @

this bill does precisely the opposite. it institutionalizes t.a.r.p., it makes permanent are too big to fail. it grants broad authority for never-ending cash infusions by the taxpayer to not just banks but any sort of company in america. so i don't think america wants us to go down that road. i do think that not only will yield future bailouts but it does create the sort of heightened moral hazard that senator crapo talked about and invites collapse and invites future bailouts. and i'm gravely concerned about that first and most fundamentally. i hope this process, this exercise can change in its flavor, in its direction, because as i said at the beginning, right now, it's a purely partisan bill, a purely

partisan markup under the mantra, we're not going to let a good crisis go to waste. i hope that can change, i hope we can come together in a bipartisan way, put good policy forward with the clear focus of solving the real problems that led to the crisis all of america has lived through in the last several years. thank you very much, mr. chairman. >> thank you, senator. and we now turn to senator bennett. >> thank you, mr. chairman. i'd like to thank chairman dodd and committee staff for putting together an extremely comprehensive bill that takes crucial steps towards securing our financial system for years to come. it's been over a year since the american taxpayers were forced to open their checkbooks to rescue financial firms that were deemed to be too big to fail. in effect, consumers borough the brunt of our regulatory failures in two significant ways.

first, firms on wall street exposed consumers to inordinate risk by selling them products that were unfair and lacked transparency. then the same wall street firms were build a out by taxpayers in order to protect our system from complete collapse. to add insult to injury, mr. chairman, this came after a period of economic growth in our country when median family income actually went down. it's the first time in our country's history when working families income actually fell in real dollars during a period of economic recovery. so our work iing families are n not just recovering from the worst recession since the great depression, not just recovering from an economy that was too levered where profits weren't real and where the growth wasn't real, they're recovering from effectively recession that lasted four ten years before that. while wall street was fortunate enough to receive a rescue, families all across our country in my state have been in

freefall due to the current are recession, whether someone is trying to run a small business, send their kid to college or even keep up with their mortgage payments, this is truly a generational life changing period for too many families. so we've learned the hard way that bailing out large banks won't solve problems caused by inadequate system of regulations and. in fact, since the bailout, systemic risk has become even more concentrated in our largest institutions. for example, just four large banks issued two out of every three credit cards in this country. so it's incredibly important that we begin the hard work of reforming our financial system without meaningful reform, our financial system will remain dangerously susceptible to the very same problems that wrecked our economy last year. we need to create a resolution authority that can handle the dismantling of a large interconnected company without transforming the fail aing company two a permanent ward of the state like a gmac or aig

without creating real financial consequences for failing management and investors will mark truly market discipline putting our broader economy at further risk. we also need to do a better job at protecting consumers and investors. the government failed to address the subprime lending crisis which played such an enormous role in the current recession. at the same time, our credit rating agencies have too many conflict of interests embed ed in their compensation structure which has undermined their credibility and disadvantaged investors. and we need do a better job of monitoring our derivatives market. it's my understanding that between 2000 and 2008, the must be of outstanning over-the-counter derivatives contracts rose by 522%. our regulators have little itemized meaningful information on these contracts and how they affect our broader markets, but no product is perfect given the complexity and number of issues at stae, we should seek to minimize any unintended consequences of the bill.

i think we need to be careful with respect to derivatives that we understand that for many industries and companies across our country that will is a significant business purpose in the derivatives that they use. and along those line, mr. chairman, our effort must not unfairly single out smaller banks and credit u.n.s, they don't have huge compliance departments and can't grapple with government regulations, these smaller players lend money to communities nnd small businesses in ways that create jobs. our reforms should not disadvantage these local lenders in the marketplace, it's also important to note that they did very little to contribute to the current are crisis. so let's not overreact by catching them with new requirements that have unintended consequences. finally, it's my hope we will be able to fashion a bill with bipartisan support. in my brief time in the senate, i've seen how members of this

committee are worked in a bipartisan fashion. i commend both chairman dodd and ranking member shelby for creating a an environment that fosters bipartisan issues. it's my hope we can ultimate ly craft a bill that both democrats and republicans can can be proud to support. these issues are too important and consequences of getting this wrong are too serious, not just for wall street but for the working families all across the united states of america. i look forward to the work ahead. and i thank you, mr. chairman, you look good in that chair. >> thank you very much, senator bennett. we now have the opportunity to turn from one senator bennett to other other senator bennett. >> thank you very much, mr. chairman. one of the advantages of coming late, is a, you get to hear everybody. and b, your constantly changing your statement as you hear other people make the points you would have made if you had been here a little early. i particularly want to associate

myself with the comments of senator gregg. i think he summarized it about as well as it could be summarized and his reference to the book "bubbles" is, i think instructive here. because we have had a lot of conversation not only here but in the congress generally as to what was the cause of the problem? and very often we hear well it was wall street. i go back to a conversation i overheard with a group of world class economists in davos, switzerland, discussing this with very long-headed academic terms and one economist summarized it perfectly, he said i knew we were are in trouble when my taxi driver told me he owned three houses. this was caused by a bubble in housing.

senator gregg is correct, the congress played a role. when i first came on this committee as a junior member, i remember the more senior members of the then-majority complaining bitterly that the banks were not making enough credit available to the poor. and saying, you treat credit as if it should only be the province of the rich. you should be making credit available to the poor. they need houses, they need credit for their businesses, you should be doing everything you can to make sure you extend credit. interestingly after the collapse came in 2008, some members of congress actually sponsored legislation that would put bankers in jail for having made loans to the poor. now, we created an atmosphere where we were are pressuring banks, we, the congress, create an atmosphere where we were pressuring banks to make loans.

the bubble in subprime lending started as people bought the bubble concept which always is -- continued to go up. senator gregg made reference to the tulip bubble. we had the dot com bubble and oil price bubble. people were buying oil futures on the grounds that oil futures would never ever turn around and price would never come down. there were pension funds managed by some of the wisest people in the world, buying oil futures at $140 a barrel because they believed that oil was going to go do $200 a barrel by the end of the year. and when the real market forces then came in to play and oil dropped to $30 a barrel, they paid the price. there were people all over america absolutely convinced that house would go never turn

down and mortgages were the safest investment could you possibly make and yes, they got securiti securitized on wall street and yes, it was the big financial firms on wall street that constituted the greatest systemic risk when the bubble collapsed. but let us not make the mistake that they were the one whose created the psychology that produced the bubble. the reason i make that point is because the phrase that is used with respect to war is used here they say every general fights the last war. every general goes into a war based on the experience in his previous one and while we have war after war after war throughout history, every war is different. and president eyewitness hour, general eisenhower learned in

north africa thoot kind of tactics he had learned at west point didn't apply anymore and he had to change bra before he could be the successful commander that planned normandy. and many of the things we did in vietnam were fighting the previous war and many of the things we did in iraq were based on our experience gulf war. we must be very careful in this circumstance, mr. chairman, not to build our solution to the financial regulatory challenge on the last war. or in this case on the last crisis. we must understand that the regulatory regime we will put in place must be forward looking instead of entirely structured on the basis of well, how can we prevent what happened from happening again? we know how to do that. that's fairly easy.

let me give you some examples, one of the glaring problems of the past crisis is that we put too much faith in regulatory supervision. some of the largest bailouts that cost taxpayers the most money have been at the highest regulated institutions. some of the more loosely regulated entities subject to pure market discipline came through this much better than the more regulated ones. there's a signal we should pay some attention to. a badly managed firm, firm that's overextends itself will always be punished by the market. at some point or another, the market is inexrabble. now the market reacts to government regulation and the question we need to ask is how will the market react to this

bill? what will be the consequences? even if we achieve the goal of reducing risk for customers and eliminating the possibility of systemic risks, will we pay the price to which senator gregg referred of less innovation, less investment, less credit availability and lower economic growth. as one who has built businesses from scratch, started in a basement, and one who's presided over businesses that have failed, started in a garage, i hoe that you have to have access to credit, you have to have access to capital, put it that way, whether it's credit or your brother-in-law or angel investors or the bank, you have to have access to capital if you're going to build a business and create jobs. we want and need individuals and companies to take that risk and

that's what leads to economic growth and innovation, we need to have people borrow, invest many of my colleagues have talked about that here this morning and i think it's a very

important question we need to answer. and will entities that do not really fit into the bank regulatory model but are deemed large enough to be systemically significant become subject to bank-like regulations under this proposal? if so, i don't understand how it would work fairly and efficiently. for example, a large property and casualty insurer has very different risks, capital needs and liquidity concerns than a major bank like financial entity. all right. resolution, that's an issue that's been discussed a lot. question. how would the resolution authority really work? my fear is that the powers contained in the bill to resolve failing financial and nonfinancial entities under this authority could be used to create a permanent t.a.r.p. that's been discussed also. no requirements that the entities be completely wound

down and liquidated. they would be simply supported and allowed to continue in perpetuity. a very real possibility. question, by creating just a division by state bank regulation within a single federal prudential bank regulatory agency, would this cause the state bank system to drift into second class status? we hear a lot of conversation about the dual banking system and everybody saying they're in favor of it. i am and i think we need the competition, choice and innovation that a vibrant state banking charter system and regulatory model can provide. and i recognize and i'm concerned about the gaps in regulation but i do believe that some regulatory competition can be a good thing and again looking back in history, the states have done a pretty good

job. i fear they would be downgraded by this. okay. the consumer protection agency, a the lot of conversation about that here this morning. question, will the creation of the consumer protection agency outside of the regulatory regime create tension between regulation and consumer protection leading to a systemic freezing up of the availability of credit? this is one of the issues that has united one of the very few issues that has united banks and credit unions in my statement. my state is probably ground zero for the fight between banks and credit u.n. unions but on this they are together. there is work -- consumer protection is important. safety and soundness regulation is important. and the two of them should go together so that one does not trump the other.

i'm certain we can devise a scheme that provides the proper balance within this bill if we work at it. finally, derivatives. question, will the derivative regulation in this bill adequately address the end user needs and uses of these risk hedging products? derivatives didn't grow up just to be a threat. derivatives grew up because there was a legitimate market demand for the results that they produce. a market demand that has been benign in most cases because it does allow businesses to hedge their bets. with need to do work on derivatives, i understand that many of the derivatives did get out of control but the current proposal creates a sis incentive for many of the current end u users to continue to use these projects to hedge their risk

exposure and it adds significant and unnecessary costs for them to participate in these markets. well, those are my five questions in the five areas, mr. chairman, you've been very patient to sit here and listen. we have the true believers sitting in the audience who have stayed through everybody else an are willing to listen and i thank you and them for your patience. >> i thank you very much, senator. and i think the reason that chairman dodd put forward this discussion draft was to enable people to raise exactly the sort of questions you've listed out in your presentation and i know that the discussion will go forward in the weeks ahead. so with that, we'll adjourn this meeting. we will reconvene after the meet vogts that are scheduled at 2:30. thank you.ñgñgññññññ/ñ/ççññ

quote. and further, the receivership would avoid or mitigate these risks. this is in section 202. section 203 states that upon this determination, if such a determination is made, the secretary of the treasury should appoint the fdic as the severe. it doesn't say any conservator nor does it permit open company assistance. a severe is appointed to wind down a financial institution. simply the fdic can't bail out a company and put it back in business. the fdic will have the same bridge authority that the fd ic has used successfully for banks to prevent a destabilizing dumping of assets in the market anddown of critical operations.

this protects taxpayers just as the current prij authority protects the federal deposit insurance fund. once the company has been put inthe fdic receivership, the management would be replaced, the shareholders would be wiped out and the creditors would take a hit. to put it simply, the bill permits no bailouts of failing companies, between the receivership authority and the myriad provisions in title one that tackle the risk, the bill would end, as we see it, too big to sail. obviously that's complicated. there are other ideas. i listened to a colleague today talk about using the fisa court model that we use in intelligence matters. we've been through that debate. these are federal judges that are designated that are then called upon in very special circumstances to come in and make a determination as to whether or not a warrant is permissible, but it's a separate -- existing judges to perform separate functions under different rules.

so there are various ideas out there kicking around on how to do this. we incorporated one set of ideas that some have come to us and anyone to leaf this some sense. room to believe there's any effort here to try to minimize the importance of reaching the conclusion that we no longer have this "too big to fail." that can't happen. we ended here, and i believe it it's. >> it's a democrat. >> we'll go to senator warner and senate johans. for those who didn't get here, they asked if their statements could be included in the record. for those who can't get back here, we'll certainly do so as i said this morning. senator warner. >> thank you, mr. chairman. i would ask my statement be included in the record and just to comment on the fact that, first of all, that with senator johans and i here, this is a

long way, mike, from both of us being governors and being the first to speak to kind of down at the tail end. i very much appreciate the chairman and the ranking member to come back -- >> senator shelby and i always think it's a little humility on the part of the former governor is not a bad thing. >> it is. well, let me thank you. let me also just quickly add on -- i think, mr. chairman, clearly getting resolution right is going to be one of our biggest challenges. i share with you your desire to make sure that we -- i've had a number of conversations with senator shelby on this as well. we've got to end too big to fail. getting it right with some balance of time so that we can unwind appropriately is absolutely correct. i think we've seen in the crisis a year ago, i would argue, two instances, one in the case of lehman where because there was not a period, you had folks, particularly counterparties

rushing in and getting fire sales, making the lehman winddown even worse. in the case of aig, we, the taxpayers, got stuck holding the bag in many ways and payingti o, i believe, extraordinarily more than if we had an appropriate period, but with the other all goal of winding down these organizations and not allowing them to receive further taxpayer support. let me also thank you for the amount of time and effort that you and i know the ranking member and the committee spent looking at this issue. my good friend, senator corker, talked about the amount of time we spent together with other members trying to get up to speed. i spent 20 years around the financial markets. i came to this committee thinking i knew something and quickly realized how much more i had to learn. and working with senator corker on some of these issues and

bringing in experts has been very, very helpful to me. i also want to make one comment that, complimenting the chairman and so many members on both sides of the aisle on what you had to do last year, not very politically popular. not necessarily things that any of us would have liked to have done. i've been supportive of the -- some those actions since i've been here. clearly t.a.r.p. and others have been easy to criticize. i do believe that some of those actions averted what very well could have been a depression. and i think, if i just think back, since the time i've been on this committee, if in march of this year when we had just gone through a quarter where we lost over 6% in gdp growth and the dow was at 6500, if anyone had said that, would you take an economy at thanksgiving where the dow was north of 10,000, where banks were repaying their t.a.r.p. funds and we'd just

seen a quarter of 3.5 gdp growth, we would have said that was wildly optimistic. by no means are we done. 10,000 point dow is great for some. but if you don't have a job, it doesn't mean very much. or if you're a small business in my state or in nebraska looking for financing and you can't find it because banks have constricted capital, it doesn't mean much. if you're a entrepreneur coming out of a virginia tech or out of uconn looking for startup capital, it doesn't mean much. i think one of the things we need to recognize is that, you know, over the last few years, banking and investment banking has been the place to be as year after year we've seen banks record record profits. but i think that we've seen that many of those gains were really based upon black magic and that the magic of the marketplace has turned into a nightmare for an awful lot of families and

businesses and in many ways for the country. to a degree it's time to make banking a little bit more boring again. and i think it reflects the fact that one of the things that we've had some conversations with, and it's not directly a purpose of the bill, but something that i think has underlined -- i know my colleague, senator greg was talking about real estate being one of the @@@@@

leverage ratios and go out and create a financial engineering tool that might create you a lot of wealth but really doesn't add a lot of innovations, jobs or value to our overall society? so i come to this committee as someone or perhaps on this side of the aisle somebody who will match his free market credentials with anybody on the committee, for that matter in the senate. and as much as i believe in the market, i also believe the market's got to have some rules of the road and that's what our challenge is going forward. and while i do believe and support my good friend senator shelby's ideas, trying to make sure we get to the cause of how we got here, i don't think we can simply put this -- put this task off. i know that there are tremendous

numbers of businesses, entrepreneurs and others who are waiting on the sidelines, waiting for us -- waiting to get us a new set of rules because the existing financial regulatory system, they've just lost faith in. they don't want us to over do. but they also -- i've not met anyone even from the financial industry that hasn't acknowledged that there was ex-es and there needs to be correction. and i think that the only way we can return to where we get that balance right where people are once again innovating, creating jobs and value, is to make sure we've got an appropriate financial set of rules, rules of the road. now, i would also concur and i know other members have said this, that if there was again a case where the perfect can be the enemy of the good, it's in this area. the complexity of the issues that we are facing are enormous. senator corker again made mention of the fact that he and i have been spending a lot of time trying to get resolution

authority right. it is extraordinarily complex. i appreciate the chairman's comments earlier about the goal of the draft is to make sure that we no longer have to hear in the public conversation "too big to fail," and never again have to have the public pick up the obligations of "too big to fail." i particularly appreciate the chairman's comments that if the discussion draft doesn't fully get us there, he'll work with all of us to get it there. that is clearly a common goal of folks on both sides of the aisle. we've got to make sure that we prevent systemic risk obviously in "too big to fail." we've got to make sure, and i think the discussion draft takes us in this direction, we take a 21st century look at the mishmash of federal raeg laters amongst depos store institutions so we don't have the regulatory arbitrage, both real or threats of arbitrage that in the past have created some of the

opportunities for excess. we've got to make sure that we do a much better job of restoring transparency and accountability to our system. that ranges from some of our sophisticated financial products around derivatives to hedge funds to basic clearing processes between our banking institutions. personally, in addition to resolution, i've been working very hard on the question of how we get a systemic risk, and i appreciate the chairman's -- the fact he's incorporated a number of the ideas that i proposed earlier on the year on the floor of the senate and with legislation about creating a systemic risk council and making sure we embody an entity with the ability to look above the silos of banking and securities and other related financial activities and have a holistic approach that is going -- with an independent chair that's seoul function is going to be making sure that we look at the

risks to the system in its macro approach. i think that is best suited in the an independent entity with an independent chair where there is no other primary function and that we can consolidate all the information coming up from the prudential regulators. but while we need to create the systemic risk oversight and occasional rule making, we've got to make sure that, hopefully this body is rarely called into action, that the major goal here is to empower the day today prudential regulator to do their job better and do their job in a more efficient way and simply this systemic risk entity being the -- in fact, regulator of last resort and also the entity that can set -- i agree with senator gregg, there's nothing wrong with size in and of itself, but to give simply size and the competitive advantages that size sometimes bring to the marketplace and then the ability to take undue risk, we need to

put some speed bumps at least in the road. whether that's additional capital requirements or an examination on a holistic way of some of these large bank and holding companies that have securities trading, other risky financial instruments in their portfolio that indirectly could then effect not only the system but obviously the depositors, putting some appropriate at least bumps in the road in there i believe makes some sense. so there's enormous, enormous work to be done on this. i am new to the senate, but i want to i guess close with echoing again my friend, senator from tennessee's comments. i've been very pleased as a new number with the kind of spirit that both the chairman and the ranking member have brought to all these discussions. there's not the back and forth. there are areas where we may have serious disagreement. but i commit to work with both of you and senator johans and all the colleagues to make sure we get this right.

if there was ever a piece of legislation that the rule of unintended consequences could have drastic effects, long term, not just on our economy, but on the world's economy, it's this issue. there's nothing that i've seen on these areas while they are arcane that any of these areas come with a traditional republican or democrat position. our job ought to be making sure we get it right. our job ought to be making sure that the american public and the american taxpayer is never put back in the kind of circumstances they were put in last fall and that we do it in a way that allows, echoing what senator gregg said, allowing america to maintain its financial leadership of the world's economy. i look forward to working with you to make sure we get it right. >> thank you, senator very much. i appreciate immensely your work you've done. we've talked about the formal hearings. what we don't ever chronicle and necessarily keep tabs on is the number of informal meetings,

conversations that go on all the time that happen on this subject matter. i don't know of another subject matter in my 30 years that i've been o this committee where we've spent as much time as a committee looking back as well as forward to what teps we ought to be taking. in the midst of other things we've done not only to this. i appreciate the tremendous amount of experience you bring to this. one of the values of having new members come in and you bring your experience as governors, as both of you have had, but also your experience as a secretary in a cabinet position, somebody who has been involved in private equity in the financial sector and can personally speak to the practicalities on a day-to-day basis. all of that brings a tremendous value as we go forward. i thank you, senator warner for that. senator johanns, i welcome your comments as well. >> thank you, mr. chairman. i was thinking about senator

warner's comments about being a former governor and yet here we are speaking near the last. there's sometimes great value in having the last word or thereabouts. that's not necessarily a bad thing. mr. chairman, and i'd say this to the ranking member, i think you can see from the comments today the high regard that your colleagues hold each of you. there's a tremendous amount of respect toward the ranking member and chair. i think you set the correct tone. we are here to try to figure this out and move in a direction that is good for the nation, good for our economy, creates jobs, provides the kind of protection that our citizens are expecting us to provide. so i applaud you for setting that tone, and i just want you to know how much i have appreciated it, how much i've really enjoyed and been challenged by this committee.

i must admit i do more studying for this committee i think than any because it's so active. it seems like we have a lot of hearings. the final thing i want to say in that regard, and it is again a credit to you, mr. chairman, i've often sat there while we've dug deep into these really tough issues and thought to myself, you know, the chairman could have ducked this issue. and you don't. you take on these hard issues. there probably isn't any political mileage in you doing it. but i have appreciated it. and i just think it sets us in a direction that is positive and hopefully gets us to a good result. i think one of the nice things about being so new here is that you can risk saying things that maybe, after i get a little more experience i'll look back and say, gosh, i wish i hadn't said that. but i'm going to say this anyway.

it will be up to the chairman in consultation with ranking member to decide what's next and where we go from here. i do think this has been very helpful today. i think people have kind of gotten off their chests some of the things that they wanted to. and yet i pick up that the mood is very good. these issues don't cut on partisan lines. commune theity banks come community banks come to my office, your office, senator shelby's office. they have their concerns. it's not a republican/democrat thing. quite frankly, they don't care much what my party registration is. the reason why i set that out is because i think there's a great opportunity to take the good will on this committee and the respect that exists for the ranking member and chair and think about where do we go from here. one possibility is just proceed to markup, count the votes and

see where it comes. i hope we don't go that way. i'll just be very candid. maybe i'm treading on thin ice here. my hope is that -- and i'm not asking for delay. i'm just asking for the opportunity for the committee to work together. there may be tough votes on issues. there may be disagreement about what we think is the best course of action. that's always fair. but i think there's a great opportunity here to work through some of these issues and truly craft a bill that works well for the country in a bipartisan way. i throw that out because i know you'll be talking about what next. and i hope that is considered, maybe a little more of an informal process. you've got a discussion draft out there. it's gotten a lot of discussion, a lot of agreement, disagreement and debate. i'm hoping that we can now sit down and take the input and move forward. those would be the main things i

wanted to say today. i can certainly talk about the single regulator. i just want to mention, mr. chairman, coming from a governor's background and having a director of banking and having state banks and seeing the dual banking regulator system. i must admit i'm a believer in it. i just think we did a great job at the state level. if it's anything i bristle against sometimes these days having been a mayor and a governor and county commissioner and a city council member, it's kind of this notion that, about the only good thing that can happen happens in the beltway. well, i just want to say there's a lot of good things happening in the states. there's a lot of good things happening in communities across the country. there's a lot of good, tough, fair regulation going on. we did it. i felt we did. i had a great, great banking director. like i said, i felt we did a great job.

i want to make sure that whatever model we adopt we're understanding of that because again, i just don't think because it happened in washington means that's the only way it should happen. consumer financial protection agency, i'll just tell you, i've really agonized over as much as anything. i think if we did a roll call vote on do you think there's a need for protection against consumers, i think you'd get a unanimous vote. it isn't the premise that's the problem. it is how we get there and how we manage that and how we interface with others that have regulatory powers today. i will tell you as a cabinet member, every time congress could streamline something for me, it made my life easier, but it didn't necessarily make for a better result. i thought we ran a great department. which had a lot of regulatory

responsibility, but quite honestly, it's hard to regulate on a national basis and really have the impact that you want. i only mention that because i think there is an opportunity for many roles here and still @ @ @ @ @℠@ @ @ @ @ rr topic. i'll just be very blunt about it. but having said that, hugely important topic.

it is our nation's way of managing risk. the other thing i would tell you that i've come to appreciate about derivatives in their most basic form, and they're hugely complicated, they are a contract. and they are a contract by which parties try to make hopefully a reasoned assessment about risk allocation in exposure to risk. and i think it would be very, very unfortunate if, looking at those existing contracts, if we got in the middle of them and redefined the rules in the the middle of the game. you see, one of the things i've learned is that derivatives are priced in a certain way because of certain factors. and if we have changed those factors or we change our rules we may find ourselves inadvertently unintended consequences picking winners and

losers. and i don't think that's what we're intending to do. and yetly say in this area i certainly appreciate we were so lacking in transparency. we didn't have a clue about how much risk exposure there was out there. and i think there are better ways of working that transparency issue. but i will constantly try to remind us that, as a government, we have to be careful about contractual relationships and the rights and obligations that have been established under the old regime and how we manage forward and try to do that in a thoughtful way. with that, mr. chairman, there are only about ten dozen other things i could mention. i'm not going to do that to you. it is late in the day. i just appreciate the opportunity to offer a few words. i want you to know that i- it is my sincere hope that somehow the two of you, the ranking member and the chairman can sit down

and work for this and maybe chart a course for us in a process by which we can work -- i don't know how best to work, but maybe chapter by chapter, piece by piece, because i think we'll get a good bill. the karma is good, if you know what i'm saying. i'm optimistic about where we have headed today. thank you and thanks for your patience. >> thank you, senator, very much. i can't thank you enough for your very, very constructive comments. i not only listened to them carefully, but they embody exactly the kind of framework i'd like to proceed under. we've got senator murphy here as well and then i'll share concluding remarks today, barring some others showing up. as always, very constructive, senator. can't thank you enough. you're bring a wonderful experience. i fail to mention the mayorship and the city council job as well. i apologize to you about those other experiences.

on my list here, we turn to senator dock ka next. i see you are on your way home to ha why yeah or something. >> thank you. thank you very much, mr. chairman. i want to thank you for all of your tre men does leadership and for convening this markup. and i also want to thank the ranninginging member too for what he's done with the committee. enacting t.a.r.p. brought with it an obligation to reform our financial system, to make it more stable and more fair to working families. i'm proud to have worked with you and with your staff to develop this historic legislation. this vital bill protects, ed case and empowers investors and consumers. i greatly appreciate the inclusion of my proposal to

create an investor advocate within the securities and exchange commission in this legislation. i've always wanted the sec to retain its investor protection authority. however, it is necessary to create an office of investor advocate within the sec to strengthen the institution and ensure that the interests of retail investors are better represented. the investor advocate is tasked with assisting retail investors were resolving significant problems with the sec or self-regulatory organizations. the investor advocate's mission includes identifying areas in which investors would benefit from changes in commission or sro policies and problems that

investors have with financial service providers and investment products. the investor advocate will recommend policy changes to the commission and congress in the interest of investors. i ask unanimous consent, mr. chairman, that a letter of support for the creation of the investor advocate for consumer labor and industry organizations be included in the committee record. >> thank you very much, senator. >> thank you, mr. chairman. i also appreciate the inclusion of several additional investor protection provisions. i have advocated for applying a fiduciary duty to brokers and requiring that point-of-sale disclosures be provided to mutual fund investors since 2005. i appreciate your including these much-needed reforms in

your legislation, mr. chairman. imposing a fiduciary duty on brokers is necessary because it will ensure that all financial professionals, whether they are an investment adviser or a broker, have the same responsibility to act in the best interests of their clients. clarifying that the sec has authority for point of sale disclosures on mutual funds is essential so that investors are provided with relevant and meaningful disclosures from which they can make better informed investment decisions. mr. chairman, issues relating to mutual funds are so vitally important because these are the investment vehicles for middle income americans that provide diversification and professional money management. many working families rely on their mutual fund investments to

pay for their children's education, prepare for retirement and attain other financial goals. we must ensure that working families have the relevant and useful information they need when they are making decisions on which their financial future depends it is my intention to file an amendment that will further clarify that the sec has authority to effectively require pre sale disclosures prior to the sale of financial products and services. mr. chairman, thank you for also including an important sec financial literacy study. the sec will have it to develop an investor financial literacy strategy intended to bring about positive behavioral change in investors. additionally the geo study on

mutual fund advertising will further examine recommendations intended to improve investor pro techses and insure investors can make sound financial decisions when purchasing mutual fund shares. i want to thank the leadership and the staff of the sec for working with me and my staff. i appreciate all of the efforts of my friend, chairman shapiro to better protect investors. i look forward to continuing to work with chairman shapiro and the rest of the commission to better protect, educate and empower investors. too many working families are taken advantage of by predator lenders and questionable business practices. i commend the president for his dedication in trying to improve the lives of working families by creating the consumer financial protection agency.

the new agency has tremendous potential for restricting predator financial products and unfair business practices such as mandatory arbitration. mr. chairman, i also want to thank you for working with me to create an office of financial literacy within the scfba. the financial literacy office is tasked with developing and implementing initiatives intended to educate and empower consumers. a strategy to improve the financial literacy among consumers that includes measurable goals and benchmarks must be developed. i also want to thank department of the treasury staff and our colleagues in the house for their contributions on this issue. mr. chairman, i appreciate you working with me on the title 11 which creates the financial regulatory agency's transection

oversight commission. there will be extraordinary challenges presented by the creation of three new regulatory agency and the transfer of staff responsibilities from the existing regulators. this commission is intended to provide oversight over the transition process and ensure that the new agencies are tracked and retained. a qualified workforce and establish comprehensive training and benefits programs. finally, mr. chairman, there are several additional issues that i want to include in the mark. i look forward to contiing to work with you and other members of the committee to have these included. again, mr. chairman, thank you for all of your work and that of your talented and dedicated staff and this vital legislation that will protect, educate and empower investors and consumers. thank you very much, mr. chairman.

>> senator ak ka ka, we thank you very, very much. all of us have a deep appreciation for your consistent and untiring commitment to financial literacy. you have been speaking about that for so many years, i don't recall a time when we haven't had a piece of legislation up that you haven't found some way to raise that very important issue. it goes to the issue of individual responsibility, people being aware and knowledgeable about how to conduct and manage financial activities. we appreciate immensely your commitment to those issues, among others. i wanted to particularly point out your stead fast report for that particular effort. i thank you. senator merckly. >> thank you very much, mr. chair. i echo your words about senator ak ka ka. when i came out of graduate school to work here in washington, d.c. for the defense department i was turned down for my first credit card because i didn't have two years of job experience. and now the credit card companies send applications to

my children and my dog, and we didn't have payday loans and we didn't have a host of other very complicated products. mauer gajs were something you could actually read as opposed to being a stack of papers an inch thick. so it is a much more complicated world. we do not in my home state have financial education as a required part of a high school degree. it's something i've talked about for a long time. it is a challenge for our children to go out in the world and be poorly prepared for the complexity of basic financial decisions that will face them. i offer to assist you in any way i can in that area. i thank the chair for putting together superb discussion draft, one that takes so seriously the challenge that we face in rewriting the rules for wall street, rules written so

that traffic flows freely but doesn't have to stop at every corner. right lane markers, right traffic signals. it is indeed a complicated world. and i think this draft really puts us on the path to utilizing all the testimony we've had throughout this year in a very productive manner. during my lifetime we have had two major financial calamities, the savings and loan disaster of the 1980s and the financial collapse of 2008. it is my goal, and i suspect everyone's goal in this room to set the rules of the road so we don't have a third in our lifetimes, so that business can thrive, so that families can thrive. certainly if you look at the collapse of 2008 from the viewpoint of families, it is all-encompassing. jobs that were lost -- oregon

has an unemployment rate of about 12%. but the underemployment is much, much higher if you include folks who have down sized@@@ rrr)u @ z this crisis began with retail mortgage practices over the last ten years, practices in which kickbacks were allowed to

brokers to steer families into subprime, exploding interest rate loans. that is a conflict of interest that should never have been allowed. families were like lambs from the slaughter going from their real estate broker in a highly controlled, protected area to the broker in which the broker had a huge conflict of interest. indeed, "wall street journal" found when it did a study that 60% of the families with subprime loans would have qualified for a prime loan. families did not know the person who were their financial adviser were getting paid to mislead them into a disastrous financial product. that simply has to end. it's these rotten mortgages that have poisoned the system all the way up, through investment banks, through the commercial banks, through the five big investment banks, all of them very involved in the securitization of mortgages,

slicing and dicing of cdos, instruments that ultimately poison financial houses of every sort through out the world. i'd like to remind folks that it was in 2004 that the fed was pressing the investment banks for some form of regulation. and the investment banks turned instead to the securities and exchange commission. and the securities and exchange commission offered a special program to regulate them. so we had the sec regulating the investment banks. that program was very special. in a 15-minute meeting, virtually unknown to the public, the sec allowed the five biggest investment banks to have unlimited leverage. their leverage went from 15-1 to 30-1 in a short period of time. so here we had very dangerous products built on rotten

mortgages, and then we had virtually unlimited leverage. you can make a lot of money on the way up, and you're going to have a spectacular crash on the way down. that's what we ended up with. bear stearns and lehman and merrill lynch, jpmorgan, goldman sachs, commercial banks were tied into these mortgages as well. i mention these because it shows how many of the parts of our structure failed and why this bill is so complicated and so important to try to address those various areas. commercial banks certainly had risks through their involvement in mortgages, mortgage securitization, in proprietary trading, and many of them suffered as well. but what enabled these securities be sold? part of it was the aaa ratings. aaa ratings -- there's a fascinating article just a little while ago about moody's and how folks who called for

responsible use of their -- assigning their ratings were pushed aside and folks who were advocating to use the ratings to maximize profits were pushed ahead or pushed to the top. so the rating agencies let us down. another factor was the key piece of the ability to sell these securities and say that they were insured. we're all familiar with aig's role in this huge amount of what are called swaps, but essentially credit default insurance. so we have a big task ahead of us. and we have to tackle systemic risk, have to tackle having a coherent regulatory structure that ends regulatory arbitrage. we have to address the issue of "too big to fail" and the ability to unwind firms. we have to address practices that create and transfer risk from one financial institution to another and that certainly is a big piece of taking on the

role of derivatives, and we have to have fairness for consumers. and let us not forget, it was not having fairness for consumers, allowing huge conflict of interest in brokerages that set this whole mess in motion. now, some have said, well, we should simply put the mission of consumer protection on a par with good stewardship of the financial system for wall street. level out those missions. and i just want to note that there is completely different issues here. for example, when the fed had the mission of both dealing with monetary policy and with consumer protection, consumer protection didn't get addressed. we had this huge surge in subprime mortgages to folks who could have had prime mortgages,

and the fed didn't get involved. they didn't get involved when you had yield spread premiums, these kickbacks to brokers. and why is that? well, they were focused on a very different set of issues. they were immersed in billion and trillion dollar issues of wall street. consumer protection was not their specialty. quite frankly, many of these consumer protection issues are so different. for example, are you going to have a fair period for somebody to return their check after they receive their bill? are you going to allow remote post office boxes that delay delivery by two or three days. ? are you going to add res the size of print that seniors and others can hardly read because it's either too small or too light of color? what are you going to do about undisclosed fees on prepaid credit cards? well, that's a different set of issues. that's tricks and traps. it's appropriate to have an

agency that addresses those tricks and traps and lays out the same practices throughout the industry so there's not shopping in this area, looking for, well, we can do tricks and traps here, but not there. and i certainly 'em thighs and agree with the point that we want to make a level playing field on fairness, consistent advice about how to implement that, but that we can certainly work with the different institutions to make sure we don't create a regulatory burden in the process of having fairness. so thank you, mr. chair, for putting such a solid discussion draft together. i want to particularly thank you for including the concepts that senator corker and i had put together on auditing the fed, protecting the monetary functions so they can fulfill that mission effectively, but creating great transparency and better understanding of how the fed is operating for all of us

as well as the american public. i also want to the thank you for including the protections for whistle blowers that i think is all about a fairness and improves the system considerably. and i appreciate the effort to start to take on a very complicated subject of proo pry tear trading where we wrestle, and i don't know just what the right answer is, but we ressal with how to enable appropriate trading in our banking system that does not create enormous and inappropriate risk in depositor institutions. there's a balance to be struck and working to figure that out. so i just want to close where i began, that citizens are looking to us to reset the rules of the road so that business can do well, so american families can do well. it's a very important task, and i feel honored and privileged to

be part of this conversation. >> senator, thank you very much. you've been a wonderfully constructive new member of our committee. can't thank you enough for your contributions, not just to this but other matters as well on the commit committee. thank you immensely for your comments today as well. we look forward to your continuing prarticipation as we develop this very important piece of legislation. and we've been joined by my good friend and neighbor, senator schumer from new york. thank you, chuck. >> thank you, mr. chairman. first i want to begin by thanking you for your hard work and dedication in crafting this legislation, overhauling america's financial system would be difficult in the best of times. but senator dodd's done a terrific job putting together a draft bill that will reform wall street and protect main street even in these most difficult and tumultuous times. it's been two years -- it's now been more than two years since the crisis started to unfold with the collapse of a couple of bear stearns hedge funds and more than a year since the collapse of lehman brothers that

sent our financial markets into deep panic and laid bare for all to see the inadequacies of a regulatory system where all shopkeepers were minding their own aisle, but nobody was responsible for minding the entire store. risks that ultimately brought down the financial system were allowed to build up in the unregulated and underregulated corners of our markets, getting little attention until it was too late. when the financial system fails on the scale we just experienced, the losers are not only or even primarily executives of financial firms who took excessive risks or hedge fund managers that guessed wrong and lost money on their trades, they are middle class americans who lost their jobs when the real economy inevitably feels the effects of the financial crisis, average people whose retirement plans and college savings accounts have been disseminated. a crisis that was sparked by subprime mortgages and court fire in the darkest corners of

the shadowed banking system has left the real economy reeling for more than two years -- more than two years later. people are still losing their jobs. people are still losing their homes to foreclosure. there's doubtless plenty of blame to go around. more than two years into this crisis, congress will only have itself to blame if we don't come together and pass a comprehensive plan to fill the gaps in our regulatory system, protect consumers, refocus and rededicate our regulatory resources and empower investors to work on the front lines to keep corporations honest and accountable. i'd like to make a point here. i've heard that most of my colleagues on the other side of the aisle said we ought to delay. while it is certainly true that we don't know everything, we have learned a heck of a lot from what's happened in the last two years. and we continue to risk both recovery and additional financial setbacks if we don't move forward.

it does not make sense to delay. this is not a week or a month after the financial crisis began. it's two years. and in many places there's a consensus as to what we ought to do. no one thinks that mortgage securities -- mortgages by mortgage brokers ought to be left unregulated. no one thinks that there shouldn't be some kind of systemic risk regulator. no one thinks that many of the instruments that were traded should have greater capital requirements. everyone agrees on almost every one of those things. so while there is probably not agreement on 20 or 30% of what we have to do, there's agreement on 70%. and we would be derelict in our duty if we didn't move forward on that 70% and debate the other

30%. i dare say there's not a single person on this committee who thinks we ought to leave the present system as it is. i dare say there's not a single economist who thinks that. if they do, they haven't learned the lessons of history. so i'd just like to insert a point here. stalling is not an answer. it's two years after the crisis. we now are at about the exact time to act, not too precipitous, not too soon, but we also shouldn't be too late, especially when regulation like this will strengthen our economy and improve recovery that our nation so badly needs. now, having said that, i know we can't hope to prevent all future financial crises. bubbles and busts have been with us since the days before -- since well before the days of

the speculative actual into bowl markets in holland in the -- i think it was 1500s or 1600s. they'll be with us well after mortgage backed securities and cdo and sids. we can make crises less likely by increasing the transparency and accountability in the system. we can make the system less fragile by building in buffers and giving regulators the tools they need so the failure of any single institution does not bring our entire system down to its knees. chairman dodd's discussion draft is comprehensive and covers lots of ground. and i would say one other thing. i was here when the s&l industry collapsed. i was in the house. i played a role along with senator dodd, he was already in the senate. senator shelby was in the house i think -- in the house? >> senate. >> he was in the senate. but we played a role, a significant role in reforming that system, and it worked. the problems we saw in lots of other parts of the industry we

didn't see in the thrift industry because the regulations exchange commission once and for all by allowing the agency to become fully self-funded. right now the sec doesn't have the money they need to hire enough analysts and update their technology resources. they're overwhelmed and over matched by the people they regulate.

that cannot corporate. we saw what happened with bernie madoff. a whistle-blower gave the sec a color-in-the-dots, step-by-step map as to how to find madoff's ponzi scheme. you didn't need new laws. they just didn't do it. if you look why, it's because the agency has not been strong the way they were 20 years ago. they don't have the resources. they don't have the technological resources. they don't have the resources to hire enough people and frankly, they don't have enough resources to hire the kind of skilled people who might get paid somewhat of a higher salary and who would stay in the job for years. now these days, you work for the sec for two or three years and go to the other side. no one over there develops the skills that are needed to go after the kinds of fraud and

abuse that we know will always be with us. by simply allowing the sec to retain the transaction and registration fees it collects, the bill would give the sec access to hundreds of millions of dollars in additional funding over its current budget. i heard my colleague from louisiana say, well, we shouldn't spend this money. we will save much more money than we spend by investing these dollars here. if the bernie madoff scheme had been uncovered alone, there would be a grand net savings. so let's be clear about this. it's very easy to get up there. it's almost dem goejic by saying don't give the sec a nickle. i think everyone left, right and center who studies this realizes that. we would allow the commission to embark on the long-term reforms that chairman shapiro promised without -- and without the money there will be next year to pay for personnel and technology

upgrades. out won't have to to worry abou those things. so, that's one thing that we should do. the second major reform i would like to mention is a series of proshareholder measures that senator dodd include in the bill. they were drawn in legislation called shareholders bill of rights. the premission of that bill is the best way to rein in executive compensation is to empower the firms' shareholders and make sure boards fulfill their responsibility. we need government regulation but i'm sure most people would concede the best watchdog are the shareholders if they are empowered because they don't want to lose money like the bear stearns or aig shareholders did. so, what we've done, the new regulatory overhaul contains this. first allowing shareholders a say on pay so they can vote on compensation packages awarded to company executives. second, allowing for proxy

access to improve shareholders ability to elect their preferred candidates. third, requiring corp board candidates to win their seats by a majority vote. fourth, let shareholders vote to keep them. fifth requiring the riskyist financial institutions and other bank holding companies with over $10 billion to form risk committees. to put the onus on companies. finally i just would like to say a few words about the need of a strong independent consumer watchdog. one of the roots this was crisis was undoubtedly total failure of our consume protection regime. americans were sold products they didn't understand and couldn't afford by mortgage originators eager for a fee and happy to offload those loans to the great securitization

machine, which in turn made money doesn't have to hold the security. so there was nobody home watching the store. after the events of the last several years nobody can argue that fundamental reform of our regime is not necessary the status quo won't do. there's no accountability in the current system. consumer protection is split among seven different regulatory agencies. some argue you can't protect it from safety and soundness. but what i've found is this -- consumers deserve an accountable regulator with overing sight of consumer financial products as its primary objective not as an after thought. one final thing i would like to say, mr. chairman and this is a bigger picture. we're spending a lot of time trying to correct this system in

a constructive way and we should. there are many actors to blame. ultimately we have one large task in this country that does go beyond regulatory reform. for 20 years america produced more -- consumed more than it produced. borrowed more than it saved. imported more than it exported. no one could predict it would be the lowly mortgage that would bring the system to its knees. but people did predict that something bad would happen because a society can't continue to just consume and consume and borrow and borrow and import and import without the benefits on the other side, assets on the other side. so, a great challenge for our nation beyond the scope of this bill is how do we get back to the old american way.

where the main stay of our economy is production not consumption, savings not borrowing. exporting, not importing. and that's again beyond the narrow scope here. not narrow. but beyond the scope here but something we have to examine in this committee and others as well. mr. chairman, you've done a great job here. and i want to thank you for your hard work on this legislation. i don't agree with every piece of it. i guess no one on the committee does. but, boy, it's a great start and i look forward to marking up this bill and passing regulatory reform to strengthen not only our financial institutions but our entire economy. >> senator, thank you very, very much and you've been an invaluable member of this committee. going back to the house i remember those all night sessions trying to resolve some of those matters more than a decade and a half ago. we welcome your participation

here as well. you bring a wonderful perspective. i thank all of my colleagues. we've had them express their views. four who could not be here submitted their own testimony. they were here actually earlier in the day. but given the timing of everyone's statements couldn't get back to make a statement. i appreciate the full participation of every member, the direct presence of almost 20, 19 of the members of the committee have been very helpful this morning. what's the message that comes out this morning aside from people expressing themselves on the various parts of the bill? the larger message for me here is a common determination which is not always that evident these days. of members who want to work together to produce a consensus bill if we can in this area. obviously, with one-quarter of the united states senate represented on this committee with as many different views across the political spectrum that exists in the united states senate that's never an easy task

no matter what the sub jesht matter is the what became quite hear to me is a realization that this subject matter is one that absolutely demands our common determination to find common answers to these questions rather than what could turn out to be and all of us want to avoid a partisan debate that could degenerate into a bill that may end up pass, may not end up passing, the effects of which could have long term implications for our country and none of us want that. so i am -- i'm very, very pleased to hear, as i have this morning, overwhelmingly, not exclusively, overwhelming a determination to sit down and work this out. with that in mind i'll make the following suggestion. earlier today i proposed the idea i wanted all amendments to this bill be submitted by next wednesday. i realize members will be gone. but people have had time over the last week or so to evaluate

the bill. in light of the commitments made to roll up our sleeves, rather than have an amendment process that begin next wednesday, we'll make it more difficult at that point to develop that kind of consensus, i'll delay that deadline that we posed, and we're going to have the confirmation hearing of chairman bernanke on the 3rd or 4th -- the 3rd of december, which will take some time, obviously. i presume we can do it in a day, may take two. we'll probably do it in a day. in the mean time, i've already spoken with senator shelby about this and he can speak for himself and other members of the committee, to determine whether or not the commitments made here today about a willingness to really work together at this and this will require a lot of hard work. this is not a question of having a casual meeting along the way but some serious effort to deal, i think senator murphy pointed

out, senator schumer has and others, we have a good understanding of the pools of issues that need to be worked on. as i've listened over these last 50 hearings not to mention countless conversations, i sense as senator schumer has a lot more common interest in at least 70 maybe more a percent of the issues in front of us and common in in the other 20 is not best,000 resolve them but recognition that they are matters we should address. and as someone who is relatively new to this business of chairmanship, having served here for a long time, the tragedy ever losing our great friend and colleague ted kennedy and retirement of paul sarbanes, all of a sudden i find myself 24 months ago chairing this committee for the first time. we've done some good work over the two years. most recently iran sanctions. i'm hopeful that will happen

here. we have a debate on health care that will consume a lot of time. but there's no reason why this committee can't function in trying to pull together this bill that reflects the goals that i identified in our discussion draft, some ideas incorporated in there along with other suggestions i heard to come up with a bill that will work. so i'm going to operate on the fact that these were not just public statements made for public consumption but rather firm commitments made by our colleagues to sit down and do what doesn't happen often enough and that's to develop a common piece of legislation to address the issues that we know need to be confronted. with that i'll delay any -- next wednesday. we want the ideas and thoughts as we begin this process. and i'm going to give my staff a day or two here to get their breath. beginning over the weekend or first part of next week, with the exception of thanksgiving,

the members who are interested in this bill need be prepared to work virtually around the clock to help put this together. senator shelby. >> mr. chairman, first of all, in the spirit of putting something together, i think senator schumer is on point. we might be agreeing on 70%, perhaps more. we got a lot of the concepts that we got to work out. but i think we can do it. we can do it. we've shown it in other things. this is the time to do it. i agree it with the senator from nebraska, this is not a democrat or republican proposal. shouldn't be. we should be putting together the most important piece of legislation that's come before this committee in 80 years. i'll say we're going to work, try hard to work with you to do a good deal. >> senator, i thank you very much for that. i thank all of my colleagues. i think the patience of those -- once again i thank our staffs.

they rarely get the attention or credit. they spent countless hours of putting this together. i'm deeply grateful to the staff that's been so helpful. with that, this committee will stand adjourned until further call of the chair. >> thank you. >>kg4ñq2?a77w)ó1ñ?;#ñwcçow ms. landrieu: mr. president? the presiding officer: the distinguished senator from louisiana. ms. landrieu: thank you, mr. president. i first want to commend my colleague on the floor, senator cantwell, the senator from washington state, that's worked so hard and so long and in such a professional way. and she's been extremely helpful

to me through this process, and i want to acknowledge that and thank her. i also, before i make this statement, mr. president, want to complement about a few other colleagues that have been extremely helpful and supportive, not just to me but, i think, to the entire senate. beginning with senator harry reid, our leader, who with patience and persistence and care has led to a bill that is before the senate. the question today is whether we should proceed. i would like to say that there are probably, in my view, maybe no other member of the senate could have accomplished what he has today, and i think many senators share my thoughts and belief. number two, i want to recognize the extraordinary work of a senator from oregon, senator ron

wyden, who two years ago, before the process of election of a president really significantly got under way, before it was really ever clear it i as to who might win, he put down a bill called the healthy americans act, which i was very proud to support -- and still am so proud of his effort today -- that had the support of almost seven republicans and seven democrats, a truly bipartisan effort, that would accomplish, in my view, what many americans are asking for: a marketplace that's fixed and reformed, more choices, affordable choices for individuals and small businesses and families, and a real effort to curb the rising and alarming cost to the federal taxpayers,

given that the percentage now of our g.d.p. spent on health care is almost exceeding 16%, twice as high as any nation in the world. that is alarming, and that bill and that effort went a long way to help frame my thoughts on this debate. i also -- and we're going to continue to work together through this process. i also want to thank senator blanche lincoln, who because of her persistent leadership has pushed and prodded members of this body to give the time necessary for the review that our constituents, whether they are for or against the directions that we're moving, have the time. i have used that time, i think, very well these last two and a half days. i have been in meetings with

economists, on phones with health care experts talking with people from my state as well as from around the nation, and i have used that time well and wisely. and because she pushed for it, many of us received the time we needed and i know she'll be speaking on the floor later today giving her final views on where we are. madam president, i come to the floor today to acknowledge those members but also to speak on the matter before the senate today. and that is whether to proceed to debate on the patient protection and affordable care act, a bill that is the best work of the senate today and a subject of significant importance to the people of my state and the country. my vote today to move forward on this important debate should in no way be construed by the

supporters of this current framework as an indication of how i might vote as this debate comes to an end. it is a vote to move forward to continue the good and essential and important and imperative work that is under way. after a thorough review of the bill, as i said, over the last two and a half days, which included many lengthy discussions, i've decided that there are enough significant reforms and safeguards in this bill to move forward but much more work needs to be done. over the past many years -- and in particular the last six months -- i've heard from people all across louisiana that their insurance premium costs are simply too high and continue to rise without warning,

threatening the financial stability of their families and their businesses. i have also heard the pleas and cries of many people who need coverage, health coverage, but they can't find it anywhere within reach of their budgets. through months of public meetings, in v.f.w. halls, school gyms, and in hospitals and health clinics, from louisiana to shreveport in large and small communities throughout my state, it is clear to me that doing nothing is not an option, nor is waiting any longer for this debate to begin to continue and to come to some final conclusion. spirited debate and good-faith negotiations in this senate have produced a bill that contains

some amazing and cutting-edge reforms that will, i am hopeful, reduce cost for families and small business while reducing the debt burden of the federal government. but these reforms must be implemented properly and carefully, and they must be put in place in a timely fashion. small business owners across the country have told me time after time, in order to remain viable and create the jobs they want to -- and, madam president, may i say, the jobs we need nem to create if we're -- we need them to create if we're going to work our way out of the recession that we're in -- they need affordable health insurance and they need stable and predictable cost. yes, they would like their costs to be lowered, and i am going to stay focused like a laser on doing that. but what they also need is

predictability, simplicity. they need to be able to plan so they can get to their job, which is creating jobs, and not finding their way through very complicated and limited choices under the current situation. as we all know, the current situation, smal small business s are faced with impossible choices. when an employee or employee's family member gets seriously ill, they can expect cost increases of the plans and meager choices they have or they can go to the family member and say, to save my business and the other 10 employees, we need to let you go. here's $1,000 or $2,000 or $5,000. you're on your own. good luck. that is a tragic story, painful and depressing, and it has to stop. so i appreciate the hard work of many, many business owners and

organizations that have helped to craft portions of this framework because they have remained at the negotiating table. they didn't run and hide. they remained at the table. i'm asking them today to stay at this table. before i discuss the work that needs to be done to improve this bill, i'd like to discuss some of the points in this bill that encourage me to move forward. small business owners, under the current framework of this bill, would no longer be confronted with these kinds of volatile costs. this bill prevents insurance companies from escalating their rates or dropping their coverage after someone gets sick. that important change goes a long way in stabilizing the amount small businesses will have to pay for their health plans and it allows business owners to do what they do best: plan smart investments, grow their businesses, and then help us grow our economy. in recent years, economists have

found workers' wages have remained largely stagnant. why? because employers are paying more and more for health care that we are indirectly subsidizing through the current tax code, leaving less and less money to pay real wages that workers, in large and small businesses, could actually take home, put in their pockets, and spend in much more productive ways. that is an important change in this underlying provision. this framework that we're debating would also encourage employers to move away from high-cost-benefit plans and increase the amount that working families can take home, as i said. in addition, it would ensure that the majority of louisiana families would pay no more than 10% of their income for health care. that's still high, but it is not as high as the projections which are today, if we do nothing, 60%

of an average family's income in louisiana will have to be spent trying to afford health care -- on the current trajectory that we are on. so while some people still think that 10% or 12% may be too high, it's a lot better than 60%, which is the direction that we're headed. and that is real progress. these reforms i have just mentioned are necessary now and are too important a goal for the senate to abandon its work. but as i have said, there is a great deal more work that needs to be done, and i'd like to mention briefly in my time left -- because other colleagues are here to speak -- just three or four of those, and i will submit others for the record. number one, in order to increase choices for small businesses, we must enhance and expand tax credits that are in this bill for small businesses,

particularly those of 25 and less, and if we can expand it between 25 and 50, that would be a great help. current projections are that 96% of all businesses that have more unanimous 100 employees have coverage, it's pretty decent. they have some choices. we needs need to give those businesses more choices. we need to expand these exchanges and we must give help to the small businesses in this country that are leading the way out of in recession to help them with this situation. in addition, i will continue to fight for more tax equity for the 27 million americans who are currently self-employed. and every chairman of a small business committee, both republican and democrat, i understand for the last 25 years, has asked for this to be addressed. it is time to make progress on that now.

number two, in order to really deliver our promise to hold down costs for families, we should think about in this debate focusing on ways to prevent premiums from being excessively raised between the time this bill is enacted -- if it ever is -- and the time it actually goes into effect. many of the provisions in this bill, because of cost considerations, which understa i understand don't go into effect until 2014 or 2017. well, today is 2009. that's a long time between now and then, and we need to make sure that bridge is there, that safety bridge is there. finally, i remain concerned that the current version of the public option included in this bill could shift significant risk to taxpayers over time unnecessarily, and i will continue to work with my colleagues to find a better and bipartisan solution for this

issue. i've suggested that a free-standing, freedom-supported, competitive community option, which would trigger on a date certain, along the language that senator snowe has been advocating now for many months, if our private market reforms fail to work might be a possible compromise. but because i'm hopeful we can make progress on each of these concerns and others, as well as i believe in an open and transparent debate on the senate floor, i believe that debate is in order. i stand ready to work together with my colleagues to fashion a principled and hopefully bipartisan compromise in the end to achieve what many people in my state need, what many americans want, and which we, madam president, really have to do our best to try to give them. i know that my time is up, but i'd like to ask a personal

privilege for just one more minute to address an issue that has up, unfortunately, in the last 24 hours by some very partisan republican bloggers, so i need to respond, i think, and will do so now. one of the provisions in the framework of this bill that i've just decided to move on to debate has to do with fixing a very difficult situation that louisiana is facing and any other state that might have a catastrophic disaster. let's hope they don't -- like we did in 2005. i'm not going review the horrors of katrina and rita and the levees broke and by the way the courts have just ruled that the corps of engineers was responsible and we'll hear more about that later. but nonetheless, in 2005, louisiana experienced twoft worst natural disasters in recent memory. in an effort to aided recovery,

congress stepped in with a massive aid package for louisianans. thank you -- that ink fused grant dollars and direct assistance. some of these one-time recovery dollars anything in addition to the increased economic activity were calculated into our state's per capita income. the result is that louisiana's per capita income it can. the presiding officer: time has expired. ms. landrieu: may i ask for an additional minute? the presiding officer: without objection. land land the per capita income was abnormally inflated. you can understand that. there were billions of dollars that came in from insurance and from road home and community development block grant, in addition labor and wage costs went up because there was a constriction in the market, which any economist can tell you always happens after a natural disaster. and, as a result, when we did the calculation under the law, it .t

overnight become rich. that is not the case, madam president. our state is still as poor as it was, if not poorer. i am not going to be defensive about asking for help in this situation. and it is not a $100 million fix. it's a $300 million fix. and it is the number one request of my governor, who is a republican. and it is unanimously supported by every member of our delegation, democrat and republican. i'm proud to have asked for it. i'm proud to have fought for it. and i will continue to. that is not the reason i am moving to debate. the reason i'm moving to the debate, as is expressed in this statement and in hundreds of statements and speeches i've given over the last year or two on the subject, which should be self-explanatory. so, madam president, i thank my colleagues for their graciousness. i known i've gone a little bit over my time. but i wanted to get that on the

record. and, again, i am moving forward on this debate and look forward to working with....... mrs. lincoln: could i ask unanimous consent that the quorum call be dispensed with. the presiding officer: without objection. mrs. lincoln: thank you. thank you, madam president. madam president, i've asked for this time not only today to address thigh colleagues in this body but to -- not only today to address my colleagues in this body but to speak to my constituents in arkansas. after many months on health care, we're nearing yet another important step in a very deliberative process. today we are voting on whether to continue to discuss how to improve health care in america or to stop the debate. i personally have carried the mantle to improve health care for arkansans throughout my public service, like many of my colleagues. so many others as well who have worked hard on this issue. over the last several decades, the advance of medical technologies and our nation's

changing demographics have placed new demands on our health care system that is not -- that it's not designinged to meet. our vote later this evening is not the first step towards making the necessary adjustments in health care, nor will it be the last, without a doubt. the finance committee on which i serve and which is led so ably by chairman baucus has produced what i still describe as the most responsible approach to health insurance reform. we deliberated for more than 22 months, incorporating recommendations from experts all across our great nation and proved that our bill -- through our bill that america can achieve unprecedented health insurance reforms that expand coverage, reduce cost, and provide stability for those with existing corchl. we accomplished these goals without posing long-term risk for taxpayers.

it was not a perfect bill. we never see perfect bills around here, quite frankly. but i can honestly say that i will fight hard so that our final product will be more closely resembling the commonsense, deficit-reducing plan we produced in the senate finance committee. at times like this, i think it is very important for each of us to remember the very reasons that we began this debate altogether. small businesses, madam president, working families are reaching the breaking point financially because of the relentless rise in health care costs. notly, our economic recovery will only be slowed by the inflationary cost of health care. taxpayers and the insured are already bearing the cost of medical treatment for the uninsured at the most expensive point of delivery -- in our emergency rooms. health care in america today is a model that waits until people

get sick rather than focusing on the wellness, prevention, and good management of illness that keeps people out of the hospital and from having the most costly care needs. our current health care system wastes money and is so inofficiatininefficient that ths twice as much per person while ensuring a smaller proportion of our population than the average spending in 29 other industrialized nations. there simply aren't enough health insurance options available to most americans today. when in at least 17 states, including my home state of arkansas, only one insurance company controls more than half the insurance market, and in at least 22 states, still only two carriers control half of the market or more. patients and doctors, madam president, are routinely making

treatment decisions with little or no objective information about which treatments are most effective. american capitalism is based on choice and competition because when these elements are present, consumers can most always find the best value for their money. that's not true in health care, so by creating health insurance exchanges through which small businesses and individuals can choose from a menu of private plans, we can enhance cost transparency, create head-to-head competition, and allow market forces to reduce prices. these are facts. these are facts, madam president. and whether we are republicans or democrats or independents, i believe that we can agree on most all of them. i know that the great majority of arkansans believe these facts and the want to see us

accomplish these reasonable goals. for months now groups from outside my state have assigned various motives to my deliberations on health care and tried to define the meaning of my vote. according to the last tally, there is ebeen more than 3.3 -- $3.3 million worth of media ads that have been purchased in my home state of arkansas by groups from outside of our state, certainly none by me, and most with my name in the ad. still, madam president, i have continued to approach this issue like i always do. these outside groups seem to think that this is all about my reelection. i simply don't think they know me very well. i am focused on my opportunity to influence the final version of health care reform legislation in a way that most helps my state. that's why the people of arkansas sent me here.

they sent me here because they know that i am going to work hard to do the best job possible and to do the right thing. to stand my ground and my principles. i have avoid the extremist claims from the left and from the right and tried to pull the commonsense solutions from among all the policy options so that we get health care reform that benefits arkansans and all americans. that's our job in this body, madam president, to represent our states in this unbelievably historic body, the united states senate. truth is, this issue is very complex. there is no easy fix, and it's imperative that we build on what is already working for health care in america and not turn away from the problems that we face. we keep building upon what we truly can say one day that all american citizens will have

access to quality and affordable health care, in order to improve upon and build upon what we already have. i do not support the creation of a so-called robust government-administered public plan. i believe that we should work to make sure that we do not expose american taxpayers and the treasury to long-term risk that could occur over future government bailouts of a public plan. rather than create an entirely new government-run health plan to compete with private insurers, i support health insurance reform that focuses on changing the rules of our existing employer-based private health insurance system. i believe we should change the current rules that permit insurance companies to bully their customers and cherry pick healthy patients so we can force them to compete with each other. madam president, my first loyalties are with the people of arkansas, not insurance

companies, the health care industry, or my political party. in fact, i have authored an amendment during consideration of legislation in the senate finance committee which limits taxpayer subsidies for health insurance companies that pay their top executives millions in salaries. responsible health insurance reform should ensure that insurance executives aren't receiving a personal windfall and that companies they work for are not receiving excess tax breaks while at the same time profiting from government requirement on consumers to buy insurance. the reason we are having this vote, madam president, is because our republican colleagues object to beginning debate and consideration of amendments on health care legislation. although i don't agree with everything in this bill, i have concluded that i believe it is more important that we begin this debate to improve our

nation's health care system for all americans rather than just simply drop the issue and walk away. that is not what people sent us here to do. attempts by the national republican party and other conservative groups to portray this as a vote for or against this particular health care reform bill is untrue, and it's dlibtsly mislead -- deliberately misleading. the vote tonight will mark the beginning of consideration of this bill. by the full u.s. senate, not the end. the republicans have sought to revive their political party by popping any real solution -- by opposing any real solution to our nation's health care crisis. in fact, madam president, this vote for or against a procedure that allows us to begin open debate on health care reform is nothing more and nothing less. put simply, those who vote "yes"

on this vote believe that our nation's health care system needs reforming and they are ready -- ready -- to have an honest and open debate on the floor of the united states senate about how to best achieve that reform. i'm not afraid of that debate, nor am i afraid of coming before this body to say what i believe is the most important thing we can do to reform health care in this country. i hope none of us are. our country needs us too desperately now to be making good decisions and moving forward. i will not allow my decision on this vote to be dictated by pressure from my political opponents nor the liberal interest groups from outside arkansas that threaten me with their money and their political opposition. the multitudes of e-mails and ads that we have received, unbelievable types of threats about what they're going to do

and how they're going to behave. the fact is, madam president, i am serious about change our health care system, as most arkansans and most americans are. i am not with those who seek to avoid the debate, nor with those who use political attacks to achieve their narrow goals. i will vote to support -- will vote in support of cloture on the motion to proceed to this bill, but, madam president, let me be perfectly clear: i am opposed to a new government-administered health care plan as part of comprehensive health insurance reform, and i will not vote in favor of the proposal that has been introduced by leader reid as it is written. i, along with others, expect to have legitimate opportunities to influence the health care reform legislation that is voted on by

the senate later this year or early next year. i am also aware that there will be additional procedural votes to move this process forward that will require 60 votes prior to the conclusion of the floor debate. i've already alerted the leader, and i'm promising my colleagues, that i'm prepared to vote against moving to the next stage of consideration as long as a government-run public option is included. the public option as a part of health insurance reform has attracted far more attention than it deserves. while cost projections show that it may reduce costs somewhat, those projections don't take into account who pays if it fails to live up to expectations. if in fact premiums don't cover the cost of the public plan, it is taxpayers in this country who are faced with the burden of bailing it out.

madam president, our colleagues, we simply cannot ignore the growth in the federal government since the year 2000. i can assure you that the american people have not ignored it. according to the american institute for economic research, government spending grew by 55% under president bush. and as he was leaving office, government launch add massive bailout of wall street. then it was the domestic auto manufacturing industry that needed taxpayer funds to survive, and finally, in order to revive a dying economy, it took a government economic recovery package to save or create hundreds of thousands of jobs. madam president, we can argue about the necessity of these unprecedented steps, but we need not argue about the impression they have made on the american people. we should be stopping the growth

of government, noacts spanning it more. without the public option, we can still force private insurance plans that participate in the exchanges to provide standard benefit packages that are easy to compare and more fairly priced. we will be bringing millions of new customers to the exchanges so insurers would be motivated to lower their prices and be competitive. i've appreciated the dialogue with leader reid regarding my concerns that remain about this bill and i look forward to continuing that dialogue on improvements that i feel like are necessary in order to meet the challenge. i'll be asking my colleagues to consider these additional important changes that i believe will improve our chances for real insurance reform that can also enjoy the support of most arkansans and i believe most americans. some of these include that the legislation remain deficit-neutral now and in the

future and cushes future costs. that protects medicare beneficiaries for seniors and extends solvency of the medicare program. that it improve accessibility and affordability of health insurance for employees and owners of small business and the self-employed through access to health insurance exchanges and tax credits. that it enhance choice and competition of health insurance plans for small businesses and individuals without the inclusion of a government-run public option. and, madam president, that it build our nation's health care work force and ensure continued access to quality health care providers, especially in rural america. today i know that i will ultimately be held accountable by my constituents in arkansas for my votes -- all of my votes -- on health care. not the national republican senatorial committee, not by other groups from outside my state that continue to engage in the conversation that they have begun.

i know that my decision to support the upcoming cloture vote on the motion to proceed is not my last nor only chance to have an impact on health care reform. in conclusion, madam president, i am optimistic and encouraged about the step we are preparing to take in the senate to amend and craft a bill that will improve access to quality, affordable coverage options for the residents and businesses of my state who desperately need relief. a bill that improves the quality and efficiency with which we deliver health care in america, all without adding to our nation's deficit and while lowering the cost of health care over the long term. i am committed to using every power of my office to achieve success on this issue by enacting needed reforms that will benefit the people of arkansas and our nation. i've spent the last several months to a passionate dialogue with my constituents about health care reform. it wasn't just town hall

meetings where i heard from arkansans. i heard hundreds of conversations with many of them in groups and one-on-one conversations. they may not be in agreement about solutions but i can assure my colleagues that each arkansan i speak with and i speak to expects us to roll up our sleeves and get this right. we can. following the vote tonight, the bill that will be laid before us will not be the only possible solution. i know that my decision to support the cloture vote on the motion to proceed again is not my last or only chance to have an impact on overall health care reform, and my strongest hope is that each of us in this body, madam president, can lay political fortunes aside and make the tough, commonsense choices that our constituents expect of us. whether you're a democrat or a republican, look at what we face

and the challenges of our nation and make sure that as we are working towards an end result, that each of us is working as hard as we can to come up with the pragmatic solutions that our constituents expect of us. we may not get this opportunity again in our lifetime. today, madam president, i am thinking about the arkansas working family that can't pay their mortgage because their sick child's medical bills. i'm thinking of the arkansas small business owner who told me that more than 20% of the cost of running his business now goes to health insurance for him and his workers. and i'm thinking about the 450,000 arkansans who have no health insurance. i'm not thinking about my reelection, the legacy of a president, or whether democrats or republicans are going to be able to claim victory in winning this debate. i hope all of my colleagues join me in looking forwards to working with the leader --

looking forward to working with the leader and all of our colleagues in the days and weeks ahead as we strive to solve a problem whose solution is long overdue. thank you there appears to be a sufficient second. there is a sufficient second. the clerk will call the roll. quorum call: ms. stabenow: mr. president? the presiding officer: the senator from michigan. ms. stabenow: mr. president, it's my pleasure and honor this evening to be here to strongly support this motion, historic motion, to proceed to an historic debate about whether or not we as america, the greater countr-- the greatest country ie world, are going to make sure that all americans have access to affordable health insurance. this is something that's been debated for 100 years, and now we have the opportunity, with the house having passed their

version, to move forward to this debate where we will have lots of opportunity to offer amendments, to debate honest differences in policy. but in the end, i believe confidently that we will come together to move forward to pass legislation, mr. president, that will save lives, that will save money for the american people, that will protect medicare, and that will stop insurance abuses happening for families every single day. at this moment -- i have come to the floor so many times to talk about health insurance reform, as has the distinguished presiding officer from rhode island. i want to take just a moment to say thank you to a few people because, mr. president, as you know, we would not have this opportunity literally today if it were not for senator harry reid, our distinguished majority

leader. he is a quiet, smart, determined, focused leader who has listened to everyone, who has looked at the work products from the finance committee and the "help" committee and brought together a combined bill that is the best of both, and he is going to give us the opportunity to continue to debate and improve it on the floor before final passage. i want to thank senator reid. i know he's passionate about his state of nevada, but that's -- and that's his number-one love after family. but i think number two is the united states senate and the ability to lead and get things dofnlt and i want to thank him. i want to thank senator baucus for his incredible leadership in the finance committee, senator dodd for his leadership and stewardship in bringing the health committee through with their legislation, senator harkin, senator wyden and

senator bennett, who was on the floor -- wir we are not agreeinn the movement forward on this bill, but i want to say that there have been two years of working on health care that i appreciate and their efforts together to work on -- to work on health care. i want to thank senator snowe. i don't know she's going to be with us this evening, but her courageous vote in the finance committee is something we desperately appreciate. i know that she's going to continue to provide input and i'm hopeful that she will be with us on the final vote because her input and her knowledge has been extremely important in this process. i also want to thank the memory of a very important senator named ted kennedy, who i know is here in spirit, mr. president. 40 years of dedication to this cause. and finally i want to thank president obama for his vision. we would not be here today.

eight years under a former president, we did not have the opportunity to get here to this place. we did not have the opportunity to be able to end insurance abuses and truly protect medicare for the future, to put forward health care reform to save lives and save money. i want to thank president obama also for understanding that health care is also about jobs and that we have too many people in this country today who are losing their job, and with that, they're losing their health insurance. so it's impossible to take talk about health care reform without also talking about jobs because, for most families, they are connected and one of the same. i have spoken on the floor so many times on health care costs and access and, frankly, mr. president, health care is something that brought me to public service 30 years ago when i was five -- i just want that

for the record. i led an effort in our community to keep a nursing home open in okemos, michigan, and every since then have been fighting to get to this debate, to get to this point in terms of affordable health insurance for all americans. so tonight after this vote we started real debate. this bill provides a framework for every american to find affordable insurance. is it everything i would do if i was writing it by myself? of course not. every member can say the same thing. but the democratic process is coming together with the best ideas and negotiating and doing the best we can to be able to solve as much as we can in the best way possible. i am going to continue to work to make health care truly affo affordable and be sponsoring and cosponsoring amendments as we move forward to improve an what i believe is a very, very good

bill. and i am confident at the end, again, mr. president, that we will pass legislation that saves lives, that saves money, that protects medicare, and stops insurance abuses. mr. president, i set up a health care people's lobby when we first started this effort on my web site so that people could share their stories, how they felt about what we should be doing; should we move forward and act, what should happen, what are their experiences with their health insurance and the companies that cover them now. and i've heard so many stories, and i want to thank everyone, thousands of people who have shared their stories, and i want to put a face on this debate and vote tonight by sharing just a couple with you. when we say "sav "saving lives,s

is not just a slogan, mr. president. we are talking about saving lives. 45,000 people have the ultimate rationing every year because they can't find affordable insurance, and as a consequence lose their life. 45,000 people in the greatest country in the world. we can do better than that, and that's what this bill is about. i want to share just one story of a young man, joe, from okemos, michigan. he's recent graduate of dental skill. worked very hard, very bright. he was just between jobs after completing his residency, and we know how long and hard that is to get to that point, and he suddenly fell ill. and this was only a few months ago. he called his mom. she urged him to go to the doctor. but because joe didn't have insurance, he was worried about going to the doctor, and so he

didn't, and he continued to feel worse. his family finally got him to agree to go to the hospital but by then it was too late. joe died at age 27 of an aneurysm. 27 years old because in america he didn't have insurance and was afraid he couldn't afford it if he went to a doctor. this is about saving lives. this is about saving money for businesses that are trying to keep the doors open, who may provide insurance now but are at a point where either the jobs go or they have to stop providing insurance. and so people come in and the owner says, you know, i want to keep you working, but we're not going to be able to have health care for you anymore.

this is about the fact that our country is spending twice as much as any other country on health care, and yet sometimes having outcomes that are far worse than we would like to see as it relates to other countries. we're 29th in the world in the number of babies that make it through the first year of life@' 70% of the companies a woman can choose from don't provide maternity care, basic care, prenatal care. career mom and baby during the first year. so, that is going to change because of the values that we bring to this.

we are going to protect medic e medicare. folks don't have to believe us. there's a lot of debate about what is happening on medicare. i'm very proud to say we have received a very strong letter from the aarp supporting a yes vote to move forward on this debate. that is critically important for us. let me share from the website of aarp what they say. country, what they say -- not what we say -- about what is being done in health care reform. on their web site "myth: health care reform will hurt medicare. fact: none of the health care reform proposals being considered by congress would cut medicare benefits or increase your out-of-pocket costs for medicare services. fact: health care reform will lower prescription drug costs for people in the medicare

part-d coverage gap or the "doughnut hole" so they can get- so they can better afford the drugs they need. fact: rather than weaken medicare, health care reform will strengthen the financial status of the medicare program." that is why aarp has written a letter urging us all to vote "yes" on the motion this evening that we will be voting on, because we are strengthening medicare for the future. and then let me speak to the question of insurance reforms. because the reality is, the majority of people have insurance. the majority of us, so far, have insurance through our employer, and we hope that as we bring down the costs and save money that, in fact, we will be able to make sure that people are

going to be able to continue to have the coverage that they are paying for today. so we're talking about insurance abuses and stopping those insurance abuses, and i wanted to share a couple of stories, mr. president from individuals who have found themselves in a very difficult situation, and i realize that my time has come to an end, so i will be brief, mr. president. but i do want to share just a couple of stories in conclusion. from the newspaper recently, "benjamin french was born with his right arm missing below the elbow. in his 12 years he's been fitted with seven prosthesis. his most recent replacement will cost nearly $30,000 and his doctor says he will soon grow oust it." a 12 yeempletd he is growing up. so as he gets an artificial arm,

it has to be replaced periodically in order to be able to grow with him. "but according to his insurance company, the boy is ineligible for future coverage of prosthetic devices because he has already spent his lifetime maximum benefit." that's going to stop, mr. president. we're going to eliminate those lifetime caps. they get in the way of a 12-year-old being able to have the artificial arm that he needs as he grows up so he can lead a normal life. i want to share one other story, and that is from glenn from sterling heights. he is 62 years old. got lied off in december. doesn't like -- got laid off in december. doesn't look like he'll be called back. "i'm stew young for medicare. i have preenlts so noib want wao insure me. if i get sick before i can get medicare, my savings and everything else will be wiped

out. this is not the way i pictured retirement was going to be. i raised 4 children, got them through school and married, paid taxes and did what i thought was the right and moral thing to do. i didn't create this mess but i'm sure paying for it." he did the right and moral thing, mr. president, and that's what we are being asked to do on behalf of the american people: vote to move forward tonight. vote for the debate. doing nothing is not an option when we are losing jobs, people are losing lives, when we are losing the capacity as a country to be able to be able to provide the health care for our families that we need to provide. it's our turn tonight to vote "yes" on proceeding to a debate that i believe working together will result in legislation on health care that will save

lives, save money, protect medicare, and stop insurance abuses. thank you, mr. president, i yield the floor. a senator: mr. president? the presiding officer: the senator from new jersey. a senator: mr. president, the voices to the opposition to any health care reform has been loud and clear, they have been shouted at town howl meetings and heard in debates in this chamber. mr. menendez: we have heard voices raised in anger from those who were misinformed or that would benefit the insurers at the -- for too long those voices have gone unanswered. mr. president, the patient protection and affordable care act we're about to consider is our answer, and it is loud and it is clear. it is thoughtful and historic and, once again, like so many other pieces of landmark legislation in the last century, it is a product of this side of

the aisle. those who have chosen to block any attempt at health care reform this year are on the wrong side of history. just as those who came before them had one response to every landmark piece of legislation for the last 0 years. their -- 80 years. their response has been a resounding no. they told us it's not good for business. it's socialism. it stifles free-market forces, that it's too much and it goes too far. mr. president, we have heard the same fear mongering and innuendo since the new deal. there are those who raise the specter of socialism then and said no to social security. they said no to unemployment insurance when president roosevelt proposed it as part of the social security act. they said no when john kennedy and lyndon johnson fought for

medicare, no to the live rights act, to -- no to the civil rights act, they said no the job program, no to increasing unemployment insurance when people needed it the most. they have said no to government oversight of polluters who poisoned our land with toxic race and then they said no to cleaning it up. they have been on the wrong side of history for almost a century on every major piece of legislation that has leveled the playing field for average americans. and they're on the wrong side of history once again. all we hear from the other side of the aisle is the dim echo of the past with no plan for the future. madam president, americans are tired of the naysayers, tired of the shrill choices of no when so much is at stake. it's time to say yes. time to say yes to stopping

greedy insurance companies from standing between doctor and patients. time to say yes to ending medical decisions based on risk management and the bottom line rather than on saving people's lives. this historic legislation, like so many other pieces of legislation debated on this floor is about people. their lives, their hopes, their health, their dreams for a better life for themselves and their families. we can be proud of this legislation and i know when the dust settles and the provisions of this bill becomes clear, america will be proud of it as well. this landmark reform legislation includes state basic changes creating a fair, open, competitive marketplace for affordable health coverage. it includes an amendment i proposed for long overdue consumer protections, for

emergency services without having to call your health care provider and get a prior authorization. it requires insurance plans to provide behavioral health treatments, such as those children who face the challenges of autism as part of the minimum benefit standard. it encourages investments in new therapy to prevent, diagnose, and treat acute and chronic disease. a tax credit for innovative biotolg research. it ensures that -- for the availablity of child-only insurance coverage in the exchanges. it tops insurance companies -- stops insurance companies from denying coverage for some preexisting condition or gender. it ends the medical benefits shell game. mr. president, as soon as this

passes ant president signs it into law, 1.3 million seniors in new jersey will receive free preventive care, like colonoscops. 230,000 new jersey seniors would have their brand name medicare part-d cut in half. 854,000 new jerseyians will qualify for tax credits to help them buy health insurance and ease the payment of co-payments. 100,000 small businesses could get a small business tax credit up to 50% of premiums. and health care reform will help end the hidden tax with th the $1.1 billion spent on uncompensated care in new jersey. it will provide portability, security, and choice to the health insurance exchange for

1.5 million new jersey residents who don't have health insurance at all. the bottom line is that senator reid's merged bill helps new jersey and it helps america. it is fair, balanced and fixes a badly broken system. it is truly a historic piece of legislation and will be remembered as such. and, yet, there are those who will stand against all of it. those who will stand firmly on the wrong side of history. once again, those who will use every legislative tactic to stop this legislation as they try to stop social security and medicare. i'm afraid history is about to repeat itself. we have seen that the truth has been a victim on the senate floor today. we listened to some of the most dire predictions. we hear some of the most incredible statements with figures thrown out there that are astro mom kal --

astronomical and in defines of the congressional office that democrats and republicans depend on that say that this bill cuts the deficit by $130 billion in the first 10 years an and $650 billion in the second 10 years. mr. president, in the face of a health care system that seems to work only for health insurers, certainly not for average americans, one must ask: what, if any health care reform, are my friends on the other side of the aisle for? one might ask: what were their predecessors for when they were standing in line -- standing in breadlines? they seem to be for one thing, and one thing only which is protecting the status quo, leaving health care just the way it is. letting insurers make medical decisions, letting insurers collect premiums and finding

creative ways to find coverage. on the other hand, this bill represents the change that america voted for. but as we have seen change does not come easily. you have to work for it. you have to fight for it. sometimes in the face of the naysayers and fear mongers, you need more than the truth, common sense and even a good plan. you need to fight for what you know, the right thing for every american is, not a fuchs not the powerful or well connected, but rn. at the heart of it this vote we will cast tonight is about change and we can see how hard real, honest commonsense change is. we must ask ourselves, do we continue to be the agents of change or do we stand with the status quo that discriminates against hard-working americans who are denied health coverage because of preexisting conditions? do we continue to be agents of change or do we stand with the status quo and deny coverage to women when they are pregnant? do we continue to be agents of

change however hard it may be or do we continue to deny millions of ameri@@@@@@@ !)b mr. president, history calls on us to stand up on rare occasions for what is fair and just and right for the american people. this is one of those occasions. it requires more than parliamentary maneuvers to slow the process. it requires more than voices raised under the banner of free market values. it requires doing what is right forç the americaç people. only then will we find ourselves on the right side of history. that is what this vote is about. with that, mr. president, i yield the floor.

pass a pass pass momentous crossroads right >> let me add by saying we are at a momentous crossroads right now in the history of our country. congress passed the social security act. it's like the time in 1965 when congress passed medicare. both of them were giant steps forward in the health and economic security of the american people. but, as much as they are a part and parcel of our american life today, both social security and medicare were bitterly, bitterly

opposed in this united states senate by conservatives who did not want to change. in fact, one conservative republican senator said that passing social security would put an end to the progress of our great country. they attacked medicare as socialized medicine. as senator robert taft at that time said, it's going to sovietize america if we have medicare. they said it will be a government takeover. well, mr. president, here they go again. they are frightening people in this country, unduly frightening people -- well, we saw it earlier with the death panels. all bogus, but it was too instill fear in people. you know, it's hard to change. it's hard to change. but people of america voted last november overwhelmingly for barak obama and for democrats in the house and senate because they wanted to change the

system. they knew we had to change. people don't fear change. they know it's tough. but they don't fear it. they don't fear in our health care system either. i'll tell you what people fear. what i hear, they fear keeping the present system. that's what the american people fear. they fear being denied coverage because they have a preexisting condition or one of their children have a preexisting condition, and they will not be able to get health care coverage. that's what people fear. they fear that they'll be dropped from their policy because they've come down with cancer or heart disease or some other chronic illness. they fear that if they have a serious illness, they'll have to go into bankruptcy to pay the bills. 62% of all of the bankruptcies in this country are because of medical causes. and 80% of those -- 80% of those are due to people who already had coverage. so that's what people really

fear. now, another reason that i think conservative forces will fail this time is because they believe -- they believe that people who have good health insurance really lack compassion and they don't care about the 46 million other americans who don't have it. well, i disagree. people care deeply about this that 46 million americans don't have insurance, and this is a national shame when children don't have access to a doctor. it is unfortunate that our republican friends are determined to prevent us from debating and amending this. that's what this bill is about tonight. republicans in the health insurance are now joined at the hip. same talking points, same distortions, same bogus cooked up stories, same tactics with my friends on the republican side. all i can say is since the republicans goal is to obstruct -- obstruct and obstruct, well,

the people of this country are looking to us. they're looking to the democrats as they did in social security and as they did in medicare. they're looking at us to move this country forward. and so this is a call to arms for our caucus. i hate to put this in those kind of partisan terms, but what can i do when every single republican says they want to obstruct and stop this bill? so it's now on us, the democratic caucus, all 60 members, to come here and to stand strong for the american people. now is not the time to go wobbly in the knees, i say to my friends in the democratic caucus. now is the time to stand strong. now is the time to come here to this well at 8:00 tonight and move this country forward, say yes to the american people. and no to these fears and unfounded allegations that you will hear from on the other

side. now is the time to take the next step forward in the real progress of this country. the presiding officer: under the previous order the time until 7:15 p.m. will now be controlled by the republicans. the senator from iowa. mr. grassley: mr. president, i would like to be notified when i have spoken 20 minutes, please. the presiding officer: i will be glad to do that. mr. grassley: on november 10, the former president clinton visited the democratic senate caucus. it has been widely reported that his message to senate democrats was that on health care reform, the worst thing to do is to do nothing. with all due respect to former former -- to the former president, that is simply wrong. mr. clinton, the worst thing that we can do is pass this bill. this is not something that i say lightly because there are

serious problems with our health care system. there are important steps that we need to take to fix the problems in our system, but the excesses of this bill appear willfully ignorant of what's going on on outside health care. those things deal with our economy. those excesses make this bill far worse than doing nothing. we are a nation facing challenging economic times. we have seen the auto industry go into bankruptcy. we have seen banks shutter their doors. i'd like to refer to the chart here of -- of our national debt. the federal debt has increased by $1.4 trillion just since inauguration.

this chart shows the growing amount of debt that the federal government is taking on. just the amount of increased debt added just since the inauguration is $11,535 per household. it now exceeds, the national debt does, $12 trillion for the first time in history. i'd like to show you a chart on federal spending, federal health spending. as this chart here illustrates, this bill bends the federal spending curve further upward by by $160 billion over the next decade. the red area of this chart is that net additional federal health spending and according to -- not according to this senator, but according to the nonpartisan congressional budget office, americans have rightly

lost faith when in the face of the current economic crisis congress thinks that this this $2.5 trillion restructuring of the health care system happens to be a good idea. perhaps one of the biggest warning signs that this bill will saddle taxpayers with more spending and debt is the fact that the budget fail-safe mechanism was dropped from the bill. behind those closed doors here in the capitol where this bill was written -- and i emphasize closed doors -- the grassley budget fail-safe mechanism was cut from the bill and lots of budget gimmicks were added. former congressional budget office director douglas hotels eagan wrote yesterday's "wall street journal" this -- that this bill is "fiscally

dishonest." that it uses "every budget gimmick and trick in the books. it leaves out inconvenient spending, back load spending to disguise the true costs, front loads tax revenue, let inflation push up tax revenues and promise spending cuts to doctors and hospitals that have no record of materializing and so on." this bill is simply irresponsible, it's worse than doing nothing. let's talk about some of the excesses in the bill. it increases the size of government by a staggering staggering $2.5 trillion when fully implemented. it imposes half a trillion in new fees and taxes. imposing these new fees and taxes as the economy is struggling, struggling to recover is worse than doing

nothing. this half a trillion dollars in new taxes will hurt small business and destroy job creation. it breaks obama's campaign promise by increasing taxes on individuals and families making less than $250,000 per year. adding insult to injury, these fees and taxes will also cause health care premiums to go up, beginning just next year. but i don't want you to take my word for it. both the nonpartisan committee on taxation and the congressional budget office has confirmed that these taxes and fees will be passed through to the consumers in the form of higher health insurance premiums, and these taxes and fees will start increasing premiums four years before most of the reforms in this bill take

effect in 2014. let's take a look at what happens to medicare and medicaid in this bill. both of these health care entitlement programs are already on perilous financial footing. both are adding financial -- they're facing financial meltdown. this bill adds to that burden. first of all, the medicare trust funds started going broke last year. in the year operate, in the year 2008, the medicare program began depending more out of their trust fund than was coming in. the medicare trustees have been warning all of us for years that the trust fund is going broke. they now predict that it will go broke right around the corner

about 2017. but rather than work to bridge medicare's $37 trillion in unfunded liabilities, this bill cuts half a trillion dollars from that medicare program to fund yet another unsustainable health care entitlement program. and medicare has a major problem with physician payments that will cost more than $250 billion to fix, but this bill ignores that problem by pretending that that problem doesn't exist. this bill would leave future congresses virtually no way to restructure medicare to do the doctor's fix. by diverting medicare resources elsewhere and ignoring major problems like that one, this bill does worse than nothing.

and then there's medicaid, the medicaid program serves 59 million low-income children and families. it is our health care safety net, and it, too, is on very shaky financial ground. the government accountability office has reported to congress that states are reaching the financial and budgetary crisis with medicare and medicaid -- with medicaid, and like medicare, medicaid is essentially going broke. the government accountability office models predict that state spending on medicaid will grow faster than state revenues for at least the next ten years. here's what the government accountability office has said about the situation, and i quote -- "since most state and local governments are required to balance their operating budgets, the declining fiscal condition shown in our simulations suggest that without

intervention these governments would need to make substantial policy changes topcpctt7xñ#r#t7# but this bill doesn't fix this # problem either. here again, this bill makes the problem worse. this bill adds another $374 billion in spending to the medicaid program. it adds 15 million to the rolls of the worst delivery system in healthcare. in increases state spending by $25 billion, and that happens to be a hidden tax increase because states will be forced to raise taxes to pay for this increased cost, another unfunded mandate.

by dropping the equivalent of a 10,000-pound weight to our frayed medicaid safety net, this bill does worse than nothing. this bill also compounds these long-term entitlement spending problems by creating yet another new entitlement program called the class act. this one is a voluntary federal program for long-term care insurance. care supports, particularly for the disabled and the elderly. i understand the issues that the supporters of the class act want to address. but the class act is just simply not viable in its current form. the class act is almost certain to attract people who are all most likely to need it. this is known as adverse selection. that will cause premiums to increase and healthier people to drop out of the program. it's a classic insurance death

spiral. on november 13, the administration's own chief actuary confirmed this. the chief actuary issued a dire warning in a report on the class act, in the house bill which is virtually identical to the senate version. quoting the chief actuary -- "there is a significant risk, the problem of adverse selection would make the class program unsustainable." for the first ten years, the class act saves money, saves money at the beginning because it collects premiums before benefits start getting paid out, but sometime afterwards, it starts to lose money. we all know what happens from there. it will become the taxpayers' responsibility to rescue the program as it fails. look at the financial struggles of social security, look at medicare, look at medicaid.

now go home and look at your children and grandchildren, creating an unsustainable class act is not a responsible thing to do for our children and grandchildren. by adding the ticking time bomb of yet another unfunded liability to our children and grandchildren through the class act, this bill again does worse than nothing. health care is 1/6 of the economy. the american people don't want a bill that makes the economy worse. the nonpartisan congressional budget office committee on taxation and even the office actuary of u.s. department of health and human services have told us what the american people already knew. these massive partisan health care reform bills are going to make the problem worse when it comes to the costs of health

insurance. according to a september 22 letter from the congressional budget office's chairman baucus about the finance committee bill, the c.b.o. wrote -- "premiums in new insurance exchanges would tend to be higher than the average premiums in the present law individual market." so according to c.b.o., after these bills spend a trillion dollars, many of the people struggling to afford their premiums today will actually end up paying more if this bill moves forward and is enacted. by increasing costs when people desperately need congress to lower costs, this bill does worse than nothing. it doesn't have to be this way. when the debate began last year, interested legislators of both parties set forth benchmarks that were really no-brainers.

health care reform should lower the cost of premiums. it should make health care more affordable. it should do so without medicare cuts that jeopardize access to care for seniors. it should do so without overloading the medicaid safety net until it rips. it should do so without adding to the already unsustainable, unfunded liabilities by creating yet another unsustainable entitlement program. well, it should have done all those things. that's what we intended to do when we started out. instead, this bill threatens the economic recovery. it's a half a trillion dollars in new taxes, hurting small business and destroying job creation. it calls for an even bigger and more unsustainable federal budget. it adds to that burden with a massive government-run health plan. it makes health care more unaffordable

and lower quality. i know some people believe that we should get on to the bill and try to fix it by amendment. but this 2,000-page bill has many more problems than can being fixed by amendment on the senate floor. if you really want to improve it, it should be stopped right now and get back together where we were at one time. democratic leaders and the white house have put together one extreme health care plan after another. after the bailouts of wall street and detroit, a stimulus bill that led to the highest unemployment in 26 years and the fed shoveling money out the door without any accountability, this health care reform bill is a straw that broke the camel's back. what senate republicans are trying to say tonight with tonight's vote that we don't support reform just for the sake

of reform. changes to the health care system must be responsible and not break the backs of the taxpayers and the job-creating engine in america: small business. it doesn't make any sense to make major new unsustainable commitments to entitlement spending. already medicare solvency is in jeopardy, and the reid bill would make things worse for medicare. seniors are in a tough situation today with the way the economy has hit their retirement savings. we have to step back and remember that it's not our money. it's their money. it's the taxpayers' money that we're talking about. $2.5 trillion of taxpayers dollars over the decade when this bill is fully implemented. generations of hard-working americans will be forced to pay the costly price for this bill

if it moves forward. it's irresponsible for democratic leaders to use their filibuster-proof majority in the senate and their control of the house and the white house to push through such a massive legislation reshaping, one-sixth of the american economy. the unintended consequences of this legislation could have a destabilizing effect at just the wrong time as the america's economy struggles to recover and working families are doing everything in their power just to hold on. the late senator moynihan -- the late senator moynihan often warned about the perils of a majority party pushing through major bills and changes in a partisan way. it's a well-founded warning that democratic leadership has not heeded this time at least. if a bill like this one can't

get support more broadly, then something is wrong with it. moreover, grass roots america has spoken out against this legislation. it's alarming how those voices have been disregarded by congressional leaders. president andrew jackson made it clear that our duty is to tune in to common sense of the american people who sent us here. i quote president jackson -- "our government is founded upon the intelligence of the people. i, for one, do not despair of the republic. i have great confidence in the virtue of the great majority of the people, and i cannot fear the result." end of president jackson's quote. friends and colleagues, listen to what president jackson said. listen to the concerns of the people. they are telling us to

reconsider this massive, complicated legislation and take a path that leads to less spending, less taxes, and less debt. instead of continuing to mortgage the future of our children and grandchildren, we need to get back to basics. congress should pass commonsense medical malpractice reform to stop wasting so much money on defensive medicine. congress should empower consumers to shop around for health care and lower costs with competition, just like with other services that the consumers buy. congress should make market reforms that help small businesses and self-employed have greater access to health insurance at an affordable rate. these issues can be addressed without upending the entire

health care system. with the results of higher taxes -- the presiding officer: the senator has used 20 minutes. mr. grassley: i'll just use one more, and then i'll be done. these issues can be addressed without upending the entire health care system with the result of higher taxes, higher insurance premiums and deficits and debts that will get in the way of opportunity that results from the ingenuity and industry of the american people. and if we were sitting around a coffee shop in springfield, illinois, or little rock, arkansas, and we were discussing health care reform and i told them we're talking about a bill that is going to raise taxes, cut medicare, raise premiums and not do anything about costs, they would say that's not health care reform. so i encourage my colleagues to listen to the american people and to send this bill back to the drawing board. i yield the floor.

mr. enzi: mr. president? the presiding officer: p-t distinguished senator from wyoming. mr. enzi: as morning broke over our nation today millions of americans woke to a typical crisp fall day. it seemed ordinary as children filled soccer fields and families made preparations for the thanksgiving holiday. it seemed ordinary, mr. president. but today is anything but ordinary in the life of our nation. we've all heard the phrase and repeated it so many times that we have almost grown numb to it. america is facing the worst crisis since the great depression. think about that for a minute. what that really means is that every single legislator in this senate is in uncharted territory. we have never been here before, and recent signs of a slow, unsteady and jobless recovery

are troubling. and the american people know it. in a survey from this past week, 82% of americans said that our nation's economic conditions are poor. consider the news report from just yesterday that 14% of all mortgage loans, meaning 7.4 million households, were delinquent in -- or in foreclosure in the last quarter. that's the highest number since the mortgage bankers industry began this survey in 1972. consider the unemployment rate. it reached a 26-year high of 10.2% in october. we lost 190,000 jobs in just the month of october alone. and according to the department of labor's broadest measure, some 17.5% of americans are without a job or underemployed. mr. president, we've shed 3.5 million jobs since january of this year, and the average workweek is now down to 33 hours for the american worker.

it's against this backdrop that the senate majority leader has chosen to bring up this health care bill. health reform is a huge undertaking, mr. president. every one of the 2,074 pages in this bill will have a dramatic impact on the health care of every american. and i've got to tell you this is a bigger problem than anybody can imagine because it's going to affect every single american. this bill represents a massive government intrusion into the medical care of every american. under this bill, the government will review every employer health insurance under this bill the government will review every employer health insurance plan in the nation to determine if it satisfies all of the government mandated benefit requirements. if it doesn't, the government will then tax many of those employers. the government will also now determine whether it believes your hea